3 ms·

How Papa John's could have saved $250MM

33 points by ashrust 14y ago

patdennis 14y ago
I think it's important to point out that the potential liability from a class action lawsuit such as this is not the same thing as actually owing $250 million. And it's not like they're going to pound out a resolution to this in a timely manner. Still, it's a lot of trouble and legal fees for no good reason.
- ashrust 14y ago
  Agreed, we just want to make sure people know text marketing can be done correctly, so it's good for business and consumers.
itsmequinn 14y ago
Could have used that $250 million to pay for big bad Obamacare that papa claims will force him to cut employee hours.
- peterw846 14y ago
  Yes, agreed. Or also just a lot more pepperoni to spice up those garbarge pizzas.
dude3 14y ago
Gross negligence by lawyers. I will get 1 cent from this lawsuit while lawyers will get 75 million. Folks this is why America is losing its competitiveness. Why not send the money wasted on lawyers to communities through simple arbitration and refund the costs of the texts to the customers. It's not like anyone was severely harmed. Not to mention this frivolous lawsuit costs society millions through court costs etc etc. We reformed healthcare, now its time for frivolous lawsuit reform (wait that will never happen).
- rdpfeffer 14y ago
  On one hand I agree. Frivolous lawsuits mostly have a large positive impact on the litigators and only rarely benefit the plaintif. On the other hand there's something to be said about protecting the privacy and preventing harassment via sms. There are few things and mediums as sacred as those these days.
- genwin 14y ago
  It's not a frivolous lawsuit when millions have been harmed even to a small degree. Plus it's not a small degree; it's a rather large fine per text. Whether the fine should have been enacted by Congress is debatable; whether it should be paid once it's been enacted, especially when enacted so long ago (1991), is much less debatable. "Simple arbitration" is a euphemism for when the arbitration company is in the defendant company's pocket, so that they almost always win, as is the case for today's arbitration clauses in contracts. The court system is the fairest big-case arbitration system we have today.
- otakucode 14y ago
  Go ahead, you do that. And tomorrow, I am going to start a company which will inundate you with illegal text messages because your declared stance makes violating those laws very profitable. What most people refer to as "frivolous lawsuits" are absolutely necessary. If I am a business owner, and I find out that my product hurts or kills people, but that my legal liability for that is less than the cost of fixing the product, especially in America today, I am legally bound to continue hurting and killing customers. It's that simple. Cost-benefit. If it costs $2 million to stop hurting people, and $1 million to settle the lawsuits, the business continues hurting people as a cost of doing business. The solution to this problem is called punitive damages. When a company does something which society actually wants to stop them from doing in the future, they HAVE TO levy a fine against the business large enough to make it cost-ineffective to continue their behavior. Public opposition to "frivolous lawsuits" and whiny opposition to people 'winning the lottery' with large punitive damage settlements hurt us all. Goldman Sachs, for example, has been caught breaking the law half a dozen times or so, ripping off the public to the tune of hundreds of billions of dollars. In response, the FTC has investigated them over and over, and every time the response is to fine them a piddly $5 or $10 million because public outcry over fining them $5 billion or whatever is actually necessary would be too great. So Goldman Sachs accepts that as a cost of doing business and continues raping the economy. This is not theory. Automobile companies were caught doing this in the 70s. The cost of producing reliable cars was so much more than simply settling a few lawsuits each year at a million bucks a pop. How do you stop them? Ask nicely? No, if its profitable for them to do things which cause peoples deaths, then they could be sued for negligence if they knowingly changed their business practices and harmed the investments of their shareholders.
stephengillie 14y ago
That blog post left a bad taste in my mouth. It's a post without substance -- pointing out one company's dirty laundry, then making the claim that they'll never do the same. How do we know they won't? Why even raise the question or put the doubt in our heads?
- ashrust 14y ago
  Their dirty laundry? It's a story we found on CNN. We're trying to let people know - both consumers and businesses - they are right ways of doing text marketing, and gave some bets practices on how to avoid the getting into trouble. Maybe Papa John's won't change but a quarter billion sounds like a strong motivator to them and others.
  - stephengillie 14y ago
    It's funny that you're linking to the HuffPo version of the AP story you found on CNN ;) And there you go again. You must really dislike Papa John's or their CEO. Is it a political reason or a civil one?
    - ashrust 14y ago
      I don't eat pizza (paleo diet) but I miss it. We have no problem with Papa John's as a whole but this practice is bad for the growing text marketing business we're a member of and working hard to keep clean and useful for everyone. No politics, just business.
jessriedel 14y ago
Why two M's in $250MM?
- jimbobob 14y ago
  M = 1000. MM = 1,000,000.
- jfarmer 14y ago
  In financial context, million is often abbreviated MM. It comes from the French word for thousand, mille. A million is a thousand thousand, or MM.
- seanstickle 14y ago
  M => a thousand, as in Roman numerals. MM => a thousand thousands, i.e. a million. Commonly used in accounting and finance.
chadrs 14y ago
$250MM - profits from pizza deals sold to mobile users
pkdevil 14y ago
I am suddenly seeing a lot of negative stories on Papa John's - on reddit and now on HN - over the last few days. Did I miss something in the news? First, I saw a boycott thread on reddit and now this news about the lawsuit. As far as I can tell, all these actions seem to have kicked off after the election results due to the anti-Obama stance of "Papa John". Can someone help me with a link that is the source of this current backlash?
- ashrust 14y ago
  You mean apart from the ads with Peyton?
  - pkdevil 14y ago
    Nope. I have not seen any of those ads. I will go and check it out.

