Schulte v. Fifth Third Bank
2011 U.S. Dist. LEXIS 83423
| N.D. Ill. | 2011Background
- Class action alleging Fifth Third re-sequenced debit/ATM transactions to maximize overdraft fees.
- Settlement approved: $9.5 million fund to reimburse overdraft fees from a 45-day period within the class period, plus prospective non-monetary relief.
- Class covers overdraft fees from debit/ATM transactions; fees from checks not included.
- Court preliminarily approved settlement; final approval granted after fairness hearing and briefing.
- Court approved $3,166,666 in attorneys’ fees (one-third of fund); denied costs without prejudice; approved $1,000 incentive to each named class representative Schultz/Willard.
- Settlement includes injunctive relief changing posting order and training call center staff; cy pres not triggered due to large claims volume.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Fairness, reasonableness, adequacy of settlement | Schulte argues strong class benefits; defenses reduce risk | Fifth Third asserts settlement is fair given defenses and value | Settlement approved as fair, reasonable, adequate |
| Reasonableness of attorneys’ fees | Fee set at one-third of fund reflects risk and work | Fees may be excessive or not fully justified by results | Fees approved at $3,166,666 (one-third of fund) |
| Reimbursement of costs and expenses | Costs reasonable; necessary to prosecute | Costs should be supported with detailed documentation | Costs denied without prejudice pending more detailed itemization |
| Incentive awards for class representatives | Representatives’ efforts merit incentive | Awards should be modest given overall fund | Incentive awards of $1,000 each approved |
| Claims process necessity and adequacy | Claims process needed to verify eligibility and distribute funds | Process could be burdensome but negotiated; direct payout not required | Claims process approved as part of settlement; court rejected postponement for direct payouts |
Key Cases Cited
- Synfuel Techs., Inc. v. DHL Express (USA), Inc., 463 F.3d 646 (7th Cir. 2006) (key framework for evaluating settlement fairness and value)
- Isby v. Bayh, 75 F.3d 1191 (7th Cir. 1996) (factors for evaluating settlement fairness; stage of proceedings; discovery)
- In re General Motors Corp. Engine Interchange Litig., 594 F.2d 1106 (7th Cir. 1979) (early authority on evaluating settlements and class actions)
- Reynolds v. Beneficial Nat’l Bank, 288 F.3d 277 (7th Cir. 2002) (value of continued litigation and discounting to present value)
- In re AT&T Mobility Wireless Data Services Sales Tax Litig., 789 F. Supp. 2d 935 (N.D. Ill. 2011) (discussion of complexity, discovery, and settlement value in large actions)
- Gutierrez v. Wells Fargo Bank, 730 F. Supp. 2d 1080 (N.D. Cal. 2010) (bench trial damages framework; comparison caution in settlements)