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New Bell Atlantic-Maryland Class Action Settlement Could Net Class Counsel $12.5 Million of $26 Million Class Recovery

TLPJ Will Continue to Challenge Settlement That First Gave Class Members Less Than $200,000 and Class Counsel $13 Million

Trial Lawyers for Public Justice (TLPJ) will continue to represent class members who object to the proposed settlement of the consumer late fee class action in Dotson v. Bell Atlantic-Maryland, Inc., now pending before the Circuit Court for Prince George’s County, Maryland. The revised settlement would allow the class counsel to collect up to $12.5 million in attorneys’ fees, plus expenses, from a $26 million class recovery fund. The original settlement in this case – which would have paid the class members less than $200,000 and class counsel $13 million – was rejected by the Court after TLPJ and others objected.

"Because we succeeded in killing the first outrageous deal, the amount actually being paid to Bell Atlantic customers has increased dramatically," said TLPJ Staff Attorney Michael Quirk. "But this revised settlement is still unacceptable. There is still no evidence that the company is paying what it should for charging its customers illegal late fees and the deal would still allow Bell Atlantic to pay class counsel an excessive sum -- more than it will likely pay the class members."

TLPJ first began representing objectors in Dotson in April 2003, when Bell Atlantic and class counsel asked the Court to approve the original proposed settlement. The class recovery was under $200,000, despite the parties’ claims that over $50 million was available to the class, because class members had to fill out and mail in claims forms to receive payments of only $6 or slightly more in relief. As a result of this reliance on a claims process, fewer than 18,000 of the estimated 2.5 million class members submitted claims. TLPJ and a team of lawyers that included Lead Counsel Kieron F. Quinn of Quinn, Gordon, & Wolf, Chtd. in Baltimore, Philip S. Friedman of Friedman Law Offices in Washington, D.C., and Philip O. Foard of Foard, Gisriel, O’Brien & Ward in Towson, Maryland, represented a group of 14 class members who objected to this settlement. In our objections to the first settlement, we argued that the settlement should be rejected because so few of the class members would receive any money, the entire class’s recovery would be dwarfed by the $13 million award of attorneys’ fees, and the amount of this fee award was never even disclosed to the class members in the class notice.

Our objections were successful. On November 13, 2003, Prince George’s County Circuit Court Judge Steven Platt issued an opinion embracing our arguments and throwing out the parties’ first settlement. The Court held that it could not approve a settlement "that includes an award of Attorneys’ Fees based on phantom numbers and calculations based thereon." Instead, the Court ordered that "the practical solution to this problem is to make sure the fee awarded is appropriate to the value actually received by the Class Members."

Now the parties are back seeking Court approval of a new settlement proposal. Under this new settlement, Bell Atlantic has agreed to pay $26 million towards class relief, class notice, and attorneys’ fees for class counsel. Out of this $26 million fund, class counsel are asking for a fee award of up to $12.5 million for themselves. The settling parties allege that the new settlement is worth a lot more than $26 million for two reasons. First, they argue that the settlement once again makes over $50 million available to the class through a claims process, even though the first settlement proved that only a minuscule number of claims will actually be filed and the new settlement only guarantees that the class members (and other Bell Atlantic customers) will receive between $12 and $13 million. Second, they argue that the settlement provides additional value to the class because Bell Atlantic, besides paying $26 million in cash, has also agreed not to take this money back from its customers by agreeing not to ask the Maryland Public Service Commission for authorization to recoup the settlement’s full value through a rate increase.

TLPJ has already objected to preliminary approval of this new settlement on behalf of our class member clients. We have explained that the settlement fails to guarantee adequate relief to the class and allows an excessive near-50% attorneys’ fee to class counsel. We have urged the Court to ignore the settlement’s supposed $52 million maximum value because that figure, as the Court found in rejecting the first proposed settlement, is a "phantom number." Finally, we urged the Court not to treat Bell Atlantic’s "no-recoupment agreement" as if it provides additional value to the class when it is no more than an agreement not to take away what the class is recovering in the first place. To see a copy of our objections, click here. We will continue to press these and related arguments when we file objections opposing final approval of this settlement by the Prince George’s County Circuit Court.

If you are a class member and you are opposed to this settlement, you can object to the settlement directly by following the instructions set out in Paragraph III (B) of the Notice of Class Certification and Settlement. You can also contact your own attorney, TLPJ, or any of the attorneys listed above for assistance in objecting to this proposed deal. 

For information, contact: Michael J. Quirk, 202-797-8600 ext. 241 or F. Paul Bland, Jr., 202-797-8600 ext. 223 (TLPJ's Counsel for Objecting Class Members). For additional information about objections to the proposed class action settlement, click here.