Papa Johns Sued for $250 Million for Spamming Cell Phones

Posted November 20, 2012 in Class Actions Consumer Law by

John Schnatter, founder, chairman and CEO of Papa John's. (Tom Strickland/AP Images for Papa John's)

Papa John’s Pizza is facing a $250 million class action lawsuit for spamming its customers’ cell phones with text message advertisements. The suit alleges that the popular pizza chain violated the Telephone Consumer Protection Act of 1991 by sending out half a million unauthorized messages in 2010 to pizza lovers in Washington and other states.

Some customers said they were spammed by over a dozen messages in a row, sometimes in the middle of the night. The TCPA specifically bans text message advertisements unless customers give the ok first.

Erin Chutich, one of the plaintiffs in the suit, said “After I ordered from Papa John’s, my telephone started beeping with text messages advertising pizza specials. Papa John’s never asked permission to send me text message advertisements,” in a statement put out by plaintiff attorneys.

Several Papa John’s franchises used a marketing company named OnTime4U to send out the texts. OnTime4U is also named in the lawsuit. The pizza chain’s headquarters has denied liability, saying that only a few franchises were involved. In 2010 after an initial lawsuit the corporate office reminded its franchisees that text message marketing is illegal, and ordered them to stop using OnTime4U.

 

No Jury in the World

Donald W. Heyrich

A judge in Seattle granted the lawsuit class action status this month. “There are so many people affected by this, it’s really impractical to think that every single one of them is going to go to small claims court to enforce their rights,” says Donald W. Heyrich of Seattle firm Heyrich Kalish McGuigan, one of the attorneys for the plaintiffs.

The TCPA penalizes companies to the tune of $500 a pop for unauthorized text advertisements. “That’s what the law says, and that’s what Congress set when they were determined to keep advertising out of our cell phones,” Heyrich says.

If the company is found to have willfully violated the law, the penalty will rise to $1500 per message and the attorney says the class hopes to convince the court to award the higher rate. “We will of course present facts that we believe will show a willful violation, but that will of course be in the hands of the jury,” says Heyrich. “There were very many complaints coming into their national complaint hotline. They certainly were aware that there were a large number of complaints. They had the ability to stop the program but they waited months and allowed thousands of messages to continue to go out every single week.”

Notably, Papa John’s founder and CEO John Schnatter recently announced that the implementation of Obamacare and subsequent changes to the chain’s health care policies would raise the cost of pizza by 14 cents a pie. Perhaps not paying a third party to spam customers and break the law would be another means of making up the costs.

At the very least, hopefully the chain has learned a lesson about federal telephone law and will serve as a reminder for other would-be spammers. “Really what we hope this case accomplishes is to keep spam from spreading from email into our cell phones,” Heyrich says. “I don’t think there’s a jury in the world that will say please give me more spam text messages.”

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