Microsoft Loses Round In Text Spam Lawsuit

by Wendy Davis, Jul 31, 2012, 8:19 PM

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In a blow to Microsoft, a judge has refused to dismiss a potential class-action lawsuit alleging that it sent text spam to consumers.

U.S. District Court Judge Janis Sammartino in the Southern District of California rejected Microsoft's argument that the case should only proceed if the consumer who sued could show an economic injury. Sammartino ruled that the federal law prohibiting text spam allows people to sue regardless of whether they had to pay extra to receive the messages.

The potential class-action dates to last August, when Illinois resident Neil Smith sued Microsoft for allegedly sending text ads promoting the Xbox. He alleged that the campaign violated the Telephone Consumer Protection Act, which prohibits companies from using automated dialing systems to make calls to cell phones unless the recipients have consented. The statute provides for damages of up to $1,500 per violation.

Microsoft argued that Smith didn't allege enough facts to show he had "standing" to bring the case. Specifically, Smith didn't allege that his carrier charged him any extra fees for the texts he allegedly received from Microsoft. "He nowhere alleges he personally suffered any actual harm," Microsoft argued in its motion to dismiss the lawsuit.

But Sammartino ruled that Smith can proceed with the case regardless of whether the text ads cost him money. "The TCPA, by its unambiguous terms, does not limit protection to instances in which a plaintiff is charged individually, or even incrementally, for each text message," Sammartino wrote.

Microsoft isn't the only company to face accusations that it violated the federal law. Three years ago, the 9th Circuit Court of Appeals ruled that sending SMS messages potentially violates the federal Telephone Consumer Protection Act. That ruling spurred a wave of potential class-action lawsuits against companies that ran text ad campaigns.

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