November 27, 2022

Volume XII, Number 331

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HUGE DOLLARS: Allstate Hammered in $4.5MM TCPA Settlement Paying Over $600.00 a Class Member in a DNC Class–Plus Funneling More Money to the NCLC

In the TCPAWorld there are good class settlements and bad class settlements.

Generally a good class settlement is one where a Defendant gets a TON of liability released for a relatively low per-class member settlement.

Generally a bad settlement is one where a Defendant pays millions of dollars and only a (relative) handful of claims are eradicated.

And setting aside the size vs cost analysis, there are different risk levels in different cases as well.

DNC TCPA class actions are–generally speaking–less dangerous because: i) the Plaintiff has to prove all class members actually placed their numbers on the DNC list themselves (very tough on a classwide basis); ii) a complete defense exists if the Defendant has good policies; and iii) damages are “up to” $500.00 a call and not set at $500.00 a call.

So when a TCPA DNC class case settles–and they sometimes do–they are generally at a lower dollar figure than wrong number classes or straight “no consent” classes involving prerecorded calls.

But even as to the RISKIEST class settlements–even post-certification–class settlements in TCPA cases generally run well below $100.00 a class member.

And then there’s Gebka vs. Allstate. 

Now for a company claiming to have “good hands” Allstate sure has been fumbling the ball a bit lately in TCPAWorld.

We’ve been covering the ongoing saga of Allstate battling Alex Burke after the company had to turn over its entire do not call list last year. That battle is still being waged.

And the claims in Gebka are somewhat similar–calls made without consent to numbers on the DNC list.

The remarkable thing here, however, is how small the class is:

The approximately 7,451 individuals to whom: (a) Allstate or anyone allegedly acting on its behalf made at least two telephone calls based on leads provided by, through, and/or directed by Richardson Marketing Group and related entities within a 12-month period (b) promoting Allstate insurance (c) between October 8, 2015 and present (d) where the person’s telephone number was registered on a Do Not Call registry for more than 31 days before the first call.

So something called Richardson Marketing Group provided some leads resulting in calls to 7,451 people. That’s it. And Allstate just agreed to pay $4.5MM to settle that case– that’s over $600.00 a class member (or about 5-10x market value for this settlement IMO.)

Making matters worse–for all of us–Allstate’s counsel (who SURELY read my blog) decided to allow the National Consumer Law Center (NCLC) to be the cy pres recipient–meaning that potentially hundreds of thousands of dollars of unclaimed class member funds may end up in the hands of the NCLC.

Terrible.

For the uninitiated the NCLC is the NUMBER ONE advocate of a broad TCPA, claiming that legitimate American businesses are to blame for the robocall epidemic and advocating to the FCC and Congress for broader consumer protections to sue callers. They are the LAST organization in the world any TCPA defendant should be funneling money to–but of course the Plaintiff’s bar loves them since they help provide cover fire to keep the abusive litigation brought under the TCPA alive.

I have covered this issue over and over and over again on TCPAWorld–EXPRESSLY asking everyone out there NOT to keep giving money to the NCLC. Yet Allstate’s lawyers thought it would be a good idea to funnel more cash into the hands of an entity that pushes for more TCPA litigation.

Makes my stomach turn. Should never happen. And I hate it.

Anyway, in my opinion this is a bad settlement and one that smacks of desperation. I don’t know the facts or how Allstate ended up in some dire straights that they felt this was the only way out of a DNC case but the least they could have done was have some other outfit serve as the cy pres recipient.

© 2022 Troutman FirmNational Law Review, Volume XII, Number 277
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About this Author

Eric Troutman TCPA Lawyer Troutman Law Firm Orange County, CA
Founder

Eric J Troutman is known as one of the country’s prominent class action defense lawyers and is nationally recognized in Telephone Consumer Protection Act (TCPA) litigation and compliance. He has served as lead defense counsel in more than 70 national TCPA class actions and has litigated nearly a thousand individual TCPA cases in his role as national strategic litigation counsel for major banks and finance companies. Eric also helps industry participants build TCPA-compliant processes, policies, and systems.

Eric's perspective allows him to...

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