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Leung v. XPO Logistics, Inc.

United States District Court, N.D. Illinois, Eastern Division

May 30, 2018

VINCENT LEUNG, on behalf of himself and all others similarly situated, Plaintiff,


          Edmond E. Chang, Judge

         After receiving a prerecorded-voice call inquiring about the quality of his IKEA furniture delivery, Vincent Leung sued the caller on behalf of himself and others similarly situated, arguing that the call violated the Telephone Consumer Protection Act, 47 U.S.C. § 227.[1] R. 1, Compl. The parties engaged in discovery and underwent mediation, and finally arrived at a proposed settlement agreement. After a hearing, the Court conditionally approved a class and granted preliminary approval of the settlement agreement. R. 141, 10/19/17 Minute Entry; R. 142, Order Granting Preliminary Approval. The settlement agreement (with minor adjustments agreed to by the parties, R. 143) is now before the Court for final approval. The Court held a fairness hearing on March 7, 2018. As discussed at that hearing, the motion for final approval of the settlement is granted; the only question remaining was the Plaintiff's motion for an incentive award and attorneys' fees. The incentive award is granted as proposed, and the attorneys' fees are granted in part and denied in part. See R. 144, Mot. Fees. Attorney's fees will be limited to one-third of the settlement fund, net of administrative costs and the incentive award.

         I. Background

         In April 2015, Vincent Leung (the named plaintiff in this case) bought two mirrors from the IKEA store in Schaumburg, Illinois. R. 157, Leung Dep. 20:2-5, 20:24-21:1. In a rush and with two small children in tow, Leung opted to have the mirrors delivered by IKEA's next-day delivery service. Leung Dep. 23:7-14. Leung's wife wrote down Leung's cell phone number on a form while he watched; Leung signed and initialed the form. Id. 25:24-26:18. The next day, Leung received an automated voice message and a text message notifying him that the delivery was imminent. Compl. ¶ 14. These messages came from Defendant XPO Logistics. Compl. ¶ 14. The mirrors were delivered without issue. Leung Dep. 32:5-11.

         After the delivery, Leung received another call from XPO Logistics. Compl. ¶ 15. This call used a pre-recorded or artificial voice, and asked Leung to complete a survey regarding the delivery service. Id.; see also R. 157, IKEA Call Script. Irked by the post-delivery call, Leung complained to a friend, who referred Leung to the Keogh Law firm. Leung Dep. 15:23-18:12. Keogh Law filed a lawsuit on behalf of Leung, and sought to certify a class of similarly situated consumers. Compl. The complaint alleged that XPO Logistics violated the Telephone Consumer Protection Act, 47 U.S.C. § 227, by making calls to cell phones “using [an] automatic telephone dialing system or an artificial or prerecorded voice” without express consent. See Compl. ¶ 33; 47 U.S.C. § 227(b)(1)(A).

         The parties engaged in extensive and, at times, intensely disputed discovery. R. 56, 76, 83, 113, 127, 132; see also R. 149, Mot. Final Approval at 5. They also engaged in three mediation sessions in front of, separately, two former federal judges (Judge Wayne Andersen and Judge James Holderman), both of Judicial Arbitration and Mediation Services, Inc. (better known as JAMS). Id. The mediation sessions involved detailed argument and briefing. Id. After the third mediation session, the parties were able to reach an agreement. Id.

         The proposed settlement agreement defines the settlement class as “the parties whose cellular telephone numbers are identified in the call data produced in this litigation … where XPO or its subsidiary placed a pre-recorded post-delivery survey call after May 1, 2011 relating to an IKEA delivery.” Mot. Final Approval Exh. 1, Settlement Agreement § 2.25. The Settlement Agreement requires XPO to create a non-reversionary settlement fund of $7, 000, 000. Settlement Agreement § 2.34. Class members who file valid claims will receive cash payments from the fund. Settlement Agreement § 5.1. The Settlement provides for a robust notice plan and a streamlined claim process. See Settlement Agreement §§ 10.1-10.2. Any funds that cannot be feasibly distributed to class members will be donated to a cy pres recipient, the National Consumer Law Center. Settlement Agreement § 12.3.

