Sapan v. Safeway, Inc.

Background

Jonathan Sapan filed a class action alleging that Safeway violated the Telephone Consumer Protection Act of 1991 by sending three pharmacy-related text messages to his residential phone number. The messages were sent on December 8, 2020, June 24, 2021, and September 26, 2022. Sapan alleged that his number had been registered on the National Do Not Call Registry since June 16, 2006, and that he had not given Safeway permission to text him or had an established business or personal relationship with Safeway.

Safeway moved to compel arbitration or, alternatively, to dismiss the complaint for failure to state a claim. Safeway also asked the court to strike Sapan’s request for injunctive relief.

Arbitration

Safeway argued that Sapan agreed to its Terms of Service, including an arbitration agreement and class-action waiver, when he enrolled in Safeway’s pharmacy texting program at an in-store point-of-sale system. Safeway relied on records and a declaration stating that Sapan enrolled on November 5, 2019, received a confirmation text containing a hyperlink to the Terms of Service, and continued using the program.

Sapan disputed that he enrolled in the program, made a purchase at Safeway on that date, received notice of an arbitration clause, or knew about the email address associated with the alleged enrollment. He also argued that the arbitration agreement was unconscionable, meaning unfairly one-sided or oppressive.

The court sustained Sapan’s objection to the declaration of Peter Towle and did not consider it because Safeway had not shown that the attached records qualified for the business-record exception to the hearsay rule. The court also found a genuine dispute of material fact about whether Sapan enrolled in the texting program and received the confirmation message. That dispute independently supported denying arbitration.

The court further held that, even assuming Sapan enrolled and received the message, his continued use of the texting program did not clearly demonstrate agreement to the Terms of Service. The Terms of Service did not expressly state that continued participation would constitute consent to the arbitration agreement. The court therefore denied Safeway’s motion to compel arbitration.

Motion to Dismiss

The court explained that the Telephone Consumer Protection Act provides a private claim to consumers who receive more than one unlawful telephone call within a 12-month period from the same entity. Safeway argued that Sapan had not received more than one qualifying text in a calendar year because the December 2020 and June 2021 messages were not telephone solicitations under the Act.

The court focused on the June 24, 2021 message about COVID-19 vaccines. It held that the message appeared to fall within the Federal Communications Commission’s emergency-purposes exception for communications related to the COVID-19 pandemic’s health and safety risks. The court characterized Safeway as a health care provider and found that the message informed Sapan that COVID-19 vaccines were available to eligible individuals. Because the message was exempt from the Act as a matter of law, the court concluded that Sapan had not alleged more than one violative text message in a calendar year. The court did not address whether the September 26, 2022 message was actionable because it could not have been a second text within a 12-month period.

The court therefore granted Safeway’s motion to dismiss. It did not grant Safeway’s request to dismiss the complaint with prejudice; instead, it gave Sapan one opportunity to amend because he might be able to allege a different set of facts supporting a Telephone Consumer Protection Act claim.

Other Request and Disposition

The court denied Safeway’s request to strike Sapan’s request for injunctive relief.

Judge Jon S. Tigar’s order denied Safeway’s motion to compel arbitration and granted Safeway’s motion to dismiss. Any amended complaint had to be filed within 21 days of the order.