United States District Court, M.D. Florida, Orlando Division
REPORT AND RECOMMENDATION
GREGORY J. KELLY UNITED STATES MAGISTRATE JUDGE.
cause came on for consideration without oral argument on the
MOTION: PLAINTIFF'S UNOPPOSED MOTION FOR
PRELIMINARY APPROVAL OF REVISED CLASS ACTION SETTLEMENT AND
CERTIFICATION OF SETTLEMENT CLASS (Doc. No. 57)
FILED: November 15, 2017
THEREON it is RECOMMENDED
that the motion be GRANTED IN PART and
DENIED IN PART.
The Class Action Complaint
matter before the Court is a proposed class action settlement
under the Telephone Consumer Protection Act, 47 U.S.C. §
227 et seq. (“TCPA”). Doc. No. 57.
Unless stated otherwise, the following facts are taken from
Plaintiff's class action complaint (the
“Complaint”). Doc. No. 1. Defendant operated
Pollo Tropical, a Caribbean-themed restaurant chain with
locations in Florida, Texas, Georgia, and Tennessee.
Id. at ¶ 10. Defendant engaged in a marketing
campaign which involved sending Pollo Tropical coupons via
text message to consumers' cellular phones. Id.
at ¶ 12. Defendant used an automatic telephone dialing
system to send the coupons. Id. Defendant obtained
consent from cellular phone subscribers (“Initial
Owners”) before sending such coupons. Doc. No. 58-1 at
3. After an Initial Owner ended their cellular phone
subscription, the Initial Owner's phone number was
sometimes reassigned (“Recycled Numbers”) to a
new owner. Id. Some of these new owners (“New
Owners”) would receive text message coupons from Pollo
Tropical. Id. Defendant did not obtain written
consent from any of the New Owners to send text message
coupons to them. Doc. No. 1 at ¶ 12.
a New Owner, received fifteen to twenty text message coupons
from Pollo Tropical between January 2015 and February 2016.
Doc. No. 1 at ¶ 18. Plaintiff did not provide express
consent to receive these text message coupons. Id.
at ¶ 22. On March 17, 2016, Plaintiff, on behalf of the
New Owners, filed the Complaint asserting two causes of
action under TCPA. Id. at ¶¶ 35-46. Count
I alleges negligent violation of TCPA, and Count II alleges
knowing and/or willful violation of TCPA. Id.
January 30, 2017, the parties filed a status report stating
that they reached an agreement on a class-wide settlement
following their mediation. Doc. No. 38. On November 15, 2017,
Plaintiff filed an unopposed motion (the
“Motion”) for preliminary approval of the
parties' revised class action settlement agreement (the
“Agreement”) and certification of the Settlement
Class.Doc. No. 57. On April 10, 2018, the Motion
was referred to the undersigned for a report and
recommendation. In the Motion and attached memorandum of law
(Doc. No. 58), Plaintiff requests a Court order: 1)
scheduling a preliminary settlement approval hearing to
determine whether the Agreement should be preliminarily
approved and the Settlement Class be certified; 2)
certifying, for settlement purposes, the Settlement Class
pursuant to Federal Rule of Civil Procedure 23(a), (b)(3),
and (e) and granting preliminary approval of the Agreement in
accordance with an attached proposed order (the
“Proposed Preliminary Order”); 3) approving the
notice plan set forth in the Agreement and the form and
content of the notice attached thereto (the “Proposed
Notice”); 4) approving the Angeion Group as the
Settlement Administrator and directing that the Proposed
Notice be provided to the Settlement Class; 5) approving and
ordering the opt-out and objection procedures set forth in
the Agreement; 6) requiring objections, if any, to the
Agreement to be submitted no later than forty-five days
before the date set for the final settlement approval
hearing; 7) appointing Plaintiff as Class Representative; 8)
appointing John A. Yanchunis, Sr., and Jonathan B. Cohen as
Class Counsel; 9) requiring any application by Class Counsel
for attorneys' fees, costs, and expenses to be filed no
later than ten business days prior to the final settlement
approval hearing; and 10) scheduling a final settlement
approval hearing to determine whether the proposed
settlement, a motion seeking a service award to the Class
Representative, and/or a motion for attorneys' fees,
costs, and expenses to Class Counsel should be finally
approved. Doc. No. 57 at 1-2; Doc. No. 58 at
support of the Motion, Plaintiff attaches: 1) the Agreement;
2) the Proposed Notice; 3) declarations from Plaintiff and
Mr. Yanchunis; 4) biographies of Plaintiff's counsel
detailing their experience in class action litigation; 5) a
chart summarizing recent TCPA class action settlements; 6)
declarations detailing the means used to identify the
Recycled Numbers and the methods for contacting Settlement
Class Members; 7) a list of the Recycled Numbers filed under
seal; 8) the Proposed Preliminary Order; and 9) a proposed
order of final judgment and dismissal with prejudice (the
“Proposed Final Order”). Doc. Nos. 53, 58-1 -
The Settlement Terms
parties to the Agreement are: 1) Plaintiff, on behalf of
himself and the Settlement Class; 2) Defendant; and 3)
non-party Heartland Commerce Inc. (“Heartland”).
