Stunning decision by Farmers to settle a DNC TCPA class action arising out of texts sent by one of its agents for $2.87MM. They really just invited a huge number of additional suits– and there was absolutely no reason for it.
The suit is Starling vs. Farmers– and yes Kimberly Starling finally found a defendant willing to pay her a massive class settlement after all those trumped up lawsuits she’s brought.
She served as class representative in a TCPA class action against Farmers Insurance arising out of calls made by Todd Henderson and the Todd Henderson Insurance Agency, Inc.
I reported on this one when it was filed because it is so important for agency owners to realize they can be targeted as part of these TCPA suits in an effort to get to the insurance companies they sell for.
And that is just what happened here. Henderson’s agency allegedly made some unwanted texts and Farmers was on the hook for it to the tune of $2.87MM.
Now let me just say this is an INSANE settlement amount.
In the first place this is a DNC SMS class action– the weakest kind of TCPA case. In many jurisdictions this theory doesn’t even exist because SMS aren’t “calls” under the TCPA’s DNC rules. Plus there are a ton of other defenses that make these suits uncertifiable in many instances.
Still Farmers decided to settle the case-which I am fine with in theory.
But look at the amount they paid. $2.87MM to settle the claims of just 8,039 class members.
WTH??????
That’s $359.00 per class member.
Again on a claim that probably doesn’t even exist.
But let’s back up so we can really see what’s going on here.
The entire case arose from SMS from ONE agent. So Farmers is not settling a huge amount of exposure here. Just cleaning up after Henderson. That’s it.
And Henderson wasn’t huge. He only sent about 8,000 people text messages.
Now think about all the other agents out there Farmers works with. Farmers just created a precedent that it is willing to settle TCPA suits arising out of SMS from those agents as well– and at a huge premium to the value of these claims. Expect to see a bunch more lawsuits of this ilk– and not just against Farmers but other
Just a stunning–if not terrible– decision here.
I will note the Plaintiff’s lawyer here is Christopher E. Roberts of Butsch Roberts & Associates LLC. Big win for him. Of course he had #biglaw on the other side so…
A few take aways:
- Don’t hire #biglaw unless you want a big loss. Literally.
- Again, DO NOT settle TCPA class actions without discussing with me first folks. You are OVERPAYING and ruining the market;
- If you are a major insurer or real estate brokerage BE SMART about your settlement decisions– settling one of these creates a precedent you are willing to settle others based on the actions of different agents/brokers and you put yourself on the TCPA class action treadmill forever;
- Agents/brokers need to understand they will be in the absolute hot seat now. TCPA suits are already through the roof and you can expect to see a ton more in the insurance vertical following this settlement.
Sorry for the grim news.
Love you all.
Chat soon.