AFFIRMING IN PART TENTATIVE RULING
[Doc. No. 85]
GRANTING PLAINTIFF’S MOTION FOR FINAL APPROVAL OF CLASS ACTION SETTLEMENT
[Doc. No. 82]
GRANTING IN PART PLAINTIFF’S MOTION FOR ATTORNEYS’ FEES, COSTS, AND CLASS REPRESENTATIVE INCENTIVE PAYMENT
[Doc. No. 63]
Plaintiff Carrie Couser, on behalf of herself and all others similarly situated, moves for Final Approval of Class Settlement and for Attorneys’ Fees, Costs, and Incentive Award. See Doc. Nos. 63, 82. The Court held a final approval hearing on the matter pursuant to Federal Rule of Civil Procedure 23(e)(2). For the reasons stated below, the Court GRANTS the motion for final approval of the settlement and GRANTS IN PART the motion for attorneys’ fees, costs, and a class representative incentive award.
Background
A. Factual Background
The individually named plaintiff in this action is Carrie Couser (“Plaintiff’), a resident of California.
Defendant Comenity Bank (“Defendant” or “Comenity”) is á leader in the consumer credit lending industry. Comenity is incorporated in and has its principal place of business in Delaware.
Plaintiff brings this action against Defendant for negligent, knowing, and/or willful violation of the Telephone Gonsumer Protection Act (“TCPA”), 47 U.S.C. § 227 et seq.. Plaintiff seeks statutory damages and injunctive relief. According to Plaintiffs Complaint, in or around January 2012, Defendant contacted Plaintiff on her cellular telephone in an attempt to collect an alleged debt owed by Plaintiffs mother. Plaintiff alleges that Defendant used an automatic telephone dialing system to place multiple calls to her each day, and that she incurred charges for incoming calls. Plaintiff further alleges that such calls were hot for emergency purposes, and that she did not provide prior express consent to receive such calls. Plaintiff also alleges that on several occasions she answered the telephone call and informed an agent for Defendant that her mother could not be reached on Plaintiffs telephone, that Defendant had an incorrect telephone number, and that Defendant must stop calling Plaintiff.
Plaintiff brings this action on behalf of herself and the nationwide class of persons that she seeks to represent who received collection calls from Defendant in violation of the TCPA. Under the TCPA, a plaintiff may seek to recover statutory damages in the amount of $500 per violation, and up to $1,500 per willful violation, as well as injunctive relief to prevent future violations. 47 U.S.C. § 227(b).
B. Procedural Background
On October 12, 2012, Plaintiff filed a putative class action Complaint for negligent, knowing, and/or willful violation of the TCPA, 47 U.S.C. § 227 et seq. See Doc. No. 1. On December 20, 2012, Defendant answered the Complaint. See Doc. No. 4.
On October 14, 2013, Plaintiff filed a notice of settlement. See Doc. No. 36. On September 5, 2014, Plaintiff filed a motion for preliminary approval of class action settlement and certification of the settle
On October 2, 2014, the Court granted the motion for settlement class certification and preliminary approval, and directed dissemination of class notice, See Doc. No. 54. The Court also appointed Plaintiff Carrie Couser as the class representative, and appointed lead counsel. The parties then commenced providing notice to the class and proceeded with the claims administration process. See Passarella Decl. ¶¶ 5-17.
On January 9, 2015, Plaintiff filed the instant motion for-- attorneys’ fees, costs, and incentive payment. See Doc...No. 63. Plaintiff filed her motion for final approval of class action settlement on March 20, 2015. Plaintiff filed a Supplemental Brief on April 15,2015.
On April 20, 2015, .the Court held a fairness hearing on the matter pursuant to Federal Rule of Civil Procedure 23(e)(2). In light of the concerns raised during the hearing, the Court ordered supplemental briefing on the issue of attorneys’ fees. Plaintiff subsequently filed supplemental briefing on May 4, 2015, in which she amended her attorneys’ fees request to 16.9% of the common fund. Additionally, Plaintiff also represents that, the Claims Administrator has agreed to. reduce its cost/fee request to $2,778,664.48 from the initial $2,828,664,48. See Doc. No. 90 at 11; see also Passarella Supp. Dec!., Doc. No. 90-23 ¶ 3.
