Readers may recall a recent piece in which we discussed Texas Senate Bill 140 (“SB 140”), which resulted in sweeping amendments to Texas’ mini-Telephone Consumer Protection Act (“TCPA”). Readers familiar with that piece may also recall our guidance that these amendments do not contain an express exemption for text message-based solicitations to consumers who have provided their consent to be contacted. Now, a nonprofit corporation and two e-commerce companies have asked a Texas federal court to determine whether Texas’ SB 140 can lawfully restrict the sending of text messages to consumers who have requested them.
Texas SB 140 Constitutional Challenge
The Ecommerce Innovation Alliance (“EIA”) is a nonprofit corporation whose members include e-commerce businesses and technology vendors. Among other things, EIA’s stated purpose is to help members navigate telemarketing laws at the federal and state levels. In line with its goals, EIA, along with two e-commerce companies (“Movants”), recently asked a Texas federal court to block the enforcement of SB 140. The lawsuit named as defendants the State of Texas, Ken Paxton, and Jane Nelson, in their official capacities as Texas’ Attorney General (“Texas AG”) and Texas’ Secretary of State, respectively (collectively, the “Texas State Defendants”). Specifically, Movants claimed that SB 140 unconstitutionally restricts protected commercial speech by prohibiting businesses from engaging in consent-based text messaging. The Texas State Defendants opposed the entering of any injunctive relief, but interestingly, explicitly stated that SB 140 is aimed at stopping unwanted, deceptive solicitations, especially spam texts sent without permission. Because Movants only send marketing texts to consumers who opt-in, the Texas State Defendants are not engaging in a “deceptive practice,” which is the primary purpose of SB 140.
What Is The Impact of Texas’ Statements About SB 140?
In its opposition, the Texas AG noted that its authority to bring civil enforcement actions is discretionary, rather than mandatory, and its goal is to enforce SB 140’s primary purpose (i.e., protect consumers from false, misleading, or deceptive telephone solicitations). For its part, the Texas Secretary of State stated that it only administers regulations, and that it does not investigate or enforce violations of SB 140 or Texas’ mini-TCPA.
As discussed in our prior piece, SB 140 imposes burdensome registration and disclosure requirements on companies that send telephone solicitations to consumers in Texas. It is unclear whether these requirements apply to companies that send consent-based marketing text messages, but a plain reading of the statute suggests that these communications are not included within the updated definition of “telephone solicitation” because: (1) as amended by SB 140, telephone solicitation is defined as “a call or other transmission . . . initiated by a seller or salesperson to induce a person to purchase, rent, claim, or receive an item. The term includes a telephone call a purchaser makes in response to a solicitation sent by mail or made by other means”; and (2) Chapter 304 of Texas’ mini-TCPA clarifies that a telephone call “does not include a transmission made to a mobile telephone number as part of an ad-based telephone service, in . . . which the telephone service customer has agreed . . . to receive the transmission.” Notwithstanding the lack of clarity, companies may also be exempt from SB 140’s registration and disclosure requirements if they send solicitations: (1) to customers and former customers; and (2) have operated under the same name for two years.
While it is reassuring that the Texas AG is not looking to punish companies that send consent-based messages to consumers, until a Texas court weighs in on this issue, sending marketing text messages to consumers in Texas may lead to private lawsuits. Readers should be aware of the fact that, as a result of SB 140, violations of Texas’ mini-TCPA are considered a deceptive trade practice and can result in civil penalties of $5,000 per violation.
The attorneys at Klein Moynihan Turco (“KMT”) have extensive experience assisting companies with regulatory and marketing compliance. If your company engages in telemarketing to consumers in Texas and needs help complying with telemarketing regulations, please e-mail us at info@kleinmoynihan.com, or call us at (212) 246-0900.
The material contained herein is provided for informational purposes only and is not legal advice nor is it a substitute for seeking legal advice from an attorney. Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney.
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