Something about December always makes me nostalgic. Maybe its the short days, the cold nights and the warm drinks but I always fancy a walk or two down memory lane this time of year.

The recent decision of Phan v. Agoda, Case No. 16-cv-07243, 2018 WL 6591800 (N.D. Cal. Dec. 13, 2018) affords just such an opportunity because it relies so heavily on a victory I delivered a few years back in one of my favorite cases of all time.

The issue is both simple and recurring– as part of a registration process a company sends a text to a consumer to help facilitate the transaction. The text invariably draws the consumer’s attention to the texter’s website, app, phone number, brand, etc. So the text recipient sues claiming that the text is at least partially telemarketing (the dreaded dual-pupose call) and not merely transactional, and demands to represent a class of all similarly situated persons at $500.00 per text.

That was just the situation faced in Phan. There the Plaintiff booked a hotel with the Defendant (a travel agency) using the Defendant’s website. Once the room was booked the Defendant sent the following text: ““Good news! Your Agoda booking [number] is confirmed. Manage your booking with our free app http://app-agoda.com/GetTheApp.”

Plaintiff sued contending that the text was telemarketing and hence written express consent was required (and not obtained.) Defendant countered that the text was merely transactional in nature and not telemarketing at all.

This reminds me of one of those old This Week In Baseball “You Make the Call” Segments. (Again, December. Nostalgia.)  What say you? Permitted transactional message or telemarketing?

Well, the Defendant just had to find out. Waiving the protections of one way intervention in this putative class action, the Defendant boldly filed a summary judgment motion challenging the critical classwide substantive issue pre-certification. (Meaning that a win is only binding against the named Plaintiff and not the class, but a loss would likely have had classwide impact if the case were later certified.) *Gulp*

But the gamble paid off. The Court granted the Defendant’s motion relying in large part on my old case of Aderhold v. Car2go N.A., LLC (Aderhold I), No. C13-489-RAJ, 2014 WL 794802, at *1 (W.D. Wash. Feb. 27, 2014). Relying on Aderhold, the court derives the rule that a message is not telemarketing where the “message contain[ed] no content encouraging purchase of [the defendant’s] services” and was “directed instead to completing the registration process.”

The Aderhold rule follows neatly from the FCC’s earlier determination that ” messages ‘whose purpose is to facilitate, complete, or confirm a commercial transaction that the recipient has previously agreed to enter into with the sender are not advertisements.” See In re Rules & Regs. Implementing the Tel. Consum. Prot. Act of 1991, 21 FCC Rcd. 3787, 3812 ¶ 49 (Apr. 6, 2006)). (Where do you think I came up with the argument in the first place?)

Looking at the facts before it, the Phan court determined that “the context and the content of the message” demonstrate it was transactional in nature. As to the context, “these messages were sent as part of an ongoing business transaction between Agoda and Phan.” In the Court’s view the transaction was not the “booking” of the trip–it was the trip itself. As the Court puts it: “his transactional relationship with Agoda as to each booking continued through the time when he completed his travel.”

The Court also finds that the “plain language” of the text “is limited to (1) confirming the booking (a purpose no court cited by Phan has found constitutes advertising or telemarketing); and (2) encouraging Phan to “manage [his] booking”. Phan at *7. And these are transactional purposes, not telemarketing.

The ruling in Phan is interesting but somewhat old hat these days–semi-promotional messages are commonly found to be transactional messages these days where the text is initiating by virture of a business transaction with the call recipient. See e.g. Mackinnon v. Hof’s Hut Restaurants, Inc., No. 2:17-cv-01456-JAM-DB, 2017 WL 5754308 (E.D. Cal. Nov. 28, 2017). But I can assure you the issue was very much cutting edge when I briefed it up in Seattle all those years ago in Aderhold. I was proud of the win at the time and I remain proud that the decision was later affirmed by the Ninth Circuit and continues to stand the test of time today.

Nonetheless, much like the doctrine of “human intervention” the line between “transactional” and “telemarketing” text messages remains somewhat in the eye of the beholder. Notice in Phan that the court took a broad view of the term “transaction.” While the court determined that the entire trip was the transaction another reviewing court could reasonably conclude that the “transaction” was merely the booking process–or at least leave it to a jury to decide. Similarly, the content of the message might have directed use of an app to manage the reservation, but since when is content alone determinative of a sender’s intent? Texters should always be cautious about sending texts promoting branded apps hawking additional goods and services as part of a sterile registration process. There is a fine and shifting line between permitted transactional messaging and impermisisble dual-purpose marketing-via-registration so… watch out. It all turned out ok for the Defendant in the Phan matter, but you should seek good counsel anytime you’re planning to role out a registration process that gets close to that TCPA telemarketing livewire.