Smith v. Gurstel Chargo, PA, et al

Filing 32

ORDER OF FINAL APPROVAL OF CLASS ACTION SETTLEMENT - The parties' joint motion for final approval of class action settlement (Filing No. 28 ) is granted. Pursuant to Fed. R. Civ. P. 23(b)(3), this action is certified as a class action, for settlement purposes only, on behalf of the following class: All individuals in the State of Nebraska to whom during the period commencing four years prior to the filing of suit, June 17, 2014, through the date of preliminary approval, November 17, 2014, the defendant sent a letter substantially similar to Exhibit A to the plaintiff's complaint and whose letter was not returned as undeliverable. A sub-class ("the FDCPA sub-class") is certified consisting of Nebraska consumers to whom such letters were sent during the portion of the class period commencing one year prior to the filing of this suit. Excluded from the Class are: a. any person who is already subject to an existing release; b. any person who was deceased as of the date of the preliminary approval order; c. any person who was discharged in bankruptcy under Title 11 of the United States Code as of the date of the preliminary approval order; and d. any Class Member who timely mailed a request for exclus ion, namely, Monica A. Fisher and Jerry L. Mertz. The Court finally certifies plaintiff Gary D. Smith as the Class Representative and O. Randolph Bragg, Pamela A. Car, and William L. Reinbrecht as Class Counsel for the Class Members. The parties& #039; proposed Settlement Agreement (Filing No. 22 , Ex. 1) is approved and incorporated herein by reference. Pursuant to the Settlement Agreement, the plaintiff's class claims against the defendant are dismissed. This order is binding on all Class Members, except those individuals who validly and timely excluded themselves from the Class. The plaintiff's unopposed motion for attorney fees (Filing No. 25 ) is granted. A judgment in favor of the plaintiff and against defenda nt in the amount of $1,000 in statutory damages and $2,000 in compensation for service as Class Representative, and in the amount of $12,547.60 for attorney fees will be entered this date. Ordered by Senior Judge Joseph F. Bataillon. (TCL )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA
GARY D. SMITH, on behalf of himself and
all others similarly situated;
8:14CV183
Plaintiff,
v.

ORDER OF FINAL APPROVAL OF
CLASS ACTION SETTLEMENT

GURSTEL CHARGO, PA,
Defendant.

This matter is before the court on the parties' joint motion for approval of class
action settlement, Filing No. 28, and on the plaintiff's unopposed motion for attorney
fees, Filing No. 25. On March 19, 2015, a Final Fairness Hearing was held on the
proposed class action settlement. No objections to the proposed partial settlement or
notices of intent to appear were filed, and no one appeared at the hearing to object.
I.

FACTS

In October, 2014, after arms-length negotiations, the parties entered into a Class
Action Settlement Agreement (hereinafter, the “Agreement”), which is subject to review
under Fed. R. Civ. P. 23. Filing No. 22, Index of Evid., Ex. 1, Settlement Agreement.
On October 27, 2014, the parties jointly moved for class certification and for preliminary
approval of the class action settlement agreement.

Filing No. 20, Joint Motion To

Certify Class And For Preliminary Approval Of Class Settlement. Id. The defendant
has shown that within ten days of filing the proposed settlement, the defendant
complied with the requirements of 28 U.S.C. § 1715(b) by serving the requisite notice
on the appropriate State and Federal officials. Filing No. 30, Index of Evid., Ex. 3,
Proposed Final Order at 1.

On November 17, 2014, on consideration of the parties’ Motion for Preliminary
Approval and the record, the court certified the class and preliminarily approved the
Settlement (hereinafter referred to as the “Preliminary Approval Order”). Filing No. 23,
Order Preliminarily Certifying Class and Granting Preliminary Approval of Settlement.
Pursuant to that order, the Court, among other things, (i) preliminarily certified (for
settlement purposes only) a class (hereinafter referred to as the “Class Members”) with
respect to the claims asserted in the Lawsuit; (ii) preliminarily approved the proposed
settlement; (iii) appointed Plaintiff Gary D. Smith as the Class Representative; (iv)
appointed O. Randolph Bragg, and Pamela A. Car, and William L. Reinbrecht as Class
Counsel for the Class Members; and (v) set the date and time of the Final Fairness
Hearing.
On March 16, 2015, the parties filed their Motion for Final Approval of Class
Action Settlement (hereinafter referred to as the “Final Approval Motion”). On March 19,
2015, a Final Fairness Hearing was held pursuant to Fed. R. Civ. P. 23 to determine
applicable prerequisites for class action treatment were satisfied and whether the
proposed settlement is fundamentally fair, reasonable, adequate, and in the best
interest of the Class Members and should be fully and finally approved by the Court.
II.

