O'Donovan v. Cashcall, Inc.

Filing 379

ORDER by Judge Maria-Elena James granting 367 Motion for Attorney Fees; granting 370 Motion for Settlement. Status Report due by 5/3/2018. Status Conference set for 5/10/2018 10:00 AM in Courtroom B, 15th Floor, San Francisco before Magistrate Judge Maria-Elena James. (Attachments: # 1 Exhibit A)(mejlc2S, COURT STAFF) (Filed on 11/17/2017)

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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 EDUARDO DE LA TORRE, ET AL., 8 Plaintiffs, 9 10 United States District Court Northern District of California 11 v. CASHCALL, INC., Defendant. Case No. 08-cv-03174-MEJ ORDER GRANTING MOTION FOR FINAL APPROVAL AND MOTION FOR ATTORNEYS’ FEES, COSTS, AND SERVICE AWARDS Re: Dkt. Nos. 367, 370 12 INTRODUCTION 13 14 After litigating this certified class action for nearly nine years, Plaintiffs Eduardo De La 15 Torre and Lori Kempley (together, ―Plaintiffs‖) submitted to the Court a proposed Settlement 16 which resolved one of their claims. See Settlement, Dkt. No. 362. On June 21, 2017, the Court 17 preliminarily approved the proposed settlement and directed notice be sent to Class Members. 18 Order re: Preliminary Approval (―Prelim. Approval Order‖), Dkt. No. 364. Plaintiffs now move 19 the Court to (1) finally approve the Settlement; (2) grant Plaintiffs‘ Motion for Attorneys‘ Fees, 20 Costs, and Service Awards; and (3) enter judgment. Fees Mot., Dkt. No. 367; Final Approval 21 Mot., Dkt. No. 370. The Court held a hearing on these matters on November 16, 2017. Having 22 considered the parties‘ arguments, the relevant legal authority, and with the benefit of oral 23 argument, the Court GRANTS the Motion for Final Approval and the Motion for Attorneys‘ Fees, 24 Costs, and Service Awards. 25 26 27 28 BACKGROUND 1 2 A. Factual Allegations1 3 In February 2006, Mr. De La Torre borrowed $2,600 from Defendant CashCall, Inc. 4 (―CashCall‖) based on an annual percentage rate of interest (―APR‖) of approximately 98%. 5 Fourth Am. Compl. (―FAC‖) ¶ 24, Dkt. No. 54. In May 2006, Ms. Kempley borrowed $2,525 6 from CashCall based on an APR of 99.07%. Id. ¶ 28. Plaintiffs allege CashCall made loans to Mr. De La Torre and Ms. Kempley that were 7 beyond their financial abilities to repay in the time and manner set forth in the CashCall 9 Promissory Note and Disclosure Statement. Id. ¶¶ 25, 29. They contend CashCall did not assess 10 Mr. De La Torre‘s or Ms. Kempley‘s earning capacities, monthly expenses, or outstanding debts 11 United States District Court Northern District of California 8 when it approved them for their loans. Id. ¶¶ 27, 31. Plaintiffs further allege CashCall 12 conditioned the extension of credit on consumers‘ repayment by means of preauthorized electronic 13 fund transfers (―EFTs‖). Id. ¶ 48. 14 B. Procedural Background On July 1, 2008, Plaintiffs initiated this action on behalf of themselves and similarly 15 16 situated individuals. See Compl., Dkt. No. 1. On February 25, 2010, they filed the operative 17 FAC. See FAC. The FAC asserts a total of six claims. It asserts claims for violations of (1) the 18 Electronic Fund Transfer Act (―EFTA‖), 15 U.S.C. § 1693; (2) the California Consumer Legal 19 Remedies Act (―CLRA‖), Cal. Civ. Code § 1750; and (3) the Rosenthal Fair Debt Collection 20 Practices Act, Cal. Civ. Code § 1788. Id. ¶¶ 41-72. In addition, the FAC asserts three claims 21 under California‘s Unfair Competition Law (―UCL‖), Cal. Bus. & Prof. Code § 17200, predicated 22 on the aforementioned violations. Id. ¶¶ 73-106. As is relevant here, Plaintiffs‘ EFTA claim is 23 based on CashCall‘s alleged practice of conditioning the extension of credit on the consumer‘s 24 repayment by means of preauthorized EFTs in violation of 15 U.S.C. § 1693k(1).2 Id. ¶ 48. This 25 26 1 Former Plaintiff Krista O‘Donovan dismissed her individual claims against CashCall on August 20, 2012. Dkt. No. 132. 27 2 28 ―No person may . . . condition the extension of credit to a consumer on such consumer‘s repayment by means of preauthorized electronic fund transfers[.]‖ 15 U.S.C. § 1693k(1). 2 1 violation is also the basis for one of Plaintiffs‘ UCL claims. Id. ¶ 96. 2 1. Class Certification, Summary Judgment, and Appeal 3 On November 15, 2011, the Court certified two classes. Class Cert. Order, Dkt. No. 100. 4 It certified a Conditioning Class, which was later limited to ―[a]ll individuals who, while residing 5 in California, borrowed money from CashCall, Inc. for personal, family, or household use on or 6 after March 13, 2006 through July 10, 2011 and were charged [a nonsufficient fund (‗NSF‘)] fee.‖ 7 Order Approving Class Notice Plan, Dkt. No. 130.3 The Court also certified a Loan 8 Unconscionability Class of ―[a]ll individuals who while residing in California borrowed from 9 $2,500 to $2,600 at an interest rate of 90% or higher from CashCall for personal family or household use at any time from June 30, 2004 through July 10, 2011.‖ Class Cert. Order at 38. 11 United States District Court Northern District of California 10 The Court later appointed James Sturdevant, Arthur Levy, and Whitney Stark as class counsel. 12 Dkt. No. 127 at 6-7; Dkt. No. 130. Thereafter, the parties filed Cross-Motions for Summary Judgment. Dkt. Nos. 159, 166, 13 14 175. On July 30, 2014, the Court denied CashCall‘s Motion for Summary Judgment on Plaintiffs‘ 15 conditioning and unconscionability claims and granted Plaintiffs‘ Motion Summary Judgment on 16 the EFTA violation. Order re: Mots. for Summ. J. (―MSJ Order‖), Dkt. No. 220. CashCall moved 17 the Court to reconsider its denial of summary judgment on the unconscionability claim. Dkt. No. 18 234. The Court granted the Motion for Reconsideration and granted CashCall‘s Motion for 19 Summary Judgment as to the unconscionability claim. Dkt. No. 239. The Court entered judgment 20 on this claim pursuant to Federal Rule of Civil Procedure 54(b) (Dkt. No. 247), and Plaintiffs 21 appealed (Dkt. No. 248).4 22 23 24 3 25 4 26 27 28 The Court confirmed this definition on March 16, 2016. Dkt. No. 311. On April 24, 2017, the Ninth Circuit certified the following question to the California Supreme Court: ―Can the interest rate on consumer loans of $2500 or more governed by California Finance Code § 22303, render the loans unconscionable under California Finance Code § 22302?‖ Dkt. No. 357. The California Supreme Court has agreed to decide this question (see Dkt. No. 365), and briefing is in progress (see Dkt. Nos. 368-69). As of the date of this Order, the California Supreme Court has not decided the issue. 3 1 2. Bench Trial 2 The Court held a bench trial on September 8 and 9, 2015 on the issue of whether Plaintiffs are entitled to statutory and/or actual damages under the EFTA and/or restitution under the UCL. 4 See Sept. 8, 2015 Trial Tr., Dkt. No. 296; Sept. 9, 2015 Trial Tr., Dkt. No. 298. On March 16, 5 2016, the Court issued its Findings of Fact and Conclusions of Law. Findings of Fact & 6 Conclusions of Law (―FFCL‖), Dkt. No. 312. The Court (1) ordered CashCall to pay a statutory 7 penalty of $500,000 for its EFTA violation, but found Plaintiffs and the Class otherwise failed to 8 show they were entitled to actual damages under the EFTA; and (2) found Plaintiffs had not 9 established they were entitled to restitution, as they failed to prove they had standing to pursue a 10 representative action under the UCL‘s ―lost money or property‖ requirement. See id. The Court 11 United States District Court Northern District of California 3 further ordered the parties to submit proposed judgments and a notice plan to inform the Class 12 about the trial‘s outcome and to distribute the statutory award to the Class no later than May 2, 13 2016. Id. The Court also ordered the parties to file a supplemental status report to address some 14 of its concerns about the proposed notice plan. May 12, 2016 Order, Dkt. No. 314. 