California Court Dismisses Lawsuit Over Unsubscribe Confirmation Text
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Privileged and Confidential

DATE: August 29, 2012

RE: California Federal District Court Dismisses TCPA Lawsuit Involving Cell-Based
Research Program

A federal class action lawsuit entitled Ibey v Taco Bell Corporation, Civil Number 12-CV-00583,
filed in the Southern District of California, alleged violations of the Telephone Consumer Protection Act
("TCPA”) based on the use in a customer satisfaction research study of a text-messaging "short code”
program. Under the TCPA, it is illegal for any person to make a call using an automatic telephone
dialing system to any cell phone, except with the prior consent of the called party. Text messages are
considered "calls” under the TCPA. The lawsuit alleged that the study violated the TCPA by sending a
confirmation message to a research participant who had texted the industry standard unsubscribe message
"STOP” after previously opting-in to the research. The plaintiff alleged that by texting "STOP” he had
technically withdrawn consent and the automated text message confirming his un-subscription therefore
violated the TCPA restriction. While this may have appeared to be a frivolous claim, other federal courts
in California’s Ninth Circuit have upheld such claims. Since the TCPA provides for damages of up to
$1,500 per violation, the potential liability is significant.

In a decision that may be helpful to the research industry, the judge overseeing the case dismissed
the lawsuit. Specifically, the judge explained that the spirit of the TCPA is to prevent bulk, unsolicited
messages. The judge found that sending a single confirmatory text in response to an unsubscribe request
did not constitute an invasion of privacy as contemplated by Congress in the TCPA.

Unfortunately, the plaintiff has served notice that it intends to appeal the trial court’s decision,
which is typical when there is a split of authority within a federal jurisdiction. CASRO will be following
the case and providing whatever assistance it can.

This litigation serves as an important reminder. Unlike many provisions of the TCPA, the
particular restrictions on the use of automatic telephone dialing systems to reach cell phones do apply to
calls and text messages sent for market research. Wherever such technologies are used in connection with
a research project, the terms of such program should explicitly note that the research participant consents
to the use of those automated technologies.
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