Papa John’s Settles Text Spamming Suit for $16.5 Million
Papa John’s has settled for $16.5 million a class action lawsuit alleging that the pizza chain illegally spammed its customers with text messages. If the settlement is approved by a judge, each class member will receive $50 and a free pizza.
The suit was filed in Seattle last year, seeking $250 million on claims that the pizza company violated the Telephone Consumer Protection Act by sending out unwanted texts to people who had recently purchased pies, breadsticks and other fare.
“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,” a plaintiff alleged. Others said they would get over a dozen texts in a row, sometimes in the middle of the night.
Papa John’s, nationally known for its garlic dipping sauce, put the blame for the texts on a marketing company used by some of the franchises. The pizza chain also claimed that customers gave consent for advertising when they gave their phone numbers while ordering.
The settlement includes no admission of liability by the company.
Prior Express Consent
The class action was made possible by federal law that attempts to shield consumers from unwanted phone solicitation.
“In a nutshell, the TCPA prohibits various forms of telemarketing,” says Matthew P. McCue, an attorney in Massachusetts who specializes in consumer rights lawsuits.
The text message rules under the Act are crystal clear: “A telemarketer can only send texts to your cell if they have prior express consent- or an existing business relationship,” McCue says.
The Act also prohibits robocall marketing, marketing by calling random numbers, marketing to numbers on the Do Not Call list and unsolicited junk faxes.
The TCPA provides for damages of between $500 and $1500 per text violation; however, it doesn’t provide for attorney fees. “Accordingly, consumers seeking to enforce their rights under the TCPA often face off against some of the largest firms in the U.S. hired by telemarketers to defend these claims,” says McCue. “The class mechanism, however, allows consumers to aggregate their claims and retain competent counsel who agree to pay all expenses of the litigation and assume the risk that they will only get paid at the end of the case if they win.”
McCue recently represented a plaintiff before the FCC, which resulted in a ruling clarifying that companies who contract other firms to make illegal phone calls can still be held liable under the TCPA.
The rule could have hurt Papa John’s claim that it was their marketing contractor, not them, which sent the unwanted texts, had the lawsuit ever gone to trial.
The FCC ruling further noted that the company selling the product in question is more likely to be held vicariously liable for phone calls or texts if it authorized the marketers to act on its behalf and use its brand name, and if it helped design training sessions or provide information about the product to the people actually making the calls.
“This Order is very significant for consumers as it sets forth the circumstances pursuant to which defendants will be liable for telemarketing acts of third parties in violation of the TCPA,” the attorney says.”Enforcement of the TCPA is the only realistic means in which consumers can address and prevent illegal telemarketing.”