15 In the parties‘ Joint Response to the May 12, 2016 Order, CashCall stated it intended to 16 move to amend the judgment or for a new trial based on the United States Supreme Court‘s recent 17 decision in Spokeo, Inc. v. Robbins, 136 S. Ct. 1540 (2016) as revised (May 24, 2016), which 18 CashCall asserted ―compels the finding that . . . Kempl[e]y [also] lacks standing under the EFTA.‖ 19 Jt. Resp. at 1, Dkt. No. 315. The Court stayed any pending deadlines to allow the parties to file 20 cross-Rule 59 motions. Dkt. Nos. 319, 325. 21 3. Post-Trial Motions 22 CashCall moved to amend the FFCL and enter judgment in its favor pursuant to Rule 23 59(a)(2), on the ground that Spokeo made it clear that Ms. Kempley lacked standing to pursue 24 damages under the EFTA on both her own behalf and on behalf of the Class. CashCall Rule 59 25 Mot. at 1, Dkt. No. 326. Plaintiffs filed an opposition and affirmatively moved under Rule 59, or 26 alternatively Rule 52, to submit additional evidence, amend the class definition, and amend the 27 FFCL. Pls.‘ Rule 59 Mot., Dkt. No. 334. The Court denied CashCall‘s Motion and granted in part 28 Plaintiffs‘ Motion. See Relief Order. The Court found ―Kempley‘s harm, albeit an intangible one, 4 1 is sufficiently concrete to satisfy Article III‘s standing requirement. Through § 1693k(1) of the 2 EFTA, Congress defined a specific right, which was based on the risk of real harm, and thereby 3 elevated a violation of that right to legally cognizable, concrete injury.‖ Id. at 13. Specifically, 4 [t]he EFTA guaranteed Kempley the right to choose her method of repayment when she sought credit from CashCall. When CashCall would not allow her to obtain credit without first agreeing to use EFT payments, it violated that right and caused her to confront the very harms Congress sought to avoid: the lack of choice in using EFT payments and the risks associated with those methods of payments. 5 6 7 8 Id. at 14 (citing Spokeo, 136 S. Ct. at 1549 (―[T]he violation of a procedural right granted by 9 statute can be sufficient in some circumstances to constitute injury in fact. In other words, a plaintiff in such a case need not allege any additional harm beyond the one Congress has 11 United States District Court Northern District of California 10 identified.‖)). 12 The Court also noted that ―[w]hile standing is an elemental aspect of a UCL claim, . . . this 13 issue was never raised before the post-trial briefs, and the parties‘ Pretrial Statement limited the 14 issues for trial in accordance with the Court‘s Pretrial Order.‖ Id. (citing Case Management Order 15 at 2, Dkt. No. 280); see Jt. Pretrial Conference Statement, Dkt. No. 281. The Court thus granted 16 Plaintiffs a limited opportunity to put on evidence of such standing. Relief Order at 21-24. 17 The Court also concluded it had erred in applying EFTA‘s one-year statute of limitations 18 instead of the UCL‘s four-year statute of limitations to the Conditioning Claims. Id. at 25-26 19 (citing Beaver v. Tarsadia Hotels, 816 F.3d 1170, 1178 (9th Cir. 2016), cert. denied, 137 S. Ct. 20 113 (2016)); see also Order re Class Definitions, Dkt. No. 127. The Court allowed the parties to 21 request an evidentiary hearing to determine whether Mr. De La Torre and Ms. Kempley had 22 standing to represent a class of borrowers for the four-year UCL statute of limitations period. 23 Relief Order at 27. The parties requested an evidentiary hearing, which the Court scheduled for 24 April 5, 2017. Dkt. No. 345. 25 4. Settlement and Preliminary Approval 26 In the meantime, the parties returned to settlement negotiations. Dkt. Nos. 347, 350. On 27 March 10, 2017, they reached a settlement as to the Conditioning Claims. Dkt. No. 350. The 28 Court accordingly vacated the evidentiary hearing and set a briefing schedule for Plaintiffs to file 5 1 the instant motion. Dkt. No. 356. Plaintiffs moved for preliminary approval of the Settlement on May 17, 2017. See Dkt. 2 No. 361. In considering the Settlement, the Court found it deficient only in one regard: although 4 the Settlement provided that undistributed Settlement Funds would be given to a cy pres recipient, 5 it did not identify who that recipient would be. Prelim. Approval Order at 16-17; see Settlement ¶ 6 4.13. The Court found this did not preclude preliminary approval and granted Plaintiffs‘ Motion. 7 On July 12, 2017, the parties submitted a joint report, in which Plaintiffs propose that four cy pres 8 recipients will receive equal shares of undistributed Settlement Funds: California Reinvestment 9 Coalition, Consumer Federation of California, National Association of Consumer Advocates, and 10 Consume Federation of America. Cy Pres Report, Dkt. No. 366. CashCall does not oppose this 11 United States District Court Northern District of California 3 proposal. Id. SETTLEMENT TERMS 12 The key provisions of the Settlement are as follows. 13 14 A. The Settlement Class The Settlement provides relief for the Conditioning Class, defined as ―all individuals who, 15 16 while residing in California, borrowed money from CashCall for personal, family, or household 17 use from March 13, 2006 through July 10, 2011 and were charged an NSF fee.‖ Settlement ¶ 1.5. 18 B. 19 Remedies CashCall shall pay a maximum of $1.5 million (the ―Settlement Fund‖). The Settlement 20 allocates $830,000 of the Settlement Fund to Class Members who paid NSF fees prior to the 21 cancellation, if any, of their respective authorizations to collect loan payments via EFT. Id. ¶ 3.1. 22 Class Members will receive a pro rata share of the $830,000 fund equal to the ratio of the total 23 NSF fees he or she actually paid prior to the EFT cancellation, if any, as compared to the total 24 NSF fees collected from all Class Members prior to EFT cancellations. Id. 25 CashCall further agrees to release all Class Members from liability for all NSF fees 26 CashCall charged prior to the cancellation, if any, of their respective authorizations to collect loan 27 payments via EFT. Id. ¶ 3.3; see id. ¶ 6.1(b). The release shall apply to all Class Members, 28 whether or not they paid NSF fees. Id. ¶ 3.3. If a Class Member has an open loan account that 6 1 includes unpaid charges for NSF fees, CashCall shall recalculate the loan account to eliminate 2 such charges. Id. 3 C. Distribution of Funds 4 The Settlement Administrator shall mail Class Members payment in the form of a check. 5 Id. ¶ 3.1. Class Members shall have 60 days from the date of mailing to cash their checks. Id. ¶ 6 4.13. 7 CashCall will provide the Settlement Administrator with, among other things, Class 8 Members‘ contact information, including their last known mailing and email addresses. Id. ¶ 4.3. 9 The Settlement Administrator shall update Class Members‘ addresses through the National Change of Address Database. Id. ¶ 4.5. If a Class Member cannot be located—i.e., email and 11 United States District Court Northern District of California 10 mail notices are returned undeliverable—the Settlement Administrator will not attempt to mail 12 that Class Member a check, but shall retain any payment due to that Class Member. Id. ¶ 3.2. Within ninety days of the initial distribution, the Settlement Administrator shall report to 13 14 the parties the total amount of funds, if any, related to (1) Class Members who could not be 15 located, and (2) checks that were mailed but were not cashed. Id.; id. ¶ 4.13. The Settlement 16 requires the parties to meet and confer to discuss whether a second distribution is appropriate or 17 whether the residual funds should be paid to the cy pres recipient(s) approved by the Court. Id. 18 (both). The Court shall have final approval over whether to make a second distribution or to pay 19 the cy pres recipient(s). Id. ¶ 3.2. 