Custom Hair Designs by Sandy, LLC et al v. Central Payment Co., LLC

Filing 329

ORDER- The Unopposed Motion for Preliminary Approval of class action settlement and for direction of class notice is granted. The Court hereby preliminarily approves the Settlement and the terms embodied therein pursuant to Fed. R. Civ. P. 23(e)(1 ). The Court reappoints Plaintiffs Custom Hair Designs by Sandy, LLC and Skips Precision Welding, LLC as Class Representatives for the Class. The Court reappoints Wagstaff & Cartmell, LLP and appoints Webb, Klase & Lemond, LLC as Class Counse l for the Class. The Court hereby appoints Epiq Systems, Inc. as settlement administrator and directs it to carry out all duties and responsibilities of the settlement administrator as specified in the Settlement and herein. The Court will hold a final approval hearing on July 25, 2022, 2022 at 1:30 p.m. (Central time), in Courtroom 3, at the United States District Court for the District of Nebraska, 111 S. 18th Plaza, Omaha, Nebraska 68102. Ordered by Senior Judge Joseph F. Bataillon. (MKR)

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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA
CUSTOM HAIR DESIGNS BY SANDY,
LLC, on behalf of themselves and all others
similarly situated; and SKIP'S PRECISION
WELDING, LLC, on behalf of themselves
and all others similarly situated;

8:17CV310

ORDER
Plaintiffs,
vs.
CENTRAL PAYMENT CO., LLC,
Defendant.

Before the Court is Plaintiffs/Class Representatives’ (hereinafter “Plaintiffs”)
unopposed motion for preliminary approval of class action settlement and for direction of
class notice (“Motion”).

Filing No. 326.

As described in the Motion, Plaintiffs and

Defendant Central Payment Co., LLC (“Defendant” or “CPAY”) have entered into a class
settlement agreement and release, dated March 4, 2022 (the “Settlement”). Having
reviewed the Settlement, including the proposed forms of class notice and other exhibits
thereto, the Motion, and the papers and arguments in connection therewith, and good
cause appearing, the Court hereby ORDERS as follows:
1.

This Court has subject matter jurisdiction over this matter pursuant to 28

U.S.C. § 1332(d) and has personal jurisdiction over the Parties and the Class members.
Venue is proper in this District.
2.

The Motion is GRANTED.

3.

The Court hereby preliminarily approves the Settlement and the terms

embodied therein pursuant to Fed. R. Civ. P. 23(e)(1). Notably, the Court has already
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certified that the Class met the requirements of Fed. R. Civ. P. 23(a) and (b)(3) (Filing No.
142), a finding which has been affirmed by the Eighth Circuit. Custom Hair Designs by
Sandy, LLC v. Central Payment Co., LLC, 984 F.3d 595 (8th Cir. 2020). The Court further
finds that it will likely be able to approve the Settlement under Fed. R. Civ. P. 23(e)(2).
4.

The Court further finds that Plaintiffs and Class Counsel have adequately

represented, and will continue to adequately represent, the Class. The Court also finds
that the Settlement is the product of arm’s length negotiations by the Parties and comes
after significant litigation—including several litigated dispositive motions and an appeal—
and voluminous investigation, discovery, and expert analysis.
5.

The Court preliminarily finds that the relief provided—a settlement fund of

up to $84 million (and in no event less than $58.8 million), covering payments to Class
members, notice and administration costs, Class Counsel’s attorneys’ fees and
expenses, and service awards to Plaintiffs—is fair, reasonable, and adequate taking into
account, inter alia, the costs, risks, and delay of trial and appeal, the alleged harm to
Class members, and the proposed method of distributing payments to the Class (i.e., with
current customers receiving a cash payment automatically and former customers
receiving a cash payment if they submit a simple claim form).
6.

The Court preliminarily finds that the Settlement treats the Class members

equitably relative to each other, and that the proposed allocation of settlement funds to
Class members is reasonable and fair and is appropriately designed to ensure Class
member payments correspond to their pro rata share of their alleged individual damages,
as calculated by Plaintiffs’ expert, Arthur Olsen. The Court will assess Class Counsel’s
request for attorneys’ fees and expenses after receiving a motion from Class Counsel

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supporting such request. At this stage, the Court finds that the plan to request fees and
litigation expenses to be paid from the settlement fund creates no reason not to direct
notice to the Class.
7.

