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By David McAfee
Oct. 13 — A federal court Oct. 6 gave initial approval to a $7.5 million settlement, while concurrently certifying a class of nearly 200,000 current and former subscribers of iYogi Inc. technology support who alleged the company violated the Telephone Consumer Protection Act by utilizing “aggressive sales tactics” for renewals, including continuing to place calls to individuals who had asked to be taken off of the call list.
Judge William B. Shubb of the U.S. District Court for the Eastern District of California approved a deal that includes $40 payouts to each of the approximately 189,000 iYogi subscribers if they submit a claim form.
Judge Shubb said that, according to the terms of the settlement agreement, class members who don’t want to be a part of the settlement have to “take the affirmative step of opting out.” Those who don’t opt out and do submit documents will receive $40, which represents only eight percent of the available damages under the TCPA, the judge said.
“While the settlement agreement provides class members with only a small percentage of the possible recovery and contains a potentially unfair opt-in/opt-out requirement, there are many uncertainties associated with pursuing litigation that justify this recovery,” Shubb said.
“In light of the uncertainties associated with pursuing litigation, the court will grant preliminary approval to the settlement because it is within the range of possible approval,” the court said.
If the class prevailed at trial, there is no assurance that it would recover the full amount of available damages “given iYogi’s financial condition and limited insurance coverage,” the court said.
The settlement agreement includes a provision allowing plaintiffs’ counsel to apply for a fee award of up to $300,000, which would be paid separately from the payouts of $40 to each class member. The settlement itself isn’t dependent on the court’s approval of that attorney fee, the court said.
The newly approved deal also calls for an incentive award of $1,000 to be paid to each of the three named plaintiffs. That is less than the $5,000 incentive award that courts have “generally” decided is reasonable, according to the court.
A representative for the plaintiffs declined to comment. Representatives for iYogi didn’t immediately respond to Bloomberg BNA's Oct. 13 requests for comment.
The plaintiffs were represented by Edelson PC and the Law Office of Samuel M. Lasser. The defendant was represented by Jones Day.
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Full text of the court's memorandum and order is available at http://src.bna.com/za.
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