20 D. 21 Opt-Outs and Objections Class Members may opt out of the Settlement by mailing a written request to both 22 CashCall‘s and Plaintiffs‘ counsel. Id. ¶ 4.7. The opt out request must include (1) the Class 23 Member‘s name, signature, address, and telephone number; and (2) a statement that the Class 24 Member requests to be excluded or to opt out of the Settlement. Id. If more than 100 Class 25 Members—that is, approximately 0.1% of the Class—request exclusion, CashCall shall have the 26 option to rescind and void the Settlement before the Court finally approves the Settlement. Id. 27 Class Members may also object to the Settlement and/or request to be heard at the final 28 approval hearing. Id. ¶¶ 4.8-4.9. The Settlement requires Class Members to mail their objections 7 1 to the Settlement Administrator. The objection must (1) state the Class Member‘s name, address, 2 and telephone number; (2) include all documents or testimony supporting such objection; and (3) 3 provide a detailed statement of any objection asserted, including the grounds therefor and reasons, 4 if any, for requesting the opportunity to appear and be heard at the final approval hearing. Id. ¶ 5 4.9. 6 E. Attorneys’ Fees, Costs, and Service Awards The Settlement Fund allocates a maximum of $650,000 for payment of Class Counsel‘s 7 8 attorneys‘ fees and costs. Id. ¶ 3.5. If the Court awards less than $650,000, the amount by which 9 $650,000 exceeds the awarded amount shall be included in the distribution to Class Members. Id. The Settlement further provides for $10,000 in service awards for each Ms. Kempley and 11 United States District Court Northern District of California 10 Mr. De La Torre, subject to Court approval. Id. ¶ 3.4. Should the Court approve service awards 12 totaling less than $20,000, the amount by which $20,000 exceeds the approved sum shall be 13 distributed to Class Members. Id. 14 F. Settlement Administrator and Administration Costs Under the terms of the Settlement, CashCall shall pay all costs of notice and all other fees, 15 16 costs, and expenses charged or incurred by the Settlement Administrator. Id. ¶ 3.6. CashCall shall 17 pay these expenses in addition to the $1.5 million Settlement Fund. Id. Plaintiffs propose Kurtzman Carson Consultants (―KCC‖) as the Settlement Administrator. 18 19 Mot. at 18; Settlement ¶ 2.19. KCC administered the 2012 class notice after the Court granted 20 class certification. Id.; Dkt. Nos. 128, 130. 21 G. 22 23 24 25 26 27 28 Release of Claims In exchange for benefits under the Settlement, Class Members shall be deemed to release and forever discharge the Released Parties from and shall be forever barred from instituting, maintaining, prosecuting or asserting any and all claims, liens, debts, demands, rights, actions, suits, causes of action, controversies, costs, expenses, attorneys‘ fees, obligations, damages or liabilities of any nature whatsoever, whether individual, class or representative, whether legal, equitable, administrative, direct, indirect, or otherwise, whether known or unknown, whether arising under any international, federal, state or local statute, ordinance, common law, regulation, principle of equity or otherwise, that actually were asserted in the Litigation relating to the Conditioning Claim or that 8 could have been asserted based in any manner on an allegation that CashCall conditioned the extension of credit on an agreement by borrowers to use EFTs as the method of repaying their loans. 1 2 3 Settlement ¶ 6.1(a). ―Released Parties‖ include ―CashCall and its present and former subsidiaries, 4 parents, affiliates, divisions, officers, directors, members, managers, shareholders, insurers, 5 employees, agents, attorneys, legal representatives, heirs, predecessors, successors, and assigns.‖ 6 Id. ¶ 2.18. In addition, Plaintiffs and the Released Parties agree to 7 8 mutually release and forever discharge each other from and shall be forever barred from instituting, maintaining, prosecuting or asserting any and all claims, liens, debts, demands, rights, actions, suits, causes of action, controversies, costs, expenses, attorneys‘ fees, obligations, damages or liabilities of any nature whatsoever, whether individual, class, or representative, whether legal, equitable, administrative, direct, indirect, or otherwise, and whether known or unknown, relating to the Conditioning Claim or in any manner relating to CashCall‘s conditioning the extension of credit on payments by EFTs, and in relation to every other claim that was asserted or could have been asserted in the Litigation other than the Unconscionability Claim. 9 10 United States District Court Northern District of California 11 12 13 14 15 Id. ¶ 6.2(a). Plaintiffs further waive their rights under California Civil Code section 1542. Id. 16 H. The Settlement does not affect or impair the Unconscionability Claim, including Plaintiffs‘ 17 18 Effect on Unconscionability Claim rights to seek attorneys‘ fees and costs based on the Unconscionability Claim. Id. ¶ 7.1. MOTION FOR FINAL APPROVAL 19 20 A. Legal Standard 21 The Ninth Circuit maintains ―a strong judicial policy that favors settlements, particularly 22 where complex class action litigation is concerned.‖ Allen v. Bedolla, 787 F.3d 1218, 1223 (9th 23 Cir. 2015) (internal quotation marks omitted). ―[S]ettlement class actions present unique due 24 process concerns for absent class members[.]‖ Hanlon v. Chrysler Corp., 150 F.3d 1011, 1026 25 (9th Cir. 1998); see Allen, 787 F.3d at 1223 (―[T]he district court has a fiduciary duty to look after 26 the interests of those absent class members.‖). There is, for instance, ―the risk that class counsel 27 may collude with the defendants.‖ In re Online DVD-Rental Antitrust Litig., 779 F.3d 934, 944 28 (9th Cir. 2015) (internal quotation marks omitted). 9 1 To guard against such risks, Federal Rule of Civil Procedure 23(e) requires courts to 2 determine whether a proposed settlement ―is fundamentally fair, adequate, and reasonable.‖ 3 Hanlon, 150 F.3d at 1026; Fed. R. Civ. P. 23(e)(2) (―If the proposal would bind class members, 4 the court may approve it only after a hearing and on finding that it is fair, reasonable, and 5 adequate.‖). The Ninth Circuit has identified eight factors courts should consider in evaluating the 6 fairness of a class action settlement: (1) the strength of the plaintiffs‘ case; (2) the risk, expense, complexity, and likely duration of further litigation; (3) the risk of maintaining class action status throughout the trial; (4) the amount offered in settlement; (5) the extent of discovery completed and the stage of the proceedings; (6) the experience and views of counsel; (7) the presence of a governmental participant; and (8) the reaction of the class members of the proposed settlement. 7 8 9 10 United States District Court Northern District of California 11 In re Bluetooth Headset Prod. Liab. Litig., 654 F.3d 935, 946 (9th Cir. 2011) (citation omitted). 12 ―It is the settlement taken as a whole, rather than the individual component parts, that must be 13 examined for overall fairness.‖ Hanlon, 150 F.3d at 1026. Courts cannot ―delete, modify or 14 substitute certain provisions‖; rather, ―[t]he settlement must stand or fall in its entirety.‖ Id. 15 (internal quotation marks omitted). Where, as here, the court previously certified the class action ―under Rule 23(b)(3), the 16 17 court may refuse to approve a settlement unless it affords a new opportunity to request exclusion 18 to individual class members who had an earlier opportunity to request exclusion but did not do 19 so.‖ Fed. R. Civ. P. 23(e)(4). 20 B. Adequacy of Notice5 21 Before assessing the fairness of the Settlement, the Court considers whether Class 22 Members received adequate notice of it. See Fed. R. Civ. P. 23(c)(2)(B) (―For any class certified 23 under Rule 23(b)(3), the court must direct to class members the best notice that is practicable 24 under the circumstances, including individual notice to all members who can be identified through 25 reasonable effort.