Text Broadcaster May Be Liable Under TCPA, Says Nevada Federal Judge

TCPA Connect

In February 2019, Twilio, a cloud communications software company, was unable to convince a Nevada federal court to dismiss a putative Telephone Consumer Protection Act (TCPA) class action filed against the company and a Las Vegas-based theater company that had engaged Twilio’s services, as the plaintiff alleged that the text message marketing program could not have worked “without the knowledge, authorization, approval, ratification, participation, and/or active support of Twilio.”

In the complaint filed in Bauman v. Saxe, plaintiff Jeremy Bauman alleged that David Saxe and his theater company acquired the cellphone numbers of consumers and made representations to the consumers that the numbers would not be used to send unsolicited text message advertisements. But the defendants then devised the idea for a text message ad campaign that involved sending texts without the consent of recipients, Bauman alleged.

According to the plaintiff, Twilio collaborated as to the development, implementation and maintenance of the telemarketing text message program. Specifically, the plaintiff charged Twilio with joining its software and hardware with Saxe to create, sort and send hundreds of thousands of text message ads to cellphones in an automated manner—i.e., a text broadcaster.

Twilio also stored the numbers and messages, prioritized in what sequence the text messages would be sent and ensured that they were not blocked by carriers as spam, Bauman said. Furthermore, Twilio controlled when and how each of the texts was delivered to the intended recipients and provided software code tailored for Saxe’s devices, as well as help and advice on how to ensure the telemarketing program would function effectively.

The company also assigned Saxe a mobile marketing campaign specialist who was specifically authorized by Twilio to ensure that the program was a success and helped Saxe obtain a short code telephone number for the program, according to Bauman.

Twilio responded to the suit with a motion to dismiss. Not only did the plaintiff fail to sufficiently plead injury and causation necessary for Article III standing, the defendant argued, but as merely a transmitter of communications—not an initiator of communications—Twilio could not be liable under the TCPA.

Disagreeing with both arguments, U.S. District Judge Richard F. Boulware II denied the motion to dismiss.

Beginning with standing, the court noted that Bauman claimed Twilio violated his privacy and injured him in his quiet use and enjoyment of his cellphone. “These damages are consistent with the purpose of the TCPA, which was enacted in response to customer complaints that telemarketing calls are a ‘nuisance and an invasion of privacy,’” the court said.

In addition, the plaintiff alleged that Twilio engaged in several tangible, specific acts causing the dissemination of the text messages, including controlling when and how the text messages were sent, providing Saxe with code to enable the automated transmission of text messages and advising Saxe on how to avoid spam filters.

“Plaintiffs’ allegations satisfy the causation element,” the court wrote. “Plaintiffs specifically state that the telemarketing text message program would not have operated but for Twilio’s support and involvement, and Plaintiffs provide satisfactory factual allegations at the Motion to Dismiss stage to support this assertion.”

Turning to the issue of the liability of transmitters under the TCPA, Judge Boulware gave deference to the Federal Communications Commission’s (FCC) 2016 regulations on whether text broadcasters could be “senders” of text messages under Section 227(b)(1). The FCC clarified that “text broadcasters can be liable for TCPA violations” based on an analysis of the “totality of the facts and circumstances surrounding the placing of a particular call.”

A decision maker should consider “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,” as well as whether a text broadcaster “knowingly allowed its client(s) to use that platform for unlawful purposes.”

“The Court finds that Plaintiffs state a claim for Twilio’s liability under the TCPA that is plausible on its face,” the court said. “Accepting the facts in Plaintiffs’ complaint as true, Twilio took steps necessary to send the automated text messages. Twilio’s alleged involvement was to an extent that Twilio could be considered to have initiated the contact, considering the TCPA’s goal of limiting the nuisance and invasion of privacy caused by automated calls and text messages.”

Bauman also alleged that Twilio not only knowingly allowed Saxe to use its platform for automated text messages, but also actively helped Saxe bypass spam filters, Judge Boulware added. “Because the FCC has determined that transmitters can be liable under the TCPA under certain circumstances, and because Plaintiffs allege circumstances under which liability is plausible, Plaintiffs state a claim against Twilio under the TCPA,” the court concluded.

To read the order in Bauman v. Saxe, click here.

Why it matters: The decision provides an important reminder for text broadcasters that liability under the TCPA can attach where a court considers the facts and circumstances and finds the defendant “was so involved in placing the call as to be deemed to have initiated it,” among other factors. More typically, text broadcasters have been found not liable under the TCPA when they have had no involvement in the content, timing, recipients, etc., of the messages. One example of such a case in this edition of the TCPA Connect is Franklin v. Upland Software.