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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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SAN JOSE DIVISION

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STEPHANIE ROSE, on behalf of herself and
others similarly situated,
Plaintiff,

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United States District Court
Northern District of California

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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.
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CAROL DUKE and JACK POSTER, on
behalf of themselves and others similarly
situated,
Plaintiffs,

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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,

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Jack Poster, and Freddericka Bradshaw (“Plaintiffs”) initiated the present class action lawsuit

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against Defendants Bank of America Corp., Bank of America, N.A., and FIA Card Services, N.A.

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(collectively, “Defendants”) alleging violations of the Telephone Consumer Protection Act

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(“TCPA”), 47 U.S.C. § 227, et seq. On August 29, 2014, this Court issued its Order Granting

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Motion for Final Approval of Settlement; Granting in Part and Denying in Part Motion for

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Attorney’s Fees and Costs (“Order”). Presently before the Court is Class Counsel’s Motion for

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Case Nos.: 5:11-cv-02390-EJD; 5:12-cv-04009-EJD
ORDER DENYING MOTION FOR RECONSIDERATION

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Reconsideration of this Court’s Order. See Rose v. Bank of Am. Corp., No. 5:11-cv-02390-EJD,

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Dkt. No. 110; Duke v. Bank of Am., N.A., No. 5:12-cv-04009-EJD, Dkt. No. 64 (“Mot.”). For the

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following reasons, Class Counsel’s motion is DENIED.

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I.

BACKGROUND
The parties reached a settlement agreement resolving six actions alleging that Bank of

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America engaged in a systematic practice of calling or texting consumers’ cell phones through the

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use of automatic telephone dialing systems and/or an artificial or prerecorded voice without their

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prior express consent, in violation of the TCPA. Order at 2. On August 29, 2014, the Court

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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

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United States District Court
Northern District of California

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sought 25% of the settlement fund of $32,083,905, which amounted to $8,020,976, the Court

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concluded that a reduction was appropriate. Id. at 17. Therefore, the Court reduced the attorneys’

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fees and costs award to $2,402,243.91. Id. at 22. Judgment was entered on September 2, 2014.

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On September 15, 2014, Class Counsel filed the instant motion challenging the attorneys’

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fees and costs awarded in the Order. See Mot. Objectors James Kirby and Susan House filed an

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opposition brief, and Class Counsel filed a reply brief.

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II.

LEGAL STANDARD
A motion under Federal Rule of Civil Procedure 59(e) may be granted on the following

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grounds: “(1) if such motion is necessary to correct manifest errors of law or fact upon which the

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judgment rests; (2) if such motion is necessary to present newly discovered or previously

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unavailable evidence; (3) if such motion is necessary to prevent manifest injustice; or (4) if the

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amendment is justified by an intervening change in controlling law.” Allstate Ins. Co. v. Herron,

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634 F.3d 1101, 1111 (9th Cir. 2011). A successful Rule 59(e) motion is an exception, not the

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norm, because it “offers an extraordinary remedy, to be used sparingly in the interests of finality

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and conservation of judicial resources.” Kona Enters., Inc. v. Estate of Bishop, 229 F.3d 877, 890

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(9th Cir. 2000).

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Case Nos.: 5:11-cv-02390-EJD; 5:12-cv-04009-EJD
ORDER DENYING MOTION FOR RECONSIDERATION

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III.

DISCUSSION
In challenging the award of attorneys’ fees and costs, Class Counsel contends that the

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Order is not supported by a fulsome review of the undisputed material facts relating to five key

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issues: (1) the nature of the prospective practice changes required by the settlement; (2) the

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amount of the monetary relief achieved by the settlement for each submitted claim; (3) class

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counsel’s litigation strategy enhancing efficiency and saving the class millions of dollars; (4) the

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number of hours Class Counsel worked on this litigation; and (5) the risk that Class Counsel

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would not be paid for their work. Mot. at 1. Thus, Class Counsel requests that the Court correct

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these undisputed facts, and alter the Judgment to award attorneys’ fees and costs in the amount of

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United States District Court
Northern District of California

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$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

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Agreement,” it expressed “concern[] that the prospective relief would not be of any benefit to

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consumers because it would not prevent Defendants from continuing to call Class Members,” and

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it concluded that “Defendants chang[ing] their systems to reflect the borrower’s prior express

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consent means very little in the context of this lawsuit.” Order at 18. Here, Class Counsel

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contends that these prospective practice changes are, in fact, significant because it provides class

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members with the ability to stop the automated phone calls. Mot. at 3. Specifically, Class

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Counsel argues that as a result of this litigation, the Bank of America, N.A.’s mortgage servicing

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telephone calling policies changed so that it identified all cell phone numbers on a systematic

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basis, placed those numbers on a “suppression table” to prevent calling via auto-dialer, and

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obtained consent from the borrower before the number can again become eligible to be auto-

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dialed. Id. at 3-4. Moreover, Class Counsel argues that Bank of America Corporation and FIA

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Card Services, N.A. systematically review their databases on a daily basis to ensure that all

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customers with cell phone numbers have given consent to be autodialed. Id. at 4.

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The Court retains the same concerns it expressed in its Order. Since Defendants continue

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to use the same definition of “prior express consent,” which has an unsettled meaning, it is

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Case Nos.: 5:11-cv-02390-EJD; 5:12-cv-04009-EJD
ORDER DENYING MOTION FOR RECONSIDERATION

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possible that class members will continue to receive the automated calls that were the subject of

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this litigation. See Order at 19. Class Counsel can continue to tout this relief as “exceptional” to

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support an $8 million attorneys’ fee award, but the Court simply does not share that opinion.

