News & Press: Legal Updates

FCC Ruling Prompts End to Appeal in Case Stemming From Research Opt-Out Text Message

Wednesday, December 5, 2012  
Posted by: Staff
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December 4, 2012

Federal District Court Dismisses TCPA Lawsuit Involving Cell-Based Research Program

Earlier this year, we provided an update on a federal class action lawsuit entitled Ibey v. Taco Bell Corporation¸ Civil Number 12-CV-00583, filed in the Southern District of California.   The lawsuit was based on the use in a customer satisfaction research study of a text-messaging "short code” program. As of our last update, the district court judge had dismissed the lawsuit and the plaintiff had appealed the case to the 9th Circuit Court of Appeals.  Last week, the Federal Communications Commission ("FCC”) issued a significant Declaratory Ruling on the issue involved in Ibey and the plaintiff in Ibey dropped his appeal. 

Under the Telephone Consumer Protection Act (the "TCPA”), it is illegal for any person to make a call using an automatic telephone dialing system to any cell phone, except with the prior consent of the called party.  Text messages are considered "calls” under the TCPA.  The lawsuit alleged that the study violated the TCPA by sending a confirmation message to a research participant who had texted the industry standard unsubscribe message "STOP” after previously opting-in to the research.  The plaintiff alleged that by texting "STOP” he had technically withdrawn consent and the automated text message confirming his un-subscription therefore violated the TCPA restriction.  While this may have appeared to be a frivolous claim, other federal courts in California’s Ninth Circuit had upheld such claims. Since the TCPA provides for damages of up to $1,500 per violation, the potential liability was significant. 

Over the summer, the judge overseeing the case dismissed the lawsuit.   Specifically, the judge explained that the spirit of the TCPA is to prevent bulk, unsolicited messages.   The judge found that sending a single confirmatory text in response to an unsubscribe request did not constitute an invasion of privacy as contemplated by Congress in the TCPA.  

Last week, the FCC agreed with that decision and issued a helpful Declaratory Ruling, in which it found that companies may send a one-time text message to confirm that a subscriber has opted out of receiving text messages without violating the TCPA.  In the FCC’s view, if a consumer has consented to receiving text messages and subsequently opts out, the consumer’s prior express consent to receive text messages initially can be reasonably construed to include consent to receive the opt-out confirmation message.  The FCC noted that its holding is limited to text messages that "1) merely confirm the consumer’s opt-out request and do not include any marketing or promotional information; and 2) are the only additional message sent to the consumer after receipt of the opt-out request.”  The FCC also suggested that entities should send the confirmation text message within five minutes of the consumer’s opt-out request.

Although the Ibey litigation ended with a positive result, this litigation serves as an important reminder.  Unlike many provisions of the TCPA, the particular restrictions on the use of automatic telephone dialing systems to reach cell phones do apply to calls and text messages sent for market research.  Wherever such technologies are used in connection with a research project, the terms of such program should explicitly note that the research participant consents to the use of those automated technologies.   

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