Wright v. Lyft, Inc. ( 2017 )

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IN CLEMCt OFFICE
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DATE_
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CtUEF JUSTICE
IN THE SUPREME COURT OF THE S1A1E UF
SUPREME GOURT CLERK
CERTIFICATION FROM THE
UNITED STATES DISTRICT
COURT FOR THE WESTERN
DISTRICT OF WASHINGTON
IN
KENNETH WRIGHT, No. 94162-9
on his own behalf and on behalf of
other similarly situated persons,
Plaintiff,
En Banc
LYFT,INC,
a Delaware corporation.
Defendants. Filed I h m?
Gonzalez,J.—^Kenneth Wright received an unsolicited text message that
appeared to come from an acquaintance inviting him to download Lyfl's cell phone
application. Wright sued as a putative class member. The federal district court has
asked this court to answer two certified questions relating to the state "Consumer
Electronic Mail Act"(CEMA)and the Consumer Protection Act(CPA). Chs.
19.190, 19.86 RCW.
Wright V. Lyft, Inc., No. 94162-9
Background
Lyft operates a ridesharing service in which customers use cell phone
applications to request rides from nearby drivers. Lyft's application invites users
to initiate text messages to a user's contacts, inviting them to download the
application and receive a Lyft ride credit. This process involves a Lyft user
opening the application, clicking on the "Settings" menu, selecting "Invite
Friends," then selecting one or multiple individuals from the user's contacts or
"Select All," and, finally, agreeing to "Send Invites."
On March 20, 2014, Kenneth Wright received such a text message. The
message invited him to download Lyft's application to his cell phone, offering him
a ride worth $25.' Days later, Wright sued Lyft in federal court, seeking to
represent a national class and a Washington subclass encompassing anyone who
received an unsolicited Lyft text message. Wright alleged, among other things, the
text message generated by Lyft violated state law. Lyft moved to dismiss Wright's
claims. The district court granted in part, declining to dismiss Wright's state
'The message appeared to originate from Wright's contact,"Jo Arm C." The message read:
"Jo Arm C. sent you a free Lyft ride worth $25. Claim it at
http://lyft.com/getapp/MD 15M215."
Lyft, Inc.'s Opening Br. at 7.
Wright V. Lyft, Inc., No. 94162-9
CEMA and CPA claims. The district court then certified two questions for this
court's consideration.
Certified Questions
1. Does the recipient of a text message that violates the Consumer Electronic
Mail Act, Chapter 19.190 RCW("CEMA"), have a private right of action
for damages (as opposed to injunctive relief) directly under the statute?
2. Does the liquidated damages provision of CEMA,RCW 19.190.040(1),
establish the causation and/or injury elements of a claim under the
Washington Consumer Protection Act, Ch. 19.86 RCW ("CPA"), as a matter
of law or must the recipient of a text in violation of CEMA prove injury in
fact before he or she can recover the liquidated amount?
Am. Order Granting Stipulated Mot. to Certify Questions to Wash. Supreme Ct. at
1-2.
Standards of Review
Certified questions are matters oflaw we review de novo. Parents Involved
in Cmty. Schs. v. Seattle Sch. Dist. No. I, 149 Wash. 2d 660, 670, 72 P.3d 151 (2003)
(citing Rivett v. City ofTacoma, 123 Wash. 2d 573, 578, 870 P.2d 299(1994)). We
consider the legal issues presented based on the certified record provided by the
federal court. Bradburn v. N. Cent. Reg'I Library Dist., 168 Wash. 2d 789, 799, 231
P.3d 166(2010)(citing RCW 2.60.030(2)).
We review questions of statutory interpretation de novo. City ofPasco v.
Pub. Emp'tRelations Comm'n, 119 Wash. 2d 504, 507, 833 P.2d 381 (1992). On
matters of statutory interpretation, our "fundamental objective is to ascertain and
Wright y. Lyft, Inc., No. 94162-9
carry out the Legislature's intent." Dep't ofEcology v. Campbell & Gwinn, LLC,
146 Wash. 2d 1, 9,43 P.3d 4(2002). "[I]f the statute's meaning is plain on its face,
then the court must give effect to that plain meaning as an expression of legislative
intent." Id. at 9-10.
Analysis
We conclude that the plain language of chapter 19.190 RCW creates a
private cause of action with damages only for phishing violations. RCW
19.190.080,.090. We also conclude that while the plain language of CEMA's
liquidated damages provision does not explicitly replace the causation or injury
elements of a CPA claim, because the provision provides automatic damages for
violations without condition, injury and causation do not need to be proved to
receive damages. Accordingly, we answer no to the first certified question and yes
to the second.
