On June 19, 2009, The US Court of Appeals for the Ninth Circuit Court handed down their ruling in the case of Satterfield v. Simon & Schuster, Inc. The effects of this decision are unequivocally negative for all participants in the mobile marketing ecosystem.
We've collected some immediate reactions from around the web:
Mobile Marketer: Reinstatement of $90M lawsuit against Simon & Schuster may affect SMS marketing
The Federal Court of Appeals for the Ninth Circuit has reinstated a
$90 million class-action lawsuit against book publisher Simon &
Schuster for an SMS promotion related to author Stephen King’s “The
Cell” horror novel.
Announced Friday, June 19, the decision holds
that text messages were under the purview of the federal Telephone
Consumer Protection Act that makes it unlawful to generate automated
calls to mobile phones.
...
It is important to note that the Ninth Circuit didn’t decide that Simon & Schuster violated any law.
Instead, it decided that the district court should not have granted summary judgment in the company’s favor because of various outstanding factual issues.
Nevertheless, this decision — along with whatever the district court decides on remand — is likely to affect every company that sends text messages to consumers.
Proskauer Rose LLP New Media & Technology Blog: Ninth Circuit Executes Dictionary Attack on Telephone Consumer Protection Act
On the issue of whether the sending of a text message
constitutes a "call," the court noted that not only did the TCPA not
contain a definition of the term, text messaging had not been invented
in 1991 when the statute was enacted. The court therefore turned to the
definition of the term as interpreted by the Federal Communications
Commission and evaluated whether the agency's definition was
reasonable, i.e., that the term "call" is not limited to voice calls
and includes text messaging. The court relied on one of several
dictionary definitions of the word "call," selecting the very broad
definition: "to communicate with or try to get into communication with
a person by a telephone."
...
On the issue of whether the message was sent via an
ATDS, the court focused on the statutory definition of the term:
"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." The appeals court concluded
that summary judgment should not have been granted on the issue of
whether the message had been sent via an ATDS because there was
disputed testimony as to whether the equipment used to send the
messages had the "capacity to store or produce telephone
numbers to be called, using a random or sequential number generator."
Notably, the court found that the actual message need not be sent using
this particular "capacity," and the equipment used need only have such
capacity. Because this was a disputed issue of material fact, summary
judgment should not have been granted on this issue, the appeals court
concluded.
Davis Wright Tremanie LLP Privacy & Security Law Blog: Has The 9th Circuit Raised The Bar For Text-Message Affiliate Marketing?
Did text-message advertising get more difficult after last week’s decision by the U.S. Court of Appeals for the Ninth Circuit in Satterfield v. Simon & Schuster, Inc.? Perhaps so, but not principally for reasons cited by many accounts and commentators reporting on the case.
...
It found, given dueling expert testimony, a material fact question that needed to be tried, as to whether the equipment that sent the text was an ATDS. It also held, based on Federal Communications Commission (“FCC”) pronouncements, and on the law’s legislative history and intent, that text messages are “calls” under the TCPA. This part of the decision became the headline in much reporting and commentary on the case, not to mention speculation about what it means to marketers. But classifying text messages to phone numbers as ATDS transmissions is hardly news – the FCC said they were over five years ago, and reiterated as much in adopting rules under the CAN-SPAM Act (which govern mobile service commercial messages to email addresses, which differ from text messages to phone numbers), so that question was never in serious doubt.
Mobile Marketing Watch: $90M Awarded In SMS Spam Case, Best Practices Anyone?
While specific rules and regulations regarding SMS messages are
still a bit ambiguous, Simon & Schuster claimed that it didn’t use
an auto-dial system, and that no “calls” took place as defined by the
federal law. The company also claimed that Satterfield and other users
had given consent by agreeing to the terms of ringtone downloads, and
thus had opted-in to receiving further marketing messages.
Originally, Oakland federal district court judge Claudia Wilken sided
with Simon & Schuster, though she did not rule on the question of
whether a text message constitutes a telephone call- the most important
aspect of the case.
Other reactions:
- The Complex Litigator: In Satterfield v. Simon & Schuster, Inc., Ninth Circuit defers to FCC and construes text messages as "calls" under TCPA
- Quill & Quire: Court rules against S&S in Stephen King text messaging case
- NY Times Media Decoder: Appeals Court Sides With Woman Who Objected to Publisher’s Text Message
Any must read analyses that we missed? Let us know in the comments.
