Ninth Circuit Issues Pro-Plaintiff Ruling in Do-Not-Call Suit

Should a call to such a dual-purpose phone count as an illegal call to a residence or a permissible call to a business? The Ninth Circuit Court of Appeals recently answered this question in Chennette v. Porch.Com, Inc. (decided on October 12, 2022), and did so in a plaintiff-friendly manner. According to the Ninth Circuit, which covers most of the western United States, dual-purpose phone lines will be presumed to residential, and therefore can serve as the basis for TCPA lawsuits.

In Chennette, defendant GoSmith scraped websites such as Yelp.com, YellowPages.com, and BBB.org for contact information of home improvement contractors. GoSmith then sent automated text messages to contractors who had cell phone numbers to solicit their business. A group of these home-improvement contractors brought a TCPA class action, alleging, among other things, that they had registered their numbers on national do-not-call registry but received 2,754 text messages to the registered numbers.

Framing the issue as whether a cell phone that is used for both business and personal purposes can be a “residential” phone within the meaning of the TCPA, the Ninth Circuit noted that a few federal district courts have held that a phone used for both personal and businesses purposes is not a residential phone for purposes of the TCPA.

But in a 2-1 split decision, the Ninth Circuit overruled those cases and held as follows:

the FCC has concluded that a phone—whether a landline or a cell phone—can be residential even when used for both personal and business purposes. What we do not know, because the FCC has explicitly declined to say, is when a mixed-use phone—whether a landline or a cell phone—ceases to become a residential phone and becomes a business phone. In the absence of FCC guidance on this precise point, we hold that plaintiffs’ registered cell phones that are used for both personal and business purposes are presumptively “residential” within the meaning of [the TCPA].

This is a victory for TCPA plaintiffs, because it shifts the burden of proof to the defendants, who must show that a phone is primarily used for business in order to escape the lawsuit. According to the ruling, TCPA defendants may overcome the presumption through the following factors: (1) how plaintiffs hold their phone numbers out to the public; (2) whether plaintiffs’ phones are registered with the telephone company as residential or business lines; (3) how much plaintiffs use their phones for business or employment; (4) who pays the phone bills; and (5) other factors bearing on how a reasonable observer would view the phone line.

TAKEAWAY: The Ninth Circuit’s ruling has eliminated the residential requirement from the do-not-call list for all practical purposes, at least in that jurisdiction. Because many TCPA lawsuits are class actions that consist of thousands of plaintiffs, fact-intensive inquiries as to how a phone is used will be too costly to litigate and the presumption in favor of the plaintiff’s position will tilt the scales against defendant businesses. This ruling will increase the universe of potential do-not-call plaintiffs under the TCPA.

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