         Leung (through his counsel) also filed a motion for attorneys' fees, costs, and a service award. Mot. Fees. The motion seeks an incentive payment of $10, 000 to Leung. Id. at 1. Leung's counsel, Keogh Law, Ltd., requests attorneys' fees of $2, 333, 334 (equal to one-third of the total settlement fund), plus compensation of $52, 458.90 for counsel's out-of-pocket litigation costs. R. 144, Mot. Fees at 1; Mot Final Approval at 11. The fees, costs, and incentive award would be taken out of the settlement fund. Settlement Agreement § 2.34.

         II. Analysis

         A. Class Certification

         The first step in evaluating the settlement is to determine whether a class can be certified. See Fed. R. Civ. P. 23(e) (“The claims, issues, or defenses of a certified class may be settled, voluntarily dismissed, or compromised only with the court's approval.” (emphasis added)). To be certified, the class must meet the requirements of Federal Rule of Civil Procedure 23. Harriston v. Chi. Tribune Co., 992 F.2d 697, 703 (7th Cir. 1993). Under Rule 23(a), the class must meet the requirements of numerosity, commonality, typicality, and adequacy. Fed.R.Civ.P. 23(a). Additionally, the class must satisfy at least one of the conditions of Rule 23(b). Fed.R.Civ.P. 23(b); Arreola v. Godinez, 546 F.3d 788, 794 (7th Cir. 2008). In this case, the relevant Rule 23(b) requirement is that “the questions of law or fact common to class members” must “predominate over any questions affecting only individual members, and [ ] a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.” Fed.R.Civ.P. 23(b)(3). The Court will evaluate each requirement in turn.

         1. Ascertainability

         Implicit in Rule 23(a) is the requirement that the proposed class must be definite enough for the class to be ascertained. Alliance to End Repression v. Rochford, 565 F.2d 975, 977 (7th Cir. 1977); Oshana v. Coca-Cola Co., 472 F.3d 506, 513 (7th Cir. 2006). In general, this means that a class must be clearly defined by objective criteria. Mullins v. Direct Digital, LLC, 795 F.3d 654, 659-60 (7th Cir. 2015). Classes defined by vague or subjective criteria, or classes defined only in terms of success on the merits (so-called “fail-safe classes”), fail the ascertainability requirement. Id. The class definition in this case, however, does not suffer from any of those shortcomings. The class defined in the Settlement Agreement is “the parties whose cellular telephone numbers are identified in the call data produced in this litigation … where XPO or its subsidiary placed a pre-recorded post-delivery survey call after May 1, 2011 relating to an IKEA delivery.” Settlement Agreement § 2.25. This class definition articulates an identifiable class of individuals who have been harmed in a particular, concrete way. The proposed class as defined by the Settlement Agreement satisfies the ascertainability requirement.

         2. Numerosity

         Under Rule 23(a)(1), a class must be “so numerous that joinder of all members is impracticable.” Fed.R.Civ.P. 23(a)(1). Although there is no bright-line test for numerosity, courts have long commented that a class of forty or more is enough to satisfy Rule 23(a)(1). See, e.g., Swanson v. Am. Consumer Indus., Inc., 415 F.2d 1326, 1333 n.9 (7th Cir. 1969); Oplchenski v. Parfums Givenchy, Inc., 254 F.R.D. 489, 495 (N.D. Ill. 2008); Fauley v. Drug Depot, Inc., 2018 WL 587150, at *4 (N.D. Ill. Jan. 29, 2018). At last count, the class in this case had 311, 013 members, Mot. Final Approval at 1 n.1-enough to make joinder of all members obviously impracticable. The numerosity requirement is clearly satisfied.

