Michigan marijuana companies targeted in class-action lawsuits claiming telemarketing violations

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Florida attorney Andrew J. Shamis, who’s developed a cottage industry suing companies over use of unsolicited telemarketing, has set his sites on marijuana companies in Michigan.

Shamis with his Miami-based law firm, Shamis & Gentile, has sued at least three Michigan marijuana companies in federal court this year, including MichiCann Medical, which operates as 420 Dank in Detroit; AEY Capital, which does business as Gage Cannabis and Light ‘N Up Provisioning and Microbuddery in Flint.

Each of the lawsuits allege the companies sent unsolicited marketing text messages or automated calls to phones without proper consent in violation of the Telephone Consumer Protection Act, “which has resulted in the invasion of privacy, harassment, aggravation, and disruption of the daily life of thousands of individuals.”

The lawsuits are filed by an individual as class-action lawsuits, meaning anyone who’s received unsolicited text messages or calls may potentially join the lawsuits.

A search of federal court records reveals Shamis regularly sues companies across the nation for similar reasons. They’re not always but are frequently marijuana companies. Several Telephone Consumer Protection Act lawsuits are pending against marijuana companies in Arizona at this time.

“Sometimes, we would call this a lawsuit troll,” said Attorney Ben Joffe of Ann Arbor-based Benjamin D. Joffe law firm, who represents multiple Michigan marijuana businesses. “They try and get it certified as a class hoping somebody sent out 100,000 and they can settle for $50 each text message or even $5 for each text message and you get a large payoff.

“As the attorney, you’ve got the retainer that lets you take a third of that or whatnot.”

The lawsuits reviewed my MLive are requesting a settlement of up to $1,500 per unsolicited text message. Shamis declined to comment on his Michigan lawsuits or pattern of suing over telecommunications marketing violations.

“I can’t really comment on these cases but best of luck with your article and sorry I can’t help you out on this,“ Shamis said in an email to MLive. “Stay safe out there!”

Joffe said this practice of filing multiple class-actions lawsuits against numerous companies over the same violations is nothing new and compared it to attorneys who years ago filed lawsuits claiming gender discrimination when bars offered happy hour specials or discounts to women.

He said law firms in some cases may intentionally attempt to get their phone numbers into the possession of businesses to see if they are solicited in violation of the federal law. Once they learn the company is in violation, they seek possible litigants to file on behalf of.

Joffe and his colleague, Ari Goldstein, sent a memo to their marijuana clients several months informing them about the requirements for text-message marketing. The recipient must explicitly agree to accept marketing notifications, Joffe said, and there must be a clear way for them to opt out of marketing at a later date.

He believes marijuana companies are targeted because they’re a new industry in Michigan, aren’t that sophisticated in that area of law and often have deep pockets.

Shamis “is basically being an opportunist,” Joffe said.

The Gage Cannabis lawsuit, filed on July 21 on behalf of Dane Theisen, a resident of Lenawee County, includes screen shots of some text messages he allegedly received from Gage Cannabis, a company that operates medical or recreational marijuana stores in Lansing, Ferndale, Detroit and Adrian with plans to open more across Michigan.

“Platinum vape, Fresh Drop, 4 for $100.00,” said one, and “15% off the entire store,” another.

Life of a text message

A chart included in a federal lawsuit alleging Michigan marijuana companies sent unsolicited marketing messages to recipients without their consent in violation of federal law.

“At no point in time did plaintiff provide defendant with his express written consent to be contacted using an (automatic telephone dialing system),” the lawsuit says. “The numbers used by defendant are known as a ‘long code,’ a standard 10-digit phone number that enabled defendant to send text messages en masse, while deceiving recipients into believing that the message was personalized and sent from a telephone number operated by an individual.”

Robin Schneider of the Michigan Cannabis Industry Association, which advocates for more than 200 Michigan marijuana businesses, said most of her organization’s members are aware they need to obtain customers’ consent before sending marketing messages.

“I’ve never gotten a text message from a company that I haven’t made a purchase from personally and opted into receiving their notifications,” she said.

Joffe suspects more Michigan marijuana companies will be named in similar lawsuit going forward.

“If this guy is doing this, I would guess he’s going to try as many places as he can because it’s all the same lawsuit,” Joffe said. “He’s basically writing the same exact complaint other than a few facts that change.

“That’s why we call it lawsuit trolling.”

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