Reynolds v. Credit Bureau Services, Inc. et al
MEMORANDUM AND ORDER - IT IS ORDERED: The plaintiff class's motion for attorney fees and approval of incentive award (Filing No. 28 ) is granted. The plaintiff class is awarded attorney fees in the amount of $21,071.79. The plaintiff c lass may recover costs amount of $428.21. Payment of statutory damages in the amount of $2,000.00 and an incentive ward of $2,000.00 to the representative plaintiff are approved. A judgment in favor of the plaintiff and against defe ndants in the amount of $21,071.79 for attorney fees; $428.21 for costs; $2,000.00 for statutory damages; and $2,000.00 for service as class representative, will be entered this date. Ordered by Senior Judge Joseph F. Bataillon. (TCL)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA
KENNETH M. REYNOLDS, on behalf of
himself and all others similarly situated;
MEMORANDUM AND ORDER
CREDIT BUREAU SERVICES, INC., AND
C. J. TIGHE,
This matter is before the court on the plaintiff’s unopposed motion for attorney
fees and costs and approval of incentive award, Filing No. 28. This is a class action for
violations of the Fair Debt Practices and Collection Act, 15 U.S.C. § 1692 et seq.
(hereinafter “FDCPA” or “Act”), and the Nebraska Consumer Protection Act (“NCPA”),
Neb. Rev. Stat. § 59-1601 et seq.
The parties have entered into a Settlement Agreement that resolves this
litigation. See Filing No. 19-1, Index of Evid., Ex. A, Settlement Agreement. In the
agreement, the defendants agreed to pay costs, litigation expenses and reasonable
attorney's fees in an amount to be approved or determined by the court. Id. at 10. The
defendants later agreed to payment of the plaintiff’s costs and attorney fees of up to
$21,500.00. See Filing No. 30-3, Ex. 2, Declaration of Pamela A. Car ("Car Decl.") at 3;
Filing No. 24-1, Amended Notice at 2. Notice of this agreement was filed with the court,
approved, and provided to the class.
Id.; see Filing No. 25, Order of Preliminary
Approval. The plaintiff requests an award of fees in the amount of $21,071.79 and
costs in the amount of $428.21, for a total award of $21,500. Defendants do not oppose
The settlement agreement provides that the plaintiff class is the prevailing party
in this litigation.
Filing No. 19-1, Ex. 1, Settlement Agreement at 11-12.
agreement, the defendants have agreed to pay statutory damages of $ 32,500.00 to the
Class and $4,000.00 to lead plaintiff Reynolds as statutory damages and services as
Id. at 10-11.
Further, the defendants agreed to change the
collection letters that are the subject of the action and to pay the costs of class
administration and of class notice. Id. at 11. The settlement agreement also provides
that the defendants will pay the attorney fees and costs awarded in this case from a
separate fund and will pay the costs of administration and dissemination of notice. Id.;
see 24-1, Amended Notice at 2.
The court held a fairness hearing on the parties’ joint motion for final approval of
class settlement on May 13, 2016. No one appeared at the hearing to object to the
class settlement. No objections to the settlement were filed. See Filing No. 32, Index of
Evid., Ex. 1, Declaration of Steve Platt at 1.
The court is familiar with the litigation. On February 1, 2016, the Court entered
an Order Preliminarily Certifying Class and Granting Preliminary Approval of Settlement.
Filing No. 26.
The record shows the parties engaged in extended negotiations
regarding settlement and participated in a settlement conference with the magistrate
judge. See Filing No. 13, text minute entry; Filing No. 14, audio file (sealed); and Filing
No. 15, Order.
In support of its motion, plaintiff have shown that attorney O. Randolph Bragg
expended 29.7 hours at the rate of $275.00 per hour through April 1, 2016, on behalf of
the plaintiff ($11,137.50) and Mr. Bragg’s paralegal Shannon Carter expended a total of
0.5 hours at the rate of $125.00 per hour ($62.50) on this litigation. Filing No. 30-1,
Index of Evid., Ex. 1, Declaration of O. Randolph Bragg ("Bragg Decl.") at 17; Filing No.
30-2, Ex. 1A, Bragg Time Records.
Lead counsel Pamela A. Car has shown she
expended a total of 26.80 hours at the rate of $350.00 per hour ($9,380.00) on behalf of
the plaintiff through January 31, 2016. Filing No. 30-3, Ex. 2, Car Decl. at 3; Filing No.
