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American Eagle reaches $14.5M settlement in spam text lawsuit, blames marketing firm

By Christopher Mobley | Feb 8, 2017

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NEW YORK (Legal Newsline) – Facing a class action lawsuit involving alleged spam text messages, American Eagle Outfitters has agreed to settle the proposed lawsuit by paying a large settlement to the plaintiffs.

According to documents filed in a New York federal court, the class action suit accused American Eagle Outfitters of violating the Telephone Consumer Protection Act by sending many unsolicited text message advertisements to unsuspecting random consumers.

On April 8, 2014, Fitapelli & Schaffer LLP filed the lawsuit on the behalf of those who received the allegedly unsolicited text messages. The lawsuit claims that the plaintiffs received the unsolicited text messages from American Outfitters Inc. and AEO Management without first allowing the consumers to express written consent.

According to one of the plaintiffs, numerous text messages had been sent from American Eagle Outfitters and AEO Management to her phone since February 2014. Although the plaintiff alleges she never gave her written consent to receive such messages, she still received many messages advertising American Eagle Outfitters promoting its jeans, shorts, flip-flops and a new clothing line for dogs.

According to the Telephone Consumer Protection Act, which was established in 1991 in response to consumer complaints regarding telemarketing practices, it is unlawful to make phone calls, send text messages, or send messages by fax to potential consumers for commercial purposes without first receiving the said consumer's prior express written consent. When a company violates this act by communicating with consumers with prior consent, the consumer is entitled to receive statutory penalties, which range from $500 to $1,500 for each violation.

Also at the center of the dispute was Experian Marketing Solutions Inc. and its role in the alleged TCPA violation. American Eagle Outfitters Inc. held Experian Marketing Solutions Inc. liable for the violation. According to American Eagle Outfitters Inc., Experian signed a contract in 2009 in which Experian agreed to provide email marketing services while also indemnifying American Eagle for any legal troubles.

In 2013, the agreement was expanded to also include advertising by way of text message. While U.S. District Judge Valerie Caproni dismissed American Eagle's claims that Experian should be held liable in November 2015, Caproni granted American Eagle's bid to file a third-party complaint against Experian on May 3, 2016.

In order to end the dispute, American Eagle Outfitters settled the class action suit for $14.5 million in December. The class consisted of more than 600,000 unique phone numbers, with the customers claiming that the unsolicited texts began in April 2010. In this settlement, which combines separate class actions from New York, Florida and Illinois, each class member will receive between $142 and $285.

All additional funds that are left over after each class member has been compensated will be disbursed to the National Consumer Law Center.

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