ase 2:15-cv-05527-R-JEM Document 1 Filed 07/21/15 Page 1 of 55 Page ID #:1 1 OLAVI DUNNE LLP Daniel P. Hipskind, CA State Bar No. 266763 2 Dorian S. Berger, CA State Bar No. 264424 1880 Century Park East, Ste. 815 3 Los Angeles, California 90025 Telephone: 213-516-7900 4 Facsimile: 213-516-7910 Email: [email protected] 5 Email: [email protected] 6 OLAVI DUNNE LLP 7 Matt Olavi, CA State Bar No. 265945 Brian J. Dunne, CA State Bar No. 275689 8 816 Congress Ave., Ste. 1620 Austin, Texas 78701 9 Telephone: 512-717-4485 Facsimile: 512-717-4495 10 E-mail: [email protected] E-mail: [email protected] 11 Attorneys for Plaintiffs and the Proposed Class 12 13 LLP UNI T E D ST A T ES DIST RI C T C O UR T 14 C E N T R A L DIST RI C T O F C A L I F O RNI A UNNE UNNE 15 D 16 E D M UND PI E T Z A K A ND Case No. :____________ LAVI 17 E RIN H UDSO N, INDI V IDU A L L Y A ND O N O B E H A L F O F A L L O T H E RS SI M I L A R L Y 18 SI T U A T E D, C L ASS A C T I O N C O MPL A IN T F O R 19 D A M A G ES A ND I NJUN C T I V E R E L I E F Plaintiffs, PURSU A N T T O 47 U.S.C. § 227, E T SE Q. 20 (T E L EPH O N E C O NSUM E R PR O T E C T I O N v. A C T) A ND V I O L A T I O N O F T H E UNF A IR 21 BUSIN ESS PR A C T I C ES A C T 22 M I C R OSO F T C O RPOR A T I O N A ND HelloWorld, I N C., 23 JUR Y T RI A L D E M A ND E D Defendants 24 25 26 27 28 24(213) C L ASS A C T I O N C O MPL A IN T F O R D A M A G ES A ND INJUN C TI V E R E L I E F Case No. ____ 516- 79008 ase 2:15-cv-05527-R-JEM Document 1 Filed 07/21/15 Page 2 of 55 Page ID #:2 1 Plaintiffs Edmund Pietzak and Erin Hudson (collectively, "Plaintiffs"), 2 through their attorneys, bring this action on behalf of themselves and all others 3 similarly situated, make the following allegations on information and belief, 4 except as to allegations pertaining to Plaintiffs individually, which are based on 5 their respective personal knowledge. 6 I. IN T R O DU C T I O N 7 1. In a relentless effort to advertise its products, Microsoft 8 &RUSRUDWLRQ ³0LFURVRIW´ VROLFLWVPRELOHSKRQHQXPEHUVIURPSRWHQWLDO 9 customers using deceptive postings on social media websites. Once obtained, 10 Microsoft automatically enrolls these phone numbers in a text message- 11 advertising program that repeatedly transmits unsolicited advertisements for 12 Microsoft products to mobile phones of potential customers. Instead of obtaining 13 express written consent prior to sending repeated text message solicitations, LLP 14 Microsoft lures potential customers to provide their mobile phone numbers in UNNE UNNE 15 response to misleading sweepstakes and discount promoWLRQV0LFURVRIW¶V D 16 GHFHSWLYHSRVWLQJVRQ)DFHERRNFRP ³)DFHERRN´ 7ZLWWHUFRP ³7ZLWWHU´ LAVI 17 ,QVWDJUDPFRP ³,QVWDJUDP´ DQG<RX7XEHFRP ³<RX7XEH´ FRQFHDOIURPWKH O 18 public that providing their mobile phone number to Microsoft will subject 19 individuals to DEDUUDJHRIXQVROLFLWHG³WH[W´PHVVDJHDGYHUWLVHPHQWV 20 2. Despite the fHGHUDO7HOHSKRQH&RQVXPHU3URWHFWLRQ$FW¶V, 47 21 U.S.C. § 227 ³7&3$´ , XQHTXLYRFDOSURKLELWLRQ0LFURVRIW¶VGHFHSWLYHVRFLDO 22 media postings require customers to provide their phone number as a condition of 23 eligibility for sweepstakes, discount promotions, and the purchase of certain 24 products0LFURVRIW¶Vdeceptive social media appeals include: 25 x ³7H[W+$/2WRIRUDFKDQFHWRZLQDOLPLWHGHGLWLRQ;ER[2QH 1 26 FRQVROH´ 27 1 Microsoft Store Facebook Posting, FACEBOOK.COM WEBSITE, June 14, 2015, 28 https://www.facebook.com/MicrosoftStore/posts/10153347428817480. C L ASS A C T I O N C O MPL A IN T F O R D A M A G ES A ND INJUN C TI V E R E L I E F 24(213) - 2 - Case No. ____ 516- 79008 ase 2:15-cv-05527-R-JEM Document 1 Filed 07/21/15 Page 3 of 55 Page ID #:3 1 x ³7H[W68535,6(WRWRILQGRXWKRZWRZLQJUHDWSUL]HV´2 2 3 x ³>7@H[W+$33<WRIRUDVSHFLDOVXUSULVHRIIHUQRZWKURXJK December 23rd´3 4 4 5 x ³>6@DYHRQDIXWXUHSXUFKDVHE\WH[WLQJ62&,$/WR´ 6 7 8 9 10 11 12 13 LLP 14 UNNE UNNE 15 D 16 LAVI Figure 1: Microsoft Store Facebook.com Posting, FACEBOOK.COM WEBSITE, May 17 O 6, 2015. 18 3. Microsoft never discloses to potential customers that sending a text 19 PHVVDJHWRWKHSKRQHQXPEHUZLOODXWRPDWLFDOO\HQUROOSRWHQWLDOFXVWRPHUV¶ 20 cellphones in an advertising program that spams DXVHU¶VFHOOSKRQHwith up to ten 21 advertisements a month. 