ST. LOUIS – A federal judge in U.S. District Court for the Eastern District of Missouri recently denied a request by defendants who settled Telephone Consumer Protection Act (TCPA) claims for $5 million plus costs regarding the distribution of cy pres awards.
U.S. District Judge E. Richard Webber on May 15 held that plaintiffs’ desire to allot any remaining funds of the settlement – in which plaintiff attorneys will receive $1.6 million in fees and approximately 28,000 class members will receive $91.25 apiece – to the National Consumer Law Center was appropriate.
The final settlement order signed by Webber indicates that defendants, which included Medicredit Inc. and Memorial Healthcare Group Inc., had agreed to settlement terms drafted in November, except with respect to plaintiffs' choice of a cy pres recipient.
Cy pres, a French expression that means “as close as possible,” is a doctrine in which a settlement steers funds not to the plaintiff or members of the class but instead to a selected non-plaintiff, an organization related to an issue in the case chosen as a beneficiary.
Defendants argued that the National Consumer Law Center's (NCLC) primary activity regarding TCPA litigation has been "to lobby for expanded TCPA enforcement" against organizations such as them.
"They (defendants) state settlement funds should not be improperly used to support one party’s counsel’s agenda," Webber wrote.
Defendants, in the alternative, had proposed that cy pres awards go to Legal Services Corporation, a nonprofit legal aid organization and for the court to direct funding to telephone services.
Webber held that after "thoroughly conducting an independent investigation, this court finds plaintiff's proposed recipient, the NCLC, closely approximates the interests of the class and is an appropriate cy pres recipient."
According to background information in the ruling, the plaintiffs claimed the defendants made prerecorded calls to cellphones without the prior express consent of the class plaintiffs or the putative class members.
Webber granted preliminary approval of the settlement last December.