Sweepstakes Entry Doesn’t Establish Business Relationship

TCPA Connect

A sweepstakes entry did not establish a business relationship for purposes of an exception to liability in a putative Telephone Consumer Protection Act (TCPA) class action, according to a California federal court.

On December 3, 2019, Lucine Trim registered her cellphone number on the National Do Not Call (DNC) Registry. She later filed a TCPA lawsuit after receiving two text messages from Mayvenn, Inc., on the phone.

The first, which she received on April 24, 2020, stated: “When you want something fun, quick and protective for your hair? WIG. Shop these ready to wear units … ” The second text, sent on May 4, 2020, stated: “Mother’s day is soon. Forget the florist, what she really wants is a wig. No-contact delivery goes right to her door …. ”

Trim alleged that she never provided prior express written consent to receive text messages from Mayvenn.

Mayvenn responded with a multipronged motion for summary judgment, arguing that Trim lacked standing because she was a professional TCPA plaintiff, that it had an established business relationship (EBR) with Trim, and that she wasn’t protected by the DNC Registry because she used the phone for business, not residential, purposes.

U.S. District Judge Maxine M. Chesney rejected all three arguments, denying the motion.

She began with the contention that Trim fell outside the TCPA’s zone of interests because she is a professional TCPA plaintiff who files TCPA actions “as a means to generate revenue,” with 12 other actions filed by Trim within the past four years.

Although the court acknowledged that some district courts have found the TCPA may not encompass the interests of plaintiffs who file TCPA actions as a business under certain circumstances, it also noted that the U.S. Circuit Court of Appeals, Ninth Circuit has stated that the term “professional” is not a “dirty word.”

Mayvenn submitted no evidence that Trim seeks to receive or attract telemarketing calls, or that any of her TCPA actions are frivolous, Judge Chesney said. Nor did her failure to respond with a “STOP” message after receiving the first text show that Trim took steps to allow the continuance of the injury while building a record to facilitate a later claim, she added, rejecting Mayvenn’s standing argument.

Judge Chesney next tackled the issue of whether Mayvenn and Trim had an EBR, defined as “a prior or existing relationship formed by a voluntary two-way communication between a person or entity and a residential subscriber … on the basis of the subscriber’s inquiry or application regarding the products or services offered by the entity within three months immediately preceding the date of the call, which relationship has not previously been terminated by either party.”

Mayvenn pointed to Trim’s entry in a sweepstakes to win free products and services as the creation of their EBR.

Trim countered that while the Federal Communications Commission (FCC) has not addressed the question of whether a consumer’s sweepstakes entry can create an EBR for purposes of the exemption contained in the TCPA, the court should adopt the Federal Trade Commission’s (FTC) interpretation of an identical EBR exemption found in the Telemarketing Sales Rule (TSR), which states that a sweepstakes entry form does not create an EBR.

The court agreed.

After the FTC created the DNC Registry, Congress directed the FCC to consult and coordinate with the FTC to “maximize consistency” between the do-not-call rules in the TCPA and the TSR.

In light of this, “the TCPA’s EBR exemption should be construed in a manner that ‘maximize[s] consistency’ with the identical exemption provided for in the TSR,” Judge Chesney wrote. “Consequently, the court holds that Mayvenn may not ‘circumvent the [DNC] Registry by utilizing [Trim’s] sweepstakes entry as a way to exploit the [EBR] exemption.’”

Finally, Mayvenn was unable to persuade the court that Trim’s alleged use of her cellphone for business purposes removed the protections of the DNC Registry.

A dispute of material fact remained as to whether Trim qualified as a “residential subscriber” for purposes of the TCPA, the court said. Although Mayvenn submitted evidence that Trim used her cellphone to make sales calls to prospective customers of her employer, there was also evidence that she used a separate, employer-provided number for customer service calls.

Drawing all inferences in favor of Trim, “the court finds a reasonable jury could conclude Mayvenn’s texts were sent to a residential subscriber,” Judge Chesney wrote.

To read the order in Trim v. Mayvenn, Inc., click here.

Why it matters: The court rejected all of the defendant’s arguments in favor of summary judgment, ruling that the plaintiff’s 12 other TCPA lawsuits didn’t push her out of the zone of interests of the statute, that a sweepstakes entry does not establish an EBR for purposes of the statutory exemption and that a dispute of material fact existed as to whether the plaintiff qualified as a residential subscriber.



pursuant to New York DR 2-101(f)

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