GOOD et al v. NATIONWIDE CREDIT, INC.
MEMORANDUM AND/OR OPINION. SIGNED BY HONORABLE EDUARDO C. ROBRENO ON 3/14/16. 3/14/16 ENTERED AND COPIES MAILED AND E-MAILED.(kw, ) Modified on 3/14/2016 (kw, ).
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
BRADLEY GOOD et al.,
NATIONWIDE CREDIT, INC.,
M E M O R A N D U M
EDUARDO C. ROBRENO, J.
March 14, 2016
BACKGROUND ................................................ 3
Factual Background and Procedural History............ 3
The Proposed Class Action Settlement................. 6
1. The Proposed Settlement Class ..................... 6
2. The Proposed Settlement Terms ..................... 7
II. DISCUSSION ................................................ 9
Whether Class Certification Is Proper............... 10
1. Rule 23(a) Factors ............................... 11
Numerosity ................................... 11
Commonality .................................. 12
Typicality ................................... 14
Adequacy of Representation ................... 16
2. Rule 23(b)(3) Factors ............................ 19
Predominance ................................. 20
Superiority .................................. 22
Whether the Notice to Class Members Was Adequate.... 25
Whether the Proposed Settlement is Fair............. 27
1. The Complexity, Expense, and Likely Duration of
Litigation ....................................... 29
2. The Reaction of the Class to Settlement .......... 30
3. The Stage of the Proceedings and Amount of Discovery
Completed ........................................ 31
4. The Risks of Establishing Liability and Damages and
Maintaining a Class Action Through Trial and the
Ability of Defendant to Withstand a
Greater Judgment ................................. 32
5. The Range of Reasonableness of the Settlement in
Light of the Best Possible Recovery and the
Attendant Risks of Litigation .................... 35
Award to Class Representatives and Attorneys’ Fees and
1. Award to Class Representatives ................... 38
2. Attorneys’ Fees .................................. 41
III. CONCLUSION ............................................... 44
Plaintiffs Bradley Good and Edward Soucek, through
their proposed class counsel, and Defendant Nationwide Credit,
Inc., have negotiated and agreed to a class action settlement
that will resolve the instant matter--which alleges that
Defendant mailed Plaintiffs and others similarly situated
collection notices including language that is false, deceptive,
or misleading under the Fair Debt Collection Practices Act
(“FDCPA”), 15 U.S.C. § 1692e--in its entirety. On November 4,
2015, the Court preliminarily approved that settlement. ECF No.
47. Now class counsel has moved for final approval of the
settlement and for attorneys’ fees and costs. Because the
settlement meets the Third Circuit’s Girsh factors and the
proposed awards to the class representatives and attorneys’ fees
and costs are reasonable, the Court will grant the motion for
final approval of the settlement.
Factual Background and Procedural History
On September 9, 2013, Defendant sent Plaintiff Soucek
a dunning letter on behalf of creditor GE Capital Retail Bank
offering to settle his account for less than the amount owed.
See Compl. Ex. A, ECF No. 1. The letter included the following
language: “GE CAPITAL RETAIL BANK is required to file a form
1099C with the Internal Revenue Service for any cancelled debt
of $600 or more. Please consult your tax advisor concerning any
tax questions.” Id. On December 10, 2013, Defendant sent
Plaintiff Good a similar letter on behalf of creditor American
Express. See Compl. Ex. B. The letter included the following
language: “American Express is required to file a form 1099C
with the Internal Revenue Service for any cancelled debt of $600
or more. Please consult your tax advisor concerning any tax
In their Complaint filed on July 16, 2014, Plaintiffs
claim that this language is false and misleading and constitutes
a “collection ploy” in violation of the FDCPA. Id. ¶¶ 24, 26,
36. The Complaint proposed a class comprised of “[a]ll persons
with addresses in the Commonwealth of Pennsylvania” “who were
sent one or more collection letter(s) from Defendant” that
included the challenged statement or a “substantially identical
statement.” Id. ¶ 28. This Court has not yet decided whether to
certify the class.1
Defendant filed a motion to dismiss on September 5,
2014, ECF No. 8, which this Court denied on October 27, 2014,
ECF No. 21. In the memorandum accompanying the Court’s order,
ECF No. 20, the Court found that the challenged statement
concerning IRS reporting requirements failed to accurately
reflect controlling law, at least in some respects; could be
deceptive and misleading under the least sophisticated debtor
standard; and that the challenged statement was material. See
generally ECF No. 20.
Through discovery, Plaintiffs learned that Defendant
sent collection letters containing the challenged statement on
behalf of its clients GE Capital Bank2 and American Express from
September 2012 to July 1, 2015. Defendant mailed such letters to
Plaintiffs filed a Motion for Class Certification on
March 27, 2015, but this Court denied that motion as moot on
July 16, 2015, because the parties reached a settlement
agreement. In granting preliminary approval of the settlement
reached by the parties, the Court made a preliminary
determination, for settlement purposes only, that class
certification was appropriate. ECF No. 47 at ¶ 5.
GE Capital Retail Bank changed its name to Synchrony
Bank in June 2014. Pls.’ Mot. 2 n.1, ECF No. 51.
approximately 15,225 Pennsylvania consumers in the one-year
period preceding Plaintiffs’ filing of their Complaint.3
In May 2015, the parties informed the Court that they
had reached a class-wide settlement in principle. On July 9,
2015, Plaintiffs moved for preliminary approval of their
proposed settlement and class certification. ECF No. 37. The
Court initially rejected the proposed settlement, because the
proposed settlement fund exceeded the FDCPA’s statutory cap for
class damages of the lesser of $500,000, or one percent of the
net worth of the debt collector defendant, pursuant to 15 U.S.C.
§ 1692k(a)(2)(B). ECF Nos. 41 & 42. The parties therefore
returned to the negotiating table and arrived at an amended
settlement agreement that complied with the FDCPA’s class
damages cap. Thereafter, the Court granted Plaintiffs’ motion
for preliminary approval of the amended settlement agreement.
ECF No. 47.
On January 25, 2016, Plaintiffs filed an uncontested
motion for final approval of amended class settlement and for
Plaintiffs presumably limited the proposed class to
those who received collection letters containing the suspect
language within one year from the date of filing of the
Complaint, because the statute of limitations for bringing a
claim under the FDCPA is one year from the date on which the
violation occurs. 15 U.S.C. § 1692k(d). Plaintiffs define this
time period from July 16, 2013, to July 1, 2015. An affidavit by
Defendant’s corporate representative attaches a list of all
15,225 putative class members, although that list has not been
filed on the docket. See Pls.’ Mot. Ex. 6, Rico Aff. ¶ 2, ECF
approval of attorneys’ fees and costs. ECF No. 51. The final
fairness hearing was held on February 8, 2016. ECF No. 52. No
objections were filed to the proposed settlement, and no
objectors appeared that the fairness hearing. Id.
