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Financial Services Law Insights and Observations

District Court approves $12.5 million settlement in TCPA class action

Courts TCPA Class Action Settlement Autodialer

Courts

On October 28, the U.S. District Court for the Northern District of Illinois granted final approval of a $12.5 million TCPA class action settlement between a group of consumers and three cruise lines and their marketing group (collectively, “defendants”). According to the opinion, a consumer filed the action against the defendants alleging they violated the TCPA’s prohibition of the use of an autodialer without prior consent. While the motion for class certification was pending, the parties reached an agreement-in-principle for a class-wide settlement. The settlement requires the defendants to, among other things, set up a common fund of $12.5 million to permit each claimant to “recover for up to three calls per telephone number, with a maximum value for each call set at $300.” The court noted that after deducting attorneys’ fees, other costs, and an incentive award for the principal plaintiff, the nearly 275,000 class members will be eligible to receive an average of about $22 per claim. The court noted that while $22 is “significantly below the $500 recovery available under the statute for each call… a settlement does not need to provide the class with the maximum possible damages in order to be reasonable.” The court went on to state that the settlement “still serves the purpose of punishing [the cruise lines] for their role in the controversy,” and the total settlement fund is a “deterrent to potential future defendants who might think twice about violating the TCPA in an effort to boost business.”