On March 27, 2014, the Federal Communications Commission (FCC) addressed an outstanding petition1 seeking guidance for compliance with the “prior express consent” requirement of the Telephone Consumer Protection Act (TCPA) for informational text messages.2 In a declaratory ruling, the FCC provided clarification of this requirement, and specifically addressed whether an intermediary may provide such consent. The FCC agreed with group texting service GroupMe, Inc. that, consistent with the TCPA, intermediaries may convey consent provided by others to receive informational text messages.3 However, the FCC made clear that companies ultimately remain liable where intermediaries fail to obtain the required consent. The ruling demonstrates a current trend at the FCC to allow businesses communicating with consumers by text message some flexibility while navigating the TCPA’s increasingly complex requirements.

Background

The TCPA was enacted to protect consumers from unwanted telemarketing communications without inhibiting communications from businesses that consumers want or that do not otherwise implicate the harms that the TCPA was intended to prevent. It generally prohibits calls and text messages4 to wireless numbers made using an “automatic telephone dialing system”5 (often referred to as an “autodialer”) or an artificial or prerecorded voice message without the prior express consent of the called party.6 Recently, consumer communication preferences have shifted to more text-based, mobile communications facilitated by technological developments such as social network messaging applications. As a result, businesses are increasingly using text messages to communicate with consumers and facing new challenges complying with TCPA restrictions. The rise in the number of text-based services and methods of customer communications has led to an onslaught of TCPA putative class actions. The incentive for plaintiffs’ lawyers to file such claims is great because the TCPA provides a private right of action and statutory damages of up to $1,500 per text message without requiring the plaintiff to show any actual damages.7 The business challenges of obtaining prior express consent in the myriad contexts in which text messaging is now utilized, as well as the epidemic of putative class actions based on the receipt of a single text message confirmation, invitation, notice, or other non-telemarketing communication, have led many companies to petition the FCC over the past few years for rulings that make clear that these types of text messages do not violate the TCPA.

In March 2012, GroupMe filed such a petition asking the FCC to clarify that, consistent with the TCPA, GroupMe and other companies may rely on an intermediary’s representation that it obtained the requisite prior consent from the text recipient to be sent the text at issue. According to the FCC’s ruling, the GroupMe app provides a free text messaging service that allows users to create messaging groups of up to 50 people. GroupMe users can invite their friends, family, and other people whose cell phone numbers they have to a group by providing GroupMe with the individuals’ wireless numbers. GroupMe then sends up to four informational text messages to those wireless numbers. The messages contain information about the group and its members, instructions to stop receiving messages associated with the group, and instructions for downloading the GroupMe app.

Because it would be impossible for GroupMe to directly obtain the necessary express consent from the individuals being invited to join a GroupMe group, GroupMe relies on the GroupMe users’ (i.e., an intermediary’s) representations that they obtained prior express consent from the invitees. The GroupMe users make the representation when creating a group and agreeing to GroupMe’s terms of service, which include a representation that any individuals invited to the group consented to be added to the group and receive text messages. In its petition, GroupMe asked the FCC to clarify that such consent, obtained by an intermediary, satisfies the TCPA’s prior express consent requirement for informational calls or texts to wireless numbers.8

GroupMe Declaratory Ruling

In the declaratory ruling responding to GroupMe’s petition, the FCC agreed with GroupMe. Specifically, it clarified that for informational (i.e., non-telemarketing) texts, “a consumer’s prior express consent may be obtained and conveyed by an intermediary, such as the organizer of a group using GroupMe’s service.” In making this clarification, the commission noted that neither the TCPA nor the FCC’s rules or orders require a specific method for obtaining prior express consent for non-telemarketing calls. This lack of a required method for obtaining consent allowed the commission to exercise its discretion to interpret the prior express consent requirement by looking at the intent of the TCPA. It concluded that the informational messages were “normal business communications” and “expected and desired by consumers who gave prior express consent to participate in a GroupMe group” and receive associated text messages.9 It further concluded that allowing consent to be conveyed by an intermediary in this context was consistent with the goals of the TCPA, because the person conveying the consent already has an established relationship with the called party and is required to represent that such party has consented to the communications.

The FCC stressed, however, that GroupMe and other businesses that are sending the informational text messages remain liable if the intermediary did not in fact obtain consent from the recipient for the messages to be sent. Further, the scope of the consent is limited to messages about the particular group the text recipient consented to join. The commission also encouraged GroupMe to ensure full disclosure to its user-intermediaries of the requirement to obtain prior express consent and their representation to GroupMe of obtaining it, even though GroupMe’s terms of service include applicable language.