LAW

In approving a class settlement, the district court must consider whether it is fair,
reasonable, and adequate. DeBoer v. Mellon Mortgage Co., 64 F.3d 1171, 1178 (8th
Cir. 1995). A district court is required to consider four factors in determining whether a
settlement is fair, reasonable, and adequate:

(1) the merits of the plaintiff's case,

weighed against the terms of the settlement; (2) the defendant's financial condition; (3)
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the complexity and expense of further litigation; and (4) the amount of opposition to the
settlement. In re Wireless Tel. Fed. Cost Recovery Fees Litig., 396 F.3d 922, 931 (8th
Cir. 2005). “The most important consideration in deciding whether a settlement is fair,
reasonable, and adequate is ‘the strength of the case for plaintiffs on the merits,
balanced against the amount offered in settlement.’” Id. at 933 (quoting Petrovic v.
Amoco Oil Co., 200 F.3d 1140, 1150 (8th Cir. 1999) (internal quotations omitted)). A
court may also consider procedural fairness to ensure the settlement is “not the product
of fraud or collusion.” Id. at 934. The experience and opinion of counsel on both sides
may be considered, as well as whether a settlement resulted from arm's-length
negotiations, and whether a skilled mediator was involved. See DeBoer, 64 F.3d at
1178. A court may also consider the settlement's timing, including whether discovery
proceeded to the point where all parties were fully aware of the merits. With respect to
notice, due process is satisfied where class members receive notice of a settlement
proposal and are able to argue their objections to district court. Id. at 1176.
The parties have shown that class action notices and claim forms were mailed to
all of the Class Members. See Filing No. 30, Index of Evid., Exs. 1, Affidavit of Eugene
G. Randono; Ex. 2, Notice. The form and method for notifying the class members of the
settlement and its terms and conditions satisfies the requirements of Fed. R. Civ. P.
23(c)(2)(B) and due process, and constitutes the best notice practicable under the
circumstances. The court finds that the proposed notice was clearly designed to advise
the class members of their rights.
The record shows the class members were given a fair and reasonable
opportunity to appear at the Fairness Hearing and to object to the settlement. No Class
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Member appeared at the hearing or otherwise objected to the settlement. The Class
Members who made valid and timely requests for exclusion are excluded from the class
and settlement and are not bound by this Order. There are two such persons, and they
are: Monica A. Fisher and Jerry L. Mertz. See Id., Ex. 1, Randono Aff. at 2; Ex. 3,
Parties Proposed Order at 5.
The parties have requested final certification of the Settlement Class under Fed.
R. Civ. P. 23(b)(3) and final approval of the proposed class action settlement and
approval of attorney fees and costs. For the reasons stated in its order granting
preliminary approval, Filing No. 23, the Court finds that class action treatment under
Fed. R. Civ. P. 23 is appropriate. The court finds the class members are so numerous
that joinder of all of them in the action is impracticable; there are questions of law and
fact common to the Class Members that predominate over any individual questions; the
claims of the plaintiff are typical of the claims of the class members; the plaintiff and
class counsel have fairly and adequately represented and protected the interests of all
of the class members; and class treatment of these claims is efficient and manageable
and a class action is superior to other available methods for a fair and efficient
adjudication of this controversy. See Fed. R. Civ. P. 23
The Court has read and considered the Settlement Agreement and the record.
The material terms of the Settlement include payment of $1,000 in statutory damages
and $2,000 in compensation for his service as Class Representative to the named
plaintiff, distribution of $5,000.00 equally among all members of the Class who have not
been excluded, and distribution of $4,259.03 equally among all members of the FDCPA
Sub-Class who have not been excluded. Filing No. 22, Index of Evid., Ex. 1, settlement
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Agreement at 12. Significantly, the defendant also agrees to cease using letters in the
form of Exhibit A attached to the Complaint. The Court finds that the settlement of the
action, on the terms and conditions set forth in the Agreement is in all respects
fundamentally fair, reasonable, adequate, and in the best interest of the class members,
especially in light of the fact that the defendant is paying the maximum statutory
damages allowed by law to the FDCPA Sub-Class. See Filing No. 22, Ex. 1, Settlement
Agreement at 12.
Based on the court's familiarity with the case throughout the course of this
litigation, the court concludes that the proposed partial settlement is within the range of
potential outcomes in this case. The strength of plaintiff’s case against this defendant is
tempered by the defendant's limited resources and the statutory damages caps. In
addition to providing some monetary compensation to class members, the proposed
settlement provides the important benefit of the defendant's agreement to change its
collections practices. Further, there are no objections to the settlement. Under the
circumstances, the court finds the settlement is fair, reasonable, adequate and in the
best interests of the class. Accordingly, the court finds that the proposed settlement
should be approved.
The defendant also agreed, subject to the approval of the Court, to pay
reasonable attorney’s fees and expenses of the plaintiff’s attorneys in an amount not to
exceed $12,547.60. Filing No. 22, Index of Evid., Ex. 1, Settlement Agreement at 13. A
thorough judicial review of fee applications is required in all class action settlements. In
re Diet Drugs, 582 F.3d 524, 537-38 (3d Cir. 2009); Johnson v. Comerica Mortgage
Corp., 83 F.3d 241, 246 (8th Cir. 1996) (noting that the district court bears the
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responsibility of scrutinizing attorney fee requests). Courts utilize two main approaches
to analyzing a request for attorney fees: (1) the “lodestar” methodology (multiplying the
hours expended by an attorneys’ reasonable hourly rate of compensation to produce a
fee amount that can be adjusted to reflect the individualized characteristics of a given
action); and (2) the “percentage of the benefit” approach (permitting an award of fees
that is equal to some fraction of the common fund that the attorneys were successful in
gathering during the course of the litigation). Johnston, 83 F.3d at 244-45.
Notice of the attorney fee agreement has been provided to the class. See Filing
No. 22, Index of Evid., Ex. 4, Class Notice at 3. In support of its unopposed motion for
attorney fees, the plaintiff have shown that plaintiff's attorneys, O. Randolph Bragg,
Pamela A. Car, and William L. Reinbrecht, and a paralegal have expended a total of
close to 32 hours at rates of $125 to $350 per hour, resulting in lodestar amount of
$14,937.60.

