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.
Head over to Mobile Marketer to read the entire article!