There really is no such thing as a free lunch in TCPAWorld. And companies offering a free meal in exchange for membership in a text or call list had better pay close attention to a new case out of the Northern District of Illinois.
In Yates v. Checkers Drive-In Restaurants, Inc., Case No. 17-cv-9219, 2019 U.S. Dist. LEXIS 55103 (N.D. Ill. April 1, 2019) the Court considered the lawfulness of a call-to-action display offering a free burger coupon to anyone sending a text to a specific short code without disclosing that the texter would also have to accept future marketing texts before enjoying that tasty morsel. The Court concluded that the company’s practice of sending automated texts to hungry patrons advising that he or she would need to accept future marketing texts to get their grub on was a violation of the Telephone Consumer Protection Act (“TCPA”).
Backing up, call-to-action displays—signs and advertisements asking consumers to send text messages to specific short codes to get stuff—are becoming increasingly common. I can see three such offers from my corner table here in this coffee shop I’m typing from. *Sips his espresso for emphasis.*
Back in 2015 the FCC blessed the use of these displays to send specific information via an automated texting process to a customer who responds requesting such information. Thus, if you’re sitting in a grocery store and see a sign offering a 50 cent off coupon for baby food if you text “gerber” to a shortcode, the store can respond to your text with a coupon for stewed carrots without needed prior express written consent. Essentially the sellers’ response to a customer’s specific request for information regarding an available offer converts what would otherwise be a marketing text into an informational text. That means the seller needs nothing more than a valid telephone number supplied by the “called party” to protect it from TCPA liability when sending a text related to that request for information.
As with all “informational” calling, however, the scope of such presumed express consent is always somewhat limited. In the grocery store example, for instance, the grocer could safely send you a coupon for baby food, but probably couldn’t send you a coupon for diapers, and certainly couldn’t send you a coupon for dog food. Your request was specific. So your consent was specific. Exceeding that consent by offering you a good or service beyond what you actually asked for is simply not allowed. That’s just regular old telemarketing and presumptively illegal if the grocer used an ATDS to send the message.
So let’s get back to Yates. There the Defendant’s restaurant used a call-to-action display offering a free burger coupon to anyone who texted the word “Buford”—the name of a presumably delicious burger at the Defendant’s restaurant— to the Defendant’s shortcode. How appealing, if not entirely unbelievable. You know there’s a catch here. And there was.
When Plaintiff obeyed the command of the display he did not receive a free burger coupon, but rather a text message advising him that he would not get his burger until he provided his zip code and agreed to receive future marketing materials and “other deals” from the burger chain.
Here Plaintiff was put to a choice. Forgo the free burger, or accept future marketing from the Defendant. Quite the decision. Presumably hungry, the Plaintiff elected the latter. He provided his zip code, ate his burger, and then sued the Defendant for the subsequent text messages under the TCPA.
Defendant defended itself in the suit by arguing that the Plaintiff had consented to receive the text. In their view the “sign-up-for-marketing-to-get-your-burger” text was just a “validation” text. But since that argument makes no sense, the Court rejected it. Defendant apparently offered no other justification for the text so the Court found the text informing Plaintiff that he had to accept telemarketing in order to score his burger to be, itself, a solicitation that exceeded the scope of the initial consent provided by the Plaintiff. In the Court’s view, the Plaintiff consented to receive a burger coupon and that’s about it.
The Court went on to find, however, that the subsequent texts sent after Plaintiff texted his zip code back the Defendant were fully legal. Defendant ate his burger and knew what he was getting himself into. In the Court’s words: “Although the initial offer to convey “other deals” might itself have exceeded the scope of Yates’ consent, it cannot be argued that the subsequent messages were not consented to based on the allegations in the complaint.”
The Court’s approach to the case is interesting. One could easily read the initial text as related to the purpose for which Plaintiff provided his number—the Defendant was indeed texting about the free burger coupon the Plaintiff was after, which is exactly what Plaintiff consented to hear about. The issue, really, is the undisclosed requirement that the Plaintiff absorb solicitation texts in order to get the free burger. The Court implicitly holds that the failure to reveal that condition in the original call-to-action display defeats the Plaintiff’s consent, but that isn’t exactly right. Maybe there’s a truthful advertising suit here– the burger chain failed to disclose the conditions on the free burger in the original call to action display– but that shouldn’t make a subsequent text informing the consumer of those conditions illegal under the TCPA.
Breaking it down further, a reasonable consumer would not assume that a free burger would be immediately downloaded to his phone—no strings attached. See generally A Proverb, No Such Thing As a Free Lunch, (1st Ed. A.D. 1512). So the initial consent should be properly read to include consent to receive information about whatever strings the texter is attaching to the free burger offer. That’s all the first text did. And when Plaintiff accepted the terms of the offer he bought himself a tasty burger—and he also consented to receive the subsequent texts, just as the court concluded.
Indeed, notice that the Court treats the text as if it were a “dual purpose” call, assuming—I think falsely—that the request for Plaintiff to accept marketing texts was unrelated to the burger offer. It seems clear to me that the Defendant always intended to provide the free burger only to those willing to receive future texts about their products. So the text was entirely informational—the “information” provided was: “in order to get your free burger you must jump through this hoop.” Just because the hoop involved accepting telemarketing messages does not change the fundamental informational nature of the original text. And whereas telemarketing consent cannot be a condition of a purchase or grant of credit per federal regulations, no law says you can’t offer a free burger to all those who will accept your marketing materials. So this all looks legal to me.
Then again it doesn’t appear that the burger-chain’s counsel made the “our text was just informational” argument–at least the court does not address it and suggests that Defendant argued only that it was a “validation” text for some reason– so maybe the result here will change at the summary judgment stage once they’ve read this article. I’m kidding. Sort of.
Also, one last notable piece of this case—Yates is now the second case to hold that text messages are not pre-recorded calls for purposes of the TCPA’s delivery restrictions. So keep that in mind if anyone ever tries to tell you otherwise.
It seems like the court is saying that “the real solicitation” was never about the burger. It was always about getting more customers on defendant’s text thread. The burger offer was the bait, but what they wanted all along was to be able to sell other things to the plaintiff via subsequent text messages. So when they put out the offer for a burger, they knew a second solicitation–the real solicitation–was being held back. When I step back and look at the overall purpose of the campaign, it feels like the burger offer was an attempt to cloak a solicitation text and make it appear as an informational text. Therefore, in my mind, the court was correct in seeing it as not purely informational.