1. Private Cause of Action under CEMA
We are first asked whether RCW 19.190.040(1) provides a private cause of
action for violations of CEMA. Wright contends that it does, while Lyft argues it
provides the measure of any damages recoverable under a CPA suit. We agree
with Lyft that RCW 19.190.040 does not provide an independent cause of action.
We hold that CEMA creates a private cause of action with damages limited to
phishing violations.
Wright V. Lyft, /«c., No. 94162-9
To determine whether RCW 19.190.040 is directly actionable, we look to
the language ofthe provision. RCW 19.190.040 does not exist in isolation and
must be read in the context ofthe larger statutory scheme. See Campbell & Gwinn,
LLC, 146 Wash. 2d at 11 (reviewing courts derive plain meaning from the context of
the act and related statutes); ITTRayonier, Inc. v. Dalman, 122 Wash. 2d 801, 807,
863 P.2d 64(1993)("Statutory provisions must be read in their entirety and
construed together, not piecemeal." {cWmgDonovickv. Seattle-First Nat'I Bank,
111 Wn.2d413,415, 757P.2d 1378 (1988)). As Judge Pechmannoted, CEMA's
statutory scheme is "rather labyrinthine." Wright v. Lyft, 2016 WL 7971290, at *3
(W.D. Wash. Apr. 15, 2016)(court order). The most effective way to navigate this
complexity and place RCW 19.190.040 in context is to trace the legislative
development ofthe act and its subsequent amendments.
Since its enactment in 1998, CEMA has been amended three times to
increase the scope of prohibited electronic practices. Laws of 1999, ch. 289;
Laws of 2003, ch. 137; Laws of 2005, ch. 378. The statute was created to address
unwanted e-mail messages referred to as "spam." Final B.Rep. on Second
Engrossed Substitute H.B. 1888, 59th Leg., Reg. Sess.(Wash. 2005)(defining
"spam"); LAWS OF 1998, ch. 149, § 4(codified in RCW 19.190.030). Sending a
commercial e-mail containing false or misleading information constitutes a
"violation ofthe consumer protection act." LAWS OF 1998, ch. 149, § 4(1). The
Wright V. Lyft, Inc., No. 94162-9
statute also established the first three elements of a CPA claim ((1) unfair or
deceptive act(2) occurring in trade or commerce that affects(3)the public
interest), and included a provision specifying damages to recipients ofthese
improper e-mails. As originally passed, CEMA did not contain language creating
a separate cause of action.^
Lawmakers first amended CEMA in 1999. This legislative fix changed little
> in the original statute. Its most notable effect was to clarify that assisting the
transmission of a commercial e-mail violates the CPA.
2003 marked the first substantive amendment to CEMA. Recognizing the
rise of unsolicited commercial text messages sent to cell phones, lawmakers sought
to "limit the practice." Laws of 2003, ch. 137, § 1. The statute precluded the
initiation or facilitation of sending a commercial text message to Washington
residents. Id. § 3(1). RCW 19.190.060(2) included an identical legislative finding
to RCW 19.190.030(3), the commercial e-mail provision:
that the practices covered by this section are matters vitally affecting the
public interest for the purpose of applying the consumer protection act,
chapter 19.86 RCW. A violation ofthis section is not reasonable in relation
to the development and preservation of business and is an unfair or
^ The legislative history supports the plain language. A bill report on CEMA's 1998 enacting
statute explains that a sender using false or misleading e-mail message violates the CPA and in
doing so, the "recipient ofthe commercial electronic mail message may bring a civil action
against the sender." Final B. Rep. on Engrossed Substitute H.B. 2752, at 2, 55th Leg., Reg.
Sess.(Wash. 1998).
Wright V. Lyft, Inc., No. 94162-9
deceptive act in trade or commerce and an unfair method of competition for
the purpose of applying the consumer protection act, chapter 19.86 RCW.
The damages provision in RCW 19.190.040 was amended to include "commercial
electronic text message[s]," Id. § 5. Again, the legislature did not include an
express cause of action.
The third and final amendment to CEMA occurred in 2005. In this
amendment,the legislature added protections against the practice of"phishing."
See Final B. Rep. on Second Engrossed Substitute H.B. 1888, at 1-2(defining
"phishing"); LAWS OF 2005, ch. 378, § 2. "Phishing" generally refers to Internet
activity using fraudulent e-mails and websites to induce someone to reveal
personally identifying information under false pretenses.
