Brown et al v. Transurban USA, Inc. et al
Filing
108
MEMORANDUM OPINION. Signed by District Judge James C. Cacheris on 09/29/2016. (mpha)
IN THE UNITED STATES DISTRICT COURT FOR THE
EASTERN DISTRICT OF VIRGINIA
Alexandria Division
JO-ANN BROWN, et al.
Plaintiffs,
v.
TRANSURBAN USA, INC., et al.
Defendants.
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M E M O R A N D U M
1:15cv494(JCC/MSN)
O P I N I O N
This matter is before the Court on named Plaintiffs
Anna Stanfield, Rachel Amarti, Mary Elixe Pizarro, and Jocelyn
Chase (collectively, “Named Plaintiffs”) and Defendants
Transurban (USA) Inc. and Transurban (USA) Operations Inc.’s
(collectively, “Transurban Defendants”) joint motion for final
approval of the class settlement, as well as Plaintiffs’ motion
for attorneys’ fees and service awards.
For the following
reasons, the Court will grant final certification of the class,
grant the Parties’ joint motion for final approval of the
settlement, and grant Plaintiffs’ motion for attorneys’ fees and
service awards for Class Representatives.
I.
Background
The facts of this case are set out at length in this
Court’s prior memorandum opinion.
1
See Brown v. Transurban USA,
Inc., 184 F. Supp. 3d 809 (E.D. Va. 2015) (motion to dismiss).
The facts are presumed known and discussed only to the extent
necessary to aid the present motions.
A.
Litigation to Date
On April 15, 2015, Plaintiffs Jo-Ann Brown and Michele
Osborne, as well as Named Plaintiff Mary Elise Pizarro,
individually and on behalf of putative classes, filed a
complaint in this Court against the Transurban Defendants;
Faneuil, Inc. (“Faneuil”) and Law Enforcement Systems, LLC
(“LES”) (collectively, the “Collection Defendants”); and two
other entities that were subsequently terminated from the
litigation.
The complaint alleged that, inter alia, the
Defendants’ attempted and actual enforcement of allegedly unpaid
tolls assessed for the use of certain toll road lanes operated
by Transurban on Interstate 495 and Interstate 95 in Virginia
(collectively and individually, the “Express Lanes”) was
unlawful.
On June 8, 2015, Named Plaintiffs and several former
class representatives (collectively, “Plaintiffs”), individually
and on behalf of the putative classes, filed an amended
complaint (“Amended Complaint”) against the Transurban
Defendants and Collection Defendants (collectively, the
“Defendants”).
[Dkt. 36]
The Amended Complaint asserted claims
2
against Transurban Defendants for violation of the Excessive
Fines Clause of the United States Constitution and of the
Virginia Constitution, as well as both procedural and
substantive due process violations of the same.
The Amended
Complaint also asserted Fair Debt Collection Practices Act
(“FDCPA”) claims against the Collection Defendants.
Finally,
the Amended Complaint asserted claims against all Defendants for
unjust enrichment, violation of the Maryland Consumer Protection
Act (“MCPA”), violation of the Virginia Consumer Protection Act
(“VCPA”), and tortious interference with contract.
On July 2, 2015, Defendants moved to dismiss the
Amended Complaint.
[Dkt. 41, 44, 49]
After briefing by the
parties and oral argument, this Court entered an Order on
November 2, 2015, which granted Defendants’ motions to dismiss
in part and denied in part.
[Dkt. 65, 66]
The Court granted
Defendants’ motions with respect to the substantive due process
and unjust enrichment claims, as well as the Collection
Defendants’ motions with respect to the consumer protection act
claims.
[Dkt. 65]
The Court denied the Defendants’ motions to
dismiss with respect to all other claims.
[Id.]
The Court also
held that Plaintiffs had standing to pursue their FDCPA claims
against the Collection Defendants; that Plaintiffs Brown,
Osborne, and Hale’s claims were not moot; that Named Plaintiffs
3
had standing to sue for prospective relief; and that Plaintiffs’
claims were not barred by res judicata.
[Id.]
Immediately after the Court’s order in November 2015,
the parties embarked on discovery.
3.)
(Mem. in Supp. [Dkt. 86] at
Both Plaintiffs and Defendants served extensive discovery
requests, and both parties began to respond to those requests
and gather discovery materials for production.
(Id.)
Concurrently, the parties initiated settlement
discussions with the assistance of a professional mediator.
(Id.)
Those discussions were facilitated by a significant
amount of data produced by Transurban Defendants at Plaintiffs’
request.
(Id.)
The settlement process was intensive, including
one full-day mediation meeting and several negotiation sessions
via telephone, nearly all of which involved the assistance of
the professional mediator.
(Id.)
On January 21, 2016, the parties informed the Court
that they had reached an agreement in principle to resolve the
litigation.
On March 28, 2016, the parties executed a
comprehensive settlement agreement (the “Agreement”).
1]
[Dkt. 86-
The Agreement provides that, in exchange for a release of
all Defendants, Plaintiffs and the proposed class will receive
both retroactive and prospective relief.
Joint Motion for Settlement that same day.
The parties filed a
4
[Dkt. 85]
Plaintiffs also filed a Motion for Certification of the
Settlement Class and Appointment of Class Counsel.
[Dkt. 88]
The Court issued two orders granting those motions after
conducting a preliminary fairness hearing on April 7, 2016.
[Dkt. 93, 94]
Specifically, the Court certified a settlement-
only class pursuant to Federal Rule of Civil Procedure 23(a) and
23(b)(3); appointed named Plaintiffs as Class Representatives;
appointed Hausfeld LLP, Boies Schiller & Flexner LLP, Tyko &
Zavareei LLP, and DiMuro Ginsberg PC as Class Counsel; appointed
Transurban as Claims Administrator; preliminarily approved the
terms of Settlement according to Rule 23(e); and approved the
form and manner of notice as required by the United States
Constitution and Rule 23(c)(2).
[Dkt. 93, 94.]
A second Joint Motion for Settlement was filed in June
2016, requesting an addendum to the Settlement Agreement that
would modify some of the administrative tasks.
[Dkt 95]
The
Court granted this request after holding a hearing on June 9,
2016.
[Dkt. 98]
Pursuant to the June 2016 Court order, the Claim
Administrator sent over 40,000 postcard class notices to
potential Class Members.
(Mem. in Supp. [Dkt. 102] at 24.)
Claim Administrator also posted the court-approved notice on a
website dedicated to this settlement, issued a press release
5
about the Settlement, and maintained a toll-free number to
answer questions from potential claimants.
(Id.)
The Claim
Administrator received no objections to the proposed Settlement
and only one opt-out request.
(Id.)
Both parties now move for final approval of the terms
of the Settlement and Plaintiffs move for the approval of
attorneys’ fees and service awards.
The Court held a final
settlement hearing to consider these motions on September 29,
2015.
For the foregoing reasons, the Court will grant the
Parties’ motions.
II.
Analysis
The Court’s prior orders certified a Settlement Class,
appointed Class Counsel, named Class Representatives, and
appointed a Claims Administrator.
Order [Dkt. 94] ¶ 1.)
(See Order [Dkt. 93] ¶¶ 2-6;
Therefore, this Memorandum Opinion
addresses the following four remaining issues: (1) the final
certification of the class; (2) the proposed Settlement between
the parties; (3) the award of attorneys’ fees and costs to Class
Counsel; and (4) Service Awards for Class Representatives.
Court will address each issue in turn.
A.