The Proposed Class Action Settlement
The terms of the proposed class action settlement are
set forth in the Amended Class Action Settlement Agreement,
Pls.’ Mot. Ex. 1, ECF No. 51-3 [hereinafter “Am. Settlement
Agreement”], and are outlined below.
The Proposed Settlement Class
The Settlement Agreement provides for a settlement
class defined as follows:
All persons with addresses in the Commonwealth of
Pennsylvania who were sent one or more collection
letters from NCI that stated GE Capital Retail Bank,
Synchrony Bank, or American Express “is required to
file a form 1099C with the Internal Revenue Service
for any cancelled debt of $600 or more,” or a
underlying debt being collected was incurred primarily
for personal, family or household use; the letter(s)
bear(s) a send date from July 16, 2013 through July 1,
Am. Settlement Agreement at ¶ 1(B). The Court preliminarily
certified this class for settlement purposes. See ECF No. 47 at
The Proposed Settlement Terms
The Amended Settlement Agreement provides that
Defendant will pay $196,960.00, which is one percent of
Defendant’s 2014 net worth, to a class administrator to create
the settlement fund. Id. ¶ 16(A). This fund will then be
distributed by the class administrator in equal shares to each
of the class members who have not opted out of the class and
whose class notice was not returned as undeliverable and without
a forwarding address. Id. Because the FDCPA caps class damages
at the lesser of $500,000 or one percent of the Defendant’s net
worth, 15 U.S.C. § 1692k(a)(2)(B), the settlement fund
represents the maximum possible recovery that the class could
Plaintiffs report that postcard notices were sent to a
total of 14,866 class members that were not returned as
undeliverable, which represents a penetration rate of 97.6%.
Pls.’ Mot. at 6. There are no objections and three requests for
exclusion from the settlement. Id. Ex. 6, Sutor Decl. at ¶¶ 1415, ECF No. 51-8. Accordingly, the 14,863 class members who have
been reached by mail and who have not excluded themselves from
the settlement will receive a check for approximately $13.25
each. Id. at 6.
Settlement checks will be mailed automatically to
class members no later than twenty days after the final judgment
date; class members need not take any action, such as filing a
claim form, to receive payment. Am. Settlement Agreement at
While the original settlement agreement provided that
any unclaimed funds would be awarded one-half to Legal Aid of
Southeastern Pennsylvania and one-half to Mid-Penn Legal
Services as a cy pres remedy, the Amended Settlement Agreement
states that any residual funds will be addressed by motion to
the Court after distribution and the administrator prepares an
accounting of payments and checks cashed. Id. ¶ 16(C).
Next, the Amended Settlement Agreement states that
Defendant will pay the class representatives, Plaintiffs Good
and Soucek, a settlement for their individual FDCPA claims in
the amount of $1,000 each. Id. ¶ 16(D). In addition, Defendant
will pay the class representatives a service award of $1,000
each. Id. These payments--$4,000 in total--are separate and
apart from and in addition to the class settlement fund. Id.
Further, the Amended Settlement Agreement provides
that Defendant will pay class counsel approved reasonable
attorneys’ fees and litigation expenses in an amount not to
exceed $125,000. Id. ¶ 17. As with the payments to the class
representatives, payment of attorneys’ fees and cost is separate
and apart from and in addition to the amount that Defendant will
pay to the class. Id. Defendant will also pay the costs of class
notice and administration of the settlement. Id. ¶ 6.
In exchange for the benefits provided by the
settlement, settlement class members agree to release all claims
that they may have against Defendant Nationwide Credit, Inc.,
American Express Company, GE Capital Retail Bank, Synchrony
Bank, and their privies in connection with the challenged
language in collection letters mailed to them by Defendant. Id.
¶¶ 1(F)-(G), 15.
Under Federal Rule of Civil Procedure 23(e), the
settlement of a class action requires court approval. Fed. R.
Civ. P. 23(e)(2). A district court may approve a settlement
agreement only “after a hearing and on finding that it is fair,
reasonable, and adequate.” Id. When presented with a class
settlement agreement, the court must first determine that the
requirements for class certification under Rule 23(a) and (b)
are met and then must separately determine that the settlement
is fair to the class under Rule 23(e). In re Nat’l Football
League Players Concussion Injury Litig., 775 F.3d 570, 581 (3d
Cir. 2014); Sullivan v. DB Invs., Inc., 667 F.3d 273, 319 (3d
Cir. 2011) (en banc) (quoting In re Ins. Brokerage Antitrust
Litig., 579 F.3d 241, 257 (3d Cir. 2009)).
The factual determinations necessary to make Rule 23
findings must be made by a preponderance of the evidence. In re
Hydrogen Peroxide Antitrust Litig., 552 F.3d 305, 320 (3d Cir.
2008). The decision of whether to approve a proposed settlement
of a class action is left to the sound discretion of the
district court. In re Prudential Ins. Co. Am. Sales Practice
Litig. Agent Actions, 148 F.3d 283, 299 (3d Cir. 1998) (quoting
Girsh v. Jepson, 521 F.2d 153, 156 (3d Cir. 1975)).
Where, as here, the court has not already certified
the class prior to evaluating the settlement, the court
initially must determine whether the proposed settlement class
satisfies the requirements of Rule 23(a) and (b). Amchem Prods.,
Inc. v. Windsor, 521 U.S. 591, 619 (1997); see also In re Pet
Food Prods. Liab. Litig., 629 F.3d 333, 341 (3d Cir. 2010).
Whether Class Certification Is Proper
At the final fairness stage, the court must undertake
a “rigorous analysis” as to whether class certification is
appropriate. In re NFL, 775 F.3d at 582-83. Under Rule 23(a),
Plaintiffs must demonstrate that: (1) the class is so numerous
that joinder of all members is impracticable; (2) there are
questions of law or fact common to the class; (3) the claims or
defenses of the representative parties are typical of the claims
or defenses of the class; and (4) the representative parties
will fairly and adequately protect the interests of the class.
Fed. R. Civ. P. 23(a). Rule 23(b)(3), under which Plaintiffs
seek class certification, requires that “questions of law or
fact common to class members predominate over any questions
affecting only individual members, and that a class action is
superior to other available methods for fairly and efficiently
adjudicating the controversy.” Fed. R. Civ. P. 23(b)(3). These
twin requirements are commonly referred to as predominance and
superiority. Sullivan, 667 F.3d at 296. The Court finds that
both the Rule 23(a) and (b)(3) factors are satisfied here.
Rule 23(a) Factors
The numerosity requirement is easily met in this case,
because the class includes thousands of Pennsylvania consumers.
