Briles v. Tiburon Financial, LLC et al
Filing
73
MEMORANDUM AND ORDER granting 71 Joint Motion for Preliminary Approval of Class Action Settlement. This action is certified, as set forth above pursuant to Federal Rule of Civil Procedure 23(a) and (b)(3). The Court hereby appoints Shaunna Bri les, as class representative of the Settlement Class, and appoints Burke Smith, Esq., of the Burke Smith Law firm and Janet R. Varnell, Esq., of the law firm Varnell & Warwick, P.A. as Counsel for the Settlement Class. A Final Settlement Fairness Hearing shall be held on December 5, 2016, at 3:00 p.m., before the undersigned, in Courtroom No. 2 of the Roman L. Hruska United States Courthouse, 111 South 18th Plaza, Omaha, Nebraska. The Court approves the form, substance, and requirements of the Notice of Settlement (the "Notice") attached to the Plaintiff's Brief in Support of Joint Motion for Preliminary Approval of Class Action Settlement (Filing No. 72-1). Defendants or their designated agent(s) shall cause the Notice, substantially in the form attached to the Settlement to be emailed to the Settlement Class Members according to the terms of the Settlement Agreement. All litigation, including discovery, other than further proceedings with respect to the Settlement, is stayed until further order of this Court. Any Settlement Class Member may opt out by utilizing the procedures outlined in the Notice. Written objections shall be filed on or before fourteen (14) days prior to the Fairness Hearing. Ordered by Chief Judge Laurie Smith Camp. (ADB)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA
SHAUNNA BRILES, on behalf of herself
and all others similarly situated;
8:15CV241
Plaintiff,
vs.
MEMORANDUM
AND ORDER
TIBURON FINANCIAL, LLC, a Nebraska
Limited Liability Company;
SIGNATURE PERFORMANCE TIBURON,
LLC, a Nebraska Limited Liability
Company; JACADA, P.C., LLO, AND a
Nebraska Limited Liability Organization;
and JAMES A. CADA, an individual;
Defendants.
This matter is before the Court on the Joint Motion for Preliminary Approval of
Class Action Settlement (Filing No. 71) filed by Plaintiff Shaunna Briles, on behalf of
herself and all others similarly situated (“Plaintiff”), and Defendants, seeking an Order
certifying a settlement class and preliminarily approving the terms of the proposed Class
Action settlement between the parties. The Court has reviewed the record, including
the pleadings and other submissions of the Parties.
The Court concludes that the
Parties’ Joint Motion should be granted and the settlement should be preliminarily
approved.
DISCUSSION
To certify a class action for settlement purposes, a court must first determine that
all the requirements for class certification set forth in Federal Rule of Civil Procedure
23(a) and at least one of the requirements of subdivision of Rule 23(b), are satisfied.
See Amchem Products, Inc. v. Windsor, 521 U.S. 591, 620-20 (1997) (explaining that a
settlement class must satisfy the requirements of numerosity, commonality, typicality,
and adequacy of representation, as well as predominance and superiority).
Once the Settlement Class is determined to meet the requirements for class
certification pursuant to Rule 23, the Court’s analysis turns to the terms of the proposed
settlement. See Manual for Complex Litigation, Third, § 30.41, at 236-37 (1995). The
approval of a class action settlement as fair, adequate, and reasonable is a two-step
process. Id. First, the Court must determine whether the proposed settlement terms fall
within the range of reasonableness such that preliminary approval is warranted.
Second, after notice is given to the class, the Court must evaluate whether final
approval is warranted. Id.
Courts may not approve class action settlements in reverse, by first determining
that the settlement is fair, and thereby finding that certification is proper. Amchem, 521
U.S. at 622. Accordingly, in granting preliminary approval, courts typically first certify the
class for settlement purposes, and then consider the fairness of the settlement at the
final hearing. A court must conduct a “rigorous analysis” to determine whether the
elements of class action requirements have been met when the parties seek
certification of the class and approval of their settlements simultaneously. Gen. Tel. Co.
of Sw. v. Falcon, 457 U.S. 147, 160-61 (1982).
The Court has considered the Joint Motion for Preliminary Approval of Class
Action Settlement (“Joint Motion”) (Filing No. 71), Plaintiff’s Motion for Class
Certification (Filing No. 18), Plaintiff’s Memorandum of Law in Support of Joint Motion
for Preliminary Approval of Class Action Settlement (Filing No. 72) and the Class Action
Settlement Agreement between the Parties (“Settlement Agreement”) (Filing No. 71-1),
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as attached as Exhibit 1 to the Joint Motion. Based on the evidence in the record and
the Parties’ representations, the Court hereby sets forth the following, preliminary
findings of fact and conclusions of law upon which this Order is based.
