Derek: Hello, everyone.
Derek Johnson with tatango.com.
Today we're doing another TCPA case review with Joe Bowser from Innovista law, home of
the TCPA Defense Force.
How you doing, Joe?
Joe: I'm doing well, Derek.
How are you?
Derek: Can't complain.
So we have another case.
This one is Edelsberg versus Vroom, V-R-O-O-M.
And Vroom looks like an automotive company.
So I'm gonna read kind of the summary here of this case and then you can fill me in if
I'm missing anything and then we can talk about, you know, why this case was brought
and what text message marketers can learn from this specific case.
Joe: Sounds great.
Derek: So let's go down here.
This was July of 2016.
So Edelsberg is a person.
That's their last name.
They posted a classified ad on Craigslist.
So he was selling his mother's 2010 Toyota Prius.
So he posted a Toyota Prius on Craigslist and it looks like from the case notes I have
here, he put his cell phone number in the ad.
So he said, "Hey, give me a call if you wanna buy this car.
Here's my cell phone."
And I'm pretty sure Craigslist says that's not the best idea but, you know, that's up
to him to do.
Joe: It's South Florida.
Derek: Yeah, exactly.
And then it looks like...I'm scrolling through.
Okay.
So two days later, a company called Vroom, V-R-O-O-M, they sent Mr. Edelsberg a single
text message in response to his online advertisement, Craigslist ad.
And that text message was sent to Mr. Edelsberg's phone.
And it essentially said, you know, "Hey, we are interested in buying your car and if you
would like to see our bid or essentially our quote, you know, click on this link."
And, you know, then if he would have clicked on the link and I don't know if he did or
not, it would go to a web page that would calculate kind of all the features and functionality
of the car, and then essentially, buy the car from him so he doesn't have to do this
whole Craigslist type stuff.
Is that pretty much kind of what's going on here?
Joe: Yeah, so he got one message.
This case is about getting one message from Vroom and the message said something like,
"Hi, this is Scott from Vroom.
We'd like to make an offer but we need more information.
Please provide it here."
And then the link would have taken him to the Vroom website where he could have given
more details about the car so that they could then make a real bona fide offer for the Prius.
Derek: Okay.
And essentially, these are the companies that then will maybe spruce up your car and then
do a better job advertising it and then they sell it to another person.
So it takes all the work out of selling your car because you just get a cash offer from
this company and it's done rather than showing your car 10 times a day to random people from
Craigslist.
So there's definitely value there.
So is this guy really that angry that he received one text message from Chris from Vroom?
Joe: I don't know that the plaintiff was necessarily angry but he was represented by four different
plaintiffs' firms and it was a class-action lawsuit.
Derek: Okay.
And explain, if I wanna bring a lawsuit, let's say I got that text message, I wanna sue Vroom,
why would I wanna make it a class-action lawsuit rather than just a regular lawsuit?
Or why wouldn't I just take it to small claims court because I can take a TCPA claim to small
claims court, right?
Joe: You can.
You can.
Derek: Okay.
Joe: Now, obviously the defendant can remove the case to federal court and the individual
plaintiff doesn't have much incentive to bring it as a class action.
If the case is successful and it settles, they may get another small fee in addition
to whatever damages the rest of the class gets for being the lead plaintiff because
they had to exchange documents, they had to get deposed.
So it's not uncommon for the lead plaintiff to get some small additional payment for the
time and trouble in being the class representative.
Derek: [inaudible 00:04:12] class action lawsuit, right?
Joe: Correct, correct.
Derek: But he's not doing the majority...the plaintiff is not doing all the work.
It's mainly the plaintiff's attorneys.
Those are the ones that have to depose people, come up with strategy.
It's not like this person is like spending every waking hour thinking about this case,
right?
He's most likely just staying at home, working and he gets a call when they need him or when
it gets settled.
Joe: Right.
So if you're driving around South Florida, you'll see billboards.
There are websites.
These plaintiffs' attorneys are looking for TCPA clients.
So they make it very easy, if you get a call that you don't want, they make it very easy
to find the attorney who will bring that case for you and then, of course, they slap class-action
allegations on top of that to try to represent typically a nationwide class that has a similar
set of fact patterns, you know, facts for that lead plaintiff.
Derek: Okay.
So in that kind of case, the plaintiff, this person, how much...because, okay, one text
message is anywhere from $500 to $1,500 depending on kind of what classification, you know,
they can actually get for that specific text message, whether it was intentional or not.
So let's just say it's $1,500.
What is, like, the normal payout for, like, one of these people that call one of these
people on a billboard and say, "Hey, you know, I've been getting text message spam," compared
to how much the attorneys make, you know, on these?
Like, I'm trying to figure out like how does the ecosystem look?
Joe: That's a fair question but the answer isn't fair.
