Judge Denies Preliminary Approval of TCPA Class Action Settlement on Consent Concerns

David Kaminski
Carlson & Messler LLP

A federal judge last week denied granting an amended motion for preliminary approval of a class action settlement in a TCPA case, without prejudice, on numerous grounds. Most specifically, the judge was concerned that the class included members that had accounts and did not have accounts with the defendant and how that played into consent under the TCPA.

In Newman v. Americredit Financial Services, Inc., US. District Judge Dana Sabraw in the Southern District of California denied granting preliminary approval of a proposed class action settlement.

The salient points from the decision are as follows:

1. Plaintiff’s proposed class is composed of two distinct groups – those with accounts and those without accounts. The difference between the two is significant for class certification because class members with accounts may have consented to Defendant’s calls to their mobile phones when they opened accounts, thus potentially negating liability, which is not the case for class members without accounts.

2. The motion fails to adequately address whether Plaintiff, who does not have an account with Defendant, is typical of the entire class, and whether, in light of the consent issue, the proposed class meets the commonality and predominance requirements under Rule 23.

3. The Consent issue, which potentially negates liability to class members with accounts, raises the issue of fairness – i.e., class members with accounts are proposed to be compensated the same as class members without accounts who have not consented.

4. It is unknown whether the 2,805,051 unique mobile phone numbers at issue were actually called by an automated dialer or a prerecorded voice. An answer is necessary to understand the proposed claim processing and to give class members satisfactory notice.

5. The settlement provides that Class members may not opt out of the class settlement as a group. The Court was not inclined to approve a settlement which makes it unnecessarily burdensome to submit a claim or opt out.

6. The settlement provides that any motion for attorneys’ fees and costs is to be filed concurrently with the motion for final settlement but this does not provide class members an opportunity to object to the fee motion itself.

What I think – This is a good decision, which may or may not be followed by other judges.  It raises numerous points why the Court could not approve the settlement, as drafted.  Is the judge here also trying to telegraph more than meets the eye?  Is his decision directed at TCPA class actions, generally?  Many issues raised by the Judge are the same issues that would be raised to defeat a motion for class certification where plaintiff seeks to certify a national class.

My further comments/analysis on this matter are too lengthy to be addressed here.  Fight on!!!

Read the entire decision here.

Related content:

• Compliance Overview: TCPA

• To the Point: TCPA