Simon & Schuster faces a potential class-action settlement payout totaling as much as $90 million after an appellate court determined the publisher broke a federal telecommunications law by launching a text messaging campaign in support of the Stephen King novel Cell. The U.S. Court of Appeals for the Ninth Circuit in San Francisco unanimously overturned a lower court decision to rule that text messages are under the purview of the federal Telephone Consumer Protection Act, which makes it unlawful to make automated calls to wireless handsets. The court based its ruling on a prior interpretation by the Federal Communications Commission: "The FCC has explicitly stated that the TCPA's prohibition... ‘encompasses both voice calls and text calls to wireless numbers including, for example, short message service (SMS) calls.' [W]e find that the FCC's interpretation of the TCPA is reasonable, and therefore afford it deference to hold that a text message is a ‘call' within the TCPA."
The class-action case against Simon & Schuster was brought by Laci Satterfield, whose son received a text message promoting Cell with the tagline "The next call you take may be your last." The suit is brought on behalf of a putative class of 60,000 people, each of whom could receive at least $500 and as much as $1,500 if the violation is ruled to be intentional. The U.S. District Court for the Northern District of California initially dismissed the Simon & Schuster case, determining that the TCPA did not apply to text campaigns and adding that Satterfield had consented to receive text messages by downloading a free ringtone from an unrelated website. The appellate court rejected both arguments.
For more on the Simon & Schuster case:
- read this New York Times article [1]
Links:
[1] http://www.nytimes.com/2009/06/23/books/23arts-CELLRULINGIS_BRF.html