So the plaintiffs typically get anywhere from nothing to a coupon to at the most maybe a
couple of hundred dollars.
Derek: Okay.
So you're saying, not the person, the main person in the case, the one that actually,
like, triggered the lawsuit, not that person, but all the other people that join the lawsuit,
they usually get kind of a few bucks, you know, tossed their way.
What about the person that, like, this guy that put his name on this lawsuit?
How much money does he get?
Joe: Well so he would get the same thing that the class gets, right?
So he's representing the class.
So he would get whatever pittance the rest of the class gets, or up to a couple hundred
bucks perhaps.
So he'd get whatever they'd get because he needs to be in the class for purposes of,
you know, the class certification rules.
And then he may get an extra payment of, you know, a couple thousand, upwards of $10,000
if it's a very complex case and they put in a lot of time and effort.
So he may get an extra payment but you have to work for that.
Derek: Yeah, so he's not making millions of dollars, unless maybe he's representing himself
or something.
Joe: Well, he can't bring a class action by himself because classes have to have competent
class counsel and things like that.
Derek: Okay.
So unless he was an attorney, he couldn't bring the case himself.
And a class action lawsuit requires like a law firm.
Like, it's not an easy thing to do.
There's a lot of work right?
Joe: There should be.
There should be.
Derek: To actually win a class-action lawsuit and take it.
Okay.
So it seems like, I'm kind of doing the math in my head here, the people that make the
most money, it seems like are the plaintiffs' attorneys.
Joe: Correct.
Derek: Okay.
So the plaintiffs' attorneys, they make a lot of money.
But also, they're spending a lot of time presumably on these cases than the person that brings
the case, the person that slaps their name, you know, on to this case, they will get the
exact same thing that everybody else does that was harmed and then they might get a
little extra something, something on the side for, you know...
Joe: But it would get approved by the court.
So it's not on the side.
Derek: So this isn't like backroom deals, this is, like, it's approved by the court.
But it could be, you know, $1,000 to, like, $10,000.
They're not making millions.
Joe: Not at all, not at all.
No.
The plaintiffs' attorneys are the ones who are reaching for those seven-figure attorney's
fee awards as part of the settlement kitty.
Derek: Okay, perfect.
Okay.
So now they've got all that kind of...So this was a class-action lawsuit.
And why do you have four plaintiffs' attorneys, and you said law firms, like, this was for
law firms representing this guy?
Joe: Right.
Derek: Why do you have for law firms?
Like, they're just too small and they needed help or why does that usually happen?
Joe: There are any number of reasons.
That can be one of them.
From a quick look, it did look like all of them were from South Florida but sometimes,
you know, if the plaintiff happens to be from New England, the New England attorney will
affiliate with someone from South Florida because you need a local attorney that practices
in that particular court.
So, you know, depending on the geographic location of the attorneys, those guys can
bind together, and then other times, the plaintiff may have a personal relationship with an attorney.
Some of these plaintiffs are professional plaintiffs and their particular attorney that
they may use with some regularity wants a piece of the action as it were.
So they'll put their name on the suit and then they fight over whatever they might win.
In this case, nothing.
Derek: Okay.
And sometimes, there is cases where everybody kind of wants a piece of it.
So there might be additional attorneys.
But that's not a signal of a good case or not.
It just could be a signal of just a lot of people wanting in on something.
Joe: This one was a loser.
Derek: Okay.
I'll let you say that.
So why was this a loser?
What happened?
Walk me through this.
This guy, let's hypothetically say he called the billboard, found an attorney, and he said,
"I've been harmed because I received one text message," which sounds kind of ridiculous.
And now, I could see if you receive 100 text messages, that's very annoying and definitely
I think you have a case, and, you know, there's definitely some harm that has been done.
But one text message seems a little ridiculous in my mind.
It's frustrating but it doesn't seem like it should require all this work and kind of
hassle.
So that's my personal opinion.
So he contacted the attorney.
The attorney said, "Great.
This is a case that we would like."
Maybe he brought in some of his friends.
Then he said...I guess he filed the case and then they get the class certification?
How does that work?
Take me through the timeline.
Joe: Sure.
So ordinarily, you'll need discovery to be able to get class certification because one
of the things that plaintiffs have to prove is are the elements of, the Rule 23 elements
under the Federal Rules of Civil Procedure.
So you need to show that this particular plaintiff's case will be substantially similar to everybody
else in the class's case.
So you basically need to show the judge that there is no point in having mini trials or
individual cases for each of these class members because the type of proof you're gonna offer
is the same for each one such that you'd just essentially be repeating yourself and clogging
the courts needlessly.
So when we get, you know, class cases on the defense side, we try to show that issues like
consent are gonna predominate in the type of proof that's gonna be disputed at a trial.
So if you can show that consent is gonna be one of the key issues and you have to look
at everybody's facts individually, then class certification is not appropriate.
