A Chicago federal judge has rejected an attempt to close out a class action lawsuit against fast food chain Checkers for sending text messages to customers, saying more work is needed before he can approve a class action settlement that would have netted lawyers as much as $354,000, while getting class members a couple of $5 Checkers coupons each.
In rejecting the motion to finalize approval of the settlement, U.S. District Judge Sunil Harjani said the parties didn’t get enough buy-in from potential class members. The judge directed the parties to send text messages to potential class members, in a bid to increase the number of people willing to sign on to get the Checkers coupons.
Checkers, however, said sending the text messages would only repeat the act that got them sued in the first place.
In 2017, attorneys with the firm of Beaumont Costales, of Chicago, filed suit in Chicago federal court, accusing Checkers and its telemarketing partner, Vibes Media, of violating the federal Telephone Consumer Protection Act by offering Checkers food coupons, if they texted a keyword to Checkers.
The complaint alleged Checkers did not then reply with a coupon, but rather with a text message asking them to reply to obtain the coupon and “other deals.”
They asserted the marketing campaign violated federal law, because “it was a ‘marketing’ message sent without consumers express written consent.”
The parties continued to litigate the matter for years, and ultimately presented the judge with a settlement agreement they said would end the legal action.
In the deal, Checkers agreed to provide each class member – the owners of more than 1.89 million cell phone numbers – with two $5 Checkers food coupons.
Attorneys for the plaintiffs would be paid fees of up to $354,000 through the settlement fund.
The judge granted preliminary approval in January 2020.
However, in the months since, efforts by the administrators hired to contact potential class members and handle distribution of the settlement funds have fallen short, in the judge’s eyes.
According to Judge Harjani’s order, filed Nov. 3, administrators have signed up only a little more than 7,000 people willing to accept the coupons.
The judge blamed the lackluster response on the administrators’ primary reliance on email to contact potential class members.
The judge noted administrators used reverse lookup technology to match emails with the cell numbers on the class list.
But he chided administrators for not texting more potential class members directly.
Judge Harjani noted that “texting has become the primary method of communicating for many Americans” and “100% of the class communicated with (Checkers) by text, the class did not communicate with Defendants through email, and about one-third of one percent of the class submitted a valid claim.”
The parties had asserted in prior court filings they did not believe it was appropriate or necessary to contact the class members by text message.
“… Providing notice via text would not be appropriate in this case, as it would potentially exacerbate the very harm that Plaintiff sought to prevent in bringing the action…,” lawyers for Checkers wrote in a motion asking the judge to approve the settlement in November.
They argued the email campaign had reached at least 75% of potential class members, which they said was within the range accepted by the U.S. Seventh Circuit Court of Appeals in Chicago, which predominates over the U.S. District Court for the Northern District of Illinois.
They also said courts across the country have accepted similarly low response rates from class members.
Judge Harjani, however, said more effort was needed to get more people to take the Checkers coupons before he could sign off on approving the deal.
“At this stage, the Court concludes that email notice as the primary manner to inform the class about the settlement was not the best notice practicable under the circumstances,” the judge said. “The availability of the 1,890,005 cellular telephone numbers who received text messages from Defendants calls for a more extensive plan.
“… The potential class members are thus particularly comfortable communicating by text message and this form of communication may be more likely to effectuate notice than communicating by email.”
Checkers and Vibes has been represented in the action by attorneys with the firms Harris Wiltshire & Grannis LLP, of Washington, D.C.; Hunton Andrews Kurth LLP, of Dallas; and Hawkins Parnell Thackston & Young LLP, of Chicago.