Class Action Certified Against Papa John’s for Bad Spam (Not the Topping)
Papa John’s founder and CEO, John Schnatter, famously said recently that he will be forced to raise the price of pizza to pay for the Affordable Healthcare Act (widely known as ObamaCare). Unfortunately for Papa John’s, that may not be the only expense that could raise the cost of their pizzas, as a federal court in Seattle approved a class action seeking $250 million against Papa John’s and others for sending unwanted text messages.
The plaintiffs filed the lawsuit claiming that Papa John’s violated the Telephone Consumer Protection Act of 1991 by sending 500,000 unwanted text messages. Because each unwanted text message can carry a $500 penalty, Papa John’s faces a $250 million verdict. Also ensnared in this class action is a marketing company that sent the text messages on behalf of many Papa John’s franchises, OnTime4U. At this point in the case, OnTime4U and Pap John’s are blaming each other for this mess. Papa John’s maintains that OnTime4U sent the messages with Papa John’s knowledge or consent while OnTime4U argues that they sent the messages with Papa John’s consent. There is also disagreement as to whether franchises were encouraged to use OnTime4U and how strong that encouragement was.
The Order granting certification of the class is an interesting read. First, it appears that OnTime4U may have confused the TCPA and the CAN-SPAM Act when giving out advice to franchisees. According to the Order:
OnTime4U apparently told Papa John‘s franchisees that it was legal to send texts without express customer consent because there was an existing business relationship between the customers and the Papa John‘s restaurants.
In fact, as has been made clear with regulations released earlier this year, expressed consent is required (and written consent will soon be required).
This case serves as a good reminder to be careful when starting a marketing campaign to be sure that you are compliant with the myriad of laws, rules, and regulations that control how and when you can target specific potential and already-existing customers.
Image credit: http://www.flickr.com/photos/brent_nashville/143855978/