30-4, Exhibit 2A - Car Time Records. Ms. Car only billed for 16.8 hours for a total of
$5,880.00, as reflected in her time records. Id., Ex. 2, Car Decl. at 3; Ex. 2A, time
records. Plaintiff seeks fees for 15.75 hours of work at the rate of $325.00 per hour
performed by attorney William L. Reinbrecht ($5,118.75) and $428.21 in reimbursable
expenses. Filing No. 30-5, Declaration of William L. Reinbrecht ("Reinbrecht Decl.") at
17; Filing No. 30-6, Ex. 3A, Reinbrecht Time Records.
Attorneys Bragg, Car, and Reinbrecht have also shown they have extensive
experience litigating consumer cases and have achieved similar awards in other cases.
See Filing No. 30-1, Ex. 1, Bragg Decl. at 5-17; Filing No. 30-3, Car Decl. at 1-2; Filing
No. 30-5, Reinbrecht Decl. at 1-5. Further, counsel have shown that they reduced the
hours billed where appropriate. See, e.g., Filing No. 30-3, Ex. 2, Car Decl. at 3. Also,
counsel represent that the plaintiff's attorneys will not bill for attending the final hearing
or for any additional work needed to complete the class-action administration. See
Filing No. 29, Brief at 17.
Lead plaintiff Kenneth Reynolds seeks approval of a payment of $4,000.00 for
statutory damages and for his service as class representative. Filing No. 30-7, Index of
Evid., Ex. 4, Declaration of Kenneth Reynolds at 2. He states that he has kept himself
informed of the progress of the case, reviewed materials sent to him by counsel,
discussed the case with counsel, taken time off work to confer with counsel and provide
documents, and submitted declarations in the case.
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 Mortg. Corp., 83 F.3d 241, 246 (8th Cir. 1996) (noting that the district court
bears the 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 attorney’s 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). Comerica
Mortg., 83 F.3d at 244-45. It is within the court’s discretion to decide which method to
Defendants who violate the FDCPA are liable for the plaintiff's attorney's fees
and costs. Marx v. General Revenue Corp., 133 S. Ct. 1166, 1176 (2013); 15 U.S.C. §
1692k(a)(3); Zagorski v. Midwest Billing Servs., Inc., 128 F.3d 1164, 1166 (7th Cir.
1997) (per curiam) (“[T]he award of attorney's fees to plaintiffs for a debt collector's
violation of ‘any provision’ of the FDCPA is mandatory.”); Hennessy v. Daniels Law
Office, 270 F.3d 551, 553 (8th Cir. 2001) (citing Zagorski). The Act mandates an award
of attorney’s fees as a means of fulfilling Congress’s intent that the Act should be
enforced by debtors acting as private attorneys general. Gonzales v. Arrow Financial
Services, LLC, 660 F.3d 1055, 1061 (9th Cir. 2011).
"Where a plaintiff has obtained excellent results, his attorney should recover a
fully compensatory fee." Hensley v. Eckerhart, 461 U.S. 424, 435 (1983). Although
there is no precise formula for determining a reasonable fee, the district court generally
begins by calculating the lodestar—the attorney’s reasonable hourly rate multiplied by
the number of hours reasonably expended.
Id. at 433-37; Marez v. Saint-Gobain
Containers, Inc., 688 F.3d 958, 965 (8th Cir. 2012). “At that point, other factors ‘may
lead the district court to adjust the fee upward or downward, including the important
factor of the ‘results obtained.’” Id. (quoting Hensley, 461 U.S. at 434). The district
court should consider the factors set forth in Johnson v. Georgia Highway Express, Inc.,
488 F.2d 714, 717–19 (5th Cir. 1974).1 See Marez, 688 F.3d at 966 n.4. "[M]any of
these factors usually are subsumed within the initial calculation of hours reasonably
expended at a reasonable hourly rate.” Hensley, 461 U.S. at 434 n.9.
The market value in the relevant legal community of the legal services performed
is used to determine a reasonable attorney fee. Blum v. Stenson, 465 U.S. 886, 895
The Johnson factors are: (1) the time and labor required; (2) the novelty and difficulty of the
questions; (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 cases. Johnson, 488 F.2d at 717-19
(1984) (stating “[i]n communities, the marketplace has set a value for the services of
attorneys, and the hourly rate charged by an attorney for his or her services will
normally reflect the training, background, experience and skill of the individual
attorney.”). Reimbursement for work performed by out-of-town lawyers charging out-oftown rates is generally permitted only when in-town counsel with expertise in a
particular area cannot be located. See, e.g., Avalon Cinema Corp. v. Thompson, 689
F.2d 137, 140-41 (8th Cir. 1982).
