Domann, Matthew v. Summit Credit Union et al

Filing 78

ORDER 74 Motion for Final Approval of Settlement Agreement; granting 72 Motion for Attorney Fees and Costs. Plaintiff is awarded attorney fees and costs in the amount of $378,333.00. This action is DISMISSED with prejudice and without further costs. The court retains jurisdiction to enforce the terms of settlement. Signed by District Judge William M. Conley on 4/13/2020. (arw)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WISCONSIN
MATTHEW DOMANN,
Individually, and on behalf of
others similarly situated,
Plaintiffs,

ORDER

v.
18-cv-167-wmc

SUMMIT CREDIT UNION, and
DOES 1-100,
Defendants.

In a prior opinion and order, the court preliminarily approved the parties’ proposed
class settlement, directed distribution of a court-approved notice, and set this case for a
fairness hearing on April 13, 2020. (1/7/20 Op. & Order (dkt. #71).) The court is now
in receipt of plaintiff’s motion for attorney fees, costs and class representative incentive
award (dkt. #72), as well as plaintiff’s motion for final approval of the settlement
agreement (dkt. #74). For the reasons that follow, as well as those set forth in the court’s
opinion and order granting preliminary approval of this settlement (dkt. #71) and
provided on the record during the fairness hearing, the court will give final approval of the
settlement terms and approve an award of attorneys’ fees and costs.

OPINION
I. Settlement
Individually, and on behalf of other similarly situated members of Summit Credit
Union, plaintiff Matthew Domann alleges that defendant breached certain account
agreements with its members by imposing overdraft fees based on their “available balance,”
a subset of the money actually in their account (the “actual balance,” sometimes also called

the “ledger balance”) from which money was deducted by placing holds on funds
earmarked for pending, but not-yet-posted transactions. Domann further alleges that
defendant violated Regulation E of the Electronic Funds Transfer Act, 12 C.F.R. § 1005.17,
by enrolling credit union members in its overdraft program for subject transactions without
first making a complete and valid disclosure of the terms of the program and then obtaining
their affirmative consent. Finally, for business account class members, Domann alleges
that defendant violated its own contract terms by charging overdraft fees without first
obtaining an affirmative opt-in by the business account holder.
The court previously certified a class action under Federal Rule of Civil Procedure
Rule 23 consisting of two defined sub-classes: the “Consumer Sufficient Account Class”
and the “Business Account Class.” (Dkt. #71.) At that time, the court also preliminarily
approved the parties’ settlement agreement and directed distribution of a court-approved
notice.
Based on today’s fairness hearing, the parties’ written submissions, the lack of any
objections, and the entire record in this case, the court concludes that the parties’
settlement of plaintiff’’ claims is fair, reasonable and adequate pursuant to Federal Rule of
Civil Procedure 23(e).

Specifically, as detailed in plaintiff’s submissions, the notice

program had a successful delivery rate of 99.3 percent, meaning that all but approximately
165 class members received notice, either by mail or email. Only one class member has
opted out, and no class members have objected to the settlement. Of the lump sum
settlement payment of $1 million, with no reversion to defendant, Business Account class
members can expect to receive $17.49 for each $25 overdraft fee incurred during the
relevant time period or approximately 70 percent of their actual damages. Consumer

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Account Sufficient Funds class members can expect to receive $2.61 for each $25 fee
incurred. Upon review of the parties’ submission and this court’s earlier ruling, the court
is satisfied that the disparity in the award between subclass members accurately reflects
the relative strengths of their remaining contract claims. In addition to these payments,
defendant has also agreed as part of the settlement that is will for at least three years: (1)
change its method for assessing overdraft fees to a method close to that sought by plaintiff
in this lawsuit; and (2) improve its member disclosures to better explain how it determines
whether to assess an overdraft fee on a transaction. Plaintiff’s counsel estimates that these
changes will result in a further net benefit to class members of approximately $1.2 million.
For reasons set forth in its preliminary approval and discussed during today’s hearing, the
court reaffirms its previous finding that the settlement terms reflect a fair, reasonable and
adequate compromise in light of the relative merits of the different claims, the costs of
continued litigation, and the risk of no recovery at all. (Dkt. #71.)
In addition to the payouts to each individual class member, the settlement also
provides for an individual award of $10,000 to the sole named plaintiff, Matthew Domann.
The court finds that this award is reasonable in light of the named plaintiff’s significant
involvement in this litigation, including assisting in responding to discovery, attending
depositions, and providing declarations in support of the class claims.
Finally, the court also approves payment of the costs of the claims administrator,
which are estimated to be $43,427, but in no event will exceed $48,500.

