Domonoske v. Bank of America, N.A.
790 F. Supp. 2d 466
W.D. Va.2011Background
- Consolidated FCRA class actions against Bank of America for allegedly failing to provide credit score disclosures “as soon as reasonably practicable.”
- Settlement reached after mediation; two subclasses defined by processing system (ACAPS vs Legacy) and dates.
- Common fund of $9.95 million; proposed fees up to 25% of fund; incentive awards of $5,000 to each class representative; cy pres provision to Center for Responsible Lending if funds remain.
- Notice program via Rust Consulting, with a 13% claim filing rate and 0.04% opt-out rate; 59 objections before fairness hearing.
- Court preliminarily approved a settlement, then conducted final approval hearing and granted fees and costs, class certification, and dismissal with prejudice.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the settlement is fair and adequate under Rule 23(e) | Settlement procedures and structure favor class | Settlement is fair, reasonable, non-collusive | Settlement approved as fair and adequate |
| Whether notice to the class complied with due process and Rule 23(c)(2)(B) | Notice provided sufficient information and means to opt out | Notice adequate and reasonably calculated | Notice deemed reasonable and compliant with due process |
| Whether attorney's fees are reasonable under the common fund | Fees should be substantial given results | Fees should reflect both value and effort | Fees awarded at 18% of the fund ($1,791,000) with lodestar cross-check |
| Whether costs and incentive awards are reasonable | Costs properly reimbursable; incentives deserved | Costs appropriate; incentives justified | Costs approved ($29,659.24); $5,000 incentive awards to each named plaintiff |
| Whether class certification and scope are proper | Subclass definitions appropriately target covered disclosures | Definitions ensure proper class and avoid overbreadth | Class certified for settlement purposes; defined ACAPS and Legacy subclasses |
Key Cases Cited
- Phillips Petroleum Co. v. Shutts, 472 U.S. 797 (U.S. 1985) (due process notice standard for class actions)
- Jiffy Lube Sec. Litig., 927 F.2d 155 (4th Cir. 1991) (guides fairness analysis factors for class settlements)
- The Mills Corp. Sec. Lit., 265 F.R.D. 246 (E.D. Va. 2009) (factors for fair/adequate settlement; discovery and arm's-length negotiations)
- In re Cendant Corp. PRIDES Litig., 243 F.3d 722 (3d Cir. 2001) (seven factors for calculating fees under the percentage method)
- The Kay Co. v. Equitable Prod. Co., 749 F. Supp. 2d 455 (S.D. W. Va. 2010) (supports percentage-of-fund and fee-structure analysis)
- Stillmock v. Weis Mkts., Inc., 385 Fed. Appx. 267 (4th Cir. 2010) (discusses fee approvals in consumer class actions)
- Vizcaino v. Microsoft Corp., 290 F.3d 1043 (9th Cir. 2002) (guidance on lodestar multipliers and fee awards)