February 10, 2020

Court Affirms dismissed TCPA violations against Subway

On February 5, 2020, the Court of Appeals for the Seventh Circuit, affirmed a district court’s decision to dismiss a case against Subway Restaurants, Inc. for alleged Telephone Consumer Protection Act violations.  The case was brought in 2016 by Matthew Warciak, the named plaintiff of the proposed class, when he received a text for a free Subway sandwich.  The text was sent as part of a promotion called “T-Mobile Tuesdays” that offers free or discounted items to certain T-Mobile customers who hold qualified wireless plans. The customers are not charged for these texts and can opt-out at any time.  In the complaint, Warciak alleged that Subway’s agency relationship with T-Mobile made Subway vicariously liable for a TCPA violation against him and other T-Mobile customers when the text was sent.  T-Mobile was not named as a defendant in the suit because the arbitration clause in the customer service agreement prevented it.  Subway filed a motion to dismiss, and the motion was granted on the grounds that the complaint failed to state a plausible claim for relief.  Warciak appealed the dismissal.

The TCPA was enacted by Congress to protect consumers from unwanted telemarketing advertisements and the charges associated with them. Vicarious liability can arise under the TCPA if an agent, in this case T-Mobile, acted on Subway’s behalf and under Subway’s express or apparent control. The Seventh Circuit agreed with the district court and held that facts in the complaint only demonstrate a contractual relationship between Subway and T-Mobile, not an agency relationship.  T-Mobile’s statement offering a free sandwich was not enough to demonstrate Subway’s control or authority over T-Mobile.  In fact, T-Mobile’s control was demonstrated when they chose to send the text on Tuesday, chose only send it to qualified customers, and stated that the offer was just for being a T-Mobile customer.  Finally, the TCPA contains a wireless carrier exemption that allows ads to be sent by wireless carriers to their customers free of charge. The Seventh Circuit agreed that the exemption applied here because Warciak conceded in the complaint that T-Mobile was his carrier and that he was not charged for the text.  For these reasons, the Seventh Circuit affirmed the dismissal of the complaint against Subway.

Court of Appeals Order