Izor v. Abacus Data Systems Inc.

Background

Paul Izor brought a proposed class action under the Telephone Consumer Protection Act, a federal law regulating certain telephone calls and text messages. He alleged that Abacus Data Systems Inc., or a third party acting for Abacus, sent two unsolicited text messages to his cellular phone about an allegedly outdated HotDocs software version. The complaint asserted that the messages were sent using an automatic telephone dialing system without required consent and violated a federal regulation concerning do-not-call restrictions.

The proposed settlement class covered regular users or subscribers of specified telephone services whose numbers received a text message sent through Trumpia on Abacus’s behalf during the four years before February 26, 2019. The court noted an estimated 18,722 class members.

Provisional Class Certification

For settlement purposes, the court provisionally certified the class under Federal Rule of Civil Procedure 23. It found that the numerosity requirement was met because joining the estimated 18,722 members individually would be impracticable. It also found common questions, including whether Abacus could be held responsible for messages sent through Trumpia and whether Trumpia used an automatic dialing system under the Telephone Consumer Protection Act.

The court found Izor’s claims typical because Abacus allegedly sent unsolicited product-marketing texts to him and the proposed class members. It found no apparent conflicts between Izor, proposed class counsel, and the class, and concluded that they had litigated the case vigorously. The court also found that common issues predominated and that a class action was the superior method for resolving the dispute. It appointed Izor as class representative and appointed Rachel E. Kaufman, Avi R. Kaufman, and Stefan Coleman as class counsel.

Settlement Terms

Abacus agreed to create a non-reversionary settlement fund of $1,950,000. The fund would pay class-member claims, estimated administrative expenses of $72,496 to $103,996, attorneys’ fees of up to $650,000, litigation costs of up to $25,000, and a possible incentive payment to Izor of up to $5,000. Each valid claim would receive a pro rata share of the fund.

Abacus also agreed to implement policies and procedures intended to prevent texts without prior express consent and to avoid telemarketing texts that violate the Telephone Consumer Protection Act. The agreement included a two-year restriction on telemarketing calls or texts to settlement-class members without an independent consent investigation, subscription to the National Do Not Call Registry, quarterly checks of ten telemarketing calls or texts made on Abacus’s behalf, and requirements concerning vendors and sub-vendors.

The settlement would release specified claims arising from the way Abacus or its agents sent or attempted to send text messages, lack of consent, and messages to numbers on federal or state do-not-call lists during the relevant four-year period.

Preliminary Approval

The court applied the heightened review required for a class settlement reached before class certification. It preliminarily found that the agreement resulted from significant discovery, mediation, and informed negotiations without evidence of collusion or conflicts of interest. It found no improper preferential treatment, while reserving the decision on any incentive award and attorneys’ fees for final approval. The court also found that the settlement fell within the possible range of approval given the potential statutory damages, anticipated recovery of approximately $400 to $600 per participating class member, and litigation risks. It found no obvious deficiencies.

Notice and Disposition

The court approved a notice process involving mailed summary notices, online advertising through the Google Display Network and Facebook Ads, and a detailed notice on a settlement website. The notices would explain the case, settlement, claims process, deadlines, and procedures for objecting or opting out. The court required additional information about deadlines and access to materials concerning attorneys’ fees and the incentive award.

The court GRANTED Izor’s motion for preliminary approval. It directed the parties to implement the notice plan with the identified edits and to submit a schedule for settlement administration, objections and opt-outs, fee and incentive applications, final approval, and the final fairness hearing. The opinion granted preliminary approval only; it did not make the settlement final or decide the ultimate merits of Izor’s allegations.