         3. Commonality

         Rule 23(a)'s second requirement is that “there are questions of law or fact common to the class.” Fed.R.Civ.P. 23(a)(2). Commonality is satisfied if the class members' claims “depend upon a common contention.” Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350 (2011) (citations and quotation marks omitted). The common contention must be “of such a nature that it is capable of classwide resolution-which means that determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke.” Id. Commonality is satisfied in this case. All the class claims depend upon the common contention that XPO violated the TCPA by making an unsolicited, prerecorded survey call to the class members' cell phones following an IKEA delivery. Every one of the plaintiffs' claims rises and falls on the question of consent.

         The TCPA unambiguously prohibits prerecorded voice calls to cell phones without consent, see 47 U.S.C. § 227(b)(1)(A), but the question of “consent” is tricky and context-dependent. The Federal Communications Commission (which has statutory authority to interpret the TCPA) has cautioned that “persons who knowingly release their phone numbers have in effect given their invitation or permission to be called at the number which they have given, absent instructions to the contrary.” In re Rules & Regulations Implementing the Tel. Consumer Prot. Act of 1991, 7 F.C.C. Rcd. 8752, 8769 (Oct. 16, 1992). But consent to be called for one purpose is not necessarily consent to be called for any purpose. See, e.g., Blow v. Bijora, 855 F.3d 793, 805 (7th Cir. 2017) (agreeing that “[c]onsent for one purposes does not equate to consent for all purposes”); Van Patten v. Vertical Fitness Group, LLC, 847 F.3d 1037 (9th Cir. 2017) (holding that “transactional context matters in determining the scope of a consumer's consent to contact”); In the Matter of Rules & Regulations Implementing the Tel. Consumer Prot. Act of 1991, 27 F.C.C. Rcd. 1830, 1840 (Feb. 15, 2012). In this case, XPO Logistics would argue that the class members consented to the survey call when they agreed to give their phone numbers to facilitate delivery. Cf., e.g., In re GroupMe, Inc./Skype Communications S.A.R.L. Petition for Expedited Declaratory Ruling, 29 F.C.C. Rcd. 3442, 3443 (Mar. 27, 2014) (holding that consumers' consent to join a GroupMe text group constituted prior express consent to receive administrative texts related to the operation of that group). In response, Leung would argue that he consented to be called or texted only to the extent necessary to facilitate the IKEA delivery, and that any other calls exceeded the scope of that consent. If XPO prevailed on its consent argument, then each class member's claim would fail. Thus, all the class members' claims raise the same dispositive legal question, which satisfies the requirement of commonality.

         4. Typicality

         Next is the requirement that “the claims or defenses of the representative parties are typical of the claims or defenses of the class.” Fed.R.Civ.P. 23(a)(3). “A plaintiff's claim is typical if it arises from the same event or practice or course of conduct that gives rise to the claims of other class members and his or her claims are based on the same legal theory.” Keele v. Wexler, 149 F.3d 589, 595 (7th Cir. 1998) (quoting De La Fuente v. Stokely-Van Camp, Inc., 713 F.2d 225, 232 (7th Cir. 1983)). In this case, each plaintiff's claim arises from the same event (a post-delivery prerecorded survey call) and the same legal theory (that the prerecorded call violated the TCPA because it exceeded the scope of the consent to delivery-related calls). Leung's claim follows the simple pattern of events articulated in the class definition (a post-IKEA-delivery call), and does not raise issues that would cause his claim to succeed or fail on unique grounds, separate from the claims of the rest of the class. See CE Design Ltd. v. King Architectural Metals, Inc., 637 F.3d 721, 724 (7th Cir. 2011). In other words, Leung's claim is typical of the class claims.