The Court also preliminarily finds that the Settlement is fair, reasonable, and

adequate after considering the criteria set forth in Fed. R. Civ. 23(e), as well as the criteria
established by precedent, namely: (1) the merits of Plaintiffs’ case, weighed against the
terms of the Settlement; (2) Defendant’s financial condition; (3) the complexity and
expense of further litigation; (4) the amount of opposition to the Settlement; (5) the
procedural fairness to ensure the Settlement is “not the product of fraud or collusion (In
re Wireless Tel. Fed. Cost Recovery Fees Litig., 396 F.3d 922, 931 (8th Cir. 2005)); (6)
the experience and opinion of counsel on both sides; (7) whether the Settlement resulted
from arm’s length negotiations (DeBoer v. Mellon Mortg. Co., 64 F.3d 1171, 1178 (8th
Cir. 1995)); and (8) the timing of the Settlement, including the extent and breadth of
discovery (City P’ship Co. v. Atl. Acquisition Ltd. P’ship, 100 F.3d 1041, 1043 (1st Cir.
1996)).
8.

The Court affirms its prior certification of the Class, pursuant to Fed. R. Civ.

P. 23(a), 23(b)(3), and 23(e), consisting of:
All of CPAY’s customers that, from January 1, 2010, to October 31, 2020
(a) were assessed the TSSNF Fee (a/k/a TSYS Network Fee); (b) were
assessed the PCI Noncompliance Fee; (c) had their contractual credit card
discount rates increased above their contractual rate by CPAY; and/or (d)
had credit card transactions shifted by CPAY from lower-cost rate tiers to
higher-cost rate tiers.
9.

The Court reaffirms that the Class, as defined above, meets the

requirements for class certification under Fed. R. Civ. P. 23(a) and 23(b)(3)—namely, that
(a) the Class members are sufficiently numerous such that joinder is impracticable; (b)
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there are common questions of law and fact; (c) Plaintiffs’ claims are typical of those of
the Class members; (d) Plaintiffs and Class Counsel have adequately represented, and
will continue to adequately represent, the interests of the Class members; and (e) Class
meets the predominance and superiority requirements of Fed. R. Civ. P. 23(b)(3).
10.

The Parties preserve all rights and defenses regarding class certification in

the event the Settlement is not finally approved by this Court or otherwise does not take
effect.
11.

The Court reappoints Plaintiffs Custom Hair Designs by Sandy, LLC and

Skip’s Precision Welding, LLC as Class Representatives for the Class.
12.

The Court reappoints Wagstaff & Cartmell, LLP and appoints Webb, Klase

& Lemond, LLC as Class Counsel for the Class.
13.

The Court hereby appoints Epiq Systems, Inc. as settlement administrator

and directs it to carry out all duties and responsibilities of the settlement administrator as
specified in the Settlement and herein.
Notice Program
14.

Pursuant to Fed. R. Civ. P. 23(e)(1) and 23(c)(2)(B), the Court approves the

proposed notice program set forth at section VI of the Settlement, including the form and
content of the proposed forms of class notice attached as Exhibits 2A – 2D and 3 to the
Settlement and the proposed procedures for Class members to exclude themselves from
the Class or object.

