Taco Bell Not Responsible For Text Ads Sent By Agency
A federal judge has handed Taco Bell a victory in a potential class-action lawsuit alleging that the company sent text spam to consumers.
U.S. District Court Judge Cormac Carney ruled that Taco Bell wasn't legally responsible for text messages allegedly sent by the mobile marketing company Ipsh (now part of The Marketing Arm), even if Taco Bell paid for the campaign and knew its details.
"Knowledge, approval, and fund administration do not amount to controlling the manner and means of the text message campaign," Carney wrote.
The case stemmed from a 2005 campaign promoting new items on the menu -- chicken and steak Nachos Bell Grande. As part of the initiative, owners of 12 Taco Bell franchises in the Chicago area allegedly ran a campaign that involved sending text messages to local residents and asking them to vote for the variety of nachos they preferred.
The local owners tapped the ad agency ESW Partners, which in turn arranged for Ipsh to handle the mobile portion of the campaign, according to court papers.
Georgia resident Tracie Thomas, who says she received two SMS messages, sued Taco Bell for the campaign. She alleged that the fast-food seller violated the federal Telephone Consumer Protection Act, which prohibits companies from using automatic telephone dialing systems to make calls to cell phones unless the recipients have consented.
"Unlike more conventional advertisements, wireless spam can actually cost its recipients money, because cell phone users must frequently pay their respective wireless service providers either for each text message call they receive or for a text plan that includes a number of messages," she alleged in her complaint, filed in U.S. District Court for the Central District of California.
Taco Bell successfully countered that Thomas couldn't prove that the company "controlled the means and manner of how the text message was sent."
Carney quietly granted Taco Bell's motion for summary judgment late last month. Earlier this week, Taco Bell asked Carney to order Thomas to reimburse the company around $6,000 in court costs. That motion is still pending.
If other judges follow Carney's reasoning, the ruling could make it harder for consumers to sue advertisers -- as opposed to their agencies -- for campaigns that potentially violate the text-spam law. For that reason, Internet legal expert Venkat Balasubramani said this week in a blog post that the decision "could be somewhat of a blockbuster ruling." He added that he expects the decision will be appealed.
Thomas's lawyer, Jay Edelson, tells Online Media Daily that his client is still considering options.