I.
Findings of Fact
This class action involves a standardized, debt collection communication known
as a “Stipulation.” Plaintiff alleged that Defendants violated the Fair Debt Collection
Practices Act (“FDCPA”), 15 U.S.C. § 1692a, et seq., and the Nebraska Consumer
Protection Act (“NCPA”), Neb. Rev. Stat. § 59-1601 et seq., based on their efforts to
collect consumer debts by unlawfully simulating legal process, falsely representing the
character or legal status of the debt, and circumventing the protections given to
consumers. Plaintiff alleged that the Defendants intentionally deceived consumers by
sending collection communications (the “Stipulations”) designed to give consumers the
impression that legal process was underway.
Plaintiff alleged that consumers took
actions to their detriment, waived legal rights without just cause, paid money to debt
collectors that rightfully may have been due and owing on other debts with priority, and
suffered other harms. Defendants deny Plaintiff’s allegations; dispute that that they
violated the FDCPA or the NCPA; and deny that they deceived consumers by sending
the Stipulation.
By example, Plaintiff alleges the Stipulations included language such as: “In the
County Court of Douglas County, Nebraska,” “Tiburon Financial, L.L.C. – Plaintiff,”
“Case No.,” and “The Defendant(s) herein submit themselves to the jurisdiction of this
court,” all of which simulate legal process and falsely represent the character or legal
status of the alleged debts. Although the Defendants deny the Stipulations violated the
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FDCPA or the NCPA, and dispute Plaintiff’s characterization of the Stipulations, the
Parties agree that the class settlement provides a fair resolution to avoid protracted
litigation and significant cost.
After Plaintiff filed her Motion for Class Certification and supporting evidence, but
before this Court could rule on the Motion, the Parties voluntarily undertook arms-length
settlement negotiations and reached the proposed class action Settlement that is now
before this Court.
II.
Conclusions of Law Regarding Class Certification
Plaintiff filed her Motion for Class Certification on August 11, 2015 (Filing No. 18).
For Settlement Purposes only, Defendants do not oppose certification. Accordingly,
based upon the reasoning set forth below, the Court hereby certifies the following
Settlement Class:
All consumers located in the State of Nebraska, who
received a Stipulation from Defendants in connection with an
attempt to collect any consumer debt, where the Stipulation
was substantially similar or materially identical to the
Stipulation delivered to Plaintiff, i.e., a “Stipulation” sent by
JACADA/CADA (or any of its employees) on behalf of
TIBURON (attached as Exhibit A to the Amended
Complaint), during the four year period prior to the filing of
the Complaint in this matter, through the date of class
certification.
A.
Numerosity
The first prerequisite for class certification under Rule 1.220(a) is numerosity,
which requires that members of the class be so numerous that “joinder of all members
is impracticable.” Fed. R. Civ. P. 23(a)(1). The Class is so numerous that joinder of all
members is impractical. Id.
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“[A]s few as 40 class members should raise a presumption that joinder is
impracticable.” Caroline C. v. Johnson, 174 F.R.D. 452, 456 (D. Neb. 1996) (citing
Newberg on Class Actions § 3.05). In this case, the size of the Proposed Class is 225.
Thus, the numerosity requirement is satisfied on the record because joinder of
approximately 225 recipients of the collection communication in question would be
impracticable.
B.
Commonality
The Court finds that the commonality requirement is satisfied, for purposes of
approving the Settlement Agreement and certifying the Settlement Class, in that all
members of the Settlement Class received the same debt collection Stipulation from
Defendants. There are questions of fact or law common to the class, which include:
a. Whether Defendants violated 15 U.S.C. §§ 1692e, e(2)(A), and e(10)
by sending a Stipulation to Plaintiff and each Class Member that falsely
represented the character or legal status of the debt, and/or used false,
deceptive or misleading representations as means to collect or attempt
to collect a debt;
b. Whether Defendants violated 15 U.S.C. §§ 1692e(5) as to each Class
Member by threatening to take action that could not be taken legally or
that was not intended to be taken;
c. Whether Defendants violated 15 U.S.C. §§ 1692e(9) and e(13) by
sending a Stipulation to Plaintiff and each Class Member that
simulated or falsely represented that the Stipulation was authorized,
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approved or issued by a court, or that the Stipulations were legal
process; and
d. Whether Defendants violated Neb. Rev. Stat. § 59-1601 et seq. by
sending a Stipulation to Plaintiff and Member of the NCPA Class that
falsely represented the character or legal status of the debt, and/or
used false, deceptive or misleading representations as means to
collect or attempt to collect a debt or that simulated legal process or
falsely represented that the Stipulations were authorized, approved or
issued by a court, or were legal process.
