CY PRES PAY DAY: The NCLC Just Rakes in $1.7MM From a TCPA Judgment– But $6MM is Still Available; Will it Go to R.E.A.C.H.?

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So the National Consumer Law Center (NCLC) frequently advocates for a broader TCPA on behalf of its “low income clients” while raking in massive dollars from Plaintiff’s lawyers that funnel funds to it via cy pres distributions in TCPA settlements and judgments.

Gross.

Meanwhile TCPAWorld.com spreads the word about the TCPA and the need to comply with the law… for free.

And Responsible Enterprises Against Consumer Harassment (R.E.A.C.H.) has provided MUCH NEEDED standards and education to the marketing and lead generation industries promoting TCPA compliance and the end to unwanted calls.

Yet neither R.E.A.C.H. nor TCPAWorld.com have ever received a penny in cy pres distributions.

But that may be about to change.

In Krakauer v. Dish Network, LLC, 2023 WL 6626112 (M.D. N.C. October 11, 2023) the Court acknowledged $17MM in cy pres funds were available to be distributed but only distributed approximately $11MM of funds based on a special master’s proposal from some time ago.

The NCLC noticeably is receiving $1.7MM–a massive haul for the supposed non-profit.

The Court refused to distribute all $17MM, however, specifically requiring the special master (LESLIE J. WINNER) to consider other cy pres recipients. And I can think of no organizations worthier than R.E.A.C.H. or TCPAWorld.com and I plan to let her know.

BTW–I really respect the Court for holding back some of the funds here. Plus the Court is imposing some pretty strict requirements on recipients of the money to account to it for its use:

As a condition of the distribution, each cy pres beneficiary must: (1) agree to spend the funds in the manner proposed in the application submitted to the special master, (2) file on the public docket an annual report confirming that use and explaining in summary fashion how the distributed cy pres funds were spent during the previous year, and (3) otherwise agree to answer the Court’s questions about the spending of the money.

Because the recipients proposed using the funds over a specified period of years, the Court will order disbursement in annual amounts, over the term of years requested. Each approved project ranges in length from two to four years. For four-year and two-year projects, distributions will be made in equal yearly installments based on the length of each project. For recipients with three-year long projects, the first distribution will cover 40% of the total approved funding, followed by two distributions of 30% the following two years. This schedule can be modified for good cause shown by a particular recipient.

Respect.

As mentioned, I will be reaching (pun) out to Ms. Winner on behalf of R.E.A.C.H. and TCPAWorld.com to advocate that the money would be best distributed to these organizations that ACTUALLY DO SOMETHING to spread information about–and compliance with–the law.

Will keep everyone posted.

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Published by Eric J. Troutman

The Czar of TCPAWorld Eric Troutman is 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. He also helps industry participants build TCPA-compliant processes, policies, and systems. Eric has built a national litigation practice based upon deep experience, rigorous analysis and extraordinary responsiveness. Eric and his team feel equally at home litigating multibillion dollar telecommunications class actions in federal court as they do developing and executing national litigation strategies for institutions facing an onslaught of individual TCPA matters. They thrive in each of these roles – delivering consistently excellent results – while never losing sight of the client experience. While many firms now tout TCPA expertise, Eric has been there from the beginning. He built one of the country’s first TCPA-only defense teams and began serving as national TCPA counsel for his clients nearly a decade ago. This perspective allows him to swiftly develop the right litigation strategies for dealing with recurring problems, without wasting time on tactics that are bound to fail. Eric’s rich historical perspective and encyclopedic knowledge of the TCPA landscape also make him an invaluable resource to institutional compliance teams struggling to comply with the shifting regulatory landscape. No task is too small – or too big. Indeed, Eric and his team have helped build TCPA-compliant systems and processes for some of the largest and most complex corporate entities in the country. He commonly works with in-house compliance counsel to build and implement enterprise and business-line specific TCPA solutions, performs TCPA audits and drafts and reviews proposed TCPA policies and procedures. He and his team also have the technical expertise necessary to assist call centers seeking to develop TCPA-resistant call path architecture or to modify existing telephony and software integration to better insulate from potential TCPA exposure. Eric has built a reputation for thought leadership. An avid blogger and speaker, he has been at the forefront of the industry’s effort to push for clarity and a return to sanity for the TCPA for years. He was selected to advocate for the financial services industry on important TCPA issues before the Federal Communications Commission and co-authored the nation’s only comprehensive practice guide on TCPA defense. In his spare time, Eric leads defense teams representing banks and other financial services companies in consumer finance litigation matters. He has experience representing clients in UCC, TILA, RESPA FCRA, CCRA, CLRA, FDCPA, RFDCPA and FCCPA claims, as well as in fraud and bank operations issues.

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