Some lawsuits fade quietly. Others go down like a leaky canoe in front of a judge holding a very sharp pencil. The proposed settlement in a Washington federal TCPA case fell into the second category.
In Kovanen v. Asset Realty LLC, a case in the U.S. District Court for the Western District of Washington, the parties tried to wrap up claims over allegedly unsolicited commercial text messages with a $700,000 settlement. Instead, the court said, in essence, “Not so fast.” Judge Lauren King denied preliminary approval, finding serious problems with the class definition, notice plan, payment structure, and even parts of the settlement paperwork itself.
That makes this ruling worth more than a passing glance. It shows how a TCPA class action can hit rough water even when the parties think they have a deal. It also offers a practical lesson for marketers, compliance teams, plaintiff lawyers, and anyone else playing in the modern text-message minefield. In other words, this was not just a rejected settlement. It was a judicial reminder that in Washington federal court, sloppy class-action engineering can sink an otherwise promising case.
What Happened in the Washington Federal Court Case?
The lawsuit centered on allegations that defendants connected to Asset Realty, doing business as Century 21 Northwest, and related real estate entities either initiated or substantially assisted the transmission of large volumes of unsolicited promotional text messages. According to the complaint and the court’s order, the messages were tied to a lead-generation platform allegedly used to market real estate services.
The plaintiff did not sue under just one law. He brought claims under the federal Telephone Consumer Protection Act, better known as the TCPA, as well as Washington’s Commercial Electronic Mail Act, or CEMA, and related consumer-protection theories. That matters because Washington gives text-message plaintiffs an extra state-law lane to drive in, and that lane can be expensive for defendants.
At first glance, the settlement may have looked like a clean exit ramp. The defendants would pay $700,000. A settlement administrator would notify the class. Claimants would receive pro rata cash payments. Everyone would go home, maybe grumble a little, and eventually stop refreshing PACER. But class-action settlements, especially before a class is formally certified, get a more skeptical judicial review. Courts do not just ask whether the parties want peace. They ask whether the peace deal is fair, workable, and truly protective of absent class members.
Here, the answer was no. Or, more precisely, “no, not like this.”
Why the Proposed TCPA Settlement Was Rejected
The class definition did not match the data
The biggest problem was a classic one: the class was defined one way, but the data identified people another way. The proposed settlement class included Washington residents who allegedly received the relevant text messages. But the expert analysis used to build the class list focused on phone numbers with Washington area codes.
And there is the iceberg. A Washington resident can absolutely have a non-Washington area code. Plenty of people move and keep their cell numbers for years. Someone can live in Tacoma while still carrying a California, Texas, or New York number like a digital souvenir. The court rightly noted that these people might fall within the settlement class but would not appear on the class list used for notice and claims.
That mismatch matters because class members can be bound by a settlement even if they never hear about it, provided the notice plan is legally sufficient. But if the plan is built on incomplete identification criteria, some class members could lose claims without receiving meaningful notice. Courts do not love that. Actually, courts hate that.
The notice plan was not reasonably calculated to reach everyone who would be bound
Once the court spotted the residency-versus-area-code problem, the notice issue became impossible to ignore. If the settlement class included Washington residents, but the notice machinery was really aimed at Washington-area-code numbers, the plan was too narrow. That is not a minor clerical hiccup. In class-action practice, notice is the oxygen of due process.
The judge essentially told the parties they had two options: narrow the class to match the data they could reliably identify, or redesign the settlement so the notice plan could actually reach the people whose claims would be released. Without one of those fixes, preliminary approval was not happening.
The expert data and class list raised reliability questions
The court also pressed on the quality of the underlying data. The expert had summarized hundreds of thousands of texting activities and concluded that tens of thousands of unique numbers were associated with Washington area codes and text-capable phones. But the court was not persuaded that this alone established an accurate, reliable, and comprehensive class list.
That distinction is huge in a TCPA class action settlement. A data set can be large and still be legally flimsy. If the list does not tell the court who the class members actually are, or how they can be reached, then the settlement starts looking like a map drawn in disappearing ink.
The payment structure was too fuzzy
The agreement said eligible claimants would be paid on a pro rata basis, but the court found that the proposal did not explain the mechanics well enough. Would people with multiple devices get more than one payment? Should class members who received more texts be treated the same as those who received fewer? Should people with stronger TCPA-related facts, such as numbers listed on the Do Not Call Registry, receive the same amount as everyone else?