Final Certification of the Settlement Class
In accordance with the proposed Settlement, the
proposed Class is defined as follows:
6
The
All Persons who had one or more E-Z Pass accounts at
the time such Persons incurred one or more alleged
Toll Violation(s) on the Express Lanes and paid $100
or more to Transurban (or one of its affiliates) or
LES in Fees/Penalties arising from such alleged Toll
Violation(s) that, at the time of payment, were at the
Collections Stage or Court Stage, and made such
payment any time from the inception of the Express
Lanes to the earlier of (a) the date the District
Court issues an order granting preliminary approval of
the settlement embodied in this Agreement [April 7,
2016] or (b) March 1, 2016 (the “Cut Off Date”),
except that the following are excluded: (i) Rental Car
Companies; (ii) Other Fleet Owners; and (iii) judges
assigned to the Lawsuit.
(April 7, 2016 Order [Dkt. 93] ¶ 2.)
A settlement class, like a litigation class, must
satisfy the requirements of Federal Rule of Civil Procedure
23(a).
Under Rule 23(a), plaintiff must prove the threshold
elements of: (1) numerosity; (2) commonality; (3) typicality;
and (4) adequacy.
Fed. R. Civ. P. 23(a).
The class must also
qualify as one of the three Rule 23(b) class types.
Plaintiffs proceed as a Rule 23(b)(3) class.
Here,
Thus, Plaintiffs
must show that common issues of law or fact predominate over any
individual questions and that the class action is the superior
method for adjudicating the controversy.
Id. at 23(b)(3).
The
Court applies the preponderance of the evidence standard to this
Rule 23 analysis.
See In re The Mills Corp. Sec. Litig., 257
F.R.D. 101, 104 (E.D. Va. 2009) (applying preponderance standard
to a Rule 23 inquiry).
7
The Court first addresses the 23(a) requirements,
followed by the 23(b)(3) analysis.
i)
Rule 23(a) Prerequisites
a)
Numerosity
Numerosity exists when the proposed class “is so
numerous that joinder of all members is impracticable.”
Civ. P. 23(a)(1).
Fed. R.
There is no set minimum number or “mechanical
test for numerosity.”
Holsey v. Armour & Co., 743 F.2d 199, 217
(4th Cir. 1984) (citing Kelley v. Norfolk & Western Ry. Co., 584
F.2d 34 (4th Cir. 1978)).
The numerosity requirement is easily met by the
proposed Class here.
The Parties agree that there are thousands
of Settlement Class Members.
Joinder of thousands of
individuals would be exceedingly impracticable, so the proposed
Class satisfies the first prong of Rule 23(a), numerosity.
See
Gunnells v. Healthplan Servs., 348 F.3d 417, 425 (4th Cir. 2003)
(finding that a class of 1,400 members “easily satisfied Rule
23(a)(1)’s numerosity requirement”).
b)
Commonality
Commonality exists when “there are questions of law or
fact common to the class.”
Fed. R. Civ. P. 23(a)(2).
Commonality requires that a proposed class action have “the
capacity . . . to generate answers” that “resolve an issue that
8
is central to the validity of each one of the claims in one
stroke.”
(2011).
Wal-Mart Stores v. Dukes, 131 S. Ct. 2541, 2551
Minor factual variances will not necessarily preclude
commonality, so long as the claims arise from the same general
set of facts and “the class members share the same legal
theory.”
Mitchell-Tracey v. United Gen. Title Ins. Co., 237
F.R.D. 551, 557 (D. Md. 2006); see also Jeffreys v. Commc’ns
Works of Am., AFL-CIO, 212 F.R.D. 320, 322 (E.D. Va. 2003).
Plaintiffs certifying a class under Rule 23(b) carry a related,
but more demanding, burden of proving that these common
questions of law or fact not only exist, but also “predominate
over any questions affecting only individual members.”
Civ. P. 23(b)(3).
Fed. R.
Because the predominance inquiry is “more
stringent,” that analysis may “subsume[] . . . or supersede[]”
the Rule 23(a)(2) commonality analysis.
Lienhart v. Dryvit
Sys., Inc., 255 F.3d 138, 146 n.4 (4th Cir. 2001) (quoting
Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 609 (1997)).
Court, therefore, reserves its discussion of the common
The
questions of law and fact in this case to its predominance
analysis in part II(A)(ii)(a) below.
There, the Court finds
that common questions of law and fact predominate over any
individual issues.
9
c)
Typicality
The typicality prerequisite requires that the class
representative “be part of the class and possess the same
interest and suffer the same injury as the class members.”
Lienhart, 255 F.3d at 146 (quoting Gen. Tel. Co. of the Sw. v.
Falcon, 457 U.S. 147, 156 (1982)).
“Nevertheless, the class
representatives and the class members need not have identical
factual and legal claims in all respects.”
Fisher v. Va. Elec.
and Power Co., 217 F.R.D. 201, 212 (E.D. Va. 2003).
The key
inquiry is whether the “class representatives assert claims that
fairly encompass those of the entire class, even if not
identical.”
Id.
In order to satisfy typicality, the plaintiff
seeking to certify the class must show: “(1) that their
interests are squarely aligned with the interests of the class
members; and (2) that their claims arise from the same events
and are premised on the same legal theories as the claims of the
class members.”
Jeffreys, 212 F.R.D. at 322.
Here, the Class Representatives, just like all Class
Members, paid $100 or more in fees or penalties by March 1, 2016
at the Collections Stage or Court Stage as a result of alleged
toll violations on the Express Lanes, and they had one or more
E-ZPass accounts at the time they incurred the alleged
violations.
The Class Representatives allege they have been
10
injured by paying fees and penalties at the Collections Stage
and/or Court Stage that were allegedly unlawfully enforced by
the Defendants when the Class Representatives were E-ZPass
customers. Therefore, Class Representatives’ claims rest on the
same legal and factual issues as those of the Class Members, and
in advancing their claims, the Class Representatives necessarily
advance the claims of all Class Members.
As a result, the Court
finds Plaintiffs’ claims are typical of the claims of the class.
d)
Adequacy
Lastly, the adequacy requirement is met when: (1) the
named plaintiff does not have interests antagonistic to those of
the class; and (2) plaintiff’s attorneys are “qualified,
experienced, and generally able to conduct the litigation.”
In
re Serzone Prods. Liab. Litig., 231 F.R.D. 221, 238 (S.D.W. Va.
2005).
This inquiry “serves to uncover conflicts of interest
between named parties and the class they seek to represent.”
Amchem Prods., Inc., 521 U.S. at 625.
Plaintiffs represent that they “ha[ve] common
interests” with the proposed Settlement Class, and the Court has
identified nothing that might indicate antagonism with the
Class’s interests.
(Mem. in Supp. {Dkt. 89] at 6.)
As
mentioned above, Plaintiffs each paid $100 or more in fees and
penalties as the result of alleged toll violations on the
11
Express Lanes and had one or more active E-ZPass accounts at the
time of the alleged toll violations, just like all putative
Class Members would claim.
See Broussard v. Meineke Disc.
Muffler Shops, Inc., 155 F.3d 331, 338 (4th Cir. 1998) (“The
Supreme Court ‘has repeatedly held [that] a class representative
must be part of the class and ‘possess the same interest and
suffer the same injury’ as the class members.’” (quoting E. Tex.
Motor Freight Sys. Inc. v. Rodriquez, 431 U.S. 395, 403
(1977))).
Furthermore, the proposed class members’ claims are
homogenous and nothing indicates the existence of subgroups that
might require the creation of subclasses.
See Amchem Prods.,
Inc., 521 U.S. at 626 (identifying conflicts of interest between
prospective class members with current asbestos-related injuries
and those with only exposure to asbestos).
Plaintiffs’ Counsel is also sufficiently qualified and
experienced to fairly represent the interests of the class.
