Jiffy Lube franchisee Heartland Automotive Services agreed to a class action lawsuit settlement worth almost $47 million over allegations it texted more than 2.3 million consumers in April 2011 with a commercial message without their express consent.
Attorney Jay Edelson of Edelson McGuire LLC, who is serving as an interim lead class counsel in the case, said that Sept. 17 has been set as the date for seeking preliminary approval of the class action settlement agreement at U.S. District Court in San Diego. Assuming that is granted, notice goes out to the class, and a final fairness date is set where the court is then asked to finalize the settlement, Edelson explained to Lube Report.
Under the settlements terms, each member of the class – those among the 2.3 million who received the promotional text – will receive by mail a certificate good for $17.29 off any goods or service provided. After its 18-month term of validity expires, the certificate can be exchanged for $12.97 in cash. The total value of the certificates being offered is about $46.8 million, while the total cash value of the certificates would be about $35.1 million.
Heartland Automotive did not respond to requests for comment from Lube Report by press time.
According to the settlement agreement document, in the weeks that followed transmission of the promotional text message on April 21, 2011, six individual plaintiffs each independently initiated a class action alleging that Heartland Automotive Services – the largest Jiffy Lube franchisee in the United States – through its co-defendant mobile marketer TextMarks Inc., violated the Telephone Consumer Protection Act (TCPA) by sending text messages to a list of Jiffy Lube customers it developed, SMS short codes and related autodialing technology. A short code is a shortcut for a telephone number, and companies use the code for mobile marketing.
Ultimately, the plaintiffs cases were consolidated in the San Diego division of the U.S. District Court, Southern District of California, for coordinated proceedings by the judicial panel on multidistrict litigation. The consolidated complaint sought an injunction requiring defendants to discontinue transmission of unauthorized text messages, an award of actual damages and statutory damages under the TCPA. Another class action lawsuit filed in January 2012 in Washington State Superior Court made similar allegations, and was later transferred into the consolidated complaint in San Diego in June 2012.
Heartland responded to the consolidated complaint by filing a motion to compel arbitration and to dismiss the action on Oct. 26, 2011, arguing the plaintiffs failed to state a claim under TCPA, that plaintiffs gave consent to the text message promotion by releasing their telephone numbers to Heartland while having service performed at Jiffy Lube, and that imposing TCPA liability on Heartland would violate the companys constitutional rights under the First and Fifth Amendments.
Following the courts denial of Heartlands motions to dismiss and to compel arbitration, the parties were ordered to attend an early neutral evaluation conference presided over by a judge. On April 30, 2012, representatives of the defendants, Heartlands counsel, TextMarks counsel and an interim lead and liaison class counsel met with a magistrate judge to discuss resolution of the litigation through a settlement. The parties continued negotiations throughout the following months, culminating with the class action settlement agreement that will be considered by the court on Sept. 17.
According to its web site, Irving, Texas-based Heartland Automotive operates more than 515 Jiffy Lube locations, coast-to-coast.