Newton v. American Debt Services, Inc et al

Filing 354

ORDER by Judge Edward M. Chen granting 337 Motion for Attorney Fees; granting 344 Motion for Settlement. (bpfS, COURT STAFF) (Filed on 7/1/2016)

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Tavy A. Dumont (CSB #244946)
LAW OFFICE OF TAVY A. DUMONT
101 Cooper Street, Suite 223
Santa Cruz, CA 95060
Telephone: [phone]
Facsimile: [phone]
[e-mail]
William E. Kennedy (CSB #158214)
CONSUMER LAW OFFICE OF WILLIAM E. KENNEDY
2797 Park Avenue, Suite 201
Santa Clara, CA 95050
Telephone: [phone]
Facsimile: [phone]
[e-mail]

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Attorneys for Plaintiff
HEATHER L. NEWTON and the Class

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SAN FRANCISCO DIVISION

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HEATHER L. NEWTON, individually and on
behalf of others similarly situated,

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Plaintiff,
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AMERICAN DEBT SERVICES, INC., et al,

[PROPOSED] ORDER GRANTING FINAL
APPROVAL OF CLASS ACTION
SETTLEMENT, AND JUDGMENT

v.

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Case No.: 3:11-cv-03228 EMC

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Defendants.

Hearing Date: June 30, 2016
Hearing Time: 1:30 p.m.
Room: Courtroom 5, 17th Floor
Action filed: June 29, 2011
Trial date: Vacated

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[PROPOSED] ORDER GRANTING FINAL APPROVAL OF SETTLEMENT,
AND JUDGMENT

CASE NO. 3:11-CV-03228 EMC

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I.

Before the Court is Plaintiff Heather L. Newton’s unopposed Motion for Final Approval of

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INTRODUCTION

Class Action Settlement. Docket No. 344.
On June 9, 2015, on a contested motion for class certification, the Court certified a class in this

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matter. Docket No. 313. On September 9, 2015, Plaintiff and Defendants Global Client Solutions, LLC

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(“Global”) and Rocky Mountain Bank & Trust (“RMBT”) (all, “the Parties”) reached a settlement in

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private mediation with the Honorable Rebecca Westerfield. See Docket No. 322, p. 6, ll. 26.27. On

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November 12, 2015, Plaintiff filed her Motion for Preliminary Approval of Class Action Settlement,

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along with the Settlement Agreement and Release between Plaintiff Heather L. Newton and Defendants

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Global Client Solutions, LLC and Rocky Mountain Bank & Trust (“Settlement Agreement”). Docket

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Nos. 322, 323-1. On November 30, 2015, the Court ordered supplemental briefing as to certain issues

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relating to the settlement, ordered certain changes to the parties’ proposed Notice of Settlement, and

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ordered Plaintiff to file under seal her attorneys’ time records to support a lodestar calculation. See

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Docket No. 330. In response, the Parties filed a joint supplemental brief and revised proposed Notice of

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Settlement. Docket No. 331. Plaintiff also submitted a declaration attaching her attorneys’ time

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records, with an Administrative Motion to File under Seal. Docket No. 332. The Court held a hearing

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on preliminary approval on December 17, 2015, and on January 15, 2016 granted Plaintiff's Motion for

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Preliminary Approval of the Settlement; approved the form, content and manner of Notice of

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Settlement; and approved CPT Group as Administrator for all aspects of the settlement. Docket No.

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336.

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In determining that the settlement merited preliminary approval, the Court previewed the factors

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that ultimately will determine final approval, as set out in Churchill Village, L.L.C. v. Gen. Elec., 361

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F.3d 566, 575 (9th Cir. 2004): (1) the strength of the plaintiffs’ case; (2) the risk, expense, complexity,

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and likely duration of further litigation; (3) the risk of maintaining class action status throughout the

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trial; (4) the amount offered in settlement; (5) the extent of discovery completed and the stage of the

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proceedings; (6) the experience and views of counsel; (7) the presence of a governmental participant;

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and (8) the reaction of class members to the proposed settlement. The Court found that the first,

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second, fourth, fifth and sixth factors weigh in favor of approval, the third factor is neutral, the seventh

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[PROPOSED] ORDER GRANTING FINAL APPROVAL OF SETTLEMENT,
AND JUDGMENT

CASE NO. 3:11-CV-03228 EMC

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factor is inapplicable and, because notice of settlement had not yet been given at that time, it was too

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early to evaluate the eighth factor, the reaction of class members to the proposed settlement. Docket

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No. 336, pp. 7-9.

