Kevin McCabe v. Caribbean Cruise Line, Incorpo
896 F.3d 792
7th Cir.2018Background
- Consumers received robocalls (Aug 2011–Aug 2012) offering a free cruise for completing political surveys; plaintiffs sued under the TCPA seeking class damages.
- Defendants named included Caribbean Cruise Line, Vacation Ownership Marketing Tours, and The Berkley Group; the actual caller (third-party entities) did not participate in the settlement.
- District court certified a Rule 23(b)(3) class, granted partial summary judgment for plaintiffs, and set trial; the parties then settled on the eve of trial.
- Settlement: $56–$76 million fund (depends on approved claims); payments to class members (two rounds), admin expenses, incentive awards, and attorneys’ fees; uncashed second-round funds potentially to cy pres.
- District court approved the settlement, entered judgment dismissing the action on the merits, and awarded class counsel a tiered fee: 36% of first $10M, 30% of next $10M, 24% of next $36M, and 18% of any amount over $56M; appeals followed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Finality/jurisdiction over settlement and fee award | Plaintiffs argued the district judgment disposed of the whole action and fee formula made award final | Defendants argued fee award was interim and not appealable while claims-approval process ongoing | Court: Judgment dismissed the whole action; fee award is final because the court provided a concrete formula for calculating remaining fees, so appeals are timely |
| Size/structure of fee award | Plaintiffs (class counsel) argued fee reflects ex ante market rate given litigation risk (vicarious-liability theory) | Defendants argued percentages are excessive compared to other TCPA cases and should be reduced (e.g., 25/20/15 tiers) | Court: Reviewed for abuse of discretion and affirmed—district court reasonably approximated market compensation given risks; no abuse identified |
| Compensation to objector (Freedom Home Care) for proposing sliding-scale fee | Freedom Home Care argued it added value by proposing the sliding-scale and sought incentive/fee for its objection | Plaintiffs argued the sliding-scale was already in plaintiffs’ motion and common; objector added no marginal value | Court: Denied compensation—objector did not meaningfully add value to warrant fees or incentive award |
| Class member McCabe’s standing and notice/release objections | McCabe claimed settlement improperly released calls outside class period and notice failed to adequately describe cy pres process | Defendants argued McCabe not a class member or claims precluded; settlement defined released claims as those “alleged” (i.e., within class period) and notice was sufficient | Court: Rejected district court’s standing analysis (claim-preclusion and standing conflated) but rejected McCabe’s substantive objections—released claims limited to alleged calls within the complaint’s class period and notice satisfied Rule 23 requirements |
Key Cases Cited
- In re Google Referrer Header Privacy Litigation, 869 F.3d 737 (9th Cir. 2017) (cy pres issues in class settlements)
- Devlin v. Scardelletti, 536 U.S. 1 (U.S. 2002) (settlement judgment can bind absent parties in certain circumstances)
- Budinich v. Becton Dickinson & Co., 486 U.S. 196 (U.S. 1988) (separate appealability of fee determinations)
- Gelboim v. Bank of America Corp., 574 U.S. 405 (U.S. 2015) (practical concerns about timing of appeals and finality)
- In re Synthroid Marketing Litigation, 325 F.3d 974 (7th Cir. 2003) (standards for awarding class counsel fees in complex litigation)