33 points by ashrust 14y ago

I think it's important to point out that the potential liability from a class action lawsuit such as this is not the same thing as actually owing $250 million. And it's not like they're going to pound out a resolution to this in a timely manner. Still, it's a lot of trouble and legal fees for no good reason.

ashrust 14y ago
Agreed, we just want to make sure people know text marketing can be done correctly, so it's good for business and consumers.

itsmequinn 14y ago

Could have used that $250 million to pay for big bad Obamacare that papa claims will force him to cut employee hours.

peterw846 14y ago
Yes, agreed. Or also just a lot more pepperoni to spice up those garbarge pizzas.

dude3 14y ago

Gross negligence by lawyers. I will get 1 cent from this lawsuit while lawyers will get 75 million. Folks this is why America is losing its competitiveness. Why not send the money wasted on lawyers to communities through simple arbitration and refund the costs of the texts to the customers. It's not like anyone was severely harmed. Not to mention this frivolous lawsuit costs society millions through court costs etc etc. We reformed healthcare, now its time for frivolous lawsuit reform (wait that will never happen).

rdpfeffer 14y ago
On one hand I agree. Frivolous lawsuits mostly have a large positive impact on the litigators and only rarely benefit the plaintif. On the other hand there's something to be said about protecting the privacy and preventing harassment via sms. There are few things and mediums as sacred as those these days.
genwin 14y ago
It's not a frivolous lawsuit when millions have been harmed even to a small degree. Plus it's not a small degree; it's a rather large fine per text. Whether the fine should have been enacted by Congress is debatable; whether it should be paid once it's been enacted, especially when enacted so long ago (1991), is much less debatable. "Simple arbitration" is a euphemism for when the arbitration company is in the defendant company's pocket, so that they almost always win, as is the case for today's arbitration clauses in contracts. The court system is the fairest big-case arbitration system we have today.
otakucode 14y ago
Go ahead, you do that. And tomorrow, I am going to start a company which will inundate you with illegal text messages because your declared stance makes violating those laws very profitable. What most people refer to as "frivolous lawsuits" are absolutely necessary. If I am a business owner, and I find out that my product hurts or kills people, but that my legal liability for that is less than the cost of fixing the product, especially in America today, I am legally bound to continue hurting and killing customers. It's that simple. Cost-benefit. If it costs $2 million to stop hurting people, and $1 million to settle the lawsuits, the business continues hurting people as a cost of doing business. The solution to this problem is called punitive damages. When a company does something which society actually wants to stop them from doing in the future, they HAVE TO levy a fine against the business large enough to make it cost-ineffective to continue their behavior. Public opposition to "frivolous lawsuits" and whiny opposition to people 'winning the lottery' with large punitive damage settlements hurt us all. Goldman Sachs, for example, has been caught breaking the law half a dozen times or so, ripping off the public to the tune of hundreds of billions of dollars. In response, the FTC has investigated them over and over, and every time the response is to fine them a piddly $5 or $10 million because public outcry over fining them $5 billion or whatever is actually necessary would be too great. So Goldman Sachs accepts that as a cost of doing business and continues raping the economy. This is not theory. Automobile companies were caught doing this in the 70s. The cost of producing reliable cars was so much more than simply settling a few lawsuits each year at a million bucks a pop. How do you stop them? Ask nicely? No, if its profitable for them to do things which cause peoples deaths, then they could be sued for negligence if they knowingly changed their business practices and harmed the investments of their shareholders.

stephengillie 14y ago

That blog post left a bad taste in my mouth. It's a post without substance -- pointing out one company's dirty laundry, then making the claim that they'll never do the same. How do we know they won't? Why even raise the question or put the doubt in our heads?

ashrust 14y ago
Their dirty laundry? It's a story we found on CNN. We're trying to let people know - both consumers and businesses - they are right ways of doing text marketing, and gave some bets practices on how to avoid the getting into trouble. Maybe Papa John's won't change but a quarter billion sounds like a strong motivator to them and others.
- stephengillie 14y ago
  It's funny that you're linking to the HuffPo version of the AP story you found on CNN ;) And there you go again. You must really dislike Papa John's or their CEO. Is it a political reason or a civil one?
  - ashrust 14y ago
    I don't eat pizza (paleo diet) but I miss it. We have no problem with Papa John's as a whole but this practice is bad for the growing text marketing business we're a member of and working hard to keep clean and useful for everyone. No politics, just business.

jessriedel 14y ago

Why two M's in $250MM?

jimbobob 14y ago
M = 1000. MM = 1,000,000.
jfarmer 14y ago
In financial context, million is often abbreviated MM. It comes from the French word for thousand, mille. A million is a thousand thousand, or MM.
seanstickle 14y ago
M => a thousand, as in Roman numerals. MM => a thousand thousands, i.e. a million. Commonly used in accounting and finance.

chadrs 14y ago

$250MM - profits from pizza deals sold to mobile users

pkdevil 14y ago

I am suddenly seeing a lot of negative stories on Papa John's - on reddit and now on HN - over the last few days. Did I miss something in the news? First, I saw a boycott thread on reddit and now this news about the lawsuit. As far as I can tell, all these actions seem to have kicked off after the election results due to the anti-Obama stance of "Papa John". Can someone help me with a link that is the source of this current backlash?

ashrust 14y ago
You mean apart from the ads with Peyton?
- pkdevil 14y ago
  Nope. I have not seen any of those ads. I will go and check it out.