“The inquiry into the adequacy of legal counsel focuses on
whether counsel is competent, dedicated, qualified, and
experienced enough to conduct the litigation and whether there
is an assurance of vigorous prosecution.”
Liab. Litig., 231 F.R.D. at 239.
In re Serzone Prods.
Plaintiffs’ Counsel has an
extensive record of representing plaintiffs in consumerprotection class actions, which indicates counsel’s ability to
12
properly leverage the value of this case into a fair settlement.
(See Decl. of James J. Pizzirusso (“Pizzirusso Decl.”) [Dkt. 86]
at ¶¶ 48-60; id. at Exs. 1-4.)
That record was reaffirmed
throughout this case, wherein Plaintiffs’ Counsel argued
vigorously at the motion to dismiss stage and engaged Defendants
in settlement mediation.
In light of the foregoing, the Court finds that
Plaintiffs have satisfied all of the Rule 23(a) class
certification prerequisites.
ii)
Rule 23(b)(3) Requirements
In addition to meeting the threshold requirements of
Rule 23(a), a plaintiff seeking class certification must prove
the case qualifies as one of the three Rule 23(b) class types.
In this case, Plaintiffs seek to qualify as a Rule 23(b)(3)
class,
which requires proof that: (1) common questions of law
or fact predominate, and (2) a class action is the superior
method of adjudication.
Fed. R. Civ. P. 23(b)(3).
For the
following reasons, the Court finds Plaintiffs have proven these
requirements by a preponderance of the evidence.
a)
Predominance
The first requirement of Rule 23(b)(3) is that
“questions of law or fact common to class members predominate
over any questions affecting only individual members.”
13
Fed. R.
Civ. P. 23(b)(3).
“The common questions must be dispositive and
over-shadow other issues.”
Lienhart, 255 F.3d at 146.
This
inquiry “tests whether proposed classes are sufficiently
cohesive to warrant adjudication by representation.”
Prods., Inc. 521 U.S. at 623.
Amchem
That standard is certainly met in
this consumer-protection class action case.
Here, all Class Members suffered the same injury,
paying allegedly unlawful and unlawfully enforced fees and
penalties as a result of alleged toll violations, despite having
one or more E-ZPass accounts at the time of the alleged
violation.
The theories of liability in this case are identical
across the proposed Class.
Every Class Member’s potential claim
arises from the Defendants’ same challenged practices and
presents legal and factual questions that are common across the
proposed Class.
Therefore, common questions predominate over
this consumer-protection class action case, satisfying the first
requirement for certifying a Rule 23(b)(3) class.
b)
Superiority
Turning to the second, and last, element of the Rule
23(b)(3) inquiry, the Court finds class action to be the
superior method of settling this case.
Superiority exists when
“a class action is superior to other available methods for
fairly and efficiently adjudicating the controversy.”
14
Fed. R.
Civ. P. 23(b)(3).
Rule 23(b)(3) directs a court to consider
four factors in its superiority analysis:
[T]he
class
members’
interest
in
individually controlling the prosecution or
defense of separate actions; the extent and
nature of any litigation concerning the
controversy already begun by or against
class
members;
the
desirability
or
undesirability
of
concentrating
the
litigation of claims in the particular
forum;
and
the
likely
difficulties
in
managing the class action.
Droste v. Vert Capital Corp., No. 3:14-CV-467, 2015 WL 1526432,
at *8 (E.D. Va. Apr. 2, 2015) (quoting Fed. R. Civ. P.
23(b)(3)(A)–(D)).
With settlement classes, however, courts need
not consider the last factor, “whether the case, if tried, would
present intractable management problems, for the proposal is
that there will be no trial.”
Amchem Prods., 521 U.S. at 593.
Looking to Class Members’ potential interest in
initiating separate actions, the Court finds such suits unlikely
due to the small amount of individual claims, as well as the
fact that Class Members are dispersed over multiple states.
The
small likelihood of recovery associated with individual claims
would also reduce an individual plaintiff’s leverage in
settlement negotiations.
for individual litigation.
Thus, there will be little incentive
See Amchem Prods., 521 U.S. at 617
(“The policy at the very core of the class action mechanism is
to overcome the problem that small recoveries do not provide the
15
incentive for any individual to bring a solo action prosecuting
his or her rights.”) (quoting Mace v. Van Ru Credit Corp., 109
F.3d 338, 344 (7th Cir. 1997)).
A class action in this case is
superior to other available methods for the fair and efficient
adjudication of the controversy because a class resolution of
the issues described above avoids the difficulties in management
of separate and individual claims.
Moreover, such a
certification permits individual claimants to opt-out and pursue
their own actions separately if they believe they can recover
more in an individual suit.
The Court finds accordingly that
interest in initiating individual suits is likely low.
The second Rule 23(b)(3) factor addresses whether
class members have already begun other litigation.
P. 23(b)(3)(C).
Fed. R. Civ.
This Court is not aware of any other pending
individual litigation in the United States that tracks the
allegations set forth in this Complaint.
The absence of
independent actions weighs in favor of certifying a settlement
class here.
The Court turns now to the last Rule 23(b)(3) factor,
the propriety of consolidating all claims in this particular
forum.
Fed. R. Civ. P. 23(b)(3)(C).
This Court is apprised of
the facts and procedure of the case, such that it would promote
judicial economy to resolve this case as a class with this
16
Court, rather than require individual plaintiffs to file
separate actions elsewhere.
Furthermore, a class action
presents Plaintiffs the greatest leverage for settlement when
compared to individual litigation in courts, which may render
inconsistent rulings.
See EQT Prod. Co. v. Adair, 764 F.3d 347,
371 (4th Cir. 2014) (noting concerns of judicial economy and
avoidance of inconsistent judgments as factors “relevant to the
superiority analysis”).
In conclusion, Plaintiffs have sufficiently proven the
prerequisites for certification under Rule 23(a) and that this
case qualifies as a Rule 23(b)(3) class.
Therefore, this Court
certifies the final Settlement Class defined in the accompanying
order.
B.
The Proposed Settlement
i)
Terms of the Agreement
The Agreement provides for retrospective and
prospective relief for Class Members.
In terms of retrospective relief, the Agreement
establishes a settlement fund in which Transurban will provide
up to $1,350,000 collectively in refund checks to class members
who make valid claims.
(Mem. in Supp. [Dkt. 86] at 7.)
The
amount of the refund depends on the amount the Class Member paid
in Administrative Fees or Civil Penalties (collectively,
17
“Fees/Penalties”).
(Agreement {Dkt. 86-1] at ¶ 3.1.1.)
This
fund will be comprised of two smaller funds: the $1,050,000 fund
and the $300,000 fund.
(Pizzirusso Decl. [Dkt. 86] at ¶ 26.)
If a person paid more than $300 in Fees/Penalties on
or before March 1, 2016 arising from Express Lanes toll
violations that the person incurred while having an E-ZPass
account, and those Fees/Penalties were at the Collections Stage
or Court Stage at the time of payment, then that person will be
eligible to claim a refund of 70% of the amount paid that
exceeded $300, provided that any refund check must be at least
$10, from the $1,050,000 fund.
(Id. at ¶ 28.)
If a person paid
greater than or equal to $100 and less than or equal to $300 in
Fees/Penalties on or before March 1, 2016 arising from Express
Lanes toll violations that the person incurred while having an
E-ZPass account, and those Fees/Penalties were at the
Collections Stage or Court Stage at the time of payment, then
that person will be eligible to claim a refund of $10 from the
$300,000 fund.
(Id. at ¶ 29.)
Transurban will not pay more than $1,350,000
collectively to Class Members; thus, payments will be reduced
pro rata once this cap is reached.
