Camp Drug Store, Inc. v. Cochran Wholesale Pharm., Inc.

Camp Drug Store, Inc. v. Cochran Wholesale Pharm., Inc.

Opinion

 [*827]  RIPPLE, Circuit Judge. Camp Drug Store, Inc., filed this action, on its own behalf and as a representative of a proposed class, against Cochran Wholesale Pharmaceutical, Inc. ("Cochran"). Camp Drug Store alleged that Cochran had violated the Telephone Consumer Protection Act ("TCPA" or "the Act"), 47 U.S.C. § 227, by faxing unsolicited advertisements to the class members. The parties entered into early mediation and reached a settlement. The district court approved the settlement on behalf of the class, but reduced the proposed attorney fee and incentive awards.

Camp Drug Store appeals. It maintains that the settlement created a common fund against which the reasonableness of the attorney fee award should be assessed. [**2]  It also notes that the proposed incentive awards were commensurate with other awards to named plaintiffs for claims under the TCPA.

We cannot accept Camp Drug Store's characterization of the settlement as a common fund. Neither our case law, nor that of the Supreme Court, supports that characterization. Moreover, given the early stage at which this litigation was settled, the reductions in the attorney fee and incentive awards were not an abuse of discretion. We therefore affirm the district court's judgment.

BACKGROUND

Cochran, a small pharmaceutical distribution company in Monroe, Georgia, obtained a list of approximately 17,000 pharmacies. Using the list, it then sent faxes to prospective customers. It did not have permission from those to whom it sent faxes. Camp Drug Store was one of the recipients of the faxes and brought this class action under the TCPA, 47 U.S.C. § 227. Section 227(b)(1)(C) of Title 47 generally prohibits the sending of unsolicited advertisements by facsimile. Its complaint was filed on May 2, 2016.

Before an answer was filed, the parties moved to stay the litigation for ninety days to explore settlement. In mid-October, the parties engaged in mediation, which produced a proposed settlement. According [**3]  to the agreement, Cochran would "make up to $700,000.00 available to settle" the case, but was not required to create a separate account to hold the funds or to deposit them with the court.¹ Each class member  [*828]  could submit a claim for $125; if the dollar value of the claims exceeded the total available funds, each timely claim would be subject to a pro-rata reduction. Any funds that were not claimed by class members were to be kept by Cochran. The agreement further provided that each of the representative plaintiffs² was entitled to an incentive award of $15,000, and class counsel were to be paid "one third of the Settlement Fund ($233,333.33)."³

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