Papa John’s faces an uphill battle as a Seattle judge has certified a $250-million class action lawsuit against it and its franchisees. The case may result in the largest award in history for violations of the Telephone Consumer Protection Act.
The price of that large pepperoni pizza you order every Friday night may soon be rising.
Papa John’s, one of the nation’s largest pizza chains, is facing a $250-million class action lawsuit from customers who say some restaurants sent them more than 500,000 promotional text messages without their permission in 2010.
The case was certified a class action on November 9, 2012, by a U.S. District Court in Seattle. Plaintiffs allege that some Papa John’s franchisees sent mass texts to previous customers through marketing company OnTime4U.
According to the class certification decision, plaintiffs allege OnTime4U 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.”
Under the Telephone Consumer Protection Act, however, it is illegal to send unsolicited text messages without the express consent of the person called. Even if the individuals who received the texts were customers of Papa John’s, the TCPA still requires express consent to send text messages.
The pizza chain plans to appeal the ruling. Papa John’s contended that each restaurant is individually owned and operated, and a franchisor can only advise the franchisees on what they should do, but cannot dictate how the restaurants are run, i.e. it is not responsible for the actions of its franchisees.
In 2010, Papa John’s denounced the marketing campaign and told its franchisees that: “the practice and process of sending unsolicited messages to mobile devices is most likely illegal,” and the franchisees should reclaim the customer information from OnTime4U.
Potential liability for illegal calls or texts under the TCPA is $500 per communication, which can be trebled for “knowing or willful” communications. This is potentially more money than even the biggest pizza chain’s value, so businesses need to make sure that campaigns potentially regulated by the TCPA satisfy its restrictions. As set forth above, any business would be wise to independently verify a vendor’s representations.