C. The Settlement
1. Settlement Class
This Court provisionally certified the settlement class as follows:
All persons whose cellular telephone numbers were called by Defendant, released parties, or a third party, dialing company on behalf of Defendant or the released parties, using- an automatic telephone'dialing system and/or'an arti-. ficial or prerecorded voice, without consent, from August 1, 2010 through May 26, 2014, excluding those persons whose cellular telephone number/s were marked with a “wrong number” code in Defendant’s database (which persons are included in the putative class in Picchi u World Financial Network Bank, et al., Case No.:11-CV-61797, currently pending in the Southern District-of Florida).
Excluded from the Class is Defendant, its parent companies, affiliates _ or subsidiaries, or any employees thereof, and any entities in which any of such companies has a controlling interest; the judge or magistrate judge to whom the Action is assigned; and, any member of'those judges’ staffs and immediate families, as well as persons who validly request exclusion from the Settlement Class.
See Doc. No. 52.
2. Settlement Terms
The Settlement requires Defendant to establish a non-reversionary Settlement Fund of $8,475,000, from which the class representative incentive payment, Class Counsel’s fees and costs, costs of settlement administration, and Class Member páyments will be made. Once the fees and costs are distributed, the remaining Net Settlement Amount will be distributed pro rata to each Class Member who submitted a valid and approved claim.
During the Class Period, Class Members have filed 308,026 valid, claims.
The Claims Administrator received 5 initial objections and 168 requests .for exclusion. See Passarella Dec. ¶ 14. However, ali 5 objectors have since withdrawn their objections and requested exclusion from the Settlement.
The Claims Administrator has incurred costs'to date plus the anticipated costs of distributing settlement funds to class members of $2,828,664.48. Passarella Decl. ¶ 17. However,' since the fairness hearing and as set forth in Plaintiffs supplemental brief, the Claims Administrator has agreed to reduce its cost/fee request to $2,778,664.48. See Passarella Supp. Decl. ¶ 3.
Class Counsel initially sought $2,118,750, or 25% of the common fund, in attorneys’ fees plus $25,000 in reimbursement costs. However, in the supplemental briefing on the issue of attorneys’ fees, Class Counsel has modified their request for attorneys’ fees and now seeks $1,432,275, or 16.9% of the common fund.
The sole class representative, Carrie Couser, will receive an incentive award of $1,500.
Assuming the Court approves all fees and costs as requested, the $8,475,000 Settlement Fund will be distributed as follows: the Class Representative Incentive Award ($1,500), Class Counsel’s requested fees ($1,432,275), Class Counsel’s litigation expenses ($25,000), and the Settlement Administration costs ($2,778,664.48). This leaves the amount of $4,237,556.52 as the Net Settlement Fund available to pay Class Members-. Accordingly, each of the 308,026 Class Members with- approved claims will receive approximately $13.75.
Discussion
A. Motion for Final Approval of Class Settlement
1. Class Certification
A plaintiff seeking a Rule 23(b)(3) class certification must first satisfy the prerequisites of Rule'23(a). Once subsection (a) is satisfied, the purported class must then fulfill the requirements of Rule 23(b)(3). Here, the Court previously preliminarily certified the following class:
All persons whose cellular telephone number’s were called by Defendant, released parties, or a third party dialing company on behalf of Defendant or the released parties, using an automatic telephone dialing system and/or an artificial or prerecorded voice, without consent, from August 1, 2010 through May 26, 2014, excluding those persons whose cellular telephone number/s were marked with a “wrong number” code in Defendant’s database (which persons are included in the putative class in Picchi v. World Financial Network Bank, et al., Case No.: 11-CV-61797, currently pending in the Southern District of Florida.)
Excluded from the Class is Defendant, its parent companies, affiliates or subsidiaries, or any employees thereof, and any entities in which any of such companies has a controlling interest; the judge or magistrate judge to whom the Action is assigned; and, any member of those judges’ staffs and immediate families, as well as persons who validly request exclusion from the Settlement Class.
At that time, the Court concluded that, for purposes of settlement only, the proposed Settlement Class satisfied the numerosity, commonality, typicality, and adequacy of representation requirements of Rule 23(a). See Doc. No. 54 ¶ 2. The Court also found that the proposed class satisfied the predominance and superiority requirements of Rule 23(b)(3). The Court affirms its previous findings and certifies the Settlement Class.
