TCPA Class Action Review – 2025

authority as agents of the defendant. Accordingly, the court concluded that the plaintiff failed to adequately plead either direct or vicarious liability under the TCPA. The court thereby granted the defendant’s motion to dismiss. 5. Rulings On Settlement Approval In TCPA Class Actions GoDaddy, Inc., a publicly traded multi-billion-dollar U.S. corporation, provides services – including domain registration, website hosting, payment processing, and marketing support – to entrepreneurs around the globe. In Drazen, et al. v. Pinto, 106 F.4th 1302 (11th Cir. 2024), the litigation originally consisted of three consolidated TCPA class actions brought against GoDaddy alleging the company sent unwanted marketing texts and phone calls through an automatic telephone dialing system (ATDS). Id. at 1305. The parties eventually negotiated a settlement agreement where GoDaddy would provide up to $35 million to pay class members’ claims and up to $10.5 million to class counsel in attorneys’ fees. Id. The plaintiffs moved the district court to certify a Rule 23(b)(3) class for settlement purposes, to preliminarily approve the negotiated settlement agreement, and to approve the draft notice of proposed settlement to class members. Id. at 1306. The district court granted preliminary approval of the settlement and directed that notice of the proposed settlement be given to the class. Id. Shortly after the settlement administrator emailed the notice to the class, the U.S. Supreme Court granted certiorari in Facebook, Inc. v. Duguid , 592 U.S. 395, 401-02 (2021), which took up the same principal issue in the plaintiffs’ consolidated actions, i.e., whether a device must have certain capabilities to constitute an auto dialer under the TCPA. Class counsel, anticipating an impending Supreme Court ruling in Facebook that could impact a settlement, urged the district court to enter a final judgment approving the settlement and granting an award of attorneys’ fees. Id. at 1307. The district court granted class counsel’s motion over the objection of Juan Pinto, an individual class member, who argued (i) the district court prematurely ruled on attorneys’ fees before the deadline for objections, and (ii) the fees awarded were far in excess of what class members would receive, thereby making the settlement unfair, unreasonable, and inadequate. Id. Over the objections of this individual class member, the district court approved the settlement, and Juan Pinto appealed. Id. The Eleventh Circuit concluded the district court abused its discretion in approving the class-wide settlement agreement. Id. at 1308. Among other oversights, the Eleventh Circuit opined that the district court failed to account for the 2018 amendments to Rule 23(e)(2). Additionally, the district court overlooked evidence indicating that the settlement agreement was the product of collusion, such as an overbroad release provision. Id. Finally, the notice of the proposed settlement failed to inform the absent class members of the claims, issues, or defenses in plaintiff’s cases as required by Rule 23(c)(2)(B)(iii), fundamental due process, and the district court’s fiduciary obligation to the absent class members. Id. The Eleventh Circuit highlighted various errors committed by the district court in its 123-page opinion, but focused primarily on three areas. First, the Court of Appeals concluded that it was improper for the district court to determine the settlement as fair, reasonable, and adequate without considering Rule 23(e)(2)(A). Id. at 1329-30. The district court also overlooked evidence indicating that the settlement agreement was the product of collusion, such as the overbroad, sweeping release provision and inadequate relief provided to the class relative to what class counsel and GoDaddy received. Id. at 1330-31. Rule 23 and due process require that, in finalizing a class settlement, the parties and the district court must give absent class members a meaningful opportunity to opt-out or challenge the class settlement. Second, the Eleventh Circuit determined that the notice of the proposed settlement failed to inform the absent class members of the “claims, issues, or defenses” in the plaintiffs’ cases as required by Rule 23(c)(2)(B)(iii), fundamental due process, and the district court’s fiduciary obligation to the absent class members. Id. at 1336- 37. The Eleventh Circuit adopted the interpretation of Rule 23(c)(2)(B)(iii) as “conjunctive,” and that class members must be informed not only of the claims asserted, but also of the dispositive issue in Facebook and how its decision would affect the case. Id. at 1336. The Eleventh Circuit’s opinion further suggested that additional notice should have been provided regarding this development. Third, the Eleventh Circuit found that the district court erred in three ways when it calculated attorneys’ fees because it: (i) misapplied Rule 23(h), (ii) treated the settlement as a common fund when it was claims-made, and (iii) determined that this was not a settlement involving coupons under the Class Action Fairness Act (CAFA) and thus declined to examine class counsel’s motion for attorneys’ fees with CAFA-mandated scrutiny and procedures. Id. at 1338. First, the district court failed to give absent class members advance notice of class counsel’s fee motion, which disregarded the manifest intent of Rule 23(h). Id. The schedule proposed by the parties and adopted by the district court provided class members with only 7 days to review the attorneys’ fees motion before the objection deadline, and the notice did not specify when that motion would be filed, which the Eleventh Circuit strongly criticized. Id. at 1339. Second, although labeled a “common fund,” the settlement involved a “claims made” structure where

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