CURRENT MONTH (October 2018)

Consumer Finance Law

The TCPA Saga: The Drama Continues

By Kristina A. Del Vecchio, Joseph & Cohen, P.C.

As reported last month, the Ninth Circuit took the unprecedented position in Marks v. Crunch San Diego LLC, that an automatic telephone dialing system (“ATDS”) under the Telephone Consumer Protection Act (“TCPA”) “includes devices with the capacity to dial stored numbers automatically." On October 4, 2018, the defendant, Crunch San Diego LLC, filed a petition for rehearing en banc, which asks a larger group of Ninth Circuit judges to re-hear the appeal. Critically, Crunch argues that the Ninth Circuit’s decision abrogates its previous decision in Satterfield v. Simon & Schuster, Inc., 569 F.3d 946, 951 (9th Cir. 2009), in which the court pointed out “the statute’s clear language” and read the phrase “to store or produce telephone numbers to be called, using a random of sequential number generator” to mean “store, produce, or call randomly or sequentially generated telephone numbers.” Crunch also argues that the decision in Marks “must be reconsidered because it interprets—and effectively rewrites—the [TCPA] in a manner that directly conflicts with the statutory text, legislative history, and binding intra-circuit and persuasive inter-circuit authority from the Third and D.C. Circuits regarding the definition of an [ATDS].” Separately, on October 3, 2018, the Federal Communications Commission (“FCC”), which is responsible for promulgating rules and regulations interpreting the TCPA, issued a request for comment on what constitutes an ATDS in light of the Marks decision. The FCC’s request for comment appears to focus on how to interpret Marks and the D.C. Circuit’s ACA International decision and how smartphones fit into the definition of an ATDS.

Eleventh Circuit Affirms Award of Attorneys’ Fees Equal to One-Third of the Settlement Fund

By Eric Tsai, Maurice Wutscher LLP

The U.S. Court of Appeals for the Eleventh Circuit recently affirmed a class settlement where the merchant allegedly violated the federal Fair and Accurate Credit Transactions Act (“FACTA”) by printing point-of-sale credit card and debit card receipts that included more than the last five digits of the card number. The parties proposed a settlement fund of $6.3 million. Class members who submitted a timely claim would receive approximately $235 as their pro-rata share of the settlement fund, and class counsel would receive attorneys’ fees equal to one-third of the settlement fund, or $2.1 million. Two class members objected to the fee request and argued, among other things, that the trial court was required to subject any fee award under federal fee shifting statutes to a lodestar analysis (i.e., the number of hours worked multiplied by the prevailing hourly rates and increased due to superior performance and results). The Eleventh Circuit held that the common-fund doctrine applied to class settlements that result in a common fund “even when class counsel could have pursued attorneys’ fees under a fee-shifting statute.” Although the Eleventh Circuit acknowledged that the “majority of common fund fee awards fall between 20% and 30% of the fund,” it held that the trial court properly assessed the risks face by the class and the compensation secured by class counsel.

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