How Papa John's could have saved $250MM | Hacker News Reader

How Papa John's could have saved $250MM

blog.sendhub.com

33 pointsashrust22 comments

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.

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

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?

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.

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?

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.

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).

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.

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.

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.

Yep. In theory the shareholders could sue a corporation for not doing something to increase profit, including stuff that hurts people.

I'm not super convinced that it's so easy to calculate how much money the business will be losing, though, to "fix" the problem vs. settle it in court.

Sure, it might not matter for Goldman Sachs, but wouldn't a very consumer-centric company like Papa John's risk losing business in the long run if they have a crappy reputation? I'd be more concerned about public perception of my company. Or am I too naive?

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?

You mean apart from the ads with Peyton?

Nope. I have not seen any of those ads. I will go and check it out.

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

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

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

Why two M's in $250MM?

M = 1000. MM = 1,000,000.

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.

M => a thousand, as in Roman numerals.

MM => a thousand thousands, i.e. a million.

Commonly used in accounting and finance.

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