Court Bets on Defendant in Gambling Text Dispute on DNC Grounds, but Holds Door Open for ATDS Claims

TCPA Connect

Texts purportedly designed to “promote gambling” do not constitute marketing or advertising for purposes of the Telephone Consumer Protection Act (TCPA), an Alabama federal court has ruled.

James Underwood sued Cygnal, alleging the company sent him two unsolicited robotext messages asking him to fill out a survey despite his entry of his phone number on the National Do Not Call Registry.

On April 20, 2021, Cygnal sent a text message stating, “AL is facing big choices, and folks across the state are speaking out. Make your voice heard today,” with a link included. The next day, Cygnal sent another text message stating, “Your input about AL’s future is still needed. Don’t miss this chance to share your opinions,” with a link.

The link provided in each text directed the recipient to a voter survey about the recipient’s feelings toward legalizing certain types of gambling in Alabama, the recipient’s knowledge and impression of certain gaming organizations and locations, and, specifically, the recipient’s opinion of the Poarch Band of Creek Indians.

People who took the survey were paid for their participation in coupons and “other financial rewards.”

Underwood claimed that the messages violated both the TCPA and the TCPA’s Do Not Call (DNC) provisions. Cygnal moved to dismiss.

U.S. District Court Judge Annemarie Carney Axon rejected Cygnal’s argument that Underwood lacked standing to bring suit. And though she granted the motion to dismiss on the Do Not Call Rule claim, Judge Axon denied the motion to dismiss with respect to the TCPA claim.

Underwood sufficiently stated a claim because he provided more than a conclusory allegation that Cygnal used a random or sequential number generator, she said.

“Here, Mr. Underwood alleges that he received two text messages from a number with which he had no connection, and the content of the texts were not specifically targeted to him,” she wrote. “This is sufficient to support a plausible inference that Cygnal used an automatic telephone dialing system.”

Cygnal had greater success with respect to Underwood’s claim under the Do Not Call Rule, arguing that the text messages did not constitute telemarketing or a telephone solicitation, which the Federal Communications Commission defines 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” unless the recipient gave “prior express invitation or permission.”

Underwood took the position that the purpose of the text messages was to promote gambling in Alabama.

“But even accepting as true Mr. Underwood’s allegation that the underlying purpose of the texts was to ‘predispose the recipients favorably toward the Poarch Band of Creek Indians’ and casino gambling, attempting to sway the recipient in favor of an entity or a practice is not ‘encouraging the purchase or rental of, or investment in, property, goods, or services,’” Judge Axon said. “Mr. Underwood therefore has not adequately alleged an essential element of his claim that the text messages violated the Do Not Call Rule.”

The court granted the defendant’s motion to dismiss on the Do Not Call Rule claim but allowed the case to proceed on the TCPA violation.

To read the memorandum opinion in Underwood v. IFA Holdings, LLC, click here.

Why it matters: The split decision provides a reminder that not all ATDS claims are dead on arrival post-Facebook, particularly claims involving allegations of non-targeted messages. At the same time, the court’s determination that survey messages are not telemarketing or solicitation, even where a coupon or financial incentive is provided, adds to the growing body of authority grappling with the classification of survey messages.



pursuant to New York DR 2-101(f)

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