WORST SETTLEMENT IN TCPA HISTORY?: Jones Day Agrees to INSANE Non-Reversionary $28MM DNC TCPA Settlement for Client with Hundreds of Thousands of Dollars Likely Headed to NCLC As Cy Pres

Prepare for the return of Grumpy Czar.

In TCPAWorld there is the famous quote:

Hire #BigLaw expect a Big Loss.

Usually when I am reporting on the failures of #biglaw firms in defending TCPA class action I do not name the firm that screwed up because everyone knows I am a very nice guy.

But today I am calling out Jones Day in a big way.

This new non-reversionary $28MM TCPA settlement they signed off on for a client involving a bizarrely worded class definition and hundreds of thousands of dollars being funneled to the NCLC is SO HORRENDOUS I am just going to call Jones Day out directly.

In my opinion these guy have ABSOLUTELY NO IDEA what they are doing and should NEVER be retained to defend a TCPA class action again.

What do I mean?

Well let’s start with the basics.

DNC class actions are: i) probably uncertifable, period; ii) subject to a complete “good faith” defense; and iii) only carry penalties “up to” $500.00 per call– not an automatic $500.00 per call like 227(b) claims. So whereas DNC class actions are still dangerous, they are nowhere near as scary as 227(b) claims and should NEVER result in 8 figure settlements (unless being used to wipe out other forms of claims, which didn’t happen here as we shall see).

This particular case– which I am not going to name out of respect for the client who got taken for a ride in my view– is even worse because it arises from calls made to individuals who were actually in a business relationship with the caller, although the consumer had not actually paid for services (which doesn’t matter from an EBR perspective). That and a second class of individuals who had “asked to register” numbers on an internal-DNC list (and given the language of the class definition that is probably zero people but we will get to that.)

Oh and the release– at least as I read it– does not even protect against OTHER TCPA claims just DNC claims. So the defendant could literally get sued tomorrow if any of these calls were made using regulated technology (i.e. autodialers or prerecorded voice messages.) Plus an individual who didn’t use the specific phrase “put me on your internal DNC list” or the like might not even be in the class. So somebody who said “stop calling me” and got future calls– i.e. the exact type of person the defendant was sued for calling– might still be able to sue again despite the settlement because of the awkward phrasing of the class definition.

In other words the Defendant just paid $28MM to settle weak 227(c) claims ONLY as to: i) a group of people they probably had an EBR with to begin with; and ii) a narrow group of people who specifically asked to be put on their internal DNC list but likely NOT people who generally just asked for calls or text messages to stop.

Just absolutely terrible. No value to this at all.

And setting aside the brutal monetary terms there are also a bunch of non-monetary terms it looks like Jones Day has given the court jurisdiction to govern its client’s behavior for three years after the settlement.

INSANE.

In my view you should never agree to any form of injunctive or future-looking relief subject to court supervision in ANY TCPA class settlement against a private litigator. Oh sure you sometimes make “representations” that this has happened or that may happen. But you NEVER put the court in position to enforce those terms against a client in a private TCPA suit.

This isn’t a regulator. This is a cheesy civil litigator.

But somehow this thing gets even worse.

And this is the part that really cooked my melon. Like I can barely type I am so frustrated.

There is an individual cap on claimant recovery in the settlement of $1,500.00 per claiming class members–which is insanely high in a DNC case but whatever– and rather than any resulting remaining sums going back to the defendant (as it should) instead the money is going to the National Consumer Law Center.

Ugh.

Look, I can live with Jones Day crashing this case into the ground and having a poor defendant needlessly pay $28MM in a case that probably could have settled for $5-6MM but I CANNOT ACCEPT these guys CLUELESSLY agreeing to fund the NCLC with what will likely be a high-six figure (maybe even 7 figure) pay out from this settlement.

The NCLC is basically the plaintiff’s bar’s lobbyist to the FCC. The NCLC pushes for a broader TCPA, easier access to the courts for litigators, and TERRIBLE rules that are not friendly for businesses or consumers. THEY ARE THE ABSOLUTE WORST for anyone who wants to see the scourge of TCPA cases end. (Just search “NCLC” on TCPAWorld to get a sense of their mischief.)

And Jones Day just arranged to hand them a massive amount of cash from their client when there are literally HUNDREDS of other better-suited organizations to receive the funds–say maybe R.E.A.C.H.?

Why would they do this?

One of two reasons and only two reasons:

This firm is so completely clueless about TCPA matters that they didn’t even know who the NCLC is; or
They secretly want to use their client’s money to fund future TCPA cases to that they will make more money in the future.

Only options. Neither would surprise me.

AND OH BY THE WAY– A NAMED PARTNER AT CLASS COUNSEL’S LAW FIRM IS LITERALY ON THE BOARD OF NCLC. SHE IS FUNELLING MONEY TO HER OWN ORGANIZATION– ISN’T THAT A CONFLICT???

Apparently nobody at JD caught this. Or cares.

I have no words.

I mean… no more words. I already spoke a bunch of words.

In addition to all of this, of course, the plaintiff’s lawyers will also be receiving about $9.3MM from the settlement–assuming the court approves all of this, and we will have to wait and see.

So yeah.

I am pissed.

If you get sued in a TCPA class action please hire lawyers who know what they are doing. Not just for your own sake but or the sake of everybody else in TCPAWorld who now has to deal with: i) an insanely-high DNC class settlement that will be waived around in everyone’s face as a new benchmark for settlement (which is isn’t); and ii) the NCLC receiving a bunch of additional funding for their nefarious TCPA-related conduct.

Have a good day everybody.

I still love all of you. Just not Jones Day. But I will probably forgive them eventually.

I am too nice.

If you’re defending TCPA suits be sure to attend Law Conference of Champions May so you actually know what you’re doing. 🙂 We will be covering TCPA defense tips and tactics in addition to hours of substantive TCPA discussion. There’s a virtual option for God’s sake so there really is no excuse to miss it.