Filing No. 27, Index of Evid., Exs. 1 & 1A, Declaration of William

Reinbrecht and time records; Exs. 2 & 2A, declaration of O. Randolph Bragg and time
records; Exs. 3 & 3A, Declaration of Pamela Car and time records. They have incurred
costs in the amount of $502. Id., Ex. 1, Reinbrecht Decl. at 8.
The court finds the award of attorney fees and costs agreed to in the Settlement
Agreement are fair and reasonable. The court is familiar with attorney rates in this
community and with the competence and expertise of the attorneys representing the
class. The court finds rates of $300 to $350 per hour for attorneys and $125 per hour
for paralegals are reasonable in this community for professionals with the experience
and expertise of the plaintiff's counsel. Furthermore the number of hours expended is
reasonable in view of the nature of the litigation and the complexity of issues. The
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amount of attorney fees agreed to in the Settlement Agreement is lower that the
lodestar amount, which itself is reasonable.
counsels' services have benefitted the class.

The plaintiff has demonstrated that
Accordingly, the court finds the

unopposed motion for attorney fees should be granted.
IT IS HEREBY ORDERED:
1.

The parties' joint motion for final approval of class action settlement (Filing

No. 28) is granted.
2.

Pursuant to Fed. R. Civ. P. 23(b)(3), this action is certified as a class

action, for settlement purposes only, on behalf of the following class:
All individuals in the State of Nebraska to whom during the period
commencing four years prior to the filing of suit, June 17, 2014, through
the date of preliminary approval, November 17, 2014, the defendant sent
a letter substantially similar to Exhibit A to the plaintiff’s complaint and
whose letter was not returned as undeliverable.
A sub-class ("the FDCPA sub-class”) is certified consisting of Nebraska
consumers to whom such letters were sent during the portion of the class
period commencing one year prior to the filing of this suit.
3.

Excluded from the Class are:
a.
b.
c.

d.

4.

any person who is already subject to an existing release;
any person who was deceased as of the date of the
preliminary approval order;
any person who was discharged in bankruptcy under Title 11
of the United States Code as of the date of the preliminary
approval order; and
any Class Member who timely mailed a request for exclusion,
namely, Monica A. Fisher and Jerry L. Mertz.

The Court finally certifies plaintiff Gary D. Smith as the Class

Representative and O. Randolph Bragg, Pamela A. Car, and William L. Reinbrecht as
Class Counsel for the Class Members.

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5.

The parties' proposed Settlement Agreement (Filing No. 22, Ex. 1) is

approved and incorporated herein by reference.
6.

Pursuant to the Settlement Agreement, the plaintiff’s class claims against

the defendant are dismissed.
7.

This order is binding on all Class Members, except those individuals who

validly and timely excluded themselves from the Class.
8.

The plaintiff's unopposed motion for attorney fees (Filing No. 25) is

granted.
9.

A judgment in favor of the plaintiff and against defendant in the amount of

$1,000 in statutory damages and $2,000 in compensation for service as Class
Representative, and in the amount of $12,547.60 for attorney fees will be entered this
date.
DATED this 31st day of March, 2015.

BY THE COURT:
s/ Joseph F. Bataillon
Senior United States District Judge

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