To establish commonality, Rule 23(a)(2) of the Federal Rules of Civil Procedure
requires that there be a question of law or fact common to the class. Evans v. Am.
Credit Sys., 222 F.R.D. 388, 393 (D. Neb. 2004).
Accordingly, because there are
numerous common questions of law and fact, the Court finds that the Plaintiff’s and the
Class’s claims arise from a common course of conduct, and they share a common
interest in determining whether the collection communication at issue violated the
FDCPA and NCPA.
C.
Typicality
Rule 23(a)(3) of the Federal Rules of Civil Procedure requires that “the claims or
defenses of the representative parties [be] typical of the claims or defenses of the
class.” The Eighth Circuit, “long ago defined typicality as requiring a demonstration that
there are other members of the class who have the same or similar grievances as the
plaintiff.” Chaffin v. Rheem Mfg. Co., 904 F.2d 1269, 1275 (8th Cir. 1990) (internal
quotations and citations omitted). The burden to establish typicality is fairly easily met
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so long as other class members have claims similar to the named plaintiff. Cortez v.
Nebraska Beef, Inc., 266 F.R.D. 275, 290 (D. Neb. 2010) (citations omitted). “[F]actual
differences will not render a claim atypical if the claim arises from the same event or
practice or course of conduct that gives rise to the claims of the class members, and if it
is based on the same legal theory.” Beck v. Maximus, Inc., 457 F.3d 291, 296 (3d Cir.
2006) (citations omitted and alteration in original); see also Alpern v. UtiliCorp United,
Inc., 84 F.3d 1525, 1540 (8th Cir. 1996). Moreover, differences in the claimed damages
or the availability of certain defenses do not defeat typicality, so long as the class claims
are generally based on the same legal or remedial theory. Cortez, 266 F.R.D. at 290.
In this case, the Stipulation that Defendants sent to Plaintiff is substantially
similar to the Stipulations sent to the rest of the Class. Each Stipulation includes similar
language and Plaintiff’s claims arise out of the same course of conduct, i.e.,
Defendants’ practice of sending standardized Stipulations to consumers. The Plaintiff is
typical of the class she seeks to represent as there is nothing peculiar about Plaintiff’s
situation that makes her different from other members of the class. Accordingly, the
Court concludes that Plaintiff possesses the same legal interest and has endured the
same alleged legal injury as the other members of the class. As a result, the typicality
requirement of Rule 23(a) is also satisfied.
D.
Adequacy
Rule 23(a)(4) requires that “the representative parties will fairly and adequately
protect the interests of the class.” The focus of Rule 23(a)(4) is whether (1) the class
representatives have common interests with the members of the class, and (2) whether
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the class representatives will vigorously prosecute the interests of the class through
qualified counsel. Cortez, 266 F.R.D. at 291 (citations omitted).
Both prongs of the “adequacy” test are met here. First, Plaintiff has shown that
she is willing and able to take an active role as class representative on behalf of the
class. There has been no evidence submitted indicating that Plaintiff has any interests
antagonistic to the class she seeks to represent. Therefore, this Court finds that
adequacy requirement under Rule 23(a)(4) is met.
Second, the Court finds that Plaintiff’s Counsel has substantial experience in
consumer class actions and is adequate to act as Counsel in this class action lawsuit.
Accordingly, all of the prerequisites of Rule 23(a) have been established with regard to
the proposed Settlement Class. Now, this Court’s analysis turns to whether the facts of
this case also meet at least one of the requirements Rule 23(b).
E.
Rule 23(b) Requirements
The Court also finds that the requirements of Rule 23(b)(3) have been satisfied,
for the purposes of preliminary approval of the Settlement Agreement and certification
of the Settlement Class. Rule 23(b)(3) provides that an action may be maintained as a
class action when:
(3)
the Court finds that the questions of law or fact common to the
members of the Class predominate over any questions affecting only
individual members, and that a Class action is superior to other available
methods for the fair and efficient adjudication of the controversy.
Fed. R. Civ. P. 23(b)(3).
