Gehrich v. Chase Bank USA, N.A.
316 F.R.D. 215
N.D. Ill.2016Background
- Gehrich filed a July 2012 TCPA class action against Chase Bank.
- Parties settled discussions began by April 2013 and preliminarily approved a settlement in August 2014.
- Settlement class defined as 32,297,356 members with two subclasses: Alert Call and Collection Call.
- Chase paid $34 million into a non-reversionary settlement fund with allocations for claims, cy pres, administration, incentive awards, and fees.
- Notice reached about 80% of known members via mail, email, and magazines; 225 opted out and 18 objected chiefly on fees and cy pres.
- Final certification and incentive awards granted; final approval and fee awards granted in part, with settlement modified to adjust cy pres and distributions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the settlement class satisfies Rule 23(a) and 23(b)(3). | Gehrich argues commonality, typicality, numerosity, and predominance. | Chase contends class definitions and manageability are acceptable for settlement-only class. | Yes; class certification satisfied. |
| Whether the settlement is fair, reasonable, and adequate under Rule 23(e). | Plaintiffs contend benefits, cy pres, and fees are reasonable given risks and recovery. | Chase argues the settlement yields substantial value and peace for defendants. | Settlement approved in part; fair, reasonable, and adequate after adjustments. |
| Whether cy pres distributions are appropriate and properly allocated. | Cy pres should aid the class or be limited to reasonable use. | Cy pres allocations were appropriate to handle unclaimable sub-claims. | Cy pres awards adjusted: CFA from $1,000,000 reduced to $50,000; residual cy pres directed to EFF. |
| What fee should Class Counsel receive from the common fund? | Fees should reflect market rate and risk, using a sliding-scale approach. | Request aligns with market practices and is within reasonable bounds. | Fees awarded using Synthroid II sliding-scale: $7,257,914.10 (21.35% of fund). |
| Whether incentive awards to named Plaintiffs are appropriate. | Incentives justified to compensate participation. | Incentives are excessive if not warranted. | Five $1,500 incentive awards approved. |
Key Cases Cited
- Chi. Teachers Union, Local No. 1. v. Bd of Educ. of City of Chi, 797 F.3d 426 (7th Cir.2015) (outline of Rule 23(d) structure and class-certification standards)
- Amchem Prods., Inc. v. Windsor, 521 U.S. 591 (U.S. 1997) (settlement-only class actions require heightened protection for absent members)
- Smith v. Sprint Commc’ns Co., L.P., 387 F.3d 612 (7th Cir.2004) (settlement-only class actions context guidance on protections for absentees)
- Redman v. RadioShack Corp., 768 F.3d 622 (7th Cir.2014) (collusion concerns and fee considerations in settlement)
- Eubank v. Pella Corp., 753 F.3d 718 (7th Cir.2014) (fiduciary duties and class counsel adequacy in settlements)
- Pearson v. NBTY, Inc., 772 F.3d 778 (7th Cir.2014) (guidance on evaluating fees and settlements in class actions)
- In re Synthroid Mktg. Litig., 264 F.3d 712 (7th Cir.2001) (sliding-scale attorney fee structure for large settlements)
- In re Capital One Tel. Consumer Prot. Act Litig., 80 F.Supp.3d 781 (N.D.Ill.2015) (capital-one TCPA settlements; fee and settlement considerations)
- Santana v. Capital One, N/A () ((placeholder - not cited in opinion))