Jeff Ostrow and Scott Edelsberg, Fort Lauderdale, Avi Kaufman, Coral Gables, Kopelowitz Ostrow Ferguson Weiselberg Gilbert; Andrew Shamis, Shamis & Gentile, Miami.
Citgo Petroleum Corp. agreed to pay $8 million to settle a spam-texting class action that zipped from filing to final approval in just over a year.
West Palm Beach resident Matthew Gottlieb brought the case after receiving text messages advertising a chance to win free gas for a year through the Club Citgo mobile app. The Houston-based company sent the texts to about 93,000 people who signed up for Citgo-sponsored sweepstakes, according to the plaintiff.
The lawsuit alleged that Citgo sent the text messages using auto-dialing software in violation of the Telephone Consumer Protection Act. Gottlieb also claimed he and other recipients did not give their consent to receive the messages just because they entered contests.
“You would go to [Coral Sky] Amphitheatre in West Palm Beach for a Dave Matthews concert, and you would see a sign saying, ‘For a seat upgrade, text Citgo,’ ” said one of Gottlieb’s attorneys, Jeff Ostrow of Kopelowitz Ostrow Ferguson Weiselberg Gilbert in Fort Lauderdale. Ostrow’s colleagues Scott Edelsberg and Avi Kaufman also worked on the case, along with co-counsel Andrew Shamis of Shamis & Gentile in Miami.
Gottlieb, who is on the Do Not Call list, received three text messages in late 2016 and filed his lawsuit in November of that year.
“ His privacy was wrongfully invaded, and plaintiff has become understandably aggravated with having to deal with the frustration of unwanted text messages forcing him to divert attention away from his work and other activities,” the lawsuit claimed.
Class counsel reviewed more than 100,000 pages of documents from Citgo and collected information from the defendant’s text-messaging vendors, mGage and Black Canyon.
“We learned that they’re using computer software that a lot of companies are using, and right now there’s a lot of litigation out there as to whether that’s an auto-dialer,” Edelsberg said.
In a Northern District of Georgia case involving an Atlanta nightclub, a judge ruled in 2016 that mGage did not meet the Federal Communications Commission’s definition of “auto-dialing” because the platform required human involvement. The same question is being examined in other TCPA lawsuits across the country.
In Gottlieb’s case, the court did not decide the auto-dialing issue because the case settled so quickly. U.S. District Judge Robin Rosenberg in Fort Pierce moved things along by setting the trial for Dec. 4, 2017, putting the case on a one-year schedule instead of letting it stretch three or four years, Ostrow said.
“The court wasn’t interested in entertaining any extensions,” he said. “So we got a lot of work done.”
The parties had two all-day sessions with mediator David Lichter of the Lichter Law Firm in Aventura. The case settled in July, and Rosenberg gave final approval Nov. 23.
Citgo agreed to pay $8 million to the class, which includes anyone who received the texts, regardless of whether they were on the Do Not Call list. The company will also foot the bill for about $300,000 in settlement administration fees. Class counsel will receive one-third of the payout, or about $2.67 million, in attorney fees.
“What they’re having to pay far outweighs what they got out of the campaign,” Ostrow said. “From a business perspective, I don’t believe they’ll ever engage in a business practice like this again.”
Citgo and its Miami lawyers, Martin Goldberg and Greg Weintraub of Lash & Goldberg, did not respond to a request for comment. Chicago attorneys Scott Solberg and James Kylstra of Eimer Stahl also represented Citgo.
Case: Matthew Gottlieb v. Citgo Petroleum
Case no.: 9:16-cv-81911-RLR
Description: Telephone Consumer Protection Act
Filing date: Nov. 29, 2016
Final approval of settlement date: Nov. 23, 2017
Judge: U.S. District Judge Robin Rosenberg
Plaintiffs attorneys: Jeff Ostrow and Scott Edelsberg, Fort Lauderdale, Avi Kaufman, Coral Gables, Kopelowitz Ostrow Ferguson Weiselberg Gilbert; Andrew Shamis, Shamis & Gentile, Miami
Defense attorneys: Martin Goldberg and Greg Weintraub, Lash & Goldberg, Miami; Scott Solberg and James Kylstra, Eimer Stahl, Chicago
Settlement amount: $8 million
