Antitrust Law Daily Wrap Up, PRIVACY—W.D. Wash.: Settlement approved in TCPA class action against Best Buy, (May 9, 2014)

By Edward L. Puzzo, J.D.

The federal district court in Seattle has granted preliminary approval to the settlement of a class action arising from unsolicited telephone calls by Best Buy Stores to its customers (Chesbro v. Best Buy Stores, LP, May 7, 2014, Jones, R.).

Basis of class action. Electronics retailer Best Buy had a "Reward Zone" customer loyalty program. During the period of 2009-2011, as part of its "Go Digital" program, Best Buy sought to transition the issuance of its paper Reward Zone certificates to online issuance of these certificates. For the purpose of notifying customers of the new procedures, Best Buy placed automated calls to its customers, using contact information it had obtained when it enrolled customers in the loyalty program.

Plaintiff Michael Chesbro, on behalf of a purported class, alleged that the automated calls made by Best Buy had included calls to customers who had asked not to receive such calls, thereby violating the federal Do-Not-Call regulations promulgated under the Telephone Consumer Protection Act (TCPA), as well as the State of Washington Automatic Dialing and Announcing Statute (ADAD) and the State of Washington Consumer Protection Act (CPA). At this stage in the litigation, the parties negotiated a settlement of the class action and plaintiff brought an unopposed motion for preliminary approval of the proposed class action settlement.

The court noted that the parties' agreement to settle, by itself, was not a sufficient basis for approving the settlement. The court first had to certify a class, even if only for purposes of settlement, and had an independent obligation to protect class members.

Rule 23(a). According to the court, plaintiff Chesbro alleged that there were approximately 42,000 (sic) members of a national class outside of Washington State, and 439,000 (sic) members of class within Washington State, who had received calls from Best Buy regarding the "Go Digital" program after asking Best Buy not to be called. These factors satisfied the numerosity and commonality requirements of Federal Rule of Civil Procedure 23(a), stated the court. As the recipient of automated calls without his consent, the court also found that plaintiff Michael Chesbro met the typicality requirements of that rule, and that he and his counsel met the adequacy requirement of that rule.

Rule 23(b)(3). The court ruled that the requirement of Fed. R. Civ. P. 23 (b)(3), that questions of law or fact common to class members predominate over questions affecting only individual members, was met here. Best Buy's defense of the calls as informational, and not solicitations, could be applied on a class-wide basis, the court found.

Settlement fairness. In evaluating whether the proposed settlement was fair, reasonable and adequate, the net fund available to pay class members, in excess of $3 million, would be estimated to provide each class member $50-$100 per call received, the court noted. Considering the substantial risk that Best Buy's conduct may not be found "willful", as required by the TCPA, this level of damages for class members was adequate, the court found. The court also approved the amount of class counsel attorney's fees and the proposed methods of notifying class members.

For the above reasons, the court granted preliminary approval to the parties' settlement of the class action.

The case is Civil Action No. C10-774RAJ.

Attorneys: Kim Williams (Williamson & Williams) for Michael Chesbro.

Anne M. Lockner (Robins Kaplan Miller & Ciresi LLP) for Best Buy Stores, LP.

Companies: Best Buy Stores, LP.

Cases: Privacy StateUnfairTradePractices WashingtonNews