So ordinarily, that class certification phase comes after some discovery.
But from a defense strategy perspective, if this case is a loser, you wanna get it kicked
out as soon as possible.
The first opportunity you have to do that is a motion to dismiss.
Derek: And that's after the lawsuit has been filed, right?
Joe: Correct.
Derek: Like, they file the actual lawsuit with the court.
And sometimes, there's even like a demand letter, right?
That comes sometimes even before the lawsuit where it's like, "Hey, let's settle this,
you know, before we...here's the lawsuit, but before we file it, there's an option to
settle" sometimes.
So it usually goes demand letter, then they file the lawsuit.
So now we're at the point that the lawsuit has been submitted to the court but at that
point, is it a class-action lawsuit or...?
Joe: No, no.
It's a so-called putative class action.
So the plaintiff wants it to be one and those allegations are out there and they may or
may not frame the scope of discovery depending on how the court structures the discovery
process in that case.
But it puts the defendant on notice that this plaintiff is trying to represent a class of
people who are similarly situated.
Derek: Okay.
So it's been filed with a kind of a warning or essentially or a...You know, they're letting
this company, Vroom, they're saying, "Hey, FYI, we're going to try to establish a class."
Joe: Correct.
Now that's something that the plaintiff has the burden of establishing, but at least the
defendant is on notice that this case is not just about Mr. Edelsberg, right?
It's him and those who meet whatever the definition of the class is.
Typically, it's a nationwide class going back four years of people who got the kind of message
that the plaintiff got.
Derek: Okay.
And it was interesting, you just said there that it's the plaintiff's responsibility to
show that there are other people like this guy that were also harmed, right?
Joe: Correct.
Derek: And I've heard you say in previous case reviews that it's the defendant's responsibility
for the TCPA stuff.
Is that correct?
Joe: I think we need to get more subtle and nuanced there.
What you may be thinking of is whether the defendant has to prove consent, you know,
to be able to make a particular call or send a particular message.
So consent is an affirmative defense under the TCPA which means it's the defendant's
job to prove that.
Derek: Okay.
So that's, like, Vroom, they're the defendant.
They have to actually prove...So a consumer can just come out of nowhere and say, "Hey,
you send me text message spam," and it's not the plaintiff's responsibility, the person's
responsibility to say, "And here's all the evidence that makes me believe that."
It's more on the defendant's side, the business or brand that says, "Hey, this guy's, you
know, accusing you.
You have to defend yourself now and you have to show that you didn't do this."
So it seems like a lot of onus is put on the brand unfortunately even if, you know, these,
you know, lawsuits that, you know, don't have any, you know, standing are filed against
them.
It still requires a lot of work on the brand's side to defend themselves.
Joe: Correct, yeah.
So Vroom clearly here, because it was filed as a motion for summary judgment, which is
a motion that you typically file after there's been some discovery in the case.
So they filed a motion for summary judgment, which they won, and then the two key issues
for the court were did Vroom have consent to send this message?
And then if so, what was the level of consent that was required?
Did they need prior expressed consent or prior express written consent?
Derek: Okay.
So lawsuit filed and then they did a little bit of discovery, which discovery is like
asking questions and receiving documents and seeing records and kind of understanding more
about what went on here.
Joe: Yeah.
It's essentially a cards on the table part of the case.
So you do document requests.
You do interrogatories which are questions in lay terms, depositions, right?
So where you sit down with a court reporter and the attorney asks the witnesses questions
and all of that's under oath and admissible in court.
So, yeah.
So those are the typical discovery vehicles that you will use.
Derek: So they did a little bit of that to kind of figure out...Because usually, the
original case doesn't have much info in it about actually what happened.
It was this person just said, "Hey, I received this text message from Vroom.
Here it is.
I don't know why I received it, where I received it from."
That's where kind of the questions and the depositions, that's where they can get some
of that info from.
Joe: Right.
Yeah, it's a rare case to win on a motion to dismiss.
It's not unheard of.
It's possible but you essentially need the plaintiff to plead themself out of court because
on a motion to dismiss, the court has to essentially take everything that the plaintiff says in
the complaint as true.
And since a TCPA defendant has to prove consent, if consent is your key defense, like it was
here for Vroom, you can't always just rely on the plaintiff's allegations because obviously
here, this plaintiff said "I didn't consent to get your messages, Vroom."
Derek: Okay.
So after all that, then Vroom filed a motion to dismiss.
Is that correct?
Joe: They filed a motion for summary judgment.
The motion to dismiss is the one at the first stages of the case where you say...You know,
let's just pretend like everything you're saying is true.
You still lose as a matter of law, right?
So fine, everything you say is true in your complaint.
Let's just pretend like it is.
Judge, you still need to say "I win," because they don't even...what's called state a claim.
Like, these facts, if true, still can never cause the court to give the plaintiff a win.