Under the FDCPA, the court is authorized to award up to $1,000.00 in statutory
damages per plaintiff for any violation of the FDCPA. 15 U.S.C. § 1692k(a)(2)(A); see
Savino v. Computer Credit, Inc., 164 F.3d 81, 86 (2d Cir. 1998) (“[a]ll that is required for
an award of statutory damages is proof that the statute was violated . . . .”). The
specific amount of statutory damages, not to exceed $1,000.00, falls within the court's
discretion. Id. Factors to be considered by the court in determining an appropriate
statutory damages award include the frequency, persistence, and nature of the debt
collector's noncompliance with the Act; the debt collector's resources; the number of
individuals adversely affected; and the extent to which the debt collector's noncompliance was intentional. See 15 U.S.C. § 1692k(b)(2).
Because a named plaintiff is an essential ingredient of any class action, an
incentive award is appropriate if it is necessary to induce an individual to participate in
the suit. Cook v. Niedert, 142 F.3d 1004, 1016 (7th Cir. 1998). In deciding whether
such an award is warranted, relevant factors include the actions the plaintiff has taken
to protect the interests of the class, the degree to which the class has benefitted from
those actions, and the amount of time and effort the plaintiff expended in pursuing the
litigation. Id. Likewise, under the NCPA, each class member is entitled to an amount of
statutory damages up to $1,000.00, which does not consider the defendants' net worth.
Neb. Rev. Stat. § 59-1609.
The court finds that the plaintiff, as the prevailing party, is entitled to attorney
The court has considered the Johnson factors and finds that an award of
$21,500.00, as agreed by the parties, is fair and reasonable. The plaintiff has achieved
a significant degree of success in that he, on behalf of the class, has recovered the
maximum amount of statutory damages under the FDCPA and NCPA. Significantly, on
behalf of the class, the plaintiff has also achieved prospective relief in that the
defendants have agreed to make changes in their form collection letters. Also, lead
counsel successfully negotiated the amount of plaintiff's attorneys’ fees and costs
separate from, and in addition to, the plaintiff class's recovery.
The plaintiff has
demonstrated that counsels’ services have benefitted the class.
The court has reviewed the declarations of counsel and time records submitted in
connection with the motion.
The plaintiff has shown that the negotiated amount
represents a substantial reduction in the time actually spent on the case by plaintiff’s
counsel. The court finds counsel expended a modest amount of time, 72 hours, on the
litigation, presumably due to counsels’ combined experience in consumer protection
litigation. The plaintiff seeks fees in an amount that is below the lodestar, which would
be $22,626.96. The court finds the time and labor expended by lead counsel in this
case is reasonable and necessary to prosecute a case of this nature.
The court is familiar with hourly rates in this community and with the skill and
abilities of the attorneys involved in this litigation.
The court finds, based on its
familiarity with fees in this community, that the hourly rates charged by lead counsel are
appropriate in view of the attorneys' extensive experience in consumer litigation and in
consideration of the complexity of class-action consumer litigation.
Mr. Bragg has
discounted his customary rate to reflect fees in this community. These hourly rates and
the fee award are in line with fee awards in other cases. Paralegal fees of $125.00 an
hour are also reasonable in this community. The request for fees was disclosed in the
notice of the settlement and no class members have objected to the settlement or to the
motion for fees. Accordingly, plaintiff is entitled to a fee award of $21,071.79.
The court also finds that the representative plaintiff, Kenneth M. Reynolds should
recover statutory damages in the amount of $2,000.00 under the FDCPA and NCPA, as
well as an incentive award of $2,000.00, as provided in the Settlement Agreement.
Defendants do not object to the award. The factors to consider in connection with an
incentive award are readily satisfied. Representative plaintiff Reynolds brought a suit
that resulted in reforms to the defendants' collections practices and a reasonable
monetary award. In light of the benefit that Reynolds bestowed on the class, and the
time he spent pursuing it, an award of $2,000.00 is appropriate.
Lead plaintiff also seeks reimbursement of $428.21 in costs and expenses for the
filing fee and service of summons. These expenses are recoverable as costs. The
defendants have no objection to the award. The court has reviewed the bill of costs and
finds that the costs are fair and reasonable and were necessary to prosecute the claims
on behalf of the class. The court finds that the plaintiff’s motion for an award of costs in
the amount of $428.21 should be granted.
IT IS ORDERED:
The plaintiff class’s motion for attorney fees and approval of incentive
award (Filing No. 28) is granted.
The plaintiff class is awarded attorney fees in the amount of $21,071.79.
The plaintiff class may recover costs amount of $428.21.
Payment of statutory damages in the amount of $2,000.00 and an
incentive ward of $2,000.00 to the representative plaintiff are approved.
A judgment in favor of the plaintiff and against defendants in the amount of
$21,071.79 for attorney fees; $428.21 for costs; $2,000.00 for statutory damages; and
$2,000.00 for service as class representative, will be entered this date.
Dated this 16th day of May 2016.
BY THE COURT:
s/ Joseph F. Bataillon
Senior United States District Judge
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