SMS Spam Litigation – The Next Wave?


Apart from Joffe and a few other cases, SMS spam litigation has been relatively rare to date.  There are probably many reasons for this.  One of the reasons is that (in my experience at least) SMS spam comes from a company you’ve never heard of, for a product you’ve never heard of.  A recent case from the Northern District of California presents a slightly different scenario, although the advertisers ultimately ended up winning on summary judgment:  Satterfield v. Simon & Schuster, 2007 U.S. Dist. LEXIS 46325 (D. Cal. 2007) [pdf version of the Order here].   

Satterfield has fairly egregious facts.  Plaintiff visited www.nextones.com at her 6 year old son’s request to download a free ringtone. Before receiving the free ringtone, Plaintiff had to go through a sign in process.  She entered her son’s initials, her email address, gender and age. Then:

[s]he checked an empty box, next to which were the word: "Yes! I would like to receive promotions from Nextones affiliates and brands. Please note, that by declining you may not be eligible for our FREE content." 1 She then clicked the "Submit" button; above the button appeared, "By clicking Submit, you accept that you have read and agreed to the Terms and Conditions." 

Nextones' terms state that Nextones and its affiliates may use a mobile phone number in connection with any text message offering or other campaign. Nextone supposedly “maintains a strict ‘no-spam’ policy and, absent prior consent, does not share personal profile information, including mobile phone numbers, with any third party.”

A little over a year after downloading the ringtone, Plaintiff's son received a SMS message on the cellular telephone he used. The message stated: 

The next call you take may be your last… Join the Stephen King VIP Mobile Club at www.cellthebook.com. RplySTOP2OptOut. PwdByNexton.

The text message advertised the Cell, Stephen King's upcoming book, which was published by Simon & Schuster.  The court explains at length the process through which Simon & Schuster outsourced its marketing campaign for Cell to ipsh! who obtained plaintiff’s email address through Mobile Interactive Agency, who had an agreement with Nextones.

The parties both moved for summary judgment.  The court grants summary judgment to defendant on two counts:  (1) the equipment at issue is not an automatic telephone dialing system under the TCPA and (2) the calls were made with the "prior express consent of the called party." 

My take is that the decision is questionable on both counts.  Most significantly, I'm not sure about the court's conclusion that an admittedly vague terms of use assented to by checking the box on a cell phone constitutes consent to receive a message from an unrelated third party.  The court doesn’t talk about whether this is click-wrap or browse wrap, whether disclosure to the consumer was conspicuous.  I think this seriously stretches the concept of consent.  The privacy policy at issue also suffers from some failings.  Indeed, Defendants’ actions seem to contradict Nextone’s own privacy policy, which states:

absent prior consent, does not share personal profile information, including mobile phone numbers, with any third party. 

From what I know, the fact pattern described in the case is very typical for how legitimate sms advertisers operate.  Intermediaries obtain opt-ins and then take these opt-ins along with demographic information to third parties.   I imagine this will not be the definitive word on this type of an arrangement.

[NB:  I'm not sure why the Plaintiff's 6 year old son had his own mobile phone.]
 

 
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