Mobile shopping app Shopkick prevailed in a Telephone Consumer Protection Act suit when a California federal court judge held that the app’s “invite your friends” feature did not violate the statute.
The putative class action complaint was filed by two consumers who received what they alleged were unsolicited text messages in violation of the TCPA from Shopkick. The texts, purportedly sent by a friend including a link to Shopkick’s website, read: “Hey, just gave you 50 bonus points on shopkick—a cool new app that rewards you for shopping. Check it out.”
Shopkick countered with a motion for summary judgment, arguing that the plaintiffs failed to establish the company violated Section 227(b)(1)(A)(iii) based on the Federal Communications Commission’s Declaratory Ruling and Order issued in July.
In a section of that ruling titled “Maker of the Call,” the FCC addressed a petition by messaging app provider TextMe. The company requested a finding that it was not the “maker” of calls when users of the TextMe app caused “invitational texts” to be sent to third parties. The FCC agreed.
Applying a test to determine when a call is initiated, the FCC said it looked “to the totality of the facts and circumstances surrounding the placing of a particular call to determine: 1) who took the steps necessary to physically place the call; and 2) whether another person or entity was so involved in placing the call as to be deemed to have initiated it, considering the goals and purposes of the TCPA.”
Although TextMe controlled the content of the text messages (“a reason for concern”), the Commission found that the app user decides whether to send an invitational message, to whom to send the message, and when that message is sent. “These affirmative choices by the app user lead us to conclude that the app user and not TextMe is the maker of the invitational text message,” according to the FCC order, even though the invitational text messages “are, in essence, advertisements of the app.”
Deferring to the FCC’s interpretation of the app, U.S. District Court Judge Maxine M. Chesney granted Shopkick’s motion for summary judgment.
As was the case with TextMe, Shopkick controls the content of the invitational messages at issue which were at least in part, if not wholly, an advertisement that invites the recipient to download Shopkick’s app. These two factors weighed in favor of finding Shopkick to be the sender of the messages, the court said.
But as explained by the FCC, “an app user nonetheless is considered the sender where the app user is required to make ‘affirmative choices’ in determining whether to send invitational text messages, to whom to send such messages, and when to send the messages,” the judge wrote. Shopkick demonstrated to the court that its app users must proceed through a multistep process for invitational messages to be sent to third parties.
First, the user must affirmatively grant the Shopkick app permission to access the phone’s contacts; second, the user must select “Continue” instead of “No, thanks” to the app’s option to “Invite Friends.” Next, a user works his or her way through a series of screens to select the contacts to receive invitations, followed by a screen listing the chosen contacts and the format in which the invitations would be sent (via e-mail, for example, or Facebook message) and a button to push stating “Invite Friends.” Only once all of these steps have been completed can the invitational messages be sent.
“The Court finds the steps the user must have taken to cause the Shopkick invitational text messages to be sent are indistinguishable in all material respects from the steps a user of the TextMe app must take to cause the TextMe invitational texts to be sent,” Judge Chesney wrote.
Although the plaintiffs argued the TextMe messages were “personal and non-commercial” while Shopkick’s were paid advertisements, i.e., “generic and commercial,” the court was not persuaded of their difference. “As to ‘non-commercial’ versus ‘commercial,’ the Court finds there is no material difference between an offer of free texts and an offer of free shopping points.”
A contention that Shopkick should be held vicariously liable under an agency theory also failed, the court said, as the plaintiffs made no showing that an agency relationship existed between Shopkick and any of its users, let alone that any such user is a telemarketer.
“In sum, plaintiffs having failed to demonstrate a material difference between the circumstances presented here and those addressed in the FCC Order, the Court finds the FCC’s determination therein is equally applicable to the instant claims, and, accordingly, finds Shopkick has not violated the TCPA,” the court concluded.
To read the order in Huricks v. Shopkick, Inc., click here.
Why it matters: One of the few favorable rulings found in the FCC’s July Order, the Commission’s finding that TextMe did not initiate the invitational texts sent to third parties by users of its app proved just as beneficial for Shopkick.