The 2005 amendment is the first instance in which the legislature
specifically recognized a "civil action" for violations of CEMA:
A person who is injured under this chapter may bring a civil action in the
superior court to enjoin further violations, and to seek up to five hundred
dollars per violation, or actual damages, whichever is greater. A person who
seeks damages under this subsection may only bring an action against a
person or entity that directly violates[RCW 19.190.080].
Laws of 2005, ch. 378, § 3(emphasis added)(codified in RCW 19.190.090(1)).
Judge Pechman opined on RCW 19.190.090 in this case. Wright, 2016 WL
7971290, at *4. In her ruling on Lyft's motion to dismiss. Judge Pechman adopted
Judge Lasnik's analysis ofthe provision as set out in Gragg v. Orange Cab
Wright Lyft, Inc., No. 94162-9
Company, Inc., 145 F. Supp. 3d 1046, 1050-53(W.D. Wash. Nov. 9, 2015).
RCW 19.190.090(1) allows anyone injured "under this chapter" to bring a civil
action to enjoin further violations and seek certain damages. Standing alone, this
sentence implies a direct civil action was created for any violation ofthe chapter,
including e-mails and, notably, text messages. Id. However, Judge Pechman
further explained that the next sentence in the statute says that "'[a] person who
seeks damages under this subsection may only bring an action against a person or
entity that directly violates RCW 19.190.080 (i.e., thephishing statute).'"'' Wright,
2016 WL 7971290, at *4 (alteration in original)(quoting RCW 19.190.090(1)).
Thus, now a plaintiff cannot bring a civil action if injured under the chapter unless
he or she is a victim of phishing under RCW 19.190.080. Id. To resolve this
tension. Judge Lasnik reasoned, and Judge Pechman accepted, that the 2005
amendment created a cause of action for money damages limited to phishing. Id.
We agree.
Turning to the first certified question, the plain language of CEMA's
liquidated damages provision provides the answer. RCW 19.190.040 does not
create a private cause of action. The provision itself contains no language
concerning a cause of action. RCW 19.190.040. Nor did the legislature include a
cause of action in the original 1998 legislation or in the 2003 amendment
prohibiting unsolicited text messages. Instead, the plain language indicates it was
Wright V. Lyft, Inc., No. 94162-9
the legislature's intent for CEMA violations to be brought under the CPA. LAWS
OF 1998, ch. 149, § 4(stating violations ofthe act constituted "violation[s] ofthe
consumer protection act").
Washington lawmakers did not create any cause of action until 2005. The
2005 amendment shows the legislature knew how to institute a cause of action and
how to circumscribe its scope. This amendment did not alter CEMA's text
message provision to recognize a cause of action therein, nor did it contain
language including text message violations in a phishing claim. We presume the
legislature means exactly what it says. Davis v. Dep't ofLicensing, 137 Wash. 2d
957, 964,977 P.2d 554(1994)(quoting State v. McCraw, 127 Wash. 2d 281, 288,
898 P.2d 838 (1995)). Omissions are deemed to be exclusions. In re Det. of
Williams, 147 Wash. 2d 476, 491, 55 P.3d 597(2002); see also Landmark Dev., Inc.
V. City ofRoy, 138 Wash. 2d 561, 571,980 P.2d 1234(1999)("the expression of one
is the exclusion of the other"). CEMA's plain language demonstrates a direct
cause of action for money damages exits only for phishing violations.
Alternatively, Wright argues that if a CEMA violation is not actionable
under RCW 19.190.040, the statute implies a cause. For the following reasons, we
disagree.
Wright V. Lyft, Inc., No. 94162-9
To determine whether the legislature intended to imply a private right of
action, a reviewing court applies a three-part test established in Bennett v. Hardy,
113 Wash. 2d 912, 920-21, 784 P.2d 1258 (1990). First, we determine whether the
plaintiff is within the class for whose "especial" benefit the statute was enacted;
second, whether the explicit or implicit legislative intent supports creating or
denying a remedy; and third, whether implying a remedy is consistent with the
underlying purpose of the legislation. Id.
Even assuming Wright falls within the protected class ofthe statute, he
cannot meet the additional Bennett factors. Id. at 921. As discussed above,
CEMA's plain language demonstrates the legislature's intent that the recipient of
unsolicited text messages bring a CPA claim. This legislative intent does not
support creating a remedy where one already exists. CEMA does not imply a
cause of action here.
