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Rodney L. Joffe v. Acacia Mortgage Corporation

Transmission Of Unauthorized Commercial Emails Can Violate The Telephone Consumer Protection Act

Court holds defendant's unauthorized transmission of commercial e-mails automatically converted by recipient's cell phone carrier into text messages runs afoul of the Federal Telephone Consumer Protection Act, 47 U.S.C. §227 ("TCPA").  Such conduct constitutes a prohibited use of an "automatic dialing system" to make a "call" to a "telephone number assigned to a cellular telephone service." 47 U.S.C. §227 (b)(1)(A)(iii).  The Court further held that the TCPA was neither preempted by the CAN-SPAM Act's regulation of such conduct, nor an unconstitutional regulation of speech that violated the First Amendment.

Spam Automatically Converted Into Text Message Sent To Plaintiff's Cell

Defendant Acacia Mortgage Corp. ("Acacia") embarked on a program of advertising via e-mail low interest rate home mortgages.  As part of these marketing efforts, Acacia's computers sent two advertisements to an e-mail address comprised of a combination of plaintiff's cell phone number, and his telephone carrier's domain name, i.e., "telephonenumber@att.net."  Plaintiff's cell phone carrier, in turn, converted Acacia's e-mails into text messages, which it then sent to plaintiff's cell phone as part of its "Short Message Service."

Acacia "Called" Plaintiff By Sending Him Emails

Plaintiff filed suit, asserting that defendant's conduct violated the Telephone Consumer Protection Act.  The Arizona Superior Court agreed, and found Acacia liable for a violation of the TCPA.  This decision was affirmed on appeal by the Arizona Court of Appeals.

To be subject to the TCPA, a defendant must use an "automatic dialing system," to place a "call" to "any telephone number assigned to a … cellular telephone service."  The Court first determined that by sending the e-mails at issue, defendant had placed a "call," a term undefined in the Act.  Relying largely on its dictionary definition, the Court held that the word "call," as used in the Act, "refer[ed] to an attempt to communicate by telephone."  As such, held the Court, a text message can constitute a call within the meaning of the Act, as it is a means of communicating via telephone with another.  So too can the transmission of an e-mail which, by virtue of the cellular phone service's Short Message Service, will be converted into a text message.

In reaching this result, the Court rejected Acacia's argument that the TCPA only regulated ordinary telephone "calls" that presented the opportunity for "two-way real time voice intercommunication."  Such an interpretation was supported neither by the statute itself, nor its legislative history.  Quite the contrary, both sources evidenced Congress' desire that the Act regulate machine made automated calls that presented no possibility for real time intercommunication, such as those using artificial or prerecorded voices. 

The Court also rejected Acacia's argument that it did not place a telephone "call" at all, and instead simply sent an e-mail message.  Because the message it sent caused the cell phone carrier, via its SMS system, to automatically send a text message to plaintiff, it was an attempt to communicate via telephone - and a "call" - subject to the strictures of the TCPA.  Said the Court:

As is clear from the foregoing discussion, Acacia did not, as it contends, simply send e-mail to an e-mail address.  Using its computers and the Internet, Acacia co-opted the SMS service offered by Joffe's carrier to deliver SMS text messages to Joffe by telephone.  As the trial court correctly observed, Acacia "initiated a demand to make a connection . . . for the purpose of delivering a message by telephone encouraging the purchase of services or investment in a product offered" by it.  In so doing, Acacia attempted to communicate by telephone.  Under the TCPA, Acacia called Joffe.

The Court also held that Acacia had used an "automatic dialing system" when sending the e-mails at issue.  As defined by the Act, an "automatic telephone dialing system" consists of "equipment which has the capacity (a) to store or produce telephone numbers to be called, using a random or sequential number generated and (b) to dial such numbers."

Acacia's Computers Constituted An Automatic Dialing System 

The Court held that Acacia's computers constituted the requisite "automatic telephone dialing system" because, in conjunction with the cell phone carrier's SMS, they had the capability to cause a cell phone to be dialed.  Said the Court:

Acadia did not simply send e-mail to an e-mail address.  Acacia took advantage of a service offered by Joffe's carrier to reach Joffe's cellular telephone.  Even though Acacia used an attenuated method to dial a cellular telephone number, it nevertheless did so. 

As such, held the Arizona Court of Appeals, Acacia's transmission of unauthorized commercial e-mails that caused text messages to be sent to plaintiff's cell phone by operation of his carrier's Short Message Service was conduct prohibited by the Telephone Consumer Protection Act.  Said the Court:

By pairing its computers with SMS technology, Acacia did what the TCPA prohibits.  It used an automatic telephone dialing system to call a telephone number assigned to a cellular telephone.

No Preemption By CAN-SPAM

The Court rejected Acacia's argument that the TCPA was preempted by either the CAN-SPAM Act, or regulations promulgated thereunder by the FCC governing the transmission of commercial electronic mail messages directly to wireless devices.  It also rejected Acacia's arguments that in light of such regulations, the Court's interpretation of the TCPA was overly broad.  The Court agreed that the conduct at issue was subject to FCC regulations promulgated under CAN-SPAM.  However, noting that the Act specifically states that "[n]othing in this Act shall be interpreted to preclude or override the applicability of [the TCPA]. . . " 15 U.S.C. § 7712(a), the Court concluded that "nothing in the wording, legislative history or FCC implementation of the CAN-SPAM Act demonstrates Congress intended only the CAN-SPAM Act, and not the TCPA, to apply to the SMS text message calls Acacia made to Joffe."

No Violation Of Acacia's First Amendment Rights

Finally, the Court rejected defendant's argument that the TCPA was an impermissible regulation of speech that violated Acacia's rights under the First Amendment.

As a "content neutral, time, place and manner restriction on speech," the TCPA will pass constitutional muster if it serves "a significant governmental interest," is "narrowly tailored" to serve that interest, and leaves "open amply alternative channels for communication of the information."  The Court held the TCPA met these strictures, and hence was constitutional.  The TCPA served a significant governmental interest by "protecting the privacy of cell phone users from automated calls."  It was narrowly tailored because it only prohibited calls using "automatic dialing systems."  Finally it left open many other means for communicating with targeted consumers, such as through calls dialed by hand, calls placed by telephone solicitors or calls made with consumer consent.

The Court of Appeals accordingly affirmed the lower court's determination that defendant Acacia's conduct violated the TCPA.