Checkers Text Coupons Class Action Settlement Delayed Due to Deficient Notice

A federal judge in Illinois delayed final approval of a class action settlement for a lawsuit alleging TCPA violations for Checkers text coupons, determining that the notice to the Class was deficient by reaching less than 1% of the Class Members.

The case was commenced in 2017 by lead plaintiff Madeline Yates against the fast-food restaurant and Vibes Media LLC, a mobile marketing company. In the lawsuit, Yates raised allegations that she received numerous ads from Checkers via text message after sending a text for a free hamburger coupon, in violation of the Telephone Consumer Protection Act (TCPA).

Although preliminary approval of the class action settlement was granted in January 2020, U.S. Magistrate Judge Sunil R. Harjani in the United States District Court for the Northern District of Illinois found that notice to the Class was deficient due to lack of response and stalled final approval, allowing the Class Members to receive notice by text.

Under the initial notice plan, each settlement Class Member was to receive an email or a short-form notice sent to their mailing address if email wasn’t possible. A long-form notice was also made available on the website.

The settlement administrator was able to obtain 75% of the email addresses associated with Class Members’ phone numbers, and delivery of the notice by email resulted in a 91.43% delivery rate, with 26,594 notices being sent via mail as a result of undeliverable emails.

However, only 0.37% of the Class responded to the notice.

The judge stated in the Nov. 3, 2020 order, “At the time it approved the proposed notice plan, the Court believed it was adequate to provide notice to [C]lass [M]embers associated with the 1,890,005 unique cellular telephone numbers on the Class List. But only 7,017 valid claims were submitted despite 1,890,005 text messages during the class period.”

According to the judge, the number of submitted claims unexpectedly left out 99.63% of the Class. The judge remarked that the means of notifying the Class by email may not have been effective, accounting for the low return rate of less than 1%.

Despite Checkers’ argument that notice by text message could potentially result in additional exposure to TCPA liability, the court determined that a supplemental notice by text was appropriate, noting that most people access texts more frequently than emails.

According to the judge, a supplemental text message notice would help ensure that a large number of the Class Members were notified. A text message could accomplish notice without significant effort or expense and potentially increase the rate of response.

According to the judge’s order, there is no case law or provisions in the TCPA that would prohibit the court from directing notice by text message.

The judge also stated that notice by text message was more likely to reach the Class since the suit was commenced over allegations surrounding the Checkers text coupons, making it apparent that all of the Class Members used such means of communication.

The judge wrote, “The potential [C]lass [M]embers are thus particularly comfortable communicating by text message and this form of communication may be more likely to effectuate notice than communicating by email.”

Under the class action settlement terms, each Member of the proposed Class would receive two $5 vouchers for use at a Checkers or Rally’s fast food restaurant.

How Did the Checkers Text Coupons Allegedly Violate the TCPA?

In the lawsuit, Yates argued that she received more than 10 text messages from Checkers after she texted the fast-food chain requesting a coupon for a free hamburger. She claims that the promotional texts were sent by an ATDS system, without her express consent, in violation of the TCPA.

Yates also alleged that there were no “opt-out” options included with the Checkers text coupons, further demonstrating the fast-food chain’s noncompliance with the TCPA.

Are Restaurants Allowed to Send Texts Under the TCPA?

Statistics have shown that 97% of cellphone users text every day. As a result, many restaurants and fast-food chains use text messaging as part of their marketing campaigns. To advertise their food products, they typically send texts advertising specials or provide customers with mobile coupons.

Unless a consumer provided consent to be texted, restaurants who send text coupons or promotions to them may be violating the TCPA.

Enacted in 1991 in an effort to prevent consumers from unwanted calls from telemarketers, the TCPA prohibits businesses from sending unsolicited communications to consumers’ landlines and cellphones without an established business relationship or their prior express consent. Additionally, businesses may not contact those who are on the National Do Not Call Registry.

Businesses are also generally not permitted to make robocalls or use an autodialing system to send out mass text messages to consumers without consent.

Even if a consumer did provide express consent to be contacted by a business, they can revoke consent at any time. A business should provide the consumer with a way to opt-out in the text message — typically, a consumer can opt-out by texting the word “STOP,” or another word indicating that they do not wish to receive the texts.

The TCPA imposes strict monetary penalties on businesses that fail to comply. Under the TCPA, a consumer who receives unsolicited texts or robocalls can receive $500 for each unsolicited communication in violation of the Act and $1500 for each willful or knowing violation.

The Checkers Text Coupons Class Action Lawsuit is Madeleine Yates v. Checkers Drive-in Restaurants Inc. et al., Case No. 1:17-cv- 09219, in the United States District Court for the Northern District of Illinois. 

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If you were contacted on your cell phone by a company via an unsolicited text message (text spam) or prerecorded voice message (robocall), you may be eligible for compensation under the Telephone Consumer Protection Act.

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This article is not legal advice. It is presented
for informational purposes only.