Court Urged to Strike Down Second Proposed
Bell Atlantic-Maryland Class Action Settlement

Trial Lawyers for Public Justice (TLPJ) has urged the Circuit Court for Prince George’s County, Maryland to strike down the second proposed settlement in Dotson v. Bell Atlantic-Maryland, Inc., a consumer late fee class action. This new settlement would allow the attorneys for the class to collect $12.5 million in fees out of a $26 million settlement fund, while the plaintiff class would receive an identical $12.5 million in relief. The objections were filed on October 14, 2004, less than a year after TLPJ and its co-counsel’s objections defeated the previous proposed settlement of this case – which would have paid under $200,000 to the class and $13 million to class counsel.

"Since we brought down the first outrageous settlement, the amount actually being paid to customers has increased dramatically," said TLPJ Power-Cotchett Attorney Michael J. Quirk, who is briefing and arguing TLPJ’s objections. "But the new agreement remains unacceptable because it could still sell the class members short by shifting almost half the money to attorneys’ fees."

TLPJ began representing objectors opposing the first Dotson settlement in April 2003. Despite the parties’ claims that over $50 million was available to the class under that settlement, the actual class recovery would have been less than $200,000 because class members had to submit claims forms for a mere $6 in relief. Fewer than 18,000 out of approximately 2.5 million class members filed claims. TLPJ argued that the court should reject that settlement because so few class members would be paid, the $13 million fee award would dwarf the class recovery, and the value of this fee award was never disclosed in the class notice.

On November 12, 2003, the court embraced TLPJ’s arguments and threw out the first settlement, finding that it "include[d] 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."

The parties now seek approval of their new agreement, under which Bell Atlantic agrees to pay $26 million towards class relief, notice, and attorneys’ fees. Class counsel are still seeking fees of $12.5 million, arguing that the settlement fund is worth more than $26 million for two reasons. First, they again claim that the settlement makes over $50 million available to the class through a claims process, even though history shows that the number of claims filed will be miniscule. Second, they contend that the settlement provides additional value to the class because Bell Atlantic, besides paying $26 million in cash, also agrees not to take this money back from customers, which it claims it could do by asking the Maryland Public Service Commission for a rate increase equal to the full value of the settlement.

TLPJ’s objections insist that the new settlement is worth no more than $26 million because the "no-recoupment" argument counts the same dollars twice without adding value to the settlement fund. In light of the settlement’s actual value, TLPJ argues that $12.5 million in class relief, where there has been no discovery on damages, is not adequate and that an identical $12.5 million attorneys’ fee award is excessive in relation to the class relief.

TLPJ’s briefs objecting to the two settlements in Dotson v. Bell Atlantic, filed as part of TLPJ’s Class Action Abuse Prevention Project, are available at www.publicjustice.net.

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Trial Lawyers for Public Justice is the only national public interest law firm dedicated to using trial lawyers’ skills and resources to advance the public good. Founded in 1982, TLPJ utilizes a nationwide network of more than 3,000 outstanding trial lawyers to pursue precedent-setting and socially significant litigation. It has a wide-ranging litigation docket in the areas of consumer rights, environmental protection, toxic torts, worker safety, civil rights and liberties, and access to the courts. TLPJ is the principal project of The TLPJ Foundation, a not-for-profit membership organization. It has offices in Washington, DC, and Oakland, CA. TLPJ’s State Coordinator in Maryland is Gerald I. Holtz of Rockville, MD, tel. 301-610-0777.