Decohen v. Abbasi, LLC, 299 F.R.D. 469

Background

Plaintiff Philip Decohen bought a used car financed by a retail installment contract that included a GAP (Guaranteed Asset Protection) addendum; Beacon serviced the GAP and Capital One held the loan.
After a total loss, Decohen’s insurer paid less than Capital One’s remaining balance because the GAP addendum used retail car guides (NADA/Kelley) and defined coverage in a way that sometimes left a remaining loan balance.
Decohen sued (state court, removed) alleging violations of Maryland CLEC provisions, MCPA, RISA, breach of contract, and unjust enrichment on behalf of a Maryland class; initial dismissal was vacated by the Fourth Circuit (Decohen v. Capital One).
Parties negotiated a settlement for up to ~2,000 class members: Capital One agreed to cancel outstanding balances for class members, report accounts as “paid as agreed,” and pay $3,050,000 to a Settlement Fund; benefits would be distributed automatically and unclaimed funds go to cy pres recipients.
The district court preliminarily approved notice and, after no objections or opt-outs, held a fairness hearing and granted final approval of the settlement, certified the settlement class, awarded one-third of the fund to counsel, $5,504.09 in costs, a $10,000 incentive to Decohen, and approved the cy pres distribution.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Class certification for settlement under Rule 23(b)(3)	Class members share common legal theory: GAP forms using retail guides violate Maryland law by not canceling full debt; numerosity, typicality, adequacy met	Capital One reserved its defenses, did not concede certifiability for trial	Court certified the settlement class under Rules 23(a) and 23(b)(3) for settlement purposes
Procedural fairness of notice and settlement process	Notice was mailed to all identified class members and supplemented; fairness hearing provided	No opposition presented	Notice was adequate; no objections; procedural fairness satisfied
Substantive fairness and adequacy of settlement	Settlement provides substantial monetary and non-monetary relief, automatic distribution, and cancellation of balances; litigation risks and costs warranted settlement	Capital One maintained lack of liability and reserved defenses; contested issues remained for trial	Court found settlement fair, reasonable, and adequate after considering Jiffy Lube/MicroStrategy factors
Attorney’s fees and costs	Counsel requested one-third of the common fund plus $5,504.09 costs; argued results, risk, and experience justify fee	Defendant agreed not to oppose up to one-third but reserved litigation positions otherwise	Court awarded one-third of the fund to class counsel; lodestar cross-check (3.9 multiplier) supported reasonableness; costs awarded
Named plaintiff incentive and cy pres	Decohen materially participated and justified $10,000 incentive; unclaimed funds to consumer-advocacy cy pres	No opposition	Court approved $10,000 incentive and cy pres split among three organizations

Key Cases Cited

Amchem Products, Inc. v. Windsor, 521 U.S. 591 (1997) (heightened scrutiny for settlement-only class certification)
Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011) (commonality principle for class certification)
Jiffy Lube Sec. Litig. v. Jiffy Lube Int’l, Inc., 927 F.2d 155 (4th Cir.) (standards for assessing settlement fairness and required procedural protections)
Gunnells v. Healthplan Servs., Inc., 348 F.3d 417 (4th Cir. 2003) (predominance and individualized damages in Rule 23(b)(3) analysis)
Decohen v. Capital One, N.A., 703 F.3d 216 (4th Cir. 2012) (vacating dismissal and holding CLEC provisions not preempted by National Bank Act)
In re MicroStrategy, Inc. Sec. Litig., 150 F. Supp. 2d 896 (E.D. Va. 2001) (bifurcated fairness analysis for settlement approval)
In re The Mills Corp. Sec. Litig., 265 F. R. D. 246 (E.D. Va. 2009) (factors for percentage-of-recovery fee awards)