8.)
(Mem. in Supp. [Dkt. 86] at
However, if the cap is reached in one fund but not the
other, money will be moved from the fund with remaining monies
18
to the other fund so as to provide Class Members with the
maximum benefit under the Agreement.
(Pizzirusso Decl. at ¶ 26-
27.)
Additionally, Transurban will forgive all unpaid tolls
and associated administrative fees that are outstanding and
unpaid at the Collections Stage that, as of March 1, 2016, were
more than twelve months old from the date of the toll violation
at issue.
(Id. at ¶ 31.)
The proposed Agreement also provides for significant
prospective relief to members of the Settlement Class for a
period of five years.
The Agreement includes: (a) extending the
First Time Forgiveness (“FTF”) period from 60 days to 90 days;
(b) renewing FTF eligibility on a yearly basis; (c) codifying
FTF applied to the Collections and Court Stages in the form of
reduced compromised amounts that eligible customers can pay in
full satisfaction of outstanding Fees/Penalties at the
Collections and Court Stages, which will result in the
forgiveness of all other outstanding unpaid tolls and associated
Fees/Penalties pending against such customers at prior stages of
the violation process at time of payment; (d) directing the Debt
Collector to report these amounts as paid in full to credit
agencies; and (e) codifying the $2,200 cap on Fees/Penalties for
eligible first-time violators, regardless of whether these
19
individuals qualify for FTF.
(Mem. in Supp. [Dkt. 86-1, 86-3]
at 7.)
Transurban has also agreed to provide more substantial
notice to Express Lanes users so that they may avoid the issues
giving rise to this lawsuit in the future, including, but not
limited to: (a) new language on Transurban’s website notifying
customers of the availability of E-ZPass account balance
warnings and the fact that FTF need not be requested in writing;
(b) a new envelope design for its unpaid toll invoices; (c)
establishment of a website where Express Lanes users can opt-in
to receive an email from Transurban when they fail to pay a
toll; and (d) postcard notices to eligible Express Lanes users
with outstanding amounts at the Collections or Court Stage.
(Mem. in Supp. [Dkt. 86-3 at ¶¶ 35-39] at 8.)
Moreover, the Virginia Department of Transportation
(“VDOT”) has agreed, in connection with the settlement, to send
an email to eligible Virginia E-ZPass customers who failed to
pay a toll due to insufficient funds in their E-ZPass account,
reminding customers to promptly bring their account into good
standing.
(Id. at 9.)
Virginia E-ZPass customers will now have
ten days, instead of five, to bring their accounts into good
standing, thereby avoiding administrative fees.
(Id.)
The Agreement also provides E-ZPass users relief from
20
the debt collection process that was at issue in this lawsuit.
Except when an unpaid toll invoice is returned to Transurban as
undeliverable with no forwarding address, toll violations will
not be forwarded to the debt collector for at least ninety days
from the date of travel.
(Id.)
If debts were previously
reported and an FTF payment is applied to those debts,
Transurban will direct the debt collector to report the debts as
resolved in full to the credit reporting agencies.
(Id. at 9-
10.)
Finally, the Settlement provides for the Class
Representatives, Class Members who do not opt out of the Class,
and those who receive postcards and pay reduced FTF amounts at
the Collections or Court Stage (collectively, “Releasors”) to
release all Defendants from all claims that were asserted in
this lawsuit or relate to unpaid toll violations on the Express
Lanes. 1
(Id. at 10.)
ii) Approval of the Proposed Settlement
Before parties may settle a class action, a court must
1
Released claims will not include claims for personal injury; damage to
tangible property; any and all claims that pertain to anything other than the
lawsuit or unpaid toll violations on the Express Lanes, including all claims
pertaining to tolls that are not paid via E-ZPass and any claims pertaining
to Transurban’s charging of toll amounts different than amounts displayed; or
any and all claims for retrospective relief related to payment made in
connection with unpaid tolls incurred after March 1, 2016, except the claim
of a postcard responder relating in any way to a reduced compromise amount
paid by such responder or to such responder’s underlying toll violations and
any associated Fees/Penalties will be released.
21
approve the settlement.
Fed. R. Civ. p. 23(e).
Final
settlement requires a hearing to determine whether the agreement
is “fair, reasonable, and adequate.”
Fed. R. Civ. P. 23(e)(2).
This standard includes an assessment of both the procedural
fairness of the settlement negotiations and the substantive
adequacy of the agreement itself.
See In re Am. Capital
S’holder Derivative Litig., No. 11-2424(PJM), 2013 WL 3322294,
at *3 (D. Md. June 28, 2013) (identifying procedural and
substantive prongs of settlement analysis).
The procedural
fairness inquiry protects against “the danger of counsel . . .
compromising a suit for an inadequate amount for the sake of
insuring a fee.”
Id.
The substantive adequacy inquiry, by
contrast, “weigh[s] the likelihood of the plaintiff’s recovery
on the merits against the amount offered in the settlement.”
Id. (internal quotations omitted).
Together, these requirements
serve to protect “class members whose rights may not have been
given adequate consideration during the settlement
negotiations.”
In re Jiffy Lube Sec. Litig., 927 F.2d 155, 158
(4th Cir. 1991).
A court may apply these same principles in a
preliminary fairness hearing, as the Court did in this case.
When a district court preliminary approves a settlement after a
hearing, the proposed settlement enjoys a presumption of
22
fairness.
See Berkley v. U.S., 59 Fed. Cl. 675, 681 (2004)
(“Settlement proposals enjoy a presumption of fairness afforded
by a court’s preliminary fairness determination.”); In re Gen.
Motors Corp. Pick-Up Truck Fuel Tank Products Liab. Litig., 55
F.3d 768, 785 (3d Cir. 1995) (“This preliminary determination
establishes an initial presumption of fairness . . . .”); Martin
v. Cargill, Inc., 295 F.R.D. 380, 383 (D. Minn. 2013) (accord);
In re Tableware Antitrust Litig., 484 F. Supp. 2d 1078, 1079
(N.D. Cal. 2007) (accord).
a)
Fairness
Four factors from In re Jiffy Lube Securities
Litigation, 927 F.2d 155 (4th Cir. 1991), guide the Court’s
analysis of whether the settlement was reached through goodfaith bargaining at arm’s length.
Those factors are: “(1) the
posture of the case at the time settlement was proposed; (2) the
extent of discovery that had been conducted; (3) the
circumstances surrounding the negotiations; and (4) the
experience of counsel.”
Id. at 159.
The proposed Settlement
satisfies these factors.
Considering the posture of the case at the time of
settlement allows the Court to determine whether the case has
progressed far enough to dispel any wariness of “possible
collusion among the settling parties.”
23
In re The Mills Corp.
Sec. Litig., 265 F.R.D. 246, 254 (E.D. Va. 2009) (quoting In re
Jiffy Lube Sec. Litig., 927 F.2d at 159).
In this case, as in
In re MicroStrategy, Inc. Securities Litigation, “the Settling
Parties vigorously contested [] motion[s] to dismiss,” 148 F.
Supp. 2d 654, 664 (E.D. Va. 2001), and engaged in formal
settlement mediation with the assistance of a professional
mediator.
“These adversarial encounters dispel any apprehension
of collusion between the parties.”
In re NeuStar, Inc. Sec.
Litig., No. 1:14-CV-885(JCC/TRJ), 2015 WL 5674798, at *10 (E.D.
Va. Sept. 23, 2015) (finding, under similar circumstances
including the assistance of a professional mediator, that the
first factor weighed in favor of the fairness of the proposed
settlement).
The second Jiffy Lube factor—the extent of discovery—
ensures that all parties “appreciate the full landscape of their
case when agreeing to enter into the Settlement.”
