MJBizMag August 2021 - 64

Steering Clear of Spam
policies for employees to outline precise
text messaging and robocalling procedures,
careful examination of third-party
practices if a contractor is being used and
checking company insurance policies to
see if they contain TCPA-related coverage
in case of a lawsuit.
Above all, cannabis businesses should
educate themselves on TCPA parameters
so they know how far they can reach in
electronic marketing, Sampson said.
Digital marketing firms are worth
using, he said, although it's still wise
to keep a close eye on any contractor's
practices. Sampson said he's seen cases
in which a marketing contractor violated
the TCPA while working for a marijuana
business, which landed both companies
on the hook for TCPA fines.
Another way for businesses to protect
themselves is to follow Eaze's lead and
include clear provisions in their terms of
service stating that any dispute between
the customer and the company must be
taken to arbitration as opposed to a full
court battle.
" That is also what I call a 'silver bullet'
or get-out-of-jail-free card, " Roth said.
" That assumes, though, that that person
has interacted with you directly-either
on your website or in some other
form-in which case, they have to opt in.
And then they also agree to your terms
of use. That right there means you have a
relationship somehow with the customer. "
SETTLE QUICKLY
One of the reasons it's unknown just how
many TCPA cases have been hashed out
is because many, if not most, happen out
of the public eye and with no record of a
settlement, Roth said.
That's in part because it's usually
much cheaper to pay a smaller sum to
a potential plaintiff to make the threat
of a TCPA lawsuit disappear instead of
shelling out tens of thousands of dollars
to pay for lawyer's fees or an expensive
trial, he said.
" Very often, these are handled
individually, " Roth said, explaining that
companies often will receive a letter
64 MJBizMagazine | August 2021
from a possible plaintiff who received
an unsolicited text message from a
marijuana business.
That business may then call him for
advice, and his immediate suggestion
is to settle the case quickly and quietly,
along with obtaining a clear nondisclosure
agreement that doesn't admit any
liability by the marijuana business.
" If they call me, I tell them: 'Just write
a check. Get rid of this, and then stop
doing this,' " Roth said. " There've been
a lot of lawsuits filed. But more often
than not, there's a threat of litigation.
Someone's demanded, say, $2,500, and
that ends it privately. "
Though the idea of paying off a
nuisance lawsuit instead of proving a
company's innocence might leave a sour
taste in the mouth of some executives,
Roth and Sampson agreed it's a cheaper
option than going to trial, especially if
the company is legitimately in
the wrong.
IF YOU DO GET SUED
The most immediate step for any
marijuana business that receives
notification of a TCPA violation should
be to hire an expert attorney, both Roth
and Sampson said.
" Your time to respond to a legal
complaint starts to run when it's served.
And you might only have 20 or 30 days
in which to respond. Get legal counsel
involved immediately, " Sampson said.
" Work with your counsel to craft a
mitigation strategy. That can be anything
from motion to dismiss, to an answer, to
getting started with discovery. "
If a company does get sued for running
afoul of the TCPA, one of the first legal
strategies should be to defeat the possible
class certification, since a class action
suit would allow plaintiffs to join forces
against a company over the unwanted
texts or calls.
If a company can successfully defeat
class certification in a TCPA case,
Sampson said. " You've taken a case that's
worth millions and reduced it to a case
that's worth dollars. Once that happens,
In addition to having a double opt-in system for
text messages, offering consumers a way to
opt-out from future communications is a good
marketing practice.
it becomes a lot less interesting for the
plaintiffs' (lawyers). "
And in any settlement, Roth said, it's
key to have a nondisclosure agreement
included, in part so that the same plaintiff
can't go around telling others that
your business is an easy mark.
Still, paying off one plaintiff at a time
is risky if a company has made a habit
of violating the TCPA, Roth noted. One
settlement would likely leave executives
holding their breath to see if more
plaintiffs come out of the woodwork.
The easiest way to avoid TCPA
lawsuits, Roth reiterated, is " don't send
unsolicited text messages. "
John Schroyer is a reporter for
MJBizDaily. You can reach him at
john.schroyer@mjbizdaily.com.

MJBizMag August 2021

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