The Court finds that the proposed notice program meets the

requirements of Due Process under the U.S. Constitution and Rule 23; and that such
notice program—which includes direct notice to Class members sent via email and/or first
class U.S. Mail; a settlement website (at the URL, www.centralpaymentclassaction.com)

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where Class members can view the full settlement agreement, the detailed long-form
notice, and other key case documents, and former customers can electronically submit
claims; and a toll-free telephone number where Class members can get additional
information—is the best notice practicable under the circumstances and shall constitute
due and sufficient notice to all persons entitled thereto. The Court further finds that the
proposed form and content of the notices are adequate and will give the Class members
sufficient information to enable them to make informed decisions as to the Settlement,
including whether to object, whether to opt out, and whether to submit a claim (for former
customers only). The Court finds that the notice clearly and concisely states in plain,
easily understood language, inter alia: (a) the nature of this case; (b) the definition of the
Class; (c) the class claims and issues; (d) that a Class member may enter an appearance
through an attorney if the member so desires; (e) that the Court will exclude from the
Class any member who timely and validly requests exclusion; (f) the time and manner for
requesting exclusion; and (g) the binding effect of a class judgment on Class members
under Rule 23(c)(3).
15.

The Court directs the settlement administrator and the Parties to implement

the notice program as set forth in the Settlement.
16.

In compliance with the Class Action Fairness Act of 2005, 28 U.S.C. § 1715,

CPAY shall work with the settlement administrator (at its own cost) to promptly provide
written notice of the proposed Settlement to the appropriate authorities.
17.

Within ten (10) days following entry of this Order, CPAY shall provide to the

settlement administrator any updates to Class member contact information that has

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occurred since it last produced such information as well as a delineation of which Class
members are current customers, and which are former customers.
18.

No later than thirty (30) days following entry of this Order (the “notice

deadline”), the settlement administrator shall send direct notice to the Class members, in
conformance with the terms of the Settlement and substantially in the forms attached as
Exhibits 2A-2D to the Settlement, by email or postcard, as applicable.

If a Class

member’s individual notice is returned as undeliverable at least seven days prior to the
opt-out deadline, the settlement administrator shall use reasonable efforts to locate an
updated mailing address for the Class member and, if an updated address is identified,
re-mail the notice to their address as updated.
19.

The settlement administrator shall maintain the settlement website—which

shall include the long-form notice substantially in the form attached as Exhibit 3 to the
Settlement and otherwise be in conformance with the terms of the Settlement—and a tollfree number that Class members can call for additional information.
20.

No later than fourteen (14) days before the final approval hearing, the

settlement administrator shall provide to Class Counsel for filing a declaration confirming
that the notice program has been implemented in accordance with the Settlement and
this Order (including CAFA notice) and providing a final list of persons who submitted
timely and valid requests for exclusion from the Class.
Claims Procedure
21.

The Court approves the form and content of the proposed claim form, in the

form attached as Exhibit 2D to the Settlement, approves the proposed process and
methods set forth in the Settlement for former customers to submit claims, and directs the

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Parties and the settlement administrator to implement the claims process pursuant to the
terms of the Settlement.
22.

Class members that are former customers must submit a valid claim form

by the claims deadline in order to receive a settlement payment pursuant to the
Settlement.
Opt-Out and Objection Procedures
23.

Class members may exclude themselves from the Class by mailing to the

settlement administrator (at the address listed in the long-form notice) a written request
for exclusion that is postmarked no later than sixty (60) days after the notice deadline (the
“opt-out deadline”). To be effective, the request for exclusion must include: the case
name and/or number; the identity of the individual or entity requesting to be excluded; a
statement that such individual or entity has chosen to opt-out or exclude itself from the
Class; and the name, address, position, and signature of the individual who is acting on
behalf of the individual or entity. Mass or class opt outs shall be void. Any Class member
who does not opt out of the Class in the manner described in this paragraph shall be
deemed to be part of the Class upon expiration of the opt-out deadline, and shall be bound
by all subsequent proceedings, orders, and judgments in this case. The settlement
administrator shall provide copies of all timely and valid requests for exclusion to Class
Counsel and CPAY’s counsel.
24.

