Illinois Lawsuit Abuse Watch contends that a federal court ruling allowing a group of Sprint customers to proceed with a class action lawsuit against Yahoo sets a disturbing precedent.
The suit, which claims that Yahoo violated the federal Telephone Consumer Protection Act (TCPA) by sending Sprint cellphone users unsolicited text messages, could potentially involve more than 500,000 customers.
Illinois resident and Sprint customer Rachel Johnson brought the case, claiming that in March 2013 she received a welcome message from Yahoo after receiving a spam text from another user.
The suit claims that the Yahoo message violated the TCPA, which protects cellphone customers from receiving unsolicited advertising.
In a ruling earlier this month in the U.S. District Court, Northern District of Illinois, Judge Manish Shah said that the claims of Sprint users who received Yahoo texts in March 2013 have enough in common to warrant a class action suit. Shah rejected the separate claims of a group of T-Mobile users over Yahoo messages sent in April 2014, stating that their user agreements authorized delivery of such messages.
If found that it engaged in willful violation of the TCPA, Yahoo could face up to $1,500 in damages per message sent.
Travis Akin, executive director of I-LAW, said the ruling is troubling, as it shows a significant lowering of the threshold of harm plaintiffs in a class action lawsuit need to show to bring a case for damages. Akin also said the suit is less about protecting consumers than creating a big payoff for attorneys.
“The ruling to allow a class action to move forward is indicative of a shift in how we view damages in civil cases. No longer is it necessary for plaintiffs to demonstrate actual harm,” said Akin. “Here, some individuals received a welcome text message. Most people have unlimited texting with the cell phone plans. So how do you calculate damages? Make no mistake about it — this case is about creating a huge payday for the plaintiffs’ attorneys. It is about greed – not consumer protection.”
Akin agreed with Yahoo's argument that a class action lawsuit could subject the company to damages disproportionate to any actual harm suffered by the plaintiffs.
“It is a text message. How is this harmful?” Akin said. “Most people have unlimited text messages in their cell phone plans. So, they are not being harmed financially, and even if there are people who got the message and who do not have an unlimited plan — the monetary loss is only a few cents.”
Whatever damages are assessed in suits such as this, Akin said, usually end up in the pockets of lawyers rather than the consumers affected.
“Cases like this usually end up with the lawyers pocketing millions while consumers end up with pennies. These cases are not about righting a wrong — they are about lining the pockets of personal injury lawyers,” Akin said.
The Northern District of Illinois has a long history of plaintiff-friendly rulings in this type of litigation, Akin said, and it is likely the court was chosen by the plaintiffs' attorneys for this reason.
“It is no accident that this case is filed in a court jurisdiction known for these types of cases,” Akin said. “This is how personal injury lawyers continue to find ways to game the system. They intentionally look for the friendly court jurisdictions to file their cases.”
In its case, Yahoo also argued that allowing the Sprint users to file a class action lawsuit would promote future “piecemeal” litigation.
Akin agreed, adding that even if Yahoo settles out of court, the company may be in jeopardy of future suits.
“This case only involves one cell phone carrier, so if Yahoo settles this case, they likely would be sued by other carriers as well.”
Akin said that this lawsuit and many others like it generally end up bringing little benefit to the actual consumers that laws are intended to protect.
"These cases are not about righting a wrong — they are about lining the pockets of personal injury lawyers,” he said.
A similar case against Yahoo is playing out in federal court in East St. Louis. Plaintiffs in that case are represented by former Madison County judge Ann Callis, who works at the Goldenberg firm in Edwardsville.
Lead plaintiff Kaylynn Rehberger of Highland voluntarily dismissed her claims on Nov. 2. Carol Sparks of St. Jacob replaced her as sole lead plaintiff on Nov. 23.
Attorneys Peter W. Herzog, III and Thomas J. Palazzolo of St. Louis represent Yahoo.
Magistrate Donald Wilkerson presides over pre-trial discovery.