As many of our followers are already aware, the Telephone Consumer Protection Act (“TCPA”) is dominating the headlines with multi-million dollar class action settlements being reached almost weekly. By various accounts, TCPA filings are up 40-60% in 2013, when compared to the same period in 2012. On the heels of last month’s $16.3 million dollar TCPA settlement by Papa John’s Pizza, last week, Domino’s Pizza reached its own TCPA settlement for allegedly violating the TCPA.
Domino’s TCPA Settlement
On June 27, 2013, after several days of negotiation, Domino’s agreed to pay up to $9.75 million to settle a class action lawsuit involving residents of Alabama, Louisiana and Mississippi. The settlement, which was described by the parties as “complex and document intensive,” was finally reached after Domino’s general liability insurer agreed to contribute to the settlement amount. The terms of the TCPA settlement contain various redress provisions including:
- Approximately $6,000,000+ worth of cash awards and free pizza vouchers to class members who submit valid claims;
- $3,000,000 in payment of attorney’s fees to class counsel;
- $5,000 to pay the representative class member; and
- the remainder to pay court administration costs and the cost of notifying customers of the settlement;
Domino’s TCPA Case Details
Specifically, the robocalls advertised that the consumer would receive either $15.00 or a free one-topping pizza voucher. The Court certified two subclasses of people in Alabama, Louisiana and Mississippi who received at least one unsolicited text message or phone call on their cell phone that marketed a Domino’s branded product:
- those who received robocalls between May 20, 2006 and May 19, 2009 (“Merchandise Voucher Sub-Class”); and
- those who received robocalls between May 20, 2009 and May 20, 2010 (“Monetary Sub-Class”).
The individuals within the Monetary Sub-Class are entitled to recover the $15.00 monetary benefit of the robocalls and the individuals within the Merchandise Voucher Sub-Class are entitled to receive a free large pizza coupon.
What is interesting to note is the fact that the complaint alleged that Domino’s engaged in unauthorized text message violations of the TCPA, along with telemarketing calls, but the settlement agreement entered into between the parties does not make any mention of the alleged text messages and does not address any form of remuneration for these alleged violations of the TCPA.
The TCPA provides for either actual damages or statutory damages ranging from $500 to $1,500 per unsolicited call and/or message. Considering that text message and telemarketing campaigns often yield thousands, and in this case over a million, calls and/or text messages, potential damages under the TCPA can escalate very quickly. Given the fact that Domino’s overall class size certified equaled 1,152,617, it was only a matter of time before a settlement was reached.
Should it opt to engage in this method of marketing in the future, as part of the TCPA settlement agreement, Domino’s also agreed to obtain consumers’ express consent, in writing, to receiving marketing messages and/or calls. For a brief description of how to handle a situation in which a TCPA action is brought against you, please see our post entitled, How to Defend a TCPA Lawsuit.
Domino’s TCPA Settlement should be of interest to telemarketers and those generally interested in the Internet and mobile marketing spaces.