Heartland is a party to the Agreement because Defendant
engaged Beanstalk Data LLC, Heartland's predecessor in
interest, to coordinate the sending of text messages to Pollo
Tropical customers. Doc. No. 58 at 3-4.
Effective Date and Releases
Agreement states that it shall not be effective until the
Effective Date, which is defined as the later of: 1) the date
the Court enters Final Judgment substantially in the form of
the Proposed Final Order (Doc. No. 58-2) or in another form
agreed to by the parties; or 2) should a Settlement Class
Member object to the Agreement, the date on which the period
for filing an appeal related thereto has expired or the date
on which the settlement and final judgment have been affirmed
in all material respects by an appellate court of last
resort. Doc. No. 58-1 at 12-13.
the Court's entry of the Proposed Final Order, all
Settlement Class Members, including Plaintiff, who do not opt
out of the Settlement Class release Defendant and Heartland
“from any and all claims … that have been, could
have been, or in the future might be asserted that arise out
of or relate to Defendant's or [Heartland's]
transmission of text messages between March 1, 2012 and March
15, 2017.” Doc. No. 58-1 at 14. All Settlement Class Members
who do not opt out of the Settlement Class are permanently
enjoined from commencing any legal action regarding the
above-referenced claims against Defendant, Heartland, or any
other released party.Id. at 15-16.
The Settlement Fund
and Heartland agreed to create a settlement fund of $975,
000.00 (the “Settlement Fund”) Doc. No. 58-1 at
9. Settlement Class Members who timely file a claim shall be
paid a pro rata share of the Settlement Fund, up to $50.00
per phone number. Id. at 10. No. more than $50.00
per phone number will be given regardless of the number of
text message coupons a Settlement Class Member received or
the number of Settlement Class Members assigned to a single
phone number. Id.
shall be paid $5, 000.00 from the Settlement Fund as a class
representative service award. Doc. No. 58-1 at 12. The
Agreement provides for a proposed attorneys' fee of
twenty-five percent of the Settlement Fund, which amounts to
$243, 750.00. Id. Class Counsel shall also be
reimbursed for costs and expenses not exceeding $5, 000.00.
Id. The proposed service award, attorneys' fees,
and cost reimbursement are all subject to the Court's
approval. Id. Finally, the fees and costs of the
Angeion Group, the proposed Settlement Administrator, shall
be paid out of the Settlement Fund. Id. at 7.
The Settlement Class
Settlement Class is defined as:
All persons who received text messages on behalf of Pollo
Operations from March 1, 2012 to March 15, 2017 to telephone
numbers that had been reassigned to them after the original
or prior owners of the telephone numbers consented to receive
such text messages from Pollo Operations, who did not consent
to receive such text messages, and who can be identified
through the reverse telephone number look-up process utilized
by the Settlement Administrator (“Settlement
Class”). Excluded from the Settlement Class
are: (a) Defendant and its present and former officers,
directors, employees, shareholders, insurers, and their
successors, heirs, assigns, and legal representatives; and
(b) the Court and members of the Court's staff.
