CHICAGO — A federal judge’s decision awarding at least $15 million to lawyers who secured a $56 million settlement in a class action against a cruise line and others who allegedly masked telemarketing calls as non-profit political surveys, marks one of the largest such payouts to attorneys under the federal Telephone Consumer Protection Act.
But while the settlement and fee award could prove attractive to other litigants seeking a big payday, it could also prompt a response from federal regulators and lawmakers to change the law, as well, said a lawyer whose practice involves telecommunications law.
Earlier this year, Caribbean Cruise Line settled a years-long case alleging they had violated the TCPA, agreeing to pay up to $76 million in damages. Of that, the plaintiffs’ attorneys sought $24.5 million in fees, but the defendants and one class member objected.
Judge Matthew F. Kennelly of the U.S. District Court for the Northern District of Illinois decided April 6 to allow the attorneys who brought the case, from the Chicago firms of Edelson P.C. and Loevy & Loevy, to collect anywhere from $15 million to $18.9 million in fees, depending on how many claimants come forward to collect their share of the settlement.
“That’s very significant and certainly will open the eyes wider of the collective plaintiff’s bar and those that bring class actions,” said David Klein, managing partner of Klein Moynihan Turco in New York. “As you may be aware, the TCPA has been a vehicle that the plaintiff’s bar has taken advantage of in recent years, since updates to the TCPA’s regulations which make it quite onerous to comply with. In the telemarketing and text message marketing space, [the TCPA] is very nuanced and convoluted, and it’s hard to comply with, particularly by virtue of the fact that various jurisdictions differ over their interpretations and how they rule.”
Although there is concern that this large attorney award might lead to an increase in class action suits under the TCPA, Klein said some are taking action to prevent that.
“There are numerous petitions pending before the (Federal Communications Commission) to reconsider or at the very least provide additional guidance on the TCPA regulations themselves,” Klein said. “Do I think these kinds of cases are going to continue? Certainly.
"But I think the Trump administration has probably issued an edict to the FCC to cut back on how crazy the TCPA has become in terms of the litigation that’s mounted against private industry, and those that are endeavoring to use telemarketing to promote their goods and services. So I don’t think the TCPA class action space is going to continue to grow much more significantly than it already has.”
The $76 million settlement against Caribbean Cruise Line, though significant, is not the largest one to have come out of TCPA litigation, according to Klein.
“It’s worth noting that each violation of the TCPA, meaning per call or per text, is a $500 violation, up to $1,500 per call, per text, if it’s willful and knowing," he said. "And in the state of Connecticut, one (improper) call or text can cost as much as $20,000.”