A Chicago federal judge has green-lighted a potential $76 million settlement in a million-member class action suit, which alleged a cruise line and other companies masked telemarketing calls as nonprofit surveys. The judge, however, held off for now approving what could be as much as $24.5 million in fees for plaintiffs’ attorneys – fees defendants are alleging are “excessive” and “unreasonable.” 

On March 2, U.S. District Judge Matthew Kennelly approved a settlement in a 2012 suit brought by named plaintiffs Regina Stone, Stephen Parkes, Grant Birchmeier and Gerardo Aranda. Defendants in the action included Caribbean Cruise Line, Economic Strategy Group, the Berkley Group and Vacation Ownership Marketing Tours. 

The suit alleged the defendants breached the U.S. Telephone Consumer Protection Act by making about 1 million unsolicited calls through Economic Strategy Group. In these calls, an automated voice told recipients they could be eligible for a “free cruise” to The Bahamas, if they took a political survey. At the end of the call, those interested could be connected to a representative of Caribbean Cruise Line. People who received free cruises were required to pay taxes and fees. They were offered a different package if they were willing to tour a Berkley Group timeshare facility. 

The calls were allegedly placed between August 2011 and August 2012. 

Defendants contended the calls did not fall under the TCPA, as they were made by a nonprofit group conducting political surveys. 

Ultimately, the parties presented a settlement agreement to Kennelly, who reviewed the arrangement and found it “fair and commensurate with the strength of plaintiffs’ case.” He found no reason to block the agreement. 

The deal calls for a settlement fund of $56 million-$76 million, from which defendants are to pay $56 million in installments. The amount of the final installment, which could be as much as $20 million, will be based on the number of people who file approved claims. Such claimants could collect $500 per call they received, unless the total of all claims exceeds $76 million. In that case, the money will be distributed on a pro rata basis. 

The four named plaintiffs will each receive $10,000, according to court papers. 

There were two claimants who objected to the settlement, but Judge Kennelly overrode them. 

One man said it was unreasonable to require him to provide documentation of calls, in order for him to be part of the settlement. Kennelly countered plaintiffs’ attorneys were available to help members obtain phone records, but this man did not avail himself of this opportunity. 

Another man asserted people who received alleged calls outside the designated period, August 2011 to August 2012, could lose claims against defendants by virture of the settlement, which releases defendants from future claims. Kennelly dismissed this challenge by saying the man simply misread the settlement details, that the only claims being released by the settlement are those that arose in the 2011-2012 period; calls outside that time are not affected. 

One third of the settlement, which could be as much as $24.5 million, was to be set aside as fees for the Chicago firms of Edelson P.C. and Loevy & Loevy, which pursued the suit for plaintiffs. However, defendants have objected to the method of calculation and the resulting fee amount. 

Defendants are alleging the rates are “unreasonably high” and the work of some of the lawyers was “duplicative” of each other and “redundant.” They are also claiming the number of billed hours is “clearly excessive” and it was “unreasonable” to have 19 lawyers work the case for plaintiffs, according to defendants. 

Kennelly is waiting for the firms to provide information, such as their hourly rates, before determining fees. 

Defendants are represented by the firms of Greenspoon Marder, of Fort Lauderdale, Fla.; Tabet, DiVito & Rothstein, of Chicago; Mayer Brown, Chicago; Forde Law Offices, Chicago; and Rose, Harrison & Gilreath, of Kill Devil Hills, N.C.

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Organizations in this Story

Edelson PC Loevy & Loevy Mayer Brown Tabet Divito & Rothstein LLC U.S. District Court for the Northern District of Illinois

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