Conflicting TCPA Decisions Pose Risks for Text Message Marketing

July 2013

The Telephone Consumer Protection Act (TCPA) (47 U.S.C. §227) prohibits the use of automatic dialing machines to make any calls to a telephone number assigned to a mobile device without “prior express consent” of the called party. This prohibition applies to text message marketing, because the Federal Communications Commission (FCC) and several courts have ruled that a “text message” is a “call.” See 18 FCC Rcd. 14014, 14115 ¶265 (2003); Satterfield v. Simon & Schuster, Inc., 569 F.3d 946 (9th Cir. 2009). Whether a message is “telemarketing” depends on whether there is a direct or implied sales offer. Chesbro v. Best Buy Stores Inc. 697 F.3d 1230, as amended by 705 F.3d 913 (9th Cir. 2012) (holding that a text message warning of the expiration of rewards points, and providing a means to preserve them, was a telemarketing message).

So, what constitutes “prior express consent”? The TCPA itself does not say, but in 1992, the FCC said that “persons who knowingly release their phone numbers have in effect given their invitation or permission to be called at the number which they have given, absent instructions to the contrary.” Implementing the Telephone Consumer Protection Act, 7 FCC Rcd. 8752 (1992).

Many businesses have conducted text message marketing campaigns on that basis. But in recent years, annoyed recipients of such messages have brought lawsuits under the private rights of action provision of the TCPA. And recent court decisions—reaching opposite conclusions—highlight the legal and business risks that text message marketers may assume.

In the most recent decision, a federal court in Florida ruled as a matter of law that a consumer who provided his cell number during an online ticketing transaction did not give prior express consent to receiving promotional text messages. Lusskin v. Seminole Comedy Inc., 2013 U.S. Dist. Lexis 86192 (S.D. Fla. June 19, 2013). In Lusskin, the plaintiff averred that he had not expressly consented to receiving promotional text messages and that the defendant had given no warning that providing his cell number would have that effect.

The defendant moved to dismiss, relying on the 1992 FCC interpretation. The court denied the motion and in doing so expressly rejected the FCC's position. The court stated that because the FCC's conclusion “must be inferred from conduct, that necessarily means that permission was not directly stated (i.e., it was not expressed).” Id. *8. The court also held that the statute was plain on its face and that, accordingly, the FCC's interpretation was not entitled to any deference under the Chevron doctrine. Accordingly, the FCC interpretation upon which the defendant relied in effect created an implied consent where the statute requires express consent and therefore was invalid.

However, the Lusskin decision contrasts with another decision issued just three weeks earlier in Roberts v. PayPal Inc., 2013 U.S. Dist. Lexis 76319 (N.D. Cal. May 30, 2013). In Roberts, a federal district court ruled that a business is not liable under the TCPA for sending an unsolicited text message to a customer's cellphone when the customer had provided his cellphone number to the business. In that case, the plaintiff had added his cellphone number to a PayPal account that he had established years before, and promptly received a text from the company promoting its mobile services. He responded with a class action lawsuit claiming that the text message was sent from an automatic dialing machine to his mobile device without his consent.

PayPal moved for summary judgment on the grounds that Section 227(b)(1) exempts from the prohibition calls made with the “prior express consent of the called party.” PayPal argued that Mr. Roberts expressly consented when he provided his cellphone number. The court agreed, holding that individuals who voluntarily provide their number thereby provide “express consent.” Because Mr. Roberts had voluntarily provided his cellphone number to the business, the PayPal court ruled that he had thereby expressly consented. It is unclear from the decision, however, whether the plaintiff had been made aware of the possibility that he might receive text marketing messages.

In so ruling, the PayPal court was strongly influenced by a decision last autumn in Pinkard v. Wal-Mart Stores Inc., 2012 U.S. Dist. Lexis 160838 (N.D. Ala. 2012). There, the plaintiff began receiving text messages from Walmart after having provided her number when filling a prescription. The Pinkard court observed that the TCPA itself does not define “express consent.” Instead, it relied on the 1992 FCC interpretation for the proposition that a person who provides a phone number to a business thereby expressly consents to receiving text messages.

These decisions cannot easily be reconciled. In none of these cases does it appear that the plaintiffs thought they were consenting to—or were even aware of the possibility of—receiving text messages. After all, a person who provides a cellphone number when ordering a prescription may well expect to receive a notice that the prescription is ready, but should she also expect to receive further messages as well? But the TCPA does not draw the distinction between “transactional” and “marketing” messages in the way that, for example, the CAN-SPAM Act does in the case of emails.

These conflicting decisions obviously pose a substantial risk to businesses engaged in text message marketing. Businesses may wish to consider consulting with legal counsel to evaluate the level of risk that their campaigns now face.  

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