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
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
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.
calls were allegedly placed between August 2011 and August 2012.
contended the calls did not fall under the TCPA, as they were made by a
nonprofit group conducting political surveys.
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.
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.
four named plaintiffs will each receive $10,000, according to court papers.
were two claimants who objected to the settlement, but Judge Kennelly overrode
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.
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.
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.
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.
is waiting for the firms to provide information, such as their hourly rates,
before determining fees.
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.