Group Text Services Grapple with TCPA Class Actions

[Post by Venkat Balasubramani]

Pimental v. Google Inc., No. 11-2585 (N.D. Cal.; Mar. 2, 2012)

Plaintiffs sued Google (and Slide), asserting that text messages sent via the “Disco” service offered by Google violated the Telephone Consumer Protection Act.

As I understand it, Disco allows anyone to create a group for group text messaging purposes. According to the complaint, any time someone’s number is added to the group, Google sends out a service advertising its Disco services:

Disco is a group texting service. Standard SMS rates may apply or chat for FREE w/ our app – http://disco.com/d . . .

Plaintiffs sued for TCPA violations, but alleged that the messages sent by Disco violated the TCPA (they did not sue for the underlying texts).

The court rejects Google’s motion to dismiss, noting that the TCPA only requires that the text message be unsolicited (sent in the absence of prior express consent or pursuant to another exception) and sent using equipment that has the capacity “to store or produce telephone numbers to be called, using a random or sequential number generator.” Citing to the Ninth Circuit’s decision in Satterfield v. Simon and Schuster, the court says that plaintiffs’ allegations are sufficient to state a claim under the TCPA.

Defendants also raised a First Amendment argument, saying that the text messages were “informational” in nature. As with First Amendment arguments in spam litigation generally, the court was skeptical of this argument.

Glauser v. Twilio, No. C 11-2584 PJH (N.D. Cal.; Jan. 27, 2012)

A separate class action involved Twilio and GroupME, who were sued in a putative class action alleging TCPA violations. In that case, defendants successfully moved for a stay pending resolution of the FCC’s rulemaking procedures around TCPA issues. Because the FCC was considering rules clarifying (1) what constitutes an “auto-dialer” for TCPA purposes; (2) the scope of the prior express consent exception; and (3) the applicability of the “common carrier” exception to liability under the TCPA, the court granted a stay. Although the court has not lifted the stay, plaintiff recently filed a notice of decision from the FCC, and argued that as to GroupMe, the stay should be lifted, and the FCC’s rulemaking did not affect GroupMe’s liability. The court has not considered whether to lift the stay, but if plaintiff is correct, it looks like the lawsuit will go forward with respect to GroupMe. Interestingly, plaintiff did not seek to have the stay lifted as to Twilio.

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I took a quick look at the FCC’s final regulations, and nothing in the rules offer much of an out for group text messaging services. With respect to the equipment used and the type of consent that is required, the final regulations do not seem to change much. Given the stringent nature of the TCPA rules (as articulated by Satterfield and other cases), those who send text messages are advised to procure consent through means other than the initial text message informing recipients that they can opt-out from receiving further texts. Also, this did not come through in the court orders resolving the claims against Disco or Twilio, but group texting services suffer from the flaw that they can be used by spammers, absent adequate validation measures. I haven’t seen a validation mechanism that is foolproof, and the best approach is to procure consent over the web or through some other means before any texts are sent (e.g., if you sign me up to receive texts, tell me to go to a website and validate my phone number, and only after this validation is complete should I receive texts). Courts seem warm to the idea that even the initial text saying people can opt-out from receiving further texts is sufficient to create TCPA liability, and nothing in the statute says otherwise.

The platforms may also have a viable section 230 defense if they provide “interactive computer services.” Given the broad definition of interactive computer services, they should qualify, but only as to messages sent by third parties. The lawsuit against Slide is aimed at texts sent by the Slide service (arguably automated and triggered by other users of the services), so Slide probably has a tougher argument to make based on Section 230. To the extent the claims are based on text messages transmitted by customers, Section 230 should come into play.

Other coverage:

Jeff J. Roberts (PaidContent/Giga): “Spam Lawsuits Weigh On Twilio, Group Texting Apps”