In a blow to Jiffy Lube franchisee Heartland Automotive Services, a federal judge has given the go-ahead to a lawsuit accusing the company of spamming customers with text ads for discounts.
U.S. District Court Judge Jeffrey Miller in the Southern District of California rejected Heartland's argument that the Telephone Consumer Protection Act, which requires companies to obtain users' express consent before sending them text ads, unconstitutionally restricts free speech.
Miller also disagreed with Heartland's Jiffy Lube's stance that it couldn't be held responsible for the ads because it had tapped an outside company, TextMarks, to manage the campaign.
"Heartland should not be allowed to avoid TCPA liability merely because it hired a different firm to send advertisements to its customers," Miller wrote in a ruling denying Heartland's motion to dismiss the lawsuit.
The case dates to last year, when several consumers filed a potential class-action against Heartland and TextMarks for allegedly sending unsolicited text messages advertising a "1 time offer" for 45% off an oil change.
The consumers argued that the ads violate the TCPA, which prohibits companies from using so-called automatic telephone dialing systems to make calls to cell phones unless the owners have consented. Other judges have said the law applies when companies use devices capable of generating phone numbers to send text messages without users' permission. The law provides for damages starting at $500 per violation.
Heartland argued that the TCPA is unconstitutional because many common devices, including smartphones and computers, have automated dialing systems. Therefore, Heartland said, the law would infringe on free speech principles by preventing consumers from using iPhones or BlackBerrys to send texts without the recipients' consent.
"Heartland posits that a person could be held liable under the TCPA if she were to send a dinner invitation to a friend of a friend using a machine that has the capacity to randomly or sequentially generate telephone numbers," Miller wrote.
But the judge rejected that argument as too farfetched. "The court cannot conclude that use of personal electronic devices in the situations posed by Heartland would be restricted by the TCPA," he wrote.
The ruling shows that SMS campaigns can prove dangerous for marketers, Internet legal expert Venkat Balasubramani says in a blog post. "The big takeaway from the order is that text message-based marketing is something that companies often screw up, and these screw-ups end up being costly," he writes. "Rulings like these make me think companies should consider avoiding text message-based marketing altogether."