Rose v. Bank of America Corporation

Filing 125

ORDER denying 110 Motion for Reconsideration. Signed by Judge Edward J. Davila on 5/1/2015. (ejdlc4S, COURT STAFF) (Filed on 5/1/2015)

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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 SAN JOSE DIVISION 7 8 STEPHANIE ROSE, on behalf of herself and others similarly situated, Plaintiff, 9 10 United States District Court Northern District of California 11 12 Case Nos. 5:11-cv-02390-EJD; 5:12-cv-04009-EJD v. BANK OF AMERICA CORP., and FIA CARD SERVICES, N.A., ORDER DENYING MOTION FOR RECONSIDERATION Defendants. 13 14 15 CAROL DUKE and JACK POSTER, on behalf of themselves and others similarly situated, Plaintiffs, 16 17 18 19 20 21 v. BANK OF AMERICA, N.A.; BANK OF AMERICA, CORP.; and FIA CARD SERVICES, N.A., Defendants. Plaintiffs Stephanie Rose, Sandra Ramirez, Shannon Johnson, Amin Makin, Carol Duke, 22 Jack Poster, and Freddericka Bradshaw (“Plaintiffs”) initiated the present class action lawsuit 23 against Defendants Bank of America Corp., Bank of America, N.A., and FIA Card Services, N.A. 24 (collectively, “Defendants”) alleging violations of the Telephone Consumer Protection Act 25 (“TCPA”), 47 U.S.C. § 227, et seq. On August 29, 2014, this Court issued its Order Granting 26 Motion for Final Approval of Settlement; Granting in Part and Denying in Part Motion for 27 Attorney’s Fees and Costs (“Order”). Presently before the Court is Class Counsel’s Motion for 28 1 Case Nos.: 5:11-cv-02390-EJD; 5:12-cv-04009-EJD ORDER DENYING MOTION FOR RECONSIDERATION 1 Reconsideration of this Court’s Order. See Rose v. Bank of Am. Corp., No. 5:11-cv-02390-EJD, 2 Dkt. No. 110; Duke v. Bank of Am., N.A., No. 5:12-cv-04009-EJD, Dkt. No. 64 (“Mot.”). For the 3 following reasons, Class Counsel’s motion is DENIED. 4 I. BACKGROUND The parties reached a settlement agreement resolving six actions alleging that Bank of 5 6 America engaged in a systematic practice of calling or texting consumers’ cell phones through the 7 use of automatic telephone dialing systems and/or an artificial or prerecorded voice without their 8 prior express consent, in violation of the TCPA. Order at 2. On August 29, 2014, the Court 9 issued an Order granting final approval of the class action settlement agreement, and granting in part and denying in part Plaintiffs’ motion for attorneys’ fees and costs. While Class Counsel 11 United States District Court Northern District of California 10 sought 25% of the settlement fund of $32,083,905, which amounted to $8,020,976, the Court 12 concluded that a reduction was appropriate. Id. at 17. Therefore, the Court reduced the attorneys’ 13 fees and costs award to $2,402,243.91. Id. at 22. Judgment was entered on September 2, 2014. 14 On September 15, 2014, Class Counsel filed the instant motion challenging the attorneys’ 15 fees and costs awarded in the Order. See Mot. Objectors James Kirby and Susan House filed an 16 opposition brief, and Class Counsel filed a reply brief. 17 18 II. LEGAL STANDARD A motion under Federal Rule of Civil Procedure 59(e) may be granted on the following 19 grounds: “(1) if such motion is necessary to correct manifest errors of law or fact upon which the 20 judgment rests; (2) if such motion is necessary to present newly discovered or previously 21 unavailable evidence; (3) if such motion is necessary to prevent manifest injustice; or (4) if the 22 amendment is justified by an intervening change in controlling law.” Allstate Ins. Co. v. Herron, 23 634 F.3d 1101, 1111 (9th Cir. 2011). A successful Rule 59(e) motion is an exception, not the 24 norm, because it “offers an extraordinary remedy, to be used sparingly in the interests of finality 25 and conservation of judicial resources.” Kona Enters., Inc. v. Estate of Bishop, 229 F.3d 877, 890 26 (9th Cir. 2000). 27 28 2 Case Nos.: 5:11-cv-02390-EJD; 5:12-cv-04009-EJD ORDER DENYING MOTION FOR RECONSIDERATION 1 III. DISCUSSION In challenging the award of attorneys’ fees and costs, Class Counsel contends that the 2 3 Order is not supported by a fulsome review of the undisputed material facts relating to five key 4 issues: (1) the nature of the prospective practice changes required by the settlement; (2) the 5 amount of the monetary relief achieved by the settlement for each submitted claim; (3) class 6 counsel’s litigation strategy enhancing efficiency and saving the class millions of dollars; (4) the 7 number of hours Class Counsel worked on this litigation; and (5) the risk that Class Counsel 8 would not be paid for their