BOWMAN v. Art Van Furniture, Inc, 2:17-cv-11630

Background

Plaintiff Michael Bowman sued Art Van Furniture under the TCPA for prerecorded telemarketing calls to his landline and alleged similar calls to a class between May 23, 2013 and the preliminary approval date.
Parties negotiated after informal investigation and mediation; defendant denied liability and withdrew its motion to dismiss when settlement was reached.
Settlement provides a $5,875,000 non-reversionary Settlement Fund to pay approved claimants pro rata (value per claim determined after deductions for fees, costs, and incentive award) and 24 months of injunctive restrictions on prerecorded calls to residential landlines without written consent.
Notice plan: summary postcards and emails were sent to ~1.17 million unique class members (≈92.6% deliverable rate); CAFA notice was sent to federal and state officials.
Claims/response: 31,471 claims filed, 348 opt-outs, and 3 objections; estimated per-claim value at filing ≈ $98.87 (subject to final adjustments).
Court previously granted preliminary approval and, after a fairness hearing, granted final approval, finding the settlement fair, reasonable, and adequate and ordering dismissal with prejudice.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Adequacy of class notice under Rule 23	Notice via mailed postcards and emails to identified members was the best practicable notice and included required content	Not disputed as to method; CAFA notice was properly sent	Notice plan satisfied Rule 23 and due process; over 90% reach achieved
CAFA compliance	CAFA notice was sent to AGs and federal officials as required	N/A	CAFA notice properly implemented by defendant through administrator
Whether settlement is fair, reasonable, adequate under Rule 23(e)	Settlement gives immediate monetary relief plus injunctive change; $5.875M fund non-reversionary and comparable to other TCPA settlements	Defendant maintains denial of liability; settlement avoids protracted litigation risk	Court found settlement fair, reasonable, and adequate after weighing Sixth Circuit factors
Risk of collusion	Negotiations were adversarial, mediated by independent JAMS mediator, and based on exchanged information	N/A	No evidence of fraud/collusion; presumption of fairness stands
Sufficiency of discovery before settlement	Parties exchanged enough information to estimate class size and exposures despite no formal discovery	Lack of formal discovery noted by objectors	Court held information exchanged was sufficient for settlement evaluation
Reaction of class (opt-outs/objections)	Low opt-out rate and very few objections indicate favorable reaction	Objectors argued low recovery relative to theoretical statutory damages and criticized fee structure	Court found response favorable (31,471 claims; 348 opt-outs; 3 objections) and addressed objections; weighed heavily in favor of approval

Key Cases Cited

Gautreaux v. Pierce, 690 F.2d 616 (7th Cir. 1982) (two-step class settlement approval overview)
Eisen v. Carlisle & Jacquelin, 417 U.S. 156 (U.S. 1974) (individual notice required where names/addresses reasonably available)
Int'l Union, United Auto., Aerospace & Agr. Implement Workers of Am. v. General Motors Corp., 497 F.3d 615 (6th Cir. 2007) (factors for evaluating fairness of class settlements)
Newby v. Enron Corp., 394 F.3d 296 (5th Cir. 2004) (sufficient information exchanged can support settlement absent formal discovery)
In re Cardizem CD Antitrust Litig., 218 F.R.D. 508 (E.D. Mich. 2003) (risks of trial and class recovery considerations)
In re Dry Max Pampers Litig., 724 F.3d 713 (6th Cir. 2013) (warning against settlements that favor counsel over class and offer illusory relief)
Gooch v. Life Investors Ins. Co. of Am., 672 F.3d 402 (6th Cir. 2012) (notice need only fairly apprise class members of settlement terms)
Nat'l Rural Telecomm. Coop. v. DIRECTV, Inc., 221 F.R.D. 523 (C.D. Cal. 2004) (absence of many objections supports settlement fairness)
In re NASDAQ Market–Makers Antitrust Litig., 187 F.R.D. 465 (S.D.N.Y. 1998) (context on objections and approval in large-class settlements)
IUE-CWA v. General Motors Corp., 238 F.R.D. 583 (E.D. Mich. 2006) (presumption against collusion in class settlements)