United States District Court, E.D. Pennsylvania
SHERRY BROWN and ERICKA NEWBY, on their own behalf and on behalf of all others similarly situated
RITA'S WATER ICE FRANCHISE COMPANY LLC
representatives Sherry Brown and Ericka Newby move for
approval authorizing the Settlement Administrator to disperse
payments to eligible class members. They make the request
because there are 18, 359 fewer valid claim forms than the
Settlement Administrator and plaintiffs' counsel had
originally represented at the final approval hearing. The
Settlement Administrator has since determined that there are
only 10, 164 valid and non-duplicative claim forms rather
than 28, 523. Plaintiffs have filed the motion to
“apprise the Court of this development and obtain final
approval for payment of properly submitted, and verified,
claims to the actual class members in this case.”
the class members eligible for a payout will receive larger
awards than had been contemplated, we shall grant the motion
and supplement the Findings of Fact in this class action
settlement to reflect the correct number of eligible class
Telephone Consumer Protection Act class action, the complaint
alleged that Rita's knowingly or willfully sent class
members unauthorized, automated text messages known as
“Cool Alerts, ” which announced when certain
flavors of products such as water ice, custard, and ice cream
became available in the recipient's local store. The
plaintiffs claimed that Rita's generated the messages
using a list or database of telephone numbers of persons who
had not provided them to the defendant, continued to send
Cool Alerts to customers even after they had texted
“STOP” in response to the texts'
instructions, and used outdated and insufficient consent
language on its Cool Alerts webpage.
parties reached a settlement agreement, which was
preliminarily approved on March 23, 2016. The settlement
agreement required Rita's to create a
three-million-dollar Settlement Fund, out of which notice and
administration costs, class representative incentive awards,
and attorneys' fees and expenses were to be paid. The
remainder was the Net Settlement Fund, from which class
members who submitted a valid and timely claim form were to
receive a pro rata share, the amount depending on
whether they received just one Cool Alert text message or
also received at least one other Cool Alert after responding
“STOP” to a previous text. The settlement
agreement allowed Class Counsel to seek attorneys' fees
and expenses up to one million dollars.
preliminary approval hearing, Class Counsel informed the
court that based on the number of telephone numbers they had,
there were approximately 138, 000 potential class members.
Culling this initial list, the Settlement Administrator, A.B.
Data, Ltd., found that there were approximately 132, 140
unique telephone numbers. Of those, there were 110, 328
unique names and addresses, who were sent class notice by
mail. Decl. of Christine Peters-Stasiewicz (Doc. No. 50-4)
(“Peters-Stasiewicz Decl.”), ¶¶ 9-10.
As of July 14, 2016, six days after the claim form filing
deadline and twelve days before the final approval hearing,
the Settlement Administrator submitted a declaration stating
that class notices were mailed successfully to 106, 493
persons, and that 30, 636 timely claim forms had been
submitted. Id. ¶¶ 16, 19. After conducting
a “preliminary review” of the timely submitted
claim forms, the Settlement Administrator determined that 28,
523 claim forms were non-duplicative. Id. ¶ 19.
Of that group, 28, 137 received one Cool Alert text message
and 386 received at least one additional Cool Alert after
responding “STOP” to a previous text.
Id. ¶ 20. The Settlement Administrator also
represented that the 28, 523 claim forms were
“undergoing additional reviews, ” and that it
would “coordinate to provide the parties with
updates to mailing, claims and correspondence
statistics following the complete claims and auditing
processing once all claims received/postmarked by the July 8,
2016 deadline are fully reviewed.” Id.
¶¶ 19, 23 (emphasis added).
on the representation by A.B. Data that 28, 523 valid claim
forms had been submitted, Class Counsel boasted an
“outstanding” claims rate of 20.6% of the class,
higher than their expected five to six percent response rate.
Mot. for Final Approval of Class Action Settlement (Doc. No.
