Earlier this summer, a federal judge in the Southern District of California dismissed a potential class action suit against Redbox over the movie rental company’s use of confirmations for opt-out text messaging. Judge Dana Sabraw agreed with Redbox that a declaratory ruling from the FCC in November 2012 had held that confirmatory, noncommercial text messages following an opt-out request do not violate the Telephone Consumer Protection Act (TCPA), so long as the texts do not contain promotional or marketing information. She further held that links to websites that themselves include promotional information do not constitute “promotional or marketing” materials, in violation of the TCPA. In doing so, Judge Sabraw handed a major victory to businesses that rely on confirmatory text messages instead of phone calls and mass mailings. Notably, however, her ruling avoided the more significant issue at stake in the case, involving the constitutionality of the Telephone Consumer Protection Act under the First Amendment.
The court’s decision reflects two major precedents – an FCC declaratory ruling on a petition by SoundBite Communications (SoundBite) and the Southern District of California’s previous ruling in Ibey v. Taco Bell Corp. The Ibey court had held that “the TCPA does not impose liability for a single, confirmatory text message.” The FCC’s SoundBite decision developed this principle further, noting that confirmations of text message opt-outs did not violate the TCPA if they were strictly noncommercial – containing no marketing or promotional information. Plaintiffs had argued that Redbox’s inclusion of a link to its website in the confirmation texts constituted promotional information, in violation of the TCPA, because the website itself contained offers, ads, and other marketing tools. However, the court “declin[ed] to adopt this ‘look through’ approach to liability.” A contrary holding could have led to fines of up to $500 per violation, a hefty sum when extrapolated over the hundreds of thousands of consumers that would have been part of the class action suit. The ruling also could have had a widespread effect across countless commercial industries and non-profit sectors. According to the Mobile Marketing Association, confirmation texts are a common practice in many businesses as a way of substantiating consumer preference and avoiding accidental opt-ins and opt-outs.
Had it not been sidestepped, the constitutional issue would have focused on the TCPA’s ability to restrict noncommercial speech such as text messages. Redbox claimed that the TCPA as applied in the suit was a violation of its First Amendment rights. This constitutional aspect of Redbox’s answer to the initial complaint caused the United States government to intervene in the case. The Department of Justice argued that Redbox did not have a First Amendment right to send text message confirmations of consumer opt-outs because the texts did not constitute a “substantial quantity of speech,” a term of art most notably applied in the Supreme Court’s 2002 ruling in Ashcroft v. Free Speech Coalition, which struck down two provisions of the Child Pornography Prevention Act of 1996 (CPPA) for violating the First Amendment. However, the court here left for another day the battle over freedom of speech in the text message realm.
Businesses that use text message confirmations for consumer opt-outs should consider two primary takeaways from Judge Sabraw’s decision:
- In order to violate the FCC’s SoundBite ruling, at least in Judge Sabraw’s court, confirmatory text messages in response to a consumer opt-out must be commercial on their face, explicitly containing marketing or promotional information. “Look through” arguments are too attenuated for TCPA liability. While this ruling is a good one, it is too soon to tell if other courts will follow so companies should continue to exercise caution with the text of any confirming opt out texts.
- The principle that noncommercial text messages are protected by the First Amendment remains untested. What had the potential to be a landmark decision on freedom of speech in the information age turned out to be merely a practice run for both the government and for industries that rely on text message confirmations. DOJ undoubtedly will again fiercely defend the ability of the TCPA to restrict the use of text messages whenever the Department next has the opportunity.
*Grant is a Venable summer associate and not admitted to practice law.