In Massaro v. Beyond Meat, Inc., No. 3:20-cv-00510-AJB-MSB, 2021 U.S. Dist. LEXIS 46980, at *15-20 (S.D. Cal. Mar. 12, 2021), Judge Battaglia allowed a TCPA claim to proceed against PETA because their texts endorsing Beyond Meat constituted advertisements.
Here, PETA appears to argue there is a blanket exemption for non-profit organizations, (Doc. No. 30-1 at 19-22), while Plaintiff contends PETA’s text messaging campaign amounts to a commercial advertising endeavor masquerading as charitable communication, (Doc. No. 42 at 23). The issue therefore turns on whether PETA is shielded from liability regardless of the content of the allegedly offending text message. On the one hand, PETA’s text message notifying recipients of the availability of a meat alternative product at a certain restaurant is certainly related to PETA’s mission of encouraging a vegan diet. But equally compelling is the argument that the text message was sent to encourage the purchase of a for-profit corporation’s product. The Court is not aware of any court in the Ninth Circuit expressly addressing this issue. However, persuasive federal case law, the FCC regulations, and the legislative history help guide this Court to its conclusion that the non-profit exemption does not apply to these facts at this stage. First, other federal courts have touched on this subject in a way helpful to this Court’s analysis. In the motion for summary judgment context in Aranda v. Caribbean Cruise Line, Inc., 179 F. Supp. 3d 817 (N.D. Ill. 2016), the court grappled with a non-profit exemption under Section 64.1200(a)(2). While the non-profit exemption was different, the reasoning applies similarly. The court noted that if a tax-exempt non-profit entity was acting on its own behalf, the exemption would absolve the non-profit of liability for the calls. See 179 F. Supp. 3d 817, 828. But the court further noted that it was not clear at that stage of the litigation that the non-profit made the calls on its own behalf or “rather did so as an agent” of other defendants. Id. If the nonprofit was acting as a “conduit for [the other for-profit defendants] to solicit business and generate profit, then the calls can hardly be said to have been made ‘by or on behalf of a tax-exempt nonprofit organization.'” Id. Thus, the court held that “[b]ecause a reasonable jury could find that [the nonprofit] was acting on its own and without the authorization of [the other for-profit defendants], the Court cannot say at this juncture whether the exemptions contained in sections 64.1200(a)(3)(ii) and 64.1200(a)(3)(iv) might shield defendants from liability.” Id. Second, the FCC regulations demonstrate that this question is not as clear cut as argued by PETA. By the plain terms of the FCC regulations, non-profits are shielded from liability under the non-profit exemption as a categorical matter if the nonprofit is promoting its own products or services. See In Re Rules & Regulations Implementing the Tel. Consumer Prot. Act of 1991, 18 FCC Rcd. 14014, 14089 (2003). As stated in the regulations, “[c]onsistent with section 227, a tax-exempt nonprofit organization that conducts its own fundraising campaign or hires a professional fundraiser to do it, will not be subject to the restrictions on telephone solicitations.” Id. While the regulations make clear that a blanket exemption exists if a non-profit is promoting its own organization, there is not the same clarity when the subject call/text involves a for-profit entity. For example, in its 2003 Report and Order, the FCC confronted complaints that the “[nonprofit exemption] frequently has been used to veil what is in reality a commercial venture.” FCC 2003 Report & Order, 18 FCC Rcd. 14014, 14088 ¶ 127. In light of this concern, the FCC issued a clarification of the non-profit exemption: “[i]f . . . a for-profit organization is delivering its own commercial message as part of a telemarketing campaign (i.e., encouraging the purchase or rental of, or investment in, property, goods, or services), even if accompanied by a donation to a charitable organization or referral to a tax-exempt nonprofit organization, that call is not by or on behalf of a tax-exempt nonprofit organization.” Id. at 14089 ¶ 128. Thus, the FCC regulations shed light on the concern for the use of the non-profit exemption to conceal for what is in fact a commercial scheme. Third, the legislative history confirms that Congress’ decision to exclude non-profit organizations from the definition of “telemarketing” in the TCPA was related to Congress’ belief that calls from non-profits tend to be less intrusive. In the House Report No. 102-317, the House Committee on Energy and Commerce stated, “the record suggests that most unwanted telephone solicitations are commercial in nature. . . . [T]he Committee also reached the conclusion, based on the evidence, that . . . calls [from tax-exempt nonprofit organizations] are less intrusive to consumers because they are more expected. Consequently, the two main sources of consumer problems—high volume of solicitations and unexpected solicitations—are not present in solicitations by nonprofit organizations.” H.R. Rep. No. 102-317 at 16. Thus, an interpretation of the non-profit exemption in a way that would tend to frustrate Congress’ intent would be improper. Based on the foregoing authority, the Court finds the non-profit exemption inapplicable to PETA at the motion to dismiss stage. Construing the facts alleged in the Complaint as true, and viewing them in a light most favorable to Plaintiff, it appears the subject text messages was made with dual commercial and non-commercial purpose. Plaintiff’s allegations provide that PETA, as a nonprofit, was acting as a conduit for Beyond Meat in advertising the availability of the alternative meat product at a certain restaurant. (FAC ¶ 55.)
But, then, the Court stayed the action pending SCOTUS’ decision in Facebook, Inc. v. Duguid.