Court Finds that SMS Spam Messages are Subject to the TCPA and Rejects First Amendment Defense — Abbas v. Selling Source, LLC

[Post by Venkat]

Abbas v. Selling Source, LLC, Case no. 09 CV 3413 (N.D. Ill.; Dec. 14, 2009).

I didn’t think there was much dispute as to whether SMS spam falls under the Telephone Consumer Protection Act, but Judge Gottschall’s order in Abbas v. Selling Source, LLC, tackles this issue and concludes that SMS spam messages are “calls,” under the Telephone Consumer Protection Act. Along the way, the court addresses a few other interesting arguments, including defendant Selling Source’s First Amendment defenses.

Abbas allegedly received SMS spam from Selling Source. Abbas sued Selling Source in state court under the TCPA. Selling Source removed and filed a motion to dismiss. The court rejected the crux of Selling Source’s arguments.

Was Abbas Charged for the Text Messages? Selling Source’s first argument was that Abbas did not allege he was charged for the text messages, and that the TCPA only applies to messages for which the recipient is charged. Due to lazy drafting, the statute is not totally clear on this issue. It contains a list of services to which the TCPA applies, but adds a catch-all: “or any service for which the called party is charged for the call.” The question for the court is whether this modifier applies to numbers assigned to all types of services, or whether it’s just a separate catch-all category. Following passage of the TCPA, the FCC concluded that the TCPA did not apply to calls to cellular customers for which the called party is not charged. Shortly after this FCC pronouncement, Congress passed a law that allowed the FCC to exempt from the scope of the TCPA any calls for which the called party is not charged. The court looked to this Congressional amendment and concluded that the TCPA applies to both “charged and uncharged calls.” [Sidenote: should the applicability of the TCPA to “uncharged calls” affect the First Amendment analysis?]

Did Selling Source Use an Automatic Telephone Dialing System? Selling Source argued that Abbas failed to adequately allege that Selling Source used an auto-dialing system to send the messages. The Ninth Circuit dealt with this issue in Satterfield (discussed by Prof. Goldman here and Jeff Neuburger here), where it held that the TCPA only required that the calling mechanism have the capacity to store or produce numbers using a “random or sequential number generator,” not that this mechanism was used to initiate the calls (messages). I’m not really sure what to make of this argument in the context of this case, since it’s unclear exactly what equipment Selling Source used. Plaintiff certainly has no way of knowing this information at this stage in the litigation. Whatever it means for a piece of equipment to have the “capacity” to store or produce random or sequential numbers, I would guess – given the analysis in Satterfield and in this case – that any reasonably sophisticated piece of equipment fits the bill.

Does the TCPA Apply to SMS messages? Selling Source argued that the TCPA only applies to

“calls,” and not to text messages (or that text messages were not “calls” under the TCPA). The court engages in a fairly lengthy analysis (which is worth reading) before concluding that “an SMS message is a ‘call’ within the meaning of the TCPA.” Most people treat this as a foregone conclusion (or at least assume this is likely the case), given that the FCC has long held (starting from a 2003 FCC order) that text messages are “calls” within the TCPA. But Selling Source made some creative arguments that the court seemed to grapple with. Interestingly, the court declined to give the 2003 FCC order concluding that text messages were calls under the TCPA Chevron deference. (The court undertakes an independent look at the issue and concludes that SMS messages are “calls” within the meaning of the TCPA.)

Selling Source’s First Amendment Challenge: Finally, the court rejects Selling Source’s First Amendment challenge. Jaynes (and the Virginia spam statute) notwithstanding, First Amendment challenges to unsolicited marketing laws are a losing proposition. It wasn’t a big surprise that the court didn’t buy Selling Source’s First Amendment arguments, but cost-shifting is typically advanced as one of the big evils sought to be addressed by unsolicited marketing laws. The court’s interpretation of the TCPA potentially takes this out of the equation, at least in some cases. This leaves the privacy rationale, but accepting that rationale as a justification for laws governing unsolicited marketing may make way for lot broader regulation than most people think is appropriate from a First Amendment standpoint. I’m not quarreling with the court’s conclusion, and I haven’t taken a close look at the issue, but I thought this was worth noting.

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It’s worth mentioning that the court grants Selling Source’s motion to dismiss on the basis of specificity. Although it finds plaintiff’s claims viable as a matter of law, plaintiff is required to re-file and allege specifics regarding the receipt of the text messages in question.

It’s also worth noting that last week a district court dismissed Computer Fraud and Abuse Act claims based on the receipt of SMS spam messages. See, my post here for a discussion of Czech v. Wall Street on Demand, Inc. As I mentioned in that post, the TCPA is a possible avenue for plaintiffs who receive SMS spam messages.

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