The United States District Court for the Western District of Washington recently certified a national class of customers to bring a lawsuit against pizza franchisor Papa John's for alleged violations of the federal Telephone Consumer Protection Act.
The Act bars companies from sending advertisements via text message if the recipient has not agreed to receive text messages from them. The customers sued Papa John's and its marketing company, OnTime4U, alleging that Papa John's franchisees worked with OnTime4U to send text messages advertising Papa John's products without the customers' consent. Certain Papa John's franchisees had provided OnTime4U with the telephone numbers of their customers, and OnTime4U then sent advertisements to the telephone numbers. Each message sent is a violation of the Act, and each violation carries a penalty of $500 to $1500. The plaintiffs are seeking damages totaling over $250 million.
In order to certify a class, the representative plaintiff must show that she has standing to bring the lawsuit and that she meets the requirements of Federal Rule of Civil Procedure 23 relating to class action lawsuits. Standing requires that a plaintiff has suffered an injury in fact, which is traceable to the defendant's conduct, and which is likely to be redressed by a favorable court decision. Rule 23 requires that a plaintiff satisfy the following four prerequisites: (1) the class is so numerous that joinder of all members would be impractical; (2) there are common questions of law or fact; (3) the claims or defenses of the representative party are typical of the claims or defenses of the class, and (4) the representative party will fairly and adequately protect the interests of the class. Courts also require that class members can be identified using objective criteria.
In opposing the class certification, Papa John's argued that the representative plaintiff did not have standing to sue Papa John's because her injury was not traceable to it. Papa John's claimed it played no role in its franchisees' decisions to hire OnTime4U. The court, however, decided that that fact was disputed. Documents, including email messages sent by Papa John's employees to franchisees, suggested that Papa John's encouraged franchisees to engage OnTime4U. The court stated that disputed issues of fact should not be resolved at the preliminary stage, and that because the plaintiff had alleged that Papa John's was directly and vicariously liable for the text messages sent by OnTime4U, she had alleged an injury traceable to Papa John's.
The court also rejected Papa John's argument that individualized inquiries overwhelmed common issues of fact with regard to consent and its involvement in the franchisees' text message campaigns. With regard to consent, the court determined that the legal issue of whether a customer's purchase of a pizza could be construed as consent to receive text message advertisements is a common question that predominates over individual issues of consent.
The court also noted that Papa John's would be in the best position to present evidence of individual consent and could present such evidence later in the case. With regard to Papa John's argument that questions related to its involvement in the franchisees' text message campaigns would involve examination of several interactions between Papa John's employees and franchisees, the court found that such an assertion belied Papa John's position that it played little to no role in the franchisees' marketing decisions. Therefore, the court found that the representative plaintiff demonstrated that she had standing and fulfilled the requirements of Rule 23.
Carl Zwisler, IDI franchising Country Expert for U.S.A. and Maisa Jean Frank Gray Plant Mooty.