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Therefore, the Court will not disturb the position expressed in the Order.
B.

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Amount of Monetary Relief Achieved by the Settlement
The Order states that “claimants will receive an average recovery of between $20 and $40”

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and that “the $20 to $40 range falls in the lower range of recovery for achieved in other TCPA

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class action settlements.” Order at 18. Here, Class Counsel contends that these figures were

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conservative. Mot. at 6. In fact, Class Counsel argues, class members who submitted a claim for

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mortgage calls or credit card calls would receive at least $57, and class members who submitted a

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United States District Court
Northern District of California

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claim that they received both a mortgage and credit card call would receive at least $114. Id. at 6-

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7.

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Even if the average recovery is higher than that stated in the Order, this alone is not

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sufficient to increase Class Counsel’s attorneys’ fee award from $2 million to $8 million. The

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monetary results of the settlement agreement was one component of this Court’s analysis, which

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also included an evaluation of the non-monetary relief, the risk of continuing litigation, the skill

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required, and the contingency rationale. See Order at 18-21. Therefore, the increased economic

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recovery is insufficient to depart from the opinion stated in the Order.
Class Counsel’s Litigation Strategy

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C.

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In its Order, the Court stated that “much of the work done prior to settlement negotiations

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and mediation was duplicative” and that “Class Counsel appear to have coordinated their efforts

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from very early on in the proceedings.” Order at 14, 16. Here, Class Counsel contends that it did

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not initially pursue a coordinated litigation strategy. Mot. at 7. It contends that in May 2011, the

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Rose action was brought solely on behalf of persons who had a credit card serviced by FIA, and in

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August 2011, the Ramirez action was brought against Bank of America, N.A. Id. It further

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contends that when it learned that class members from both actions overlapped, the Duke action

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was filed in July 2012 to provide a vehicle through which the cases could be litigated together

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Case Nos.: 5:11-cv-02390-EJD; 5:12-cv-04009-EJD
ORDER DENYING MOTION FOR RECONSIDERATION

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given the overlap. Id. at 8. Moreover, Class Counsel argues that due to the overlap between the

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mortgage and credit card class members, Class Counsel’s strategy resulted in at least $2 million in

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savings because of the consolidated notice and administration costs. Id. at 8-9.

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In issuing its Order, the Court examined Class Counsel’s billings which showed

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duplicative work, and the history of the six separate actions involved in the settlement. Even in

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the instant motion, as Class Counsel discusses the Rose, Ramirez, and Duke actions, it appears

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that there was an overlap of law firms and/or counsel working on each of these actions. See Mot.

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at 7-8. It is difficult to conceive that there was no coordinated litigation strategy or discussion

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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

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United States District Court
Northern District of California

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Order at 14-16. Therefore, the Court will not disturb the position expressed in the Order.

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D.

Number of Hours Class Counsel Worked
In the instant motion, Class Counsel disputes the following: (1) the Order states that Class

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Counsel’s total submitted lodestar was $1,396,523.75 from a total of 2,560.7 hours of work, but its

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actual lodestar was $1,500,817.25; (2) the Order states that Class Counsel spent 800 hours in

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settlement negotiations and mediation, but it actually spent 800 hours on settlement-related work;

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(3) the Order states that the number of hours logged in Duke and Johnson prior to settlement

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negotiations and mediation was 560 hours, but it actually spent under 160 hours; and (4) Class

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Counsel states that it continues to spend time on this matter, including working with the

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Settlement Administrator and responding to class members’ inquiries. Mot. at 9-11.

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These arguments are unpersuasive. That the lodestar is actually higher than that stated in

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the Order does not help Class Counsel as the Court had already determined that it was too high.

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That Class Counsel spent 800 hours in settlement-related work rather than in settlement

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negotiations and mediation is duly noted, but it alone does not warrant an increase of attorneys’

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fees. That the number of hours logged in Duke and Johnson were actually lower than that stated

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in the Order is also duly noted, but again, it does not warrant a higher attorneys’ fee award.

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Lastly, that Class Counsel continues to spend time on this matter is expected since large class

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Case Nos.: 5:11-cv-02390-EJD; 5:12-cv-04009-EJD
ORDER DENYING MOTION FOR RECONSIDERATION

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action settlements require continuing work with its clients—the class members—and often

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generate significant post-approval litigation. Having evaluated Class Counsel’s billings, this

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Court had determined that a reduction in the number of hours worked was appropriate. See Order

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at 16. Therefore, the Court will not disturb the position expressed in the Order.
E.

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Risk that Class Counsel Would Not Be Paid
In the instant motion, Class Counsel argues that it took this matter on a contingency fee

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basis and that it faced a real risk of non-payment. Mot. at 11. As Class Counsel is aware, this is a

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risk inherent in litigation, particularly when serving as class counsel in a large class action suit.

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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

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United States District Court
Northern District of California

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risk of recovering nothing, and given the liability of TCPA actions, defendants are apt to settling if

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there is any merit to a case. See Order at 21. The Court did not find Class Counsel’s argument

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persuasive when it first issued its Order, and it does not find it persuasive now. Therefore, the

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Court will not disturb the position expressed in the Order.

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IV.

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CONCLUSION
In sum, Class Counsel has not provided a persuasive argument so as to warrant the

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extraordinary remedy of a successful Rule 59(e) motion. Accordingly, Class Counsel’s Motion

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for Reconsideration is DENIED.

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IT IS SO ORDERED.
Dated: May 1, 2015
______________________________________
EDWARD J. DAVILA
United States District Judge

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Case Nos.: 5:11-cv-02390-EJD; 5:12-cv-04009-EJD
ORDER DENYING MOTION FOR RECONSIDERATION