Corp., 265 F.R.D. at 254.
The Mills
This factor derives from the
recognition that “a reasonable judgment of the possible merits
of the case is best achieved when all discovery has been
completed and the case is ready for trial.”
Sec. Litig., 927 F.2d at 159.
In re Jiffy Lube
According to Class Counsel, it
conducted a “rigorous investigation” of the claims before filing
the Complaint and Amended Complaint.
24
Moreover, during the
mediation process overseen by a professional mediator,
Transurban Defendants provided extensive information and data to
Class Counsel relating to, inter alia: (a) how E-ZPass functions
with respect to the Express Lanes and the services that E-ZPass
provides to its customers, including the availability of account
balance warnings via e-mail or text message; (b) the toll violation
process on the Express Lanes and Transurban’s enforcement of tolls
through the use of a photo-enforcement system that takes a
photograph of the license plate number of every vehicle that
travels on the Express Lanes; (c) the VToll process, by which
unpaid tolls are, in some circumstances, collected retroactively
from an E-ZPass account without any additional fees being charged,
even though the E-ZPass account had insufficient funds to pay the
toll at the time of travel on the Express Lanes; (d) the process by
which Transurban issues unpaid toll invoices and the manner in
which it charges administrative fees for unpaid tolls; (e) the
process by which unpaid tolls and administrative fees are collected
by a debt collector; the process by which Transurban seeks unpaid
tolls, administrative fees, and civil penalties when it resorts to
court action; (f) the FTF program and other policies designed to
accommodate consumers; (g) the account and alleged violation
history of each of the Plaintiffs; and (h) detailed accounting of
the amounts of unpaid tolls, administrative fees, and civil
penalties historically collected from Express Lanes users, the
25
amounts that remain unpaid at various stages of the collection
process, and the number of unpaid accounts and the amounts owed.
(Pizzirusso Decl. [Dkt. 86] at ¶¶ 16-17; see also Agreement [Dkt.
86] at ¶ 2.)
Thus, “although this settlement came early on—prior
to the completion of formal discovery–it is clear that
plaintiffs have conducted sufficient informal discovery and
investigation to . . . evaluate [fairly] the merits of
Defendants’ positions during settlement negotiations.”
In re
MicroStrategy, 148 F. Supp. 2d at 664 (internal quotation and
citation omitted).
The negotiations leading to settlement were also
sufficient to satisfy the third Jiffy Lube factor.
This factor
requires the Court to consider “the negotiation process by which
the settlement was reached in order to ensure that the
compromise [is] the result of arm’s-length negotiations
. . . necessary to effective representation of the class’s
interests.”
The Mills Corp., 265 F.R.D. at 255 (internal
quotation and citations omitted).
Parties reached this
Settlement after an informed negotiation before a professional
mediator.
The parties submitted confidential mediation briefs
to the mediator and engaged in a full day mediation on December,
4, 2015.
(Pizzirusso Decl. [Dkt. 86] at ¶¶ 14-15.)
Thereafter,
the Parties continued their settlement discussions with the
26
assistance of the mediator.
(Id. at ¶¶ 15-19.)
Additionally, in
advance of mediation and during subsequent settlement discussions,
Transurban Defendants provided Class Counsel with extensive
information and data.
86] at ¶ 2.)
(Id. at ¶¶ 16-17; see also Agreement [Dkt.
These negotiations were sufficiently informed,
thorough, and at arm’s length to conclude that the parties
fairly arrived at the proposed Settlement.
Lastly, the Court is satisfied that Class Counsel is
sufficiently experienced in the field of consumer-protection
class action litigation to fairly represent the interests of the
Class.
“Counsel may be evaluated by their affiliat[ion] with
well-regarded law firms with strong experience in the relevant
field.”
In re Neustar, 2015 WL 5674798, at *11 (internal
quotation marks and citation omitted).
Class Counsel have a
wealth of experience and knowledge in consumer-protection class
actions.
(See Pizzirusso Decl. [Dkt. 86] at ¶¶ 48-60; id. at
Exs. 1-4.)
Class Counsel also includes law firms recognized for
their dedication to handling complex and class action litigation.
Guided by this experience, Class Counsel represents the
Settlement to be fair, reasonable, and adequate.
(Id.)
This
factor weighs in favor of the fairness of the proposed
Settlement.
Based on the foregoing factors, the Court finds that
27
the integrity of the arm’s length negotiation process was
preserved, indicating that this settlement is sufficiently
“fair” under Federal Rule of Civil Procedure 23.
b)
Adequacy
The Court is also satisfied that the $1,350,000 gross
recovery for the Class and other terms of Settlement are
adequate.
The adequacy analysis “weigh[s] the likelihood of the
plaintiff’s recovery on the merits against the amount offered in
settlement.”
In re Am. Capital S’holder Derivative Litig., 2013
WL 3322294, at *3.
The factors to consider include:
(1) the relative strength of the plaintiffs’
case on the merits, (2) the existence of any
difficulties of proof or strong defenses the
plaintiffs are likely to encounter if the
case goes to trial, (3) the anticipated
duration
and
expense
of
additional
litigation,
(4)
the
solvency
of
the
defendants and the likelihood of recovery on
a litigated judgment, and (5) the degree of
opposition to the settlement.
In re Jiffy Lube Sec. Litig, 927 F.2d at 159.
The first and second factors addressing the adequacy
of a settlement require the Court to examine “how much the class
sacrifices in settling a potentially strong case in light of how
much the class gains in avoiding the uncertainty of a
potentially difficult case.”
256.
The Mills Corp., 265 F.R.D. at
While Class Counsel are optimistic that Plaintiffs’ claims
will prevail, Defendants have vigorously and consistently argued
28
that Plaintiffs’ claims lack merit and intend to challenge the
factual predicates of the Court’s holding in its Memorandum
Opinion issued on November 2, 2015, should the case proceed to
trial.
[Dkt. 65 at 58, 67, 77, 82-83; Dkt. 102 at 21.]
Moreover, Class Counsel have pointed out two recent state court
cases that have rejected the Excessive Fines Clause challenges
to Transurban Defendants’ civil penalties on the merits.
Pizzirusso Decl. [Dkt. 86] at ¶ 20; id. at Exs. 5-6.)
(See
Thus, Class
Counsel believe that “any additional benefit to the [C]lass from
continued litigation could be offset by substantial costs from
protracted litigation.”
[Dkt. 102 at 21.]
In light of the
risks inherent in proceeding to trial, the Court agrees that the
first two factors weigh in favor of the adequacy of the proposed
Settlement.
The third factor examines the anticipated duration and
expense of additional litigation.
at 256.
The Mills Corp., 265 F.R.D.
The completion of merits and expert discovery, class
certification briefing, dispositive motions, trial, post-trial
motions, and possible appeals would entail substantial time and
expense for all Parties.
[Dkt. 102 at 23.]
Conversely, the
proposed Settlement would provide significant retrospective and
prospective relief quickly.
This factor weighs in favor of the
adequacy of the proposed Settlement.
29
The fourth factor involves the solvency of Defendants
and the likelihood of recovery on a litigated judgment.
Transurban Defendants’ solvency or the ability of the class to
recover on a judgment rendered against the Defendants is not
contested.
[Dkt. 102 at 23.]
However, that should not preclude
final approval of the proposed Settlement.
See Henley v. FMC
Corp., 207 F. Supp. 2d 489, 494 (S.D. W. Va. 2002) (“[That
factor] is largely beside the point given the other factors
weighing in favor of a negotiated resolution.”)
The final factor-the lack of opposition to the
Settlement—further supports a finding of adequacy.
