Monitronics To Pay $28M To End TCPA Robocall MDL

Law360, New York (September 1, 2017, 4:05 PM EDT) — Monitronics International Inc. told a West Virginia federal court on Thursday that it has agreed to pay $28 million to settle multidistrict litigation accusing the company of violating the Telephone Consumer Protection Act by autodialing consumers to peddle home security devices.

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Monitronics, a security alarm monitoring company, and several alarm manufacturers were accused of violating the TCPA by using automated telephone dialing systems and calling numbers listed on the Do Not Call Registry to plug products from Monitronics and Honeywell. Consumers said that the company was vicariously liable for calls placed by its authorized dealers and their subdealers and vendors.

If approved by the court, the settlement would release Monitronics from all claims related to telemarketing calls, though not to those related to debt collection calls. The settlement does not apply to the other defendants in the litigation, including Alliance Security Inc., UTC Fire & Security Inc., Honeywell or, according to court documents.

The proposed settlement, which was factored on the basis that Monitronics’ insurer disputed whether its policy covered TCPA claims, includes a $13.18 million fund to pay cash awards to the settlement class, $9.33 million for attorneys’ fees and $4.77 million in costs associated with administering the agreement. The remainder includes payouts to the lead plaintiffs and other fees. 

“Plaintiffs steadfastly advocated for substantial settlement relief, but at the same time were pragmatic about Monitronics’ ability to pay a large judgment in excess of insurance proceeds,” the proposed settlement states. “Plaintiffs also were well aware of the risks they faced if they continued to litigate, particularly the risk that they would lose on summary judgment.”

Attorneys for the consumers estimate they have contact information for roughly half of the 7.8 million individuals who received calls. Each class member is expected to earn $12-$25 each, according to the terms of the settlement. While the figure appears low, Monitronics argued that the amount was reasonable when weighed against the costs and fees associated with any individual class member trying to stake it out on their own.

Diana Mey sued Monitronics and Honeywell in West Virginia state court in 2011, and the suit was removed to federal court later that year and eventually transferred into multidistrict litigation along with several others in 2013. The suit has since grown to include more than 30 actions, according to court documents.

The company began negotiations in December 2016, although the parties could not come to terms at the time. After the court granted summary judgment in favor of UTC and Honeywell in January, negotiations began in earnest, and the parties resumed mediation in June. Throughout the negotiations, Monitronics insurers claimed that various policy provisions barred coverage, policies scrutinized by consumers. Consumers challenged Honeywell and UTC’s quick win with the Fourth Circuit in February, according to court documents.

The proposed settlement class consists of consumers who, starting in May 2007 and going to the date when the settlement is approved, received a telemarketing call from Monitronics or an affiliate on a number registered on the national do not call list. As the court had dismissed claims against two of the companies in the suit, Monitronics said the settlement was fair given the risks consumers faced taking the case any further.

Counsel and representatives for the parties did not immediately return requests for comment Friday.

Monitronics is represented by Jeffrey A. Holmstrand of Grove Holmstrand & Delk PLLC, Benjamen Dyer and Margaret Carlson of Culp & Dyer LLP and Meryl C. Maneker of Wilson Turner Kosmo LLP.

The consumers are represented by Jonathan R. Marshall and John W. Barrett of Bailey & Glasser LLP, and Beth E. Terrell and Mary B. Reiten of Terrell Marshall Law Group PLLC.

The case is Monitronics International Inc., Telephone Consumer Protection Act Litigation, case number 1:13-md-02493, in the U.S. District Court for the Northern District of West Virginia.

— Additional reporting by Stephen Trader. Editing by Emily Kokoll.. Opinions expressed are the author’s and do not necessarily represent the position of The Gallant Goose & Friends.

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