Affirming a district court, the U.S. Court of Appeals for the Seventh Circuit tossed a Telephone Consumer Protection Act (TCPA) suit against a retailer over a text message marketing campaign.

Chicago-based women's clothing and accessory chain Akira launched a "text club" in 2009 to connect with its customers and inform them of promotions, discounts and in-store special events. Akira gathered the cellphone numbers of about 20,000 customers who either provided their number to a representative inside a store, texted it to an opt-in number or completed an "Opt In Card."

Akira worked with software provided by Opt It, which loaded all the numbers into its platform. An Akira employee would then log in and draft a message to be sent to the text club members, with additional options about which members to send it to and when. From September 2009 through May 2011, the retailer sent approximately 60 text messages about store promotions, events, contests and sales to the customers on the list, including Nicole Blow.

Blow (who became the class representative after there were problems with the first two named plaintiffs) alleged that Akira violated the TCPA's prohibition against using an automated telephone dialing system to make calls without the express consent of the recipients (the messages were sent before the Federal Communications Commission's [FCC's] "prior express written consent" requirement for marketing messages was enacted). The complaint requested $1.8 billion in statutory damages (trebled for willful and knowing violations).

On cross motions for summary judgment, an Illinois district court granted the defendant's motion, holding that Akira did not use an ATDS. Blow appealed. Although the Seventh Circuit affirmed summary judgment in favor of the retailer, it did so on alternative grounds.

Opt It's CEO provided an affidavit for Akira that explained the process of sending a text message, emphasizing that a human must take action to send a message through the platform. While the district court was correct that this affidavit established that the platform lacked the present capacity to use a random or sequential number generator for storing or producing numbers, "it falls short of entitling Akira to summary judgment on this issue given the [FCC's] conclusion that equipment need not possess the 'current capacity' or 'present ability' to use a random or sequential number generator," the Seventh Circuit wrote, citing the FCC's 2015 Declaratory Ruling and Order for support.

Because the parties disputed whether Opt It's software is in fact capable of dialing numbers without human intervention—and given the expansive definition of an autodialer adopted by the FCC—summary judgment for Akira on this issue was premature, the federal appellate panel concluded.

However, the court did not end its analysis there, instead turning to an argument not reached by the district court that Akira was entitled to summary judgment because Blow consented to the text messages.

The record demonstrated that Blow gave her cellphone number to Akira on several different occasions, the Seventh Circuit said, signing up in either 2009 or 2010 for a frequent buyer card that granted the retailer permission to provide her with "exclusive information and special offers." The defendant also produced notes that Blow requested a sales associate call her about a particular item, and the plaintiff admitted that she texted "AKIRA" to opt in to the text program.

Blow argued that she never consented to receive the texts, because she provided her phone number only "to receive discounts" and not to get "mass marketing text messages." But the court rejected this attempt at line drawing.

"We are unpersuaded that there is a distinction of legal significance between the two terms of Blow's consent: the alleged 'mass marketing' texts were in fact the very 'exclusive information and special offers' described on Blow's Akira VIP and client cards," the panel wrote. "Blow's attempt to parse her consent to accept some promotional information from Akira while rejecting 'mass marketing' texts construes 'consent' too narrowly."

For support, the Seventh Circuit cited a recent decision from the U.S. Court of Appeals for the Ninth Circuit in Van Patten v. Vertical Fitness Group, LLC, where the federal appellate panel ruled the plaintiff granted consent to be contacted on his cellphone number when he provided it in connection with his application for gym membership. Even though he was contacted years later by a company with a different name after he had canceled his gym membership, the court said the texts related to the reason the plaintiff had supplied his number in the first place: to apply for a gym membership.

Blow not only provided her consent to receive text messages, she did so specifically to receive discounts, the Seventh Circuit said.

"Both cards in the record containing Blow's name and cell phone number clearly state that her information would be used to provide exclusive information and special offers," the court wrote. "Of the sixty texts Blow received, one welcomed her to the text club, forty-one contained a promotional or discount offer, and the remaining eighteen announced special events such as fashion shows, events that fit comfortably within the aforementioned 'exclusive information' described on the cards. Because the texts she received were reasonably related to the purpose for which she provided her cell phone number, we agree that Blow provided prior express consent for the text messages."

To read the decision in Blow v. Bijora, Inc., click here.

Why it matters

Highlighting that the scope of consent provided by a consumer continues to be an important issue, the Seventh Circuit joined the Ninth Circuit to hold that while a consumer does not consent to any and all contact by providing her cellphone number, she has consented to contact related to the reason the number was provided.

For further information on this topic please contact Christine Reilly at Manatt Phelps & Phillips LLP's Los Angeles office by telephone (+1 310 312 4000) or email ([email protected]). Alternatively, contact Diana L Eisner at Manatt Phelps & Phillips LLP's Washington DC office by telephone (+1 202 585 6550) or email ([email protected]). The Manatt Phelps & Phillips LLP website can be accessed at‚Äč.

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