In what the plaintiff claims will result in the largest per-class-member payout in a Telephone Consumer Protection Act settlement to date, Western Union has agreed to pay $8.5 million to a class of 823,472 individuals.
Jason Douglas sued the company in 2014 after receiving an allegedly unsolicited text message asking if he wanted to "opt in" for updates from Western Union. Douglas claimed that he never provided consent to receive any texts from the company and filed a putative class action alleging violations of the TCPA.
After "extensive negotiations" over the course of several months, coupled with multiple mediation sessions, the parties reached an agreement. Western Union agreed to provide $8.5 million for a settlement fund that could provide up to $650 per class member after payment of attorneys' fees and costs.
"[W]hen measured apples-to-apples against other court-approved TCPA settlements in this District and nationwide, this Settlement is among the most superior TCPA class action settlements in the country—ever," Douglas argued in his motion for preliminary approval of the deal, especially in light of the numerous defenses raised by Western Union.
First, the defendant contended the dispute was subject to arbitration. Text messages from the company are sent to those who registered an online account with Western Union and, as part of that process, consumers agreed to terms and conditions requiring that any dispute be submitted to arbitration subject to a class action waiver.
In addition, registrants for an online account provided the requisite consent to receive text messages from the company because they voluntarily provided their wireless telephone numbers during the process, and the equipment used to send the texts did not qualify as an automatic telephone dialing system under the statute.
Although both sides believed their positions to be meritorious, they elected to settle by defining the class as those individuals who received one or more unsolicited text messages sent by or on behalf of Western Union since March 12, 2010. This group of 823,472 will receive a pro rata cash award upon submission of a valid claim.
After deducting notice and administration costs (estimated at around $240,000), a requested attorneys' fee award (35 percent of the fund, or roughly $2.891 million), and an incentive award ($5,000) from the $8.5 million fund, $5,364,000 will be distributed among members of the class.
According to the motion, "Class Counsel estimates that if 1%, 3%, or 5% of Class Members submit Valid Claims, each said Class Member will receive approximately $651.37, $217.12, or $130.28 respectively." Class Counsel argued that "This Settlement is . . . designed to afford relief to as many Class members as possible." To put these amounts in perspective, Douglas compared them to other sizable TCPA settlements if 100 percent of the class members filed claims.
The largest deal, $75 million paid by Capital One to more than 17.5 million class members, would pay out $4.31 per class member, topped only slightly by the $40 million HSBC settlement with more than 9 million class members for a rate of $4.41 per class member.
"[O]n an apples-to-apples basis (comparing settlement common funds to class sizes), Settlement Class Members have the opportunity to receive more than double (and in some cases more than triple) what class members have received in other court-approved TCPA settlements," Douglas claimed, with $10.32 per class member. Given that the other deals were all deemed fair, adequate, and reasonable, "there should be no doubt that this Settlement readily satisfies these same standards," the plaintiff argued.
To read the motion in support of preliminary approval of the settlement inDouglas v. The Western Union Company, click here.
Why it matters: As TCPA class actions show no signs of slowing, the settlement deals show no signs of getting smaller. Even as compared to two of the largest TCPA agreements on record (Capital One's record-setting $75 million deal and HSBC's $40 million settlement), Western Union's $8.5 million payout with a smaller number of class members makes it the current contender for the largest per-member deal—for now.