Court of Appeal Affirms Multi-Million Settlement Despite Vigorous Objections

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On June 28, 2010, in the unpublished opinion Cellphone Fee Termination Cases, A124038 (June 28, 2010), the Court of Appeal, First District, affirmed the trial court’s approval of a nationwide class action settlement over the objections of several class members. Although it is not published, the Cellphone Fee case provides guidance for litigants seeking to secure approval of class-wide settlements. It also suggests effective litigation strategy that will help class action parties “win” the settlement against asserted objections.

The Cellphone Fee case focused on early termination fees (“ETFs”) assessed by Verizon Wireless to its customers. For the relevant time period, the ETFs were $175 and were not prorated during the duration of the contract. Cellphone Fee at 2. The plaintiffs claimed that the ETFs violated consumer protection statutes and were unauthorized penalties under Civil Code section 1671. After the plaintiffs rested their case during trial, a settlement was reached that applied to a nationwide class of all Verizon customers.

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