Bradley VAN PATTEN, an individual, on behalf of himself and all others similarly situated, Plaintiff-Appellant, v. VERTICAL FITNESS GROUP, LLC, a limited liability company; Advecor, Inc., a California corporation, Defendants-Appellees.
No. 14-55980
United States Court of Appeals, Ninth Circuit.
January 30, 2017
847 F.3d 1037
Argued and Submitted May 4, 2016, Pasadena, California
Alexander Papaefthimiou (argued), Law Office of Alexander E. Papaefthimiou, Camarillo, California; Gregory M. Harrison, Gregory M. Harrison APC, San Diego, California; for Defendant-Appellee Advecor, Inc.
Brian Melendez, Dykema Gossett PLLC, Minneapolis, Minnesota, for Amicus Curiae ACA International.
Before: WILLIAM A. FLETCHER and RONALD M. GOULD, Circuit Judges, and IVAN L.R. LEMELLE,* District Judge.
OPINION
GOULD, Circuit Judge:
This is a consumer protection case arising from text messages about a gym membership. The parties dispute the scope of the consumer‘s consent to being contacted after he gave his cell phone number while signing up for a gym membership, and whether he revoked his consent when he cancelled the membership. For purposes of the Telephone Consumer Protection Act of 1991 (TCPA), we hold that the scope of a consumer‘s consent depends on the transactional context in which it is given. The call or text message must be based on the circumstance in which the consumer gave his or her number. The consumer may revoke his or her consent but in that case must clearly express that he or she does not want to receive the messages or calls.
For the reasons that follow, we conclude that Plaintiff-Appellant Bradley Van Patten gave prior express consent to receive the text messages at issue, and did not effectively revoke his consent, hence dooming his TCPA claim. Also, as for his claims under California law asserting violations of
I
On March 21, 2009, Plaintiff-Appellant Bradley Van Patten visited a Gold‘s Gym franchise in Green Bay, Wisconsin to obtain information about a gym membership. During the visit, Van Patten submitted a desk courtesy card to the gym, wherein he wrote his demographic, financial, and contact information to determine whether he was pre-qualified to become a member. In this data Van Patten listed his cell phone number as his contact number.
Van Patten then met with the gym‘s manager, an employee of Defendant-Appellee Vertical Fitness Group, LLC, to discuss the possibility of a membership. During this conversation, the manager filled out a Gold‘s Gym Membership Agreement on behalf of Van Patten, which Van Patten signed. The manager wrote Van Patten‘s cell phone number in the phone number field. Within three days of opening his gym membership, Van Patten called Gold‘s Gym to cancel his membership. Van Patten moved to California in the summer of 2009, but he kept his Wisconsin cell phone number.
Vertical Fitness owned or managed several of the Gold‘s Gym franchises. Although Vertical Fitness did not own the gym Van Patten joined, it operated and managed the gym. In the spring of 2012, many of the Gold‘s Gym franchises in Wisconsin and Minnesota, including the gym that Van Patten had joined, ended their franchise relationships with Gold‘s Gym and became “Xperience Fitness” gyms.
After the brand change, Vertical Fitness turned to its marketing partner, Defendant-Appellee Advecor, Inc., to help announce the gym‘s brand change to current and former gym members and invite members to return. One such announcement was made via text messages. Vertical Fitness gave the phone numbers of former or inactive gym members to Advecor, and Advecor sent the text messages. Van Patten received his first text message on May 14, 2012. The message read:
Golds [sic] Gym is now Xperience Fitness. Come back for $9.99/mo, no commitment. Enter for a chance to win a Nissan Xterra! Visit Myxperiencefitness.com/giveaway
He received a similar text on June 25, 2012.
Van Patten filed a putative class action lawsuit arising out of the text messages on June 28, 2012. He alleged that the unauthorized text messages Defendants sent “caused consumers actual harm,” including “the aggravation that necessarily accompanies wireless spam” and that consumers “pay their cell phone service providers for the receipt of such wireless spam.” Van Patten asserted three causes of action: (1) violation of the Telephone Consumer Protection Act of 1991,
II
On appeal, Van Patten argues that the district court erred by granting Defendants’ motions for summary judgment on all three of his claims. We have jurisdiction under
We address each of Van Patten‘s claims in turn.