2. The Settlement
a) Legal Standard
Courts require a higher standard of fairness when settlement takes place prior to class certification to ensure class counsel and defendants have not colluded in settling the case. Hanlon v. Chrysler Corp.,
A court considers several factors in determining whether a proposed settlement is “fair, adequate and reasonable” under Rule 23(e). Such factors may include: (1) the strength of the case; (2) the risk, expense, complexity and likely duration of further litigation and the risk of maintaining class action status throughout the trial; (3) the stage of the proceedings (investigation, discovery and research completed); (4) the settlement amount; (5) whether the class has been fairly and adequately represented during settlement negotiations; and (6) the reaction of the class to the proposed settlement. Staton v. Boeing Co.,
Judicial policy favors settlement in class actions and other complex litigation where substantial resources can be conserved by avoiding the time, cost, and rigors of formal litigation. In re Wash. Pub. Power Supply Sys. Sec. Litig.,
b) Analysis
(1) The strength of the case, and risk, expense, complexity and likely duration of further litigation
To determine whether the proposed settlement is fair, reasonable, and adequate, the Court must balance against the continuing risks of litigation (including the strengths and weaknesses of the Plaintiffs case) the benefits afforded to members of the Class, and the immediacy and certainty of a substantial recovery. See In re Mego Fin. Corp. Sec. Litig.,
[t]he Court shall consider the vagaries of litigation and compare the significance of immediate recovery by way of the compromise to the mere possibility of relief in the future, after protracted and expensive litigation. In this respect, “It has been held proper to take the bird in hand instead of a prospective flock in the bush.”
Regarding the strength of the case, Plaintiff claims that “Class Counsel believe strongly in the merits of .the claims brought on behalf of the Class.” Doc. No. 82-1 at 25. However, Defendant claims to have various meritorious defenses, including its denial that it violated the TCPA, and that this Action would be amenable to class certification (both because of the presence of arbitration clauses in cardholder agreements for many Class Members, and because some courts in this District have denied motions for class certification in TCPA cases).
(2) The Risk of Maintaining Class Action Status Throughout the Trial
Pursuant to Rule 23, the Court may revisit a prior order granting certification of a class at any time before final judgment. See Fed.R.Civ.P. 23(c)(1)(C) (“An order under that grants or denies class certification may be altered or amended before final judgment”). Where there is a risk of maintaining class action status throughout the trial, this factor favors approving the settlement. Adoma v. Univ. of Phoenix, Inc.,
Here, the parties reached a settlement before the Court determined whether certifying the class was appropriate. Although Defendant has stipulated to the class certification for settlement purposes, Defendant insists that this action would not be amenable to class certification. Specifically, the presence of an arbitration clause in the cardholder agreement (which includes a class action waiver) for many Class. Members presents a major risk in seeking class certification and maintaining a class throughout litigation. Additionally, Plaintiff recognizes that some Courts in this District have denied motions for class certification in TCPA cases. Based on the parties’ representations to the Court, there is a risk that the Class would either not be certified or that something may arise before trial to decertify the class. Thus, this factor weighs in favor of settlement.
(3) The stage of the proceedings (investigation, discovery and research completed)
“A settlement following sufficient discovery and genuine arms-length negotiation is presumed fair.” DIRECTV, Inc.,
Here, Plaintiff represents that the Settlement is the result of intensive, arms-length negotiations. The parties engaged in both formal and informal discovery regarding Plaintiffs claims and Defendant’s defenses, including written Interrogatories and Requests for Production of documents. Kazerounian Decl. flO. Class Counsel took 2 depositions pursuant to Federal Rule of Civil Procedure 30(b)(6). The parties appeared for an ENE and telephonic CMC before Judge Skomal, and then participated in 3 full-day mediation sessions before the Honorable Leo Papas (Ret.). See id. at ¶ 9-10. After reaching a. settlement in principle, the parties engaged in extensive discussion to determine the details surrounding the Settlement — in particular, how many cell phones were contacted during the Class Period and what types of consent Defendant was relying on. Plaintiff maintains that because the two
(4) The Settlement Amount
“In assessing the consideration obtained by the class members in a class action settlement, it is the complete .package taken as a whole, rather than the individual component parts, that must .be examined for', overall fairness.” DIRECTV,
Pursuant 'to the Settlement Agreement, Defendant must establish a non-reversionary Settlement Fund of $8,475,000, from which the Class Representative Incentive Payment, Class Counsel’s fees and costs, Settlement Administration costs, and the Class Member claims will be paid. The sole class representative, Carrie Couser, will receive an incentive award of $1,500. Class Counsel seeks $1,432,275 in attorneys’ fees plus $25,000 in litigation costs. The Claims Administrator has incurred costs in the amount of $2,778,664.48 for Settlement Administration. Assuming these fees and costs are approved as requested, the Net Settlement Fund available to pay Class Members is $4,237,650.52. The Claims Administrator approved 308,026 Class Member claims, resulting in a pro rata payment of approximately $13.75 per Class Member.