work. Mot. at 1. Thus, Class Counsel requests that the Court correct 9 these undisputed facts, and alter the Judgment to award attorneys’ fees and costs in the amount of 10 United States District Court Northern District of California 11 12 $8,020,976, which is 25% of the common fund created in the settlement agreement. Id. at 14. A. Nature of the Prospective Practice Changes Required by the Settlement In its Order, the Court “question[ed] the ‘prospective relief’ provided by the Settlement 13 Agreement,” it expressed “concern[] that the prospective relief would not be of any benefit to 14 consumers because it would not prevent Defendants from continuing to call Class Members,” and 15 it concluded that “Defendants chang[ing] their systems to reflect the borrower’s prior express 16 consent means very little in the context of this lawsuit.” Order at 18. Here, Class Counsel 17 contends that these prospective practice changes are, in fact, significant because it provides class 18 members with the ability to stop the automated phone calls. Mot. at 3. Specifically, Class 19 Counsel argues that as a result of this litigation, the Bank of America, N.A.’s mortgage servicing 20 telephone calling policies changed so that it identified all cell phone numbers on a systematic 21 basis, placed those numbers on a “suppression table” to prevent calling via auto-dialer, and 22 obtained consent from the borrower before the number can again become eligible to be auto- 23 dialed. Id. at 3-4. Moreover, Class Counsel argues that Bank of America Corporation and FIA 24 Card Services, N.A. systematically review their databases on a daily basis to ensure that all 25 customers with cell phone numbers have given consent to be autodialed. Id. at 4. 26 The Court retains the same concerns it expressed in its Order. Since Defendants continue 27 to use the same definition of “prior express consent,” which has an unsettled meaning, it is 28 3 Case Nos.: 5:11-cv-02390-EJD; 5:12-cv-04009-EJD ORDER DENYING MOTION FOR RECONSIDERATION 1 possible that class members will continue to receive the automated calls that were the subject of 2 this litigation. See Order at 19. Class Counsel can continue to tout this relief as “exceptional” to 3 support an $8 million attorneys’ fee award, but the Court simply does not share that opinion. 4 Therefore, the Court will not disturb the position expressed in the Order. B. 5 Amount of Monetary Relief Achieved by the Settlement The Order states that “claimants will receive an average recovery of between $20 and $40” 6 and that “the $20 to $40 range falls in the lower range of recovery for achieved in other TCPA 8 class action settlements.” Order at 18. Here, Class Counsel contends that these figures were 9 conservative. Mot. at 6. In fact, Class Counsel argues, class members who submitted a claim for 10 mortgage calls or credit card calls would receive at least $57, and class members who submitted a 11 United States District Court Northern District of California 7 claim that they received both a mortgage and credit card call would receive at least $114. Id. at 6- 12 7. 13 Even if the average recovery is higher than that stated in the Order, this alone is not 14 sufficient to increase Class Counsel’s attorneys’ fee award from $2 million to $8 million. The 15 monetary results of the settlement agreement was one component of this Court’s analysis, which 16 also included an evaluation of the non-monetary relief, the risk of continuing litigation, the skill 17 required, and the contingency rationale. See Order at 18-21. Therefore, the increased economic 18 recovery is insufficient to depart from the opinion stated in the Order. Class Counsel’s Litigation Strategy 19 C. 20 In its Order, the Court stated that “much of the work done prior to settlement negotiations 21 and mediation was duplicative” and that “Class Counsel appear to have coordinated their efforts 22 from very early on in the proceedings.” Order at 14, 16. Here, Class Counsel contends that it did 23 not initially pursue a coordinated litigation strategy. Mot. at 7. It contends that in May 2011, the 24 Rose action was brought solely on behalf of persons who had a credit card serviced by FIA, and in 25 August 2011, the Ramirez action was brought against Bank of America, N.A. Id. It further 26 contends that when it learned that class members from both actions overlapped, the Duke action 27 was filed in July 2012 to provide a vehicle through which the cases could be litigated together 28 4 Case Nos.: 5:11-cv-02390-EJD; 5:12-cv-04009-EJD ORDER DENYING MOTION FOR RECONSIDERATION 1 given the overlap. Id. at 8. Moreover, Class Counsel argues that due to the overlap between the 2 mortgage and credit card class members, Class Counsel’s strategy resulted in at least $2 million in 3 savings because of the consolidated notice and administration costs. Id. at 8-9. 