The Supreme Court recently reiterated: “Rule 23(b)(3) ... does not require a
plaintiff seeking class certification to prove that each ‘elemen[t] of [her] claims [is]
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susceptible to classwide proof,”’ but that “common questions ‘predominate over any
questions affecting only individual [class] members.”’ Amgen Inc. v. Conn. Ret. Plans &
Trust Funds, 133 S. Ct. 1184, 1196 (2013) (quoting Wal-Mart Stores, Inc. v. Dukes, 131
S. Ct. 2541, 2552 n.6 (2011)) (emphasis added). Accordingly, plaintiffs must make a
“showing that questions common to the class predominate, not that those questions will
be answered, on the merits, in favor of the class.” Id. at 1191 (emphasis in original).
It is not necessary to illustrate that all questions of fact or law are common. See
Sacred Heart Health Sys., Inc. v. Humana Military Healthcare Servs., Inc., 601 F.3d
1159, 1178 (11th Cir. 2010). In order to predominate, common issues must constitute a
significant part of the individual cases. Cortez, 266 F.R.D. at 292 (citations omitted).
Where there is an essential factual link between all class members and the defendants,
for which the law provides a remedy, questions of law or fact common to the class exist.
Id.
A comparison of the Stipulations sent by Defendants during the class period
shows that the Stipulations sent to all class members are identical with respect to the
standard language underlying Plaintiff’s claims. Accordingly, this Court finds that the
predominating issue in this case is whether this language violates the FDCPA and
NCPA. Therefore, the facts of this matter satisfy the predominance requirement of Rule
23(b)(3).
The superiority requirement of Rule 23 is also satisfied because a class action is
superior to other available methods of resolving this matter. The only alternative would
be to have 225 individual actions addressing the same issue. Such an undertaking
would be a waste of resources, and likely few or no individual actions would be pursued.
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Therefore, this Court finds that all the elements of Rule 23(a) and (b)(3) have
been satisfied and certification of the Settlement Class is appropriate.
III.
CONCLUSIONS OF LAW
SETTLEMENT TERMS
REGARDING
THE
FAIRNESS
OF
THE
When determining whether to grant preliminary approval to a class action
settlement, trial courts typically first certify the class for settlement purposes, and then
consider the fairness of the settlement. 4 Newberg on Class Actions, § 11.26.
The
purpose of preliminary evaluation of proposed class action settlements is to determine
whether the settlement is within the “range of reasonableness” such that notice should
be issued to the class. Id.
The Eighth Circuit has established four factors for determining whether a
proposed 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) 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, 932 (8th Cir. 2005); see also Van Horn v. Trickey, 840 F.2d 604 (8th Cir. 1988).
In this case, all of the factors weigh in favor of granting preliminary approval.
Under the terms of the proposed Settlement, Settlement Class Members will
receive a pro-rata share of the $17,500.00 Settlement Fund. Importantly, the FDCPA
limits statutory damages in class actions such as this case to “the lesser of $500,000 or
1 per centum of the net worth of the debt collector.” 15 U.S.C. § 1692k(a)(2)(B). Here,
Defendants’ net worth will render the recovery per class member smaller, but not so
small as to destroy the superiority element. See Hicks v. Client Services, Inc., 257
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F.R.D. 699, 700 (S.D. Fla. 2009) (De minimus recovery of $1.24 did not destroy
superiority).
Given that the net worth of Defendants is relatively low, the recovery to the Class
appears to be reasonable.
The class representative incentive award to Ms. Briles
appears to be reasonable in light of the time and effort expended by Ms. Briles in
representing the Settlement Class, and because attorney’s fees will be awarded
separately by the Court and do not diminish the relief to the Settlement Class, such fees
are reasonable for this type of case. Therefore, the Court finds that the Settlement
Agreement, when viewed in light of the factors set forth in In re Wireless Tel., falls within
the range of reasonableness such that Preliminary Approval of the Settlement terms is
warranted, and Notice should be issued to the class.
Accordingly,
IT IS ORDERED:
1.
The Joint Motion for Preliminary Approval of Class Action Settlement
(Filing No. 71), is granted.
2.
This action is certified, as set forth above pursuant to Federal Rule of Civil
Procedure 23(a) and (b)(3).
3.
The Court hereby appoints Shaunna Briles, as class representative of the
Settlement Class, and appoints Burke Smith, Esq., of the Burke Smith Law firm and
Janet R. Varnell, Esq., of the law firm Varnell & Warwick, P.A. as Counsel for the
Settlement Class.
4.