Rule 23(a)(1) requires that the class be “so numerous that
joinder of all members is impracticable.” Fed. R. Civ. P.
23(a)(1). No minimum number of plaintiffs is required to
maintain a suit as a class action, but generally if the named
plaintiff demonstrates that the potential number of plaintiffs
exceeds forty, the numerosity prong has been met. Stewart v.
Abraham, 275 F.3d 220, 226-27 (3d Cir. 2001).
Here, Plaintiffs have identified 15,225 Pennsylvania
consumers as members of the class and, through their notice
efforts, they actually reached 14,863 members who have not asked
to be excluded from the settlement. The parties maintain that
collection letters with the challenged language concerning
Internal Revenue Service (“IRS”) filing requirements were sent
to 15,225 Pennsylvania consumers during the relevant time
period. Pls.’ Mot. Ex. 5, Rico Aff. ¶ 7, ECF No. 51-7.
Specifically, 1,200 persons were sent letters involving debts
owed to GE Capital Retail Bank or its successor Synchrony Bank,
and 14,025 persons received letters involving debts owed to
American Express. Id.
Commonality exists in this case, because Plaintiffs
allege that substantially similar debt collection letters in
violation of the FDCPA were sent to all members of the class,
thereby implicating similar issues of law and fact. Rule
23(a)(2) requires a showing of the existence of “questions of
law or fact common to the class.” Fed. R. Civ. P. 23(a)(2). The
commonality element requires that the plaintiffs “share at least
one question of fact or law with the grievances of the
prospective class.” In re Warfarin Sodium Antitrust Litig., 391
F.3d 516, 527-28 (3d. Cir. 2004) (citations omitted). To satisfy
the commonality requirement, class claims “must depend upon a
common contention . . . of such a nature that it is capable of
classwide resolution--which means that determination of its
truth or falsity will resolve an issue that is central to the
validity of each one of the claims in one stroke.” Wal-Mart
Stores, Inc. v. Dukes, 564 U.S. 338, 349 (2011). Generally,
courts have held that the commonality requirement is satisfied
in FDCPA actions when “the defendants have engaged in
standardized conduct towards members of the proposed class by
mailing them allegedly illegal form letter or documents.”
Saunders v. Berks Credit & Collections, Inc., No. 00-cv-3477,
2002 WL 1497374, at *6 (E.D. Pa. July 11, 2002) (citing Keele v.
Wexler, 149 F.3d 589, 594 (7th Cir. 1998)).
Here, there are both questions of law and fact common
to the proposed class. As a factual matter, the challenged
statement concerning reporting requirements under the Internal
Revenue Code and its accompanying regulations was standardized
language that Defendant included in collection communications
mailed to all class members. The only difference in the
statements was the name of the addressee’s creditor, either GE
Capital Retail Bank or American Express. Further, common legal
questions include, inter alia, whether Defendant made any false,
deceptive, or misleading representations in connection with the
collection of any debt in violation of the FDCPA, 15 U.S.C.
§ 1692e, and whether the language in Defendant’s form collection
letters misstated requirements under IRS regulations.
The typicality element is satisfied, because
Plaintiffs Good’s and Soucek’s injuries are identical to those of
all class members since all injuries flow from the same allegedly
illegal language in Defendant’s collection letters. Rule 23(a)(3)
requires that the class representatives’ claims be “typical” of
the claims of the class. Fed. R. Civ. P. 23(a)(3). The typicality
inquiry is “intended to assess whether the action can be
efficiently maintained as a class and whether the named
plaintiffs have incentives that align with those of absent class
members so as to assure that the absentees’ interests will be
fairly represented.” Baby Neal v. Casey, 43 F.3d 48, 57 (3d Cir.
1994). Where claims of the representative plaintiffs arise from
the same alleged wrongful conduct on the part of the defendant,
the typicality prong is satisfied. Warfarin, 391 F.3d at 532.
Here, all members of the proposed class received
collection letters containing nearly identical language about
IRS reporting requirements, which Plaintiffs allege violated the
FDCPA’s ban on false, deceptive, or misleading representations
in debt collection communications. The use of this language on
the part of Defendant gives rise to the sole claim in this case.
The Court need not inquire as to Defendant’s intentions to
include the challenged language in any one particular letter or
at any one period of time, because “[t]he FDCPA is a strict
liability statute to the extent it imposes liability without
proof of an intentional violation.” Allen ex rel. Martin v.
LaSalle Bank, N.A., 629 F.3d 364, 368 (3d Cir. 2011).
Further, the question of whether the challenged
statement is false, deceptive, or misleading under the FDCPA is
answered under an objective, rather than a subjective, standard.
The Third Circuit evaluates 15 U.S.C. § 1692e claims under the
“least sophisticated debtor [or consumer]” standard.4 Brown v.
Card Serv. Ctr., 464 F.3d 450, 453-54 (3d Cir. 2006). Therefore,
the Court need not assess whether Good or Soucek--nor any other
individual class member--was actually deceived or misled by the
letter, because the effect that the challenged language had on
any individual consumer is irrelevant. To prevail, Plaintiffs
Good and Soucek would need only show that the challenged
statement was deceptive from the perspective of the least
sophisticated consumer. This is the same showing that any member
Consistent with the basic purpose of the FDCPA, this
objective standard aims “to protect ‘all consumers, the gullible
as well as the shrewd,’ ‘the trusting as well as the
suspicious,’ from abusive debt collection practices.” Id. at 454
(quoting Wilson v. Quadramed Corp., 225 F.3d 350, 354 (3d Cir.
2000)). The standard “does not . . . provide solace to the
willfully blind or non-observant,” Campuzano-Burgos v. Midland
Credit Mgmt., Inc., 550 F.3d 294, 299 (3d Cir. 2008), and
“prevents liability for bizarre or idiosyncratic interpretations
of collection notices by preserving a quotient of reasonableness
and presuming a basic level of understanding and willingness to
read with care.” Brown, 464 F.3d at 454 (quoting Quadramed
Corp., 225 F.3d at 354-55) (internal quotation marks omitted).
of the proposed class would need to make to prevail on an FDCPA
claim against Defendant.
Adequacy of Representation
Finally, the Court has no reason to doubt that the
proposed class representatives, Good and Soucek, and proposed
class counsel adequately represent the interests of the class in
this matter. Rule 23(a)(4) requires representative parties to
“fairly and adequately protect the interests of the class.” Fed.
