Caribbean Cruise Line Settlement
A Telephone Consumer Protection Act (“TCPA”) class action litigation, Birchmeier et al. v. Caribbean Cruise Line Inc. et al., No. 1:12-cv-04069 (N.D. Ill.), has been winding its way through the court system for four years and finally settled this month. Caribbean Cruise Line and its co-defendants, who were sued for violating the TCPA by allegedly robocalling millions of individuals with offers for free cruise trips, will now pay between $56 million and $76 million, to settle claims of the approximately one million person class who received such calls from the defendants in 2011 and 2012. The total amount of the settlement will be based on the number of claimants. Class members are to receive $500 for each call received up to $1,500, with the final amount going to class members determined pro rata based on the number of claimants less the attorney’s fees of $24.5 million. If Caribbean Cruise Line ultimately ends up paying the $76 million, then it will be the largest settlement in TCPA history.
The TCPA is Outdated and Functions to Line Plaintiffs’ Attorneys’ Pockets
The Caribbean Cruise Line settlement may serve as the poster child for what’s wrong with the TCPA. For years, opponents of TCPA litigation have argued that the TCPA is both outdated and merely a way to line attorney’s pockets. The Caribbean Cruise Line settlement does not differ in that it gives nearly 50% of the settlement amount to the attorneys. If all class members make claims under this settlement, the total received by each class member will be very close to the average recovery for a consumer in a TCPA class action settlement, which hovers around $4.12 per consumer (i.e., about $496 less per TCPA violation than an individual plaintiff could recover by bringing a small claims action himself or herself). Plaintiff’s lawyers, by contrast, receive an average of $2.4 million in TCPA class actions. The Caribbean Cruise Line settlement certainly takes care of the attorneys.
Recent Congressional Hearing on TCPA Effectiveness
Indeed, this sentiment was expressed in a recent congressional hearing on modernizing the TCPA. Representative Blackburn (R-TN) in particular emphasized the disconcerting uptick in TCPA litigation, which she cited as having grown 940% from 2010 to 2015. (A list of the most recent TCPA class action complaint filings is available here.) She also noted how the average payout of $2.4 million to attorneys suggested that lawyers were using the TCPA as a personal “piggy bank.”
The hearing, “Modernizing the Telephone Consumer Protection Act,” was held by the House Energy and Commerce Committee’s Subcommittee on Communications and Technology on September 22, 2016. The hearing primarily addressed how changes in technology, including the ubiquitous use of cell phones, have impacted the effectiveness of the TCPA and whether changes in the law may be necessary to reflect these social and technological changes. Committee members stressed that the TCPA is outdated and hinders legitimate consumer outreach. The hearing also addressed the issue of caller ID spoofing, a mechanism frequently used by scammers to hide their identity and evade law enforcement. The Committee was in agreement that addressing these technological issues will be important to effectively target many of the bad actors that the TCPA was intended to address in the first instance.