A cruise line and other companies accused of allegedly cloaking telemarketing calls as nonprofit surveys have agreed to settle a federal class action lawsuit against them, agreeing to pay potentially as much as $76 million – including potentially as much as $24 million to plaintiffs’ attorneys - to end the litigation before it went to trial.
On Sept. 28, attorneys for the plaintiffs’ class and lawyers for the defendants, Caribbean Cruise Line, Economic Strategy Group, The Berkley Group and Vacation Ownership Marketing Tours, presented their proposed settlement agreement to a Chicago federal judge.
A day later, U.S. District Judge Matthew F. Kennelly granted preliminary approval to the deal, beginning a 45-day period in which potential plaintiffs’ class members will be notified of their opportunity to submit a claim to a share of the settlement fund.
The settlement is poised to end the consolidated legal action against the vacation marketing companies, which has been pending since 2012 over claims the companies had violated the federal Telephone Consumer Protection Act.
The plaintiffs were represented in the action by attorneys with the firms of Edelson P.C. and Loevy & Loevy, each of Chicago.
The lawsuit alleged that the owners of potentially as many as 900,000 mobile and landline phone numbers received unsolicited calls placed by Economic Strategy Group. When a person would answer these calls, the lawsuit alleged an automated voice would direct them to take a political survey. The call also indicated their participation could make them eligible for a “free cruise” to the Bahamas. At the end of the call, those interested could be connected with a representative of Caribbean Cruise Line.
Court documents alleged the people who received free cruises were still required to pay all applicable taxes and fees.
Customers were also offered a different package if they agreed to a timeshare tour at a Berkley facility.
The defendants had argued the calls were exempted from the TCPA, as they were made by a nonprofit conducting political surveys.
In April, however, Kennelly granted summary judgment to the plaintiffs, and in August, the judge sunk a bid by the defendants to assail the lawsuit under the recent U.S. Supreme Court decision in Spokeo v. Robins. In that case, the high court had ruled people suing companies for procedural violations of a law must also demonstrate “concrete and particularized injuries.” The judge, however, said the Spokeo reasoning doesn’t apply in this case.
In early September, lawyers for both sides resumed negotiating sessions, and announced to the court they had reached the framework of a settlement deal a few days before the case’s scheduled Sept. 12 trial date.
The settlement deal would require the defendants to pay at least $56 million in installments, with an additional installment of as much as $20 million to be paid after the court signs off on a final version of the settlement deal. The actual amount of that final settlement installment payment would be based on the number of people who submit approved claims, according to the terms of the settlement agreement filed Sept. 28.
The four named plaintiffs in the case – Gerardo Aranda, Grant Birchmeier, Stephen Parkes and Regina Stone – would each receive $10,000, according to the settlement.
The settlement would also allow attorneys Jay Edelson, of Edelson P.C., and Scott Rauscher, of Loevy & Loevy, to ask the court to grant them attorney fees of as much as $24.5 million. The settlement said they are not required to request that amount, but could request less.
Class members could receive $500 per call they received, unless the total of all claims would exceed $76 million. In that case, the relief would be distributed on a pro rata basis.
The settlement agreement stressed both sides wished to avoid the uncertainty of a trial.
Any potential class member wishing to object would have up to 56 days following the end of the 45-day notice period, which began Sept. 29, the day the judge preliminarily approved the settlement deal.
Caribbean Cruise Line, Economic Strategy Group and Berkley were represented by attorneys with the Forde Law Offices, of Chicago, and the firms of Greenspoon Marder, of Ft. Laurderdale, Fla., and Mayer Brown, of Chicago.