Class certification is a massive inflection point in many TCPA cases. Plaintiffs’ attorneys’ interest in the case can evaporate as soon as the specter of class-wide damages is off the table.
So Yahoo, presumably, wasn’t delighted when a federal judge in Chicago certified a class for consumers who received a “Welcome Message” text it sent as part of its “PC2SMS” feature of its Messenger service. The PC2SMS, as the code implies, allowed Yahoo Messenger users to have their IM sent as a text message to the recipient. From a TCPA perspective, that would be fine: the Yahoo Customer, not Yahoo, is the sender of that message. But Yahoo added a message that the design team apparently neglected to “run by legal”: the first time a Messenger customer used the PC2SMS feature to send an SMS version of the IM, Yahoo would also send an SMS to the recipient, which read: “A Yahoo! user has sent you a message. Reply to that SMS to respond. Reply INFO to this SMS for help or go to y.ahoo.it/imsms.”
Yahoo, meet a TCPA class action.
Separately, Yahoo has a universal Terms of Service that, if accepted, gives Yahoo consent to text you (among other things).
But Yahoo had an information gap: for those PC2SMS text messages, it knew the phone number of the person it sent the Welcome Message to, but not necessarily anything else. And for those who agreed to the Yahoo Terms of Service, Yahoo had names and email addresses, but not necessarily phone numbers.
Who can connect names with phone numbers? The phone company, of course. But, oddly, Yahoo never served a subpoena on the relevant carrier (Sprint in this case) seeking that information. So when plaintiff filed its class certification motion, Yahoo argued that some of the potential class members may have consented to the Welcome Message because they were also Yahoo users who had agreed to the Terms of Service, but the court didn’t find that conceptual possibility enough to defeat Plaintiffs’ motion for class certification.
Ironically, Yahoo did not connect the name-to-phone number dots until the plaintiff subpoenaed Sprint after discovery closed in connection with plaintiffs’ effort to identify the size of the class (the bigger the class, the bigger the settlement, the story goes). But with that data in hand, Yahoo was able to cross-reference the two data sources and identify that roughly 20-25% of the potential class members agreed to the Terms of Service, and thus consented to the text messages at issue. Because those consent issues could now create the need for a mini-trial on the consent issue, the court agreed that common issues no longer predominated, making class certification inappropriate. The court decertified the class yesterday, taking it back to just the plaintiff’s one-text TCPA claim against Yahoo.
This case is a good reminder that TCPA defense counsel should always consider, early in a TCPA case, whether to issue a subpoena to the relevant carriers. In our experience, carriers’ data retention practices can vary substantially. The major carriers retain documents for different lengths of time, and the same carrier often keeps some data (like CDRs) for a much shorter period of time than other data (such as customer contact information). An early subpoena may recover data that would otherwise have been destroyed had you waited to serve the subpoena.
Yahoo is breathing a sigh of relief, but there was probably some avoidable hand-wringing before that big exhale.