7th Circuit Bolsters TCPA Wireless Carrier Exemption: Affirms Subway Not Liable for T-Mobile’s Text

In 2016, a plaintiff filed suit against Subway over a text message for a free sandwich, sent to him by his wireless carrier, T-Mobile.  The text read:

“This T-Mobile Tuesday, score a free 6” OvenRoasted Chicken sub at SUBWAY, just for being w/ T-Mobile. Ltd supply. Get app for details:http://t-mo.co/2bGiBjS.”

The Plaintiff did not name T-Mobile in the putative class action lawsuit (due to a governing arbitration clause).  The Plaintiff alleged that Subway had an agency relationship with T-Mobile.  Subway filed a Motion to Dismiss, which the district court granted.  The 7th Circuit back dropped its short opinion in Matthew Warciak et al. v. Subway Restaurants Inc., case number 19-1577: “The district court found the complaint lacked sufficient facts alleging Subway’s conduct to support [Plaintiff’s agency claims]… Further, the district court found that the wireless carrier exemption applied and therefore, no underlying TCPA violation exists.” 

The more vanilla portion of the 7th Circuit’s opinion, was where it affirmed that the complaint lacked allegations that Subway could be vicariously liable for T-Mobile’s text.  There were no allegations Subway actually made T-Mobile its agent, as the Plaintiff only alleged Subway “engag[ed] in a contractual relationship with T-Mobile…[and] not all contractual relationships form an agency. For example, when a company wishes to place an advertisement … the publisher … does not become the agent of the company.” Moreover, the complaint failed to allege that the Plaintiff could have reasonably believed that T-Mobile was acting on Subway’s behalf.  The text indicated that it was all T-Mobile, i.e. T-Mobile maintained control over the content, timing and recipients of the text.  Therefore, there was no agency theory to pin liability on Subway.     

The spicier part of the opinion is that the 7th Circuit held that the suit was barred by the TCPA’s wireless carrier exemption.  The wireless carrier “exemption” to the TCPA is as old as the TCPA itself: the TCPA’s ATDS and prerecorded messages prohibition never applied between a wireless provider and its customer, if the customer is not charged for the communication.  The Plaintiff’s complaint conceded that T-Mobile was his carrier, and he was not charged for the text.  “Therefore, the district court properly applied the wireless exemption when it found no TCPA violation existed based on the facts alleged in the complaint.”  This implies that even if the Plaintiff properly alleged that Subway had somehow made T-Mobile its agent, the wireless exemption cuts off liability to Subway.  Wireless carriers can breathe a bit easier now in launching identical promotions, and this is a nice development for TCPA defense.

What’s wild is this opinion flies directly in the face of a recent district court case in California (Fishman v. Subway Franchisee Adver. Fund Trust, Case No: 2:19-cv-02444-ODW (ASx), 2019 U.S. Dist. LEXIS 200710 (C.D. Cal. Nov. 18, 2019) where a court ruled under identical facts, that the same free sandwich text sent by a wireless carrier to its customer, was enough to allege an agency theory, and that the wireless exemption does not apply to texts sent by a carrier, to promote goods or services. Another percolating circuit split!

Leave a Reply