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Marengo v. Miami Research Associates, LLC

United States District Court, S.D. Florida

June 7, 2018

DESIREE MARENGO, Individually and on behalf of all Others similarly situated, Plaintiff,
v.
MIAMI RESEARCH ASSOCIATES, LLC, d/b/a QPS MIAMI RESEARCH ASSOCIATES, a Florida corporation, Defendant.

          ORDER DENYING FINAL APPROVAL TO CLASS ACTION SETTLEMENT AND MOTION FOR ATTORNEYS' FEES WITHOUT PREJUDICE

          JAMES LAWRENCE KING UNITED STATES DISTRICT JUDGE.

         THIS CAUSE comes before the Court upon Plaintiffs Unopposed Motion for Approval of Settlement, Attorney Fees, and Expenses (DE 48) filed March 2, 2018.

         On April 26, 2018, the Court held a duly noticed final approval hearing to consider: (1) Whether the terms and conditions of the Settlement Agreement are reasonable and adequate; (2) whether a judgment should be entered dismissing Plaintiffs Complaint on the merits and with prejudice in favor of Defendant, Miami Research Associates ("MRA"); and (3) whether and in what amount to award counsel for the settlement class attorneys' fees and expenses and whether and in what amount to award an incentive payment to Plaintiff. No objections were filed as to the terms of the Settlement Agreement and the Defendant is in full agreement with the settlement, including the $390, 000 award of attorney's fees that the Plaintiff has requested. For the following reasons, the Court denies approval to the parties' final Settlement Agreement and motion for attorneys' fees and costs.

         Procedural Background

         On February 5, 2017, Plaintiff filed a class action complaint against Defendant MRA alleging that MRA violated the Telephone Consumer Protection Act ("TCPA"). The TCPA is a federal privacy statute which affords consumers a private right of action. The Plaintiff alleges that in January 2017 she received three automated text message advertisements on her cellular telephone from MRA (DE 1, ¶ 25). On March 22, 2017, the Defendant filed its answer and affirmative defenses in response to Plaintiffs Complaint (DE 10). On March 24, 2017, the Court entered its Scheduling Order (DE 14) and discovery commenced thereafter.

         Between February to December 2017, the parties engaged in limited discovery. On July 27, Plaintiff moved to compel discovery (DE 25). Defendant's Response objecting to Plaintiffs Motion to compel (DE 32) was filed on September 1, 2017 and denied on January 18, 2018 (DE 45) as moot. Other than this motion, no other motions were filed. On October 25, 2017, the parties participated in a one-day court-ordered mediation that resulted in a settlement (DE 39). On December 18, 2017, the Court granted preliminary approval to the proposed class settlement, provisionally certified the class, approved the procedure for giving class notice to the settlement class members, and set fairness hearing (DE 44) for April 26, 2018 (DE 52).

         The Settlement Agreement provides for a settlement fund requiring Defendant to pay $130 for each text message submitted by class members. The claims are subject to verification. The settlement requires Defendant to make available up to $1, 236, 300 to pay timely and valid claim submissions, including $390, 000 for attorneys' fees and costs associated with the notice program and settlement administration.

         At the Fairness Hearing, Plaintiff Class Counsel presented legal argument in support of the Plaintiffs Motion for Final Approval of the Settlement Agreement and presented the Court with the final results of the settlement administration process. Plaintiff counsel stated that of the apprxomiately 9, 500 consumers who received text message advertisements from Defendant, 8, 263 individuals were mailed notices. Out of the 8, 263 notices that were mailed out, a total of 3, 159 claims were submitted for verification. Ultimately, only 211 claims were validated. This resulted in a total cash benefit potentially available to the Plaintiff class of $27, 430. At the fairness hearing, no objections were raised and the Defendant voiced that they were in full agreement with the terms of the settlement. No witnesses were called or any exhibits or documents offered by either counsel.

         Upon being questioned by the Court about plaintiffs theory of calculation of his attorneys fee the transcript reflects:

Pg.9
4 THE COURT: So let me get this straight.
5 You set up a fund of close to one-and-a-quarter million
6 dollars. Out of that fund you're going to pay $27, 000, and
7 you're going to walk away with $390, 000; is that what you're 8 telling me?
9 MR. LEHRMAN: Your Honor, that is the settlement that 10 the parties have reached.
11 That is accurate, what Your Honor has recited.
12 THE COURT: But my obligation is to make a 13 determination whether that is ...

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