On October 30, 2019, the plaintiffs in a long-running class-action suit against ADF MidAtlantic, LLC, American Huts, Inc., ADF Pizza I, LLC, ADF PA, LLC and Pizza Hut, Inc. filed a motion with the US District Court for the Southern District of Florida, indicating that the more than seven-year-long dispute had come to an end. Plaintiffs’ motion for preliminary approval of a class-action settlement -- pursuant to which Defendants will establish a $6 million fund -- requires court approval before becoming final.
The case began in May 2012, when the plaintiffs filed a complaint alleging that the defendants had violated the Telephone Consumer Protection Act, 47 U.S.C § 227 et seq. by soliciting the plaintiffs' business via text message, at the time “[o]ne of the newest types of [ ] bulk marketing.” The plaintiffs alleged that the defendants had sent them unsolicited text messages promoting Pizza Hut. In turn, they alleged that these text messages caused aggravation, forced them to incur costs in the form of cell phone charges, diminished their cell phone battery lives, and resulted in loss of data storage capacity, invasion of privacy, and intrusion upon seclusion. The allegations also called into question the defendants’ method for building their database of cell phone numbers, which called for individuals to forward their friends’ cell phone numbers in exchange for coupons and promotions. The defendants denied the allegations.
In December 2018, the court granted class certification. In August 2019, the parties participated in mediation, which, after further negotiations, resulted in the parties’ signing a settlement agreement on October 28, 2019. The agreement provides that the defendants will establish a $6 million fund, with settlement class members eligible to receive up to $400 each. The plaintiffs’ motion touts the class members’ recovery under the settlement as “substantial,” particularly in light of the potential statutory damages recovery of $500 per call provided under the TCPA. The plaintiffs further argue that the settlement is the product of extensive arms-length negotiations and that it avoids the inherent risk of litigation, tipping the scale decidedly in favor of approval of the settlement.
The settlement must next go through a two-step process for review and approval of proposed class-action settlements under Rule 23 of the Federal Rules of Civil Procedure.