Second Circuit Moots Class Claims Based on Offer of Judgment

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The Second Circuit last week confirmed that entries of judgment satisfying an individual plaintiff’s claims moot TCPA class actions.

In Bank v. Alliance Health Networks, LLC, No. 15-cv-4037 (2d Cir. Oct. 20, 2016), the Second Circuit affirmed the dismissal of the class claims after an entry of judgment, pursuant to the defendants’ offer of judgment, rendered the class claims moot. The Second Circuit acknowledged that the Supreme Court held in Campbell-Ewald Co. v. Gomez, 136 S. Ct. 663 (2016) that an unaccepted offer of judgment does not moot a plaintiff’s claims. “But where judgment has been entered and where the plaintiff’s claims have been satisfied, as they were here when [the plaintiff] negotiated the check, any individual claims are rendered moot.”  Continue reading

Seventh Circuit Holds That TCPA Does Not Shift Attorneys’ Fees or Create Common Funds, Reverses Order Entitling Individual Plaintiffs To More Than $500 Per Violation

In Holzman v. Turza, Nos. 15-2164 & 15-2256, 2016 U.S. App. LEXIS 12594 (7th Cir. July 8, 2016), the Seventh Circuit reversed an order that could have resulted in individual payments of $500 per violation plus attorneys’ fees, i.e., more than the $500 in statutory damages for which the statute provides.

After the plaintiff prevailed on the merits, the trial court directed the defendant to deposit $4.215 million into court, which represented the $500 in statutory damages for each of the 8,430 faxes at issue. It then ordered that one third of the $4.215 million be used to pay class counsel and that two-thirds of the $4.215 million be used to pay class members. Id. at *3. Class members would be sent a check in the amount of $333 per fax, i.e., two thirds of $500. If, however, a check was uncashed or undeliverable, class members who had cashed their checks would receive a second distribution of up to $167 (i.e., so that their total recovery could, in theory, reach $500 per fax).  Id. If any funds remained after that second distribution, then, and only then would they revert to the defendant. IdContinue reading

Court Finds Fault With Preliminary Approval Motion, Directs Plaintiff to Supplement Record

The Southern District of Alabama recently denied a plaintiff’s motion for preliminary approval of a proposed classwide settlement of TCPA claims. See Bennett v. Boyd Biloxi, LLC, No. 14-0330-WS-M, 2015 U.S. Dist. LEXIS 163987 (S.D. Ala. Dec. 7, 2015). The plaintiff claims that he and some 70,000 other people received unlawful telemarketing calls promoting the defendant’s casino, resort, and spa. Describing the plaintiff’s motion as a “somewhat pro forma” submission that did not “come close to bearing his burden of persuading the Court to certify the proposed settlement class,” the court sent him back to the drawing board “to research and effectively present the legal argument . . . needed to support certification.”

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Court Rules That Settlement Term Sheet Is Not Worth The Paper It’s Written On

Judge Amy J. St. Eve of the Northern District of Illinois recently held that a purported settlement agreement in a putative class action filed by Craftwood Lumber Co. against Interline Brands, Inc. was not enforceable. See Craftwood Lumber Co. v. Interline Brands Inc., No. 11-4462 (N.D. Ill. Sep. 23, 2014). Judge St. Eve held that the “Term Sheet” executed at the end of the parties’ mediation session lacked sufficient detail to establish that a binding and enforceable settlement had been reached.

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Capital One Agrees to $75 Million TCPA Settlement

Capital One and three collections agencies recently announced the largest proposed cash settlement in TCPA history – $75.5 million. This is more than double the amount of the prior record – a $32 million settlement from Bank of America.

The plaintiffs allege that Capital One and the other defendants used an ATDS to place debt collection calls to 21 million cell phone numbers without the requisite consent. Under the terms of the proposed settlement, Capital One will contribute $73 million to the settlement fund, while AllianceOne Receivables Management Inc., Leading Edge Recovery Solutions, LLC and Capital Management Services, L.P. will contribute $1.4 million, $996,205 and $24,220, respectively. The settlement agreement estimates that claimants will receive at least $20-$40 and allocates up to 30% of the settlement fund for an award of attorneys’ fees and costs in an amount to be set by the court. The settlement fund is non-reversionary. Capital One also agreed to take steps to ensure TCPA compliance going forward though it expressly disclaimed any liability in connection with the settlement.

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TCPA Plaintiffs Take Aim at the Sports World

Virtually every customer-facing industry has faced TCPA class actions and sports franchises are no exception. In the past few months, both the Los Angeles Clippers and the Buffalo Bills have settled TCPA suits that relate to text messages.

The Clippers recently agreed to settle a TCPA class action that relates to the alleged dissemination of promotional text messages without the requisite consent. Specifically, in Friedman v. LAC Basketball Club Inc., No. 13-0818 (C.D. Cal.), the plaintiff claimed that he received promotional messages after he sent the team a text message that he wanted it to display on its scoreboard during a game.

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Buyer Beware: When the Financially Challenged Marketing Partner is a Co-Defendant in TCPA Litigation

A recently proposed class action settlement agreement illustrates the potential litigation perils when any established business relies on outsourced, undercapitalized marketing agents who lack either the assets or insurance to adequately defend TCPA class action litigation.  Indeed, the only proposed recovery for the class is an agreement to provide testimony and documentary evidence of the co-defendant’s actual knowledge of the conduct that violated the TCPA, and its alleged authorization of the subject unlawful text messaging.

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