Federal judge hammers construction firm for deceptive website

Earlier I posted about how Pinnacle Home Improvements was trying to duck a telephone consumer protection act lawsuit by claiming the "live person" chat box on its website was secretly a robot and they can't be held responsible for knowing the information their chat box robot takes in. Yes a dumb argument sure to be shot down but the judge and indeed it was.

In Barton v. Pinnacle Home Improvements LLC, 3:24-cv-05142-TMC, (W.D. Wash. Jun. 11, 2024), Pro se Plaintiff Nathen Barton filed this lawsuit alleging that Defendant Pinnacle Home Improvements LLC, a window company based in Georgia, sent him unwanted marketing text messages and phone calls in violation of state and federal law.

It seemed like a dumb move to get out of a small pinch by admitting to a large fraud on your customers, and it didn't work out for Pinnacle Home Improvements anyway:

Dkt 20 - ORDER DENY Motion to Dismiss.pdf

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Pinnacle has moved to dismiss, arguing it is not subject to personal jurisdiction in this district because it did not purposefully direct the messages at Washington state. Dkt. 7. Mr. Barton responds that at least some of Pinnacle’s messages were directed at Washington, because after receiving the first unwanted texts, he visited Pinnacle’s website and—through a “live chat” feature, which represented to the public that it was “a Live Person here to help”—told Pinnacle he was in Washington and did not want to be called. Pinnacle admits its website stated the chat was manned by a live person. But Pinnacle maintains that since this was not in fact true—instead, the “live chat” was a chatbot designed to “mimic” a person “because consumers want to believe they are receiving personal attention”—it should not be charged with knowledge of what Mr. Barton communicated through the chat. Because a reasonable person would believe the live chat was an effective way to communicate with Pinnacle, the Court concludes Pinnacle knew or should have known the substance of Mr. Barton’s communication, and Pinnacle’s telemarketing messages to him after that point were purposefully directed at Washington state.

The operative jurisdiction law in play is a three part "effects test" enumerated in Calder v. Jones, 465 U.S. 783, (1984). Under the effects test, a plaintiff must show that a defendant “(1) committed an intentional act, (2) expressly aimed at the forum state, (3) causing harm that the defendant knows is likely to be suffered in the forum state.” The district court banged out the first one very quickly: Calling and texting Mr. Barton’s phone number was unquestionably an intentional act and Pinnacle does not argue otherwise. The first prong of Calder is satisfied.

What Pinnacle Home Improvements was challenging was Calder's second and third prongs purposeful direction into the forum state but to no avail:

Here, Mr. Barton’s phone number does not have a Washington area code. Dkt. 10 at 3. But unlike the Plaintiffs with out-of-state area codes in Komaiko and Abedi, Mr. Barton informed Pinnacle that he was in Washington. Dkt. 10 at 3. Specifically, Mr. Barton told a chatbot on Pinnacle’s website to “please put 972 207 5749 on your do not call list. I am in Washington State so can’t use your services.” Id. Once Mr. Barton sent this message, Pinnacle had reason to know that calls and texts to Mr. Barton’s 972 number would be sent into Washington, and thus that the effects of calls to Mr. Barton would be felt in Washington. Pinnacle argues that Mr. Barton cannot show Pinnacle knew he was in Washington because he sent his message to a chatbot and “submitting information on a website” does not “equate[] to actual knowledge.” Dkt. 7 at 10–11. But as Mr. Barton points out and Pinnacle admits, Pinnacle intentionally misleads consumers into believing that they are communicating with a real person when they message the chatbot. Dkt. 10 at 4–7; Dkt. 13 at 4. The link to chat with an agent states “I am a Live Person here to help,” and uses a photo of a human. Dkt. 10 at 2. Clicking the link opens a chat that begins with the same message: “I am a Live Person here to help,” and features a name and photo, ostensibly of the human with whom the consumer is chatting. Id. The chatbot window also includes a message that “[t]his chat transcript will be saved and viewed by Pinnacle Home Improvements and/or those working on its behalf,” informing the consumer that, regardless of whether the chatbot agent is a live person, Pinnacle would save a record of the transcript and a person would review it. Id. And when Mr. Barton later returned to Pinnacle’s website and asked a different chatbot agent, “Carmelia,” whether it was a real person, “Carmelia” answered: “this chat is 24/7 and all the time you will find a live representative available.” Dkt. 11 ¶ 12; Dkt. 13 at 3. Pinnacle admits that “[t]he chatbot is programmed to mimic a real person because consumers want to believe they are receiving personal attention.” Dkt. 13 at 4. Pinnacle effectively argues that even though its chatbot is designed to mislead consumers into thinking they are communicating with a person, Pinnacle should not be charged with knowledge of information consumers communicate to it in reliance on those misrepresentations because they are actually communicating with a chatbot. Dkt. 13 at 2–4. The Court disagrees. Pinnacle presented the chatbot as a real person and informed users that it would save and review the chat transcript. A reasonable person visiting Pinnacle’s website would believe the chatbot was an effective way to communicate with the company. Pinnacle thus can be charged with knowledge of information Mr. Barton communicated to the chatbot, including that he requested to be added to the do-not-call list and that his 972 number is associated with Washington. After Barton told Pinnacle’s chatbot he was in Washington and did not wish to receive any more calls, Pinnacle knew or should have known that any future calls or texts to his 972 phone number were directed at Washington. All three prongs of the purposeful direction Calder test are satisfied, and Mr. Barton has thus met the first prong for specific jurisdiction with respect to Pinnacle’s texts and calls after Mr. Barton’s September 25th chatbot conversation. The Court does not have personal jurisdiction over claims arising from the calls and texts sent before this conversation because nothing in the record suggests Pinnacle had reason to know Mr. Barton was in Washington until he informed the chatbot.

Oof and goof! Pinnacle Home Improvements must be reeling from the shock that they can't lie to the public about their chat bot and then benefit from their lie. The silver lining is they escaped sanction for a frivolous argument because they do not reflect frivolousness as required for Rule 11 sanctions.

While unpersuasive, and perhaps lacking in common sense, Pinnacle’s arguments were grounded in the Calder test and the legal standard for purposeful direction of activity into the forum state.

The takeaway here is that to sue a telemarketing defendant outside their domicile you need to show the court has subject matter jurisdiction. Plaintiff Barton's phone number area code was outside of Washington State and Pinnacle Home Improvements was calling without using Washington State area codes, so plaintiff Barton smartly contacted Pinnacle Home Improvements to both request the calls stop and give Washington State courts jurisdiction over Pinnacle Home Improvements.

Would you like a free case review? Do you have a question or a telemarketing, debt collection, or bankruptcy case that would make a great blog article? We might even review your pro-se complaint or motion in a blog post. Email peter@nwdebtresolution.com and/or nathen@nwdebtresolution.com and we may answer it for everyone!

Are telemarketers harassing you in Washington, Oregon, or Montana? My Washington State TCPA plaintiff law practice can help, just give us a call at 206-800-6000 or email peter@nwdebtresolution.com.

The thoughts, opinions and musings of this blog are those of Peter Schneider, a consumer advocate and Washington State plaintiff's TCPA attorney at Northwest Debt Resolution, LLC. They are just that, his thoughts, opinions and musings and should be treated as such. They are not legal advice. If you are looking to file a lawsuit for TCPA violations and unwanted calls please contact me for a consultation.

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