Fifth Third Bank is moving toward a $50 million settlement to end a class action lawsuit involving its telemarketing activities.
Attorneys with Myron M. Cherry & Associates, of Chicago, filed a motion for preliminary approval of settlement March 12 with U.S. District Judge Rebecca Pallmeyer. The motion, on behalf of Express Hauling, Mangia Nosh, Chief’s Market and potential class members, would end a longstanding dispute with Fifth Third and its affiliates and subsidiaries, Vantiv and National Processing Company, now known as Worldpay.
According to the motion, the $50 million would be “unprecedented” and is nearly double a $28 million deal reached with Wells Fargo Bank in similar litigation. Both lawsuits, which have some common plaintiffs, involve allegations of the banks’ contractors recording telemarketing conversations with small business owners and others using “caller ID spoofing” and other tactics to allegedly mislead the business owners into believing they were speaking with either a local customer or an existing service provider, when the marketers were actually soliciting them to transfer their debit and credit card transaction processing business to a new bank and vendors.
Cherry & Associates attorneys working on the case — Myron Cherry, Jacie Zolna, Benjamin Swetland, Jeremiah Nixon and Jessica Chavin — said the firm will seek a third of the settlement fund, about $16.67 million. The firm also will seek reimbursement for about $350,000 in costs associated with the litigation.
The Fifth Third lawsuit dates to Dec. 9, 2016, and was filed on behalf of small business owners who said they got calls to establish sales appointments from International Payment Services or Ironwood Financial. In the scope of the principal-agent between Fifth Third and IPS and Ironwood, according to the motion, the vendors allegedly violated the California Invasion of Privacy Act by not giving notice they were recording calls.
According to the settlement motion, the agreement with the Wells Fargo defendants for more than 192,000 class members led to more serious settlement discussions between Fifth Third and a class estimated at 313,215 members, who received more than 1.15 million calls from May 8, 2014, through July 29, 2016.
Class members would need to submit a claim form online or through the mail. They could collect up to $5,000 for each documented call. If the initial response doesn’t exhaust the settlement pool, class members will be invited to submit additional claims. Named plaintiffs are pursing $5,000 incentive awards.
In asking Pallmeyer to approve the settlement, the plaintiffs said they expected Fifth Third would seek summary judgment at the conclusion of discovery on grounds of its consistent position they had no direct responsibility for the calls, and their agents “acted outside the scope of its authority by illegally recording calls.”
The plaintiffs also noted Ironwood filed for Chapter 11 bankruptcy protection last year, potentially further complicating resolution of the case. And they expressed concerns Fifth Third might pursue a similar strategy, sweeping up the class claims in that proceeding. Fifth Third also has contested the plaintiffs’ position that every recorded call constitutes a distinct CIPA violation with a $5,000 statutory penalty, instead insisting the damage provision applies only once to any aggrieved party regardless of how many calls are involved.
Defendants have been represented in the matter by attorneys Anthony C. Porcelli, Claire E. Brennan, John W. Peterson, Matthew S. Knoop, Joseph C. Sharp, Mark A. Olthoff, of Polsinelli P.C.; John H. Mathias and Megan B. Poetzel, of Jenner & Block; John Touhy, Kiley Keefe, Carrie Dettmer Slye and Melissa M. Hewitt, of Baker & Hostetler; James R. Figliulo, Peter A. Silverman, Rebecca Rejeanne Kaiser and Thomas Daniel Warman, of Figliulo & Silverman; and Charles M. Merkel Jr. and Charles M. Merkel III, of Merkel & Cocke.