Nothing Skinny About this $3MM Settlement: Jenny Craig Class TCPA Deal Receives Final Approval.

With an $840,000 fee award, class counsel in Bloom v. Jenny Craig should have no trouble paying for a gym membership. The Southern District of Florida gave final approval to a TCPA class settlement that involved marketing-related texts from Jenny Craig sent via TextMagic. See Bloom v. Jenny Craig, No. 1:18-cv-21820, 2019 U.S. Dist. LEXIS 36330 (March 7, 2019). The settlement consists of a $3 million non-revertible fund, with $840,000 going to class counsel and $4,500 going to the named plaintiff.

The $3 million fund for a class of 628,610 individuals – around $4.75 per class member – is within the typical range for a TCPA settlement, particularly when the defendant has ATDS defenses available to it. The court noted that the case involved “contested issues related to whether the software and equipment used to send the messages constituted an [ATDS] in a setting of developing case law and FCC rulings . . . .” (Emphasis added). This uncertainty made “recovery . . . dependent on a successful outcome, which was uncertain.”

The court’s holding is undoubtedly correct. Although successful TCPA plaintiffs can earn between $500 and $1,500 per call, pending FCC rulemaking could defeat the plaintiff’s claims entirely. Or the court could follow the growing trend of limiting the definition of an ATDS to systems that a random or sequential number generator (i.e., what the statute actually requires). The class thus faced the prospect of having their claims eliminated by agency rulemaking after litigating the case for multiple years. With that uncertainty and the significant time and resources required to pursue a TCPA class action, the court correctly found that the $3 million fund is reasonable.

The court also held that the $840,000 fee award is reasonable in that it is only 28 percent of the fund, while one-third of the fund is common in TCPA settlements. The court is correct on this point as well; class-action settlements typically involve one-third distributions to class counsel. Class counsel, after all, bears the financial risk of a case not being certified or of losing on the merits. That risk is heightened in TCPA World, where FCC rulemaking is forthcoming and courts are split on the definition of an ATDS.