Derek: So that's like a throw it out real quick, like, this is a very frivolous lawsuit
because everything here, if they say is true, that doesn't violate any laws.
Like, there's nothing here to even discuss going forward.
Joe: Right.
So in the TCPA cases that we see win on a motion to dismiss, we've talked about one
of those before where the plaintiff alleges that they gave consent to a brand.
We talked about that Edible Arrangements case.
So that plaintiff alleged that they gave consent and then they gave the allegations of how
they allegedly revoked it.
But because the court found that that plaintiff didn't even revoke consent, the consent piece
was already in the complaint.
So the court didn't really need to look outside of the plaintiff's own allegations.
But here...
Derek: And that's a motion to dismiss.
That's kicking it out.
If you don't do the motion to dismiss, then you do some kind of fact-finding.
And then you said it was a motion to...
Joe: Motion for summary judgment.
Derek: Summary judgment that's after there has been a little more info gathered.
Is it kind of almost the same as motion to dismiss but after you've kind of done some
research a little more?
Joe: Well, it's the same idea insofar as you're asking the court to rule.
What's different and what's important or to distinguish in a motion for summary judgment
is that there are facts on the table now that have come in into the record from outside
of the complaint.
But what you need to prove to the court is that the facts that matter, the so-called
material facts, aren't in dispute.
And so plaintiffs might try to say, "Oh, there's this, you know, metaphysical doubt about a
particular fact."
The court's not gonna allow you to just throw things on the wall and say, you know, "aliens
might have done that," or something like that, right?
But there are facts that are in front of the court that matter that weren't in the complaint
but are now admissible evidence and they're not in dispute.
So basically, what you're telling the court is, "Hey, court, we don't need a trial because
what juries do is decide the facts.
But because the facts aren't disputed, here are the facts, and now you get to tell us
who wins as a matter of law."
And since Vroom was saying "I win as a matter of law," they filed a motion for summary judgment
and clearly in this case, the court agreed with Vroom that the facts that matter aren't
in dispute, and sure, they can come from outside the complaint.
But, like, let's take it as true that these are the facts that matter, and in light of
this record, there is no reasonable juror who could do anything but say that Vroom wins
as a matter of law.
Derek: And you say they come together and they say that both things like, "Yes, this
person received text message, that is, Edelsberg says that he received a text message, and
Vroom said yes they sent the text message.
Everybody agrees that this was what happened."
So that's kind of where they get to that stage.
But then they say there's no debate anymore about, like, what happened.
Everybody's on the same page.
Then they can say, "Well, based on being everybody on the same page with all the facts on the
table, you know, based on the law, this is not a case."
Joe: Correct, right.
Because it's the judge's job to apply the law.
So the judge's job is to apply the law to the undisputed facts.
So if the facts that matter aren't disputed, it's now ripe for the judge to make a legal
decision.
You know, it's time to call balls or strikes.
Now, in this case, it turns out that the plaintiff argued that they should get more discovery
because they wanted, you know, more information about some issues that the court agreed were
independent and collateral of the facts that matter.
Derek: And that the plaintiff is this person, right, the Edelsberg?
Joe: Correct.
Edelsberg.
Derek: And so they're just trying to cause more work for Vroom and for racking up attorney
fees, you know, because Vroom has to defend themselves no matter what, you know, they
throw at them.
Joe: Right.
There's always a judgment call from the defendant's perspective about when you file that summary
judgment motion.
In this case, it looks like they filed it relatively early.
And, you know, we will often do that, but the risk, and we've talked about one in the
Seventh Circuit that came out recently.
The Seventh Circuit ruled that the trial court granted summary judgment to the defendant
too soon because the plaintiff didn't have an adequate opportunity to get the kind of
discovery that he might need to test the defendant's story.
Derek: So it's a lot of strategy and kind of, you know, inside baseball that's going
on here.
It's not as cut as dry, you know, as you see on TV usually.
Joe: Right.
So sometimes, the defendant's perspective is, "Let's make this difficult.
Let's make these guys work," right?
Derek: Because they might then settle, right?
Because they'll look at it and go, "This is gonna be a six-month thing.
Maybe there's, you know, a cash settlement that we could just pay him to go away."
Joe: Correct.
But you wanna get the win, right?
Like, Vroom has an incentive to get a published decision that validates its business practice.
Derek: Oh, okay.
Joe: That's not worthless.
Derek: That's interesting.
So there's value in actually winning a TCPA case other than just not being sued, like
losing a billion dollars, essentially.
Joe: Correct.
I mean it's one of the things that we talk about, you know, with our clients.
You know, sure, you know, you can often get a nuisance value settlement but what's the
value to the company of getting a published decision that validates your business practice?
Derek: Interesting.
Joe: And some clients say that it's in our interests to, you know, commit the resources
necessary so that we minimize this risk going forward, right?