A. The Telephone Consumer Protection Act of 1991
The TCPA makes it “unlawful for any person within the United States ... to use any telephone facsimile machine, computer, or other device to send, to a telephone facsimile machine, an unsolicited advertisement....”
1. Article III Standing
Before turning to the merits of Van Patten‘s TCPA claim, we first address whether Van Patten has standing under Article III of the Constitution.2 Article III limits federal judicial power to “Cases” and “Controversies,”
The Supreme Court most recently addressed the concrete injury requirement of standing in Spokeo v. Robins. The Court reiterated that “Article III standing requires a concrete injury even in the context of a statutory violation,” and that a plaintiff does not “automatically satisf[y] the injury-in-fact requirement whenever a statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right.” Id. at 1549. In Spokeo, the plaintiff alleged violations of the Fair Credit Reporting Act (FCRA), based on a website‘s publication of inaccurate consumer information regarding the plaintiff‘s age, marital status, educational background, and other demographic information. Id. at 1546. The FCRA sets procedural requirements for consumer reporting agencies to ensure that credit reporting is fair and accurate. See
Here, Defendants argue that Van Patten did not establish a concrete injury-in-fact necessary to pursue his TCPA claim in light of Spokeo. We disagree.
As the Supreme Court explained in Spokeo, “both history and the judgment of
The TCPA establishes the substantive right to be free from certain types of phone calls and texts absent consumer consent. Congress identified unsolicited contact as a concrete harm, and gave consumers a means to redress this harm. We recognize that Congress has some permissible role in elevating concrete, de facto injuries previously inadequate in law “to the status of legally cognizable injuries.” Spokeo, 136 S. Ct. at 1549 (quoting Lujan, 504 U.S. at 578). We defer in part to Congress‘s judgment, “because Congress is well positioned to identify intangible harms that meet minimum Article III requirements.” Id. We also recognize that “Congress’ role in identifying and elevating intangible harms does not mean that a plaintiff automatically satisfies the injury-in-fact requirement whenever a statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right.” Id.
Congress aimed to curb telemarketing calls to which consumers did not consent by prohibiting such conduct and creating a statutory scheme giving damages if that prohibition was violated. Unlike in Spokeo, where a violation of a procedural requirement minimizing reporting inaccuracy may not cause actual harm or present any material risk of harm, see id. at 1550, the telemarketing text messages at issue here, absent consent, present the precise harm and infringe the same privacy interests Congress sought to protect in enacting the TCPA. Unsolicited telemarketing phone calls or text messages, by their nature, invade the privacy and disturb the solitude of their recipients. A plaintiff alleging a violation under the TCPA “need not allege any additional harm beyond the one Congress has identified.” Id. at 1549 (emphasis in original). Cf. Gomez v. Campbell-Ewald Co., 577 U.S. 153, 136 S. Ct. 663, 672, 193 L. Ed. 2d 571 (2016) (affirming that “the District Court retained jurisdiction to adjudicate Gomez‘s [TCPA] complaint.“).
We hold that Van Patten alleged a concrete injury in fact sufficient to confer Article III standing.
2. Prior Express Consent
The parties do not dispute that Defendants sent Van Patten text messages using an automatic telephone dialing system; we need only assess whether Van Patten gave prior express consent. Van Patten contends that the district court erred by granting Defendants’ motion for
Express consent is not an element of a plaintiff‘s prima facie case but is an affirmative defense for which the defendant bears the burden of proof.3 See In the Matter of Rules & Regulations Implementing the Tel. Consumer Prot. Act of 1991, 23 F.C.C. Rcd. 559, 565 (Jan. 4, 2008) (the “2008 Order“) (“[W]e conclude that the creditor should be responsible for demonstrating that the consumer provided prior express consent.... Should a question arise as to whether express consent was provided, the burden will be on the creditor to show it obtained the necessary prior express consent.“); see also Grant v. Capital Mgmt. Servs., L.P., 449 Fed. Appx. 598, 600 n.1 (9th Cir. 2011) (“‘[E]xpress consent’ is not an element of a TCPA plaintiff‘s prima facie case, but rather is an affirmative defense for which the defendant bears the burden of proof.“). The district court correctly stated that prior express consent is a complete defense to Van Patten‘s TCPA claim. Van Patten v. Vertical Fitness Grp., LLC, 22 F. Supp. 3d 1069, 1073 (S.D. Cal. 2014). We agree and next address whether there was prior express consent that was effective here as a defense to the text messages that were sent.
