Moskowitz v. American Savings Bank: Texting a Short Code Consents to the Reply, and Rule 41(d) Costs Exclude Attorney's Fees

Facts

American Savings Bank (ASB) provides text banking features through a five-digit short code. When an unenrolled number texts the short code, ASB automatically sends one of two standard replies. One identifies "ASB Hawaii Mobile" and explains how to stop messages or contact the bank. The other, sent after "STOP," says the sender is not subscribed and will not receive alerts.

The plaintiff was not an ASB customer. Between May and July 2016, his phone sent 11 texts to the short code. Ten were unrelated to ASB and drew the first reply. One said "STOP" and drew the second. The replies were the only texts that ASB sent to him.

He first sued in the District of Connecticut. When ASB moved to dismiss for lack of personal jurisdiction, he voluntarily dismissed, and that court dismissed "without costs to any party." He then refiled the same claims in the District of Hawaii. Judge Helen W. Gillmor granted summary judgment to ASB and awarded Rule 41(d) costs for the Connecticut action, including attorney's fees.

Consent to Responsive Texts

The plaintiff argued ASB lacked prior express consent under 47 U.S.C. § 227(b). The panel held Van Patten v. Vertical Fitness Group (9th Cir. 2017) controls. Under Van Patten, which adopted the Federal Communications Commission's 1992 interpretation, a person who knowingly releases his number consents to contact at that number within the scope of the transaction. Van Patten is binding authority.

The facts here were even stronger. The plaintiff initiated each contact, and ASB sent a single automated reply confirming receipt, identifying the short code, and explaining how to stop or continue. "By sending text messages to ASB's short code, Moskowitz expressly consented to receive reply text messages." Each of the automated replies was within the scope of consent.

Rule 41(d): Costs Are Not Fees by Default

Rule 41(d) lets a court order a plaintiff who dismissed and refiled the same claim against the same defendant to pay "costs" of the earlier action. The panel affirmed the award of costs, but reversed the inclusion of attorney's fees. "Costs" has a long-standing meaning tied to 28 U.S.C. §§ 1920 and 1923, and nothing in the rule's text includes attorney's fees as a matter of right.

The panel reserved two questions. It did not decide whether fees are recoverable when the underlying statute provides for them, because the TCPA does not provide prevailing party fees. And it did not decide whether bad faith would support fees, because ASB had not alleged bad faith.

Judge Wardlaw would have vacated and remanded for a bad faith determination, in line with circuits allowing fees where the statute provides for them or on a bad faith finding.

Practical Points

• Automated replies to inbound texts. In the Ninth Circuit, a single informational reply within the scope of the inbound message is covered by consent.
• Refiling has a price, but limited. Rule 41(d) costs are available, but TCPA defendants should not expect fees without more.

Read the Ninth Circuit opinion.