Plaintiff asserts that if[t]his payment is a significant win for Class Members who only had to take a few minutes to submit a claim” and “Class Members were able to avoid the time, expense and risk associated with bringing their own individual TCPA action, where they could receive an award of $500 per negligent violation.” Doc. No. 82 — 1 at 26. To support her motion for settlement approval, Plaintiff asserts that this payment is in line with other TCPA settlements. Upon reviewing the cases cited by Plaintiff, however, the Court finds the Class Member recovery amount is on the low end when compared with other TCPA settlements. Compare Knutson v. Schwan’s Home Serv., Inc., No. 3:12-CV-00964-GPC,
However, -the Court finds this case is distinguishable based on the large number of Class Member claimants and the high claims rate. See, e.g., Rose v. Bank of Am. Corp., No. 5:11-CV-02390-EJD,
(5) Whether the Class has been fairly and adequately represented during settlement negotiations
“Great weight is accorded to the recommendation of counsel, who are most closely acquainted with the facts of the underlying litigation. This is because parties represented by competent counsel are better positioned than courts to produce a settlement that fairly reflects each party’s expected outcome in the litigation.” DIRECTV, Inc., 221 F.R.D. at 528; Adorna,
Class Counsel asserts that they are both familiar with the specific facts and issues arising in this case and also have considerable expertise in TCPA and class action litigation. For example, Mr. Kazerouni had litigated over 300 consumer class actions, and 50% of his class action practice involves litigating TCPA claims. See Kazerounian Decl., Doc. No. 63-2, ¶ 10. Additionally, Joshua B. Swigart and Todd Friedman also have significant experience in consumer class action litigation, including TCPA lawsuits. See Swigart Decl., Doc. No. 63-8, ¶¶ 8 — 9; Friedman Decl., Doc. No. 63-9, ¶¶ 9-10. It appears the Class was adequately repi-esented by competent counsel. This factor supports approval of the settlement.
(6) The reaction of the Class to the proposed settlement
The Ninth Circuit has held that the number of class members who object to a proposed settlement is a factor to be considered. Mandujano v. Basic Vegetable Prods. Inc.,
As discussed above, there were 308,026 Class Members claims filed out of 3,982,-645 potential class members, resulting in a higher than average claims rate of 7.7%. The Claims Administrator received 168 requests for exclusion out of the 3,982,645 potential class members. Further, although 5 Class Members initially filed objections, they subsequently withdrew their objections and decided to opt-out of the Settlement. Accordingly, all of the objections have been withdrawn. Upon considering the high rate of Class Member claims and the relatively low number of requests for exclusion, the Court finds the reaction of the Class to the Settlement favors approval of the Settlement.
3. Conclusion
Because the majority of the factors discussed above favor approving the Settlement, the Court finds that the settlement is “fair, adequate and reasonable” under Federal Rule of Civil Procedure 23(e). The Court therefore GRANTS Plaintiffs
B. Motion for Award of Attorneys’ Fees and Costs
In her initial motion, Plaintiff requested an attorneys’ fees award of $2,118,750, or 25% of the common fund, and $25,000 in costs. During the fairness hearing, the Court raised some concerns about the amount of attorneys’ fees in light of the results achieved for Class Members and the relative burden of litigation on Class Counsel. In the supplemental briefing on the issue of attorneys’ fees, Class Counsel modified their request for attorneys’ fees and now seeks $1,432,275, or 16.9% of the common fund.
