In November 2012, mobile marketers breathed a collective sigh of relief when the Federal Communications Commission issued a key declaratory ruling, clarifying that the common practice of sending a final text to confirm consumer “opt-out” from future mobile marketing is legal – provided that such messages are sent one time only, promptly after opt-out, and do not contain additional marketing material. But questions remained, including whether marketers have a First Amendment right to send opt-out messages, and whether and to what extent opt-out messages may link to websites containing marketing material. Now, in Holt v. Redbox Automated Retail LLC (Case No. 3:11-cv-03046), U.S. District Court Judge Dana M. Sabraw of the Southern District of California has dodged the First Amendment question but provided guidance on the second question, in a ruling dismissing a putative class action against movie rental company Redbox Automated Retail LLC.
Plaintiff Kathleen Holt filed suit against Redbox in December 2011, after receiving an opt-out confirmation text following her request to unsubscribe from a Redbox mobile campaign. These types of final confirming messages have been standard practice in the mobile marketing industry for many years, and are required under the U.S. Consumer Best Practices guidelines issued by the nonprofit trade group the Mobile Marketing Association (MMA), which serve as an industry benchmark. Nonetheless, Holt – joining a long list of similar class action plaintiffs in recent years – alleged that because Redbox’s opt-out text was sent to her after she revoked her consent to receive mobile messages, the message violated the federal Telephone Consumer Protection Act (“TCPA”), which prohibits sending text messages without consent. Holt sought to represent a class of the hundreds of thousands of consumers who had received similar opt-out confirmation messages from Redbox, with potential liability of $500 per violation.
While the Holt case was pending, on November 29, 2012, the FCC issued a declaratory ruling on the Petition of SoundBite Communications, Inc. (“SoundBite”). SoundBite had implications for Holt, because the FCC clarified that noncommercial text messages promptly sent to confirm a consumer’s opt-out do not violate the TCPA, as long as they do not include additional marketing materials. (See 27 F.C.C. Rec. 15391). But Holt argued that Redbox’s opt-out texts were not protected by the FCC ruling, because they contained a link to, and invited Plaintiffs to visit, the Redbox website – essentially a marketing vehicle for Redbox.
Judge Sabraw declined to adopt Holt’s “look through” approach to liability under the TCPA. Instead, the Court focused on the texts themselves, which did “not contain any marketing or promotional information for products or services.” As such, the Court found they could not form the basis for liability under the TCPA, and dismissed Holt’s claims on June 20, 2013.
The Holt ruling is helpful for mobile marketers because it provides additional clarity on allowed content for opt-out messages, namely that including a link to a marketer’s home page (where advertising material may be present) does not transform an otherwise legal opt-out message into one that violates the TCPA. The Court did sidestep the constitutional issue raised by Redbox’s assertion that its opt-out texts were protected by the First Amendment (the Department of Justice had weighed in on this issue in April 2013, rejecting the idea that Redbox had a First Amendment right to send opt-out messages), however, so whether this defense will be viable in future opt-out cases remains an open question.
A full copy of the ruling is available here (Pacer subscription required).