RCW 19.190.040 does not create an independent cause of action for
monetary damages under CEMA. The plain language of chapter 19.190 RCW
provides a direct cause of action with damages limited to phishing violations.
RCW 19.190.090. The statute similarly does not imply a cause of action for
monetary damages aside from phishing violations.^ Importantly, a recipient of
^ While an action for monetary damages is limited to phishing, we note that a plaintiff may bring
an action to enjoin any CEMA violation. RCW 19.190.090(1)("A person who is injured under
10
Wright V. Lyft, Inc., No. 94162-9
unsolicited commercial text messages is not bereft of legal remedy—he or she may
pursue redress under the CPA. We therefore answer no to the first certified
question.
2. Injury and Causation under the CPA
The CPA prohibits unfair methods of competition and unfair or deceptive
trade or commerce acts. RCW 19.86.020. A person injured in his or her business
or property by a violation ofthis act may bring a civil suit for injunctive relief,
actual damages, attorney fees, and up to treble actual damages. RCW 19.86.090.
This court has concluded that a CPA claimant must establish five elements:
(1) an unfair or deceptive act or practice (2)in trade or commerce(3)that affects
the public interest,(4)injury to plaintiffs business or property, and (5)causation.
Hangman Ridge Stables, Inc. v. Safeco Title Ins. Co., 105 Wash. 2d 778, 780, 719
P.2d531 (1986).
Here, Lyft and Wright do not dispute that transmission of a text message in
violation of CEMA establishes the first three elements of a CPA claim. See, e.g.,
Lyft, Inc.'s Opening Br. at 24-25 (citing RCW 19.190.060). They disagree
whether RCW 19.190.040 establishes the injury and causation elements.
this chapter may bring a civil action in the superior court to enjoin further violations."(emphasis
added)).
11
Wright V. Lyft, Inc., No. 94162-9
Thus,the second certified question asks if CEMA's liquidated damages
provision, RCW 19.190.040, establishes the causation and/or injury elements of a
CPA claim as a matter of law or if the recipient of a text in violation of CEMA
must prove injury in fact prior to receiving damages. Am. Order Granting
Stipulated Mot. to Certify to Wash. Supreme Ct. at 1-2.
The plain language of RCW 19.190.040 does not definitively resolve the
-issue. Estates:
(1)Damages to the recipient of a commercial electronic mail message or a
commercial electronic text message sent in violation ofthis chapter are five
hundred dollars, or actual damages, whichever is greater.
(2)Damages to an interactive computer service resulting from a
violation ofthis chapter are one thousand dollars, or actual damages,
whichever is greater.
RCW 19.190.040. This is the complete text of the damages provision. It does not
mention injury or causation. The provision does not indicate these elements are
replaced, so Lyft urges us to read the section as requiring a CPA plaintiff to prove
both to bring a successful claim. Lyft would like the inquiry to end here. But
doing so ignores the converse, more reasonable, reading of RCW 19.190.040—^the
provision does not condition the award of damages on proving either injury or
causation. In fact, damages for CEMA violations are automatic. It is nonsensical
for the legislature to write a damages provision free of preconditions, only for this
court to read in elements that lawmakers did not include. Indeed, our canons of
12
Wright V. Lyft, Inc., No. 94162-9
statutory construction warn against such an interpretation. State v. Delgado, 148
Wn.2d 723,727,63 P.3d 792(2003)(reviewing courts cannot add words or
clauses to a statute when the legislature has chosen not to include that language).
Though both Wright and Lyft advance arguably reasonable readings ofthe
provision, Wright prevails in this case. Where two interpretations ofstatutory
language are equally reasonable, our canons of construction direct us to adopt "the
interpretation which better advances the overall legislative purpose."
Weyerhaeuser Co. v. Dep't ofEcology, 86 Wash. 2d 310, 321, 545 P.2d 5 (1976).
In amending CEMA to preclude unsolicited text messages, the legislature
recognized
[t]hat the number of unsolicited commercial text messages sent to cellular
telephones and pagers is increasing. This practice is raising serious concerns
on the part of cellular telephone and pager subscribers. These unsolicited
messages often result in costs to the cellular telephone and pager subscribers
in that they pay for use when a message is received through their devices.
The limited memory of these devices can be exhausted by unwanted text
messages resulting in the inability to receive necessary and expected
messages.
The legislature inten[d]s to limit the practice ofsending unsolicited
commercial text messages to cellular telephone or pager numbers in
Washington.
Laws of 2003,ch. 137,§ 1 (emphasis added).
