Taco Bell Ruling Faults Franchises For TCPA Violations

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A new ruling from the 9th U.S. Circuit Court of Appeals has changed some of the rules for the enforcement of the Telephone Consumer Protection Act (TCPA), saying that in the cases of franchise business, like fast food restaurants, the parent company may not always be on the hook for TCPA lawsuits, at least in cases when franchise restaurants act independently.

The latest TCPA lawsuit involved fast food giant Taco Bell, and alleged that a group of Taco Bell restaurants engaged in an unauthorized text message spam campaign that violated the TCPA.

The TCPA is designed to be partially enforced through text message spam lawsuits like this, and awards can be hundreds, or even thousands of dollars. The Federal Communications Commission, also bears some of the responsibility for enforcing and interpreting the TCPA.

Earlier this year, the FCC laid down new guidelines for the enforcement of the TCPA in relation to franchise-based businesses like Taco Bell. This is the first ruling of its kind since the FCC laid down the new rules.

The ruling found that the larger parent company of Taco Bell was not responsible for the action of individual franchise restaurants in TCPA rulings. This could mean that larger companies will be less vulnerable to TCPA text spam lawsuits.

This ruling basically states that TCPA violations do not propagate up the “chain of command” for large companies organized like Taco Bell, ending with the business with the deepest pocket.

It also essentially puts individual franchise restaurants on their own in situations like this. This could complicate future TCPA class action lawsuits in cases involving corporations that follow this business structure. While the ruling makes no changes to what constitutes a TCPA violation, it did clarify what business entity bears the responsibility for such violations.

Understanding the Telephone Consumer Protection Act

The TCPA lawsuit concerned alleged violations of the Telephone Consumer Protection Act Act. This law was created to protect consumers from aggressive direct-to-consumer marketing. The original iteration of the law was created in the early 1990s, as new technologies made it easier for companies to cheaply contact consumers via mass faxes and autodialers.

The TCPA served to discourage companies from harassing consumers with various technologies. Initially, telemarketing firms challenged this new law, arguing that the new law violated their first amendment rights.

However, court rulings established the constitutionality of the TCPA. Subsequent rulings and amendments to the TCPA expanded it to include newer technologies like text messages. This newest TCPA lawsuit has changes some of the rules on who bears the responsibility for TCPA violations in a previously-ambiguous situation.

The TCPA Text Message Spam Class Action Lawsuit is Tracie Thomas v. Taco Bell Corporation, Case No. 12-56548, in the U.S. Court of Appeals for the Ninth Circuit.

Join a Free TCPA Class Action Lawsuit Investigation

If you were contacted on your cell phone by a company via an unsolicited text message (text spam) or prerecorded voice message (robocall), you may be eligible for compensation under the Telephone Consumer Protection Act. Learn more and see if you qualify for a legal claim at the Text Message Spam, Unwanted Cell Phone Calls TCPA Class Action Lawsuit Settlement Investigation.