The court-
appointed Claims Administrator distributed more than 40,000
postcards notifying potential Class members of the Settlement
amount and terms.
Additionally, the notices informed interested
parties how to object to the Settlement.
After providing notice
through thousands of mailed postcards and issuing a press
release, as well as creating a website and toll-free number for
potential claimants, not a single objection was received.
Therefore, all Parties, the unanimity of potential Class
members, and this Court agree that the Settlement is
sufficiently adequate.
In conclusion, the Court finds the proposed Settlement
is fair, reasonable, and adequate under Federal Rule of Civil
30
Procedure 23.
Settlement.
Accordingly, the Court approves the proposed
The Court will now consider the adequacy of the
approved notice and its compliance with due process
requirements.
C.
The Approved Notice
Federal Rule of Civil Procedure 23 requires that
notice of a settlement be “the best notice that is practicable
under the circumstances, including individual notice to all
members who can be identified through reasonable effort.”
R. Civ. P. 23(c)(2)(B).
Fed.
In addition, the notice must state
“clearly and concisely . . . in plain, easily understood
language” the following: (1) the nature of the action; (2) the
definition of the class certified; (3) the class claims, issues,
or defenses; (4) that a class member may enter an appearance
through an attorney if the member so desires; (5) that the court
will exclude from the class any member who requests exclusion;
(6) the time and manner for requesting exclusion; and (7) the
binding effect of a class judgment on members.
Id.
In its June 16, 2016 Order, this Court approved the
form and procedures for disseminating notice of the Settlement
as set forth in the proposed Settlement Agreement and Addendum.
[Dkt. 93, 94, 98]
The Court found that the notice, including
the postcard class notice, was the best notice practicable under
31
the circumstances, and constituted valid, due, and sufficient
notice in full compliance with the requirements of applicable
law.
[Dkt. 98]
Furthermore, the Long Form Class Notice
followed the guidelines suggested by the Federal Judicial Center
for consumer class settlements. 2
The notice program, including the dissemination of the
postcard class notice via first class mail to every Class Member
who was reasonably ascertainable from Transurban’s databases,
fulfilled the requirements of due process.
See Leitz v. Kraft
Foods Grp., Inc., No. 3:15-CV-262-HEH, 2016 WL 1043021, at *1
(E.D. Va. Mar. 10, 2016) (finding that notice by United States
mail to the class was “the best notice practicable under the
circumstances and in full compliance with Rule 23 of the Federal
Rules of Civil Procedure, the requirements of due process[,] and
applicable law”); see also Kinder v. Meredith Corp., No. 14-R11284, 2016 WL 45441, at *3 (E.D. Mich. Feb. 5, 2016) (finding
that a notice regime comported with due process where the long
form class notice was not mailed and there was an online claim
submission option).
The notice program fairly and accurately
informed the Class Members of the terms of the proposed
2
See Federal Judicial Center, “The Federal Judicial Center’s ‘Illustrative’
Forms of Class Action Notices,” available at
http://www.fjc.gov/public/home.nsf/autoframe?openform&url_1=/public/home.nsf/
inavgeneral?openpage&url_r=/public/home.nsf/pages/376.
32
Settlement Agreement and provided sufficient opportunity for
them to make informed decisions regarding their rights.
D.
Attorneys’ Fees and Expenses
Having approved the Settlement, the next issue to
discuss is Class Counsel’s motion for attorneys’ fees and
service awards.
Class Counsel requests $675,000 in attorneys’
fees and expenses—which represents only a portion of the
lodestar Class Counsel has accrued in this case—and a combined
service award to the Class Representatives and Former Class
Representatives of $3,150. 3
(Mem. in Supp. [Dkt. 105] at 1).
No
Settlement Class Members have filed an objection to the amount
of attorneys’ fees and expenses allowed under the Agreement.
(Id.)
Plaintiffs’ attorneys in a successful class action
lawsuit may petition the Court for compensation relating to any
benefits to the Class that result from the attorneys’ efforts.
See, e.g., Boeing Co. v. Van Gemert, 444 U.S. 472 (1980).
Rule
23 of the Federal Rules of Civil Procedure expressly states that
“the court may award reasonable attorney’s fees and nontaxable
costs that are authorized by law or by the Parties’ agreement.”
Fed. R. Civ. P. 23(h).
Here, under the Agreement, Defendants
3
This fee will be paid by Transurban Defendants directly and will not reduce
the recovery available to the class. (Pizzirusso Decl. [Dkt. 86] at ¶ 46.)
33
have agreed to pay up to $675,000 for Plaintiffs’ fees and
expenses.
(Pizzirusso Decl. [Dkt. 86] at ¶ 46.)
Thus, the only
question for the Court is whether the unopposed fee is
“reasonable.”
The Court must determine the best method of
calculating attorneys' fees to appropriately compensate Class
Counsel.
There are two primary methods of calculating
attorneys' fees: (1) the “percentage of recovery” or “percentage
of the fund” method, which awards fees as a percentage of the
benefit secured for the Class; and (2) the “lodestar” method,
which awards fees based on the value of Counsel’s time spent
litigating the claims.
Singleton v. Domino’s Pizza, LLC, 976 F.
Supp. 2d 665, 681, No. CIV.A. DKC 11-1823, 2013 WL 5506027, at
*10 (D. Md. Oct. 2, 2013).
With either method, the goal is to
make sure that counsel is fairly compensated.
The Fourth
Circuit has not decided which of the general approaches to
adopt, although the “current trend among the courts of appeal
favors the use of a percentage method to calculate an award of
attorneys' fees in common fund cases.” Boyd v. Coventry Health
Care Inc., 299 F.R.D. 451, 462 (D. Md. 2014) (quoting Goldenberg
v. Marriott PLP Corp., 33 F.Supp.2d 434, 438 (D. Md. 1998)).
Because there is no common fund in this case, the Court will
34
evaluate Plaintiffs’ Counsel’s request for fees under the
lodestar method.
i)
The Lodestar Method
The Court’s analysis begins with a calculation of
Counsel’s lodestar, or the reasonable hourly rate multiplied by
the number of hours reasonably expended in litigation.
Grissom
v. The Mills Corp., 549 F.3d 313, 320 (4th Cir. 2008).
Here,
the lodestar calculation weighs in favor of approval of the
requested fees and costs.
a)
Reasonable Hourly Rate
To calculate the lodestar, the Court looks at the
reasonable hourly rate multiplied by the hours reasonably
expended in the litigation.
The Mills Corp., 549 F.3d at 320.
To determine a reasonable hourly rate, the Court will examine
three possible rates: the regular billing rate, the Laffey
Matrix, and the Adjusted Laffey Matrix.
An “attorney’s actual billing rate provides a starting
point for purposes of establishing a prevailing market rate.”
Rum Creek Coal Sales, Inc. v. Caperton, 31 F.3d 169, 175 (4th
Cir. 1994) (internal quotation omitted).
Class Counsel includes
some of the area’s leading experts on class action litigation.
(Dimuro Decl. [Dkt. 105] at ¶¶ 4-7; Pizzirusso Fee Petition
Decl. [Dkt. 105] at ¶¶ 6-7; Isaacson Decl. [Dkt. 105] at ¶¶ 4-5;
35
Kaliel Decl. [Dkt. 105] at ¶¶ 6-7.)
The attorneys’ regular
billing rates are based on the customary rates that each firm
typically charges its paying clients. 4
at 7.)
(Mem. in Supp. [Dkt. 105]
Further, these hourly rates are within the low range for
rates charged by attorneys with similar levels of experience and
credentials in Washington, D.C.