         5. Adequacy

         Last up of the Rule 23(a) requirements is the rule that “the representative parties will fairly and adequately protect the interests of the class.” Fed.R.Civ.P. 23(a)(4). When evaluating adequacy of representation, courts consider “the adequacy of the named plaintiff's counsel, and the adequacy of representation provided in protecting the different, separate, and distinct interest of the absentee members.” Sec. of Labor v. Fitzsimmons, 805 F.2d 682, 697 (7th Cir. 1986) (en banc). As already discussed, Leung is an adequate representative, because his claim is basically identical to the other claims in the class, without complicating factual issues that would lead to “antagonistic or conflicting claims.” Retired Chi. Police Ass'n v. City of Chi., 7 F.3d 584, 598 (7th Cir. 1993) (quoting Rosario v. Livaditis, 963 F.2d 1013, 1018 (7th Cir. 1992). As for the adequacy of plaintiff's counsel, Keogh Law (headed by lead counsel Keith J. Keogh) has extensive experience litigating TCPA class actions. See R. 144, Keogh Decl. ¶¶ 12, 15-16. As would be expected of competent and experienced attorneys, Leung's lawyers have vigorously litigated this case, including engaging in motion practice and substantial discovery efforts. Leung and his counsel are adequate class representatives.

         6. Predominance and Superiority

         As a final hurdle before class certification, the plaintiffs must show that they fit into at least one of the categories outlined in Rule 23(b). The 23(b) category that plausibly applies here is that “questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.” Fed. R. Civ. Pro. 23(b)(3) (emphases added). The predominance requirement is similar to the commonality and typicality requirements, but “far more demanding.” Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 623-24 (1997). Predominance is established if “common questions represent a significant aspect of [a] case and ... can be resolved for all members of [a] class in a single adjudication.” Messner v. Northshore Univ. HealthSystem, 669 F.3d 802, 815 (quoting Wright & Miller, Federal Practice & Procedure § 1778 (3d ed. 2011)). The court should take a pragmatic view of the evidence and issues in the case, and “formulate some prediction as to how specific issues will play out in order to determine whether common or individual issues predominate in a given case.” Costello v. BeavEx, Inc., 810 F.3d 1045, 1059 (7th Cir. 2016) (quoting Waste Mgmt. Holdings, Inc. v. Mowbray, 208 F.3d 288, 298 (1st Cir. 2000)). “Courts determine whether issues of individualized consent defeat commonality and predominance in [ ] TCPA cases on a case-by-case basis after evaluating the specific evidence available to prove consent.” Physicians Healthsource, Inc. v. A-S Medication Sols., LLC, 318 F.R.D. 712, 725 (N.D. Ill. 2016).

         In this case, the predominance requirement is satisfied by the common question of law regarding the scope of the plaintiffs' consent to delivery-related calls. As discussed, there is no dispute that an unconsented-to call to a plaintiff's cellular phone using an automatic voice violates the TCPA. 47 U.S.C. § 227(b)(1)(A). But the question in this case is whether the plaintiffs' consent to receive calls related to their IKEA deliveries extended to a follow-up survey call about the delivery service. Of course, there might be some individual variation in the claims- perhaps some plaintiffs explicitly consented to a follow-up survey call-but Rule 23(b)(3) does not require that individual questions be absent. Messner, 669 F.3d at 815. It is enough that the common questions predominate, as they do here. See, e.g., Kolinek v. Walgreen Co., 311 F.R.D. 483, 492 (N.D. Ill. 2015) (holding that predominance was satisfied when there was a common question whether providing a cell phone number for identity verification purposes constitutes consent to receive prescription refill reminders); Toney v. Quality Resources, Inc., 2018 WL 844424, at *17 (N.D. Ill. Feb. 12, 2018) (predominance satisfied by common questions whether “(1) a privacy policy hyperlinked to a website constitutes a person's consent to receive telemarketing phone calls if a person orders a product on that website; and (2) providing one's cell phone number for questions about her order results in her consent to receive telemarketing calls unrelated to her order”). The same considerations also satisfy Rule 23(b)(3)'s superiority inquiry. Because the plaintiffs' claims all turn on the outcome of the same legal question, it makes sense to adjudicate the claims all at once, rather than having the hundreds of thousands of plaintiffs file individual cases.

         In sum, the requirements of Rule 23 are met, so the Court certifies ...

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