The story started in December, 2004. Laci Satterfield's six-year-old son persuaded his mother to download a free ringtone from Nextones.com for his phone. Ms. Satterfield, a resident of New York, filled out the signup form to become a member of Nextones, agreeing to receive promotional material from the company. She put her son's initials and phone number on the form, but used her own age and email address, indicating she was over 18.
A year later, just after midnight on January 18, 2006, Satterfield's son received a text message that read: "The next call you take may be your last . . . Join the Stephen King VIP Mobile Club at www.cellthebook.com.RplySTOP2OptOpt.PwdByNexton.”
Simon & Schuster had sent the text message as part of their promotional campaign for Stephen King's novel The Cell. Using a list of 100,000 mobile numbers from Nextones' subscriber list, a marketing company hired by Simon & Schuster sent out the middle-of-the-night promotional message.
Outraged, the New York mom filed a class action suit against Simon & Schuster and their mobile marketing firm, citing the Telephone Consumer Protection Act of 1991, which prohibits such unsolicited calls by an Automatic Telephone Dialing System (ATDS). Ms. Satterfield's suit claimed she had never agreed to receive calls from Simon & Schuster. Additionally, she alleged that a SMS (short message service, another name for a wireless text message) constituted a call.
The Northern District of California ruled in Simon & Schuster's favor, partially because that "PwdByNexton" part of the message indicated the message came from the Nextone brand and partially because the Court felt the equipment used was not a ATDS.
Satterfield's attorneys appealed the decision. And, last month, according to Media Post, the Ninth Circuit Court of Appeals in San Francisco ruled in Satterfield's favor:
The decision appears to mark the first time that a federal appellate court has said that the telephone law applies to text messages.
The ruling could have far-reaching effects on mobile marketers who send SMS ads, says cyberlawyer Venkat Balasubramani of Seattle. "There's a lot of marketing going on by text message, and now there's another regulatory scheme that marketers and brands have to worry about . . ."
The IP Law Blog says there are three lessons learned from this case:
- Do Not Use An Automatic Telephone Dialing System
- A “Call” Can Also Be A Text Message
- The “Express Consent” Exemption Will Be Narrowly Construed. Ms. Satterfield did not agree to receive promotional messages from Simon & Schuster, only from Nextones.
The case now goes back to the trial court, and MOCO News Net reports:
The suit was brought on behalf of about 60,000 people, each of whom could receive a minimum of $500 and as much as $1,500 each, according to the law firm behind the lawsuit, meaning a total of as much as $90 million could be paid by S&S and the mobile marketing firm behind the campaign, ipsh! (now owned by Omnicom).