Madison - St. Clair Record

Saturday, August 17, 2019

Judge denies class motion in unsolicited-fax suit against Sterling Management Systems

By Mike Helenthal | May 30, 2017

BENTON — A motion for the final approval of a class action suit filed against Sterling Management Systems for violating the Telephone Consumer Protection Act has been denied by an Illinois federal court judge.

The decision was rendered in U.S. District Court for the Southern District of Illinois on May 25 following arguments at a May 10 final fairness hearing.

The suit, filed by Dr. Robert Meinders on behalf of nearly 14,000 people, claims that Sterling sent unsolicited promotions by fax between 2010 and 2014.

Under a pretrial agreement, Sterling had agreed to make nearly $700,000 available for settlement of the case, which, after attorneys' fees of about $231,000, would have given class members about $50 apiece. The rest of the settlement, about $15,000, would have gone to Meinders as an “incentive award.”

But very few of the proposed class members—fewer than 1,200—submitted a claim, the order states. With the relatively few class members joining the suit, the class payout would have been about $58,000, while attorneys would have collected more than $231,000.

“Class Counsel would receive almost four times the total amount to be paid out to the class,” the Judge Staci Yandle noted in the decision.

Though the case that the faxes were sent without users’ consent was “strong” and survived initial class certification, the judge said the arrangement didn’t benefit the class and denied final approval for the class action.

The judge cited legal precedent to support the ruling.

“As the Seventh Court has repeatedly observed,” the Yandle wrote, “the very structure of class actions ‘gives action lawyers an incentive to negotiate settlements that enrich themselves but give scant reward to class members, while at the same time the burden of responding to class plaintiffs’ discovery demands gives defendants an incentive to agree to early settlement that may treat the class action lawyers better than the class.'"

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U.S. District Court for the Southern District of Illinois