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SMS Marketing Lawsuit Review – Reichman v. Poshmark

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In this video, we review Reichman v. Poshmark, Inc. and discuss the legality of text message marketing as it relates to the Telephone Consumer Protection Act (TCPA). The TCPA was established to protect consumers from unwanted marketing phone calls, but with the rise of text message marketing, the rules continue to be challenged in new ways. 

 

How Reichman Got Involved with Poshmark

Reichman v. Poshmark, Inc. was a class-action lawsuit that examined who, exactly, is sending marketing text messages. 

Poshmark is an app in which any user can create an online “closet” and sell used clothing. After a user builds their closet, they can invite other users to shop through social media, email, or text message. Invitations increase visibility and sales for an individual’s shop. 

In this case, a user, Ms. Tolentino, chose to share her shop via text messaging. When she selected this option, it gave her two choices:

  1. Individually invite specific contacts. 
  2. Invite all contacts in her phone at once.

The case begins here. Ms. Tolentino clicked “invite all” to quickly share her items with as many people as possible. Reichman, the plaintiff, was among the recipients of her invite link. When he received this link, he considered it spam and decided to take legal action against Poshmark under the TCPA guidelines. Upon meeting with his attorneys, they decided to pursue a class-action lawsuit. 

 

Why Choose a Class-Action Lawsuit 

These days, class-action lawsuits are more common than individual cases. If Reichman completed an individual lawsuit, he could only receive up to $3000 for his individual “damages” from two text messages (we will explain that later). $3000 wouldn’t even cover attorney fees, so it wouldn’t be worth it for Reichman or his attorneys. 

A class-action lawsuit represents many people. Instead of filing a lawsuit for each case, everyone bands together in one suit, which helps the plaintiff receive a much larger settlement. Reichman wouldn’t necessarily benefit more from this type of case, but he could receive extra compensation because he would be the case representative. 

You may be wondering, “Wait. He could sue a company for $3000 for two text messages?”

In short, yes. When the TCPA was introduced in 1991, congress wanted to create an incentive for individuals to bring their unwanted messages to small claims courts. The incentive had to make showing up to court worth it for people. A plaintiff could receive anywhere from $500-1500 per phone call (and now text message) for damages. 

 

The Verdict 

Reichman v. Poshmark, Inc. was dismissed at the trial court level. Either the plaintiff’s attorneys agreed to dismiss, or Poshmark paid a settlement. Poshmark won a motion for summary judgment, but Reichman appealed. However, the parties resolved privately. 

The main question in this case was simple: Who sent the message? Was it the platform or the user? The final ruling was that Ms. Tolentino sent the message, not Poshmark, so the company wasn’t responsible for the damages. The FCC guidance states that if the user decides who gets the text, it doesn’t fall under the TCPA. 

 

What SMS Marketers Can Learn

As the lines between user and platform provider continue to blur, both can be liable under the TCPA. However, if one party takes ownership over who gets messages and when, the liability clearly lies with the party making those decisions.

It’s not uncommon for the damages to reach six figures. Reichman v. Poshmark was filed in 2016 and was resolved two years later, in 2018. It’s much easier and affordable to consult with an attorney before getting started so you get it right from the beginning. Application of TCPA regulations can vary from state to state. Have a law office (ideally one that specializes in TCPA requirements) review your insurance policy and advise on the law as it applies specifically to your company. Learn more with our TCPA Survival Guide.

 

Work with Tatango on TCPA Compliance

Tatango has been an industry leader for more than 13 years. Our platform includes features that help ensure your campaigns follow TCPA regulations. In addition to consulting with an attorney knowledgeable in TCPA requirements, we invite you to contact our sales and support team. Our experts are ready to help you get started.

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