50-3) at 2, 8, 12-13 (“Each of these claims represents
an affirmative vote in favor of the Settlement, and . . .
[w]hen considered against the total number of notices sent,
the claims rate in this case (20.6%) is far above the rates
seen in typical consumer class action settlements” of
2-8%); Mot. for Preliminary Approval (Doc. No. 43-2) at 25;
Oral Arg. Tr. at 26:25-27:1-19. Indeed, at the final approval
hearing, counsel stated:
I'm willing to wager that there is no [TCPA] settlement
out there . . . with a higher claims rate than ours. . . .
This is [a] 20.6% claims rate. There is nothing out there
like this. . . . This is [an] outstanding settlement. . . .
This is the gold standard of TCPA settlements . . . because
we have over 20% claims rate, 28, 523 claims. Getting 28, 000
people to do anything, that actually requires them to write
or fill something out is moving a glacier and we did it here.
. . .
Oral Arg. Tr. at 9:8-13, 17-23 (July 26, 2016). Emphasizing
the 20.6% claims rate, Class Counsel requested approval of an
award of attorneys' fees and expenses in the amount of
one million dollars, which was one-third of the settlement
fund and the maximum amount allowed under the settlement
agreement. See Pls.' Suppl. Br. in Supp. of
Pls.' Mot. for Reasonable Att'ys' Fees &
Costs (Doc. No. 55) (“Suppl. Br.”) at 2
(“The 20.6% claims rate reflects the excellent efforts
of Class Counsel (in negotiating a strong result and
developing an effective notice plan) and the overwhelming
approval of the class.”).
amount each class member would recover depended on the number
and type of claimants. Consequently, at the final approval
hearing, we questioned Class Counsel extensively about the
claims rate and the amount they were expecting each class
member to recover when they negotiated the
three-million-dollar settlement, and how that compared to the
actual claims and recovery rate of the 28, 523 claimants
entitled to a cash payment. Oral Arg. Tr. at 11:1-12,
24-25-12:1-14; 27:2-25 - 28:1-5, 14-16; 29:12-18.
March 16, 2017, we granted final approval of the class action
settlement, where we: (1) awarded Class Counsel a total of
$691, 074.00 in attorneys' fees and expenses; (2) allowed
the Settlement Administrator $144, 000.00 to cover class
administration costs; (3) awarded $66.54 to each of the 28,
197 class members who received just one Cool Alert; and (4)
awarded $731.99 to each of the 386 class members who received
a Cool Alert after texting “STOP.” See
Final Approval Order (Doc. No. 59) ¶¶ 5(a), 6;
Findings of Fact and Conclusions of Law (Doc. No. 58) ¶
32; Doc. No. 57, ¶¶ 1-2; Attorneys' Fees
Op'n (Doc. No. 56) at 6 n.27.
four months after the court approved the class action
settlement, and more than one year after the Settlement
Administrator promised to “update” the parties
with the results of its “full review” of the
claims received and postmarked by the July 8, 2016 deadline,
A.B. Data reports a significant reduction in the number of
valid claim forms despite receiving 1, 364 additional claim
forms since submitting its earlier declaration
on July 14, 2016. See Decl. of Eric Schachter
(“Schachter Decl.”) (Doc. No. 60-1) ¶¶
2, 5. Specifically, A.B. Data reports that after completing a
full review of all claim forms received,  it has determined
that it has received only 10, 164 valid and non-duplicative
claim forms,  which is 18, 359 fewer than the 28, 523
number A.B. Data had reported as valid in July 2016. Of the
valid claim forms, 9, 684 class members received one Cool
Alert text message and 480 received at least one additional
Cool Alert after responding “STOP” to a previous
text. Schachter Decl. ¶ 7.
on the reduced number of valid claim forms, the total number
of award units is 14, 964. Schachter Decl. ¶
The value of each award unit is $144.00,  which means that
9, 684 class members are each entitled to receive an award of
$144.00 and 480 class members, $1, 584.00. The award amounts
applied in the ...