Settlement strategies in TCPA lawsuits - Plaintiff's perspective
- Peter Schneider
- May 27
- 7 min read
Our good friend Mr. Troutman recently posted a blog article with his commentary on a TCPA settlement exemplified in Katz v. Allied First Bank, 2025 WL 1489176 (N.D. Ill May 24, 20245). In this lawsuit, Mr. Katz sued Allied First Bank, the seller, and Consumer Nsight, the telemarketer/lead seller.
Consumer Nsight settled with Mr. Katz while Allied First Bank soldiered on against Mt. Katz, and then third party claimed Consumer Nsight anyway [it would have been a cross claim if Consumer Nsight had stayed a defendant].
Mr. Troutman's take was that Consumer Nsight was bone headed - yes they settled with Mr. Katz but they got stuck in a lawsuit anyway, with the case transferred to Florida or Arizona. Lets get a few things out of the way - Consumer Nsight is free of the lawsuit for now. The judge granted their motion to dismiss in Illinois for lack of jurisdiction and didn't transfer the case.
But what was Mr. Troutman's advice to Consumer Nsight? That they should have pressured Allied First Bank to settle with Mr. Katz at the same time, or barring that, settled with Allied First Bank themselves to not get drug back into the lawsuit. In Mr. Troutman's thinking, all Consumer Nsight accomplished with its settlement is bankrolling Mr. Katz, and by extension the bank's case against Consumer Nsight.
Putting on my neutral observer hat, I don't agree that Consumer Nsight must have been foolish to get out when the getting out was good. Allied First Bank can go after Consumer Nsight but they will have to file a new lawsuit in Florida or Arizona to do it [Mr. Troutman left out that Allied First Bank was trying to join an Iconic Results, LLC to the lawsuit and failed, presumably because of jurisdiction. Can Allied First Bank ever get Consumer Nsight and Iconic Results, LLC into the same lawsuit?], which the bank may choose to simply not do. Second, even if they do, Consumer Nsight probably (at least for now) minimized their exposure to discovery and attorney fees in a class action lawsuit.
Third, Mr. Troutman is assuming Allied First Bank hired competent counsel that either a) won't screw up a potential future case against Consumer Nsight, or b) didn't hire a law firm that will bleed Allied First Bank for way more money than Mr. Katz ever could. More on that in a minute.
But back to a). Telemarketing law is very complex and in my experience the bank may well have hired a general litigation law firm who could easily screw up what is essentially another plaintiff's case against Consumer Nsight. And keep in mind that depending on the wording in their indemnity agreement, Consumer Nsight might be completely off the hook if Mr. Katz loses against the bank, which is a distinct possibility, and might also be off the hook if Allied First Bank settles with Mr. Katz without an adverse court ruling saying Consumer Nsight illegally called Mr. Katz.
And on the topic of b). TCPA plaintiffs should keep in mind they aren't really limited to negotiating based on the the value of their claims, but also on the costs predatory defense lawyers charge TCPA defendants. The litigation in Volkswagen Group v. On-Line Administrators 2025 WL 1503120 (C.D. Cal May 27, 2025) is a very apt example. On-Line Administrators Inc. d/b/a Peak Performance Marketing Solutions got Volkswagen into a class-action TCPA lawsuit.
From approximately 2008 to 2016, VWGoA hired Peak to call Volkswagen and Audi owners to remind them to service their vehicles at Volkswagen and Audi dealerships. The calls were part of VWGoA’s Target and Retain After Sales Customers (“TRAC”) program. Peak performed under the contract and placed the calls without complaint from VWGoA and without any claim (even to this day) that Peak did anything wrong. Unfortunately, the calls requested by VWGoA got both VWGoA and Peak sued in a class action alleging violations of the Telephone Consumer Protection Act (the “TCPA”). Quoting from Peak Performance Marketing Solutions' brief.
The lawsuit was Brian Trenz v. On-Line Administrators, Inc. et al. Case No. 2-15-cv-08356-AB-KS and even though they won, Volkswagen wanted their costs back via an indemnity agreement.
The allegations in the Trenz Litigation were run-of-the-mill TCPA allegations, and were ultimately proven meritless. VWGoA and Peak were each defendants, faced with the same claims and legal issues, the same discovery, and the same litigation, but each were represented by different firms. VWGoA and Peak prevailed, entirely. Of the four named Plaintiffs, two dismissed their claims with prejudice, and the other two lost on summary judgment. One of the two that lost on summary judgment filed an appeal, and VWGoA settled with that plaintiff for a nominal sum. In this case, VWGoA seeks reimbursement for its settlement costs and costs of defense from Peak. Quoting from Peak Performance Marketing Solutions' brief.