‖). Notice must be ―reasonably calculated, under all the circumstances, to 26 apprise interested parties of the pendency of the action and afford them an opportunity to present 27 5 28 The Court certified the Class prior to settlement, and the parties do not request to alter the Class definition. The Court therefore does not revisit the Rule 23(b) analysis. 10 1 their objections.‖ Mullane v. Cent. Hanover Bank & Tr. Co., 339 U.S. 306, 314 (1950). ―Notice 2 is satisfactory if it generally describes the terms of the settlement in sufficient detail to alert those 3 with adverse viewpoints to investigate and to come forward and be heard.‖ Rodriguez v. W. 4 Publ’g Corp., 563 F.3d 948, 962 (9th Cir. 2009) (internal quotation marks omitted). The Court approved the form and content of the proposed notice, as well as the method of 5 6 providing notice. Prelim. Approval Order at 17-18. Pursuant to the terms of the Settlement, on 7 July 6, 2017, CashCall provided Settlement Administrator KCC with an Excel file containing the 8 names, mailing addresses, and email addresses of 95,688 individuals identified as Class Members. 9 Perry Decl. ¶ 2, Dkt. No. 370-1. KCC reviewed the data; removed 1,852 duplicate and 2 incomplete records; and processed the names and addresses through the USPS National Change of 11 United States District Court Northern District of California 10 Address (―NCOA‖) database. Id.; Suppl. Perry Decl. ¶ 2, Dkt. No. 376. KCC determined there 12 were 94,736 unique Class Members. Suppl. Perry Decl. ¶ 2. After removing the three individuals 13 who opted out of the Settlement, there remain 94,733 Class Members. Id. On August 7, 2017, KCC took the following steps to provide notice to Class Members. 14 15 See id. ¶¶ 3-6. First, KCC established a website and a toll free interactive voice recognition 16 telephone line for the Settlement.6 Id. ¶¶ 3-4. The website allows Class Members to download 17 relevant case documents such as the long-form Class Notice, Settlement Agreement, Motion for 18 Preliminary Approval, Preliminary Approval Order, and Motion for Attorneys‘ Fees; provides 19 answers to frequently asked questions; and provides contact information. Id. ¶ 3. The telephone 20 line also provides answers to frequently asked questions and includes all information and features 21 as required by section 4.5 of the Settlement. Id. ¶ 4; see id., Ex. A (telephone hotline script). 22 Second, KCC sent the Long Form Email Notice to 85,027 Class Members whose email addresses 23 KCC validated. Id. ¶ 5; see id., Ex. B (email notice). KCC mailed the postcard Short Form Notice 24 to the 9,707 Class Members for whom KCC did not have a valid email address. Id. ¶ 6; see id., 25 Ex. C (postcard notice). On August 17, 2017, KCC mailed the Short Form Notice to 10,974 Class Members whose 26 27 28 6 The website is available at www.cashcallconditioningclasssettlement.com. 11 1 validated Email Notice was returned as undeliverable. Id. ¶ 7. These postcards were sent to the 2 mailing addresses provided in the Excel file, updated through a NCOA database search. Id. KCC project manager Andrew Perry oversaw the notice administration for the Settlement. 3 4 Id. ¶ 1. Mr. Perry declares that as of October 23, 2017, there were 4,471 Short Form Notices 5 returned as undeliverable. Id. ¶ 8. KCC searched updated addresses for these Class Members and 6 re-mailed the Short Form Notice to 3,981 Class Members at their updated address. Id.; see id., Ex. 7 D (October 16, 2017 Weekly Case Status Report identifying number of notices returned as 8 undeliverable and re-mailed). A total of 463 Short Form Notices were returned as undeliverable 9 after this mailing. Id. ¶ 9. In addition, KCC has received a total of 32 requests for exclusion, 29 of which were 10 United States District Court Northern District of California 11 received in 2012 after the Court certified the Class. Perry Decl. ¶ 10 & Ex. E (list of Class 12 Members requesting exclusion). KCC has received no objections. Id. ¶ 11. 13 Under the circumstances, the Court is satisfied this method of providing notice was 14 reasonably calculated, and the best practicable means, to notify Class Members of the Settlement. 15 While 463 Class Members did not receive email or postcard notice, Rule 23 does not require 16 actual notice of settlement to class members in time to opt out of the class. Rather, notice need 17 only be ―reasonably certain to inform the absent members of the plaintiff class[.]‖ Silber v. 18 Mabon, 18 F.3d 1449, 1454 (9th Cir. 1994) (internal quotation marks omitted); see Mullane, 339 19 U.S. at 319 (―[N]otice reasonably certain to reach most of those interested in objecting is likely to 20 safeguard the interests of all, since any objections sustained would inure to the benefit of all. We 21 think that under such circumstances reasonable risks that notice might not actually reach every 22 beneficiary are justifiable.‖). 23 C. 24 Fair, Adequate, and Reasonable In preliminarily approving the Settlement, the Court found it was ―fair, reasonable, and 25 adequate‖ under Rule 23(e)(2). The preliminary approval stage is ―an ‗initial evaluation‘ of the 26 fairness of the proposed settlement made by the court on the basis of written submissions and 27 informal presentation from the settling parties.‖ In re High-Tech Emp. Antitrust Litig., 2013 WL 28 6328811, at *1 (N.D. Cal. Oct. 30, 2013) (citation omitted). The Court now considers each of the 12 1 In re Bluetooth factors to determine whether the Settlement is fair, adequate, and reasonable. The Strength of Plaintiffs‘ Case 2 1. 3 The Court granted summary judgment in favor of Plaintiffs on the Conditioning Claims. 4 See MSJ Order. The Court found Plaintiffs are entitled to statutory damages. See FFCL. 5 Plaintiffs thus have a strong claim, and this factor favors final approval. 6 2. The Risk, Expense, Complexity, and Likely Duration of Further Litigation 7 Despite the Court‘s rulings and findings, CashCall has consistently denied liability under 8 the EFTA on the ground that § 1693k does not apply where, as here, the creditor allows the 9 borrower to cancel EFT payments. Plaintiffs are confident ―in this Court‘s ruling on the issue, [but] they cannot say that the issue is without appellate litigation risk because there is no appellate 11 United States District Court Northern District of California 10 decision on this issue.‖ Final Approval Mot. at 8. Regardless of its final outcome, any appeal on 12 this issue is likely to be expensive and further delay relief to Class Members in this 2008 case; the 13 Settlement provides Class Members with immediate relief. As such, this factor weighs in favor of 14 final approval. 15 3. The Risk of Maintaining Class Action Status throughout Trial 16 The Court certified the Conditioning Class and held a bench trial on the Conditioning 17 Claims. It did not decertify the Class. Accordingly, Plaintiffs have shown that they can maintain 18 class action status throughout trial, and this factor favors final approval. 19 4. The Amount Offered in Settlement 20 The Settlement allocates $830,000 to Class Members and waives outstanding NSF fees 21 CashCall charged prior to Class Members‘ cancellation, if any, of their authorizations to collect 22 loan payments via EFT. Settlement ¶¶ 3.1, 3.3. The cash payment alone is $330,000 more than 23 the Court awarded Plaintiffs after the bench trial. See FFCL. 24 There were 55,945 Class Members who paid NSF fees prior to cancellation. Suppl. Perry 25 Decl. ¶ 3. KCC estimates the maximum payment to Class Members who paid NSF fees prior to 26 cancellation would be $232.16, with an estimated average payment of $14.84. Id. ¶ 4. 