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CPT Group disseminated the approved Notice of Settlement on February 15, 2016. Docket No.

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345, Skey Declaration, at ¶ 7. The deadline for objection was 90 days later, Docket No. 336, p. 12, ll.

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6-7, and thus has passed. CPT Group received no written objections to the settlement. Docket No.

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345, Skey Declaration, at ¶ 11. The Court received no objections to the settlement.

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Now, having carefully considered Plaintiff’s Motion for Final Approval of Class Action
Settlement, and the Settlement Agreement,

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IT IS HEREBY ORDERED THAT:

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1. Pursuant to this Court's class certification order of June 9, 2015 (Docket No. 313), the Class

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has been defined as:

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All consumers in California who paid QSS directly, or indirectly through ADS, for debt
settlement services during the four years preceding filing of the complaint, who opened a
Special Purpose Account with RMBT to be administered by Global, and did not receive a
full refund of all fees and charges paid to all Defendants.

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2. For the reasons stated above and in the Court’s Order of January 15, 2016 preliminarily

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approving the settlement, the Court finally approves the Settlement Agreement set forth in the

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November 12, 2015 Motion for Preliminary Approval of Class Action Settlement, Docket No. 322. The

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Court finds the settlement negotiations were conducted at arms-length and in good faith among counsel

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for the Parties, and that the terms of the Settlement Agreement are in all respects fair, reasonable, and

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adequate as to each of the Parties and the Class Members, and are consistent and in compliance with all

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requirements of Due Process and California law, as to, and in the best interests of, each of the Parties

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and the Class Members.

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3. No Class Members have filed timely requests for exclusion. The Class Members who did not

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timely request exclusion are bound by this Final Order and Judgment and by the Settlement Agreement,

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including the releases provided for in this Final Order and Judgment and in the Settlement Agreement.

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4. The Notice of Settlement and the notice methodology that was implemented pursuant to the

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Settlement Agreement and this Court’s January 15, 2016 Order constituted the best practicable notice

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[PROPOSED] ORDER GRANTING FINAL APPROVAL OF SETTLEMENT,
AND JUDGMENT

CASE NO. 3:11-CV-03228 EMC

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under the circumstances. The notice provided due, adequate and sufficient notice of the settlement

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approval proceedings and of the matters set forth in the proposed settlement, to all persons entitled to

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receive notice, and constituted notice reasonably calculated to apprise Class Members of their right to

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object to the proposed settlement and to appear at the Final Approval Hearing. The notice fully

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satisfied the requirements of the Rule 23(e) of the Federal Rules of Civil Procedure, all applicable

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requirements of due process and California law, and the January 15, 2016 Order of this Court.

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5. The Court finds that Plaintiff’s Counsel and Plaintiff adequately represented the Class
Members in this litigation.

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6. The Settlement Agreement and this Final Order and Judgment shall be binding on, and have

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res judicata and preclusive effect in, all pending and future lawsuits or other proceedings encompassed

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by the Release in the Settlement Agreement, maintained by or on behalf of Plaintiff and all other

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members of the Class.

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7. Plaintiff Heather L. Newton and the Class Members, on behalf of themselves, their heirs,

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executors, administrators, predecessors, successors and assigns, have released and forever discharged

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the Released Parties from the Released Claims (as both those terms are defined in the Settlement

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Agreement), and as to the Released Parties shall be forever barred from instituting, maintaining, or

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prosecuting any action on the Released Claims.

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8. Global and RMBT, on behalf of themselves, their heirs, executors, administrators,

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predecessors, successors and assigns, have released and forever discharged the Plaintiff, Class

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Members, and their attorneys from, and shall be forever barred from instituting, maintaining, or

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prosecuting, any claims for fees, costs, indemnity or contribution.

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9. Each and every term of the Settlement Agreement shall be binding upon, and inure to the

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benefit of, Plaintiff and the other Class Members, Global and RMBT, and any of their successors and

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personal representatives (in their capacities as such), which persons and entities are intended to be

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beneficiaries of the Settlement Agreement.

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10. The Parties shall be deemed to have agreed that the releases set forth in the Settlement

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Agreement will be and may be raised as a complete defense to and will preclude any action or

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proceeding based on the Released Claims, as that term is defined in the Settlement Agreement.

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[PROPOSED] ORDER GRANTING FINAL APPROVAL OF SETTLEMENT,
AND JUDGMENT

CASE NO. 3:11-CV-03228 EMC

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11. None of the above releases includes releases of claims to enforce the terms of the Settlement
Agreement.
12. The Court approves a class representative services award of $7,500 to Plaintiff Heather L.