Volkswagen's lawyers cost them $2.2 million dollars to win at summary judgment. Which Mr. Trenz appealed. While the appeal was pending Volkswagen settled with Mr. Trenz individually for $275,000 [$6,000 to Trenz and $269,000 to his attorneys], and came after Peak Performance Marketing Solutions for the whole thing. Peak Performance Marketing Solutions thought $1.1 million was more reasonable for the attorney fees and the hired an expert witness to prove it.
after reviewing the records relating to the Trenz Litigation, Mr. Pierce opines that, of the more than $2.2 million billed by VWGoA’s attorneys in the underlying litigation, at least $1.05 million was unreasonable. This conclusion is not surprising. As detailed in Mr. Pierce’s report and the exhibits thereto, VWGoA employed two separate law firms in the Trenz Litigation, and those two firms, combined, staffed the matter with 29 timekeepers. The staffing was also top heavy—there were at least 11 partners to just five associates. And the number of hours was extraordinarily high—the two firms, together, billed 4,720 hours to the matter. Many of those entries were redacted, were vague, or were block billed.
According to Peak Performance Marketing Solutions, Volkswagen got grifted by their TCPA defense attorneys.
VWGoA and Peak were sued for the same claims based on the same set of facts; they each engaged in the same or similar discovery and depositions; and they each filed the same or similar pleadings . . . Peak’s firm staffed the matter with just 15 total time keepers—about half the number of time keepers as VWGoA’s attorneys. Peak’s firm also staffed the matter more appropriately, with just two partners and the rest either associates or paralegals. And, overall, Peak’s attorneys billed just 1,823 hours to the matter. The differences are astounding: VWGoA employed twice the number of firms, who staffed the matter with about twice the number of timekeepers, all of whom billed, in the aggregate, about 2.5 times more hours, ultimately resulting in fees that were about twice as much.
Peak Performance Marketing Solutions wasn't trying to get out of a judgement entirely, they just didn't want to pay for the grifting and they hoped the court would see things their way. That was misplaced.
The Court finds that the time and labor expended by Volkswagen’s attorneys was largely reasonable. The Court recognizes that the briefing completed in the Trenz action was significant, including two motions to dismiss, two motions for summary judgment, a Rule 23(f) petition regarding the class certification ruling, a motion to certify immediate appeal regarding the Court’s denial of summary judgment, class certification and decertification briefing, and supplemental briefing on class decertification. In addition to briefing, Volkswagen’s attorneys engaged in discovery and successful settlement negotiations.
In an amusing juxtaposition of his take on the Katz lawsuit, in the Volkswagen matter Mr. Troutman speculated that the Peak Performance defendants will now either negotiate the settlement down or declare bankruptcy, basically leaving Volkswagen holding the bag.
Given how Volkswagen turned out, isn't Consumer Nsight best off being out of the lawsuit now, knowing that Allied First Bank probably won't try to drag them into a new one unless and until Allied First Bank loses at summary judgment or trial, and that Allied First Bank will be under mounting pressure to simply settle with Mr. Katz itself versus run up a huge legal bill and risk a large judgment in the hope the members who own and operate Consumer Nsight don't just walk away from it and start Consumer Nsight II, while laughing at Allied First Bank's attempts to collect from Consumer Nsight I?
Mr. Troutman loves it when TCPA plaintiffs can't collect from an assetless LLC, and in my experience these lead generator/telemarketers tend to be asset light companies that won't sustain a large financial judgment no matter what indemnity agreement they signed. Mr. Troutman might not laugh so hard when a common telemarketing business operation harms one of his cherished sellers!
My thoughts are, Mr. Katz and Consumer Nsight came out winners. Mr. Katz presumably got cash, and Consumer Nsight minimized its financial exposure and lived to fight another day. Allied First Bank is taking a huge roll of the dice - they are slowly sinking in quicksand and their only way to get made whole might be losing against Mr. Katz, then winning a lawsuit against Consumer Nsight, and then actually collecting from Consumer Nsight. No offense to Consumer Nsight but their website doesn't give the impression they have any substantial assets.
At the end of the day, what does this mean for Joe Blow TCPA plaintiff? First, let me start out by saying I don't believe in bringing claims unless a TCPA defendant started it with an unwanted phone call. But for those that do, for a lot of defendants, the big bad wolf isn't the TCPA's statutory damages, but their own predatory lawyers. Volkswagen and Peak Performance could have paid Trenz $275,000 at the start and kept roughly 3 million dollars in their pockets. TCPA plaintiffs with strong cases are doing TCPA defendants a favor by accepting full statutory damages, plus something more for the hassle of collecting the damages, and still leaving the TCPA defendant much better off than if they pursued litigation.
Do you have a question or a telemarketing, debt collection, or bankruptcy case that would make a great blog article? We might even review your pro-se complaint or motion in a blog post. Email peter@nwdebtresolution.com and/or nathen@nwdebtresolution.com and we may answer it for everyone!
Are telemarketers harassing you in Washington, Oregon, or Montana? My Washington State TCPA plaintiff law practice can help, just give us a call at 206-800-6000 or email peter@nwdebtresolution.com.
The thoughts, opinions and musings of this blog are those of Peter Schneider, a consumer advocate and Washington State plaintiff's TCPA attorney at Northwest Debt Resolution, LLC. They are just that, his thoughts, opinions and musings and should be treated as such. They are not legal advice. If you are looking to file a lawsuit for TCPA violations and unwanted calls please contact me for a consultation.
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