1. Relevant Law
Rule 23(h) of the Federal Rules of Civil Procedure provides that, “[i]n a certified class action, the court may award reasonable attorney’s fees and nontaxable costs that are authorized by law or by the parties’ agreement.” Under Ninth Circuit precedent, a court has discretion to calculate and award attorneys’ fees using either the lodestar method or the percentage-of-the-fund method. Vizcaino v. Microsoft Corp.,
“While attorneys’ fees and costs may be awarded in a certified class action where so authorized by law or the parties’ agreement, Fed.R.Civ.P. 23(h), courts have an independent obligation to ensure that the award, like the settlement itself, is reasonable, even if the parties have already agreed to an amount.” In re Bluetooth,
The Ninth Circuit has characterized the district court’s role in awarding fees as that of a fiduciary of the class. Id. at 970 (“In setting the amount of common fund fees, the district court has a special duty to protect the interests of the class.”). As the court has further explained, “[bjecause in common fund cases the relationship between plaintiffs and their attorneys turns adversarial at the fee-setting stage, courts have stressed that when awarding attorneys’ fees from a common fund, the district court must assume the role of fiduciary for the class plaintiffs.” Vizcaino,
Here, Class Counsel seeks an award of at least $1,432,275, or 16.9% of the Settlement Fund. Alternatively, if the Court elects to apply the lo'destar method, Class Counsel seeks then' current lodestar amount of $453,663.50 with an upward multiplied of 3.157, totaling $1,432,275.
Pursuant to the Settlement Agreement, Defendant has agreed not to oppose an attorneys’ fees award not to exceed 25% of the Settlement Fund. However, the Ninth Circuit has made clear that “a defendant’s advance agreement not to object cannot relieve the district court of its duty to assess fully the reasonableness of the fee .request.” In re Bluetooth,
Ordinarily, a defendant is interested only in disposing of the total claim asserted against it, and the allocation between the class payment and the attorneys’ fees is of little or no interest to the defense. A district court therefore must ensure that both the amount and mode of payment of attorneys’ fees are fair, regardless of whether the attorneys’ fees come from,a common fund or are otherwise paid.
Id (internal citations and quotations marks omitted). Thus, the fact that Defendant does not oppose the fees requested has little bearing on the Court’s determination of whether the. requested fees are reasonable.
Because this Settlement has produced a common fund for the benefit of the entire class, the Court elects to award fees under the percentage-of-recovery method. See In re Bluetooth,
To determine the reasonableness of the requested fees, the Court considers the factors set forth above. First, the Court considers the results achieved for the Class Members. See In re Bluetooth,
Another factor for the Court to consider is the risk of continued litigation. See Vizcaino,
The Court next considers the skill and quality of Class Counsel’s work, the burdens carried by Class Counsel, and the contingent nature of the. fee. See Vizcaino,
The Ninth Circuit has also instructed district courts to - consider the lodestar cross-check as one factor in assessing the reasonableness of a fee request. See Vizcaino,
Based on the current record, the Court cannot conclude that Class Counsel’s requested fee amount of 16.9% of the common fund is reasonable, even taking into account Plaintiffs arguments regarding the complexity of the issues and the risk of non-payment based on the contingent nature of the representation. Upon considering the results obtained for Class Members, as well as the risks of continued litigation, Class Counsel’s skill and quality of work, the complexity of the issues litigated, the burden on Class Counsel, the contingent nature of the fees, and awards in similar cases, the Court finds that 15% of the common fund, or $1,271,250, is reasonable. When cross-checked with the lodestar amount, the awarded fees equals approximately 2.80 times the lodestar amount. The Court finds this amount reasonably rewards Class Counsel for the risk of non-payment based on their contingent representation, the favorable results achieved for the Class, the burden on class counsel, and the skill and quality of Class Counsel’s work.
