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$9 Million Settlement In Re APA Assessment Fee Litigation

Outcome: $9,020,000 Settlement

In re APA ASSESSMENT FEE LITIGATION, Case No.: 1:10-cv-01780 in the United States District Court for the District of Columbia

In October 2015, Tycko & Zavareei LLP won final approval of a settlement with the American Psychological Association (APA) for their practice of representing optional fees as mandatory. The APA is a 501(c)(3) nonprofit organization, which limits the amount of lobbying it can do. Thus, the group maintains a separate lobbying arm, the American Psychological Association Practice Organization (APAPO). When the APAPO was founded in 2001, the APA added a “Special Assessment” fee for the APAPO to their annual membership dues statement. Although the APA could not require members to contribute to the APAPO as a condition of membership, the APA wrote in the dues statement and on the APA website that the Special Assessment fee was mandatory. The Special Assessment was not a small fee either—in 2009, the Special Assessment was $137 per person, while normal dues were $238.

In 2010, some APA members discovered that the Special Assessment fee was actually voluntary and shared their findings in an APA email listserv. That year, TZ filed a lawsuit against the APA in D.C. district court, alleging that their practice of presenting the Special Assessment fee as mandatory allowed them to unjustly enrich themselves.

In 2013, the court dismissed the case, but TZ appealed. The appellate court ruled unanimously that plaintiffs’ legal claims were viable and reversed the district court’s decision to dismiss the case. In 2015, TZ negotiated a $9,020,000 settlement with the APA. APA members who paid the Special Assessment fee could receive a portion of the settlement fund proportional to the amount they paid in fees. With this settlement, TZ helped compensate APA members who were misled by the APA’s billing practices and continued to fight to protect people from unreasonable and deceptive fees. Judge John D. Bates validated TZ’s performance, noting, “[T]he Court has no concerns about the quality or vigor of class counsel, who have an extensive background in complex litigation and class actions, and have been appointed class counsel in prior cases.”

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