By Gonzalo E. Mon
Shortly after the Penguins finished battling the Flyers on the ice in the Stanley Cup playoffs, they started a new battle off the ice. On May 25, 2012, a consumer filed a class action lawsuit against the Penguins, arguing that the team violated the federal Telephone Consumer Protection Act (TCPA) by sending him text messages without consent. Although these types of suits aren’t new, what’s unique about this one is that the plaintiff did consent to receive the messages —l he just received more than he expected.
Telephone Consumer Protection Act
The TCPA was enacted in 1991 amidst public frustration over telemarketing. A key provision of the law makes it unlawful to make a “call” to a mobile phone “using any automatic telephone dialing system” unless the caller has “the prior express consent of the called party.” 47 U.S.C. § 227 (b)(1)(A). The term “automatic telephone dialing system” is defined as “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.” Id. § 227 (a)(1).
The TCPA has been used to attack many text message campaigns. Although some defendants have tried to convince courts that a statute that governs “calls” and was enacted before SMS was even invented shouldn’t apply to text messages, courts haven’t been persuaded. For example, in 2009, the Ninth Circuit held that the term “calls” encompasses both voice calls and “text calls,” and that the equipment used to send text messages can constitute an automatic telephone dialing system. See Satterfield v. Simon & Schuster, 569 F.3d 946 (9th Cir. 2009).
Getting Consent
The first step in avoiding these types of lawsuits is to get express consent from consumers before sending text messages. Not all consents are equal, though. Fortunately, the Mobile Marketing Association (MMA) has published Consumer Best Practices Guidelines that provide helpful advice. The Guidelines are essentially a compilation of legal requirements, carrier requirements, and industry best practices. Although the Guidelines don’t have the force of law, most contracts in the mobile space require parties to comply with the Guidelines.
Among other things, the Guidelines dictate what disclosures companies must make when getting consent. For example, online ads must include: (1) a disclosure that message and data rates may apply; (2) a resource, such as website or phone number, where subscribers can find all of the terms (if they aren’t all in the ad); (3) the frequency of the messaging; (4) instructions for obtaining help; and (5) instructions for opting-out of a recurring service. Pay attention to the third disclosure —l that will be important shortly.
The Penguins Suit
The Penguins website invites consumers to sign up to receive text message alerts about big trades, breaking news, and special offers. The disclosures required by the MMA Guidelines appear immediately below the invitation. The plaintiff in the pending case claims that when he signed up to receive text messages, those disclosures stated, in part: “By subscribing, you consent to receiving, from time to time, further text messages from us which may include offers from us, our affiliates and partners. Available on participating carriers. Maximum of 3 messages a week.”
Although the terms specifically stated that subscribers would receive a “maximum” of three messages per week, the plaintiff claims he received five messages in the week between March 11 and March 17, 2012, and that he received four messages in the week between March 18 and March 24, 2012. The plaintiff claims that the two additional messages he received during the first week and the one additional message he received on the second week exceeded the consent he had provided and, thus, violated the TCPA.
The plaintiff argues that class members were harmed by having to pay their wireless carriers for these additional text messages and that they are entitled to a minimum of $500 in statutory damages for each violation of the TCPA. Moreover, the plaintiff argues that because the defendant’s misconduct was willful and knowing, the court should treble the amount of statutory damages. Lastly, the plaintiff argues that the transmission of more than three messages in a week constitutes a breach of contract, entitling the class to further damages.
Trends and Tips
This lawsuit is part of a troubling trend in text message cases. Although the initial lawsuits generally targeted SMS “spam,” plaintiffs’ attorneys are now targeting a broader range of issues. The new cases are less about consumer protection, and more about money. Indeed, with settlements in the millions of dollars, it’s no surprise that plaintiffs’ attorneys are getting more aggressive. In recent months, they’ve challenged several sports entities, including the Penguins, NASCAR, and the NFL.
Although some of these cases are unpredictable, there are a few easy steps companies can take to reduce their risks:
Get consent. The most important step is to get consent before you send a text message. The consent must be specific to SMS —l consent to receive other types of marketing messages isn’t enough —l and it must be tailored to the types of messages you plan to send.
Draft terms carefully. Make sure your terms accurately reflect how you plan to run your campaign. Little things can make big differences. For example, the Penguins may have been able to avoid the suit if they had written “approximately 3 messages a week” instead of “maximum of 3 messages a week.”
Do what you say. This should be obvious, but it’s important to ensure you run your campaign in a manner that is consistent with your terms. The suit against the Penguins demonstrates that even minor deviations could lead to a lawsuit.
Process opt-outs promptly. If a person opts out, you should process the request promptly to ensure that person does not receive any additional text messages. Again, the Penguins lawsuit demonstrates that even a few extra messages could lead to problems.
If you’re new to mobile marketing —l and perhaps even if you’re not —l make sure you have a copy of the MMA Guidelines on your desk before you start. You may also want to keep your lawyer’s phone number handy. A little careful planning on the front end can help save you a lot of headaches and legal fees later.
Gonzalo E. Mon is a partner in the Advertising Law practice at Kelley Drye & Warren LLP. You can reach him at gmon@kelleydrye.com. Read more on Kelley Drye’s advertising blog, www.adlawaccess.com.
