Advertising Law Blog

On September 1, 2025, Texas Senate Bill 140 (“SB 140”) expanded the state’s telemarketing law to cover text messaging under Chapter 302 of the Texas Business & Commerce Code. Previously, these rules primarily applied to telephone calls, but SB 140 was designed to include unwanted or “spam” text messages. Critical to businesses that use text messaging for marketing purposes, SB 140’s broad language appears to expose such businesses to burdensome registration and bonding requirements, even if the businesses limit their marketing texts to consumers who have opted in voluntarily. This uncertainty prompted a same-day legal challenge in federal court, filed by Flux Footwear, Postscript, and the Ecommerce Innovation Alliance (EIA).

These plaintiffs sued the State of Texas, arguing that SB 140 unfairly burdens businesses engaged in consent-based marketing. For example, Flux Footwear invites customers to provide their phone numbers in exchange for discounts, while Postscript operates a platform that helps businesses send texts only to consumers who have requested them. The lawsuit argues that SB 140 imposes significant burdens on them, such as registration fees, public disclosure of proprietary business information and quarterly reporting requirements, without furthering the purpose of curbing unsolicited texts.

In addition to the registration burden, plaintiffs argue that the new law is unconstitutionally vague. Key terms such as “purchaser located in the state,” “customer,” and “retail establishment” are undefined, and there are separate references to the terms “telephone call,” “call” and “telephone solicitation.”

Compliance has become a guessing game and businesses are uncertain as to how to protect themselves because they cannot reliably determine the real-time location of a text recipient and may not know someone’s current state of residence. Does SB 140 require registration for businesses that text only with prior consumer consent? Does it apply to consumers with Texas area codes? To those physically located in Texas? This ambiguity could chill lawful commercial speech, as it may lead businesses may stop sending texts to Texas consumers, even when those consumers have explicitly indicated a desire to receive the messages.

The businesses are seeking a preliminary injunction in the Western District of Texas that would prevent the law from remaining in effect as currently worded. The court currently has a November hearing date scheduled.

Commercial speech, so long as truthful and lawful, is generally protected under the First Amendment. The lawsuit contends that Texas has conflated wanted and unwanted texts, punishing consent-based communications as if they were spam. The plaintiffs emphasize that consumers who opt in have a legal right to receive messages as requested, and the law’s overreach unnecessarily limits both commercial speech and consumer choice.

In late September, the State of Texas filed its opposition to the preliminary injunction motion, but that only muddied the water even further. The state appears to take the position that SB 140 does not apply to businesses that only text to consumers from whom they have obtained consent. According to the State of Texas’ filing, SB 140 “does not arguably proscribe Plaintiffs’ conduct. […] A plain reading of the statute suggests ‘texts sent with the consent of the recipient’ are not among the communications captured by Chapter 302’s updated definition of ‘telephone solicitation.’ […] Because Plaintiffs operate ‘text-messaging campaigns’ reaching only consumers who have consented to receive those text messages, their services are specifically exempted from regulations reaching ‘telephone calls.’”

The state emphasizes that uncertainty alone is not enough to strike down a law, and warns that enjoining SB 140 would undermine consumer protection efforts while allowing deceptive marketers to continue evading oversight.

But there are flaws in the state’s logic, and in any event, the court is not due to issue a ruling until November at the earliest.

The lawsuit highlights the tension between protecting consumers from unwanted communications and allowing lawful, consent-driven marketing. So far, neither the new statute nor the lawsuit itself have provided any clarity to businesses trying to decide whether or not to register in Texas as a telemarketer. The court’s eventual ruling will have far-reaching implications for e-commerce businesses. Those companies trying to navigate Texas’s evolving legal landscape for telemarketing will need to carefully consider compliance strategies and monitor ongoing legal developments. Olshan will continue to follow this lawsuit.