Those are not academic questions. They go directly to whether the settlement treats class members equitably. In class-action land, “we’ll sort it out later” is not a payment methodology. It is a red flag wearing a trench coat.
The court also pointed out inconsistent estimates of what class members might actually receive. One part of the settlement materials suggested one payout range, another part suggested something else. When a court is already scrutinizing fairness, fuzzy math is a terrible wingman.
The settlement included an evidence-preservation problem
One of the more dramatic issues involved proposed changes to the defendants’ practices. The settlement contemplated the permanent shutdown of the lead-management platform and deletion of related online materials. That may sound tidy from a business perspective, but the court saw the litigation problem immediately.
If some potential class members opted out and later filed their own suits, relevant evidence could still matter. Courts expect litigants to preserve evidence once a dispute is reasonably foreseeable. So a settlement term that effectively blesses deletion of potentially relevant records is the legal equivalent of trying to vacuum the crime scene while the detectives are still in the driveway.
The paperwork itself had avoidable mistakes
Then came the kind of details that make judges rub their temples. The long-form notice reportedly said a state court had authorized the notice, even though this was federal court. It identified the wrong courtroom. Different forms allowed different numbers of phone numbers to be submitted. Instructions did not line up cleanly with the agreement. Release language needed tightening.
Any one of those issues might have been fixable. Together, they created an unmistakable theme: the settlement was not ready for primetime. And federal judges are not in the business of handing out participation trophies for half-baked class notices.
Why This Case Matters Beyond One Real Estate Texting Dispute
The ruling is important because it captures the modern reality of TCPA litigation. These cases are still very much alive, but they are getting more complicated. Plaintiffs still have meaningful tools. Defendants still have meaningful defenses. And courts are taking a harder look at both.
The TCPA itself remains a major source of exposure for businesses that use phone calls and text messages to market products or services. At the federal level, the statute restricts certain autodialed calls, prerecorded calls, and telemarketing practices absent the required consent. For telemarketing texts, consent is still the star of the show, and recent FCC rules have made that story even stricter by emphasizing one-to-one written consent for marketing robocalls and robotexts.
Washington adds another layer. Under CEMA, businesses in the state may not initiate or assist in sending commercial text messages to Washington residents without the kind of clear, affirmative consent the statute requires. Violations can also function as unfair or deceptive acts under Washington’s consumer-protection framework. So if a marketer assumes state law is just background wallpaper, this case offers a very expensive reminder that the wallpaper can suddenly become the wall.
Standing is another reason this decision matters. Over the past few years, many courts have continued to recognize that even a single unwanted text can be enough to support Article III standing in federal court. That means plaintiffs often can get through the courthouse door. But getting in the door is not the same thing as getting a settlement approved. Class action procedure is where many cases become less about broad outrage and more about meticulous execution.
And the legal backdrop keeps shifting. The Supreme Court’s decision in Facebook v. Duguid narrowed the definition of an automatic telephone dialing system, pushing some plaintiffs to lean harder on prerecorded-voice claims, Do Not Call theories, and state-law claims. More recently, new arguments have emerged over how much weight federal courts must give FCC interpretations in TCPA suits, and courts have also been split on whether certain Do Not Call provisions cleanly apply to text messages. Translation: the outer edges of the statute are getting more contested, not less.
That uncertainty makes settlement precision even more important. If the law is moving, the paperwork cannot be sloppy.
Lessons for Businesses Sending Marketing Texts
First, consent records need to be real, specific, and organized. Not vibes. Not assumptions. Not a dusty spreadsheet labeled “Leads_FINAL_FINAL2.” If your defense depends on proving who consented, when they consented, what they consented to, and for which seller, your records have to do that work.
Second, do not confuse phone data with residency data. The Washington federal court was crystal clear on this point. A state area code is not a magic wand that turns a phone list into a legally reliable class list. If your campaign targets state residents, your compliance and litigation strategy should be built around something stronger than area-code guesswork.
Third, vendors and lead generators deserve serious scrutiny. The FCC’s one-to-one consent rule has made it much riskier to treat broad website lead consent as a universal hall pass. If a comparison-shopping site or lead broker is feeding your SMS campaign, you need to know exactly what disclosures consumers saw and exactly which seller they agreed to hear from.