Or, "We're testing this model out.
We wanna deploy it but before we really leverage it fully, let's use this as a test case before
our exposure is 10X, 100X, and really roll out this campaign."
So some defendants will rationally choose to go and test the waters.
Because once you get a win, the plaintiffs' attorneys will be reluctant to try again,
right?
Derek: Yeah, and that's what I was gonna say.
So if Vroom continues this process, and maybe they take it to a different scale, it would
be very unlikely if they're doing exactly the same thing another attorney to be like,
"Ooh, there's money to be made here."
Most likely not because they look it and they go, "Wow, some other people have already tried
this and it's been thrown out.
You know, maybe let's go find other things to, you know, file."
Joe: I don't know about very unlikely.
I mean, plaintiff's attorneys, you can't control them.
They're gonna sue who they wanna sue but it's certainly a very good weapon to have in your
arsenal.
Derek: Do you see that very much, like a case like this and then they'll try again?
Joe: Oh, sure.
Derek: Okay.
So it is common but it's not...It does help a business.
Joe: It often depends on the kind of defendant, right?
So financial institutions will be repeat litigants because there are often other claims in addition
to the TCPA claims, right?
So banks, for example, will get Fair Debt Collection Practices Act claims, FCRA claims,
the Fair Credit Reporting Act claims, and then they'll throw the TCPA stuff in there
as well.
So Vroom is probably really only exposed on the TCPA side for this kind of business practice.
Derek: Like, it's a narrow use case there.
It's one little thing that they're texting out.
They're not texting out like HIPAA compliant type stuff or, you know, debt collection.
So it is very unlikely that attorneys would keep trying, you know, to sue Vroom under
this specific use case.
Joe: Right.
Bank of America is probably still gonna call people when you don't pay your bills, right?
Like, they're gonna keep calling people.
But Vroom, you know, they wanna get this practice validated.
And so there is some value to them I'm sure in getting a court to say, "No, no.
Like, what you're doing doesn't violate the TCPA."
Derek: Yep, "you're good to go.
Keep doing what you're doing."
Joe: Now, you know, obviously, this is one trial court.
Until the Supreme Court rules on something, it's really not the law of the land.
So it's good as far as it goes.
Derek: Explain that difference there.
Are you saying that, like, wherever they're located, Vroom, it might not be okay, or there
might be, you know, a different rule of law in another state or a different part of the
country until it goes to the Supreme Court, then it blankets everything.
Joe: Correct.
So, you know, this case came out of the Southern District of Florida.
Frankly, this court can change its mind on similar facts.
Another judge, I'm not saying this was a close case, but another judge could go a different
direction.
A part of this case, and we may get there, [inaudible 00:26:43] in this episode, this
particular message was a so-called dual purpose message, was it an informational message and
a telemarketing message, right?
And this is an area of TCPA law that is fairly direct.
So you can definitely find judges that have different opinions on where that line falls
between informational on the one hand and promotional on the other.
So now, if this case got appealed to the Eleventh Circuit, which is the appellate court that
would oversee this particular trial court, if they affirmed, then that would be the law
of the land for that circuit.
But you could probably find another circuit that might come out a different direction.
Derek: And a circuit is like a different area of the country, right?
Joe: Correct, correct.
There are circuits...
Derek: Okay.
So it's like over here, they've made a decision...
Joe: You're in the Ninth Circuit in Seattle.
This is in the Eleventh Circuit here in the southeast.
Derek: Okay, so again, and this is just how crazy that I think the TCPA is is it's not
cut and dry all the time.
Like, I think people think you put, you know...all you have to do is just put a few disclosures
on your website when you're opting people in.
The TCPA can really vary, or the way that the courts interpret it, based on where you're
located.
Joe: It can.
It can, right?
So yeah, the outcomes can be rather different based on which judge gets the case, which
court gets the case.
So, you know, for example, when we're preparing contracts for our clients, you know, we'll
often make choice of law selections that speak to these issues so that if we go to arbitration
or we go to court, we feel like we're positioning our clients in the best possible framework,
you know, from the TCPA perspective.
Derek: So if that client, let's say, has, you know, 40 different, you know, headquarter
locations all through the United States, you might look at each individual state and say,
"Well, if somebody, you know, agrees and consents to receive text messages, we're gonna make
them or try to make them agree to consent and arbitration or, you know, kind of going
to court in a certain place."
Joe: Well, the location is one thing but the choice of law is the other.
So location is more forum-oriented and that, you know, can be wherever the client is based,
whatever.
But the choice of law is so you can have an arbitration in Texas but you can tell the
arbitrator, "We want you to apply New York law," for example.
Derek: Oh, okay.
I didn't even know that.
