Antitrust Law Daily Wrap Up, PRIVACY—S.D. Cal.: Settlement in TCPA class action gains final approval, (Mar 7, 2014)

By Edward L. Puzzo, J.D.

The federal district court in San Diego has granted final approval of a class action settlement and award of attorney’s fees in a Telephone Consumer Protection Act (TCPA) claim (Grant v. Capital Management Services, March 5, 2014, Hayes, W.).

Wade Grant, on behalf of a purported class, had alleged that Capital Management Services had violated the Telephone Consumer Protection Act (TCPA) by making unsolicited calls to various cell phones by use of an automated dialing system. Grant subsequently moved for class certification. The parties agreed to stay the case and participate in mediation, during which they reached a settlement agreement. The settlement was preliminarily approved on December 11, 2013.

Settlement. The settlement class consisted of “[a]ll persons within California who received any telephone call from Defendant to said person’s cellular telephone through the use of any automatic dialing system or an artificial or prerecorded voice, within the four years prior to the filing of this Complaint.”

The court certified that the settlement class satisfied the numerosity, commonality, typicality, and adequacy of representation requirements of Federal Rule of Civil Procedure Rule 23(a). It found the settlement to be fair and reasonable, agreeing that the actual recovery through settlement conferred substantial benefits on the class that outweighed potential recovery through full adjudication.

The settlement provided solely injunctive relief for the class members: a stipulation for 3 years that required defendant to use a telephone number database distinguishing cell phone numbers from land lines, and to refrain from placing pre-recorded messages to the cell phone numbers. The incentive award to class representative Wade Grant was $5,000. “While this settlement does not include monetary relief for the Class, it stops the allegedly unlawful practices, bars Defendant from similar practices in the future, and does not prevent class members from seeking legal recourse,” the court stated.

The court was satisfied that the parties had sufficient information to make an informed decision about settlement based on their engagement in extensive discovery, both formal and informal, and negotiations leading up to this agreement. The court found that class counsel was competent and well qualified to conduct this litigation and to assess its settlement value. The court was also satisfied that the settlement, based on arms length negotiations with the assistance of a mediator, was not the product of collusion. Thus the court granted final approval of the settlement.

Attorneys’ Fees. The parties agreed to an award of $475,000 in attorneys’ fees to plaintiff’s counsel. The court used a lodestar method, without a multiplier, to evaluate attorneys’ fees, using current hourly billing rates for the attorneys involved, with evidence supporting the hours worked and the rates claimed, approved the fee request.

The case is Civil Action No. 10-cv-2471-WQH (BGS).

Attorneys: E. Elliot Adler (Frantz Law Group APLC) for Wade Grant. Andrew M Steinheimer (Ellis Law Group, LLP) for Capital Management Services, LP.

Companies: Capital Management Services, LP.

Cases: CaliforniaNews Privacy Advertising ConsumerProtection StateUnfairTradePractices