The business model employed by ride-hailing company Uber Technologies, Inc., has certainly been disruptive in the transportation business. Now, a decision involving Uber may have implications for telecommunications carriers as well. In a closely watched decision, a California federal judge agreed to certify a class of California drivers who claim to have been misclassified as
Jameson Dempsey co-authored this post.
In a ruling that FCC Commissioner Ajit Pai described as “a win for consumers and for innovative companies alike,” the FCC granted a petition for declaratory ruling filed by SoundBite Communications, Inc., finding that one-time text messages confirming a consumer’s request not to receive any future text messages do not violate the Telephone Consumer Protection Act of 1991 (“TCPA”). The Order represents a significant victory for mobile marketing firms like SoundBite and companies conducting mobile marketing, which have been inundated with actual and threatened class action lawsuits over such confirmatory messages.
Although the ruling is an important victory, the FCC’s rationale for permitting the messages is relatively narrow and not all confirmatory messages will be permitted. Moreover, the FCC’s ruling in effect imposes a requirement that confirmatory texts be sent within five minutes of the consumer’s opt-out request. Companies engaging in mobile marketing should review their practices carefully before sending additional confirmatory text messages in reliance on the FCC’s ruling.…
While the FCC has taken an interest in mobile marketing by carriers — most notably with investigations of carrier early termination fees and proceedings examining wireless consumer "bill shock" — it also is helpful to remember that the mobile content providers are subject to enforcement for deceptive marketing practices. Our colleagues at the Ad Law Access …
On Friday, June 19, 2009, the Ninth Circuit Court of Appeals reversed a district court decision involving a mobile marketing campaign. A key issue in the case is whether text messages are subject to the Telephone Consumer Protection Act (the "TCPA"), a law that was drafted before the advent of text messaging. Although the Ninth Circuit remanded the case so that the district court could develop more facts, the decision underscores the importance of ensuring that marketers get express consent before sending text messages to consumers.
Background on the Case
Laci Satterfield became a registered user of Nextones in order to receive a free ring tone. During the registration process, Ms. Satterfield checked a box which read, in part: "I would like to receive promotions from Nextones affiliates and brands." On January 18, 2006, Ms. Satterfield received a text message from Simon & Schuster advertising a novel by Stephen King. Shortly thereafter, Ms. Satterfield filed a class action lawsuit alleging that Simon & Schuster’s text message campaign violated the TCPA.
In June 2007, the Federal Court for the Northern District of California granted summary judgment to Simon & Schuster holding that the company did not violate the TCPA. Specifically, the court determined that the text message campaign did not violate the TCPA’s prohibition against using an automatic telephone dialing system (an "ATDS") because the device used to send the messages did not fall within the statutory definition of an ATDS. Moreover, the court found that Ms. Satterfield had agreed to receive text messages when she registered for Nextones.
Ninth Circuit Opinion
On Friday, June 19, 2009, the Ninth Circuit Court of Appeals reversed the district court decision and remanded the case for further proceedings. The Ninth Circuit held that the district court had erred because (1) the text message was a "call" within the meaning of the TCPA, (2) there was a disputed issue of material fact as to whether the system Simon & Schuster used was an ATDS, and that (3) Ms. Satterfield did not consent to receive messages from Simon & Schuster because Simon & Schuster is not an affiliate or brand of Nextones.
The TCPA applies to certain types of "calls." 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