Joe: So the Texas arbitrator can apply New York law and then you can also say "but if
the claim arises out of or relates to the TCPA, we want you to apply Ninth Circuit and
Second Circuit case law and Eleventh Circuit case law," because the Eleventh Circuit has
some TCPA law that's not terribly helpful for callers, at least as it relates to revocation
of consent and some other issues.
Derek: Man, it feels like I'm always getting like a legal education whenever I talk to
you.
And I think this goes to the point that the TCPA is complex.
It is not something that, you know, a software provider or even Vroom should try to figure
out themselves, or a brand.
It always requires a third party, a TCPA attorney, to really look at it and go through all of
this stuff.
It is not a just, you know, "Okay, we're doing a double opt-in."
It's where are you doing the double opt-in?
The law, the location, all of these things come into play.
Now, for this specific example, what was...How were they able to get it not dismissed, right?
What was the term?
Joe: The case was dismissed.
The vernacular is a little confusing sometimes, but the case was dismissed.
Derek: There was two things that the judge said, "Well, based on the law, this doesn't
have any merit.
It shouldn't go to, you know, the jury."
So what were those two things?
And then what were those two things and how those apply to text message marketers.
Like, how can they use them or what significance does it have?
Joe: Sure.
So in this case, you know, the first key question was what was the level of consent that Vroom
needed to have to be able to send this particular message, right?
And so that required the court to look at what was the purpose of the message.
And the purpose of the message here was to make an offer to Mr. Edelsberg.
So he was saying, "Oh, you're a business, right?
At the end of the day, you wanna sell stuff, you wanna sell cars."
And Vroom said, "Fair point, but that's not why I texted you.
I texted you so you could give me information so that I could make you an offer to buy your
car."
Derek: Because in the Craigslist ad, I bet he said, "Call me to make an offer."
So they were kind of following his instructions almost.
Is that what you're saying?
Joe: Exactly.
So he was deposed and he admitted in his deposition that if Vroom had offered top dollar, he would
have been fine to sell Vroom his car.
Derek: So it literally is just like me text messaging him being, and I would, because
I don't like calling people, I'd be like, "Hey, I'm interested, you know, in your car."
So he thought there might be maybe some money or something behind the fact that it was a
business that did it and maybe he saw one of these billboards, you know, that these
TCPA attorneys put up.
So he thought maybe there was...Because it almost seems like you wouldn't even be angry
at somebody text messaging you giving you an offer for your car, even if it was not
a good offer, I would say, "Well, okay, whatever," and move on.
Joe: Right.
So he didn't get an offer per se, right?
They sent him a link to the website because they wanted more information, right?
His Craigslist ad apparently wasn't terribly illuminating.
It said it was a clean car and it had so many miles.
Maybe they wanted to know what trim it was, you know.
I don't own a Prius, but obviously, there are details about a new car that any purchaser
might wanna know about, right?
Were there past accidents?
Who knows.
Derek: Okay.
So he was frustrated maybe because he was like, "You know, this is a business text message
me.
They really don't have an offer yet, I had to click on the link and fill out all this
stuff."
And he looks at $500, $1,500 per text message and he says, "Oh, interesting."
But the court, they said that...
Joe: They said that he gave them consent to text, that particular text.
Derek: And he didn't do it like personally.
He did it in the Craigslist ad.
That was his consent.
Joe: Right.
Because the FCC has long held for about 15 years that when you make your number available
for a particular commercial purpose, you're giving prior expressed consent for the business
to contact you about that area of business, right?
So if you give your number to the bank, the bank can call you about bank business.
Now, they probably shouldn't call you to sell ice cream or vacations.
But they can call, they have permission to call you about the purpose for which you gave
them your number.
Derek: It's just weird in this case because he didn't give his phone number to Vroom.
He gave the consent essentially to the entire internet to call him about his car and one
of those people were Vroom.
Joe: Right.
And that is an important caveat about this case.
You know, the court did note that he didn't put any qualifiers on his phone number, on
the use of his phone number.
So there have been other cases where for whatever reason, and, you know, it's fine someone put
out their phone number, but said "don't text me."
Derek: Oh, interesting.
Okay.
Yeah.
Joe: So if a bot was just trolling Craigslist and they vacuumed up that number and it didn't
also take in the narrative portion of the ad that said "But don't text me," this case
might have been different, right?
Derek: Interesting.
Yeah, okay.
I get it.
Joe: But since this particular ad didn't have any conditions on the use of his phone number,
the court felt comfortable saying this fits neatly within how the FCC has construed prior
expressed consent for non-promotional text messages and phone calls.
Derek: Was it ruled or agreed upon that this was non-promotional or that wasn't decided?
Joe: It was ruled that way because if it went the other way, if it was found to be dual
purpose or a marketing message, then Vroom would have needed to prove that it did have
prior express written consent with all of the, you know, the disclaimers and the terms
that come with that.
Derek: So this message was found to be informational even though it was kind of marketing and sales,
but it was informational because it was, he asked for the offer and they gave him the
offer essentially.
