- May 31, 2012
- Posted by: Seth Heyman
- Categories: Business Law, Marketing & Advertising Law
A federal court in Washington has dismissed Domino’s Pizza from litigation alleging that a Domino’s franchisee’s use of automatic calls with a prerecorded message to numbers stored from previous orders violated state and federal laws prohibiting “robo-calls.” Anderson v. Domino’s Pizza, Inc., No. 11-cv- 902 RBL (U.S. Dist. Ct., W.D. Wash., Tacoma, decided May 15, 2012).
While the claims against the franchisee and the telemarketing company that placed the calls remain, the court refused to certify the case as a class action, because the plaintiff’s motion was untimely, the statutory damages alone would be significant, and the “burden of any award [which would be grossly disproportionate given the actual damages] would fall on a small business (i.e., the franchisee).
Although Domino’s requires franchisees to use a phone system that can store customer numbers, and introduced its franchisees to the telemarketer during a national convention in 2009, the court found this insufficient to conclude that Domino’s was a party to the calling campaign. The court further determined that, while Domino’s likely benefited from the calls, allowing this as a basis for liability “would dramatically expand the scope of the Washington statute governing ‘automatic dialing and announcing devices.
This case is significant in that it limits the scope of liability with respect to third parties (such as franchisors), from illegal telemarketing activities undertaken by their franchisees or affiliates. By doing so, the court made these types of telemarketing class actions (which are complicated and require considerable resources to undertake) less palatable to plaintiff attorneys, who prefer to bring in as many parties as possible, especially if one of them has deep pockets.