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Newton, and an award of attorneys’ fees of $348,091, and costs of $19,409, as set forth in Plaintiff’s

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Motion for Attorneys’ Fees, Costs and Service Award, Docket No. 337.

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13. Not later than fifteen (15) days after the Effective Date, as that term is defined in the

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Settlement Agreement, Defendants Global Client Solutions, LLC and Rocky Mountain Bank & Trust

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shall forward $375,000.00 to the Administrator for restitution payments to the Class Members

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designated in Exhibit 2 to the Settlement Agreement. Not later than forty (40) days after the Effective

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Date as that term is defined in the Settlement Agreement, the Administrator shall distribute the

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payments to the Class Members by first class mail. Pursuant to the terms of the Settlement Agreement,

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the Administrator shall distribute the $375,000 pro rata to each of the Class Members, including Class

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Representative Heather L. Newton, according to the dollar amount each Class Member paid in fees to

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all defendants combined, which dollar amounts are listed in Exhibit 2 to the Settlement Agreement.

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14. To the extent that any part of the $375,000.00 in class relief cannot be distributed, by reason

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that the Class Member cannot be located using the procedures described in the Settlement Agreement,

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or because the refund checks provided to Class Members are not negotiated within 90 days of mailing,

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or for any other reason, the undistributed funds shall be donated, half to the Watsonville Law Center in

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Watsonville, California, and half to the Katherine and George Alexander Law Center in San Jose,

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California as cy pres.

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15. Pursuant to the Settlement Agreement, Defendants Global Client Solutions, LLC and Rocky

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Mountain Bank & Trust shall pay for administration, class representative service award, and attorneys’

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fees and costs by delivering a check in the amount of $375,000.00, addressed to and payable to the

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Consumer Law Office of William E. Kennedy, not later than fifteen (15) days after the Effective Date.

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Within fifteen (15) days of receiving the check, Attorney Kennedy in turn will forward a service award

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payment of $7,500.00 to Class Representative Heather L. Newton, and distribute the approved

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attorneys’ fees award of $348,091, and costs award of $19,409 among Plaintiff’s Counsel.

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[PROPOSED] ORDER GRANTING FINAL APPROVAL OF SETTLEMENT,
AND JUDGMENT

CASE NO. 3:11-CV-03228 EMC

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16. Pursuant to the Settlement Agreement, Defendants Global Client Solutions, LLC and Rocky
Mountain Bank & Trust are jointly and severally responsible for payments of the sums ordered herein.
17. This action is dismissed on the merits and with prejudice as to Defendants Global Client

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Solutions, LLC and Rocky Mountain Bank & Trust and this dismissal shall be without fees of costs to

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any party, except as otherwise provided herein and in the Settlement Agreement. This action is

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dismissed without prejudice as to Defendants American Debt Services, Inc. and Quality Support

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Services, LLC.

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18. The Settlement Agreement and the settlement provided for therein, and any proceedings
taken pursuant thereto, are not, and should not in any event be offered or received as evidence of, a

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presumption, concession, or an admission of liability by Global, and RMBT; provided, however, that

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reference may be made to this Settlement Agreement and the settlement provided for therein in such

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proceedings as may be necessary to effectuate the provisions of this Settlement Agreement.

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19. The Court directs the Parties and their counsel to implement and consummate the

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Settlement Agreement in accordance with its terms and provisions, and authorizes the Parties, without

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further approval from the Court, to agree to and adopt such amendments, modifications, and expansions

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of the Settlement Agreement and all exhibits thereto as (i) shall be consistent in all material respects

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with this Final Order and Judgment and (ii) do not limit the rights of Class Members.

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20. Without affecting the finality of the Final Order and Judgment for purposes of appeal, the

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Court retains jurisdiction over Global, RMBT, the Plaintiff, and the Class Members as to all matters

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relating to the administration, consummation, enforcement, and interpretation of the terms of the

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settlement and this Final Order and Judgment, and for any other necessary purposes.

IT IS SO ORDERED.

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Hon. Edward M. Chen
United States District Judge
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M. Che
Edward
Judge

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[PROPOSED] ORDER GRANTING FINAL APPROVAL OF SETTLEMENT,
AND JUDGMENT

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Dated: _____________________

R NIA

D
RDERE
S SO O
______________________________
IT I

July 1, 2016

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S DISTRICT
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UNIT
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This order disposes of Docket No. 344.

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