In Newell v. JR Capital, LLC, a federal judge in the Eastern District of Pennsylvania recently addressed a motion to dismiss a claim alleging violations of the Telephone Consumer Protection Act (TCPA) related to marketing text messages. The plaintiff, Jourey Newell, claimed that JR Capital sent him five telemarketing text messages without required caller identification information, specifically JR Capital’s name, which he alleged violated 47 C.F.R. § 64.1601(e).
In a questionable analysis, the court concluded that a private cause of action exists to sue for violations of § 64.1601(e) because the regulation was promulgated under § 227(c) of the TCPA, which creates a right for some regulations created by the Federal Communications Commission in their power to interpret the TCPA. While the FCC has never itself said that § 64.1601(e) can be enforced through private litigation, this court found that caller ID is considered a “network technology” under § 227(c), based on the administrative history of the FCC. Further, the court concluded that § 64.1601(e)’s caller ID requirements extend to text messages.
Regarding the requirement for the company to include its name in text messages, the court determined that the complaint stated a claim because the complaint alleged that JR Capital’s text messages did not include the name of the seller or telemarketer. While the texts included a website link to “jrwcap.com/equipment,” the court found that “jrwcap.com” is not the same as “JR Capital”. The court also noted that requiring a recipient to click a link to identify the sender shifts the burden and risk of malware and phishing to the consumer, which this court decided goes against the TCPA’s purpose of protecting consumer privacy (even though neither Congress nor the FCC has ever even implied that malware or phishing concerns are relevant considerations for the TCPA). The court further also concluded that the administrative record from when the FCC promulgated § 64.1601(e) indicated that the FCC considered but declined to adopt a rule that would have made website URLs a compliance option for the identification requirements.
How the Court’s Decision Errs
While this case will move forward in the Eastern District of Pennsylvania, this is not the end of the story. EIA’s review of the court’s opinion finds that the court’s decision fails to address a critical caveat within 47 C.F.R. § 64.1601(e). The regulation states that caller identification information “must include either [calling party number] or [automatic number identification], and, when available by the telemarketer’s carrier, the name of the telemarketer.” The court never confronts this critical requirement – which clearly requires the name to be transmitted by the carrier as part of their caller ID service.
The court’s opinion discusses the requirement for the telemarketer’s name to be transmitted without addressing whether the complaint plausibly alleges that transmission of this information was “available by the telemarketer’s carrier.” Rather, the court merely accepts the notion that the sender’s name must be included in the text message itself. Placing the name of the business directly within the body of a text message, however, is fundamentally different than the name being transmitted as part of the caller ID, which is a technical service provided by telecommunications carriers, and where the name would appear as part of the display information related to the message, rather than within the body of the message itself.
This distinction is significant. The FCC imposed a caller ID requirement – not a requirement that requires businesses to include content in their text messages. The regulation clearly ties the requirement for the name to be transmitted to the question of whether this service is available from the carrier. Indeed, the FCC’s 2003 Order discusses the caller ID requirement in connection with the availability of SS7 signaling, which is a set of protocols used in telecommunications networks to manage call setup, routing, and other signaling functions. It’s the foundation for how phone calls, SMS messages, and other services are established and maintained across networks, including both landlines and mobile phones. In its 2003 Order adopting the Caller ID requirement, the FCC made clear that if caller ID information, including the name, “is not passed through to the consumer, through no fault of the telemarketer originating the call, then the telemarketer will not be held liable for failure to comply with the rules.” In re Rules & Regulations Implementing the Tel. Consumer Prot. Act of 1991 , 18 FCC Rcd 14014, 286-287 (emphasis added). The FCC’s phrasing of the information being “passed through,” combined with its discussion regarding the importance of 227 signaling in adopting the caller ID rules, makes clear that the requirement to transmit the name exists only if the carrier networks makes it possible to transmit the name as part of the signaling and call setup information that is passed between carrier networks to route the calls and text messages, and imposes no obligation to include the information in the body of the text message itself.
Caller ID for SMS is Not the Same as Caller ID for Voice Calls
The ability to display a business name for voice calls and A2P SMS messages differs significantly due to fundamental technical distinctions. For voice calls, the Caller ID Name (CNAM) system operates by performing a real-time database lookup. When a call is received, the recipient’s carrier queries a CNAM database that associates phone numbers with registered names. This name isn’t transmitted directly with the call; it’s pulled from an external database based on the originating phone number. In stark contrast, Application-to-Person (A2P) SMS messages (sent from applications to mobile users) are routed through intermediary SMS gateways and messaging service providers, not directly from a personal phone line. The SMS protocol itself, governed by standards like GSM 03.40, includes only a single “Sender ID” field. This field is designed to carry either a numeric phone number or a short alphanumeric string, but it lacks the capability for a dynamic, lookup-based name like CNAM.
The technical architecture of SMS messages imposes rigid constraints on sender identification. The “Originating Address” (TP-OA) field within an SMS message’s data unit is strictly structured to define the sender as either a numeric phone number or an “Alphanumeric” string, among other predefined formats. Crucially, this protocol was not designed to support a dynamic, lookup-based name. Furthermore, alphanumeric Sender IDs are limited to a maximum of 11 characters. This historical constraint, dating back to early mobile phone technology, persists due to the immense challenge and cost of modifying foundational global telecommunications standards for backward compatibility across all networks and devices. This fixed, character-limited field directly prevents the inclusion of both a phone number (which is absolutely required under FCC rules) and the business name (which is required only where possible) in the Sender ID.
While the 11-character limitation makes it impossible to include both a phone number and a name, a significant functional and regulatory problem would arise if a business attempted to use alphabetical characters in Sender IDs: any Sender IDs that include an alphabetical character are inherently one-way. Recipients are unable to reply to messages sent using an alphanumeric Sender ID because there’s no routable return address associated with a non-numeric string. This design choice is rooted in the technical complexities of routing replies to non-numeric identifiers and, critically, serves as a measure for fraud prevention. If consumers cannot reply, they are unable to request more information or, more importantly, opt-out of receiving text messages using industry-standard opt-out words like STOP. This directly conflicts with other regulations which prioritize the ability to easily stop unwanted communications.
Why Does This Decision Matter?
While EIA believes that this court’s analysis fails to address the critical legal issue or to understand the important technical limitations of caller ID for SMS, the decision is nevertheless material because it was brought by a serial plaintiff’s attorney who regularly files TCPA class actions. And, it is not uncommon for one bad decision to create copycat litigation or even be followed by other judges who may not scrutinize the regulatory language with a clear understanding of how telecommunications networks and signaling work. Therefore, the decision is likely to prompt more costly litigation against companies if they omit their name from their marketing text messages.
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