Implications

The FCC’s clarification in the GroupMe declaratory ruling that prior express consent may be obtained through an intermediary is a welcome development for many businesses. Numerous group messaging, mobile social network, and other communication apps and services exist that allow users to invite people they know and whose cell phone numbers they possess to join the service. Although ultimately such services may still face lawsuits if their users do not actually obtain consent from the people whose cell phone numbers they are sharing, the clarification enables these services to comply with the TCPA’s prior express consent requirement. Companies that send text messages at the direction of users of their services should especially take note of the ruling and consider its impact on their business practices. It may provide such organizations with more flexibility for complying with the TCPA’s consent requirement.10

Companies that deliver informational text messages to consumers via cell phone numbers may also wish to consider seeking an exemption from the TCPA. If a company moves to a free-to-end-user service when sending informational text messages, it may be able to obtain a ruling from the FCC exempting the messages from compliance with TCPA restrictions. Cargo Airline Association recently obtained such an exemption, subject to several conditions, for free-to-end-user package delivery notifications.11

The recent ruling addresses only a small portion of the backlog of petitions regarding TCPA compliance. As the FCC works through the remaining petitions, it will provide additional guidance on many uncertain areas, including “what it means to initiate a call, whether there is liability for calls made to reassigned phone numbers . . . whether consent can be inferred from consumer behavior or social norms, whether devices including smartphones could be considered automatic telephone dialing systems, and what types of faxes are actually unsolicited.”12 Hopefully the FCC will continue to recognize that many companies are now using text messaging for “normal, expected, and desired business communications” that do not implicate the harms addressed by the TCPA and provide additional welcome guidance on the pending issues consistent with such recognition.

1 On March 27, the FCC also granted Cargo Airline Association’s request for an exemption from TCPA restrictions for free-to-end-user delivery notification cell phone calls and text messages subject to several conditions. See Order, In the Matter of Cargo Airline Association, FCC 14-32 (March 27, 2014), available at http://transition.fcc.gov/Daily_Releases/Daily_Business/2014/db0327/FCC-14-32A1.pdf.

2 47 U.S.C. § 227.

3 Declaratory Ruling, In the Matter of GroupMe, Inc./Skype Communications S.A.R.L., FCC 14-33 (March 27, 2014), available at http://transition.fcc.gov/Daily_Releases/Daily_Business/2014/db0327/FCC-14-33A1.pdf.

4 Although the statute refers to “calls,” the FCC has concluded that a “call” includes the transmission of a text message. In re Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, Report and Order, 18 FCC Rcd. 14014, 14115 (July 3, 2003). Numerous courts have adopted this interpretation. See, e.g., Saterfield v. Simon & Schuster, Inc., 569 F.3d 946, 954 (9th Cir. 2009).

5 The TCPA defines “automatic telephone dialing system” as equipment that has the “capacity” to both “store or produce telephone numbers to be called, using a random or sequential number generator; and . . . to dial such numbers.” 47 U.S.C. § 227(a)(1). Despite this very specific definition, plaintiffs have argued that any equipment that has the capacity to automatically dial numbers from a list or database without human intervention is an “automatic telephone dialing system” for purposes of the TCPA. Thus, many putative TCPA class actions have been filed based on text messages allegedly sent to users of a service using a computerized or otherwise automated dialing system.

6 47 U.S.C. § 227(b)(1)(A).

7 47 U.S.C. § 227(b)(3).

8 The FCC’s new TCPA rules, which took effect October 16, 2013, require prior express written consent for all marketing or promotional calls or text messages to wireless numbers made using autodialers or artificial or prerecorded messages. Under the rules, the written consent must include specific authorization language and a “clear and conspicuous” disclosure. See our WSGR Alert discussing the new TCPA rules at http://www.wsgr.com/WSGR/Display.aspx?SectionName=publications/PDFSearch/wsgralert-TCPA-changes.htm.

9 Declaratory Ruling, supra note 3 at ¶ 8.

10 Id.

11 See Order, supra note 1.

12 Michael O’Rielly, FCC Commissioner, “TCPA: It is Time to Provide Clarity,” Official FCC Blog (March 25, 2014), http://www.fcc.gov/blog/tcpa-it-time-provide-clarity.