Electronic Direct Marketing

An Important Issue for Text-Message Marketers

There has been an uptick in litigation under the federal Telephone Consumer Protection Act (TCPA), 47 U.S.C. § 227 – likely due to the increased use of mobile marketing (not to mention the availability of statutory damages between $500 and $1,500 per violation).  And

Cellco Partnership, doing business as Verizon Wireless, filed a lengthy complaint on March 7, 2011, against mobile marketing entities that have conducted short code marketing campaigns on its network. The complaint alleges that these entities failed to comply with the Mobile Marketing Association’s Consumer Best Practices Guidelines for Cross Carrier

Gordon v. Virtumundo (9th Cir. Aug. 6, 2009) concerns whether plaintiff James Gordon, a serial CAN-SPAM Act litigant and “professional plaintiff,” had standing to bring a civil action for damages under the Act. There have been inconsistent rulings on CAN-SPAM standing in the lower courts, several of them involving Gordon. Compare the lower court ruling in this case, Gordon v. Virtumundo, Inc., 2007 U.S. Dist. LEXIS 35544 (W.D. Wash. May 15, 2007), that because Gordon did not experience “substantial actual harm” as a result of unsolicited commercial e-mail sent to its users he lacked standing under the Act with Gordon v. Ascentive, LLC, 2007 U.S. Dist. LEXIS 44207 (E.D. Wash. June 19, 2007), finding that Gordon’s provision of free e-mail accounts to a small number of individuals conferred standing to pursue CAN-SPAM civil claims.

Here, the Ninth Circuit upheld the district court ruling above that dismissed Gordon’s claims for lack of standing. The appeals court also upheld the district court’s conclusion that the Washington anti-spam statute is preempted by CAN-SPAM, and therefore Gordon’s claims under the Washington statute were properly dismissed as well.

In determining the issue of standing, the court construed 5 U.S.C. § 7706(g)(4), which permits a civil action under the Act to be brought by a “provider of Internet access service adversely affected by a violation of” specified sections of Act.

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.