Phillips v. Caliber Home Loans, 0:19-cv-02711

Caliber charged borrowers "Pay-to-Pay Fees" for mortgage payments made by phone/IVR/internet; plaintiffs alleged breach of contract, unjust enrichment, and violations of state debt-collection statutes in Minnesota, Texas, North Carolina, and Maryland.
Three separate putative class actions were effectively consolidated; parties mediated and reached a global settlement in March 2021; the court granted preliminary approval July 19, 2021, held a final-approval hearing December 16, 2021, and entered final approval March 21, 2022.
Settlement creates a $5,000,000 non-reversionary common fund (about 29.38% of alleged damages) to be distributed pro rata to class members without a claims process; Kroll administers the settlement; class ≈ 456,663 members (≈ 322,404 loans).
Injunctive relief: Caliber had stopped charging the fees by January 21, 2020 and agreed not to charge them for at least two years after final approval; class members release claims related to Pay-to-Pay Fees through the date of the order.
Notice and response: notice by email/postcard/website reached >99% of class; six class members opted out; one objection was filed then withdrawn; Habitat for Humanity designated as cy pres recipient.
Fee and awards: Plaintiffs sought 33.33% ($1,666,500) in attorneys’ fees, $10,410.66 in costs, and $5,000 service awards to each of six class representatives; the court granted these requests.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the settlement is fair, reasonable, and adequate	Settlement provides immediate cash (pro rata) and injunctive relief, representing ~29.38% of alleged damages	Caliber denied liability and would vigorously litigate and likely contest certification and merits	Court approved settlement as fair, reasonable, and adequate
Whether the class may be certified for settlement purposes	Class meets Rule 23(a) numerosity, commonality, typicality, adequacy, and Rule 23(b)(3) superiority	Caliber would have opposed class certification and may have appealed	Court certified the settlement class for settlement purposes only
Whether the notice plan satisfied due process and Rule 23	Email/postcard/website/toll-free line provided the best practicable notice and full information	No opposition	Court found notice adequate and compliant with Rule 23 and due process
Whether requested attorneys’ fees, costs, and service awards are reasonable	Fees: 33.33% of fund; costs $10,410.66; $5,000 service awards each—reasonable given contingency, hours, risk, and results	No opposition to the requested awards	Court awarded $1,666,500 fees, $10,410.66 costs, and $5,000 to each class representative; retained jurisdiction for settlement administration

Kloster v. McColl, 350 F.3d 747 (8th Cir. 2003) (district court acts as fiduciary in approving class settlements)
Ortega v. Uponor, Inc., 716 F.3d 1057 (8th Cir. 2013) (factors for evaluating fairness of class settlements)
Petrovic v. Amoco Oil Co., 200 F.3d 1140 (8th Cir. 1999) (presumption of validity for negotiated class settlements and common-fund fee method)
Blum v. Stenson, 465 U.S. 886 (U.S. 1984) (common-fund doctrine supports percentage-fee awards)
In re U.S. Bancorp Litig., 291 F.3d 1035 (8th Cir. 2002) (awarding percentage-based attorneys’ fees from common fund)
In re Xcel Energy, Inc., 364 F. Supp. 2d 980 (D. Minn. 2005) (surveying customary percentage fee awards in this circuit)
Huyer v. Buckley, 849 F.3d 395 (8th Cir. 2017) (affirming substantial percentage fee awards in class actions)
Phillips Petroleum Co. v. Shutts, 472 U.S. 797 (U.S. 1985) (due-process notice requirements for class actions)
Eisen v. Carlisle & Jacquelin, 417 U.S. 156 (U.S. 1974) (individual notice requirement where class members are identifiable)