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Best Buy Calls Urging Customers to Update Rewards Accounts Were Ads, Violated TCPA

Monday, October 22, 2012

Automated phone calls from Best Buy Stores, urging a customer to update his rewards program account information, were unsolicited advertisements that violated the Telephone Consumer Protection Act, the U.S. Court of Appeals for the Ninth Circuit held Oct. 17, reversing the districtcourt (Chesbro v. Best Buy Stores LP, 9th Cir., No. 11-35784, reversed and remanded 10/17/12).

The court concluded that informational content included in the messages did not take them outside the reach of the TCPA. Because the messages encouraged recipients to engage in future purchasing activity, they also constituted telemarketing under do-not-call regulations. The customer was on the federal do-not-call list and had repeatedly asked Best Buy not to contact him.

“We approach the problem with a measure of common sense[,]” the court wrote. Although the messages did not explicitly mention a good or product, they encouraged customers to visit Best Buy stores and redeem rewards points.

“Neither the statute nor the regulations require an explicit mention of a good, product, or service where the implication is clear from the context[,]” the court added.

Informational Content Not Enough.

The TCPA, at 47 U.S.C. §227(b)(1)(B), makes it unlawful to initiate any telephone call using a prerecorded message without the prior express consent of the called party. The statute provides that the Federal Communications Commission may exempt certain commercial calls from the TCPA, provided the calls do not adversely affect the privacy rights the statute was intended to protect and do not include unsolicited advertisements. The statute defines unsolicited ads as including “material advertising the commercial availability or quality of any property, goods, or services,” 47 U.S.C. §227(a)(5).

The FCC has exempted automated commercial calls that do not introduce or include unsolicited advertisements. However, the FCC has determined that “dual purpose” calls--calls that contain both information and an ad--do not fall within the exemption.

With that in mind, the court concluded that Best Buy's automated calls fell within the scope of the TCPA. The calls, among other things, urged the listener to redeem his or her reward points, directed the listener to a website to further engage with the rewards program, and thanked listeners for shopping at Best Buy.

Redeeming rewards points required shopping at Best Buy, the court found. The points served no other purpose. Thus, the calls encouraged listeners to make future purchases and constituted ads.

No Consent Via Privacy Policy.

Best Buy argued that customers consented to receiving ads when they signed up for the rewards program. The court disagreed.

The plaintiff repeatedly asked that Best Buy not contact him. As a result, the calls violated the TCPA and the do-not-call regulations.

Kimberlee L. Gunning and Beth Ellen Terrell, of Terrell Marshall Daudt & Willie PLLC, in Seattle; and Kim Williams and Rob Williamson, of Williamson & Williams, in Bainbridge Island, Wash., represented the plaintiff. Aimee K. Decker and K. Michael Fandel, of Graham & Dunn PC, in Seattle; and Anne M. Lockner, David Christian Lundsgaard, Denise Rahne, and Michael D. Reif, of Robins Kaplan Miller & Ciresi LLP, in Minneapolis, represented Best Buy Stores.


Full text of the court's opinion is available at http://pub.bna.com/eclr/11cv35784_101712.pdf.

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