R. Civ. P. 23(a)(4). This requirement “serves to uncover
conflicts of interest between the named parties and the class
they seek to represent.” Amchem v. Windsor, 521 U.S. 591, 625
(1997). The Third Circuit applies a two-prong test to assess the
adequacy of the proposed class representatives. First, the court
must inquire into the “qualifications of counsel to represent
the class,” and second, it must assess whether there are
“conflicts of interest between named parties and the class they
seek to represent.” In re Prudential Ins. Co. of Am. Sales
Practice Litig., 148 F.3d 283, 312 (3d Cir. 1998)
Adequacy of Class Counsel
Here, Plaintiffs’ counsel has substantial experience
in consumer class action litigation and is therefore well
qualified to represent the class. The class is represented by
three attorneys: Cary Flitter of Flitter Milz, P.C.; Andrew Milz
of the same firm; and Carlo Sabatini of the Sabatini Law Firm.
The qualifications of these attorneys are highlighted below and
are more fully set out in their certifications submitted with
this motion, as well as the motion for preliminary approval of
the settlement. See generally Pls.’ Mot. Ex. 10, Flitter Cert.,
ECF No. 51-12; Ex. 11, Milz Cert., ECF No. 51-13; Ex. 12,
Sabatini Cert., ECF No. 51-14; see also Pls.’ Mot. Prelim.
Approval at 10-12, ECF No. 45. Defendant has not challenged the
qualifications of these attorneys, and there is no indication in
the papers filed in this case that Plaintiffs’ counsel has been
unable provide capable representation.
Mr. Flitter has been approved as class counsel in
several other consumer class actions in the Eastern District of
Pennsylvania. Pls.’ Mot. Prelim. Approval at 10. He has led CLE
seminars on consumer class actions, served as adjunct faculty at
two local law schools, and co-authored a treatise entitled
Pennsylvania Consumer Law. Id.
Mr. Milz, an associate at Flitter Lorenz, P.C., has
practiced consumer credit litigation since 2008 and has tried
consumer cases in the Eastern District of Pennsylvania. Id. at
11. He has presented at local and national conferences on FDCPA
and class action topics and has also co-authored the treatise
referenced above. Id.
Finally, Mr. Sabatini has practiced law for over
fifteen years and has served as plaintiff’s counsel in a number
of FDCPA matters. Id. He, too, has lectured on consumer matters
and contributed to the Pennsylvania Consumer Law treatise. Id.
Mr. Sabatini was recently appointed as co-counsel for a
certified class of consumers in an FDCPA case in this district.
Blandina v. Midland Funding, LLC, No. 13-1179, Doc. 57 (E.D. Pa.
Dec. 23, 2014).
Together, these attorneys litigated this matter for
roughly one and a half years. They successfully opposed
Defendant’s motion to dismiss, propounded written discovery
requests upon Defendant, and took the deposition of Defendant’s
corporate designee. Further, they prepared a motion for class
certification. Finally, the proposed class counsel engaged in
settlement negotiations with Defendant and its counsel,
including over such matters as class composition, Defendant’s
net worth, and the settlement fund. Finally, class counsel has
committed substantial resources to the prosecution of this
action and no doubt will continue to do so during the
administration of the settlement as necessary. Accordingly, this
factor weighs in favor of class certification.
Adequacy of Class Representatives
There are no conflicts of interest between Plaintiffs
Good and Soucek and the class they seek to represent. As
explained above, the conduct of the Defendant is the sole focus
of this case. All members of the putative class, including the
proposed class representatives, received communications from
Defendant containing nearly identical language as to IRS
reporting requirements, and any inquiry into the deception
caused by this challenged statement would be from the
perspective of this least sophisticated consumer. Nothing in the
record suggests that Good and Soucek have been unwilling or
unable to prosecute the claims of the other class members. The
Court therefore deems Good and Soucek as adequate class
In sum, Plaintiffs have demonstrated compliance with
each of the Rule 23(a) prerequisites for class certification.
Rule 23(b)(3) Factors
In addition to satisfying each of the prerequisites in
Rule 23(a), a class representative must show that the action
falls into at least one of the three categories provided in Rule
23(b). Plaintiffs bring this action under Rule 23(b)(3). Pls.’
Mot. Prelim. Approval at 6. Under Federal Rule of Civil
Procedure 23(b)(3), a class action may be maintained if common
questions of law or fact predominate over questions affecting
only individual members, and a class action is superior to other
available methods for fairly and efficiently adjudicating the
In this case, where Defendant sent nearly identical
debt collection letters to all members of the putative class,
common questions of law and fact predominate due to the
virtually identical factual and legal predicates of each class
member’s claim. The predominance inquiry “tests whether proposed
classes are sufficiently cohesive to warrant adjudication by
representation.” Amchem, 521 U.S. at 624. Further, it assesses
whether a class action “would achieve economies of time, effort,
and expense, and promote uniformity of decision as to persons
similarly situated.” Fed. R. Civ. P. 23(b)(3) advisory
committee’s note to 1966 amendment.
Here, class issues with respect to both liability and
damages easily predominate over individual issues. With regard
to liability, Third Circuit case law, as discussed above,
requires an FDCPA plaintiff to prove that the offending debt
collection practice was deceptive from the perspective of the
least sophisticated consumer. As such, there would be no need
for individual proofs as to each class member’s reaction to the
letter, because a plaintiff is not required to show that she
herself was deceived. The primary question presented by the sole
claim in this case--whether the statement concerning IRS
reporting requirements would deceive the least sophisticated
consumer--is common to all class members’ claims.
With regard to damages, the FDCPA allows for classwide recovery. Under 15 U.S.C. § 1692k(a)(2)(B), “any debt
collector who fails to comply with [the FDCPA] with respect to
any person is liable to such person in an amount equal to the
sum of . . . in the case of a class action, (i) such amount for
each named plaintiff as could be recovered [in any action by an
individual, such additional damages as the court may allow, but
not exceeding $1,000], and (ii) such amount as the court may
allow for all other class members, without regard to a minimum
individual recovery, not to exceed the lesser of $500,000 or 1
per centum of the net worth of the debt collector . . . .” The
settlement reached by the parties is structured as a class
award, as it is a single fund of $196,960.00 that will divided
in equal shares among the class members who could be located by
mail. Am. Settlement Agreement ¶ 16(A). Accordingly, there will
be no need to calculate individual damages in this matter.
The superiority requirement is also apparent in a case
such as this one, in which thousands of individuals seek relief
for violation of the FDCPA regarding a substantially identical
debt collection letter. The superiority requirement “asks the
court to balance, in terms of fairness and efficiency, the
merits of a class action against those of alternative available
methods of adjudication.” Warfarin, 391 F.3d at 533-34
(citations omitted) (internal quotation marks omitted). When
assessing superiority and “[c]onfronted with a request for
settlement-only class certification, a district court need not
inquire whether the case, if tried, would present intractable
management problems, . . . for the proposal is that there be no
trial.” Amchem, 521 U.S. at 620.
