The Ninth Circuit Court of Appeals in California has recently ruled that a consumer could bring a cause of action against a sender of a text message under the Telephone Consumer Protection Act (TCPA). Satterfield v. Simon & Schuster (9th Cir. June 19, 2009).
The Ninth Circuit Court of Appeals in California has recently ruled that a consumer could bring a cause of action against a sender of a text message under the Telephone Consumer Protection Act (TCPA). Satterfield v. Simon & Schuster (9th Cir. June 19, 2009).
The consumer had originally provided her number to a ringtone company and checked “submit” in response to the following disclosure: “Yes! I would like to receive promotions from Nextones affiliates and brands. . . .” Simon & Schuster then sent a text message to her, and she sued under the TCPA alleging that she had received a text message to her cell phone without providing express consent to the sender.
The court addressed two issues: 1) did the plaintiff consent to the text message, and 2) was the text message a “telephone call” as that term is used in the TCPA?
The court determined that the term “affiliate” in the above disclosure did not refer to a Simon & Schuster, a company which purchased a lead from the ringtone company. The court held that “affiliate” only applied to companies effectively controlled by that ringtone company. The lead sale did not create a relationship with Simon & Schuster such that it could send the text message.
Next, the court agreed with the FCC that text messages are subject to the TCPA’s restrictions as “telephone calls”.
Because of the exemptions to the national and state “do-not-call” lists, TSR, and TCPA in general, for calls placed either with an established business relationship or the express consent of the recipient, this case is important and shows where the line between a lead sale and a joint venture might fall.
The FTC has also examined this question in an opinion letter dated July 19, 2006. In its letter to Michael Goodman, the FTC reviewed a website which generated leads for lenders. The consumer is asked to submit his or her contact information including e-mail address and telephone number, and the website expressly disclosed that contact information is used so that lenders can respond to the consumer.
The FTC’s opinion letter answered the question of whether such lead generation constituted an “established business relationship” such that the purchaser of the lead could call the consumer without “scrubbing” against the national “do-not-call” list.
To answer the question, the FTC looked to the consumer’s reasonable expectation regarding what the language of the website meant. The FTC concluded:
[a]s long as a lead generator provides the consumer with certain material disclosures . . . if the lead generator clearly and conspicuously discloses to the consumer, before the consumer divulges her telephone number, both that the consumer may receive telemarketing calls as a consequence of submitting her telephone number, and the maximum number of entities from which the consumer may receive these calls . . . the consumer should, if possible, be informed of the identities of the lenders who may call the consumer before the consumer receives such calls.
If you generate leads, or purchase leads, you can strengthen the above language by obtaining signed express consent or requiring your lead generator to obtain same prior to purchasing leads. Express consent and established business relationship are separate exemptions to the national “do-not-call” list and either is sufficient to allow you to place calls or text messages (if otherwise compliant with other laws). Express consent must be signed, but you can rely on E-SIGN to obtain the signature if the consumer clicks “submit” or otherwise consents with intent to sign the record. In my opinion, the disclosure must, therefore, state that clicking “submit” or other similar mechanism constitutes the consumer’s “signature” “expressly consenting” to receive such calls.
The lead company should specify a maximum number of companies and, if possible, name the companies and/or describe the types of services or goods which would be offered. These two sources provide lead creators, brokers and users a good framework regarding how to legally create and use leads.
This article is not to be used as a substitute for legal counsel.