Judge Appoints Master to Review $4M TCPA Settlement

A District Court judge in Pennsylvania has appointed a former state Supreme Court justice as master in a case to determine whether a proposed $4 million settlement in a Telephone Consumer Protection Act case is sufficient.

The settlement was approved in March in Ward v. Flagship Credit Acceptance (2:17-cv-02069) and would award 67,000 individuals about $35 each. One-third of the settlement would go toward the attorney representing the plaintiffs, Sergei Lemberg.

“This is not a money grab. It’s a standard application for standard fees, and in this case, we feel that we deserve it,” said Lemberg, in a published report. “I will only do settlements that I believe in. I don’t do any Mickey Mouse games.” 

The lawsuit was filed back in 2017 against a subprime auto lender, Flagship Credit Acceptance, after it was accused of using an automated telephone dialing system to try and contact an individual names Charles Walker. The problem was that the lender kept calling Robert Ward who had no idea who Walker was.

Flagship has agreed to the settlement, but the judge in the case, Judge Michael Baylson of the District Court for the Eastern District of Pennsylvania, is not sure the settlement is fair and reasonable.

“As the Court discussed with counsel at the recent hearing, also of concern in this case is the very large amount of attorneys’ fees being sought as a percentage of recovery, compared to the anticipated net return to each class member who filed a claim,” Judge Baylson wrote in an order discussing his uncertainty. “As stated in other decisions, every dollar going to counsel is one less dollar doing to the class.”

Neither side in the case objected to the appointment of Jane Cutler Greenspan as master in the case.

What makes this case special is that the defendant never responded to the complaint and a pretrial conference was never held. The plaintiff filed the complaint, the defendant asked for an extension to respond, and after 15 months, the preliminary settlement was put before Judge Baylson.

“The Court appreciates that there were substantial negotiations and that the parties engaged an experienced mediator, Honorable Joel Rosen, former U.S. Magistrate Judge for the District of New Jersey,” Judge Baylson wrote back in May. “However, in many, if not most, decisions approving large class settlements, the Court has had exposure to the controversy, and the underlying facts, and legal issues. In this case, this factual background is missing.”

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