Advertising Law Blog

The decision in Gragg v. Orange Cab Company, decided on November 9, 2015 in the Western District of Washington, shows just how difficult legal compliance can be for companies using text messages to communicate with the public.

The plaintiff, a client of a frequent Telephone Consumer Protection Act (TCPA) litigation attorney, ordered a taxi from Orange Cab. He received a text message that both confirmed his order and also advertised the services of RideCharge for future taxi booking.  Gragg filed a class action against both companies.

In 2014, the plaintiff’s claims under the TCPA were dismissed because autodialing equipment was not used to send the text messages.  However, state law claims remained in the case and Judge Lasnik in the Western District of Washington recently determined that the text message violated a Washington state statute—the Commercial Electronic Mail Act (CEMA).

CEMA precludes the transmission of an electronic commercial text message to a telephone number assigned to a Washington resident for cellular telephone or pager service. Because part of the text message offered to provide a taxi-booking service for future rides, the Court found that the text was a commercial message and therefore violated CEMA.

Under a related statute, Washington’s Consumer Protection Act, the Court awarded the Plaintiff statutory damages of $500 per text. The Court previously certified a class after the Plaintiff alleged more than 100,000 similar texts were sent to Washington residents.  A motion for reconsideration was denied on December 11, 2015. Therefore, unless the defendants win on appeal, they are facing catastrophic liability for actions that caused little or no actual harm to anyone.

Takeaway: Even seemingly innocuous communications can cost legitimate businesses millions of dollars if compliance with federal and state laws is not cleared in advance.