Any Class member that does not submit a timely and valid request for

exclusion shall have the right to object to the proposed Settlement and/or to Class
Counsel’s motion for attorneys’ fees, expenses, or service awards. To be considered
valid, an objection must be filed electronically with the Court or mailed to the Clerk of the

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Court (at the address listed in the long-form notice) and also mailed to Class Counsel and
CPAY’s counsel (at the addresses listed in the long form notice). For an objection to be
considered by the Court, the objection must be filed or postmarked no later than sixty (60)
days after the notice deadline (the “objection deadline”), and must set forth the following:
(a) the name of and case number for the action; (b) the objector’s full name, address, and
telephone number; (c) an explanation of the basis upon which the objector claims to be a
Class member; (d) all grounds for the objection, including copies of any papers, exhibits
or other evidence that the objecting Class member will present to the Court in connection
with the final approval hearing; (e) the number of times in which the objector has objected
to a class action settlement within the five years preceding the date that the objector files
the objection, the caption of each case in which the objector has made such objection,
and a copy of any orders related to or ruling upon the objector’s prior such objections that
were issued by the trial and appellate courts in each listed case; (f) the identity of all
counsel who represent the objector, including any former or current counsel who may be
entitled to compensation for any reason related to the objection to the Settlement or fee
application; (g) the number of times in which the objector’s counsel and/or counsel’s law
firm have objected to a class action settlement within the five years preceding the date
that the objector files the objection, the caption of each case in which the counsel or the
firm has made such objection, and a copy of any orders related to or ruling upon counsel’s
or the firm’s prior such objections that were issued by the trial and appellate courts in
each listed case; (h) any and all agreements that relate to the objection or the process of
objecting—whether written or oral—between objector or objector’s counsel and any other
person or entity; (i) the identity of all counsel representing the objector who will appear at

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the final approval hearing; (j) a statement confirming whether the objector intends to
personally appear and/or testify at the final approval hearing; (k) at least four dates that
the objector will be available to be deposed before the Final Approval Hearing by Class
Counsel and Defendant’s counsel and the location where the objector will be available;
(l) if the objector is represented by an attorney who intends to seek fees and expenses
from anyone other than the objectors he or she represents, the objection should also
include a description of the attorney’s legal background and prior experience in
connection with class action litigation; the amount of fees sought by the attorney for
representing the objector and the factual and legal justification for the fees being sought;
a statement regarding whether the fees being sought are calculated on the basis of a
lodestar, contingency, or other method; the number of hours already spent by the attorney
and an estimate of the hours to be spent in the future; and the attorney’s hourly rate; and
(m) the objector’s signature (an attorney’s signature is not sufficient).
25.

Any Class member that does not make an objection in the manner provided

in the preceding paragraph shall be deemed to have waived such objection, shall not be
permitted to object to any terms or approval of the Settlement at the final approval hearing
or otherwise, and shall be foreclosed from making any objection to the fairness,
reasonableness, or adequacy of the proposed Settlement or to Class Counsel’s request
for attorneys’ fees, expenses and/or service awards. Any Class member that objects to
the Settlement shall nevertheless be entitled to all benefits of the Settlement if it is
approved and becomes final.

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26.

The settlement administrator shall promptly after receipt provide copies of

any objections, including any related correspondence, to Class Counsel and CPAY’s
counsel.
Final Approval Hearing
27.

The Court will hold a final approval hearing on July 25, 2022, 2022 at 1:30

p.m. (Central time), in Courtroom 3, at the United States District Court for the District of
Nebraska, 111 S. 18th Plaza, Omaha, Nebraska 68102. At the final approval hearing,
the Court will, among other things: (a) determine whether the proposed Settlement
should be finally approved by the Court as fair, reasonable, adequate, and in the best
interests of the Class; (b) determine whether judgment should be entered pursuant to the
Settlement, dismissing this action with prejudice and releasing all released claims; (c)
determine whether the Court’s prior certification of the Class should be reaffirmed; (d)
rule on Class Counsel’s motion for attorneys’ fees, expenses, and service awards; (e)
consider any properly filed objections; and (f) consider any other matters necessary in
connection with the final approval of the Settlement.
28.

By no later than thirty (30) days before the opt-out deadline and objection

deadline, Plaintiffs and Class Counsel shall file their: (a) motion for final approval of the
Settlement; and (b) motion for attorneys’ fees, expenses, and service awards. Promptly
after they are filed, these documents shall be posted on the settlement website.
29.