Because the TCPA does not define the phrase “prior express consent,” we turn to the FCC‘s Orders and Rulings, which interpret and clarify the term. Defendants rely on In re Rules & Regulations Implementing the Telephone Consumer Protection Act of 1991, 7 F.C.C. Rcd. 8752 (Oct. 16, 1992) (the “1992 Order“) and stress one sentence in particular: “[P]ersons who knowingly release their phone numbers have in effect given their invitation or permission to be called at the number which they have given, absent instructions to the contrary.” 7 F.C.C. Rcd. at 8769. Emphasizing this language, Defendants argue that Van Patten gave “prior express consent” to being contacted at his cellular telephone number by providing that number in connection with his application for a gym membership.
We do not question, in this appeal from an order of the district court, the validity of the FCC‘s interpretation of “prior express consent.” See Mais v. Gulf Coast Collection Bureau, Inc., 768 F.3d 1110, 1119-21 (11th Cir. 2014); U.S. W. Commc‘ns, Inc. v. Jennings, 304 F.3d 950, 958 n.2 (9th Cir. 2002). We read the 1992 Order in a way that harmonizes with the TCPA‘s text and purpose, as well as the FCC‘s other orders and rulings. In our view, an effective consent is one that relates to the same subject matter as is
The TCPA was created in response to the ever increasing consumer complaints regarding telemarketing calls. “The purpose and history of the TCPA indicate that Congress was trying to prohibit the use of [automatic dialing] to communicate with others by telephone in a manner that would be an invasion of privacy.” Satterfield, 569 F.3d at 954. Taking into account the statutory language that prior consent must be “express” and the TCPA‘s legislative history, we do not read the 1992 Order to mean that the FCC has determined that providing a phone number in itself means that the consumer has expressly consented to contact for any purpose whatsoever. Instead, the consent must be considered to relate to the type of transaction that evoked it.
To aid the FCC‘s interpretation of “prior express consent” in its 1992 Order, the FCC cited a House of Representatives report on the TCPA, which stated that when people provide their telephone numbers, “the called party has in essence requested the contact by providing the caller with their telephone number for use in normal business communications.” 7 F.C.C. Rcd. at 8769 n.57 (quoting H.R. Rep. No. 102-317 at 13) (emphasis added). This supports that a consumer consents to contact for transaction-related communications when the consumer provides his or her phone number to the caller; it does not support the view, argued by Defendants, that the consumer consents to any and all contact.
The FCC‘s 2008 Order interpreting prior express consent also indicates a more narrow view than assuming that giving a phone number alone amounts to consent to receive calls or texts at that number irrespective of purpose. In its 2008 Order, the FCC was asked by a trade association to rule on whether a creditor has permission to call a debtor. See 2008 Order, 23 F.C.C. Rcd. at 563. The FCC “conclude[d] that the provision of a cell phone number to a creditor, e.g., as part of a credit application, reasonably evidences prior express consent by the cell phone subscriber to be contacted at that number regarding the debt.” Id. at 564 (second emphasis added). The FCC cited to the legislative history of the TCPA and the House Report‘s exception for “normal business communications.” Id. The 2008 Order went on to state that giving a contact phone number is not prior express consent for any contact, instead “prior express consent is deemed to be granted only if the wireless number was provided by the consumer to the creditor, and that such number was provided during the transaction resulted in the debt owed.” Id. at 564-65.