Doc. No. 58-1 at 6. Thus, the Settlement Class includes all
New Owners who: 1) from March 1, 2012 to March 15, 2017, had
a Recycled Number that received a text message coupon from
Pollo Tropical; 2) did not consent to receive such messages;
and 3) could be identified through a reverse telephone number
look-up process utilized by the Angeion Group. Id.
Excluded from the Settlement Class are: 1) Defendant and its
present and former officers, directors, employees,
shareholders, insurers, and their successors, heirs, assigns,
and legal representatives; and 2) the Court and members of
the Court's staff. Id. The Agreement also states
that each New Owner included in the Settlement Class is a
Settlement Class Member. Id.
Agreement also provides information as to how the parties
identified the Recycled Numbers of Settlement Class Members:
The Recycled Numbers that will be provided to the Settlement
Administrator, and that have been currently filed with the
Court, represent the best and preferred method of identifying
the Settlement Class Members after carefully considering
alternatives and appropriate expert input. The Recycled
Numbers were identified from business records in
[Heartland's] possession. Specifically, [Heartland],
using its proprietary software, ran a search on its internal
system for: (i) each cellular telephone number that received
a text message during the class period; and (ii) for which a
subsequent text message was sent and a response stating that
the number was an “Invalid, Blocked, or
Deactivated” number was received by [Heartland]; and
(iii) after receiving this notification, a subsequent text
message was sent by [Heartland] and ultimately delivered to
the cellular phone number. The search generated more than 40,
000 cellular phone numbers that fit this criteria.
Doc. No. 58-1 at 7-8. Thus, the parties identified the
Recycled Numbers of the New Owners making up the Settlement
Class by: 1) collecting each telephone number in
Heartland's internal system that received a text from
March 1, 2012 through March 15, 2017; 2) finding which of
those numbers responded to a subsequent text message with a
response stating that the phone number was invalid, blocked,
or deactivated (which implies that an Initial Owner cancelled
their subscription); and 3) finding which of the
previously-stated numbers later received a text message
(which implies that an Initial Owner's cellular phone
number was reassigned to a New Owner). Id. Plaintiff
attaches declarations from two consultants with litigation
technology experience stating that such method is the best
method available to determine the Recycled Numbers of the
Settlement Class Members. Doc. Nos. 58-11, 58-12.
the parties' approval, the Angeion Group will use a
reverse telephone number look- up process to correspond the
list of Recycled Numbers to the addresses of each Settlement
Class Member and send the Proposed Notice to those addresses.
Doc. No. 58-1 at 9-10. The Agreement permits the Angeion
Group to engage in reasonable additional due diligence to
identify Settlement Class Members if the reverse telephone
number look-up process is unsuccessful. Id. at 10.
The Angeion Group will also perform other tasks including: 1)
mailing the Proposed Notice to Settlement Class Members; 2)
assisting the Settlement Class Members in completing claim
forms; 3) maintaining a website regarding the settlement; 4)
verifying all claims submitted; 5) informing the parties of
all persons opting out of the Settlement Class; and 6)
providing the parties with a list of accepted and rejected
claims and the total to be paid to each
claimant. Id. at 6-7.
Proposed Notice states the nature of the lawsuit, the details
of the Agreement, the names of counsel and the Angeion Group,
the reason for receiving the notice, and the date and time of
the final settlement approval hearing. Doc. No. 58-4 at 2-3.
Within seven days after preliminary approval of the
Agreement, the Proposed Notice will be mailed to the
identified addresses of the Settlement Class
Members. Doc. No. 58-1 at 10. Settlement Class
Members will have sixty days to submit their claims to the
Settlement Fund, and they must provide their full contact
information and verify ownership of a Recycled Number.
Id.; Doc. No. 58-4 at 2. Each Settlement Class
Member submitting a claim must provide their full legal name
on the claim form, which cannot match the name of an Initial
Owner. Doc. No. 58-1 at 11. Furthermore, each Settlement
Class Member submitting a claim must identify the date they
obtained ownership of a Recycled Number so that the Angeion
Group can confirm that a change in ownership of that phone
number occurred after the Initial Owner consented to receive
text message coupons from Pollo Tropical. Id.
