Calls made to a cellphone offering free goods and services can trigger liability under the Telephone Consumer Protection Act (TCPA) when they cross the line into marketing as "dual purpose" calls, according to a decision from a federal court in Alabama.
In his complaint, Jason Bennett claimed that he received multiple prerecorded messages on his cellphone from defendant Boyd Biloxi, the owner of a local casino, in violation of the TCPA. The messages stated:
"Hello, this is IP Casino, Resort and Spa calling to invite you to enjoy 2 free tickets to see the Kenny Wayne Shepherd Band. If you wish to opt out of future calls, please dial 877-388-5999 and mention the opt out number 5822. Jason Bennett, join us and enjoy 2 free tickets to see the Kenny Wayne Shepherd Band on Saturday, July 5th. Tickets are limited so reserve your tickets today. To take advantage of this great offer now, please call 1-888-946-2847 x. 5152 and have your BConnected card ready to reserve your tickets, or visit BConnected online to view all of your offers. Thank you and we look forward to your visit here at IP Casino, Resort and Spa."
The casino filed a motion to dismiss the suit, arguing that the calls were neither an "advertisement" nor "telemarketing" under the statute. U.S. District Court Judge William H. Steele said Biloxi failed to address the "advertisement" definition and turned to "telemarketing," defined by the Federal Communications Commission regulations as "the initiation of a telephone call or message for the purpose of encouraging the purchase or rental of, or investment in, property, goods, or services, which is transmitted to any person."
Biloxi told the court the calls at issue only sought to provide complimentary tickets to Bennett and simply informed him of his two free tickets to an event. But the court disagreed.
"Had its emissary merely notified the plaintiff he was entitled to free tickets and then stopped talking, the defendant might have an argument," Judge Steele wrote. "But the voice went on, suggesting that the plaintiff 'visit BConnected online to view all of your offers.' The second amended complaint alleges that this site 'offered discounts on room reservations, coupons/discounts for food purchases,' as well as ostensibly 'free play' on the casino floor. That is, the online 'offers,' or at least some of them, were offers to sell—not to give away with no strings attached—various goods and services. The defendant's calls patently encouraged the plaintiff to visit this site and see what goods and services the defendant had for sale."
Biloxi's calls served a "dual purpose," the court said, with an informational component as well as a marketing angle. Despite the information about the free tickets provided in the calls, they were not inoculated from liability, however.
"Thus, any customer service or information aspect to the defendant's notification that the plaintiff was entitled to free show tickets does not insulate the defendant from liability for any advertisement or telemarketing contained elsewhere in the same message," the judge said.
Neither the TCPA nor the implementing regulations require an explicit mention of a good, product, or service and the caller's purpose does not have to be an immediate sale, the court added.
"As noted, the defendant patently encouraged the plaintiff to view online all its offers for sale," Judge Steele wrote. "Employing common sense, what possible purpose could the defendant have for such an encouragement other than that of obtaining future sales to the plaintiff of the goods and services being offered? The defendant suggests none."
The court rejected the casino's argument that the FCC has only regulated dual purpose calls that contain an "advertisement" and not "telemarketing" and that liability for such calls is limited to residential recipients and not cellphones.
Judge Steele acknowledged that the FCC has only discussed dual purpose calls in the context of an advertisement, "but that appears to be only because the examples presented to it involved advertisement," he wrote. "The defendant has not attempted to support the improbable idea that the FCC considers dual purpose calls to be prohibited if the objectionable purpose is advertisement but considers them to be permissible if the objectionable purpose is the equally restricted one of telemarketing."
As for the type of phone that received the call, the court was not persuaded that the FCC's failure to make provisions of the regulations applicable to cellphones subject to its 2003 report and order finding dual purpose calls violate the TCPA, In re Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, alleviated the casino from liability.
"[I]t seems clear the purpose was not to limit the scope of the dual purpose prohibition to residential lines," Judge Steele concluded. "On the contrary, the 2003 Report expressly confirms the FCC's 'belie[f] that wireless subscribers should be afforded the same protections as wireline subscribers.'"
To read the order in Bennett v. Boyd Biloxi, LLC, click here.
Why it matters: The decision offers one court's analysis of what constitutes a "dual purpose" call and how it can trigger liability under the TCPA, regardless of whether the call was placed to a residential line or a cellphone. Callers should keep in mind that some courts will take a broad reading of the call's purpose to find that it violates the statute even with no explicit mention of goods, products, or services, or intent of an immediate sale.