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.”
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.
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.
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.