Leung et al. v. XPO Logistics, Inc.
In Leung et al. v. XPO Logistics, Inc., CEI is objecting to a class action settlement fee request in a case involving an IKEA contractor’s alleged violation of the Telephone Consumer Protection Act (TCPA). The TCPA is a law that protects consumers from telephone solicitations, and the IKEA contractor allegedly violated the law by calling customer cell phones for them to take an automated survey about recent furniture delivery by the contractor.
CEI argues the plaintiffs’ attorneys are attempting to overpay themselves by taking over one-third of the net settlement fund, or $2.33 million, which is substantially more than the median fee award in similar cases. The settlement proposes to distribute checks from a $7 million fund—less attorneys’ fees and administration costs—to the fraction of 313,000 class members who file claims. In TCPA class actions settlements, the median fee recovery for lawyers is 25 percent of the net recovery. Applying a more appropriate 25 percent fee structure in this case would return over $600,000 to the class members.
Plaintiffs’ attorneys also failed to document the time they spent on the case. Based on past TCPA cases, it’s likely a $2.33 million fee award is five or ten times the base amount of hourly fees (called a “lodestar”) that the attorneys would normally receive. Therefore, even a 25% award likely overcompensates attorneys.