Fourth, evidence preservation is not optional just because a settlement is on the table. If there is a chance that some claims could survive or branch into opt-out litigation, destroying platforms, databases, or related records can create an entirely new category of pain.
Finally, good compliance procedures still matter. Washington federal courts have previously shown that strong Do Not Call compliance systems can help defendants defeat claims. Written procedures, trained staff, internal suppression lists, and real auditing are not glamorous, but they are much cheaper than learning TCPA doctrine by invoice.
Lessons for Plaintiffs and Class Counsel
This case also says something important to the plaintiffs’ side: judges are not going to paper over settlement design problems just because the overall number looks respectable. A class must be ascertainable enough for notice to work. The payment methodology must make sense. The release language must match the claims. The forms must be consistent. The math must behave.
That may sound obvious, but obvious things have a funny way of becoming invisible when everyone is tired, the mediator is optimistic, and the settlement draft has hit version twenty-three. In that setting, this ruling is a blunt but useful message: if you want preliminary approval, build the settlement like you expect a judge to read every page. Because one might.
What This Kind of TCPA Fight Feels Like in Real Life
For consumers, cases like this often begin with something that seems laughably small: one random text, then another, then another. Maybe it is a real estate pitch. Maybe it is a promotional blast from a company they never knowingly contacted. At first, it feels like garden-variety annoyance. Then the person realizes the messages keep coming, the opt-out does not seem to fix the problem, and the whole thing starts to feel like a stranger has a key to the front gate of their attention. That is one reason the TCPA still resonates. It is not just about telecommunications law. It is about people feeling that their phones have been turned into billboards without permission.
For businesses, the experience is often the mirror image. A marketing team may think it is running an ordinary lead campaign. The numbers look good, the click-through rate is healthy, and the vendor insists the consent language is “industry standard,” which is corporate for “please do not ask follow-up questions.” Then litigation arrives. Suddenly, everyone wants to know exactly where each phone number came from, whether consent was seller-specific, whether the texts were manual or automated, whether the number was on the Do Not Call Registry, and whether the recipient lived in the state at the relevant time. The campaign that felt modern and efficient starts to look like a compliance scavenger hunt designed by a very grumpy law professor.
For lawyers on both sides, these cases can become strangely technical and strangely human at the same time. One hour is spent arguing about Rule 23, due process, and statutory damages. The next is spent staring at screenshots, vendor contracts, text logs, and spreadsheets full of area codes, timestamps, and suppression data. Then comes settlement work, which sounds peaceful until everyone realizes that a class definition can collapse if one phrase is too broad, or a notice plan can fail if one assumption about phone ownership turns out to be wrong. It is a little like trying to build a suspension bridge out of legal drafting: impressive when done well, terrifying when one bolt is loose.
And for judges, the experience is often about protecting people who are not in the room. Named plaintiffs and defendants may both want the deal. But absent class members are the silent stakeholders. They are the ones who could lose claims without understanding the notice, without seeing the postcard, or without realizing that their out-of-state area code kept them off the settlement radar. That is why rulings like the one in Washington matter. They force everyone to slow down and remember that class actions are not merely deals between litigants. They are court-supervised resolutions that must hold together for people who never sat at counsel table.
So yes, a rejected settlement can look like a procedural headache. But it can also be something more constructive: a reality check. In the TCPA world, details are not decorative. They are the whole engine.
Conclusion
The headline may say a TCPA class action sunk in Washington federal court, but the deeper story is more useful than that. The court did not say unwanted marketing texts do not matter. It did not say class actions are dead. And it did not give defendants a free pass. What it did say was this: if you want to settle a texting case that releases the rights of a large group of people, your class definition, notice plan, data support, payment structure, and preservation obligations all have to line up.
That is a good lesson for everyone. For businesses, it is a warning that SMS marketing compliance cannot run on autopilot. For plaintiffs, it is a reminder that settlement mechanics matter as much as settlement dollars. And for anyone watching the broader TCPA landscape, it is proof that federal courts are still very much engaged, still skeptical, and still willing to send weak class-action proposals back to the drawing board.
In other words, the boat did not sink because the water was rough. It sank because the blueprint was not seaworthy.
Note: This article is for general informational purposes only and does not constitu:e legal advice.