FDCPA claims have a special relationship with the
class action mechanism. Indeed, the Third Circuit has found that
class actions are “fundamental to the statutory structure of the
FDCPA.” Weiss v. Regal Collections, 385 F.3d 337, 345 (3d Cir.
2004). Congress clearly contemplated that this procedural
mechanism would be used to bring FDCPA claims, as evidenced by
the Act itself and its legislative history. First, Congress
specifically provided for class damages in the FDCPA. See 15
U.S.C. § 1692k(a)(2)(B) (establishing a cap on damages in FDCPA
class actions). Second, Congress intended for the FDCPA to be
self-enforcing. Weiss, 385 F.3d at 345; see also Graziano v.
Harrison, 950 F.2d 107, 113 (3d Cir. 1991) (The FDCPA “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.”). As the Third Circuit has
recognized, without the class action device, “meritorious FDCPA
claims might go unredressed because the awards in an individual
case might be too small to prosecute an individual action.”
Weiss, 385 F.3d at 345. A class action’s proffer of a means for
“[c]ost-spreading can also enhance the means for private
attorney general enforcement and the resulting deterrence of
wrongdoing.” In re Gen. Motors Corp., Pick-Up Truck Fuel Tank
Prods. Liab. Litig., 55 F.3d 768, 784 (3d Cir. 1995).
The class action mechanism is a superior method of
adjudicating the FDCPA claims in this case. Defendant mailed
letters with the challenged language to over 15,000 Pennsylvania
consumers. Even if a mere fraction of the members of the
putative class were to litigate their claims individually, the
courts would be significantly burdened by numerous lawsuits. It
is more probable, however, that Pennsylvania consumers would
find it uneconomical to litigate their claims individually,
thereby hindering the FDCPA’s private attorney-general
enforcement mechanism. The FDCPA’s damages provisions limit an
individual plaintiff’s damages to “any actual damage” sustained
by the plaintiff as a result of the defendant-debt collector’s
failure to comply with the FDCPA, plus “such additional damages
as the court may allow, but not exceeding $1,000.” 15 U.S.C. §
1692k(a)(1)-(2)(A). Damages in a FDCPA case are typically so
small that litigation of a single claim is hardly worth the cost
and effort of litigation. Indeed, under the terms of the
proposed settlement, each class member would receive an
estimated $13.25, with the class representatives receiving a
total recovery of $2,000 each.
Further, the proposed settlement will offer prompt
relief to the class, whereas individual litigation may be much
more time consuming. The settlement agreement provides that upon
entry of final judgment, Defendant will pay $196,960 to the
class administrator to create the settlement fund. Am.
Settlement Agreement at ¶ 16(A). Settlement checks will then be
mailed to class members within twenty days of the final judgment
date. Id. ¶ 16(B).
In sum, Plaintiffs have demonstrated compliance with
each of the Rule 23(b)(3) prerequisites for class certification.
Because the Rule 23(a) factors are also satisfied, the Court
finds that the class may be certified.
Whether the Notice to Class Members Was Adequate
Having determined that the class may be certified, the
Court next reviews the notice procedures implemented by
Plaintiffs. “In the class action context, the district court
obtains personal jurisdiction over the absentee class members by
providing proper notice of the impending class action and
providing the absentees with the opportunity to be heard or the
opportunity to exclude themselves from the class.” Prudential,
148 F.3d at 306. Rule 23 includes two provisions concerning
notice of the class members.
First, Rule 23(c)(2)(B) requires that class members be
given the best notice practicable under the circumstances,
including individual notice to all potential class members
identifiable through reasonable efforts. Specifically, the Rule
provides that such notice must, in clear, concise, and plain
language, state: (i) the nature of the action; (ii) the
definition of the class certified; (iii) the class claims,
issues, or defenses; (iv) the class member’s right to enter an
appearance by an attorney; (v) the class member’s right to be
excluded from the class; (vi) the time and manner for requesting
exclusion; and (vii) the binding effect of settlement on class
members. Fed. R. Civ. P. 23(c)(2)(B).
Second, Rule 23(e) requires notification to all
members of the class of the terms of any proposed settlement.
Fed. R. Civ. P. 23(e). This “notice is designed to summarize the
litigation and the settlement” and “to apprise class members of
the right and opportunity to inspect the complete settlement
documents, papers, and pleadings filed in the litigation.”
Prudential, 148 F.3d at 327.
In the Court’s order granting preliminary approval of
the settlement, the Court directed notice by newspaper
publication, through a website dedicated to this matter, and by
postcard mailing. ECF No. 47. At that time, the Court reviewed
the parties’ notice program, including the language of the
notices, in advance and made revisions to the language of the
notices to satisfy itself that the notices were clear and
included all requisite information. Ultimately, the notices
explained, in plain language, the settlement and the procedures
necessary to file a claim, opt out, or object to the settlement.
Plaintiffs report that all three methods of notice
were timely executed by the settlement administrator, Heffler
Claims Group. See generally Pls.’ Mot. Ex. 6, Teresa Sutor
Decl., ECF No. 51-8. Heffler launched a dedicated website at
www.goodsouceksettlement.com and ran a one-time publication in
the Philadelphia Inquirer on December 3, 2015. Id. at ¶¶ 8-9. On
December 4, 2015, Heffler mailed notice of the class settlement
to 15,225 class members with Pennsylvania addresses. Id. at ¶
10. Notices returned to Heffler as undeliverable were then re26
mailed to updated addresses after an address search. Id. at
¶¶ 11-12. After mailing and re-mailing, postcard notices were
sent to a total of 14,866 class members that we not returned as
undeliverable--a penetration rate of 97.6%. Id. at ¶ 13.
Accordingly, the Court finds that the notice program
used in this case satisfies Rule 23(c)(2)(B) and (e).
Whether the Proposed Settlement Is Fair
After class certification, the court must approve the
settlement of a class action and determine whether the proposed
settlement is “fair, adequate, and reasonable,” as required by
Rule 23(e)(2). Prudential, 148 F.3d at 316-17. Where the parties
simultaneously seek certification and settlement approval, the
Third Circuit requires “courts to be even more scrupulous than
usual” when they examine the fairness of the proposed
settlement. Id. at 317 (quoting GM Trucks, 55 F.3d at 805). This
heightened standard is designed to ensure that class counsel has
demonstrated “sustained advocacy” throughout the course of the
proceedings and has protected the interests of all class
members. Id. at 317 (quoting GM Trucks, 55 F.3d at 806).
Ultimately, “[t]he decision of whether to approve a proposed
settlement of a class action is left to the sound discretion of
the district court.” Girsh, 521 F.2d at 156.
