Anti-Spam Litigation Involving Text Messages: What Marketers Need to Know

Since the advent of the internet, consumers have been up in arms about “spam”––unsolicited marketing material that arrives not in mailboxes via the United States Postal Service but in the text message and e-mail inboxes of consumers nationwide. In response to consumer concern, Congress enacted laws intended to give consumers the power to stem the tide of spam.

Technology, however, continues to more forward more quickly than legislation. Thus, while some of these new laws do not explicitly mention recently developed communications methods like text messaging and social networks, consumers have sought to expand the use of these laws to emerging technologies.

Texting—The New Phone `Call’

The Federal Trade Commission and Federal Communications Commission administer the National Do Not Call Registry, which permits consumers to register numbers that they do not wish telemarketers to call. The Telephone Consumer Protection Act, 47 U.S.C. §227, makes it unlawful to “call” telephone numbers listed on the registry.

It also makes it unlawful, in some circumstances, to make a “call” using an Automatic Telephone Dialing System, as defined by statute, without the recipient’s consent. According to courts that have considered claims filed by consumers under the TCPA, texting is the new phone “call.”

The TCPA, enacted by Congress in 1991, became law before text messaging was available, yet it is now readily applied by courts to consumer actions against marketers who use text messaging to send marketing messages without the consumer’s permission.

Not surprisingly, in lawsuits brought under the TCPA, consumers argue that “text messages” are “calls.”

Despite protests from marketer defendants, courts have agreed with consumers, finding that Congress meant the TCPA to apply to emerging technologies such as text messaging. Kazemi v. Payless Shoesource, Inc., 2010 WL 963225 (N.D. Cal. 2010); Lozano v. Twentieth Century Fox Film Corp., 2010 WL 1197884 (N.D. Ill. 2010)(15 ECLR 551, 4/7/10).

The Federal Communications Commission also has agreed with this interpretation and has recommended that the TCPA extend to text messages. Accordingly, there has been an increase this year in consumer actions brought under the TCPA based on unsolicited text messages from marketers.

As a result, marketers must use caution when expanding their campaigns to emerging communications systems. Do not assume that because technology is evolving that spam, in any form, will be permitted.

Less Consumer Success Under CFAA

However, this is not to say that one size fits all and that every statute that could potentially regulate marketing activity can be applied to the latest technological advances.

For example, late last year, a district court in Minnesota concluded that a consumer failed to state a claim under the Computer Fraud and Abuse Act, 18 U.S.C. §1030, based on unsolicited text messages. Czech v. Wall Street On Demand Inc., 674 F.Supp. 2d 1102, 1119-22 (D. Minn. 2009)(14 ECLR 1779, 12/16/09).

The CFAA proved unworkable in that instance because the CFAA, generally, is more applicable to situations in which the plaintiff’s information is taken without authorization, rather than when the plaintiff is on the receiving end of information he or she did not consent to receive.

The CFAA also requires that the plaintiff suffer “damage” or “loss” as a result of the CFAA violation—adding to an already substantial burden for the plaintiff seeking to establish a violation based on receipt of unsolicited text messages.

Focus on Informed Consent

When it comes to emerging technology that allows marketers to send unsolicited messages to consumers, consumer plaintiffs will likely take the path of least resistance and employ statutes designed to cover similar technology in order to combat spam.

To avoid the likelihood of being on the receiving end of undesirable lawsuits filed by consumers, including class actions, marketers should focus on the common thread running through all claims brought by plaintiffs who file lawsuits based on unwanted marketing material—consent.

If the plaintiff has clearly consented to receiving the marketing material via a voice or text “call,“ sending such material is more likely to be considered lawful by a court under the TCPA. But the devil is in the details.

Failure to communicate to the consumer exactly what they will be receiving, obtaining their unequivocal consent to receive it, and inform those responsible for distributing the marketing material of the parameters of that consent, can prove problematic for marketers.

A lack of informed consent can result not only in a consumer receiving unsolicited marketing material, but also in a marketer receiving an unsolicited and most unwelcome lawsuit.

Consent Important on Social Networks, Too

Social networks such as Facebook are now frequently used by marketers to promote goods and services. As with most technology, social networks are often accessible through multiple types of devices, including mobile telephones and PDAs.

For instance, Facebook Mobile allows users to send text messages to another Facebook user’s cell phone. While this may be a great marketing tool, improper use of it could result in violations of statutes like the TCPA.

Indeed, in late 2007, a class action lawsuit was initiated against Facebook Inc. for permitting third parties to send unsolicited text messages to outdated cell phone numbers using Facebook Mobile. Abrams v. Facebook, Inc., No. 07-05378 (N.D. Cal. complaint filed Oct. 22, 2007)(12 ECLR 1044, 10/31/07).

The action was brought pursuant to various California state laws, including California’s notoriously broad unfair competition law, California Business and Professions Code Section 17200. While this case settled before the issues could be fully adjudicated by the court, it illustrates some key points for marketers to keep in mind.

First, most emerging technology used by marketers intersects with other technology. This overlap in technology means that marketers must be wary of how their marketing materials are being transmitted in order to avoid liability for violation of the TCPA and other statutes such as the CAN-SPAM Act, which seeks to prevent the unauthorized dissemination of marketing material via e-mail. 15 U.S.C. §7701.

Second, it shows that not only is the company or person from which the marketing material originates potentially liable, but also those who facilitate the dissemination of, or otherwise disseminate the unsolicited marketing material.

The use of social networks to market goods and services is a great marketing tool. But it is not without risk.

As a rule of thumb, marketers should make sure consumers consent to receipt of the marketing material and that the limits on that consent are clearly communicated to those involved in disseminating the material.