Kenneth Njema v. Wells Fargo Bank, N.A., 847 F.3d 934

Background

Plaintiffs filed a class action in 2008 against Wells Fargo alleging, among other claims, that Wells Fargo automatically ordered and charged fees for drive-by property inspections when borrowers fell behind on mortgages.
In 2015 the parties reached a settlement: Wells Fargo to pay $25,750,000 in exchange for dismissal and a broad release of claims “based upon, arising out of, or relating to” property inspection fees and related practices; the district court preliminarily approved the settlement and enjoined class members from prosecuting Released Claims.
Separately, in 2013 Kenneth Njema sued Wells Fargo in Minnesota asserting an individual trespass claim (agents allegedly entered his property and changed locks); his trespass claim survived summary judgment and a trial was scheduled for December 2015.
After receiving class notice, Njema sought to transfer or join his trespass claim to the class action (via JPML, a district transfer motion, Rule 23 subclass certification, and Rule 19 relief); the MDL/JPML filing acceptance was clerical and the Minnesota court declined to stay or transfer his case; the Minnesota action was later dismissed for failure to prosecute.
The district court denied Njema’s motion to certify trespass as a related subclass under Rule 23 (no common questions of law or fact), held a fairness hearing, overruled objections, and granted final approval of the settlement (including attorneys’ fees and $10,000 incentive awards to named plaintiffs).
Njema appealed the denial of joinder/certification and the settlement approval; the Eighth Circuit affirmed, concluding the district court did not abuse its discretion.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
1. Whether trespass claim could be certified as a related Rule 23 subclass	Njema: trespass is sufficiently related and common questions exist to add a trespass subclass and name himself representative	Wells Fargo: trespass involves different injury (physical entry) than the class claims (inspection fees); no commonality	Denied — no commonality under Rule 23(a)(2); trespass and fee claims raise different injuries/questions
2. Whether settlement was fair, reasonable, adequate under Van Horn factors	Njema: settlement undervalues claims; court misapplied Van Horn and understated plaintiffs’ likelihood of success	Wells Fargo: settlement fund and Van Horn analysis were reasonable given defenses, complexity, and litigation risk	Affirmed — district court properly analyzed Van Horn factors and did not abuse discretion
3. Whether CAFA requires a written finding that non-monetary benefits outweigh monetary loss (alleged net loss)	Njema: class members ‘‘pay’’ $10 net (recover $5 vs $15 alleged damages), so CAFA §1713 requires a written finding	Wells Fargo: CAFA applies only if class members are obligated to pay or incur costs that create a net loss; here members receive net recovery from the fund	Rejected — no CAFA written-finding required because settlement does not require class members to pay counsel or incur net loss
4. Whether release/waiver, incentive awards, and CAFA notice rendered settlement unfair	Njema: release unfairly bars related claims; Wells Fargo improperly waived release in his Minnesota case; incentive awards too small; CAFA notice possibly not given	Wells Fargo: release covers only inspection-fee-related claims (not trespass); waiver in Njema’s case does not make settlement unfair; incentive awards issue lacks standing; CAFA notice objection was waived for appeal	Affirmed — release not prejudicial to trespass claims; incentive award objection dismissed for lack of standing; CAFA notice claim waived for failure to raise below

Key Cases Cited

Avritt v. Reliastar Life Ins. Co., 615 F.3d 1023 (8th Cir. 2010) (standard of review for denial of class certification-related motions)
Ebert v. General Mills, Inc., 823 F.3d 472 (8th Cir. 2016) (commonality requires showing class members suffered the same injury)
Marshall v. National Football League, 787 F.3d 502 (8th Cir. 2015) (abuse-of-discretion review of settlement approval)
Van Horn v. Trickey, 840 F.2d 604 (8th Cir. 1988) (four-factor framework for evaluating class settlement fairness)
Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167 (2000) (standing requires showing injury in fact for each relief sought)
Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (standing principles and injury in fact requirement)
Quinn v. St. Louis County, 653 F.3d 745 (8th Cir. 2011) (issues not raised below are waived on appeal)