Trombley v. National City Bank
2011 U.S. Dist. LEXIS 137898
| D.D.C. | 2011Background
- Plaintiffs allege National City Bank charged overdraft fees via a high-to-low reordering of electronic debit transactions in violation of contract, Regulation E, and other laws.
- Case progressed through preliminary class certification and settlement approval; MDL context and re transfer/return to this court for final approval.
- Settlement provides a $13.8 million total payout (including added notice/administration costs) to the Settlement Class, with $5,000 incentive awards to each representative and up to 25% of the fund for attorneys’ fees, plus costs.
- Class period covers July 1, 2004 through August 15, 2010; eligible overdraft reimbursements capped at two months per claimant; cy pres distribution possible if funds remain.
- Notice was provided via Hilsoft, published notices, a settlement website, and claim forms; approximately 187,679 timely claims were verified, with ~76 opt-outs.
- Court granted final certification and final approval, finding the settlement fair, reasonable, and adequate given litigation risks and data-collection costs.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the settlement class properly satisfies Rule 23(a) and 23(b)(3). | Trombley argues common, typical, adequate representation; predominance and superiority exist for nationwide class. | National City contends common issues predominate and class treatment is appropriate given similar claims and damages. | Yes; class certification for settlement is appropriate. |
| Whether the settlement amount and structure are fair, reasonable, and adequate. | Edgeworth damages analysis supports $12M/$13.8M with reasonable recovery relative to potential trial outcomes. | Settlement reasonably balances risk and recovery given uncertain defenses and costs of complex data retrieval. | Yes; the settlement is fair, reasonable, and adequate considering risks and costs. |
| Whether the release and cy pres provisions are proper and properly limited. | Release appropriately covers claims tied to the National City/PNC setup with limited scope and minimal cy pres likelihood. | Release ensures comprehensive resolution of related claims and avoids duplicative litigation; cy pres unlikely due to funds exhaustion. | Yes; release and cy pres terms are proper and reasonable. |
| Whether attorneys’ fees, expenses, and incentive awards are reasonable. | Fees of $3M (25% of fund) and $77,857 expenses are within norms for complex nationwide settlements; $5,000 per named plaintiff appropriate. | Fees should reflect risk and time; requested amounts align with circuit norms and common fund practices. | Yes; fees, expenses, and incentives are reasonable. |
Key Cases Cited
- In re Lorazepam & Clorazepate Antitrust Litig., 203 F.R.D. ness (D.D.C. 2002) (guideposts for class certification and settlement approval)
- Gutierrez v. Wells Fargo Bank, 730 F. Supp. 2d 1080 (N.D. Cal. 2010) (Regulation E context and damages framework)
- In re Vitamins Antitrust Litig., 305 F. Supp. 2d 1 (D.D.C. 2004) (standard for evaluating class actions and settlements)
- Schulte v. Fifth Third Bank, 805 F. Supp. 2d 560 (N.D. Ill. 2011) (reasonableness of settlements in overdraft/complex-litigations)
- In re Rite Aid Corp. Sec. Litig., 146 F. Supp. 2d 706 (E.D. Pa. 2001) (common fund benchmarks for fee awards)