United States: Spillman v. RPM Pizza, LLC, 2013 WL 2286076 (M.D. La. May 23, 2013)

Last Updated: May 20 2014
Article by CAFA Law Blog

Spillman v. RPM Pizza, LLC, 2013 WL 2286076 (M.D. La. May 23, 2013).

The plaintiff brought an action under the Telephone Consumer Protection Act (TCPA) on behalf of a class of persons who received automated telephone calls to their cellular phone numbers made by or on behalf of the defendant, RPM Pizza, LLC or one of its Domino's franchise stores. The parties settled the action, and the settlement agreement created a common fund totalling $9,750,000.

Pursuant to the settlement, 314,231 members of the Monetary sub-class would receive up to a $15 cash payment funded by a $4,000,000 deposit by Argonaut Insurance Company and RPM, creating a total common fund amount of $9,750,000. Additionally, the Merchandise Voucher sub-class, the largest sub-class composed of 1,152,617 members, would receive a fully-transferrable voucher worth from $6.71 to $11.99. Without the settlement, the Merchandise Voucher sub-class would have received no benefit, because their claims were dismissed in February 2011.

The settlement agreement also contained a provision for injunctive relief with RPM agreeing to comply with the TCPA statutory and regulatory requirements applicable to pre-recorded phone messages. The value of this injunctive relief was estimated at $16.2 million dollars. Excluding the estimated value of the injunctive relief, the total potential value of the cash and voucher components of the settlement was more than $20,000,000.

Because the settlement involved creation of a common fund, the settlement was subject to CAFA, and a CAFA settlement must comply with 28 U.S.C. § 1714 and § 1715. Having preliminarily approved the settlement, the Magistrate Judge issued the class notices and directed the parties to comply CAFA notice requirements. After a fairness hearing, the Magistrate Judge approved the settlement, concluding that it was fair, reasonable, adequate and in the best interests of the class.

The Magistrate Judge found that under § 1714, the proposed settlement did not provide for the payment of greater sums to some class members than to others, solely on the basis that the class members to whom the greater sums are to be paid are located in closer geographic proximity to the Court. The proposed settlement provided that the members of the largest sub-class, the Merchandise Voucher sub-Class, would receive a fully transferrable, single-use voucher for a large one-topping pizza redeemable for in-store pick-up at an RPM-owned Domino's store in the states of Louisiana, Alabama and Mississippi. However, the basis for geographic limitation had nothing to do with geographic proximity to the Court, and the provision was a result of the fact that RPM operated in these three states, and the vast majority of the class members had phone numbers with area codes originating from Louisiana, Alabama and Mississippi.

Further, notice of the proposed settlement and appropriate settlement documents had been given to the attorneys general in all 50 states and the District of Columbia. The 90-day period required by § 1715(d) had expired before the date of fairness hearing, and no officials had filed objections to the settlement. Accordingly, the Magistrate Judge found that the proposed settlement complied with the CAFA requirements of 28 U.S.C. §§ 1714 and 1715.

The Magistrate Judge also concluded that the notice of proposed settlement was given sufficiently to the class, which consisted of more than 1,400,000 class members. No objection to the settlement had been filed. The essential components of the notice plan developed and implemented were print publication, internet, the settlement website and press releases. The geographic composition of the class and the relative costs were considered in determining the national print and internet outlets to provide the best notice practicable to the class as a whole. 770 claims had been filed on the settlement website, and there were approximately 80 requests from individuals for claim forms. This rate of filing was consistent with other TCPA class action settlements awarding similar relief.

The notice directed to all class members who would be bound by the settlement complied with the Court's orders and Rule 23(e), and the content and form of the notices provided were reasonable and sufficiently apprised all interested parties and class members of their right to object or opt out.

Finally, the settlement was within the range of possible recoveries and court approvals when compared to other TCPA cases which had settlements approved by the courts in this and other districts.

Accordingly, the Magistrate Judge found that the proposed TCPA class action settlement was fair, reasonable and adequate, and in the best interest of the class.

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