CITGO Spam Texts Class Seeks Court Approval of $8.3M Settlement

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By Daniel R. Stoller

CITGO Petroleum Corp. has reached an $8.3 million no-fault settlement of consumer class claims that it violated a federal telemarketing law by sending unsolicited text messages (Gottlieb v. CITGO Petroleum Corp., S.D. Fla., motion for preliminary approval 8/8/17).

The settlement highlights the class litigation risks to companies that collect consumer mobile phone numbers for one purpose but use them for another.

Under the Telephone Consumer Protection Act (TCPA), companies must get express consent from consumers before sending texts or placing calls using an automated dialing system to mobile devices. Consumers can sue for up to $1,500 per call or text for willful violations of the TCPA.

The plaintiffs alleged that participants in CITGO’s “text-to-win sweepstakes” promoted at various “concerts, theme parks, sporting events, and retail gas stations” ended up receiving automated telemarketing unsolicited texts in violation of the TCPA. The plaintiffs “never actually consented to receive” marketing texts from CITGO, the settlement motion said.

Plaintiff Matthew Gottlieb filed Aug. 8 an unopposed motion for preliminary settlement approval in the U.S. District Court for the Southern District of Florida. The motion will be considered by Judge Robin L. Rosenberg. The case is the first in which CITGO has appeared before Rosenberg, according to Bloomberg Law Litigation Analytics.

The pact would establish an $8 million settlement fund. The oil giant would also pay $300,000 in administrative costs but can recoup that if the settlement fund isn’t claimed in full. The settlement class of approximately 93,000 individuals would release all claims against CITGO and the text-marketing companies it hired, MTI Connect LLC and mGage LLC.

The settlement would allow the class counsel from Kopelowitz Ostrow Ferguson Weiselberg Gilbert and from Shamis & Gentile P.A. to petition the court to receive up to a third of the fund as attorneys’ fees and expenses.

CITGO is represented by Lash & Goldberg LLP and Eimer Stahl LLP.

Representatives for CITGO, MTI Connect, and mGage didn’t immediately respond to Bloomberg BNA’s email requests for comment.

To contact the reporter on this story: Daniel R. Stoller in Washington at dstoller@bna.com

To contact the editor responsible for this story: Donald Aplin at daplin@bna.com

For More Information

Full text of the motion for preliminary approval is available at http://src.bna.com/rwR.Full text of the settlement agreement is available at http://src.bna.com/rwS.

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