Published by LawTechie - March 6, 2013 - LawTechie

internet lawWal-Mart has landed in hot water yet again over its mobile phone SPAM text marketing “strategy” — it was hit yesterday by a class action lawsuit for an alleged violation of the Telephone Consumer Protection Act (TCPA).

Plaintiff Elizabeth Ibey claims she agreed to receive text messages from Wal-Mart related to on online purchase she made in January, but that after Wal-Mart texted her saying that the item she purchased was available, she requested that the messages stop. Wal-Mart sent two confirmation texts back to her, the second of which she contends was unsolicited and violated the TCPA.

“Plaintiff did not provide defendant or its agent prior express consent to receive this unsolicited SPAM confirmatory text message,” the suit said. “By the time defendant sent the unsolicited spam confirmatory text message, plaintiff had already opted out of receiving further text messages from defendant, and defendant had already sent a text message confirming plaintiff’s opt-out request.”

Elizabeth Ibey v. Wal-Mart Stores Inc.,  3:13-cv-00502 (S.D.C.A., filed March 5, 2013).

Setting aside what, IMO, is the sheer uselessness of SPAM as a marketing strategy, it seems that Wal-Mart got itself sued here for no other reason than the fact that it did not seek proper advice on how to structure its SPAM opt-out policy so as to properly conform to the TCPA (e.g., one confirmation is okay, two confirmations = 1 unsolicited violation of the TCPA).

In fact, these TCPA violations are becoming so frequent among major companies, that their equally-major insurance companies are beginning to refuse to cover the lawsuits of their insureds. In fact, just this Monday, ACE American Insurance Company filed a lawsuit against Dish Network, LLC saying that it has no duty to defend Dish in its lawsuit with the FTC arising out of similar TCPA violations.

According to ACE, “its policies with Dish contain exclusions for claims of knowingly violating the Telephone Consumer Protection Act and another person’s rights.” See ACE American Insurance Company v. Dish Network, LLC, 1:2013cv00560 (D. Co., filed March 4, 2013).

The key term in the above is “knowingly” and it seems that ACE is pretty confident that it could convince the court that Dish’s TCPA violations were no mere accident. This is likely because it takes all of 10 minutes to look up what is and isn’t Kosher practice under the TCPA.

The takeaway? Have your lawyer vet your super aggressive (if tragically silly) marketing strategy.

LawTechie is a blog focusing on trends in tech and digital media. Areas covered include intellectual property, cyberlaw, venture capital, transactions and litigation as they relate to the emerging sectors. The blog is edited by the firm's partner Tim Bukher with contributions from the firm's experts in their respective areas of law.


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