U.S. Court of Appeals Applies Telephone Solicitation Restrictions to Text Messaging

The U.S. Court of Appeals for the 9th Circuit (in California) has reversed a federal district court ruling and held that federal laws restricting telemarketing calls to consumers apply to text messages as well as voice telephone calls. Specifically, the Court concluded that text messages are "calls" within the meaning of the Telephone Consumer Protection Act. The TCPA includes restrictions on the use of automatic dialers and telemarketing calls to residences and wireless phones.  In hearing a class action case against publisher Simon and Schuster for texting advertising about a new Stephen King novel, the district court had granted summary judgment for the publisher without deciding whether the TCPA applies to texting. The district court did not decide whether texts are "calls" because it had concluded that the device sending the text messages did not perform the functions of an "automatic dialing device" when sending the texts, and therefore it was not covered by the TCPA.  The Court of Appeals reversed that finding, concluding that the device did not have to actually use automatic dialing to send the texts; so long as it has the capacity to do so, the Court ruled that is sufficient to subject the device to the TCPA.  Thus, it reversed the lower court's judgment and told the court to reconsider whether the device had automatic dialer capability.  And the Court of Appeals went further and also decided that text messages are "calls" subject to the law if the dialer is within the statute. A third issue was raised by a consent which the individual plaintiff had signed agreeing to accept text solicitations.  The district court had ruled that the consent, which was given as part of a purchase of ringtones for downloads, covered Simon and Schuster and thus provided another reason that judgment should be entered for the publisher.  However, the Court of Appeals reversed this finding as well, concluding that the consent applied only to "affiliates" and "brands" of the ringtone seller (Nextones); since Simon and Schuster is not formally affiliated with Nextones through ownership, the Court found no "affiliation" within the meaning of the consent.
 
In summary, the Court of Appeals found (1) that "texts" are "calls" for purposes of telephone solicitation and telemarketing laws, like the TCPA; (2) that devices that send such texts are "automatic dialing devices" within the coverage of the law if they have the "capability" to operate as such; and (3) that in any consent form purporting to agree to receive commercial texts, the term "affiliates" is narrowly viewed to include only actual corporate or ownership relationships.  Simple contractual affiliation is not sufficient. With these rulings, Simon and Schuster's win will be turned into a loss unless the district court rules on remand that the device in question does not have the capability to perform as an automatic dialing device. Absent that finding, the Court of Appeals has effectively mandated a ruling in favor of the class action plaintiff, except for the amount of damages.  This ruling makes it clear that this particular Court of Appeals was stretching as far as it possibly could to rule against the use of text messaging for commercial solicitations.  Such outcomes may be avoidable in the future by being sure that the device being used does not have the capability to act as an automatic dialer and, most importantly, writing consent language that is not limited in any way.

-- Danny Adams