27 Approximately 5,594 Class Members who paid NSF fees prior to cancellation – 10% of the Class 28 – would receive payments averaging $49.99 and ranging from $29.02 to $232.16. Id. ¶ 5. 13 1 Approximately 13,986 Class Members who paid NSF fees prior to cancellation – 25% of the Class 2 – would receive payments averaging $33.80 and ranging from $17.41 to $232.16. Id. 3 For those Class Members who were charged but did not pay an NSF fee, CashCall will 4 waive and will not engage in further action to collect such fees. Settlement ¶ 3.3. Ethan Post, 5 CashCall‘s former Principal Architect, declares there are a total of 37,329 loans for which Class 6 Members were charged but did not pay an NSF fee. Post Decl. ¶ 3, Dkt. No. 377. The total NSF 7 fees charged but unpaid on these loans prior to the cancellation of the EFT authorization is 8 $570,165. Id. CashCall currently owns 10 loans that are subject to collection by CashCall and 9 that have a total of $405 in unpaid NSF fees. Id. ¶ 4. CashCall also outsourced collections to a third party on an additional 29 loans with $1,035 in unpaid NSF fees. Id. Thus, there are a total of 11 United States District Court Northern District of California 10 39 open loans with a total of $1,440 in unpaid NSF fees. Id. CashCall will recalculate the 12 outstanding balances on these loans to eliminate the unpaid NSF fees. Id. 13 In light of these benefits, the Court finds this factor favors final approval. 14 5. 15 The parties negotiated the Settlement after years of litigation. CashCall and Class Counsel The Extent of Discovery Completed and the Stage of the Proceedings 16 engaged in written discovery, depositions, and expert discovery; they briefed motions for class 17 certification and summary judgment. They also litigated a bench trial on the Conditioning Claims 18 and engaged in post-trial motion practice. Class Counsel is well-positioned to evaluate the 19 strengths and weaknesses of the Conditioning Claims; they can make a fully informed decision 20 regarding settlement. 21 6. The Experience and Views of Counsel 22 Class Counsel are experienced class action litigators. The following summarizes the 23 declarations they filed attesting to their qualifications. Steven M. Tindall has served as lead or co- 24 lead counsel in class action cases in federal and state courts, and obtained significant settlements 25 for class members. Tindall Decl. ¶ 13, Dkt. No. 367-1. Arthur D. Levy has 36 years of litigation 26 experience, including serving as lead counsel in several consumer class action cases. Levy Decl. 27 ¶¶ 3, 6, Dkt. No. 367-4. Jessica Riggin focuses on litigating class and collective action lawsuits. 28 Riggin Decl. ¶ 2, Dkt. No. 367-5. She and her firm, Rukin Hyland LLP, have been appointed 14 1 class counsel in numerous class actions. Id. ¶ 3. Damon M. Connolly has 28 years of litigation 2 experience in government and private practice, with a focus on complex litigation matters. 3 Connolly Decl. ¶ 3, Dkt. No. 367-6. James C. Sturdevant and his firm have been co-lead counsel 4 in several class action cases. First Sturdevant Decl. ¶ 4, Dkt. No. 361-1. That Plaintiffs‘ Counsel fully support the proposed Settlement as being in the best interests 5 6 of the Conditioning Class strongly favors final approval. 7 7. The Presence of a Governmental Participant 8 No government entity participated in this action. This factor is therefore neutral. 9 8. The Reaction of Class Members of the Proposed Settlement As noted, there are a total of 94,736 Class Members. Suppl. Perry Decl. ¶ 2. After 10 United States District Court Northern District of California 11 accounting for the individuals who opted out from the Settlement, there remain 94,733 Class 12 Members. Id.; see Final Approval Mot. at 7; Perry Decl. ¶ 10 & Ex. E. A list of those individuals 13 is attached to this Order as Exhibit A. No Class Members objected or appeared at the final 14 fairness hearing. Final Approval Mot. at 7; Perry Decl. ¶ 11. As so few Class Members seek 15 exclusion and no one objects to the Settlement, this factor also favors final approval. 16 9. 17 The Bluetooth factors strongly favor final approval. 18 D. Summary Summary 19 In light of the foregoing, the Court finds (1) Class Members received adequate notice of 20 the Settlement; and (2) the Settlement is fair, adequate, and reasonable. Accordingly, the Court 21 GRANTS the Motion for Final Approval.7 22 23 24 25 26 27 28 7 Because the parties negotiated the Settlement after class certification, the Court does not consider whether the Settlement is the product of collusion. See In re Bluetooth, 654 F.3d at 946 (―Prior to formal class certification, there is an even greater potential for a breach of fiduciary duty owed the class during settlement. Accordingly, such agreements must withstand an even higher level of scrutiny for evidence of collusion or other conflicts of interest than is ordinarily required under Rule 23(e) before securing the court‘s approval as fair.‖). The Court nevertheless examined the Settlement for signs of collusion at the preliminary approval stage, and found none. Prelim. Approval Order at 10-17. Nothing causes the Court to change that finding now. 15 MOTION FOR ATTORNEYS’ FEES, COSTS, AND SERVICE AWARDS 1 2 Class Counsel request $650,000 in fees and costs incurred in litigating the Conditioning 3 Claims. Fees Mot. at 1; see Settlement ¶ 3.5. Of that figure, $601,336.74 represents attorneys‘ 4 fees and $48,663.25 represents costs. Fees Mot. at 3; Tindall Decl. ¶ 18. 5 A. 6 Attorneys’ Fees The EFTA provides that a prevailing consumer is entitled to ―the costs of the action, together with a reasonable attorney‘s fee as determined by the court.‖ 15 U.S.C. § 1693m(a)(3). 8 Counsel have spent 1,875.1 hours litigating the Conditioning Claims, with a total lodestar of 9 $1,156,585.63. Tindall Decl. ¶ 18; see Levy Decl. ¶¶ 45, 52; Riggin Decl. ¶ 6; Connolly Decl. ¶¶ 10 9, 14; Second Sturdevant Decl. ¶¶ 8-9, Dkt. No. 367-8; Terrell Decl. ¶ 12, Dkt. No. 367-7. Thus, 11 United States District Court Northern District of California 7 $601,336.74 represents approximately 40% of Class Counsel‘s lodestar. Fees Mot. at 1. 12 1. Legal Standard 13 Courts may award attorneys‘ fees and costs in a certified class action as authorized by law 14 or by the parties‘ agreement. Fed. R. Civ. P. 23(h). However, ―courts have an independent 15 obligation to ensure that the award, like the settlement itself, is reasonable, even if the parties have 16 already agreed to an amount.‖ In re Bluetooth, 654 F.3d at 941. 17 ―In this circuit, there are two primary methods to calculate attorneys fees: the lodestar 18 method and the percentage-of-recovery method.‖ In re Online DVD, 779 F.3d at 949. ―[C]ourts 19 have discretion to choose which calculation method they use[.]‖ In re Bluetooth, 654 F.3d at 942. 20 But the Ninth Circuit ―encourage[s] courts to guard against an unreasonable result by cross- 21 checking their calculations against a second method.‖ Id. at 944-45 (citations omitted). 22 23 24 25 26 27 28 In applying either method, courts evaluate the reasonableness of the award by balancing the Kerr factors: (1) the time and labor required, (2) the novelty and difficulty of the questions involved, (3) the skill requisite to perform the legal service properly, (4) the preclusion of other employment by the attorney due to acceptance of the case, (5) the customary fee, (6) whether the fee is fixed or contingent, (7) time limitations imposed by the client or the circumstances, (8) the amount involved and the results obtained, (9) the experience, reputation, and ability of the attorneys, (10) the ―undesirability‖ of the case, (11) the nature and length of the professional relationship with the client, and (12) awards in similar 16 cases. 