639 F. App'x 880
3d Cir.2016Background
- Landsman & Funk sued Skinder-Strauss under the TCPA for sending unsolicited fax advertisements; case heavily litigated since 2008 and earlier appeals to this Court occurred.
- Parties reached a settlement after mediation: $625,000 common fund, sliding claimant payments ($500–$175), attorneys’ fees sought at one-third of fund, and a $10,000 incentive award for class representative; a large portion of unclaimed funds would revert to defendant.
- Class preliminarily certified for settlement purposes; notice sent to ~20,000 potential claimants; ~300 claims were confirmed and there was only one objection (from Lightman & Associates / Glenn Manochi).
- Objectors submitted a claim but refused to sign the required perjury certification that they received a fax; their claim was rejected and the Magistrate found they lacked standing to object as class members but considered objections on the merits.
- Magistrate approved final settlement, class certification, attorneys’ fees, and incentive award; Objectors appealed arguing improper application of Girsh and Baby Products principles and that fee award should be based on actual direct benefit to class (not entire fund).
- Third Circuit affirmed, finding no abuse of discretion: court found the Magistrate adequately applied Girsh/Baby Products factors, properly considered distribution data, and permissibly used the entire fund as a benchmark for fee assessment given lack of indicia of self-dealing and counsel’s adequate prioritization of direct benefit.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to object / class membership | Objectors claimed entitlement to object as class members | Landsman argued Objectors lacked class membership standing because their claim lacked the required perjury certification | Court agreed Objectors lacked membership standing but reviewed objections on merits and rejected them |
| Adequacy of settlement / class certification | Objectors argued settlement inadequately benefits class given many potential claimants and large reverter | Landsman argued settlement was product of arm’s-length negotiation, many potential claimants but only ~300 confirmed claims, few objections | Court held certification and settlement approval were reasonable under Girsh factors and record evidence |
| Attorneys’ fees benchmark (entire fund vs. amount claimed) | Objectors argued fee should be reduced to reflect small direct distribution to claimants (use amount claimed) | Landsman and Magistrate relied on Boeing and Baby Products permissibility of using entire fund as benchmark where appropriate | Court held Magistrate did not abuse discretion using entire fund as benchmark after considering Baby Products guidance and the claims data |
| Application of Girsh / Baby Products factors | Objectors contended the Magistrate failed to properly apply factors and to prioritize direct benefit to class | Landsman maintained Magistrate thoroughly applied Girsh/Gunter/Prudential factors and analyzed direct benefit and claims distribution | Court found Magistrate adequately applied the relevant factors and did not abuse discretion in fee and settlement approval |
Key Cases Cited
- Mims v. Arrow Fin. Servs., 132 S. Ct. 740 (2012) (federal jurisdiction over TCPA claims)
- Boeing Co. v. Van Gemert, 444 U.S. 472 (1980) (permissibility of measuring fees against entire common fund in certain cases)
- In re Baby Prods. Antitrust Litig., 708 F.3d 163 (3d Cir. 2013) (requirement to analyze degree of direct benefit to class when approving settlements and fee awards)
- Gunter v. Ridgewood Energy Corp., 223 F.3d 193 (3d Cir. 2000) (factors for assessing reasonableness of fee awards)
- In re Prudential Ins. Co. Am. Sales Practice Litig., 148 F.3d 283 (3d Cir. 1998) (fee assessment factors and standards)
- Girsh v. Jepson, 521 F.2d 153 (3d Cir. 1975) (factors for class settlement approval)
- Landsman & Funk, P.C. v. Skinder-Strauss Assocs., 640 F.3d 72 (3d Cir.) (prior appellate proceedings in same litigation)
- In re Cendant PRIDES Corp. Litig., 243 F.3d 722 (3d Cir. 2001) (district court’s fiduciary role in reviewing class settlements)
- In re Rite Aid Corp. Sec. Litig., 396 F.3d 294 (3d Cir. 2005) (few objections by class favors settlement approval)