Shopkick Unable to Shake Text Spam Complaint — Huricks v. Shopkick
Shopkick is a rewards-based app that shoppers use on their phone while they are in-store shopping. I’m not precisely sure how it works (you get points for trying on items or walking in certain parts of the store?) but it did not seem to have crowd-buying component to it. Apparently, Shopkick allowed its users to send text messages giving their friends “points” on Shopkick and encouraging them to try the app. It’s unclear if the users must individually send such messages, or if the messages are sent out to all contacts en masse.
A recipient brought claims under the TCPA. The court initially dismissed the complaint because it failed to allege use of an automatic telephone dialing system. The amended complaint withstands a renewed motion to dismiss. The court says that plaintiffs face inherent difficulties in figuring out whether defendant uses an ATDS (plaintiff has no idea what equipment defendant may be using). Here, the allegations (uploading numbers from a contact list and sending out messages en masse) raise a possible inference that such equipment is being used. Courts have taken different approaches to this issue, with some saying that anything could be an ATDS, and with others vaguely saying that something that sends out messages in some orchestrated fashion would likely have ATDS capacity. In any event, the court denies the motion on the ATDS issue.
Shopkick also brought a motion to disqualify both plaintiffs and plaintiffs’ counsel. An earlier motion to disqualify raised the issue that the person who sent the text message and the recipient would be at odds, because Shopkick could point the finger at the end user who initiated transmission of the message, but the court’s most recent order does not mention defendant making this argument. Ultimately, the court says that adequacy of representation is more appropriately raised down the road (at the class certification stage).
It cannot be said often enough that text-based marketing is a bad idea. Don’t do it! This case illustrates how easy it is for plaintiffs to allege the elements of a TCPA violation. The message is unwanted (by definition, to a potential plaintiff, it always is). All that is left is that defendant used an auto dialer, and this case indicates that the pleading standard is a pretty low bar.
It’s unclear if this is a “refer a friend” case or if Shopkick “commandeered” the contacts, as plaintiffs allege. To the extent it’s the former, it does raise an interesting issue of whether Shopkick should be held liable for its users’ conduct of initiating messages. The answer should be no. Interestingly, Shopkick’s initial motion to disqualify raised the issue that users may have divergent interests, but I don’t think anyone seriously thinks Shopkick would try to really throw its users under the bus (i.e., seek indemnification from users).
Perhaps Shopkick thought it would be able to argue that the messages were not truly marketing messages, since they were just individual encouragement by users encouraging others to sign up? Courts have not accepted this argument. Compare the messages here with the messages in cases such as Voxernet or more recently in WhisperText (dismissing claims but granting leave to amend). At least in those cases there’s an argument to be made that the messages are sent to alert the recipient of the app so the sender and recipient can communicate via the app.
I’m somewhat sympathetic to plaintiffs here, assuming their version of the facts is accurate. However, the lawsuit is representative of a broader trend. Cases (including Satterfield v. Simon & Schuster) set a low bar for what it takes to plead a text spam complaint. (Perhaps Congress was sloppy in its initial drafting or the statute is outmoded.) A predictable torrent of lawsuits followed. There are a few cases pending winding their way through appeals and proceedings in front of the FCC that could inject some much needed common sense into text spam litigation, but my sense is that it will need a legislative fix.
Case citation: Huricks v. Shopkick, C-14-2464 MMC (N.D. Cal. Oct. 1, 2014)