The first time I read through the class action lawsuit settlement reached between Plaintiff Christopher Kertesz and Rick’s Cabaret International, Inc., who operates Rick’s Cabaret, Club Onyx, Tootsie’s Cabaret, and XTC Cabaret I laughed. Instead of settling for hundreds of dollars a text message, the plaintiffs won RCI Access Certificates (strip club gift certificates that are redeemable at any of Rick’s 23 strip clubs – or so I’ve heard), with each having a value of $50.
Each plaintiff is entitled to receive four RCI Access Certificates, valued at a total of $200, for each text message received in excess of eight text messages in a single month. The only bummer, plaintiffs can’t use them for performances (that means lap dances – or so I’ve heard), only for purchases in the clubs, including but not limited to entry fees, food and drink, and merchandise. In addition, Rick’s Cabaret International, Inc. is being made to pay the Class Counsel $150,000 in attorneys’ fees and for reimbursement of expenses (including court costs) associated with the Action
A little background, in May 2011, Plaintiff Christopher Kertesz registered to receive promotional SMS text message alerts from Tootsies Cabaret Miami, a nightclub owned and operated by Rick’s Cabaret International, Inc. The terms and conditions governing the delivery of the SMS text message alerts expressly provided that individual consumers would receive no more than eight text message alerts in a single month (see below). Plaintiff alleges, however, that he received at least fifteen (15) promotional text messages from or on behalf of Rick’s Cabaret International, Inc. from approximately May 12, 2011 through May 31, 2011. That’s almost one SMS text message alert per day!
This is the first ever class action lawsuit that I’m aware of that has targeted a business for sending more than the amount of SMS text message alerts stated in the campaign’s terms and conditions. This concerns me for two reasons…
- This type of SMS lawsuit is only the first in a wave of many that I can see coming down the pipeline.
- In response to this lawsuit, many SMS providers will start telling their clients in their terms and conditions to tell subscribers that they may receive up to 30 messages/month. While this won’t be accurate, it will cover the off chance that the business will want to send more SMS text message alerts than they originally planned. With SMS providers advising their clients to greatly over-inflate the messages/month subscribers should expect, it makes this metric completely useless.
What do you think? What effect on the SMS marketing industry will this settlement have? Let me know your thoughts in the comments section below.