Bank of America $32M TCPA Settlement Receives Final Approval, but Fees Reduced

Sept. 4 — A $32 million class action settlement resolving claims that Bank of America violated the Telephone Consumer Protection Act by calling or texting consumers' mobile phones without their consent Aug. 29 received a federal district court's final approval.

However, Judge Edward J. Davila of the U.S. District Court for the Northern District of California reduced class counsel's requested $8 million in attorneys' fees and costs to approximately $2.4 million. The court called the attorneys' estimated hours spent on settlement negotiations and mediation “particularly excessive” and said their deliberate litigation strategy resulted in class members being “asked to pay the costs of litigating six separate actions with a total of 18 attorneys and 8 paralegals.”

The nominal amount of the nonmonetary relief offered by the defendants also militated toward a lower fee award, the court said. The fee award will be deducted from the $32 million settlement fund.

The amount of this TCPA settlement, although large, still falls short of two other financial industry TCPA settlements that recently received preliminary approval, a $34 million settlement with Chase Bank USA NA and a $75 million settlement with Capital One. The plaintiffs in the Capital One case said that, if the court grants final approval, the settlement would be the largest in the TCPA's history.

Bank Denies Allegations

The plaintiffs alleged that the defendants—Bank of America Corp., Bank of America NA and FIA Card Services NA—called or texted consumers on their mobile phones using an automatic telephone dialing system or an artificial or prerecorded voice without their prior express consent in violation of the TCPA, 47 U.S.C. § 227(b)(1)(A).

Bank of America denies the allegations and contends that it had the plaintiffs' and class members' prior express consent, the court said.

In September 2013, the parties filed a proposed settlement agreement, which provided for a $32 million settlement fund. The court granted preliminary approval to the settlement in December 2013.

Unsettled Meaning of Consent

The court granted the plaintiffs' motion for final approval of the settlement but only granted their motion for attorney's fees and costs in part.

The court said that “the amount of the Settlement Fund, considered in light of the size of the class, is in line with recoveries obtained in similar TCPA class action settlements.” There are approximately 7 million class members.

But the court found the amount of class counsel's requested attorneys' fees and costs unreasonable. In addition to finding the hours billed for settlement negotiations and mediation excessive, it also found much of that work duplicative of other work and said the case was similar to other cases filed against the defendants.

In addition, the prospective relief offered by the defendants—enhancements that would prevent the calling of a mobile phone unless a loan servicing record reflected the borrower's prior express consent to be called—might not benefit consumers, according to the court. Class members will likely continue receiving automated calls given that the defendants continue to use the same definition of “prior express consent,” the court said.

“The mere fact that Defendants changed their systems to reflect the borrower's prior express consent means very little in the context of this lawsuit,” the court said. “ ‘Prior express consent' under the TCPA is a term of art with an unsettled meaning.”

Lieff Cabraser Heimann & Bernstein LLP; Meyer Wilson Co.; Terrell, Marshall, Daudt & Willie PLLC; Casey Gerry Schenk Francavilla Blatt & Penfield LLP; Kazerouni Law Group APC; Douglas J. Campion, in San Diego; Burke Law Offices LLC; Saeed & Little LLP; Daniel G. Shay, in San Diego; and Steven E. Kaftal, in San Diego, represented the named plaintiffs and the class. Reed Smith LLP represented the defendants.

Full text of the court's opinion is available at http://www.bloomberglaw.com/public/document/Rose_v_Bank_of_Am_Corp_Case_No_511CV02390EJD_512CV04009EJD_2014_B.