By no later than fourteen (14) days before the final approval hearing, the

Parties shall file any responses to any Class member objections and any replies in
support of final settlement approval and/or in support of Class Counsel’s motion for
attorneys’ fees, expenses, and service awards.

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30.

The Court may, in its discretion, modify the date and/or time of the final

approval hearing, and may order that this hearing be held remotely or telephonically. In
the event the Court changes the date, time, and/or the format of the final approval hearing,
the Parties shall ensure that the updated information is posted on the settlement website.
31.

Only Class members who have submitted timely and valid objections, in

accordance with the requirements of this Order, may be heard at the final approval
hearing.
32.

If the Settlement, including any amendment made in accordance therewith,

is not approved by the Court or shall not become effective for any reason whatsoever, the
Settlement and any actions taken or to be taken in connection therewith (including this
Order and any judgment entered herein), shall be terminated and shall become null and
void and of no further force and effect except for (a) any obligations to pay for any expense
incurred in connection with notice and administration as set forth in the Settlement, and
(b) any other obligations or provisions that are expressly designated in the Settlement to
survive the termination of the Settlement. In the event of a termination, section XII of the
Settlement shall apply, including, but not limited to, the Parties shall return to the status
quo ante in the action as if the Parties had not entered into the Settlement, all of the
Parties’ respective pre-Settlement claims and defenses will be preserved, and the Court
will reset the action for trial.
33.

Other than such proceedings as may be necessary to carry out the terms

and conditions of the Settlement, all proceedings in this action are hereby stayed and
suspended until further order of this Court.

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34.

Pending final determination of whether the Settlement should be finally

approved, Plaintiffs and all Class members are barred and enjoined from filing,
commencing, prosecuting, or enforcing any action against the Released Parties insofar
as such action asserts Released Claims, directly or indirectly, in any judicial,
administrative, arbitral, or other forum. This bar and injunction is necessary to protect
and effectuate the Settlement and this Order, and this Court’s authority to effectuate the
Settlement, and is ordered in aid of this Court’s jurisdiction.
35.

This Order, the Settlement, and all negotiations, statements, agreements,

and proceedings relating to the Settlement, and any matters arising in connection with
settlement negotiations, proceedings, or agreements shall not constitute, be described
as, construed as, offered or received against CPAY or any of the other Released Parties
as evidence or an admission of: (a) the truth of any fact alleged by Plaintiffs in this action;
(b) any liability, negligence, fault, or wrongdoing of CPAY or the Released Parties; (c) the
propriety of maintaining this action as a class action for purposes other than settlement;
or (d) the propriety of certifying a class in any other action.
36.

The Court retains jurisdiction over this action to consider all further matters

arising out of or connected with the Settlement, including enforcement of the releases
provided for in the Settlement.
37.

The Parties are directed to take all necessary and appropriate steps to

establish the means necessary to implement the Settlement according to its terms should
it be finally approved.
38.

The Court may, for good cause, extend any of the deadlines set forth in this

Order without further notice to Class members. Without further order of the Court, the

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Parties may agree to make non-material modifications in implementing the Settlement
that are not inconsistent with this Order, including non-material modifications to the
exhibits to the Settlement.
39.

The following chart summarizes the dates and deadlines set by this Order:

Last day for CPAY to provide the settlement administrator with updated class data
Last day for CPAY to provide the settlement
administrator with updated class data

10 days after entry of
preliminary approval Order
30 days after entry of the
preliminary approval Order

Notice deadline
Last day for Plaintiffs and Class Counsel to file
motion for final approval of the Settlement and
motion for attorneys’ fees, expenses, and
service awards

60 days after entry of the
preliminary approval Order

Opt-out/objection deadline

90 days after entry of the
preliminary approval Order

Last day for the Parties to file any responses to
objections and any replies in support of final
settlement approval and/or application for fees,
expenses, and service awards

14 days before
final approval hearing

July 25, 2022,
1:30 p.m.

Final approval hearing

150 days after entry of the
preliminary approval Order

Claims deadline

Dated this 9th day of March, 2022.
BY THE COURT:
s/ Joseph F. Bataillon
Senior United States District Judge

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