In Girsh, the Third Circuit Court identified nine
factors to be considered when determining the fairness of a
proposed settlement: (1) the complexity, expense, and likely
duration of the litigation;(2) the reaction of the class to the
settlement; (3) the stage of the proceedings and the amount of
discovery completed; (4) the risks of establishing liability;
(5) the risks of establishing damages; (6) the risks of
maintaining the class action through trial; (7) the ability of
the defendants to withstand a greater judgment; (8) the range of
reasonableness of the settlement fund in light of the best
possible recovery; and (9) the range of reasonableness of the
settlement fund to a possible recovery in light of all the
attendant risks of litigation. Girsh, 521 F.3d at 157.
In Prudential, the Third Circuit identified
additional, nonexclusive factors for courts to consider. 148
F.3d at 323. Those factors, which often overlap with the Girsh
the maturity of the underlying substantive issues, as
measured by experience in adjudicating individual
actions, the development of scientific knowledge, the
extent of discovery on the merits, and other factors
that bear on the ability to assess the probable
outcome of a trial on the merits of liability and
individual damages; the existence and probable outcome
of claims by other classes and subclasses; the
comparison between the results achieved by the
settlement for individual class or subclass members
and the results achieved--or likely to be achieved-for other claimants; whether class or subclass members
are accorded the right to opt out of the settlement;
reasonable; and whether the procedure for processing
individual claims under the settlement is fair and
Id. While the court must make findings as to the Girsh factors,
the Prudential factors are illustrative of additional factors
that may be useful but that do not trigger a requirement of
specific findings. Here, mechanical application of the Girsh
factors is perhaps unfitting, because the settlement affords the
class the maximum recovery permitted under the FDCPA’s damages
cap. Still, the Court turns to apply the Girsh factors--some
individually, some together as a group--before separately
addressing the class representatives’ awards and the attorneys’
fees and costs.
The Complexity, Expense, and Likely Duration of
The first Girsh factor is the complexity, expense, and
likely duration of the litigation, which aims to take into
account the “probable costs, in both time and money, of
continued litigation.” In re Cendant Corp. Litig., 264 F.3d 201,
233 (3d Cir. 2001). Plaintiffs argue that this case was filed
roughly a year and a half ago and has been “hotly contested.”
Pls.’ Mot. 8. They note that Defendants moved to dismiss the
case (albeit unsuccessfully), Plaintiff filed a contested motion
for class certification, and Defendant likely would have moved
for summary judgment after class certification was decided. Id.
at 8-9. Plaintiffs also note that the amount of damages in an
FDCPA is a question for a jury. Id. at 9. Accordingly, continued
litigation would have entailed rulings concerning summary
judgment and class certification, a trial on at least damages,
and potential appeals from any certification decision or jury
verdict. As such, significant time would pass before class
members would see any relief in this case. Accordingly, this
factor weighs heavily in favor of settlement.
The Reaction of the Class to Settlement
The second Girsh factor to be considered is the
reaction of the class to the settlement. Plaintiffs represent
that 14,866 persons received notice through the direct mailing
program. Only three timely requests for exclusion were made, and
there have been no objections filed. Pls.’ Mot. 9. Such a
reaction is to be expected in a consumer case with a relatively
small recovery no matter the merits of the settlement. Reibstein
v. Rite Aid Corp., 761 F. Supp. 2d 241, 252 (E.D. Pa. 2011).
Still, that the settlement is entirely uncontested is evidence
of its fairness. See, e.g., Prudential, 148 F.3d at 318
(affirming district court’s conclusion that class reaction was
favorable when 19,000 out of 8,000,000 class members opted out
and 300 objected); Stoetzner v. U.S. Steel Corp., 897 F.2d 115,
118–19 (3d Cir. 1990) (noting that the second Girsh factor
“strongly favor[ed]” settlement where “only twenty-nine” “of 281
class members” objected to the settlement’s terms). As such,
this factor also favors approval of the settlement.
The Stage of the Proceedings and Amount of
The third factor to be considered is the stage of the
proceedings and the amount of discovery completed. This Girsh
factor requires the Court to evaluate whether Plaintiffs had an
“adequate appreciation of the merits of the case before
negotiating” settlement. Prudential, 148 F.3d at 319. Where, as
here, the class obtains the maximum recovery permitted by law,
this factor seems inapplicable. Nevertheless, Plaintiffs note
that this settlement comes after a year and a half of
litigation. Pls.’ Mot. at 10. Plaintiffs point to the motion
practice in connection with Defendant’s motion to dismiss and
Plaintiff’s class certification motion, which afforded
Plaintiffs an opportunity to assess the strengths and weaknesses
of their case. Plaintiffs also report that they have taken
significant discovery in this case. Id. The parties have
propounded and responded to multiple sets of interrogatories and
documents requests. Id. Class counsel then deposed Defendant’s
corporate designee in Luxembourg by phone concerning Defendant’s
net worth and the composition of the class. Id. at 10. Class
counsel maintains that the discovery exchanged provided them
with sufficient knowledge of the class composition, Defendant’s
financial status, and possible defenses Defendant would assert
at trial. Upon receipt of this information, class counsel was
well-informed and well-prepared for settlement negotiations. Id.
at 11. The Court therefore finds that a reasonable amount of
discovery has been taken and that both parties have a fairly
accurate view of their risks of continued litigation. This
factor thus favors approval of the settlement.
The Risks of Establishing Liability and Damages
and Maintaining a Class Action Through Trial and
the Ability of Defendant to Withstand a Greater
The fourth, fifth, sixth, and seventh Girsh factors
are the risks of establishing liability, the risks of
establishing damages, the risks of maintaining the class action
throughout the trial, and the ability of the defendant to
withstand a greater judgment. For purposes of brevity, and
because certain of these factors are irrelevant in a maximum
recovery settlement such as the instant settlement, the Court
will discuss these factors together.
These Girsh factors require the Court to “survey the
potential risks and rewards of proceeding to litigation in order
to weigh the likelihood of success against the benefits of an
immediate settlement.” Warfarin, 391 F.3d at 537. As to the
risks of establishing liability, this factor “examine[s] what
the potential rewards (or downside) of litigation might have
been had class counsel elected to litigate the claims rather
than settle them.” Gen. Motors, 55 F.3d at 814. As to damages,
this factor “attempts to measure the expected value of
litigating the action rather than settling it at the current
time.” Cendant Corp., 264 F.3d at 238–39 (quoting Gen. Motors,
55 F.3d at 816). Finally, “[b]ecause the prospects for obtaining
certification have a great impact on the range of recovery one
can expect to reap from the [class] action, this factor
[concerning the risks of maintaining the class action through
trial] measures the likelihood of obtaining and keeping a class
certified if the action were to proceed to trial.” Warfarin, 391
F.3d at 537.
