A federal judge has given final approval to a $50 million settlement ending a class action lawsuit accusing Fifth Third Bank and a contracted call center of violating telemarketing laws, allowing small business owners who joined the action to each receive $900 or more.
U.S. District Judge Rebecca Pallmeyer filed an order Aug. 4 to finalize a deal presented by attorneys with the firm of Myron M. Cherry & Associates, of Chicago. They represented named plaintiffs Express Hauling, Mangia Nosh and Chief’s Market, and more than 307,000 class members. The deal ends a longstanding dispute with Fifth Third and its affiliates and subsidiaries, Vantiv and National Processing Company, now known as Worldpay.
The small business owners originally sued in December 2016, alleging they got calls to establish sales appointments from International Payment Services or Ironwood Financial. In the scope of the principal-agent arrangement between Fifth Third and IPS and Ironwood, the vendors allegedly violated the California Invasion of Privacy Act by not giving notice they were recording calls.
The businesses also alleged use of “caller ID spoofing” technology and other tactics to allegedly mislead call recipients into believing they were speaking with either a local customer or an existing service provider, when the marketers actually were soliciting them to transfer their debit and credit card transaction processing business to a new bank and vendors.
According to a motion for final approval filed July 7, the class includes 307,954 members with only 19 who opted out. That motion reported 32,682 valid claims covering 136,907 eligible claims, compared to approximately 1.15 million improper calls during the relevant time period. The average payout is $992 per class member. One class member who submitted proof of about 120 calls received $28,673, the largest individual payout from the settlement fund.
Cherry & Associates attorneys who worked on the case — Myron Cherry, Jacie Zolna, Benjamin Swetland, Jeremiah Nixon and Jessica Chavin — will get $16.4 million in legal fees, as well as cost reimbursement of $352,616. Express Hauling, Mangia Nosh and Chief’s Market will each get $5,000 plaintiff incentive awards.
The law firm pointed out the $50 million settlement is nearly double the size of a $28 million agreement that ended similar litigation against Wells Fargo. In a March motion for preliminary approval, the firm said the Wells Fargo settlement, which covered a class of 192,836 members who got payments averaging $775, helped spur Fifth Third toward its own resolution.
While arguing for settlement approval, the plaintiffs consistently noted Ironwood filed for Chapter 11 bankruptcy protection in May 2021, potentially complicating resolution, and expressed concerns Fifth Third might pursue a similar strategy and sweep up the class claims in that proceeding. Pallmeyer noted the defendants’ intent to argue against the existence of a principal-agent relationship establishing liability.
For its part, Fifth Third 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. As a result of the settlement, class members are getting about $237 per call.
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.