In what could be the largest Telephone Consumer Protection Act settlement yet, a federal judge in the Northern District of Illinois signed off on a deal requiring three cruise marketing companies to pay up to $76 million to two classes of call recipients.
The plaintiffs accused the defendants of making more than 900,000 illegal robocalls in which they offered a free cruise in return for taking a political survey. Caribbean Cruise Line, Inc., Berkley Group Inc., and Vacation Ownership Marketing Tours Inc. disputed the charges, but after four years of litigation and on the eve of trial, they reached a deal that features a promise to create a common fund of at least $56 million and up to $76 million.
Payments will be made from the fund to two classes of plaintiffs: one for landline call recipients and one for cell phones. Each class member who submits an approved claim will receive at least $500 per call unless the total payments, settlement administration and notice expenses, incentive awards, and attorneys’ fees exceed $76 million. In that event, class members will receive a pro rata share per call.
Four class representatives will receive incentive awards of $10,000 each, and class counsel said it would limit its request for attorneys’ fees to no more than $24.5 million.
The defendants agreed to a floor of $56 million, so depending upon the number of claims filed, class members could receive up to $1,500 per call. Class members whose phone numbers appear in the defendants’ records will not be required to submit any evidence with their claims while those whose numbers do not appear must document that they received calls when submitting a claim (such as a phone bill).
In addition, the defendants agreed to provide prospective relief. For a two-year period, the defendants will each perform annual internal audits of their procedures to ensure they will not make autodialed and/or robodialed telemarking calls to either cell phones or landlines “unless to the best of their knowledge, each call recipient has given prior express consent in writing to receive such calls.”
“By any measure, this Settlement is an extraordinary result,” the plaintiffs argued. The creation of a settlement fund of up to $76 million—“the largest such fund on record in any TCPA case”—will provide “nearly unprecedented” payments for class members. The previous record-holder, Capital One’s $75 million deal, only paid out $34.60 per claimant, the plaintiffs said. With a class composed of “a small fraction of the size of the Capital One class” and a larger fund to divide up, each class member is “set to recover hundreds if not thousands of dollars.”
“Simply put, this settlement dwarfs the typical result, both in terms of the absolute size of the fund and in terms of what each class member will receive,” the plaintiffs told the court.
U.S. District Court Judge Matthew F. Kennelly granted the motion for preliminary approval of the deal and scheduled a hearing for final approval in January 2017.
To view the motion in support of preliminary approval of the settlement in Aranda v. Caribbean Cruise Line, Inc., click here.
To read the court’s order granting preliminary approval, click here.
Why it matters: The record-setting deal puts an end to four years of litigation on the eve of trial, after the court had certified the two classes of plaintiffs and denied the defendants’ motion to dismiss for lack of standing based on the U.S. Supreme Court’s decision in Spokeo v. Robins. The agreement also demonstrates that the days of multimillion-dollar TCPA settlements are not over, and in fact, we may continue to see increasing settlement figures.