(Dimuro Decl. [Dkt. 105] at ¶
12; Pizzirusso Fee Petition Decl. [Dkt. 105] at ¶ 11; Isaacson
Decl. [Dkt. 105] at ¶ 9; Kaliel Decl. [Dkt. 105] at ¶ 15.)
The Laffey Matrix is useful “as a guideline for
reasonable attorneys’ fees in the Washington/Baltimore area.” 5
In re Neustar, 2015 WL 8484438, at *10 n.6 (E.D. Va. Dec. 8,
2015)(internal quotation omitted).
Additionally, other courts
in the Fourth Circuit have used the Adjusted Laffey Matrix to
4
Tycko & Zavareei LLP (“TZ”) charges $187 for paralegals, $343-421 for
associates and of counsel, and $685 for partners. TZ also worked with Wade
Grimes Friedman Sutter & Lesichner PPLC (“WGFSL”), which charges $425 for
partners. The DiMuro Law Firm charges $300 for associates, $350 for senior
associates, $450 for senior counsel, and $400-500 for partners. Boies,
Schiller & Flexner LLP (“BSF”) charges $210-270 for paralegals, $240 for
legal assistants, $520 for associates, and $930-980 for partners. Finally,
Hausfeld LLP charges $187 for paralegals and law clerks, $421 for associates,
and $685-826 for partners. Hausfeld LLP also worked with the law firm
Zimmerman Reed LLP (“ZR”), which charges $150-160 for paralegals, $375-450
for associates, and $550 for partners, all through a blended rate. [Dkt.
105-1, 105-2, 105-3, 105-4]
5
TZ’s Laffey rates are as follows: $157 for paralegals, $322-332 for
associates and of counsel, and $465 for partners. WGFSL’s Laffey rate is
$455 for partners. The DiMuro Law Firm’s Laffey rates are as follows: $325
for associates, $455 for senior associates, $568 for senior counsel, and
$530-568 for partners. BSF’s Laffey rates are as follows: $154 for
paralegals and legal assistants, $325 for associates, and $504-530 for
partners. Finally, Hausfeld LLP’s Laffey rates are as follows: $154 for
paralegals and law clerks, $332 for associates, and $504-568 for partners.
[Dkt. 105-1, 105-2, 105-3, 105-4]
36
evaluate the reasonableness of a requested fee award. 6
See,
e.g., Stuart v. Walker-McGill, No. 1:11-CV-804, 2016 WL 320154,
at *17 n.54 (M.D.N.C. Jan. 25, 2016) (noting that “using current
market rates, rather than rates in effect at the time that
services were performed, to calculate the lodestar may
counterbalance the delay in payment as well as simplify the task
of the district court”).
Regardless of which rate is used here, each is within
the range of reasonable rates approved in the Fourth Circuit.
See, e.g., In re Neustar, 2015 WL 8484438, at *10 (approving
rates of $260-$310 for paralegal services, $420-$700 for
associates, and $800-$975 for partners, in part because the fee
award requested represented a substantial discount off the total
lodestar calculated using these rates); Hosch v.
BAE Systems Info. Sols., Inc., No. 1:13-CV-00825(AJT/TCB), 2015
WL 12227738, at *3 n.4 (E.D. Va. Apr. 28, 2015) (finding that
rates of up to $650/hour were “within the acceptable range of
6
The Adjusted Laffey rates were similar for all four firms included in Class
Counsel, as well as two firms that helped with this litigation: $187 for
paralegals and legal assistants, $343-421 for associates and of counsel, $685
for senior associates, and $826 for senior counsel and partners. [Dkt. 105-1,
105-2, 105-3, 105-4]
37
reasonableness” even though the court determined the hours
billed were excessive and reduced the fee award accordingly); In
re Microstrategy, Inc., 172 F. Supp. 2d 778, 788 n.33 (E.D. Va.
2001) (concluding that $555 per hour for a senior partner and
$220 per hour for a junior associate in 2001 were rates “not
inconsistent with the rates charged by lawyers in large,
prominent, and . . . expert law firms”); Phillips v. Triad Guar.
Inc., No. 1:09-CV-71, 2016 WL 2636289, at *8 (M.D.N.C. May 9,
2016) (finding that partner billing rates of $640-$880 per
hour and associate billing rates of $375-$550 per hour were
“within the range of reasonableness[,]” especially given that
“the market for class action attorneys is nationwide and
populated by very experienced attorneys with excellent
credentials”); Boyd v. Coventry Health Care Inc., 299 F.R.D.
451, 467 (D. Md. 2014) (accepting as reasonable rates ranging
from $325-$700 per hour).
b)
Hours Reasonably Expended
Class Counsel attests that they expended 1,730.2 hours
litigating this case.
(Dimuro Decl. [Dkt. 105] at ¶ 13;
Pizzirusso Fee Petition Decl. [Dkt. 105] at ¶ 13; Isaacson Decl.
[Dkt. 105] at ¶ 10; Kaliel Decl. [Dkt. 105] at ¶ 16.)
Counsel
also attests that they coordinated their work among the four law
firms involved, as well as the work of two additional law firms
38
that assisted, to prevent duplication of effort, as well as
assigned work to associates and paralegals whenever possible and
appropriate.
(Kaliel Decl. [Dkt. 105] at ¶ 8.)
Over the course of this litigation, Counsel
investigated and drafted the Complaint, responded to Defendants’
Motions to Dismiss, engaged in initial discovery, and
participated in one full-day meeting to discuss settlement and
one full-day mediation.
(Mem. in Supp. [Dkt. 105] at 6.)
When
no agreement was reached at the end of the mediation session,
Counsel continued telephonic negotiation sessions, nearly all of
which involved a professional mediator.
(Id.)
The hours
Counsel spent litigation this action reflect the effort required
to achieve a satisfactory result.
c)
Reasonableness of the Requested Fee
Class Counsel seeks $675,000 in attorneys’ fees.
Based upon each firm’s actual billing rates and the number of
hours expended, the lodestar is $876,271.20.
Under the standard
Laffey Matrix, Class Counsel’s lodestar is $708,614.85.
Under
the Adjusted Laffey Matrix, Class Counsel’s lodestar is
$997,918.30.
Using each billing rate, Class Counsel’s requested
fee of $675,000 falls below the lodestar incurred during the
course of this litigation.
Moreover, Class Counsel spent
$23,766.49 in expenses on this case.
39
(Mem. in Supp. [Dkt. 105]
at 9.)
When combined with Class Counsel’s fees based on actual
billing rates, the total amount spent on this litigation is
$900,037.69.
(Id.)
However, both sides have agreed to the
$675,000 in combined fees and expenses.
(Id.)
Thus, the
stipulated fee is a reasonable compromise for calculating Class
Counsel’s lodestar.
ii)
The Barber Factors
In the Fourth Circuit, twelve factors guide the
Court’s reasonableness analysis of Counsel’s request for
attorneys’ fees and costs:
(1) the time and labor expended; (2) the novelty and
difficulty of the questions raised; (3) the skill
required to properly perform the legal services
rendered; (4) the attorney’s opportunity costs in
pressing the instant litigation; (5) the customary fee
for like work; (6) the attorney’s expectations at the
outset of litigation; (7) the time limitations imposed
by the client or circumstances; (8) the amount in
controversy and the results obtained; (9) the
experience, reputation[,] and ability of the attorney;
(10) the undesirability of the case within the legal
community in which the suit arose; (11) the nature and
length of the professional relationship between
attorney and client; and (12) attorneys’ fees awards
in similar cases.
Barber v. Kimbrell’s, Inc., 577 F.2d 216, 226 n.28 (4th Cir.
1978).
The Court does not need to address all twelve factors
independently “because such considerations are usually subsumed
within the initial calculation of hours reasonably expended at a
reasonable hourly rate.”
