Class actions against Aspen businesses — nuisance cases or valid pursuits?
A handful of Aspen businesses are learning that a misstep in communications with current customers and would-be patrons can expose them to potential liability under federal laws.
The downtown marijuana dispensary Roots RX is the latest local business facing a class-action lawsuit in Denver federal court. Plaintiff Kathryn Potter of Miami sued the cannabis company, which is based in Aspen and whose owner lives here, last week over unwanted promotional text messages she has received. Her suit was filed under the Telephone Consumer Protection Act and alleged Roots RX continues to send her text messages despite her asking the company to stop.
“They blatantly ignored the requests,” said attorney Andrew Shamis on Wednesday. Shamis, a name partner with Miami-based Shamis & Gentile PC, filed the suit April 19.
Roots RX owner Robert Holmes Jr. declined comment when reached this week and his attorney handling the matter, Jeffrey Backman, did not reply to messages Wednesday. Backman, also a Miami attorney, specializes in complex class action defense and telemarketing law and is part of the Cannabis Law Group, a division of the firm Greenspoon Marder LLP.
One of the Roaring Fork Valley’s largest employers also is a target in a class-action lawsuit brought on by Douglas County resident David Katt. Katt, who is blind, is suing Aspen Skiing Co. under the ADA. His suit accused Skico of violating the ADA by not making its website compatible with screen-reading software “that vocalizes the visual information found on a computer screen or displays the content on a refreshable Braille display.”
The suit was filed Aug. 10.
“If the Website were equally accessible to all, Plaintiff could independently navigate the Website and complete a desired transaction as sighted individuals do,” said the suit, which is attempting to form a class of “legally blind individuals in the United States who have attempted to access Defendant’s Website and as a result have been denied access to the equal enjoyment of goods and service.”
It is standing Skico policy to not comment on pending litigation, yet its response to the allegations referred to Katt as “a serial plaintiff who filed this lawsuit to try to extort a monetary settlement.” In 2020, Katt filed 53 lawsuits in Denver federal court, according to court records. Among the defendants were casinos, banks and insurance companies.
Skico’s response, dated Sept. 1 and submitted by California law firm Sheppard Mullin Richter & Hampton LLP, also argued that the Department of Justice has not issued accessibility standards for websites. As well, Katt has not used Skico’s services, the response said.
“(Katt) lacks standing to pursue his alleged claims because, among other reasons, he is not a bona fide patron, he never attempted to access Defendant’s website, and/or he does not intend to access Defendant’s website in the future,” the response said.
The case is pending with a pretrial conference scheduled June 22, according to court documents.
Another local business, Aspen Anesthesia Inc., faces a potential class action suit under the Fair Debt Collection Practices Act. Through a California firm, Carbondale resident Rafael Navarro is spearheading a class suit alleging Aspen Anesthesia violated the act by misidentifying the creditor seeking payment when it billed him for it services. Navarro’s fifth and final notice demanding payment of $3,150 for Aspen Anesthesia’s services wrongly identified it under its previous name under a previous owner, the suit said.
“This is confusing for people and may cause people to be reluctant to pay their bill,” San Diego attorney Hunter Hoestenbach said in a March story about the case.
Aspen Anesthesia owners would not comment on the case at the time of its filing, but the firm’s April 14-dated motion to dismiss the complaint referred to it as a “nuisance lawsuit(s) based entirely on clerical errors in routine billing notices.”
The response asked that the lawsuit be dismissed because Aspen Anesthesia is not liable under the Fair Debt Collection Practices Act and that it also hired a third-party to handle its collections.
“The ’principal purpose’ of Aspen Anesthesia is to provide critical medical services to a remote community,” the response said. “Aspen Anesthesia’s small staff are focused entirely on providing care to their patients. They do not have collateral duties — much less primary duties — related to collecting debts for other people or businesses.
“Consequently, Navarro does not — and cannot — allege a set of facts that would transform a doctor or a nurse into a debt collector. Congress did not intend the FDCPA to transform the neighborhood doctor into a debt collection agency simply because its billing service sent a patient a billing notice. Nor did Congress intend to subject small businesses to nuisance lawsuits based entirely on clerical errors in routine billing notices.”
While Navarro has one pending action in Colorado and Katt around 50, Potter — who is suing Roots RX — filed another class-action against three marijuana-related businesses that settled last year. In that case, she sued under Florida’s Deceptive Unfair Trade Practices Act that Denver-based First Capital Venture Co. and Florida companies Potnetwork Holdings and Diamond CBD misled customers by overstating the amount of CBD in their products.
“The Company and its subsidiaries settled the matter at mediation on July 14, 2020,” according to a regulatory filing Potnetwork Holdings filed with the Securities and Exchange Commission on Sept. 30. “The parties completed the final documentation of the settlement and the case was dismissed on August 27, 2020. Pursuant to the settlement agreement the Company agreed to issue a $10 voucher to purported class members, pay the named plaintiff $5,000 and pay the law firms that brought the suit $200,000 in legal fees to be paid over 30 months, secured by a pledge of shares of the Company’s common stock.”
In her case against Roots RX, Potter alleged the pot shop’s “unsolicited text messages caused (her) actual harm, including invasion of her privacy, aggravation, annoyance, intrusion on seclusion, trespass, and conversion. Defendant’s text messages also inconvenienced Plaintiff and caused disruption to her daily life.”
The suit said thousands of people could potentially join the class.
“While the aggregate damages sustained by the Class are in the millions of dollars, the individual damages incurred by each member of the Class resulting from Defendant’s wrongful conduct are too small to warrant the expense of individual lawsuits,” the suit said.
The suit’s filing also was not deterred by the Supreme Court’s decision April 1 that Facebook’s sending non-consensual text messages did not breach the Telephone Consumer Protection Act of 1991, which resulted in national do-not-call lists.
“The Supreme Court ruling affected some texting cases, but the issue here is that the client said to ’stop’ the text messages,” said Shamis, noting that texts from Roots RX include an option for recipients to opt out of future texts by replying with the message “stop,” which is what Potter did multiple times. “That violation is not affected by the Supreme Court decision.”
Shamis and Potter will be up against a firm that has thwarted a few class-action attempts. Greenspoon Marder successfully defended Florida-based Royal Seas Cruises Ltd. travel agency against a class-action lawsuit alleging the travel agency broke anti-robocall laws with its unsolicited calls pitching free trips and vacations. The judge did not rule whether the calls themselves violated the law, but found that Royal Seas Cruises was not responsible for them, the Miami Herald reported online Feb. 11.