Izor v. Abacus Data Systems Inc.

Background

Paul Izor brought a class action under the Telephone Consumer Protection Act, a federal law regulating certain calls and text messages. He alleged that Abacus Data Systems Inc., or a third party acting for Abacus, sent unsolicited text messages using an automatic telephone dialing system and violated federal do-not-call regulations. Izor sought to represent two proposed classes involving text messages sent without required consent and messages sent to numbers listed on the federal Do Not Call Registry.

After the court denied Abacus’s motions to dismiss and to stay the case, the parties conducted discovery and participated in mediation. They reached an agreement in principle after further discovery and negotiations. The settlement defined a class of people whose qualifying telephone numbers received text messages sent by Trumpia on Abacus’s behalf during the relevant four-year period.

Settlement Terms and Notice

Abacus agreed to create a $1,950,000 non-reversionary settlement fund. The fund would cover payments to class members, settlement-administration expenses, attorneys’ fees and costs, and any incentive payment for Izor. After deductions, the parties estimated that each claimant would receive approximately $400. Abacus also agreed to implement policies and procedures concerning consent, use the National Do Not Call Registry, conduct quarterly spot checks, and impose requirements on telemarketing vendors for two years.

The settlement administrator mailed notices to 16,820 identifiable potential class members, reached approximately 90.7% of the settlement class through mail and online advertising, and maintained a settlement website and toll-free telephone line. According to the administrator, 2,793 class members submitted claims, no class members opted out, and no class members filed objections. Steven Helfand filed an objection, but the court considered it and denied it, finding no reasonable basis to challenge the settlement.

Final Approval

The court found that the notice plan satisfied the applicable requirements and that the settlement was fair, adequate, and reasonable. In reaching that conclusion, the court considered the risks and expense of continued litigation, the possibility that the class would not be certified, the settlement amount, the discovery completed, counsel’s experience, and the class members’ response. The court also found no signs of collusion or conflicts of interest that raised concerns about the settlement.

The court therefore granted the motion for final approval of the class-action settlement. It approved the settlement amount of $1,950,000 and directed the parties and settlement administrator to implement the agreement. The parties were also directed to file a short stipulated final judgment within 21 days.

Attorneys’ Fees, Costs, and Incentive Award

Class counsel requested $650,000 in attorneys’ fees, $15,169.76 in costs, and a $5,000 incentive award for Izor. The court explained that 25% of a common fund is generally a benchmark for attorneys’ fees, although an upward or downward adjustment may be appropriate based on the circumstances. The court found that the favorable result, litigation risks, counsel’s work, and contingency-fee arrangement justified an upward adjustment, but it concluded that the requested amount—more than one-third of the settlement fund—was excessive.

The court granted attorneys’ fees of 30% of the settlement fund, or $585,000. It also granted the request for $15,169.76 in costs. As to the incentive award, the court found that Izor made an important but moderate contribution by helping develop the facts, reviewing the complaint and settlement documents, responding to discovery, preparing for deposition and mediation, and evaluating settlement proposals. The court granted in part the request for an incentive award and awarded $2,500 instead of the requested $5,000.

Disposition

The court granted the motion for final approval of the class-action settlement. It granted in part and denied in part the motion for attorneys’ fees, costs and expenses, and the class-representative enhancement payment. The approved amounts were $585,000 in attorneys’ fees, $15,169.76 in costs, and $2,500 for Izor’s incentive award.