4 In issuing its Order, the Court examined Class Counsel’s billings which showed 5 duplicative work, and the history of the six separate actions involved in the settlement. Even in 6 the instant motion, as Class Counsel discusses the Rose, Ramirez, and Duke actions, it appears 7 that there was an overlap of law firms and/or counsel working on each of these actions. See Mot. 8 at 7-8. It is difficult to conceive that there was no coordinated litigation strategy or discussion 9 when counsel overlapped and all of the actions involved in the settlement sought to hold Defendants liable for allegedly making automated phone calls in violation of the TCPA. See 11 United States District Court Northern District of California 10 Order at 14-16. Therefore, the Court will not disturb the position expressed in the Order. 12 13 D. Number of Hours Class Counsel Worked In the instant motion, Class Counsel disputes the following: (1) the Order states that Class 14 Counsel’s total submitted lodestar was $1,396,523.75 from a total of 2,560.7 hours of work, but its 15 actual lodestar was $1,500,817.25; (2) the Order states that Class Counsel spent 800 hours in 16 settlement negotiations and mediation, but it actually spent 800 hours on settlement-related work; 17 (3) the Order states that the number of hours logged in Duke and Johnson prior to settlement 18 negotiations and mediation was 560 hours, but it actually spent under 160 hours; and (4) Class 19 Counsel states that it continues to spend time on this matter, including working with the 20 Settlement Administrator and responding to class members’ inquiries. Mot. at 9-11. 21 These arguments are unpersuasive. That the lodestar is actually higher than that stated in 22 the Order does not help Class Counsel as the Court had already determined that it was too high. 23 That Class Counsel spent 800 hours in settlement-related work rather than in settlement 24 negotiations and mediation is duly noted, but it alone does not warrant an increase of attorneys’ 25 fees. That the number of hours logged in Duke and Johnson were actually lower than that stated 26 in the Order is also duly noted, but again, it does not warrant a higher attorneys’ fee award. 27 Lastly, that Class Counsel continues to spend time on this matter is expected since large class 28 5 Case Nos.: 5:11-cv-02390-EJD; 5:12-cv-04009-EJD ORDER DENYING MOTION FOR RECONSIDERATION 1 action settlements require continuing work with its clients—the class members—and often 2 generate significant post-approval litigation. Having evaluated Class Counsel’s billings, this 3 Court had determined that a reduction in the number of hours worked was appropriate. See Order 4 at 16. Therefore, the Court will not disturb the position expressed in the Order. E. 5 Risk that Class Counsel Would Not Be Paid In the instant motion, Class Counsel argues that it took this matter on a contingency fee 6 7 basis and that it faced a real risk of non-payment. Mot. at 11. As Class Counsel is aware, this is a 8 risk inherent in litigation, particularly when serving as class counsel in a large class action suit. 9 As the Court stated in its Order, Class Counsel has a great deal of experience litigating TCPA class actions, it appeared to have a strategy of filing numerous small cases as a hedge against the 11 United States District Court Northern District of California 10 risk of recovering nothing, and given the liability of TCPA actions, defendants are apt to settling if 12 there is any merit to a case. See Order at 21. The Court did not find Class Counsel’s argument 13 persuasive when it first issued its Order, and it does not find it persuasive now. Therefore, the 14 Court will not disturb the position expressed in the Order. 15 IV. 16 CONCLUSION In sum, Class Counsel has not provided a persuasive argument so as to warrant the 17 extraordinary remedy of a successful Rule 59(e) motion. Accordingly, Class Counsel’s Motion 18 for Reconsideration is DENIED. 19 20 21 22 23 IT IS SO ORDERED. Dated: May 1, 2015 ______________________________________ EDWARD J. DAVILA United States District Judge 24 25 26 27 28 6 Case Nos.: 5:11-cv-02390-EJD; 5:12-cv-04009-EJD ORDER DENYING MOTION FOR RECONSIDERATION

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