Uncategorized

The Rich get Richer: Seventh Circuit Court of Appeal Affirms Record-Setting $14-19MM Attorneys Fee Award in TCPA Class Settlement

abundance bank banking banknotes

Photo by Pixabay on Pexels.com

When Jay Edelson appeared on the Ramble podcast a couple weeks back we discussed the big settlement his firm had reached in Birchmeier v. Caribbean Cruise Lines–which may end up being the largest TCPA settlement in history. He also discussed his disdain for the tactics of certain objectors in TCPA cases.

Well, yesterday Jay earned another big win. In Grant Birchmeier v. Caribbean Cruise Line, Inc., Nos. 17-1626, 17-1778, 17-1953, 17-1969, 17-1984 & 17-2857, 2018 WL 3545146 (7th Cir. July 24, 2018) the Court overruled the objections of Defendants and third-party objectors challenging the ~$76MM TCPA settlement.

The Court of Appeal specifically approved the district court’s attorney fee structure awarding Edelson PC 36% of the first $10 million paid into the fund, 30% of the next $10 million, and 24% of the next $36 million, and 18% of any additional recovery. 2017 U.S. Dist. LEXIS 54080 (N.D. Ill. Apr. 10, 2017).

Recognizing and accepting the district court’s conclusions that–as Jay boasted on the Ramble–the Birchmeier case was “riskier” than most, the Seventh Circuit panel was not bothered that the fee award would be “bigger than some.” Birchmeier at *3.

“Bigger than some” is one way of looking at it– at the minimum fund level class counsel stands to recover not less than $14.8MM. If the fund is fully exhausted, however,–meaning all $76MM in available funds are paid–the district court’s formula would net the largest TCPA attorney’s fee recovery in history– $18.84MM, substantially eclipsing the former record holder– the $15.77MM fee recovery in In re Capital One.

Despite the huge pay day to class counsel guaranteed by the decision, the Seventh Circuit panel upheld the fee structure in a one liner: “We review decisions about attorneys’ fees for abuse of discretion, [] and appellants have not identified any abuse.” End of analysis.

The Court goes on to suggest that litigants shouldn’t quibble over fee structures adopted by the district court in similar cases:

We add only that it is unproductive to make arguments about the percentages assigned to some tiers of recovery, as defendants have done. Consider: 30% of the first $20 million and 20% of the next $20 million come to the same as 25% of $40 million. Bands and percentages can be juggled, but, unless the bottom line changes, what’s the point? (The risk profiles of these two structures may differ, but that does not matter when they are devised after the award of damages has been calculated.)

Apparently the Court views such quibbles as semantic in nature, even if the odds of recovery in a claims made settlement at varying levels might truly have an impact on class counsel’s recovery (and theoretically on a defendant’s obligation to pay–especially if the fund is reversionary.)

While Birchmeier is also a fascinating study on appellate jurisdictional and objector standing issues, the key take away for TCPAland is that the rich keep on getting richer as the Boogeyman looks to walk away with a record payday. Now Edelson PC can afford another volleyball court.  Or maybe Jay will take Christine Relly’s suggestion and throw TCPAland that giant mansion party she asked for. 

Categories: Uncategorized

1 reply »

Leave a Reply