Advertising Law Blog

The Western District of Washington has joined the Northern District of Illinois and the entire state of California as a hotbed of activity for Telephone Consumer Protection Act (TCPA) class action suits. In addition to the TCPA, Washington has its own statute, both of which provide for awards of $500 or per illegal call, so a class action is a very serious risk for even the largest of corporations. Recent cases in the Western District of Washington illustrate how these risks have played out.

First we examine a pro-defendant ruling. In Anderson v. Domino's Pizza, decided July 16, 2012, Olshan successfully defended a calling service hired by a Domino's Pizza franchise to place automated, pre-recorded "robocalls" advertising Domino's pizza specials. Judge Ronald B. Leighton of the Western District of Washington refused to certify a class of 42,000 call recipients because a single common issue was lacking to trigger uniform legal treatment of each call: "Commonality is lacking in this case for one overriding reason: the question of liability hinges on whether each proposed class member consented to receiving the calls-an individual determination... Determining which members of the class gave prior consent to receive calls is ultimately an individual question-a question that undermines commonality." Because the plaintiff and her counsel were allowed to seek recovery only on her own behalf, the case was settled very quickly after the denial of class certification.

A similar case, in which Olshan played no role, did not go nearly as well for the defense. In Agne v. Papa John's, decided on November 9, 2012, Judge John C. Cogenour, also of the Western District of Washington, reached the opposite conclusion and certified a nationwide class against a competing national pizza chain, its franchisees, and an automated texting service. The essence of the claims was that Papa John's franchisees used a service called OnTime4U to send hundreds of thousands of text messages advertising Papa John's pizza without the recipients' consent in violation of the TCPA. The Los Angeles Times estimated the potential class recovery to be $250 million, a figure that caused a drop in the value of Papa John stock.

Similar to the Domino's case, Papa John's argued class treatment of every call was inappropriate because each class member "would have had innumerable discussions with scores of different franchisee locations, during which consent to receive messages could have been received." Judge Cogenour disagreed with this logic and certified the class, relying on documents produced by Papa John's reportedly showing that OnTime4U had assured the franchisees sending the texts was legal because Papa John's had an "existing business relationship" with recipients who had previously purchased its pizza. Note to readers: the existing business relationship exception to the TCPA has been abolished by the FTC and is being phased out by the FCC, so it should no longer be relied upon as a basis to make automated telemarketing calls or send text messages.

How can two similar cases yield such staggeringly different results? If there is any way to harmonize the two seemingly inconsistent legal results, it could be that the texting service in Papa John's allegedly assured the franchisee that the texts were legally permissible, while the calling service in Domino's made no such representations.

We have just reviewed a defense victory and a plaintiff's victory in the class action contest. The Western District of Washington also saw a third form of resolution recently, namely a negotiated settlement. In Meilleur v. AT&T, settlement approved on November 20, 2012, AT&T avoided trial by agreeing to pay $270 to each Washington resident, and $135 to each non-Washington resident who received a "robocall" from AT&T. The total of such payments, plus administration costs, was estimated at $2.1 million. AT&T also agreed it would not contest a motion for an additional $750,000 in attorneys' fees and a $10,000 payment to the lead plaintiff. There had been no motion for class certification at the time of the settlement.