FCC orders that took effect after the text messages at issue in this case further explain the FCC‘s interpretation of “prior express consent.” In 2012, the FCC imposed further restrictions on telemarketing calls and required prior express written consent for texts and calls that “include[] or introduce[] an advertisement” or “constitute[] telemarketing.” See
A 2014 FCC ruling on the scope of a consumer‘s consent also informs our understanding of the FCC‘s interpretation of prior express consent. The ruling addressed whether a consumer‘s consent in joining a text-based social group constitutes prior express consent to receive administrative texts confirming the consumer‘s interest in joining the group. See In re GroupMe, Inc./Skype Communications S.A.R.L. Petition for Expedited Declaratory Ruling, 29 F.C.C. Rcd. 3442, 3443 (Mar. 27, 2014). Reasoning that “Congress did not expect the TCPA to be a barrier to normal, expected, and desired business communications,” id. at 3444, the FCC considered the GroupMe administrative texts “to be normal business communications,” id. at 3445. The FCC held that
[t]o the extent that a consumer, in the absence of instructions to the contrary, agrees to participate in a GroupMe group, agrees to receive associated calls and texts, and provides his or her wireless telephone number to the group organizer for that purpose, we interpret that as encompassing consent for GroupMe to send certain administrative texts that relate to the operation of that GroupMe group.
Id. at 3446. The FCC reasoned that the consumer gave permission to be contacted at that number in connection with that particular GroupMe texting group. Id.
We conclude that the FCC has established no rule that a consumer who gives a phone number to a company has consented to be contacted for any reason. Instead, FCC orders and rulings show that the transactional context matters in determining the scope of a consumer‘s consent to contact.
In this case, we hold that as a matter of law Van Patten gave prior express consent to receive Defendants’ text messages. He gave his cellular telephone number for the purpose of a gym membership contract with a Gold‘s Gym franchised gym. Van Patten giving his phone number for the purpose of his gym membership agreement did not amount to consent to be contacted for all purposes. Under the logic of the FCC‘s orders, Van Patten gave his consent to being contacted about some things, such as follow-up questions about his gym membership application, but not to all communications. The scope of his consent included the text messages’ invitation to “come back” and reactivate his gym membership. The text messages at issue here were part of a campaign to get former and inactive gym members to return, and thus related to the reason Van Patten gave his number in the first place, to apply for a gym membership.
The parties also dispute whether Van Patten gave prior express consent to be contacted by Vertical Fitness. Defendants contend that Van Patten gave Vertical Fitness prior express consent because the particular gym he joined did not change ownership, Vertical Fitness remained the operator, and only the brand identity changed from Gold‘s Gym to Xperience Fitness. From when Van Patten initially joined the gym to when the text messages were sent, ownership and operation of the gym did not change. That the brand affiliation changed does not affect that the gym was owned and operated by the same entities.
3. Revocation of Prior Express Consent
Van Patten further argues that even if he gave prior express consent, by
We first address whether consent is revocable under the TCPA. The TCPA does not explicitly grant consumers the right to revoke their prior express consent. See
Courts have given three main reasons for concluding that consumers may revoke their consent under the TCPA. First, such a holding is consistent with the common law principle that consent is revocable. See Gager, 727 F.3d at 270. Courts have found that Congress did not depart from the common law understanding of consent, and at common law, consent may be withdrawn. Id. (citing Neder v. United States, 527 U.S. 1, 21 (1999) (“[W]here Congress uses terms that have accumulated settled meaning under ... the common law, a court must infer, unless the statute otherwise dictates, that Congress means to incorporate the established meaning of these terms.“)).
Second, allowing consumers to revoke their prior consent aligns with the purpose of the TCPA. Id. at 271; Osorio, 746 F.3d at 1255. Because the TCPA is a remedial statute intended to protect consumers from unwanted automated telephone calls and messages, it should be construed in accordance with that purpose. See Gager, 727 F.3d at 271. Allowing consent to be revoked is consistent with that purpose.
Third, the FCC has stated persuasive guidance implying that consumers may revoke their consent. In a declaratory ruling in SoundBite Communications, Inc., 27 F.C.C. Rcd. 15391, the FCC stated that “requests to stop receiving voice calls ... can be confirmed during the same call in which a consumer has expressed a desire to opt out....” 2012 Order, 27 F.C.C. Rcd. at 15398 ¶ 13. The FCC stated that a consumer may revoke his or her prior express consent by sending an opt-out request to the sending party. Id. at 15397 ¶ 11 n.47; id. at 15398 ¶ 13. For example, a consumer may request “that no further text messages be sent.” Id. at 15394 ¶ 7. While the thrust of the SoundBite ruling explained why it is permissible to send a confirmatory opt-out message, the decision indicates that the FCC endorses the ability of consumers to revoke their prior express consent. See Gager, 727 F.3d at 271-72.
