CHICAGO (Legal Newsline) - The plaintiffs in a class action lawsuit against Caribbean Cruise Line and a tax-exempt non-profit group, among others, for their alleged robocalls -- which offered a free cruise for taking part in a political opinion survey -- reportedly could get a record $76 million.
Nicole Su, an associate in Dorsey Whitney LLP’s Southern California office, reported earlier this week that the parties have reached a settlement.
Attorneys for both the plaintiffs and defendants could not immediately be reached for comment on the proposed deal, which Su reported is estimated to cost the defendants between $56 million and $76 million.
If the plaintiffs are paid out the full $76 million, the deal would be the highest Telephone Consumer Protection Act settlement in history, she noted.
Last week, Judge Matthew Kennelly, for the U.S. District Court for the Northern District of Illinois, Eastern Division, issued a notification indicating that a deal has, indeed, been struck.
The news came just days before a Sept. 12 jury trial was set to begin.
In his notification, Kennelly agreed to vacate the trial on the condition that a signed and executed settlement agreement and motion for preliminary approval is submitted no later than Sept. 26.
The motion for preliminary approval is then to be noticed for hearing on Sept. 28, the judge wrote.
In May 2012, the plaintiffs, Grant Birchmeir and Stephen Parkes, filed their proposed class action lawsuit against Caribbean Cruise Line Inc. Later, Vacation Ownership Marketing Tours Inc., the Berkley Group Inc. and Economic Strategy Group would be added as defendants.
The plaintiffs allege the defendants illegally contacted class members, which include about 1 million individuals who received calls on their cell phones or landlines from CCL and its subsidiary marketing companies between August 2011 and August 2012.
They contend the offer of a “free” cruise package from CCL in exchange for taking a political survey was a “scam.”
“Not only is the ‘free’ cruise not free, the survey is simply a marketing tool with no legitimate political basis,” the plaintiffs wrote in their complaint.
Under the TCPA, telephone solicitations, i.e. telemarketing, and the use of automated telephone equipment are strictly prohibited.
In particular, the law limits the use of automatic dialing systems, artificial or prerecorded voice messages, SMS text messages and fax machines. It also specifies several technical requirements for fax machines, autodialers and voice messaging systems -- principally with provisions requiring identification and contact information of the entity using the device to be contained in the message.
Generally, the act makes it unlawful “to initiate any telephone call to any residential telephone line using an artificial or prerecorded voice to deliver a message without the prior express consent of the called party” except in emergencies or in circumstances exempted by the Federal Communications Commission.
The law permits any “person or entity” to bring an action to enjoin violations of the statute and/or recover actual damages or statutory damages ranging from $500 to $1,500 per violation.
In April, Kennelly ruled that the robocalls were unlawful under the TCPA because they were made without prior express consent.
“The evidence is uncontroverted that a prerecorded message was played on each call; DeJongh himself testified to this effect during his deposition,” the judge wrote in his 31-page order. “This is a violation of the TCPA, irrespective of whether the calls were made by or on behalf of a tax-exempt nonprofit, were made for a political or non-commercial purpose, or did not make reference to or play long enough to mention defendants’ vacation products.”
Last year, the Federal Trade Commission and 10 state attorneys general also took action against the Florida-based cruise line company and seven other companies that assisted the massive telemarketing campaign.
Although the FTC’s do-not-call and robocall rules do not prohibit political survey robocalls, the commission said the robocalls violated federal law because they incorporated a sales pitch for a cruise to the Bahamas.
The robocalls generated millions of dollars for the cruise line, the FTC said.
“Marketers who know the ropes understand you can’t steer clear of the do not call rules by tacking a political or survey call onto a sales pitch,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection.
She added, “Anyone who assists in making illegal calls is also on the hook.”
According to the joint complaint filed by the FTC and the states, the robocall campaign ran from October 2011 through July 2012 and averaged about 12 million to 15 million illegal sales calls a day.
Consumers who answered these calls typically heard a pre-recorded message supposedly from “John from Political Opinions of America,” who told them they had been “carefully selected” to participate in a 30-second research survey, after which they could “press one” to receive a two-day cruise to the Bahamas.
An attorney for the cruise line told The Washington Post last April that a group of political action committees, or PACs, had reached out to the company, wanting to offer the cruise packages to increase participation in the surveys.
“After vetting the request with its attorneys, Caribbean agreed to allow one of its cruise promotions to be offered by the PACs to recipients of a narrow scope of specific political survey calls,” said Jeffrey Backman, an attorney who represented CCL.
“Without Caribbean’s consent, certain PACs offered the cruise promotions to recipients of calls outside the scope of calls specifically approved by Caribbean. The matter has been completely closed.”
From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.