Like, that's informational?
Joe: Right.
They were making an inquiry to get more information from him to make him an offer.
They weren't trying to sell anything.
They were trying to buy something.
Derek: Okay, interesting.
Joe: So they were buy side on the transaction.
And that was hugely important to the court.
Like, for the court to be able to make that dual-purpose analysis, it had to find that
the point of this message was just to get information.
Now granted, the court acknowledged that Vroom is in the business of buying and selling things,
but this message, read fairly, was just soliciting more details from the seller so that they
could make an offer.
Derek: Just like I would do if I texted the guy.
Joe: Correct, yeah.
Right, "Hey, has this car ever been in an accident?"
If you sent him that text, you wouldn't expect to get sued for it, right?
Derek: So let's play this out.
Let's say it was, you know, Autotrader, and Autotrader found his phone number on the web
and it said, "Hey, guys, make me an offer, text me," or whatever.
If Autotrader sent him a text message that said, you know, "Hey, you should also list
your car on Autotrader, we get really good, you know, results and stuff like that.
Here's a link."
That would be most likely marketing because it's not informational.
It's not responding to what he's looking for, essentially.
Joe: I mean, that's a different analysis, right?
Because there...
Derek: It's different than what he was asking of.
It feels to me like a very marketing-focused thing because it's pitching your services,
not that you're making an offer.
Joe: Yeah, I mean the fact that a business tries to make money, can't make every message
a business sends dual purpose.
Even nonprofits can generate revenue, right?
So the fact that an entity generates revenue in the ordinary course of business can't make
every message a marketing or a dual-purpose message.
Otherwise, [inaudible 00:37:38]
Derek: Just because it's from the business.
Joe: Right.
Derek: Yeah.
Like, it's not a blanket statement.
"If you get a message from a business, it's 100% marketing.
You never can argue that."
That's not true.
It could be informational.
Joe: Correct, exactly.
The context matters and, you know, really, the standard does look to the intent of the
message.
So here, you know, the court did, you know, study the substance of the message closely
and felt comfortable concluding that while Vroom, you know, may make revenue by selling
this car down the road, that's not why they were writing him.
They wanted to buy it.
Maybe the owner wanted to drive it around, you know, maybe it was gonna be a model.
Who knows?
But this particular message was soliciting information from the consumer to be able to
make an offer.
Derek: So this seems kind of like a very, very narrow use case.
What can we learn like on the macro from this case for text message marketing or integrating
SMS into a sales process?
Is there anything, like, big level...Obviously, this specific, you know, if somebody's selling
their car and you buy cars, you, now, most likely can text message them.
There's still risks, obviously, but it's been decided here.
On a more macro level, is there anything we can take away from this case?
Joe: Well, I mean I think it helps just put another marker, you know, in the field of
play about where messages fall on that spectrum between informational on the one hand, dual
purpose in the middle, and then promotional on the end.
And I think it just should train people to be sensitive to the, you know, the importance
of analyzing each particular campaign and not just setting it and forgetting it and
saying, "Oh, we thought about this once.
Let's just run with it."
So if you're gonna make changes to the verbiage, that TCPA light bulb needs to go off in your
head and say, "Hey, am I pushing this closer to the dual-purpose side of the line?
Is this something that I wanna run by the compliance folks, the legal folks, outside
counsel, etc., to get, you know, a more nuanced analysis of a change in campaign?"
Derek: So yeah, so it's interesting.
So essentially, if you're a business, it is not cut and dry that, you know, it's always
marketing, your message.
It could be dual purpose or it could be informational.
Like, just because you're a business doesn't mean it is only one thing and always one thing.
Joe: No, no.
You know, we've talked about some of these mixed use cases before.
There's a famous one from the Ninth Circuit out where you are where Best Buy sent text
messages to the people in this reward program saying, "Hey, your points are going to expire."
Well, the people in the marketing department probably thought, "Well, I'm just letting
them know the information that their points are about to expire."
But both courts found that, "No, no, no.
Best Buy really wants you to come into the store and buy more things."
That the point of sending that message was, "Hey, sure, your points are about to expire,
but odds are you are going to overspend and that is gonna hit the company's bottom line
in a positive way."
Derek: So that was found as a marketing message?
It was determined that that was a marketing message.
Joe: A dual-purpose, which makes it marketing, right?
So if it's dual purpose, you've gotta hit that higher level of consent.
Derek: And I know the answer to this but I'm gonna ask it just to make sure.
It's always better to come up with a concept for what you wanna do and then go to a TCPA
attorney like yourself, discuss these things and discuss strategy, change things, you know,
look at where you're sending, where you're not sending, things of that nature, before...it
seems like a lot of these cases, you go to a TCPA attorney when you get a lawsuit like
this.
Joe: That is a suboptimal time to have the discussion.