As to the risk of maintaining the class action through
trial--and as discussed more fully above with respect to the
Rule 23(b)(3)’s superiority requirement--FDCPA claims,
particularly those based on form collection letters, are well
suited for class disposition. However, Defendant has indicated
that it would oppose class certification. Accordingly,
Plaintiffs suggest that there is a possibility that Defendant’s
position could be embraced by this Court or on appeal, a factor
which militates against approval of the settlement. Pls.’ Mot.
As to the risks of establishing liability and damages,
Plaintiffs believe that the likelihood of establishing
Defendant’s liability is strong, but they acknowledge that there
are certain risks to proving statutory damages under the FDCPA.
For instance, Defendant has argued that there is a lack of
actual harm and that its misrepresentations concerning IRS
reporting requirements were “immaterial.” Pls.’ Mot. at 11.
Moreover, Plaintiffs note that, due to the FDCPA’s ceiling on
class action damages, Plaintiffs’ damages will be capped at
$196,960--exactly what they are getting through the settlement
fund--so long as the Court were to determine that 2014 is the
appropriate time at which to calculate Defendant’s net worth.
Id. at 12. And a jury would award the statutory maximum only if
Plaintiff were able to convincingly argue that “the level of
non-compliance with the FDCPA was so frequent, pervasive, and
intentional as to command the maximum statutory limit.” Id.
As to the ability of defendants to withstand a greater
judgment, this factor is “most clearly relevant where a
settlement in a given case is less than would ordinarily be
awarded but the defendant’s financial circumstances do not
permit a greater settlement.” Reibstein, 761 F. Supp. 2d at 254.
Here, the FDCPA’s statutory cap on class damages limits
recovery, and Plaintiffs are already receiving the largest
possible recovery permitted under the statutory cap.
Accordingly, these Girsh factors support final approval.
The Range of Reasonableness of the Settlement in
Light of the Best Possible Recovery and the
Attendant Risks of Litigation
The eighth and ninth factors are the range of
reasonableness of the settlement fund in light of the best
possible recovery and the attendant risks of litigation. “The
reasonableness of a proposed settlement depends in part upon a
comparison of the present value of the damages the plaintiffs
would recover if successful, discounted by the risks of not
prevailing.” Boone v. City of Phila., 668 F. Supp. 2d 693, 712
(E.D. Pa. 2009) (citing Gen. Motors, 55 F.3d at 806). As noted
above, a verdict for Plaintiffs “could certainly yield less than
$196,960 attained here by settlement--but it could not yield
more.” Pls.’ Mot. at 14. Plaintiffs also note that class
counsel, who is very experienced in FDCPA litigation, endorses
this settlement as favorable to the class in light of the
FDCPA’s damages cap and the nature of Defendant’s violation in
this case. The opinion of experienced class counsel that
settlement is in the class’s best interest is entitled to
“significant weight.” Id. (citing Lake v. First Nationwide Bank,
900 F. Supp. 726, 732 (E.D. Pa. 1995); see also In re Fasteners
Antitrust Litig., No. 08-md-1912, 2014 WL 285076, at *4 (E.D.
Pa. Jan. 24, 2014)).
The Court notes that, as the parties represented
during the preliminary approval and final fairness hearings,
roughly one-third of the class consists of consumers who
received letters from Defendant after the Complaint in this
matter was filed and who the parties agreed to add to the
proposed class during settlement negotiations. Due to the
FDCPA’s statutory cap under § 1692k(a)(2)(B), which does not
take into account the size of the class in capping class
damages, the addition of these 5,000 or so members adversely
affected the compensation received by the original 10,000 or so
members. The expansion of the class during settlement
negotiations may therefore raise an issue of fairness of the
settlement to those roughly 10,000 members of the class as
originally proposed. As a practical issue, and as Defendant
represented at the final fairness hearing, Defendant may have
been unwilling to settle the matter without the inclusion of the
5,000 additional class members. Final Fairness Hr’g. Tr. at 15,
Feb. 8, 2015, ECF No. 52. And there was no guarantee that if the
class as originally proposed had litigated this matter through
trial, they would have gotten such a favorable recovery. Id. at
16. Given that neither Plaintiffs nor any members of the class
have objected to the expansion of the class, and given the
unique circumstances of this case in which Plaintiffs are
receiving the maximum recovery permitted under the FDCPA’s
statutory cap on damages, the Court will accept the class
expansion and decline to deny approval of the settlement on this
In addition, apparently twenty-six members of the
class are commercial entities, Pl.’s Mot. at 6, and therefore
are not eligible to receive compensation under the FDCPA, which
aims to protect individual consumers. See 15 U.S.C. § 1692
(declaring congressional findings and the purpose of the FDCPA).
Given that the parties represent that removing these twenty-six
commercial entities from the class would generate significant
administrative costs with a de minimis corresponding benefit to
the remaining class members (they would, at best, receive an
additional few cents in their settlement checks), the Court will
not require these commercial entities to be removed and finds
that the inclusion of these entities in the class does not
affect the settlement’s fairness.
Award to Class Representatives and Attorneys’ Fees and
Having completed its analysis of the Girsh factors,
the Court will now address two other factors it believes bear on
the fairness of the settlement: the award to the Plaintiffs
representing the class and the attorneys’ fees and costs.
Award to Class Representatives
Plaintiffs seek approval of a service award of $1,000
each to the named plaintiffs, Good and Soucek, a sum which
Defendant has agreed to pay separate and apart from and in
addition to the class settlement fund. In addition, Good and
Soucek will receive a separate statutory damage award of $1,000
each, which Defendant has also agreed to pay separate and apart
from and in addition to the class settlement fund. Such awards
are proper under the FDCPA. Moreover, Defendant has agreed to
these payouts, and no class member has objected.
The Third Circuit has instructed district courts to
carefully scrutinize a settlement agreement that satisfies the
class representative’s individual claims in full and pays a
significant amount in cash to the lawyers who represented the
class but provides for only a token award to the class members.
Gen. Motors, 55 F.3d at 794–95. Agreements of this type not only
raise public suspicions about the purpose and value of the class
action mechanism, but also generate questions regarding the
possibility of collusion between the parties. Fry v. Hayt, Hayt
& Landau, 198 F.R.D. 461, 472 (E.D. Pa. 2000).
The FDCPA, however, specifically allows a higher
recovery for the claims by class representatives than for the
claims asserted for the other class members. Under the FDCPA, a
named plaintiff may recover actual damages, see 15 U.S.C. §
1692k(a)(1), and statutory damages, see id. § 1692k(a)(2)(A), as
well as a pro-rata share of the entire recovery, see id. §
1692k(a)(2)(B). Fry, 198 F.R.D. at 472. In light of this express
Congressional authorization, this Court will approve the
recovery by the named Plaintiffs of $1,000 each for their
With regard to the $1,000 incentive award for each
named plaintiff, such an award is “not uncommon in class action
litigation and particularly where, as here, a common fund has
been created for the benefit of the entire class.” Cullen v.
