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Sports teams use mobile technology to better connect with their fans. However, plaintiff lawyers are abusing an outdated law to reap millions of dollars from litigation,
As this video from Faces of Lawsuit Abuse explains, the Los Angeles Lakers ask fans at games to vote by text for their favorite song to be played during time outs. The team later texts back with a “Thank you.”
That simple text could cost the team millions.
One recipient decided to use the Telephone Consumer Protection Act (TCPA), a 1991 federal law designed to curb abusive telemarketing, to file a class action lawsuit against the team. Harold Kim, Executive Vice President at the Institute for Legal Reform, explains how plaintiff lawyers have distorted the TCPA’s intent:
The original intent of the law was as a quick and easy tool to avoid costly lawyers by going right to state small claims courts for any violations because such courts involve smaller sums of money and often do not require—or even allow—the participation of attorneys. Yet, we now see the law being used to levy huge class action lawsuits extracting millions of dollars from businesses for sending transactional communications to reassigned or wrong numbers, and even when such communications are sent to patrons who legally consented to receive them.
Through September 2014, 1,908 TCPA lawsuits have been filed in 2014—an increase of 29.9% over this time period last year. Recently, Capital One settled for a record-setting $75 million for allegedly using an automatic telephone dialing system—or “autodialer” —to call customers with outstanding debts to the company. The attorneys will seek one-third of that fund for their efforts ($25 million), with millions of consumers to divide up the rest, leaving no one with any real benefit other than class counsel.
Defending such lawsuit abuses cost businesses of all sizes hundreds of millions of dollars and have them, along with basketball fans, crying “foul.”