22 4. Microsoft solicits phone numbers from potential customers in an 23 unlawful bait-and-switch marketing scheme. Customers are lured to provide their 24 2 Microsoft Store Facebook Posting, FACEBOOK.COM WEBSITE, May 6, 2015, 25 https://www.facebook.com/MicrosoftStore/posts/10153243843897480. 3 Microsoft Store YouTube.com Channel, YOUTUBE.COM WEBSITE, December 5, 26 2014, https://www.youtube.com/watch?v=M_4nQ5BTn1w&feature=youtu.be. 27 4 Microsoft Store Twitter Posting, TWITTER.COM WEBSITE, March 4, 2015, 28 https://twitter.com/MicrosoftStore/status/573243653600243713. C L ASS A C T I O N C O MPL A IN T F O R D A M A G ES A ND INJUN C TI V E R E L I E F 24(213) - 3 - Case No. ____ 516- 79008 ase 2:15-cv-05527-R-JEM Document 1 Filed 07/21/15 Page 4 of 55 Page ID #:4 1 phone number for a limited purpose (a chance to win a prize). Yet, Microsoft 2 enrolls these same customers in an undisclosed advertising program, transmitting 3 multiple unconsented-to texWPHVVDJHDGYHUWLVHPHQWVWRFXVWRPHUV¶FHOOSKRQHV 4 5. Plaintiffs Mr. Pietzak and Ms. Hudson bring this suit to stop 5 Microsoft and its marketing partner HelloWorld,QF ³+HOOR:RUOG´ IURP 6 utilizing unlawful Text Message Marketing to commercialize products and 7 services. Defendants use deceptive bait-and-switch techniques to send advertising 8 solicitations to the mobile phones of the public. Defendants constructed an 9 unlawful text message-advertising program to circumvent and reach a public 10 oversaturated with commercial messages. Yet, the Federal Communications 11 Commission reiterated that even self-VW\OHG³OHJLWLPDWH´EXVLQHVVHVcannot be 12 shielded from liability where they utilize unlawful text messaging programs. 13 As its very name makes clear, the Telephone Consumer Protection LLP $FW LV D EURDG ³FRQVXPHU SURWHFWLRQ´ VWDWXWH WKDW DGGUHVVHV WKH 14 telemarketing practices not just of bad actors attempting to perpetrate frauds, EXW DOVR RI ³OHJLWLPDWH EXVLQHVVHV´ HPSOR\LQJ UNNE UNNE 15 calling practices that consumers find objectionable. D Declaratory Ruling and Order of the Federal Communications Commission, 16 DGRSWHG-XQH ³FCC 15-72´ at n.6 (emphasis added). LAVI 17 O 6. In recent years, marketers stymied by federal laws limiting 18 solicitation by telephone, facsimile machine, and email have increasingly looked 19 to alternative technologies to send bulk solicitations to consumers, cheaply.5 20 7. One of the newest methods of bulk marketing is to advertise 21 through text messages sent to mobile phones.6 22 23 5 See FCC 15-72 at n.6 (³As its very name makes clear, the Telephone Consumer Protection Act LVDEURDGµFRQVXPHUSURWHFWLRQ¶ statute that addresses the 24 telemarketing practices not just of bad actors attempting to perpetrate frauds, but DOVRRIµOHJLWLPDWHEXVLQHVVHV¶ employing calling practices that consumers find 25 REMHFWLRQDEOH´ . 6 See Id ³7KH7&3$PDNHVLWXQODZIXOIRUDQ\EXVLQHVV²µOHJLWLPDWH¶RUQRW²to 26 make robocalls that do not comply with the provisions of the statute. While the &RPPLVVLRQKDVWUDGLWLRQDOO\VRXJKWWRµUHDVRQDEO\DFFRPPRGDWH>@LQGLYLGXDOV¶ 27 . we have not viewHGµOHJLWLPDWH¶EXVLQHVVHVDVVRPHKRZH[HPSWIURPWKH 28 statute, nor do we do so today.´). C L ASS A C T I O N C O MPL A IN T F O R D A M A G ES A ND INJUN C TI V E R E L I E F 24(213) - 4 - Case No. ____ 516- 79008 ase 2:15-cv-05527-R-JEM Document 1 Filed 07/21/15 Page 5 of 55 Page ID #:5 1 8. Unlike faxes and unanswered phone calls, a text message allows 2 virtually instantaneous communication with the recipient, almost anywhere in the 3 world, day or night.7 Many cellular phones immediately alert the recipient of new 4 text messages. Consumers frequently use text messaging to stay in close contact 5 with business colleagues and associates, family members, and friends. Text 6 messaging is used by schools, police departments, fire departments, and 7 emergency medical services across the country. 8 9. Microsoft implemented its unlawful text messaging scheme in 9 FRQFHUWZLWK+HOOR:RUOG,QF ³+HOOR:RUOG´ , an advertising agency that 10 WUXPSHWVLWVDELOLW\WR³FUHDWHXQIRUJHWWDEOHLQWHUDFWLRQV´8 Microsoft and 11 HelloWorOG FROOHFWLYHO\³'HIHQGDQWV´ H[WROOWKHXVHRIWH[WPHVVDJHDGYHUWLVLQJ 12 as a way to gain an advantage over competitors by marketing to an information- 13 saturated audience. LLP 14 Hyper-fragmentation of media and high-cost, low response rates for UNNE UNNE 15 direct mail and other traditional channels make mobile advertising a D very attractive option for CPG brands.