1 2 Resurrection Bay Conservation All. v. City of Seward, Alaska, 640 F.3d 1087, 1095 & n.5 (9th 3 Cir. 2011) (quoting Kerr v. Screen Extras Guild, Inc., 526 F.2d 67, 70 (9th Cir. 1975)). ―Foremost 4 among these considerations, however, is the benefit obtained for the class.‖ In re Bluetooth, 654 5 F.3d at 942. 6 2. 7 The Court first considers the request for attorneys‘ fees under a lodestar analysis, then 8 9 10 Analysis confirms the result by applying a percentage-of-recovery analysis. a. Lodestar ―Use of the ‗lodestar method‘ to calculate attorney‘s fees under a federal fee-shifting United States District Court Northern District of California 11 statute is proper.‖ Tahara v. Matson Terminals, Inc., 511 F.3d 950, 955 (9th Cir. 2007) (citing 12 Staton, 327 F.3d at 965). ―The lodestar figure is calculated by multiplying the number of hours 13 the prevailing party reasonably expended on the litigation (as supported by adequate 14 documentation) by a reasonable hourly rate for the region and for the experience of the lawyer.‖ 15 In re Bluetooth, 654 F.3d at 941. This method therefore requires a two-step process: ―First, a 16 court calculates the lodestar figure by multiplying the number of hours reasonably expended on a 17 case by a reasonable hourly rate.‖ Kelly v. Wengler, 822 F.3d 1085, 1099 (9th Cir. 2016). 18 ―Second, the court determines whether to modify the lodestar figure, upward or downward, based 19 on factors not subsumed in the lodestar figure.‖ Id. ―There is a strong presumption that the 20 lodestar is a reasonable fee.‖ Stetson v. Grissom, 821 F.3d 1157, 1165 (9th Cir. 2016). 21 As noted, this case involved three types of claims: the Conditioning Claims, the 22 Unconscionability Claim, and the claims relating to CashCall‘s collection practices. The 23 Unconscionability Claim is currently being litigated before the California Supreme Court, and the 24 Court denied class certification as to claims regarding CashCall‘s collection practices. The 25 Settlement resolves only the Conditioning Claims, and Class Counsel seek compensation only for 26 hours spent on these claims. See Tindall Decl. ¶ 7; Riggin Decl. ¶ 8; Terrell Decl. ¶ 12; Second 27 Sturdevant Decl. ¶ 6. But in some instances, it is impractical to separate hours spent working on 28 the Conditioning Claims from time spent working on the other claims; for example, Class Counsel 17 1 drafted pleadings and other motions regarding the Conditioning Claims and Unconscionability 2 Claim. See Levy Decl. ¶ 46; Riggin Decl. ¶ 8. 3 As the Unconscionability Claim is the leading claim in this case, Counsel allocate half of 4 the commonly spent hours to this claim. Levy Decl. ¶ 48; Riggin Decl. ¶ 8; Connolly Decl. ¶ 12; 5 Second Sturdevant Decl. ¶ 6. They divide the remaining 50% of the commonly spent hours 6 equally between the Conditioning Claims and the collection practices claim. Id. (all). Allocating 7 25% of all common hours to the Conditioning Claims is reasonable, if not conservative, given that 8 Plaintiffs did not pursue the collection practices claims after the Court denied class certification on 9 them. Id. (all). Indeed, the bulk of the litigation before the Court has concerned the Conditioning Claims: the motions for summary judgment did so in part; the bench trial and the post-trial 11 United States District Court Northern District of California 10 motions exclusively so. The Court finds the 25% allocation of common hours to the Conditioning 12 Claims is reasonable. Class Counsel spent a total of 1,875 hours litigating the Conditioning Claims, broken down 13 14 as follows: 15 Firm 16 Gibbs Law Group LLP Law Office of Arthur D. Levy Rukin Hyland LLP Law Offices of Damon Connolly Terrell Marshall Law Group PLLC The Sturdevant Law Firm 17 18 19 20 Hours (Conditioning Claims + 25% of Common Hours)8 120.1 Rate Range Lodestar9 $320-$720 $66,730 483.1 $750 $362,343.75 521.1 $200-$720 $302,537.13 79.9 $525 $41,947.50 87.4 $400 $30,390 583.5 $200-$900 $352,637.25 21 22 23 24 25 26 27 28 8 These figures represent the total number of hours spent exclusively on the Conditioning Claim, plus 25% of the common hours. Mr. Levy, Ms. Riggins, Mr. Connolly, and Mr. Sturdevant provide breakdowns of these figures. See Levy Decl. ¶¶ 45, 52; Riggins Decl. ¶ 6; Connolly Decl. ¶¶ 9, 14; Second Sturdevant Decl. ¶ 7. Mr. Tindall and Ms. Terrell do not. See Tindall Decl.; Terrell Decl. 9 The lodestar figures take into account the hours spent by the various attorneys working on the case. Where individuals other than the declarant worked on this case, counsel provide a breakdown of those hours and identify the various attorneys, the related staff, and their hourly rates. See Tindall Decl. ¶¶ 7-8; Riggin Decl. ¶ 6; Second Sturdevant Decl. ¶ 8. 18 1 2 3 8 i. United States District Court Northern District of California 11 12 13 14 15 16 17 18 19 20 21 22 Hourly Rate and Hours Expended ―A reasonable hourly rate is ordinarily the ‗prevailing market rate in the relevant community.‘‖ Kelly, 822 F.3d at 1099 (quoting Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542, 551 (2010)) (brackets omitted). In this case, the relevant community is the San Francisco Bay Area. Plaintiffs‘ requested rates fall between $200 and $900, depending on the particular support 9 10 $1,156,586 Sturdevant Decl. ¶¶ 8-9. 5 7 -- Tindall Decl. ¶ 7; Levy Decl. ¶ 52; Riggin Decl. ¶ 6; Connolly Decl. ¶ 14; Terrell Decl. ¶ 12;10 4 6 1,875.1 TOTALS staff, attorney, or partner. Class Counsel describe the skills, experience, and reputations of the attorneys and support staff who worked on this matter, as well as their involvement. First Sturdevant Decl. ¶ 4; Tindall Decl. ¶¶ 3, 7-8, 10-11, 13-17; Levy Decl. ¶¶ 6-9; Riggin Decl. ¶¶ 24, 10-12; Connolly Decl. ¶¶ 2-7; Terrell Decl. ¶ 7. The range of rates requested for attorneys and support staff identified in the declarations is consistent with the overall range of market rates in this District for attorneys and staff with commensurate experience. See Prison Legal News v. Schwarzenegger, 608 F.3d 446, 455 (9th Cir. 2010) (district court did not abuse its discretion in awarding 2008 hourly rates for Bay Area attorneys of up to $875 for a partner, $700 for an attorney with 23 years of experience, $425 for an attorney with approximately five years of experience, and $190 for paralegals); see also Gutierrez v. Wells Fargo Bank, N.A., 2015 WL 2438274, at *5 (N.D. Cal. May 21, 2015) (finding reasonable rates for Bay Area attorneys of between $475-$975 for partners, $300-$490 for associates, and $150-$430 for litigation support and paralegals). The requested hourly rates are reasonable. ―Beyond establishing a reasonable hourly rate, a party seeking attorneys‘ fees bears the 23 24 10 25 26 27 28 In early 2015, Whitney Stark departed the Terrell Marshall Law Group LLC (―TMLG‖) and ceased her involvement in this matter. Suppl. Resp. ¶ 2, Dkt. No. 375. Beth Terrell assumed Ms. Starks‘ responsibilities for oversight of this matter on behalf of TMLG. Id. On November 9, 2017, Ms. Stark filed a notice of withdrawal as counsel. Dkt. No. 373. Ms. Terrell filed an appearance in this matter on November 14, 2017. Dkt. No. 374. The attorneys‘ fees and costs set forth in Ms. Terrell‘s declarations represent the hours and costs Ms. Stark expended on this litigation while at TMLG. See Terrell Decl.; Suppl. Terrell Decl. 19 1 burden to ―document[ ] the appropriate hours expended.‖ Hensley v. Eckerhart, 461 U.S. 424, 437 2 (1983). Counsel must exercise sound ―billing judgment‖ as to the number of hours worked, 3 eliminating excessive, redundant, or unnecessary hours, and provide billing records supporting the 4 time claimed. Id. at 433-34. Class Counsel ―is not required to record in great detail how each 5 minute of his time was expended,‖ but should ―identify the general subject matter of his [or her] 6 time expenditures.‖ Id. at 437 n.12; Fischer v. SJB-P.D. Inc., 214 F.3d 1115, 1121 (9th Cir. 2000) 7 (quoting id.). 