Appeals Court Vacates Certification, Settlement in TCPA Case

The Court of Appeals for the Eleventh Circuit has vacated a lower court’s approval of class certification in a Telephone Consumer Protection Act case, ruling that some of the named plaintiffs in the class did not have standing to sue in federal court.

A copy of the ruling in the case of Drazen v. Godaddy.com can be accessed by clicking here.

Three different cases against the defendant — one from Alabama and two from Arizona — were consolidated into one lawsuit. The suits accused the defendant of violating the TCPA by sending a text message to market its products and services using an automated telephone dialing system.

A proposed settlement was reached, in which members of the class could choose to receive either $35 or a coupon for $150 that could only be used for Godaddy goods and services. Attorneys representing the plaintiffs were due to receive 30% of the $35 million settlement.

After a member of the class objected to the terms of the settlement — based on the coupons that were being offered — because the redemption of the coupons would affect the amount of the settlement, and thus, the amount that the plaintiffs’ attorneys were entitled to. The objection was overturned and the settlement was approved, at which point the member of the class appealed to the Eleventh Circuit.

By certifying a class that included individuals who received one unsolicited text, the District Court granted standing to plaintiffs who otherwise should not have had it, the Court of Appeals wrote in overturning the decision.

“… when a class seeks certification for the sole purpose of a damages settlement under Rule 23(e), the class definition must be limited to those individuals who have Article III standing,” the Appeals Court wrote. “If every plaintiff within the class definition in the class action in TransUnion [v. Ramirez] had to have Article III standing to recover damages after trial, logically so too must be the case with a court-approved class action settlement.”

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