Derek: Okay, so always...And why do you think people don't go to a TCPA attorney before?
Do they think it's just gonna be expensive or they're gonna limit the amount of stuff
they can do and kind of be a pain in the ass?
Or am I just making that up?
I don't know.
It seems like a lot of these cases, TCPA attorneys always get brought in at the end, which is
never good.
Is there any advice or, like, is it not that crazy of a process to do it upfront?
Joe: Well, no, no.
We have a lot of clients who come through and we work on mock-ups and we architect the
flow with the marketing team and compliance folks.
And it doesn't take a lot of time in the ordinary course.
And oftentimes, they run off and we don't hear from them because it was architected
correctly.
So it is normal that we get these questions.
Derek: Yeah.
You're not trying to stifle innovation all the time.
Like, I feel like maybe people are just afraid to go sometimes to legal compliance because
they're like, "Oh, this is just gonna ruin my entire campaign."
You actually like help people figure out the objective and the strategy and how to get
there legally, not your job to just ax everything out and say, "There's no way you can do any
of this."
Joe: No.
You know, we want our clients to have a positive customer engagement strategy, one that, you
know, respects the customer's privacy, gives them a good user experience, and frankly,
complying with the TCPA, you know, fits with those goals.
Like, obviously, if you're sending unwanted messages, you may be injuring your brand.
So that's probably not good in the long run.
Obviously, the expense of a TCPA lawsuit is not good for the company's bottom line, and,
you know, it's the old ounce of prevention rule.
It's just something that makes sense on the front end.
You know, does it add a little bit of cost on the front end?
Probably.
Is it material?
Often not.
And, you know, we're not "no" people, because there's almost always a way to do it.
You know, we're not "no" people.
We do "yes if," right?
And so we just steer people in the right direction.
And, you know, it's rare that people come to us with ideas that can't be repositioned
in a way that complies with the TCPA.
Derek: Yeah, I've seen that before.
It's a lot of repositioning, tweaking things, it's most of the time, except you come to
like, I've heard people come where they're like, "We bought this list of phone numbers."
Like, then that's obviously a "No, there's no way to tweak that.
That is definitely spam." but, for text message marketing.
Joe: Exactly.
Derek: It's interesting too that you brought up here the hurting of the brand.
I think this is something on my side that a lot of text message marketers forget, is
that, again, you can go to, you know, the TCPA Defense Force, Innovista Law.
They can sign off on it like maybe, you know, you guys would have done with Vroom or something
along those lines.
But also I think text message marketers have to also think how is this going to impact
my brand just from perception.
If the court says this is not spam, that still doesn't mean consumers are not frustrated
with you or angry about what you're doing.
Or you could even learn from this and maybe put, you know, maybe make offers, you know,
on the cars in the text message.
Maybe that would reduce some of the frustration.
Just because a court says it's legal to do, sometimes it could hurt your brand from just
a consumer perspective.
I might not wanna do business with Vroom if they send me these messages.
You know, and I would do the same if they call me because I don't like being called.
So there's multi-facets I think to text messaging.
There's legal, there's obviously software platform, the technology, but then there's
like common sense and your brand.
So I think all of those things.
And that's why I think we work really well with you guys and other TCPA attorneys because
I think we all come together in addition to the brand and we say, "How can we get this
done but, you know, excite consumers, make them feel real good, make them feel like they're
not being spammed even if it is legal."
You guys make sure it's compliant.
We make sure it's CTIA and carrier compliant, plus we bring the technology.
It's not like a one, you know, track kind of process.
It includes a lot of people.
Joe: Right, yeah.
And when we do these kinds of projects, the audits, and the workflow projects, you know,
we're always working with the marketing teams, the compliance folks, in-house counsel.
So, you know, it's a multi-stakeholder process because you want everybody to be bringing
their expertise to bear and we almost invariably get a better product.
Derek: Yeah, I 100% agree with that.
Well, again, great TCPA case review.
Anything else to add?
I know we've kind of talked about everything and I feel like I'm always getting a legal
education.
I should have paid for this rather than my college.
Joe: I [inaudible 00:46:18]
Derek: Okay, perfect.
So this was a TCPA case review, Edelsberg versus Vroom.
Again my name is Derek Johnson with tatango.com and I'm with Joe Bowser, a TCPA attorney from
Innovista Law, home of the TCPA Defense Force.
Joe, what's your website, because I know you have a bunch of good stuff there?
Joe: Yeah, it's tcpadefenseforce.com.
No tricks.
Tcpadefenseforce.com.
Derek: Awesome.
Check out their blog.
They're always up to date in their guides, webinars, training video.
They have a lot of content.
So definitely worth it.
We'll link it up in the video below.
Again, thanks everybody for watching and, Joe, thank you for your time.
Joe: My pleasure.
Thanks everyone.
Derek: Thanks.
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