In the most recent multimillion-dollar settlement of a Telephone Consumer Protection Act class action, American Eagle Outfitters agreed to pay $14.5 million in a dispute over allegedly unsolicited text messages.
Four putative class actions against the national clothing retailer were consolidated in New York federal court. They alleged that American Eagle Outfitters relied on telemarketers that used an automatic telephone dialing system to send advertising texts on its behalf to consumers who had not provided prior express written consent.
After more than two years of litigation—including discovery and motion practice—the parties mediated an agreement. American Eagle agreed to pay a total of $14.5 million into a non-reversionary settlement fund that provided class counsel payments of up to $4,832,850 in fees and $111,943.80 in costs; administrative costs estimated between $408,000 and $647,000 and incentive awards to the four named plaintiffs of $10,000 each.
The remainder—approximately $8,768,206—will be distributed among the 618,289 potential class members who submit a valid and timely claim form. Based on a conservative claims rate range of 5 to 10 percent, the plaintiffs estimated that each class member will receive between $142 and $285. The parties designated the National Consumer Law Center as the recipient of any amounts remaining in the settlement fund after disbursements.
“The proposed settlement is more than fair, reasonable, and adequate, and exceeds many approved class settlements under the TCPA on a per class member recovery,” according to the plaintiffs’ unopposed motion for preliminary approval of the deal, noting other agreements with awards such as $40 cash or an $80 voucher or a payment of $46.98.
To read the unopposed motion for preliminary approval of class settlement in Melito v. American Eagle Outfitters, Inc., click here.
Why it matters: American Eagle Outfitter’s $14.5 million deal is the most recent multimillion-dollar TCPA settlement, and as class actions continue to be filed under the statute, likely won’t be the last. Retailers in particular appear to be a favorite target by the plaintiff’s bar.