On April 19, a Florida court preliminarily approved a $40 million class-action settlement by a privately held major real estate company over claims that it violated the Telephone Consumer Protection Act (TCPA). The complaint alleged that the company made unsolicited, pre-recorded calls to consumers without their consent, including calls to consumers registered on the National Do Not Call Registry (DNC). Allegations also included that the company provided a marketing plan to realtors affiliated with franchisees that involved unsolicited telemarketing. The plaintiff received numerous calls from the company and received a pre-recorded voice message to her voicemail stating, “We got buyers actually looking for homes across all price ranges. Please call.”
Class members include individuals who received a pre-recorded message from the company without their consent and individuals received calls to telephone numbers registered on the Do Not Call Registry. The parties estimate that there were approximately two million class members. A $40 million dollar settlement fund would be set up for an average of $20 payout per claim along with a substantial award of attorneys’ fees.
Additionally, as part of the settlement, the company agreed to (1) change its business practices to include the creation of a task force to enhance realtor compliance with the TCPA and DNC requirements, (2) change their website to make TCPA/DNC resources more visible to their franchisees and agents, and (3) provide training and material to franchisees about TCPA/DNC compliance. These remedial efforts were valued at approximately $7.8 million.
The litigation spanned five years and included class action lawsuits filed in six different federal courts. There were twenty-three adversarial motions filed, multiple waves of written discovery, over seventy subpoenas issued, fourteen depositions taken, five experts issued reports, and hundreds of thousands of pages of documents were exchanged.
Takeaway: TCPA and DNC litigation can result in protracted and costly litigation. Before launching a telemarketing campaign, companies should be sure to have a plan to ensure compliance with federal and state TCPA and DNC laws.