Finally, Class Counsel seek reimbursement of their out-of-pocket expenses in this litigation, in the amount of $25,000.00. Class counsel represent that they incurred costs totaling $28,110.64 as follows: $9,175.49 by Hyde & Swigart; $14,028.55 by Kazerounian Law Group; and $4,896.00 by Law Offices of Todd Friedman. They subsequently filed briefing in support of these costs. See Doc. No. 86. Class Counsel further represents that although they incurred costs in the amount of $28,110.64, they only seeks reimbursement of $25,000 as provided in the Settlement Agreement. Class Counsel are entitled to reimbursement of the out-of-pocket costs that they reasonably incurred investigating and prosecuting this case. See In re Media Vision Tech. Sec. Litig.,
8. Conclusion
The Court finds that 15% of the common fund, or $1,271,250, is a reasonable award of attorneys’ fees in this litigation. The Court therefore GRANTS IN PART Plaintiffs Motion for Attorneys’ Fees and APPROVES an award of attorneys’ fees in the amount of $1,271,250 to Class Counsel, as well as Class Counsel’s request for litigation costs and expenses in the amount of $25,000.
“Incentive awards are appropriate only to compensate named plaintiffs for work done in the interest of the class.” Chun-Hoon v. McKee Foods Corp.,
The only class representative in this case is Plaintiff Carrie Couser. No class member has objected to Plaintiffs request for an award of $1,500. Further, Ms. Couser has been actively involved with the case since its inception, including reviewing court filings, communicating with class counsel, and reviewing and approving the settlement. Couser Decl. ¶ 4. Finally, this award does not appear to be the resült of fraud of collusion. Accordingly, the Court APPROVES the $1,500 service award as reasonable.
Conclusion
The Court GRANTS Plaintiffs motion and finds the proposed settlement of this class action appropriate for final approval pursuant to Federal Rule of Civil Procedure 23(e). The Court finds that the proposed settlement appears to be the product of serious, informed, arms-length negotiations, that the settlement was entered into in good faith, and that Plaintiff has satisfied the standards for final approval of a class action Settlement under federal law.
Furthermore, the Court GRANTS IN PART Plaintiffs motion for an award of attorneys’ fees in the amount of 15% of the common fund, or $1,271,250, and .the requested costs in the amount of $25,000. Finally, the Court finds the class representative service payment of $1,500 is reasonable.
Judgment and Order of Dismissal
The Court APPROVES the Settlement and ORDERS the parties to implement the Settlement Agreement according to its terms and conditions and this Court’s Final Order.
The Capitalized terms used in this Final Order shall have the meanings and/or definitions given to them in the Settlement Agreement, or, if not defined therein, the meanings and/or definitions given to them in this Order. ,
This Final Order incorporates the Settlement Agreement and its accompanying exhibits [Doc. No. 52-3].
As discussed above,- a total of 168 valid requests for exclusion were received, which includes 4 late requests for exclusion that the Parties have agreed to treat as valid opt-outs and the Court approves. A list of those individuals requesting exclusion from the Class and Settlement is set forth as Exhibit A [Doc. No. 83-3] in support of Plaintiffs Supplemental Briefing filed April 15, 2015, which is incorporated by reference. The Court- hereby excludes those individuals from the Class and Settlement.
This Order is binding on all settlement Class Members, except those individuals named in Exhibit A who validly and timely excluded themselves from the Class. '
, The Class Representative, settlement Class Members, and their successors and assigns are permanently barred and enjoined from instituting or prosecuting, either individually or as a class, or in any other capacity, any of the Released Claims
This Order is not, and shall not be, construed as an admission by Defendant of any liability or wrongdoing in this or in any other proceeding.
Without affecting the finality of this Order, the Court shall retain continuing and exclusive jurisdiction over the Parties and all matters relating'to the Action and/or Agreement, including the administration, interpretation, construction, effectuation, enforcement, and consummation of the Settlement and this Order.
The Court hereby DISMISSES this action with prejudice.
IT IS SO ORDERED.
Notes
. This number consists of 298,947 timely and valid claims and 9,079 late yet accepted
. For purposes of the lodestar cross-check, the Court uses the lodestar summary figures provided by Class Counsel. See In re Online DVD-Rental Antitrust Litig.,
The Court further notes that although Plaintiff cites a previous decision of this Court in Blair v. CBE Group, Inc., No. 13cv134-MMA,
. In light of Class Counsel’s attorneys’ fee award of 15% of the common fund, the $8,475,000 Settlement Fund will be distributed as follows: the Class Representative Incentive Award ($1,500), Class Counsel’s requested fees ($1,271,250), Class Counsel’s litigation expenses ($25,000), and the Settlement Administration costs ($2,778,664.48), This