Morris Manning & Martin, LLP

The Evolving Risks of Text Messaging

01.19.2016

A recent federal district court decision, Sherman v. Yahoo! Inc., Case No. 13cv0041-GPC-WVG (S.D. Cal. Dec. 14, 2015), highlights the pervasive but uncertain reach of the Telephone Consumer Protection Act (“TCPA”).  Companies communicating with customers and potential customers by text message or providing services relating to text messaging must determine whether their communications are subject to the TCPA and, if so, comply with it.  

The decision also illustrates the uncertainty arising from a declaratory ruling issued by the Federal Communications Commission (“FCC”) last July (the “2015 Declaratory Ruling”) in which it adopted an expansive view of what constitutes an automatically generated message subject to the TCPA but failed to provide clear standards for determining whether a message is generated automatically.  See In the Matter of Rules & Regulations Implementing the Tel. Consumer Prot. Act of 1991, 30 F.C.C. Rcd. 7961 (2015).

The TCPA requires the consent of a called party before a call generated using an “automatic telephone dialing system” or “autodialer” may be made to a cellular telephone.  The FCC has ruled that “calls” in this context include text messages.  See id., at 8016-17.  Failing to comply with the TCPA can have severe consequences because the TCPA grants aggrieved parties a private right of action to recover statutory damages for violations.  Recent years have seen an explosion of class action litigation alleging TCPA violations, with a number of cases resulting in multi-million dollar settlements.

Sherman v. Yahoo involved a text message the plaintiff received via Yahoo’s Mobile SMS Messenger Service, which allows Yahoo users to send instant messages to mobile devices from their computers.  The Yahoo service converts the instant message into a text message, which is then sent to a mobile device.

If a message is sent to a person who has never before received a text message using the Yahoo service, Yahoo automatically adds a welcome message reading as follows: “A Yahoo! User has sent you a message. Reply to that SMS to respond.  Reply INFO to this SMS for help or go to y.ahoo.it/imsms.”  

Yahoo moved for summary judgment on the ground the text messages sent through its service are not subject to the TCPA because they are not sent using an autodialer but, rather, require “human intervention” in the form of the user who initiates the message.  Looking to the FCC’s 2015 Declaratory Ruling, the court noted that the FCC had rejected the argument that it should adopt a strict “human intervention” test to determine whether a device is an autodialer.  Instead, the FCC stated, “how the human intervention element applies to a particular piece of equipment is specific to each individual piece of equipment, based on how the equipment functions and depends on human intervention, and is therefore a case-by-case determination.”  Applying this language, the court found important issues of fact to be decided before it could determine whether the welcome message received by the plaintiff was sent using an autodialer.  Among those issues were the extent to which human intervention was involved in generating the welcome message and whether it was part of the user’s message or a separate text message.

This case illustrates the difficulty in determining what constitutes an autodialer under the TCPA in light of the vague standards adopted by the FCC.  Given the uncertainty in this area, companies providing services relating to texting and engaging in text communications should tread carefully.  In consumer class action litigation, a denial of summary judgment often is the equivalent of a loss since the financial incentives to settle may be overwhelming.  Few legal tests generate more uncertainty than the “case-by-case” inquiry.

Over the years, the FCC has adopted an increasingly expansive view of what qualifies as an autodialer but repeatedly has failed to provide clear standards for making this determination.  The 2015 Declaratory Ruling is consistent with that trend.  It is now under challenge in federal court on grounds that, among other things, its interpretation of what constitutes an autodialer is impermissibly vague and internally inconsistent.

For more information, please contact one of the authors.