BofA Wins Dramatic Attorney Fee Reduction in TCPA/Debt Collection Call Class Action

Last fall, Bank of America entered into a $32 million settlement to resolve a TCPA lawsuit over debt collection calls the bank made within its credit card and mortgage units. It has been called the largest TCPA settlement ever. Late last month, the judge in the case drastically lowered the amount of money the plaintiffs’ attorneys will see for their work in the final settlement approval.

The case was a consolidated class action comprised of several lawsuits claiming that Bank of America’s internal debt collection calls were made to cell phones using autodialers. The potential size of the class when the case was settled last year was 7.7 million. The case is Stephanie Rose v. Bank of America.

Attorneys from 10 different firms were slated to receive at least $8 million for their troubles, 25 percent of the total settlement inclusive of costs. The remaining money is to be paid by BofA into a settlement account.

But the judge overseeing the settlement disagreed with the method the lawyers used to determine their fee. U.S. District Judge Edward Davila of the Northern District of California went to great lengths in his opinion, filed August 29, to break down the errors in the fee calculation.

Davila took issue with how many different law firms, and attorneys within the firms, were involved in the plaintiffs’ representation. He noted that 10 firms, 18 attorneys, and eight paralegals billed on the case. As such, Davila found that “Class Counsel included an unreasonable number of hours in their lodestar calculation.”

Using a different method of calculation – applying a multiplier to a more reasonable accounting of billable hours – Davila judged that the attorneys were entitled to about $2.4 million in fees and costs, 70 percent lower than was sought.

He also found that “Class Counsel appear to have coordinated their efforts from very early on in the proceedings, perhaps deliberately selecting a litigation strategy whereby Defendants would be overwhelmed by attacks on several fronts and consequently forced to negotiate from a weaker position.” The consolidated case was initially comprised of several separate class actions.

Davila took that idea a step further in criticizing the non-monetary relief proposed by the settlement. He noted that under the terms of the settlement, members of the class should expect to continue to receive automated calls since BofA maintains that they did, in fact, have “prior express consent” to do so. And the settlement does not call on BofA to change their definition of consent, merely to have consent before autodialing cell numbers.

“The non-monetary relief achieved here is particularly nominal in comparison to non-monetary relief achieved in other TCPA class action settlements,” Davila wrote.

But it was not enough to throw out the settlement, as all parties had agreed to it.