Proposed Notice also provides procedures for objecting to the
settlement or opting out of it. Doc. No. 58-4 at 3. To object
to the settlement, a Settlement Class Member must file a
written objection to the Clerk no later than forty-five days
prior to the date of the final settlement approval hearing.
Doc. No. 58-3 at 5. Copies of any written objections must be
served on Class Counsel, Defendant's counsel, and the
Angeion Group. Doc. No. 58-4 at 3. Settlement Class Members
are not required to attend the final settlement approval
hearing for the Court to consider their objection.
Id. To opt-out of the Agreement, Settlement Class
Members must postmark a written request for exclusion within
sixty days of the date the Proposed Notice is sent. Doc. No.
58-1 at 10. The written request must be sent to Class
Counsel, Defendant's counsel, and the Angeion Group. Doc.
No. 58-4 at 3.
seeks preliminary approval of the settlement of this proposed
class action. Doc. No. 57. The Agreement contemplates its
preliminary approval, certification of a settlement class,
the Proposed Notice being sent to the Settlement Class, a
period for claims to be submitted by Settlement Class
Members, and ultimately, entry of a final order certifying
the Settlement Class and approving the Agreement. Doc. No. 57
at 1-2; Doc. No. 58 at 26. “A class may be certified
‘solely for purposes of settlement where a settlement
is reached before a litigated determination of the class
certification issue.'” Diakos v. HSS Sys.,
LLC, 137 F.Supp.3d 1300, 1306 (S.D. Fla. 2015).
“Whether a class is certified for settlement or for
trial, the Court must find that the prerequisites for class
certification under Rule 23(a) and (b) of the Federal Rules
of Civil Procedure are met.” Id. The Court is
mindful that to grant final approval of a settlement class,
it must perform a “rigorous analysis” to ensure
that the movant meets the Rule 23 requirements before
certifying the class. See Amchem Prods., Inc. v.
Windsor, 521 U.S. 591, 620, 117 S.Ct. 2231, 2248, 138
L.Ed.2d 689 (1997) (“Confronted with a request for
settlement-only class certification, a district court need
not inquire whether the case, if tried, would present
intractable management problems …. But other
specifications of [Rule 23] - those designed to protect
absentees by blocking unwarranted or overbroad class
definitions - demand undiluted, even heightened, attention in
the settlement context.”).
not explicitly stated in Rule 23, the Eleventh Circuit also
requires that the class representative has standing to sue
and that the proposed class is adequately defined and clearly
ascertainable. See Prado-Steiman ex rel. Prado v.
Bush, 221 F.3d 1266, 1279 (11th Cir. 2000)
(“[P]rior to the certification of a class … the
district court must determine that at least one named class
representative has Article III standing to raise each class
subclaim.”). Rule 23(a) is satisfied when the movant
shows: 1) the class is so numerous that joinder of all
members is impracticable; 2) there are questions of law or
fact common to the class; 3) the claims or defenses of the
representative parties are typical of the claims or defenses
of the class; and 4) the representative parties will fairly
and adequately protect the interests of the class.
the movant seek certification of a class under Rule 23(b)(3),
as is the case here, the movant must satisfy two additional
requirements in addition to those provided under Rule 23(a).
First, the movant must show that questions of law or fact
common to the class members predominate over any questions
affecting individual members. Fed.R.Civ.P. 23(b)(3). Second,
the movant must show that a class action is superior to other
available methods for fairly and efficiently adjudicating the
party attempts to certify a class under Rule 23(b)(3), then
notice must be provided to all class members. Miles v.
Am. Online, Inc., 202 F.R.D. 297, 305 (M.D. Fla. 2001).
Federal Rule of Civil Procedure 23(c)(2) requires that the
notice be as “best [as] practicable under the
circumstances, including individual notice to all members who
can be identified through reasonable effort.”
Id. (citing Fed.R.Civ.P. 23(c)(2)(B)). When
reviewing the settlement for preliminary approval, the Court
must review and approve the proposed ...