After four years of litigation, the TCPA class action lawsuit Aranda v. Caribbean Cruise Line, Inc. was settled in February of this year for what is the largest settlement in TCPA history . . . $76 million. Naturally, the attorneys concluded that they deserved an equally historic financial reward.
As you recall from our prior blog article on the $76 Million Settlement, the popular cruise line was accused of making millions of unwanted robocalls to consumers that included offering free cruises if the call recipients participated in a brief political survey. The settlement provided that the defendants establish a common fund between $56 million and $75 million from which class members would be paid.
Attorneys Seek $25 Million in Fees
What is unusual about this case is that the plaintiff's attorneys petitioned for an award equaling one third the amount of the total settlement fund, which would equal about $25 million. The Court agreed that the circumstances of the case warranted a higher fee than those granted in other TCPA class actions that resulted in a settlement, but disagreed that the award should be as high as requested.
Judge Kennelly of the U.S. District Court for the Northern District of Illinois granted $15 million, but declined to grant more because it would be a departure from the traditional "sliding scale structure" that is commonly used to determine attorney's fees in similar class action lawsuits. The “sliding scale” model consists of breaking class action settlement funds into tiers. The plaintiff’s attorneys are then awarded a decreasing percentage of each tier.
In this case, the judge did add a 6% premium to the first “band” of recovery on the sliding scale which equates to 36% of the first $10 million. Taking into account the downward sliding rates for remaining three tiers, the attorneys could potentially be awarded 25.6% of the common fund.
The settlement outcome shows that TCPA class action lawsuits are definitely a lucrative business for plaintiff's attorneys. Businesses that choose to engage in telemarketing to potential customers should ensure compliance with federal and state regulations; otherwise they might become the next target for professional plaintiffs and their attorneys who are looking for a big payday.