Agency and Former Client Have Agreed to Cease Court Actions
DALLAS--GSD&M has settled the more than $5-million lawsuit brought against it by former client Rx.com.
"We've settled the matter in a mutually agreeable way," said Eric Webber, a representative for the Austin, Texas-based agency.
Details of the settlement were not disclosed. Lawyers for both the client and agency declined
According to court documents filed in Houston, Rx.com, an online provider of medications and medical advice, filed suit against GSD&M in July, accusing it of "pull[ing] a classic bait and switch."
Specifically, Rx.com said that in its initial presentation, GSD&M promised to dedicate senior-level management to its account. Instead, the company claimed that the work was handled by junior-level employees and third parties, including Austin-based companies Sibley-Peteet Design and Digital Voodoo.
According to the client's initial court petition, "the outsiders GSD&M had deployed in their place were hopelessly behind on the work contemplated by the proposal and were, in fact, impeding the successful implementation of the Web site and brand building of the Rx.com name."
GSD&M followed this claim by filing a countersuit for the $500,000 in services owed by Rx.com, which the client refused to pay. The agency said it handled the advertising account appropriately, and that Rx.com was seeking to avoid paying its bills.
Rx.com has since moved its account a few blocks away to T3 [The Think Tank]. At the time of
the switch, which occurred last summer, T3 representative Laura Nell Soules said Rx.com had felt lost within the larger GSD&M. The client's annual advertising budget, at the time of the move, was initially estimated at $10-15 million.
"I think they just wanted that hands-on feeling, and the thing about T3 is that we're very hands-on," Soules said.
T3 is also using outside specialists for the design of the client's Web site.