Extremely Important Court Decision Handed Down Threatening The Future Of SMS Based Mobile Marketing
Mobile Marketer has a story up today about a recent District Court ruling that threatens the livelihood of mobile marketing. This is serious stuff:
The Federal Court of Appeals for the Ninth Circuit has reinstated a $90 million class-action lawsuit against book publisher Simon & Schuster for an SMS promotion related to author Stephen King’s “The Cell” horror novel.
Announced Friday, June 19, the decision holds that text messages were under the purview of the federal Telephone Consumer Protection Act that makes it unlawful to generate automated calls to mobile phones.
So what does this mean for mobile marketers?
1. The TCPA generally prohibits the use of an ATDS to place “calls” to a mobile number without the “prior express consent of the called party.”
An ATDS is equipment that has “the capacity to store or produce telephone numbers to be called, using a random or sequential number generator and to dial such numbers.”
The district court had held that the system used to send the messages was not an ATDS because the system did not actually store, produce or call numbers using a random or sequential number generator.
The Ninth Circuit, however, held that the proper question was whether the system had the capacity to do those things. There was no evidence in the record on that point.
2. Simon & Schuster had argued that the sending of text messages did not constitute a “call” under the TCPA.
Although the district court did not rule on that point, the Ninth Circuit disagreed with Simon & Schuster’s argument. The term “call” is not defined by the TCPA.
However, the Federal Communications Commission has noted that the statute encompasses both “voice calls and text calls to wireless numbers including, for example, short message service (SMS) calls, provided the call is made to a telephone number assigned to such service.”
The Ninth Circuit found this interpretation to be reasonable and, therefore, that the text message campaign was subject to the TCPA.
3. Simon & Schuster had argued, and the district court agreed, that Ms. Satterfield had consented to receive text messages when she signed up for Nextones.
The Ninth Circuit noted, however, that the term to which Ms. Satterfield had agreed specifically referred to promotions from Nextones “affiliates” and “brands.”
The Ninth Circuit found that Simon & Schuster was not an affiliate of Nextones because Nextones neither owns nor controls Simon & Schuster.
Moreover, Simon & Schuster was not a brand of Nextones. Therefore, the consent that Ms. Satterfield provided on the registration form did not apply to the messages sent by Simon & Schuster.
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