8 Class Counsel spent a total of 1,875.1 hours working on the Conditioning Claims. Tindall 9 Decl. ¶ 18. This time was spent on motion practice, including drafting and arguing the motion for class certification, CashCall‘s Rule 23(f) petition, the motion for approval of notice, the motions 11 United States District Court Northern District of California 10 for summary judgment, and the Rule 59 and 52 motions. Suppl. Resp. ¶ 3(a); Suppl. Levy Decl. 12 ¶¶ 5-6, 9, 11-13, 16, Dkt. No. 375-1; Suppl. Sturdevant Decl. ¶¶ 3, 7, Dkt. No. 375-2; Suppl. 13 Riggin Decl. ¶ 4(b), Dkt. No. 375-3; Suppl. Connolly Decl. ¶ 4, Dkt. No. 375-4; Suppl. Terrell 14 Decl. ¶ 4, Dkt. No. 375-5. It also includes hours spent on discovery, trial, and settlement. Suppl. 15 Resp. ¶ 3(b)-(d); Suppl. Levy Decl. ¶¶ 3-4, 7-8, 10, 15; Suppl. Sturdevant Decl. ¶¶ 3, 5-10; Suppl. 16 Riggin Decl. ¶ 4; Suppl. Connolly Decl. ¶ 4. Counsel also spoke with Class Members regarding 17 the Claims. Suppl. Terrell Decl. ¶ 7 18 Based on Class Counsel‘s declarations, the Court finds Class Counsel and related staff 19 expended a reasonable number of hours on this litigation. See Fox v. Vice, 563 U.S. 826, 838 20 (2011) (―[T]rial courts need not, and indeed should not, become green-eyeshade accountants. The 21 essential goal in shifting fees (to either party) is to do rough justice, not to achieve auditing 22 perfection. So trial courts may take into account their overall sense of a suit, and may use 23 estimates in calculating and allocating an attorney‘s time.‖). 24 25 ii. Modification of Lodestar Class Counsel do not seek a multiplier; rather, their request for $601,336.74 in attorneys‘ 26 fees is a fraction of their lodestar. The Kerr factors confirm this request is reasonable. Few courts 27 have considered violations of § 1693k, the EFTA‘s prohibition on conditioning the repayment of 28 loans on EFT payments. See, e.g., FFCL at 12-13. Indeed, ―[o]nly one court seems to have 20 1 addressed both liability under section 1693k and assessed damages, but that court based its 2 damages award on state laws rather than the EFTA‘s damages provision, section 1693m.‖ Id. at 3 13 (citing CashCall, Inc. v. Morrisey, 2014 WL 2404300, at *4-5 (W. Va. May 30, 2014) 4 (unpublished op.), cert. denied sub nom. CashCall, Inc. v. Morrissey, 135 S. Ct. 2050 (2015)). 5 Despite the novelty of the issue presented, Class Counsel obtained favorable results for the Class: 6 Counsel prevailed on the issue of liability on the Conditioning Claims at summary judgment and 7 obtained a $500,000 award of actual damages following the bench trial. 8 9 The long duration of this case has limited at least some attorneys‘ ability to take on other cases. See Tindall Decl. ¶ 6; Riggin Decl. ¶ 16; Connolly Decl. ¶ 15. Class Counsel took this case on a contingent fee basis, with no guarantee of recovering fees or costs. Tindall Decl. ¶ 5; Levy 11 United States District Court Northern District of California 10 Decl. ¶ 49; Riggin Decl. ¶ 16; Connolly Decl. ¶ 15; Terrell Decl. ¶ 11. Nevertheless, their 12 collective skills, experience, and reputations aided them to obtain a settlement worth more than the 13 damages award they obtained at trial. 14 15 16 17 For these reasons, the Court finds the Kerr factors weigh in favor of the modification of Class Counsel‘s lodestar. b. Percentage-of-Recovery ―Under the percentage-of-recovery method, the attorneys‘ fees equal some percentage of 18 the common settlement fund[.]‖ In re Online DVD, 779 F.3d at 949. In the Ninth Circuit, ―courts 19 typically calculate 25% of the fund as the ‗benchmark‘ for a reasonable fee award, providing 20 adequate explanation in the record of any ‗special circumstances‘ justifying a departure.‖ In re 21 Bluetooth, 654 F.3d at 942. ―The benchmark percentage should be adjusted, or replaced by a 22 lodestar calculation, when special circumstances indicate that the percentage recovery would be 23 either too small or too large in light of the hours devoted to the case or other relevant factors.‖ Six 24 Mexican Workers v. Ariz. Citrus Growers, 904 F.2d 1301, 1311 (9th Cir. 1990). 25 Plaintiffs‘ request for $601,336.74 in attorneys‘ fees represents approximately 40% of the 26 total $1.5 million Settlement Fund, significantly higher than the 25% benchmark for a reasonable 27 award. The Court nevertheless finds it appropriate under the circumstances. First, no Class 28 Members object to the proposed fee award. Second, as discussed above, the requested fees 21 1 represent work over a nine-year period and constitute a fraction of the lodestar. The percentage- 2 of-recovery analysis therefore does not render the requested fees unreasonable. See Edwards v. 3 Nat’l Milk Producers Fed’n, 2017 WL 3616638, at *9 (N.D. Cal. June 26, 2017) (―‗Rather than 4 abandon the percentage-of-recovery method, the best way to guard against a windfall is first to 5 examine whether a given percentage represents too high a multiplier of counsel‘s lodestar.‘‖ 6 (quoting In re: Cathode Ray Tube (CRT) Antitrust Litig., 2016 WL 4126533, at *6 (N.D. Cal. 7 Aug. 3, 2016))). 8 3. 9 Having considered the requested fees under the lodestar and the percentage-of-recovery Summary analyses, the Court finds they are reasonable and GRANTS the Motion as to them. 11 United States District Court Northern District of California 10 B. 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Costs Plaintiffs also seek to recover the following costs: Firm Gibbs Law Group LLP The Law Office of Arthur D. Levy Rukin Hyland LLP The Law Offices of Damon Connolly Terrell Marshall Law Group PLLC The Sturdevant Law Firm TOTAL Costs $374.36 $16,921.46 $4,167.90 $729.64 $1,470 $24,999.90 $48,663.26 Tindall Decl. ¶ 4; Levy Decl. ¶ 53; Riggin Decl. ¶ 17; Connolly Decl. ¶ 15; Terrell Decl. ¶ 10; Second Sturdevant Decl. ¶ 10. Class Counsel calculated their costs incurred while litigating the Conditioning Claims with the same formula they used to determine their attorneys‘ fees. Counsel identified expenses incurred exclusively on the Unconscionability Claim and the Conditioning Claims, as well as Common Expenses. Suppl. Levy Decl. ¶ 18; Suppl. Sturdevant Decl. ¶ 13; Suppl. Riggin Decl. ¶ 6; Suppl. Connolly Decl. ¶ 6. Counsel then allocated 25% of the Common Expenses to the Conditioning Claims and added this figure to the costs devoted solely to the Conditioning Claim. Id. (all). These expenses include out-of-pocket, unreimbursed fees incurred litigating the 28 22 1 Conditioning Claims, including filing fees; mailing, service, copying of documents; travel costs; 2 computer research; trial preparation costs; and transcript fees. Tindall Decl. ¶ 4; Suppl. Levy 3 Decl. ¶ 17; Suppl. Sturdevant Decl. ¶ 12; Suppl. Riggin Decl. ¶ 6; Suppl. Connolly Decl. ¶ 6; 4 Suppl. Terrell Decl. ¶ 8. Rukin Hyland also incurred $9,994.12 in KCC‘s administration costs and 5 $1,418.53 in expert costs. Suppl. Riggin Decl. ¶ 6; see Settlement ¶ 3.6 (requiring CashCall to pay 6 administration costs separately from settlement fund). Having reviewed the requested costs, the Court finds they are reasonable and recoverable. 7 8 C. Service Awards Service or incentive ―awards are discretionary . . . , and are intended to compensate class 10 representatives for work done on behalf of the class, to make up for financial or reputational risk 11 United States District Court Northern District of California 9 undertaken in bringing the action, and, sometimes, to recognize their willingness to act as a private 12 attorney general.‖ Rodriguez, 563 F.3d at 958-59. ―[D]istrict courts must be vigilant in 13 scrutinizing all incentive awards to determine whether they destroy the adequacy of the class 14 representatives.‖ Radcliffe, 715 F.3d at 1164. ―Many courts in the Ninth Circuit have . . . held 15 that a $5,000 incentive award is ‗presumptively reasonable.