Texas SB 140 Under Scrutiny – Advertising, Marketing & Branding

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.

Similar Blog Posts:

What Is A “Residential Subscriber” Under
The TCPA?

TCPA Compliance is Essential! Give Your Practices
and Procedures a Facelift

TCPA Quiet Hours Telemarketing and Consent

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