Federal Court Sides With Taco Bell Over Text Messaging

Siding with Taco Bell, a federal appellate court decided this week that the company isn't responsible for text messages that a mobile-marketing agency allegedly sent to consumers.

The ruling, issued on Wednesday by a three-judge panel of the 9th Circuit Court of Appeals, upholds a trial judge's order dismissing a lawsuit against Taco Bell. U.S. District Court Judge Cormac Carney in the Central District of California ruled in 2012 that the fast-food giant wasn't legally responsible for text messages allegedly sent by the mobile marketing company Ipsh (now part of The Marketing Arm).

The decision appears to 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 wrote at the time that Carney's decision "could be somewhat of a blockbuster ruling."

The legal battle 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 arranged for Ipsh (now known as The Marketing Arm) to handle the mobile portion of the campaign, according to court papers.

Georgia resident Tracie Thomas sued Taco Bell for the campaign. Thomas, who says she received two text messages, alleged that the fast-food seller violated the federal Telephone Consumer Protection Act. That law prohibits companies from using automatic telephone dialing systems to make calls to cell phones without the recipients' consent.

Thomas argued on appeal that the trial judge “allowed Taco Bell to escape liability even when it had knowledge of, approved, and paid for a text message marketing campaign promoting its own products.”

She added that Carney's ruling creates “a blueprint for retailers to evade liability for transmitting spam text messages en masse to the public.”

But Taco Bell successfully countered that it wasn't involved in the text message campaign, which was arranged between a group of local franchisees and Ipsh. Taco bell argued in its appellate papers that it “had no role in the decision to distribute the message by way of a blast text or that it ever reviewed any proposed text message, or even knew about the outgoing text message component of the local promotion.”

3 comments about "Federal Court Sides With Taco Bell Over Text Messaging".
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  1. Matt Silk from Waterfall, July 7, 2014 at 10:33 a.m.

    Nothing hokey here...just a typical class action lawsuit where they are chasing the deep pockets by going after Taco Bell corporate and expecting to extract a settlement. I am sure they named or will name the franchisees and the agency as well. This is no different than the Jiffy Lube case not that long ago. Ultimately, this type of case comes down to whether proper consent was obtained prior to messaging or not.

  2. Matt Silk from Waterfall, July 7, 2014 at 10:44 a.m.

    Wendy, I would strongly disagree with Venkat's statement that this could be a blockbuster ruling. This article doesn't talk about the underlying issues with the TCPA or whether or not this a frivolous lawsuit. It is simply saying that the franchisees and/or agency are responsible and not Taco Bell corporate.

    Happy to discuss further @matthewsilk or silk@waterfall.com

  3. Maya Mays from coco, July 14, 2014 at 2:24 a.m.

    Aside from selling good taste products especially their Doritos Locos Taco, they also help jobless citizen have their work. 15,000 team members needed for Taco Bell chains nationwide on expanding their business. Use a cash advance to pay for your Taco Bell.

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