A Final Settlement Fairness Hearing shall be held on December 5, 2016,
at 3:00 p.m., before the undersigned, in Courtroom No. 2 of the Roman L. Hruska
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United States Courthouse, 111 South 18th Plaza, Omaha, Nebraska, for the following
purposes:
a.
to determine whether the proposed Settlement is fair, reasonable,
adequate, and in the best interests of the Settlement Class, and
whether the Settlement should be finally approved by the Court;
b.
to determine whether Final Judgment as provided under the
Settlement Agreement should be entered dismissing the Complaint
filed in the Action with prejudice; and to determine whether releases
should be provided to the Releasees as defined and set forth in the
Settlement Agreement;
c.
to consider what amounts to award Class Counsel’s fees and
expenses as set forth in the Settlement Agreement; and
d.
to rule upon such other matters as the Court may deem
appropriate.
5.
The Court approves the form, substance, and requirements of the Notice
of Settlement (the “Notice”) attached to the Plaintiff’s Brief in Support of Joint Motion for
Preliminary Approval of Class Action Settlement (Filing No. 72-1). Defendants or their
designated agent(s) shall cause the Notice, substantially in the form attached to the
Settlement to be emailed to the Settlement Class Members according to the terms of
the Settlement Agreement.
6.
The form of the Notice, and method set forth herein of notifying the
Settlement Class of the Settlement and its terms and conditions, meet the requirements
of the Federal Rules of Civil Procedure and due process, constitute the best notice
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practicable under the circumstances, and shall constitute due and sufficient notice to all
persons and entities entitled thereto. The Notice shall be distributed in accordance with
the requirements set forth in the Class Action Settlement Agreement.
7.
Class Counsel is authorized to represent and act on behalf of the
Settlement Class with respect to all acts required by the Settlement Agreement or such
other acts, which are reasonably necessary to consummate the spirit of the proposed
Settlement Agreement.
8.
All litigation, including discovery, other than further proceedings with
respect to the Settlement, is stayed until further order of this Court.
9.
Any Settlement Class Member may opt out by utilizing the procedures
outlined in the Notice.
10.
Any Settlement Class Member may appear and show cause why the
proposed Settlement of the Action embodied in the Settlement Agreement should not be
approved as fair, reasonable, and adequate, or why a judgment should or should not be
entered thereon, or why the incentive award to the named Plaintiff should not be made,
or why attorney fees inclusive of the expenses should not be awarded as provided in
the Settlement Agreement; provided, however, that no Settlement Class Member or any
other Person, shall be heard or entitled to contest the approval of the proposed
Settlement, or, if approved, the Judgment to be entered thereon, unless on or before
fourteen (14) days prior to the Fairness Hearing, that person has caused to be filed
written objections in the manner and form outlined in the Settlement Agreement, stating
all supporting bases and reasons with:
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U.S. District Clerk of Court
Roman L. Hruska Federal Courthouse
111 South 18th Plaza, Suite 1152
Omaha, NE 68102
and has served copies of all such papers at the same time upon the following by firstclass mail, in accordance with the requirements of the Settlement Agreement:
Class Counsel
Burke Smith
Burke Smith Law
10730 Pacific St., Suite 100
Omaha, NE 68114
Counsel for Defendants Tiburon Financial, LLC and
Signature Performance Tiburon, LLC
Bradley S. Levison
Kaufman Dolowich & Voluck, LLP
55 E. Monroe Street
Suite 2950
Chicago, IL 60602
Counsel for Defendants Jacada, P.C., LLO and James A. Cada
Joshua C. Dickinson
Spencer Fane LLP
13520 California Street, Suite 290
Omaha, NE 68154
Attendance at the Settlement Fairness Hearing is not necessary in order for the
objection to be considered by the Court; however, persons wishing to be heard orally in
opposition to the approval of the Settlement are required to indicate in their written
objection their intention to appear at the hearing. All written objections shall conform to
the requirements of the Settlement Agreement and shall indicate the basis upon which
the person submitting the objections claims to be a member of the Settlement Class and
shall clearly identify any and all witnesses, documents and other evidence of any kind
that are to be presented at the Settlement Fairness Hearing in connection with such
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objections and shall further set forth the substance of any testimony to be given by such
witnesses.
Any Settlement Class Member who does not make his, her, or its objection in the
manner provided in the preceding paragraph of this Order shall be deemed to have
waived such objection and shall be foreclosed from making any objections to the
fairness, adequacy, or reasonableness of the Settlement.
Dated this 1st day of August, 2016.
BY THE COURT:
s/Laurie Smith Camp
Chief United States District Judge
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