Nobody likes going to jury duty, but being part of a class action lawsuit may not be so bad. That’s because “the class” or persons affected by illegal conduct stand to benefit from one or several persons’ efforts to sue on behalf of the group.
According to court documents from the Northern District of Illinois, Easter Division, as many as 500,000 people stand to gain $1,500 for each unwanted text message received from Yahoo! Messenger, thanks to a 68-year-old woman named Rachel Johnson.
And that’s no small chunk of change for Yahoo!, which may lose an estimated $750 million if the class action suit goes through. So far, the forecast doesn’t look good for the online messaging service.
Telephone Consumer Protection Act (TCPA)
According to protections outlined in the TCPA, Yahoo! unlawfully sent Welcome Messages to the plaintiff after she received a personalized message to her cell phone through a feature called Mobile to SMS Messenger Service. This particular feature converts a Yahoo! user’s online text into a mobile message—the process is also called PC2SMS.
After Johnson received the first personalized message regarding a loan, a follow up message was received welcoming her to Yahoo! Massager. Johnson claims she never gave consent to Yahoo! to communicate with her via text, nor did she sign the company’s terms of service agreement.
Yahoo! told Judge Manish Shah that the plaintiff had, at some point, signed up for one of Yahoo!’s smartphone apps or services, which would have satisfied the terms and conditions required under TCPA. This argument however was “a shot in the dark,” according to Judge Shah, who has ruled that the case may proceed.
A Shot in the Dark
Yahoo! definitely erred in this case—mostly because its primary argument assumed one piece of information: 68-year-old Johnson must, in fact, have downloaded a Yahoo! app or service to her phone prior to the incident.
The plaintiff however, did not have a smartphone at the time, and instead had a flip phone incapable of downloading applications from the Internet. Looks like grandma’s resistance to new technology is finally paying off!
Concerns over what’s called an “intermediary” were raised in this case and may set some unique precedence for similar lawsuits in the future.
According to court documents, Johnson never signed any terms and conditions with Yahoo!; she did however fill out an online application for a personal loan at CashCall.com. Within the promissory notes of the loan application, Johnson consented to receive phone calls and text messages from an automatic dialing system. Yahoo! argued that the first personalized message granted prior express consent—in this case, CashCall.com is the intermediary.
According to previous cases, intermediary consent has two requirements: 1) consent given by the recipient to an intermediary, and 2) consent conveyed by the intermediary to the sender. Yahoo! was unable to satisfy these requirements, and the intermediary argument fell short in this case.
But that doesn’t mean we won’t see more of this shady, backdoor communication. In fact, using this intermediary argument to defend spam and unsolicited text messages could be a slippery slope that sidesteps most of the TCPA entirely.
Johnson and her class of some 500,000 people are on their way to proving a huge point in the mobile marketing industry; but the industry moves fast and will likely use this court example to ensure the back door stays open.