Class Members Thought They Would Get $900, but End Up With $22 After the Court’s Final Approval of the $12,500,000 Settlement in Charvat v. Valente
Imagine expecting to receive a $900.00 TCPA settlement payday only to walk away with a check for 22 bucks! That’s what happened in Charvat v. Valente, No. 12-cv-05746, 2019 U.S. Dist. LEXIS 187225 (N.D. Ill. Oct. 28, 2019), after the parties received final approval for a $12,500,00 class action settlement, despite fierce objections from disappointed class members.
As background, the class alleged that the defendants – three cruise lines and a travel agency – used an ATDS to make calls to the class members with a prerecorded message without prior express consent in violation of the TCPA. Two years ago, the $12,500,000 settlement was preliminarily approved. The settlement amount then received copious national press, and the press tornado reported that each class member would receive $900. This caused a tsunami of people submitting claims. The $900 number, however was really just the maximum amount a class member could receive. After the claims began surging, the Court required claimants to provide supplemental documentation to prove it. Still, the large amount of claims drained the pool of settlement funds. Many class members filed objections to the settlement’s low final $22.17 average payout per claim. The Court still approved the settlement because it found the low payout was caused by the press bringing in an unexpectedly large amount of (misinformed and eager) claimants, and not by the settling parties – so even though class members were unhappy, it had nothing to do with a failure of the settlement. The Court further noted that “[f]or most individuals, the experience of receiving the recorded calls or messages at issue lasted only seconds…Given the low harm…the Court finds objector concerns regarding the low payout rate to be unwarranted…” Id. at 25-26.
Finally, the Court lowered the incentive award for the named Plaintiff from $50,000 to $25,000. The named Plaintiff endured years of discovery, however, the Court held that a $50,000 award was excessive, as the Northern District of Illinois typically awards only $5,000 for a named plaintiff in a TCPA class action. The Court also granted the class counsel’s requested fee of $3,150,000, i.e. 33.99% from the recovery, since it reflected the market rate.
So there you have it, fake news can legitimately affect the dollar amount of a class member’s TCPA claim! Luckily the parties didn’t spread the misleading news, so the settlement didn’t blow up. Stick with TCPAWorld to keep it real.
Authored by Jason M. Ingber