Under various names, National Grid TCPA used an autodialer to contact customers. One auto dialer calling one person is annoying. Thousands of auto dialers making thousands of calls to thousands of people adds up to a $38.5 million class action settlement.
Litigation costs have skyrocketed lately. Even mid-tier lawyers often charge more than $1,500 per hour, and even mid-tier electronic discovery companies charge more than $1,500 per device. To huge companies like National Grid TCPA, a multi-million dollar settlement is a good alternative to a multi-million dollar defense, especially when the company’s chances of winning at trial are slim.
Every case is different, and every class action settlement is different. However, all these cases follow the same basic outline, as discussed below. If a judge certifies a large class, a large settlement is often just over the horizon.
Class Action Certification
Quite simply, there’s strength in numbers. The bigger the class, the larger the settlement, and the greater the chance of meaningful change.
The federal court class action certification rules are rather vague. They focus on numerosity, uniformity, and advocacy.
The class must be so large that courts cannot efficiently handle the claims on a piecemeal basis. Depending on the venue (e.g. federal or state court), a few dozen cases or a few hundred cases might satisfy this requirement.
Additionally, all class members must have basically the same claims, and the defendant must plan to use the same basic defenses in all these claims. In other words, all plaintiffs must have had basically the same experience.
Finally, the named plaintiffs and their attorneys must effectively represent everyone else in the class. That’s an unusual situation. Most plaintiffs file cases to benefit themselves, and they don’t care about anyone else. Likewise, most lawyers zealously represent their clients, and only their clients.
A judge considers evidence and arguments in these three areas during a class certification hearing. If the judge gives a green light, class action settlement negotiations begin.
Class Action Settlement
The amount of a class action settlement usually depends on the strength of the plaintiff’s claims, the strengths of the defenses to this claim, and a party’s motivation to settle.
A plaintiff’s claim must be legally and factually sound. Plaintiffs must prove they are theoretically entitled to compensation, usually because the defendant was legally negligent or broke an existing law. Furthermore, the plaintiff must be able to prove this claim by a preponderance of the evidence (more likely than not).
Somewhat similarly, defendants could offer procedural or substantive defenses. Procedural defenses include the statute of limitations and more complex legal doctrines, like laches and estoppel. A substantive defense is usually a lack of evidence.
Motivated home buyers are willing to pay more, and motivated sellers are willing to take less. Motivated plaintiffs and defendants are likewise willing to pay more or take less.