Papa John's International (NASDAQ: PZZA) faces a nationwide class action lawsuit filed by customers complaining about advertising text messages they received.
Lawyers for some of the plaintiffs say damages could be $250 million ($500 for each of 500,000 "illegal" text messages sent in 2010) or more. In a press release, the lawyers said that on Nov. 9, the U.S. District Court for the Western District of Washington certified the class action suit.
Plaintiffs in the suit, customers of Papa John's, seek damages for alleged "spam" violations of the federal Telephone Consumer Protection Act. They allege that Papa John's illegally sent 500,000 text messages to customers without their consent, and in at least some cases, continued sending advertising texts even after being asked not to.
Erin Chutich, one of the plaintiffs in the case, is quoted in the press release as saying: "Our lawsuit is about keeping spam from spreading from our email to our cell phones." According to a report in CNNMondy, Papa John's argues that the texts were sent by "third-party vendors and a small number of franchisees," and that therefore it is not directly liable.
Penalties for the violations if the court decides otherwise could be more than $500 per text if the court determines that Papa John's is both liable, and willfully violated the law.
Fool contributor Rich Smith has no positions in the stocks mentioned above. The Motley Fool owns shares of Papa John's International. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.