A recently proposed class action settlement is a perfect example of an imperfect system.
In a classic example of the fundamental unfairness inherent in TCPA class actions, a recently proposed settlement will result in the Plaintiffs’ attorneys pocketing nearly $10 million (enough to purchase a private island), while class members will walk away with $38 (enough to purchase two movie tickets and a large popcorn). In addition, six representative plaintiffs would split about $115,000.
The case, In Re: Monitronics International Inc., Telephone Consumer Protection Act Litigation, is a multi-district omnibus action that consolidates 30 separate cases and includes nearly 350,000 class members who reportedly received 7,858,232 calls from the various defendants. The first case was filed on May 18, 2011 by professional TCPA plaintiff Diana Mey
In their Motion to the court to approve the proposed settlement, the Plaintiffs’ attorneys stated that the $38 payment to class members “compares favorably with other TCPA settlements approved by courts across the country.”
When it comes to unfair class actions settlements, TCPA cases are far from unique. In fact, the class action system is rife with similar examples, such as the following:
Barrera v. Pharmavite
Under a proposed class action settlement with the marketers of glucosamine supplement TripleFlex, plaintiffs’ attorneys will pocket more than $4 million, while refunds for class members are capped at $100 per household.
In Re: Subway Footlong Sandwich Mktg. & Sales Practices Litigation
Shortly after a 2013 Facebook post showing a Subway footlong sandwich measuring just 11 inches went viral, the plaintiffs’ attorneys filed nine class actions seeking damages and injunctive relief against Subway for false advertising. Following mediation, in a proposed settlement, Subway agreed to commit to a menu of quality control measures and pay attorneys fees of $520,000. Class members received no compensation.
Gianzero v. Wal-Mart Stores, Inc.
Plaintiffs claimed Wal-Mart improperly interfered with the medical care of injured employees i. Under the settlement agreement, the defendants were required to make an $8 million fund available to compensate more than 13,500 class members, but attorneys for the class were awarded $4.5 million out of the $8 million— more than 55% of the settlement fund.
Dryer v. National Football League
In a class action against the NFL, by retired players alleged that the league was using their names and likenesses without compensation. The NFL and some players settled the class-wide claims, but the original named plaintiffs who spearheaded the litigation received no direct payout. Instead, the settlement agreement created an independent organization that would fund charitable initiatives related to the health and welfare of NFL players. Meanwhile, attorneys for the class enjoyed a payout of $7.7 million.
A Final Insult
Turner v. Storm8
This case represents an even more insulting type of settlement; one that requires class members to continue using the defendant’s services. The class action plaintiff alleged that certain mobile gaming apps were improperly collecting and disseminating users’ phone numbers. Instead of a monetary payment, under the settlement agreement class members were to receive 45 in-game “points” (with an approximate cash value of $3.75), which could only be redeemed by continuing to use the offending app.
Unsurprisingly, although their “clients” were paid in points, plaintiffs’ attorneys were not. They were awarded $125,000 in fees.