II. Attorneys’ fees and costs
Also before the court is plaintiff’s motion for attorneys’ fees and costs, which the

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court will similarly approve. (Dkt. #72.) Class counsel seeks $333,333 in fees, which is
one-third of the Class Settlement Amount and the full amount allowed under the
settlement agreement. While it is within the court’s discretion to use either the lodestar
method or percentage method in awarding attorneys’ fees and costs for a class action,
Americana Art China Co. v. Foxfire Printing & Packaging, 743 F.3d 243, 247 (7th Cir. 2014),
this court typically considers both.
Having reviewed Class Counsel’s arguments in support of this award (dkt. #72),
and the declarations of Attorneys Richard D. McCune and Taras Kick (dkt.#72-2 and 4,
respectively), the court finds the fee request to be reasonable. Among other things, class
Counsel expended resources litigating this matter over the past two years, including
approximately 600 attorney and paralegal hours, which total approximately $388,336 if
billed hourly. Moreover, class counsel points out that these records do not reflect the time
that they are spending to seek approval of this settlement. Counsel also entered into an
up front contract with the named plaintiff in which he agreed to a payment of 40 percent
of the gross recovery plus costs. While not dispositive, the lower 33 percent award now
sought by counsel is a further factor favoring its approval. In addition, an attorney fee
award of one-third is consistent with awards in other consumer class actions regarding
alleged improper overdraft fees. (Kick Dec. (dkt.#72-4) ¶ 6 (citing cases).) Finally, no
class member has objected to the fee request, and the award does not even factor in the
additional, prospective benefits conferred on class members (and new credit union
members) for at least the next three years.
Utilizing the lodestar method as a cross-check, the fees are approximately 85 percent
of what counsel could be awarded based on actual hours spent and standard rates, not

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counting the additional $50,000 in fees that counsel anticipate they will incur for future
work on this case. The fact that the lodestar method produces a “negative multiplier” is
also a factor supporting the reasonableness of the fee request, given that courts have
approved multipliers of five or more. See, e.g., Johnson v. Meriter Health Servs. Employee Ret.
Plan, No. 10-CV-426-WMC, 2015 WL 13546111, at *6 (W.D. Wis. Jan. 5, 2015)
(approving attorney fee request of twice the lodestar value); Williams v. Rohm & Haas
Pension Plan, No. 04-0078-SEB, 2010 WL 4723725 (S.D. Ind. Nov. 12, 2010), aff'd, 658
F.3d 629 (7th Cir. 2011) (awarding fees of $43.5 million, representing 5.85 multiplier).
Given the work that Class Counsel expended on discovery, hiring an expert, and engaging
in settlement negotiations, the factual and legal uncertainties regarding plaintiff’s claims,
the market rates, the lodestar cross-check, the absence of objections, and awards for similar
Rule 23 class actions, plaintiff’s request for $333,333 in attorney’s fees is reasonable.
The court further finds Class Counsel’s request for reimbursement of actual costs in
the amount of $45,000 to be reasonable. Class Counsel represent that their actual costs
on behalf of class members will exceed $60,000, but they agreed in the settlement to cap
their costs at $45,000. Although not itemized in detail, the costs described by counsel are
justified and reasonable. (McHune Dec. (dkt. #72-2) ¶ 21.) Accordingly, the court will
award costs in the amount of $45,000.
Accordingly, the court will grant plaintiff’s fee petition and award $378,333 in
attorneys’ fees and costs.

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ORDER
IT IS ORDERED that:
1) Plaintiff’s motion for final approval of settlement agreement (dkt. #74) is
GRANTED and the parties are directed to carry out its terms and provisions.
2) Plaintiff’s motion for attorney fees and costs (dkt. #72) is GRANTED in the
requested amount of $378,333.00.
3) Settlement payments, including the $10,000.00 payment to the named plaintiff
and actual administrator’s costs not to exceed $48,500, are also APPROVED.
4) This action is DISMISSED with prejudice and without further costs.
5) The court expressly retains jurisdiction to enforce the terms of settlement. The clerk
of the court is directed to close this case subject to reopening upon good cause
shown.
Entered this 13th day of April, 2020.
BY THE COURT:
/s/
_____________________________________
WILLIAM M. CONLEY
District Judge

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