Text Ads Lawsuit Results in $4M Deal

A judge has approved a $4 million settlement in a class action lawsuit against a consulting company that sent text ads on behalf of the A&W restaurant chain. The suit alleges that Harman Management Corporation violated the Telephone Consumer Protection Act (TCPA) through its text message ad campaign.

The Telephone Consumer Protection Act

The Telephone Consumer Protection Act (TCPA) was passed in 1991 in an effort to protect consumers from an increasing number of telemarketing calls. The law restricts how and when telemarketers can contact consumers, including via pre-recorded voicemail messages and text ads. Specifically, telemarketers must maintain a company do-not-call list and follow the National Do Not Call Registry, may not make calls outside of certain acceptable hours, and must receive prior written consent before contacting consumers, even if those consumers have already done business with the company.

Text Ads and the TCPA

Text ads are a popular way for companies to reach consumers quickly and efficiently. However, these ads are subject to the TCPA because they are considered legally similar to phone calls. According to global telemarketing company SMS-Magic, the TCPA restricts text ads that constitute “unsolicited advertisement,” meaning consumer communications made without prior written consent. SMS-Magic says that receiving this prior written or digital consent is the only way to legally send consumers text ads. There are exceptions in place for communications made in case of an emergency.

Texts Ads Lawsuit

The text ads lawsuit filed by Cory L. on behalf of a class of affected consumers against Harman Management Corp. alleges that the company “sent unauthorized, automated text messages to putative class members’ cellular phones in violation” of the TCPA. The class covered by the suit includes all persons who were sent text ads related to A&W between Feb. 17, 2012, and the date of the preliminary approval submittal. The settlement agreement states that there are 233,026 total class members.

According to Law360, the $4 million settlement includes a $100,000 award to Cory, attorneys’ fees of $1 million, roughly $45,000 in expenses, and $210,000 in administrative fees. The attorneys’ fees account for roughly 25 percent of the settlement, an amount which the presiding judge determined was reasonable. Damages of $157 will be paid to each class member. At the time of the initial approval of the settlement agreement, 17,000 valid claim forms had been completed and filed.

Cory filed the suit in February 2016 after receiving unsolicited text ads promoting A&W. He alleged that he and other plaintiffs joined the “A&W Text Club” in order to receive a coupon for a free hamburger. However, he claims that he continued to receive “unprompted and uninvited” text ads related to other items after his initial contact. Cory alleges that Harman stored his and other class members’ phone numbers without their knowledge in order to send more text ads.

Should You File a Text Ads Class Action?

There are several reasons to consider filing a suit if you’ve received text ads without giving prior permission. First, the judge in this case noted that similar claims could result in “billions of dollars” in settlements. Second, lawmakers specifically wished to protect consumers from unsolicited and annoying communications from telemarketers by creating the TCPA, establishing your right to sue telemarketers for violations. If you’ve received annoying or simply uninvited text ads, a telemarketing attorney may be able to help you seek compensation.

The Text Ads Class Action Lawsuit is Case No. 1:16-cv-00219, filed in the United States District Court for the Eastern District of California.

Join a Free Text Message Coupon Class Action Lawsuit Investigation

If you have received coupons or sales advertisements in a text message from a restaurant or clothing retailer and your phone number is registered with the National Do Not Call registry, you may be entitled to compensation.

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