Restaurant Sued for Sending Coupons
In an effort to boost business, a local restaurant sends out coupons for drink and food specials but because of the way they did it, they got hit with a lawsuit for $5 million. In the sluggish economy, everyone wants to improve business; the way to do that is get the word out about what you're offering. Some people stand on the corner begging customers to come in, others try the internet using social websites or emails and then there are the phone calls and fax blasts. Do it right and you increase business and make more money, do it wrong and you may get sued.
Jason Thompson: In a case like this where there are approximately 5,000 faxes at stake, at a minimum it's $2.5 million that they are facing for liability and it could easily go to $7.5 million.
At Ole' Ole' Mexican Cantina in Novae they wanted to sell more margaritas and chicken fajitas.
Woman: It sounded like it was a great idea at the time.
They put together this flyer, pointing out that they were voted "Best Mexican Restaurant." They offer $3 drinks and two-for-one entrees. Then, they hired a PR firm that was working the neighborhood offering to send them out to local businesses and residents.
Woman: Lettuce, tomato, meat; we get faxes every day for people trying to sell us their goods and their businesses and this company offered us the same thing. Why wouldn't we have joined in selling our goods to people in the neighborhood and the businesses?
The faxes went out but some area of businesses didn't like their fax machines and phone lines being clogged up with unsolicited junk faxes that waste toner and time.
Jason Thompson: Congress passed the act to prohibit anyone from sending out faxes without permission.
So they just slapped Ole' Ole' with a law suit for sending unwanted promotional material.
Jason Thompson: If you have sent out a fax without permission and you didn't have a prior existing business relationship with that receiver then you violated the statue.
Attorney Jason Thompson says the law is clear, you can't do it.
Jason Thompson: It's a stiff penalty designed to put an end to this spamming, if you will, the blast faxing of these businesses.
And several people we spoke with say, it's time to put a stop to uninvited solicitors.
Man: Most of the ones I get are from vendors trying to sell me their product.
Man 2: Some days we will get like ten of them, twelve of them.
Woman 2: I think it's a waste of paper and ink. That's your fax machine, it's expensive.
Now, the most everyone who receives an unwanted solicitation can win is $500. But the attorney is rounding up everyone who Ole' Ole' faxed, he said when he is done, the fine can add up to more than $5 million if the restaurant loses.
Woman: Well, it's going to kill us. I mean, that's a lot of money that they want for us to pay for a company. We hired a company, we didn't do it ourselves, and there is a number saying please discontinue. Why wouldn't they have called?
She says it may be a big hit for a small restaurant, but this is about protecting all of us from businesses who go too far.
Jason Thompson: That's why I think Congress enacted this to free up the businesses that do the business that you are supposed to be doing.
Ole' Ole' says they plan to fight this out to the very end, the plaintiffs say that the Supreme Court has issued favorable rulings in similar cases. This battle will take place in federal court later this year.