United States: Gas And Electric Utility Company Settles TCPA Class Action For $1.1 Million

On November 10, 2016, the United States District Court for the Southern District of New York granted preliminary approval of a $1.1 million Telephone Consumer Protection Act (TCPA) class action settlement against Alpha Gas and Electric, LLC ("Alpha Gas"). The opinion is the latest in a string of recent TCPA settlements affecting a wide range of industries.

I.  Background

On July 8, 2015, the named Plaintiff, Stewart Abramson, filed his class action Complaint against Alpha Gas. According to the Complaint, Alpha Gas provides gas and electrical services for both residential and commercial customers in New York, New Jersey, Pennsylvania and Ohio. Alpha Gas allegedly uses telemarketing to obtain new clients and supposedly placed a telemarketing call to Plaintiff's cell phone. Plaintiff claims that when he answered the call, there was no one on the other end of the line. He "said hello three times before hearing a distinctive 'click' and a telemarketing representative answered his greeting." Based on these facts, Plaintiff claimed that Alpha Gas used an automatic telephone dialing system ("ATDS") to place the telemarketing call without Plaintiff's prior express consent, in violation of the TCPA.

Plaintiff sought to certify a nationwide class of all persons "who, within four years prior to the filing of this action, through the date of certification, Defendant or some person on Defendant's behalf, called using an automated telephone dialing system to phone numbers that are assigned to a cellular telephone service." According to Plaintiff's expert witness who analyzed Alpha Gas's call logs, the electric company allegedly made or caused to be made 452,124 telemarketing calls to 251,504 unique cellular telephone numbers.

The parties engaged in litigation for over a year. Alpha Gas made an Offer of Judgment to Plaintiff, which was rejected. Alpha Gas then petitioned the Court for a stay pending the Supreme Court's decisions in Spokeo and Campbell-Ewald, which was granted. The parties subsequently agreed to continue the stay after the issuance of the Supreme Court's decisions in an effort to settle the case. On August 8, 2016, the parties participated in a full-day mediation and reached an agreement on the material terms of a class settlement.

II. Class Action Settlement

The settlement class consists of:

All individuals and entities who at any time subscribed to, used, regularly placed or received calls on or from or owned any of the phone numbers that are listed and/or contained in the Class List, who, from July 8, 2011 through the date of class certification, [Defendant] called using an automated telephone dialing system or prerecorded voice, or who were listed on the Do Not Call list or otherwise did not consent to the receipt of such calls, or who otherwise have claims against the Released Parties arising under the TCPA or similar federal, state or local laws governing such matters, including without limitation the claims alleged in the Action, including calls placed to cell phones without the recipients' consent.

The settlement provides for a $1.1 million common fund that will be divided among claimants who submit valid claims. Class counsel intends to apply, subject to the approval of the Court, for a fee award of up to one-third of the common fund and for an incentive award of $10,000 for the named plaintiff. Finally, the settlement agreement provides that Alpha Gas will retain counsel to advise it regarding its future telemarketing compliance with the TCPA and related laws. A final fairness hearing is scheduled for April 2017.

III. Conclusion

All industries, ranging from motor coach leasing companies to debt collectors and gas and electric companies, are facing high-priced TCPA class action settlements and exposure. Companies should take notice of the TCPA's requirements and ensure compliance before becoming the next target of the plaintiffs' bar.

Troutman Sanders has a team of seasoned TCPA litigation and compliance lawyers that regularly advise companies on strategies to comply with the TCPA. Troutman Sanders' vast experience in TCPA-related obligations and compliance helps clients better identify compliance-related issues before they become problematic.

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