Robinhood Agrees to $9M Settlement to End Text Suit

136
SHARE
Robinhood Agrees to $9M Settlement to End Text Suit

Seattle, WA — In a bid to put an end to a legal battle, Robinhood, the popular stock-trading app, has agreed to a $9 million settlement over claims that its “Refer a Friend” program flooded non-users with unwanted promotional texts. The agreement, if approved by the court, marks a significant turn in the ongoing dispute that has captured the attention of consumers and legal experts alike.

An “Excellent Result” for Consumers

Consumers Cooper Moore and Andrew Gillette spearheaded the class-action lawsuit, alleging that Robinhood’s referral program breached Washington state law by bombarding individuals with unsolicited texts. Seeking preliminary approval from Senior U.S. District Judge Barbara J. Rothstein, Moore and Gillette hailed the proposed settlement as an “excellent result” for the affected class, estimated to comprise over 1 million individuals with Washington state area codes.

Terms of the Settlement

The proposed settlement encompasses individuals who received Robinhood’s referral program text messages while residing in Washington state between August 9, 2017, and the date of preliminary approval. Excluded from the class are those who explicitly consented in advance to receive such messages. To claim a portion of the settlement, class members must submit valid claims confirming receipt of the promotional texts without prior consent.

Seeking Fair Compensation

Both Moore and Gillette intend to seek a $10,000 award each as representatives of the class, with their legal representatives eyeing fees of up to 25% of the settlement fund, along with $151,000 in expenses. Any remaining funds will not revert to Robinhood but will instead be directed to the Legal Foundation of Washington.

Robinhood Inks $9M Deal To End Promotional Text Suit: Robinhood’s Response

Expressing satisfaction over the resolution, Lucas Moskowitz, Robinhood’s deputy general counsel and head of government affairs, emphasized the company’s commitment to facilitating accessible investing opportunities, particularly for its customers in Washington state.

Robinhood Inks $9M Deal To End Promotional Text Suit: Legal Background

The lawsuit, filed in 2021, alleged that Robinhood’s “Refer a Friend” program violated Washington state’s Commercial Electronic Mail Act and Consumer Protection Act. The program allowed users to send texts to their contacts inviting them to join Robinhood, with successful referrals potentially earning both parties lucrative rewards.

Robinhood Inks $9M Deal To End Promotional Text Suit: Court Ruling

Despite Robinhood’s attempts to dismiss the lawsuit, Judge Rothstein ruled in August 2022 that Moore and Gillette had presented sufficient evidence to proceed. The judge highlighted Robinhood’s active involvement in facilitating the transmission of unsolicited texts through its app.

Conclusion

With the proposed settlement awaiting judicial approval, the resolution of this case may serve as a benchmark for future disputes involving promotional tactics in the digital age.