The FCC also has since clarified that consumers may revoke consent in its July 2015 Declaratory Ruling and Order. See In re Rules & Regulations Implementing the Telephone Consumer Protection Act of 1991, 30 F.C.C. Rcd. 7961 (July 10, 2015) (the “2015 Order“). The 2015 Order stressed that consumers “have a right to revoke consent, using any reasonable method including orally or in writing.” Id. at 7996 ¶ 64. The FCC also specified ways that a consumer may revoke a call: “by way of a consumer-initiated call, directly in response to a call initiated or made by a
Concluding that the reasoning of our sister circuits is persuasive and the FCC‘s interpretation of the TCPA is reasonable, we agree that the TCPA permits consumers to revoke their prior express consent to be contacted by telephone autodialing systems.
We next address whether in fact Van Patten revoked his consent. Van Patten argues that cancelling his gym membership sufficiently communicated his desire to no longer be contacted. But we conclude that because Van Patten did not clearly express his desire not to receive further text messages, he did not revoke his consent.
Revocation of consent must be clearly made and express a desire not to be called or texted. That was not done here. No evidence in the record suggests that Van Patten told Defendants to cease contacting him on his cell phone. Some ways Van Patten could have communicated his revocation include, but are not limited to, plainly telling Defendants not to contact him on his cell phone when he called to cancel his gym membership or messaging “STOP” after receiving the first text message.
Because Van Patten did not revoke his consent to be contacted, we affirm the district court‘s grant of summary judgment for Defendants on their affirmative defense that Van Patten consented to receive the text messages at issue here.
B. California Business and Professions Code § 17538.41 and § 17200
Van Patten also contends that the district court erred by granting summary judgment to Defendants on his California Business and Professions Code claims. We disagree and affirm the district court‘s grant of summary judgment on his state-based claims.
Van Patten alleges that Defendants violated
Under California law, Van Patten does not have standing to bring either of these statutory claims. Proposition 64, passed by California citizens in 2004, sets a more limited standing requirement on plaintiffs seeking relief under California‘s Unfair Competition Law and/or False Advertising Law. Plaintiffs must “(1) establish a loss or deprivation of money or property sufficient to qualify as injury in fact, i.e., economic injury, and (2) show that that economic injury was the result of, i.e., caused by, the unfair business practice or false advertising that is the gravamen of the claim.” Kwikset Corp. v. Superior Court, 51 Cal. 4th 310, 120 Cal. Rptr. 3d 741, 246 P.3d 877, 885 (2011) (emphasis in original). This economic injury requirement is “more restrictive than federal injury in fact” because it encompasses fewer kinds of injuries. Id. at 741,
Van Patten cannot prove that the text messages caused him to suffer an economic injury “which is (a) concrete and particularized ... and (b) actual or imminent, not conjectural or hypothetical.” Kwikset, 246 P.3d at 886. Although Van Patten argues that he was charged for the text messages sent by Defendants, the record shows that he paid for an unlimited text messaging plan. Under this unlimited plan, regardless of how many text messages Van Patten received during a month, he still paid the same monthly fee. Van Patten contends that he was still charged for the texts because every text message he receives under his unlimited text messaging service ultimately affects his cellular telephone provider‘s bundled pricing. His argument is that cellular companies raise the prices of their bundled plans when text message traffic increases to the point that cellular operators’ profit margins decrease too much. But this argument is hypothetical and conjectural, and Van Patten has not demonstrated that any price increase was caused by Defendants’ conduct. Van Patten has not shown and cannot demonstrate any economic injury.
Van Patten lacks standing to bring his claim under
III
We affirm the district court‘s grant of summary judgment in favor of Defendants on all claims presented.
AFFIRMED.