Text Messaging Featured Article

Last week, a federal appellate court made the decision that Taco Bell was not responsible for a mass-texting campaign that a mobile-marketing agency called Ipsh allegedly sent out to consumers.

This legal battle was almost 10 years in the making, stemming from a 2005 advertising campaign in the Chicago area, where local residents received mass texts from Ipsh urging them to vote on their favorite flavor of Taco Bell Nachos. Because Ipsh was arranged through local ad agency ESW Partners—and because Taco Bell was not the one to contact the ad agency directly—the Taco Bell Corporation was not found to be liable.

This decision is quite controversial, as it makes it more difficult for consumers to sue advertisers directly, as they have to follow the paper trail to find out which ad agency is responsible for the texts. These types of mass text messages violate the federal Telephone Consumer Protection Act (TCPA), which makes it illegal for companies to use automatic telephone dialing systems to make calls (or send texts) to cell phones without the recipients' consent.

However, Taco Bell could not be held responsible due to the fact that it “had no role in the decision to distribute the message by way of blast text or that it ever reviewed any proposed text message, or even knew about the outgoing text message component of the local promotion,” according to appellate papers issued by the company.

This ruling could have far-reaching effects on how companies interact with text-spam laws, with some critics even referring to the Taco Bell situation as a blueprint for escaping liability. Because the stores were operated by franchises, their decisions technically do not reflect the Taco Bell corporation's decisions – even if they are promoting Taco Bell products which the company directly benefits from.

Since the 2005 incident, Ipsh has renamed themselves “The Marketing Arm,” although it is unknown if the company will come under fire now that Taco Bell has been cleared.