After sorting through a blizzard of more than 2 million claims, including many that “were likely fraudulent,” lawyers on both sides of a massive class action over vacation marketing robocalls have asked a judge to sign off on a $12.5 million deal to end the six-year-old litigation, under which about 275,000 approved claimants could get a share of $6 million, and plaintiffs’ lawyers could get more than $3.1 million.
First filed in 2012, the lawsuit alleged an Illinois company doing business as Resort Marketing Group made potentially millions of robocalls to people throughout the country, allegedly on behalf of cruise lines, in violation of the federal Telephone Consumer Protection Act.
In addition to RMG, the lawsuit named several cruise lines as defendants, including Royal Caribbean Cruises, Carnival Corporation & PLC and NCL (Bahamas) Ltd., which operates the Norwegian cruise line.
Catherine MacIvor Foreman Friedman
Litigation over the case rolled on for years, as the cruise lines and RMG sought to sink the case with varying maneuvers.
The plaintiffs, for instance, noted the defendants argued on multiple occasions the named plaintiff in the case, Philip Charvat, of Ohio, should not be allowed to pursue the action, because he had recorded four phone conversations with RMG representatives. While such recording is permitted in Ohio, it is illegal in Illinois, and the defendants attempted to assert Illinois law should apply, because RMG is based in Illinois.
However, judges presiding over the case rejected those dismissal attempts, setting up settlement talks, which ultimately resulted in the proposed deal, first made public in June 2017. U.S. District Judge Andrea Wood granted preliminary approval in July 2017.
In the months since, the plaintiffs’ lawyers issued press releases and took other steps to notify potential class members of the settlement – efforts they said resulted in the submission of 2.7 million potential claims.
The plaintiffs’ lawyers credited that response largely to boosts from news reports on the settlement, including prominent placement on ABC News. However, they said the largescale attention to the settlement also resulted in news reports which omitted key details, leading to “consumer misunderstandings” concerning the expected pay out per claim. While the website established for the settlement says would-be claimants could receive $300 per claim, and a maximum payout of $900, the plaintiffs’ lawyers noted the payout was always dependent on the final number of eligible claims submitted.
In this case, they said, the “misunderstandings” and blitz of claims led to $3 million in costs to screen the claims. While it helped to weed out what they said was a substantial number of claims that were “likely fraudulent,” that bill ended up costing $2.2 million than had been expected under the preliminary approval.
That, in turn, reduced the money on hand for consumers. To offset some of the loss, the plaintiffs’ attorneys said they agreed to give up $1 million in fees, boosting the total available pot for class members to about $6.1 million.
According to the memorandum accompanying the motion for final approval, the lawyers estimate this would produce an average payout of $22 per claim, with an expected maximum payment of $598.
The plaintiffs’ lawyers have asked the court to also give Charvat $50,000 for his assistance in bringing the case to the courts, and in sticking out the process until settlement. The cruise line defendants, however, have objected to that request.
The plaintiffs’ lawyers also have requested attorney fees of about $3.1 million.
The documents note some have filed objections to the settlement, asserting the class gets too little. But the plaintiffs’ lawyers noted RMG is out of business and “not a viable source to fund the settlement,” leaving only the cruise lines to foot the bill. And, if the case had gone to trial, the plaintiffs noted it remained in doubt whether a court would find the cruise lines ultimately liable for the calls made by RMG.
In their briefs supporting the settlement, the cruise lines repeatedly asserted RMG made the allegedly illegal telemarketing calls without the consent, knowledge or approval of the cruise lines.
“RMG made the Charvat Calls to Plaintiff and the Calls to consumers without ever telling the Cruise Lines about the Program …, much less obtaining their authority to do so,” the cruise defendants said.
The cruise lines further noted claimants would have had a difficult time at trial tying the cruise lines to RMG, as demonstrated by a “complete lack of forensic proof that they received Calls referencing the Cruise Lines.”
For these reasons, among others, the cruise lines asked the court to approve the settlement, which they said will compensate class members for RMG’s alleged actions, and end the legal action, which they said posed both sides with the prospect of years of “costly and risky” trials and appeals.
The cruise lines are represented in the action by attorneys Catherine J. MacIvor, of the firm of Foreman Friedman PA, of Miami, and Jeffrey S. Becker and Darren B. Watts, of Swanson, Martin & Bell LLP, of Chicago.
The plaintiffs are represented by attorneys Matthew P. McCue, of Natick, Mass.; Alexander H. Burke, of the Burke Law Offices LLC, of Chicago; and Edward A. Broderick and Anthony I. Paronich, of the firm of Broderick & Paronich P.C., of Boston.