Elsewhere in CEMA's statutory scheme, the legislature made sending spam
e-mail a per se violation ofthe CPA. RCW 19.190.030(1)("It is a violation of the
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Wright V. Lyft, Inc., No. 94162-9
consumer protection act, chapter 19.86 RCW,... to initiate the transmission of a
commercial electronic mail message"). RCW 19.190.060 contains identical
language to .030 that declares practices covered under the sections to be violations
of the CPA. Puzzlingly, no "per se violation" phrase was included in the text
message provision. Compare RCW 19.190.060, wzY/z RCW 19.190.030(1). Lyft
argues the lack ofthis phrase in RCW 19.190.060 is purposeful. Functionally,
however, there is no indication in RCW 19.190.060 and .030(1)that the legislature
intended to regulate text messages and e-mails differently. See Gragg, 145 F.
Supp. 3d at 1053. To the extent this intent is unclear, the bill report on House Bill
2007, which enacted the prohibition on unsolicited text messages, reveals that "[a]
violation ofthe commercial electronic text messaging law provides penalties
similar to those for commercial e-mail messages. A recipient of a commercial
electronic text message . . . may bring a civil action against a sender." Final B.
Rep. on Substitute H.B. 2007, at 2, 58th Leg., Reg. Sess.(Wash. 2003); Anthis v.
Copland, 173 Wash. 2d 752, 756, 270 P.3d 574(2012)("Ifthe statute is still
'susceptible to more than one reasonable interpretation, then a court may resort to
statutory construction, legislative history, and relevant case law for assistance in
discerning legislative intent.'"(quoting Christensen v. Ellsworth, 162 Wash. 2d 365,
373, 173 P.3d228 (2007))).
14
Wright V. Lyft, Inc., No. 94162-9
Lyft also appears to contend that liability under CEMA turns on whether a
cell phone user can demonstrate injury, primarily pecuniary loss. For example,
receiving an unsolicited text messages on a prepaid or limited cell phone plan
could constitute injury while receipt of a text on an unlimited data plan would not.
But the legislature did not delineate between these specific types ofinjuries. The
statute at issue reflects lawmaker's intent to limit the practice of sending any
unsolicited commercial text messages because they cause injury to consumers by
using limited data and memory of mobile devices and interrupting receipt of
necessary and expected messages. .SeeRCW 19.190.060.
Taken together, RCW 19.190.040's automatic damages language, the
legislative intent to limit the practice of sending unsolicited commercial text
messages, and the legislative intent to treat text messages in the same manner as
spam e-mail weigh against requiring a CEMA plaintiff to independently prove
injury and causation. Weyerhaeuser Co., 86 Wash. 2d at 321.
Modem cell phone users likely receive few unsolicited commercial text
messages over the course of a day. State legislatures achieved the current,
relatively "spam-free" world by encouraging actors to refrain from sending
unwanted electronic messages and providing a mechanism of enforcement. As the
Attomey General's Office points out, requiring proof of injury and causation
15
Wright V. Lyft, Inc., No. 94162-9
increases the burden on private consumers bringing CPA claims and would likely
diminish CEMA's deterrent effect. Br. of Amicus Curiae Att'y Gen. at 17-18; see
also State v. McDougal, 120 Wash. 2d 334, 351, 841 P.2d 1232(1992)(the court
should avoid an interpretation that "produce[s] an absurd and unjust result and
would clearly be inconsistent with the purposes and policies of the act in question."
(quoting NORMAN J. SINGER, 2A STATUTES AND STATUTORY CONSTRUCTION §
45:12(4th ed. 1984))).
As previously noted, the questions before this court were certified after the
federal trial court declined to dismiss Wright's CEMA and CPA claims. Whether
Wright is ultimately successful proving Lyft violated RCW 19.190.060 by sending
an unsolicited commercial text message is a question offact to be determined at
the district court.
We conclude that RCW 19.190.040 establishes the injury and causation
elements of a CPA claim as a matter of law. The answer to the second certified
question is yes.
Conclusion
RCW 19.190.040 does not provide an independent cause of action for
monetary damages. The plain language of chapter 19.190 RCW creates a private
16
Wright V. Lyft, Inc., No. 94162-9
cause for money damages for phishing violations. We answer no to the first
certified question.
Though the plain language of RCW 19.190.040 offers two arguably
reasonable answers to whether the provision establishes injury and causation for
CPA claims, the overall purpose of CEMA and its legislative intent indicate both
elements are established. We answer yes to the second certified question.
17
Wright V. Lyft, Inc., No,94162-9
WE CONCUR:
/<^Ui I // /
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