Texas SB 140 Update: Stipulated Order Provides Relief for Consent-Based Text Marketers—But Questions Remain
Update: The Secretary of State has requested a formal opinion from the Texas Attorney General as per the settlement (see copy of request here).
Since Texas Senate Bill 140 took effect on September 1, 2025, businesses engaged in SMS marketing have grappled with significant uncertainty over the law’s scope. As we detailed in our initial analysis of the law’s implications, the amendment extended registration requirements, bonding obligations, and private rights of action under the Texas Deceptive Trade Practices Act (DTPA) to text message marketing, among other nuances.
A November 17, 2025, stipulated order in Ecommerce Innovation Alliance, Inc. et al. v. State of Texas et al. (Case No. 1:25-cv-01401, Western District of Texas) now offers welcome, if somewhat tenuous, clarity: the State of Texas has agreed that consent-based text message marketing campaigns are exempt from Chapter 302’s registration requirements.
Background: The Constitutional Challenge
As we reported when the federal constitutional challenge was filed, the Ecommerce Innovation Alliance (EIA), along with Postscript and Flux Footwear, brought suit arguing that SB 140 violated the First Amendment by burdening protected commercial speech and was unconstitutionally vague in key respects.
The heart of the dispute centered on statutory construction. SB 140 amended the definition of “telephone solicitation” in Chapter 302 to include text messages, but in doing so, removed the word “telephone” before “call.” The plaintiffs argued this severed the link to Chapter 304’s consent-based exemptions, which exclude from regulation transmissions a mobile customer has agreed to receive, thereby inadvertently sweeping legitimate opt-in marketing into the registration requirements.
When Texas filed its opposition brief, the State took the position that, despite the textual change, “call” must still be read as “telephone call,” incorporating Chapter 304’s definitions and exemptions. Critically, the State represented that it does not interpret SB 140 as extending registration requirements to businesses operating consent-based marketing programs.
What the Stipulated Order Says
The parties reached a settlement, and the court entered a stipulated dismissal order on November 17, 2025. The order adopts language confirming that “a ‘call,’ as that term is used in Chapter 302, incorporates Chapter 304’s exemption for a ‘transmission made to a mobile telephone number as part of an ad-based telephone service, in connection with which the telephone service customer has agreed with the service provider to receive the transmission.'”
The order concludes: “Businesses which operate consent-based text message marketing campaigns are specifically exempted from Chapter 302.”
As part of the settlement terms, according to the EIA, the Texas Secretary of State has agreed to post guidance on its website confirming that businesses sending text messages with prior consumer consent are not required to complete the Telephone Solicitation Registration Statement. Additionally, within 20 business days of the dismissal, the Secretary of State will formally request a Texas Attorney General Opinion to reinforce this interpretation.
Welcome News—With Important Caveats
For the thousands of businesses that operate compliant opt-in SMS programs, this development offers meaningful relief from the prospect of registration, bonding requirements, and the administrative burden of quarterly reporting and sensitive disclosure obligations.
However, as commentators have noted, the path to this outcome is, to put it mildly, curious. The reasoning grafts exemptions from a specially defined term in one chapter onto a different, undefined term in another chapter.
Several considerations warrant caution:
Limited Precedential Value. This was a stipulated dismissal, not a reasoned judicial opinion. A defendant sued in a future private action could raise similar constitutional challenges and perhaps expect a comparable outcome, but simply pointing to an unreasoned stipulated order as authority will not be particularly commanding. The order moots the constitutional challenge raised in this case—it does not definitively articulate the rights of all parties statewide.
Private Litigation Risk Remains. The Attorney General’s interpretation binds only his enforcement discretion. SB 140’s enhanced private rights of action under the DTPA remain available to individual consumers. The plaintiffs’ bar will inevitably test the boundaries of this exemption, and it remains to be seen how Texas courts will interpret what constitutes “consent-based” marketing sufficient to trigger the exemption.
Consent Documentation Is Critical. The exemption hinges entirely on the quality and documentation of consent. Businesses claiming the exemption bear the burden of demonstrating that recipients affirmatively opted in through clear, unambiguous mechanisms before receiving marketing messages. Weak consent practices could expose a business to liability despite the registration exemption.
Other SB 140 Requirements Still Apply. The registration exemption does not eliminate other aspects of Texas telemarketing law. Quiet hour restrictions, requirements regarding the Texas No-Call list, proper disclosures, and immediate opt-out processing all remain relevant and enforceable.
What Comes Next
The Texas Secretary of State is expected to publish updated FAQ guidance by early December 2025 and to request a formal Attorney General Opinion shortly thereafter. These developments will provide additional clarity, but an AG Opinion, while persuasive, is not binding on courts in private litigation.
The law as written remains on the books. Until the Texas Legislature amends the statute or a Texas court issues binding precedent, uncertainty persists, especially at the margins. Expect the plaintiffs’ bar to test definitions like “purchaser located in the state,” the scope of the “customer” exemption, and what precisely constitutes sufficient “consent.”
Practical Guidance for Businesses
If your business operates a consent-based SMS marketing program:
Ensure your opt-in processes are robust and well-documented. Consent should be affirmative, clearly disclosed, and contemporaneously recorded. Continue following TCPA best practices for prior express written consent.
Maintain comprehensive records. If your exemption is ever challenged, you will need to demonstrate that every recipient consented before receiving marketing messages.
Do not assume the registration genie is entirely back in the bottle. Businesses with less-than-airtight consent practices, or those operating in gray areas, should carefully evaluate whether registration provides a prudent layer of protection.
Monitor developments. The Attorney General’s Opinion and any subsequent litigation will shape how broadly or narrowly this exemption is interpreted in practice.
Conclusion
The stipulated order in EIA v. Texas represents a significant development for businesses engaged in consent-based text message marketing. The State’s position that compliant opt-in programs fall outside Chapter 302’s registration requirements is welcome news for an industry that faced substantial compliance burdens and litigation exposure under a law whose scope was genuinely ambiguous.
Yet the law is bound to be further tested. The unusual statutory construction, the reliance on a stipulated rather than adjudicated outcome, and the continued availability of private actions all suggest this is not the final word. Businesses should take this opportunity to strengthen their consent practices and documentation, because when the next challenge comes, those records will be the first line of defense.
