Federal Judge Certifies Massive TCPA Unsolicited Text Class Action

There has been a tremendous amount of media attention in recent days on the class certification decision in Agne v. Papa John’s International, Inc., Case No. 2:10-cv-01139.

The facts are relatively straightforward and sadly not uncommon (the decision is available here: PapaJohn’sClassCert[1]). Plaintiff Agne (2 other plaintiffs were subsequently added but the Court did not consider their claims for purposes of the motion for class certification) alleges that she received unsolicited telephone calls on her cellular telephones in April 2010. According to the complaint, when these calls connected, plaintiffs received unsolicited visual text messages. Plaintiffs allege the text messages were sent using a device that made automated calls.

The complaint further alleges that, beginning in about October 2009, Papa John’s and its Washington-based franchisees engaged OnTime4U to send pre-recorded, unsolicited text messages to cellular telephones. Specifically, it alleges that the Washington-based franchisees paid OnTime4U to send approximately 30,000 unsolicited text messages in November 2009 and at least 35,000 text messages in April 2010. Evidence was presented that 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.

Additionally, although Papa John’s did not contract with OnTime4U, there is significant evidence that Papa John’s Franchise Business Directors (“FBDs”) encouraged its franchisees to utilize its services. For example, there is evidence that OnTime4U made a presentation promoting its services at the fall 2009 Papa John’s “Operator’s Summit” in Las Vegas. Papa John’s eventually disavowed the program by sending a memorandum to its corporate stores and franchisees on April 27, 2010. The memorandum directed that “all franchisees … who have shared customer data (particularly telephone numbers) with OnTime4U … take all necessary steps to reclaim this data and/or have the vendor permanently delete it from the vendors [sic] system as well as demand that the vendor not share the data with anyone.” OnTime4U informed Plaintiff’s counsel that it destroyed the call lists at the behest of Papa John’s.

The court certified the following two classes:

National Class:

All persons in the United States of America who were sent, to their cellular telephone numbers, at least one unsolicited text message that marketed a Papa John’s branded product, good, or service through OnTime4U.

Washington Sub-class:

All persons in Washington State who were sent, to their cellular telephone numbers, at least one unsolicited text message that marketed a Papa John’s branded product, good, or service through OnTime4U.

In its opposing the motion for class certification, Papa John’s challenged Plaintiff’s standing in several respects. First, Papa John’s argued that Plaintiff’s injury is not fairly traceable to any Papa John’s franchisees other than the Washington-area franchisees. However, the court held that Plaintiff’s lack of standing to sue non-named franchisees does not defeat her standing to sue on behalf of either of her proposed classes.

Papa John’s also argued that Plaintiff lacks standing because Plaintiff’s only contacts with Defendants arose from a franchisee-level decision to engage OnTime4U. However, the court held that whether Papa John’s had any involvement in the franchise-level decisions to contract with OnTime4U and the extent of the involvement is a central disputed issue in the case that was not ripe for resolution at the class certification stage.

The Washington-area franchisees argued that class certification was inappropriate because the majority of the two proposed classes suffered no injury by these franchisees and therefore lack standing to be included in any class certified as to them. However, according to the Court, there is conflicting case law as to whether a putative class representative is required to show only that she has standing or must also show that all members of the class have standing. However, the court stated that it need not reach this issue because every proposed class member has standing to sue OnTime4U, so the Article III standing requirement was satisfied.

Turning to the Rule 23(a) prerequisites, the court easily found that the requirements of (1) numerosity; (3) typicality; and (4) adequacy, and the implied prerequisite that the class be ascertainable, were met.

With respect to the commonality requirement, the court identified the following common questions of law and fact:

(1) Whether OnTime4U’s contention that buying a pizza is sufficient to establish a business relationship is valid as a matter of law;

(2) Whether an established business relationship is a defense to sending text messages to a cellular phone without express consent under the TCPA;

(3) Whether OnTime4U’s system of transmission qualifies as an “automatic dialing system” under the TCPA;

(4) Whether Papa John’s controlled, participated in, or authorized OnTime4U’s text blast campaign; and

(5) Whether Papa John’s is vicariously liable for the acts of its franchisees.

Citing Dukes v. Wal-mart, Papa John’s argued that whether it was sufficiently involved in marketing decisions of various franchisees to establish its liability would require individual inquiries that undermine commonality. However, the court held that, unlike in Dukes, the Papa John’s plaintiffs alleged that Papa John’s FBDs encouraged franchisees to enlist OnTime4U to send text messages to their customers.

The court similarly overruled Papa John’s arguments with respect to the Rule 23(b) requirements of predominance and superiority. The Court rejected Papa John’s argument that individualized inquiries predominated over common issues. It stated that Papa John’s is in the best position to present evidence of individual consent and will not be precluded from presenting admissible evidence of individual consent if and when individual class members are permitted to present claims. With respect to superiority, the court disagreed that the $500 in statutory damages provides sufficient incentive for individuals to bring claims in small claims courts.