MTU Am. Inc. v. Swiftships
40
Shipbuilders LLC, No. 1:14-CV-773(LMB/TCB), 2015 WL 4139176, at
*3 (E.D. Va. July 8, 2015) (internal quotation omitted).
Further, the “results obtained” factor is typically considered
the most important.
Imaginary Images Inc. v. Evans, No. 3:08-
CV-398, 2009 WL 2488004, at *2 (E.D. Va. Aug. 12, 2009); see
also Hensley v. Eckerhart, 461 U.S. 424, 436 (1983); Nigh v.
Koons Buick Pontiac GMC, Inc., 478 F.3d 183, 190 (4th Cir.
2007).
The Court will now discuss three of the Barber factors,
starting with the most important factor, the results obtained.
a)
Results Obtained for the Class
The result achieved is among the most important
factors to be considered in making a fee award.
See Hensley,
461 U.S. at 436 (“[T]he most critical factor is the degree of
success obtained.”).
Class Counsel here achieved relief that
provides substantial benefits for tens of thousands of E-ZPass
Express Lanes users in a legally complex and novel case.
The
Settlement Agreement provides significant benefits to the Class,
including both retrospective and prospective relief, the details
of which are discussed at length in Section II(B) above.
The
Court finds that the value of this relief is substantial,
representing many multiples of the requested fee award.
Thus,
the results obtained weigh in favor of the reasonableness of the
fees requested.
41
b)
Class Member Opposition
The absence of objections to the Settlement Agreement,
including the fees requested, demonstrates the Class’s approval.
Pursuant to the Court’s June 2016 Order, the Claim Administrator
sent over 40,000 postcard class notices to potential Class
Members.
(Mem. in Supp. [Dkt. 102] at 24.)
The notice informed
interested parties of the settlement amount and that Class
Counsel would seek a combined fee and expenses award of no more
than $675,000.
[Dkt. 96-1 at 24]
As of September 9, 2016, the
Claims Administrator received no objections to the proposed
attorneys’ fees or expenses.
This lack of objections supports a
finding that the fee request is reasonable.
See The Mills
Corp., 265 F.R.D. at 262 (“Thus, while not dispositive, the
dearth of legitimate objections to the requested fee of 18%
enforces the reasonableness of that request in the Court’s
eyes.”)
c)
Fee Awards in Similar Cases
Comparing the size of fee awards in other cases, while
overly simplistic, “nonetheless provides a valuable point of
reference.”
The Mills Corp., 265 F.R.D. at 264.
A comparison
of recent cases in the Eastern District of Virginia shows that
courts have awarded fees that included “multipliers” of at or
greater than two.
See, e.g., In re Microstrategy, Inc., 172 F.
42
Supp. 2d at 790 (approving a multiplier of 2.6); Berry v.
LexisNexis Risk & Info. Analytics Grp., Inc., No. 3:11-CV-754,
2014 WL 4403524, at *15 (E.D. Va. Sept. 5, 2014), aff’d sub nom.
Berry v. Schulman, 807 F.3d 600 (4th Cir. 2015) (approving a
multiplier of 1.99).
Here, Class Counsel’s requested fee represents a
negative multiplier of 0.77. 7
Such a low multiplier is
comfortably below the range of multipliers other courts have
found to be reasonable.
See Domonoske v. Bank of America, N.A.,
790 F. Supp. 2d 466, 476 (W.D. Va. 2011) (surveying cases to
conclude that a 1.8 multiplier is “well within the normal range
of lodestar multipliers”); see also Burke v. Shapiro, Brown &
Alt, LLP, No. 3:14-CV-201 (DJN), 2015 WL 2894914, at *6, (E.D.
Va. May 17, 2016) (“[T]he fact that Class Counsel requested the
reduced fee . . . further weighs in favor of a finding that the
hours expended were reasonable.”); Triad Guar. Inc., 2016 WL
2636289, at *8 (reasoning that even though lead counsel’s rates
were on the higher end of rates approved in this Circuit, “the
[0.35] multiplier is so far below those generally accepted as
demonstrating reasonableness that, in the context of the facts
of this case, it does suggest that the requested . . . fee is
7
This multiplier is based on the lodestar that was calculated with each of
Plaintiffs’ Counsel’s actual billing rates. The multiplier is 0.95 if using
the Laffey Matrix and 0.67 if using the Adjusted Laffey Matrix.
43
reasonable”).
Furthermore, Counsel’s requested fee also
includes $23,766.49 in costs, which is another factor in favor
of the reasonableness of the fees award.
Given the reasonableness of the attorneys’ fees and
costs requested, the Court will approve Counsel’s motion for
attorneys’ fees in the amount of $675,000.
E.
Requested Service Award
Courts recognize the purpose and appropriateness of
service awards to Class Representatives.
See, e.g., Deem v.
Ames True Temper, Inc., No. 6:10-CV-01339, 2013 WL 2285972, at
*6-7 (S.D.W. Va. May 23, 2013) (approving award of $7,500 per
lead plaintiff); Manuel v. Wells Fargo Bank, No. 3:14-CV238(DJN), 2016 WL 1070819, at *6 (E.D. Va. Mar. 15, 2016)
(approving a $10,000 service award); Berry v. LexisNexis Risk &
Info. Analytics Grp., No. 3:11-CV-754, 2014 WL 4403524, at *16
(E.D. Va. Sept. 5, 2014), aff’d sub nom. Berry v. Schulman, 807
F.3d 600 (4th Cir. 2015) (approving a $5,000 service award);
Burke, 2016 WL 2894914, at *6 (approving a $3,000 service
award).
“A fairly typical practice, incentive awards are
intended to compensate class representatives for work done on
behalf of the class, to make up for financial or reputational
risk undertaken in bringing the action, and, sometimes, to
recognize their willingness to act as a private attorney
44
general.”
Manuel, 2016 WL 1070819, at *6 (internal quotations
omitted).
Here, Plaintiffs request, and Transurban does not
oppose, a service award totaling $3,150, which will be divided
among all current and former Class Representatives. 8
Judges in
the Eastern District of Virginia have approved much larger
service awards in cases where the class representative took a
role in prosecuting the claims on behalf of the class. See,
e.g., Cappetta v. GC Servs. LP, No. 3:08-CV-288(JRS) (E.D. Va.
Apr. 27, 2011) (approving a $5,000 service award to each named
plaintiff); Henderson v. Verifications Inc., No. 3:11-CV-514
(E.D. Va. Mar. 13, 2013) (approving a $5,000 service award to
named plaintiff); Pitt v. Kmart Corp., No. 3:11-CV-697 (E.D. Va.
May 24, 2013) (approving a $5,000 service award to the class
representative); Conley v. First Tennessee Bank, No. 1:10-CV1247 (E.D. Va. Aug. 18, 2011) (awarding a $5,000 service award
to each named plaintiff); Ryals, Jr. v. HireRight Solutions,
Inc., No. 3:09-CV-625 (E.D. Va. Dec. 22, 2011) (awarding a
$10,000 service award to each class representative). Here, the
Class Representatives have amply fulfilled their duties, making
the requested service award appropriate.
8
Plaintiffs proposed $600 to each current Class Representative and $250 to
each former Class Representative.
45
III. Conclusion
For the foregoing reasons, the Court will grant the
Parties’ Joint Motion for Final Approval of the Settlement and
Plaintiffs’ Motion for Attorneys’ Fees and expenses and service
awards for Class Representatives.
An appropriate order will
issue.
September 29, 2016
Alexandria, Virginia
/s/
James C. Cacheris
UNITED STATES DISTRICT COURT JUDGE
46
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