A federal judge has granted preliminary approval to a $7 million settlement submitted by GSI Commerce Inc., Timberland and a Florida wireless carrier to settle allegations they sent unsolicited advertisements for Timberland products via text messaging in 2005.


Defendants in the case agreed Sept. 4, 2008 to establish a settlement fund of up to $7 million in a class action lawsuit filed by Jeffrey Weinstein and Lei Shen. The suit was filed on behalf of a putative class of wireless telephone subscribers who allegedly received an unsolicited text message in 2005 from the defendants advertising a product sale. The suit was brought under the the Telephone Consumer Protection Act. GSIC denies any wrongdoing, but said settling the suit was less costly than engaging in a protracted legal battle.  


On Sept. 11 2008, Judge Wayne R. Anderson, of the U.S. District Court for the Northern District of Illinois Eastern Division, granted preliminary approval of the settlement. The settlement remains subject to the final approval of the court.


GSIC said its errors and omissions insurance policy, which covers this claim, carries a deductible is $1 million. Through the end of the second quarter of fiscal year 2008, the GSIC had expensed or established reserves for approximately $900,000 of the liability relating to this lawsuit.