‘‖ Gaudin v. Saxon Mortg. Servs., 16 Inc., 2015 WL 7454183, at *10 (N.D. Cal. Nov. 23, 2015) (collecting cases). 17 ―To determine the reasonableness of a requested incentive payment, courts consider the 18 proportionality between the incentive payment and the range of class members‘ settlement 19 awards.‖ Willner v. Manpower Inc., 2015 WL 3863625, at *9 (N.D. Cal. June 22, 2015). Where 20 there is a ―very large differential in the amount of damage awards between the named and 21 unnamed class members[,]‖ such differential record must be supported by the record. Staton, 327 22 F.3d at 978. 23 The Settlement provides for service awards of $10,000 each to Ms. Kempley and Mr. De 24 La Torre. Settlement ¶ 3.4. A $10,000 service award falls within the range of service awards 25 granted in this district. See Bellinghausen v. Tractor Supply Co., 306 F.R.D. 245, 267 (N.D. Cal. 26 2015) (―Incentive awards typically range from $2,000 to $10,000.‖ (collecting cases)); see also 27 Nelson v. Avon Prods., Inc., 2017 WL 733145, at *7 (N.D. Cal. Feb. 24, 2017) (―Courts in this 28 Circuit routinely grant requests for an award over $5,000 where the particular circumstances 23 1 warrant such an award.‖). Ms. Kempley joined this action in February 2010. Kempley Decl. ¶ 1, Dkt. No. 367-9. 2 3 She has traveled from her home in Sacramento to San Francisco to meet with her counsel and has 4 made herself available via telephone during trial and settlement conferences. Id. ¶ 2. In May 5 2010, she was deposed for several hours. Id. ¶ 3. This required several hours of preparation, 6 including gathering and reviewing documents. Id. Ms. Kempley has also reviewed papers with 7 her attorneys. Id. ¶ 4. She has devoted ―a significant number of hours‖ to do this, but she has 8 done so ―in order to do [her] job as class rep.‖ Id. Ms. Kempley also worked with her counsel on 9 post-trial motions, reviewing her deposition transcript and preparing her declaration. Id. ¶ 5. Mr. De La Torre has been a Plaintiff in this action since its inception. De La Torre Decl. ¶ 11 United States District Court Northern District of California 10 1, Dkt. No. 367-10. He has constantly stayed informed of developments; his counsel has sent him 12 reports and copies of briefs and Orders, which he has read to understand the status of the case. Id. 13 ¶ 1. Mr. De La Torre has also communicated with his counsel via telephone and email to discuss 14 the case and to make decisions. Id. Mr. De La Torre sat for a deposition in November 2009, 15 which required him to search for and produce documents to his counsel prior to and after the 16 deposition. Id. ¶ 2. In all, he has ―spent a significant number of hours on discovery on this case.‖ 17 Id. After the trial, Mr. De La Torre reviewed his deposition transcript and provided a statement in 18 support of Plaintiffs‘ motion to present additional testimony. Id. ¶ 3. He has also made himself 19 available via telephone during settlement conferences and has consulted with his counsel about 20 settlement decisions. Id. The Court finds $10,000 service awards are appropriate under these circumstances. Both 21 22 Ms. Kempley and Mr. De La Torre emphasize the long and arduous nature of this case. See 23 Kempley Decl. ¶ 6; De La Torre Decl. ¶ 4. Indeed, for nearly a decade, they have actively 24 participated in this litigation to assist their counsel. Accordingly, the Court GRANTS Plaintiffs‘ 25 request for a $10,000 service award to each Ms. Kempley and Mr. De La Torre. 26 C. 27 28 Summary Based on the foregoing, the Court GRANTS the Motion for Attorneys‘ Fees, Costs, and Service Awards. 24 1 CONCLUSION 2 3 In light of the foregoing analysis, the Court GRANTS Plaintiffs‘ Motion for Final 4 Approval of the Settlement and GRANTS Plaintiffs‘ Motion for Attorneys‘ Fees and Costs. The 5 Court thus ORDERS the following: 6 1. The Settlement is finally approved as fair, reasonable, and adequate for the reasons 7 set forth above. 8 2. Lori Kempley and Eduardo De La Torre are confirmed as Class Representatives. 9 3. The Sturdevant Law Firm, APC; The Law Office of Arthur D. Levy; Gibbs Law Group, LPP; Rukin Hyland LLP; The Law Offices of Damon M. Connolly; and The Terrell 11 United States District Court Northern District of California 10 Marshall Law Group PLLC are confirmed as Class Counsel. 12 13 14 15 16 17 18 4. CashCall shall pay to Class Counsel $601,336.74 in attorneys‘ fees and $48,663.26 in costs, to be allocated in the amounts set forth above. 5. Pursuant to paragraph 2.7 of the Settlement and as no Class Member has filed an objection, the Settlement shall become effective as of the date of this Order. 6. Pursuant to paragraph 4.12 of the Settlement, CashCall shall fund the settlement within 10 days of this Order. 7. Pursuant to paragraphs 3.1 and 4.12 of the Settlement, that is, not later than 20 days 19 after funding, KCC shall distribute payments to Class Members, service awards to the Class 20 Representatives, and attorneys‘ fees and costs to Class Counsel. 21 8. The California Reinvestment Coalition, Consumer Federation of California, 22 National Association of Consumer Advocates, and Consumer Federation of America are approved 23 as cy pres nominees. The Court shall determine the amounts, if any, to be paid to these nominees. 24 25 26 9. Each member of the Settlement Class not listed in Exhibit A to this Order shall be bound to the Settlement Agreement 10. Each member of the Settlement Class not listed in Exhibit A to this Order is 27 released from liability from all NSF fees CashCall charged prior to the cancellation, if any, of their 28 respective authorizations to collect loan payments via EFT, regardless of whether the Class 25 1 Member actually paid such fees. CashCall shall not engage in any further action to collect such 2 NSF fees with respect to any loans that are still owned by CashCall. If any Class Member has an 3 open loan account that includes unpaid charges for NSF fees, CashCall will recalculate such loan 4 account to eliminate such unpaid charges. 5 11. The individuals listed in Exhibit A to this Order have validly excluded themselves 6 from the Settlement, will receive no benefits under the Settlement, and will not be bound by the 7 Settlement. 8 12. This Order does not in any manner affect or impair (a) the Unconscionability Claim as defined in paragraph 2.21 of the Settlement; (b) Plaintiffs‘ Counsel‘s right to seek attorneys‘ 10 fees, litigation expenses, and court costs based on the Unconscionability Claim; (c) any claims 11 United States District Court Northern District of California 9 arising under any loan that is not covered by the Settlement Class definition; or (d) any claims by 12 persons listed on Exhibit A to this Order. 13 14 13. The Court shall retain jurisdiction over all matters relating to the interpretation, administration, implementation, effectuation, and enforcement of all provisions of the Settlement. 15 14. This Order shall constitute a final judgment in this action. 16 15. The Court shall conduct a status conference on May 10, 2018 at 10:00 a.m. in 17 Courtroom B, 450 Golden Gate Avenue, San Francisco, California. No later than seven days 18 before the status conference, the parties shall file a joint status report that indicates (1) the number 19 of Class Members who have cashed their settlement checks, (2) the amount of uncashed funds, (3) 20 whether uncashed funds should be redistributed to Class Members or paid to the aforementioned 21 cy pres recipients, (4) any issues the parties believe should be addressed, and (5) a proposed 22 course of action for remedying such issues, if any. 23 IT IS SO ORDERED. 24 25 26 27 Dated: November 17, 2017 ______________________________________ MARIA-ELENA JAMES United States Magistrate Judge 28 26

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