Whitman Med. Corp., 197 F.R.D. 136, 145 (E.D. Pa. 2000). But
incentive awards are not necessarily compelled in each case.
Rather, to be entitled to an incentive award, the named
plaintiff must show: (1) the risks that the named plaintiff
undertook in commencing class action; (2) any additional burdens
assumed by the named plaintiff but not unnamed class members;
and (3) the benefits generated to class members through the
named plaintiff’s efforts. In re U.S. Bioscience Sec. Litig.,
155 F.R.D. 116, 121 (E.D. Pa. 1994) (footnotes omitted). “In
deciding whether such an award is warranted, [other] 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.” Cook v.
Niedert, 142 F.3d 1004, 1016 (7th Cir. 1998). Each class
representative must suggest the hourly rate at which he shall be
compensated. Fry, 198 F.R.D. at 473. In determining the hourly
rate, the Court should consider the class representative’s lost
wages as a result of his involvement in this litigation,
evidence of compensation paid to other representatives in other
class actions, and other relevant community rates. Id.
In this case, although Good and Soucek did not show
that they undertook any special “risk” in bringing the action,
their actions did generate a common fund which is the maximum
possible recovery permitted under the FDCPA. In addition, as
Plaintiff’s counsel points out, their names will be forever
associated with a litigation concerning consumer debt collection
notices--a matter which could be embarrassing to some.
Further, Plaintiffs Good and Soucek have submitted
certifications outlining their efforts in connection with this
case. Pls.’ Mots. Exs. 8 & 9, ECF Nos. 51-10 & 51-11. Good
declared that he spent hours meeting and talking by phone with
class counsel, reviewing pleadings and discovery, and attending
the preliminary approval hearing. He explained that he is a
salaried employee, but his salary breaks down to approximately
$50/hour. Pls.’ Mot Ex. 8. Soucek declared that he spent time
reviewing pleadings and strategy with class counsel. Pls.’ Mot.
at 16. Soucek is disabled and not currently working, so he did
not suggested an hourly rate of compensation. Both Plaintiffs
attended the final fairness hearing, and Good testified as to
his efforts in connection with this litigation.5 Final Fairness
Hr’g. Tr. at 32-34, Feb. 8, 2015, ECF No. 52.
Because each named plaintiff has shown that he spent
time and money in pursuit of this litigation, the Court will
permit recovery of $1,000 in an incentive award to each of them.
Class counsel move for approval of attorneys’ fees and
costs in the amount of $125,000, to compensate Flitter Milz,
P.C., and Sabatini Law Firm, LLC, for services rendered to the
class. In connection with their motion, class counsel submitted
documents showing that (1) Cary F. Flitter, a partner of Flitter
Milz, P.C., spent 94.4 hours at an hourly rate of $645.00, for a
total of $60,888.00 in fees; (2) Andrew M. Milz, an associate of
Flitter Milz, P.C., spent 189.7 hours at any hourly rate of
$345.00, for a total of $65,446.50 in fees; (3) Joan M. Raughly,
a legal assistant of Flitter Milz, P.C. spent 13.1 hours at an
hourly rate of $180.000, for a total of $2,358.00 in fees; (4)
Soucek was unable to testify at the final fairness
hearing due to health problems. The Court notes, however, that
he drove from his home in Missouri to Philadelphia for the
hearing, which undoubtedly involved significant time and certain
out-of-pocket costs to him. Final Fairness Hr’g. Tr. at 31.
Soucek’s affidavit also outlines his efforts in connection with
Carlo Sabatini, a partner of the Sabatini Law Firm, LLC, spent
48.1 hours at any hourly rate of $375.00, for a total of
$18,037.50 in fees; (5) Brett Freeman, an associate of Sabatini
Law Firm, LLC, spent 1.9 hours at an hourly rate of $275.00, for
a total of $522.50 in fees; and (6) various paralegals at the
Sabatini Law Firm, LLC, spent 54.5 hours at an hourly rate of
$125.00, for a total of $19,747.50 in fees. Pls.’ Mot. at 20.
The sum of class counsel’s total attorneys’ fees, $147,502.50,
and costs, $13,709.09, exceeds the $125,000 sought by way of the
instant motion. Id. at 20, 29. Defendants do not contest
Plaintiff’s motion,6 and no class member has objected to the
award of these fees and costs. The Amended Settlement Agreement
provides that the attorney’s fees and costs paid to class
counsel will be separate and apart from and in addition to the
class settlement fund.
In determining whether to award counsel attorneys’
fees, the court ordinarily “must conduct a ‘thorough judicial
review’ of class counsels’ request for attorneys’ fees.” Perry
v. FleetBoston Fin. Corp., 229 F.R.D. 105, 118 (E.D. Pa. 2005).
The court is tasked with ensuring that the attorneys’ fees
sought are reasonable. See Fed. R. Civ. P. 23(h) (“In a
Of course, Defendant’s apathy on this issue is not
unusual because their primary interest is in buying peace. See
Pet Food Prods., 629 F.3d at 359 (Weis, J., concurring in part
and dissenting in part) (describing “the parties’ disincentives
to invoke judicial scrutiny of fee awards”).
certified class action, the court may award reasonable
attorney’s fees and nontaxable costs that are authorized by law
or by the parties’ agreement”). In this case, Plaintiffs seek
attorneys’ fees and costs under the FDCPA’s fee-shifting
provision, which provides for an award “in the case of any
successful action to enforce the foregoing liability, [of] the
costs of the action, together with a reasonable attorney’s fee
as determined by the court,” and therefore also requires a
reasonableness analysis. 15 U.S.C. § 1692k(a)(3). The Third
Circuit has noted that under the FDCPA, attorneys’ fees are not
a special or discretionary remedy but rather “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.” Grazino v. Harrison, 950 F.2d 107,
113 (3d Cir. 1991).
Here, the amount of compensation to class counsel is
the result of an agreement between the parties which does not
affect the amount of compensation paid to class members, who are
already receiving the maximum recovery permitted by law.
Defendant does not oppose this recovery on the part of class
counsel nor has any class member objected to the amount of the
attorneys’ fees and costs. And, finally, Defendant has agreed to
pay class counsel’s fees and costs separate and apart from and
in addition to the $196,960 settlement fund. Even if the Court
were to approve less than the $125,000 negotiated amount, the
class would not gain a greater recovery; rather, Defendant would
simply keep the money. Under these circumstances, the Court
concludes that the proposed attorneys’ fees do not offend what
is an otherwise fair settlement. The Court will therefore grant
Plaintiffs’ attorneys fees and costs in the amount of $125,000.
For the foregoing reasons, the Court will grant final
approval of the class action settlement in this case. An
appropriate order follows.
An appropriate order follows.
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