The Ninth Circuit Court of Appeals issued its opinion today in Satterfield v. Simon & Schuster, Inc., a case involving the applicability of the Telephone Consumer Protection Act to text messages sent to cellular phones. The appeals court reinstated a TCPA claim against Simon & Schuster and remanded the case for resolution of disputed fact issues. But not before delving deeply into the dictionary to construe some of the critical terms in the statute and in the agreement pursuant to which the subject text message was sent.
Significantly, the appeals court concluded that because a “call” can include a text message, not just a voice call, the TCPA applies to a text messages sent to a cellular phones. The appeals court also narrowly construed the contractual term “affiliate,” which defined the scope of consent on the part of Satterfield, the text message recipient in this case. But whether the particular text message sent to Satterfield violated the TCPA is subject to the resolution of disputed fact issues on remand.
The text message sent to Satterfield was a promotional text message sent on behalf of Simon & Schuster to a cellular phone owned by Satterfield (and used by her son). Simon & Schuster did not send the text message itself, but outsourced the promotional campaign to ipsh!, which obtained a list of individual cell phone numbers from an agent of Nextones, which agent was authorized by Nextones to license the numbers of its subscribers. Satterfield’s number was on the list because, in order to receive a free ringtone for her son, she filled out a form stating that she “would like to receive promotions from Nextones affiliates and brands.” The list, in the form of a computer file, was sent by ipsh! to mBlox, a services company that actually sent out the text messages to the wireless carriers for ultimate delivery to subscribers.
The TCPA provides that it is unlawful to make “any call” for which a party will be charged to a telephone number assigned to a cellular telephone service using “any automatic telephone dialing system” (ATDS) unless the call is for emergency purposes or it is “made with the prior express consent of the called party.” The key terms here are “call,” “automatic telephone dialing system,” and “prior express consent.”
On the issue of whether the sending of a text message constitutes a “call,” the court noted that not only did the TCPA not contain a definition of the term, text messaging had not been invented in 1991 when the statute was enacted. The court therefore turned to the definition of the term as interpreted by the Federal Communications Commission and evaluated whether the agency’s definition was reasonable, i.e., that the term “call” is not limited to voice calls and includes text messaging. The court relied on one of several dictionary definitions of the word “call,” selecting the very broad definition: “to communicate with or try to get into communication with a person by a telephone.” The court concluded that this broad definition was consistent with the Congressional purpose expressed in the legislative history of the TCPA, that is, to protect the privacy of residential telephone subscribers and limit certain uses of automatic dialers. Consequently, the court ruled that the FCC’s determination that the TCPA applies to text messages was reasonable and entitled to deference.
The court’s resolution of the “express consent” issue has implications for marketers that outsource the transmission of promotional messages to service providers and rely on language similar to that in the prior express consent executed by Satterfield. While Satterfield consented to receive messages from “Nextones affiliates and brands,” the message was actually sent to her through a chain of service providers acting on behalf of Simon & Schuster. Was Simon & Schuster an “affiliate” of Nextones? Once again, the court went to the dictionary. Relying on Black’s Law Dictionary, the court concluded that an “affiliate,” is “a corporation that is related to another corporation by shareholdings or other means of control.” This legal definition was echoed in Webster’s: “a company effectively controlled by another or associated with others under common ownership or control.” Because Nextones neither owns nor controls Simon & Schuster, nor is Nextones a subsidiary of Simon & Schuster, and because there was “no direct contractual relationship between Nextones and Simon & Schuster, it was not an affiliate of Nextones, the court concluded.
Neither was the message sent by a “brand” of Nextones, even though the messages contained the phrase “PwdbyNexton.” Once again, to the dictionary. According to Webster’s a “brand” is “a class of goods identified as being the product of a single firm or manufacturer.” Simon & Schuster was not a Nextones “brand,” the court concluded. Consequently, Satterfield’s consent did not extend to the message sent on behalf of Simon & Schuster.
On the issue of whether the message was sent via an ATDS, the court focused on the statutory definition of the term: “equipment which has the capacity—(A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers.” The appeals court concluded that summary judgment should not have been granted on the issue of whether the message had been sent via an ATDS because there was disputed testimony as to whether the equipment used to send the messages had the “capacity to store or produce telephone numbers to be called, using a random or sequential number generator.” Notably, the court found that the actual message need not be sent using this particular “capacity,” and the equipment used need only have such capacity. Because this was a disputed issue of material fact, summary judgment should not have been granted on this issue, the appeals court concluded.
On remand, therefore, the critical issue will be the technical question of whether the equipment used to send the message to Satterfield had the “capacity” to send or store messages using a “random or sequential number generator.” If the lower court finds that it did not have that capacity, the TCPA does not apply to the message notwithstanding the other rulings favorable to Satterfield. There is extensive deposition testimony on this point referenced in the parties’ submissions in the trial court, where the witnesses differed substantially in their conclusions. Significantly, the plaintiff’s expert took the position that “any computer system, though particularly the hardware and software used by the defendants here, could be programmed to perform these tasks,” i.e., the storage of telephone numbers and the automatic generation of calls without human intervention. Plaintiff Satterfield’s Opposition to Defendants’ Motion for Summary Judgment (May 5, 2007) p 6-7.