SETTLEMENT REJECTED: Court Finds $25.00 Per Claim Class Settlement Insufficient in TCPA Suit

More news on the heels of yesterday’s story on the Estate of O’Shea case. 

The Court has rejected the settlement submitted by the parties to resolve the claims of class members in the suit.

As I reported yesterday, the parties had reached a classwide settlement following the certification of the suit.

Apparently, the parties met with a mediator (Magistrate Judge Brooks) eighteen times–18!–in order to get the deal done. The resolution–which required the Defendant to fund a settlement of $25.00 per individual claim–was largely driven by the Defendant’s financial condition.

But the Court was not having it. In Estate of O’Shea v. Am. Solar Sol., Inc., Case No. 3:14-cv-00894-L-RBB, 2021 U.S. Dist. LEXIS 205203 (S.D. Cal.  October 25, 2021) the court determined that a $25.00 per claim settlement was insufficient.

First, the amount was too low–never a welcome finding for a Defendant. Now the Plaintiff has a ton of leverage to demand more money, and the Defendant just has to find a way to pay up.

Second–and more problematically for TCPAWorld as a whole–the Court found that the settlement needed to take into account differences in class members. Some, presumably, received multiple calls on their cell phone. Others received only one. Yet the settlement compensates all equally.

For a variety of reasons TCPA class settlements are commonly settled on a per class member basis, with all claimants recovering equally. Indeed, that is the absolute norm in these cases. So it is a bit troubling that the O’Shea court seems unimpressed by that format. We’ll keep an eye on it.

More broadly, this is by no means the first TCPA settlement that has been rejected as insufficient by a Court. (Remember that time a court rejected a $17.5MM deal invlving a mortgage loan servicer and the Defendant had to pony up another $4MM to get the deal done? Eesh). But $25.00 per claimant was not a terrible deal either. Especially since the calls here involved a ViciDial predictive dialer–that may, or may not, be an ATDS after Facebook (and probably isn’t.)

We’ll let you know where this goes.

Separately, a lot of rumblings out of DC. News coming.



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