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William P. Erickson, On Behalf of Himself and All Others v. Credit Bureau Services

February 22, 2013

WILLIAM P. ERICKSON, ON BEHALF OF HIMSELF AND ALL OTHERS SIMILARLY SITUATED; PLAINTIFF,
v.
CREDIT BUREAU SERVICES, INC., PROFESSIONAL CREDIT MANAGEMENT, DANIEL A. MARTIN, AND C. J. TIGHE, DEFENDANTS.



The opinion of the court was delivered by: Joseph F. Bataillon United States District Judge

MEMORANDUM AND ORDER

This matter is before the court on the plaintiff's motion for attorney fees, Filing No. 119. This is a class action for violations of the Fair Debt Practices and Collection Act, 15 U.S.C. § 1692 et seq. (hereinafter "FDCPA" or "Act"), and the Nebraska Consumer Protection Act ("NCPA"), Neb. Rev. Stat. § 59-1601 et seq.

I. FACTS

The parties have entered into a Settlement Agreement that resolves this litigation. Filing No. 103, Ex. 1. The Settlement Agreement includes payment of the plaintiff's costs and attorney fees, as determined by the court. Id. The settlement agreement provides that the plaintiff class is the prevailing party in this litigation. Filing No. 103, Ex. 1, Settlement Agreement at 3. In the agreement, the defendants have agreed to pay statutory damages of $25,000.00 (1% of the defendants' net worth) to the Class and $5,000.00 to Mr. Erickson for his statutory damages and services as class representative. Id. at 10-11. Further, the defendants agreed to change the collection letters that are the subject of the action and to pay the costs of class administration and of class notice. Id. at 11. The settlement agreement also provides that the defendants will pay the attorney fees and costs awarded in this case and in addition to the funds the class members receive. Id.

The court held a fairness hearing on the parties' joint motion for final approval of class settlement, as well as a hearing on lead plaintiff's motion for attorney fees and defendants' objections thereto. No one appeared at the hearing to object to the class settlement. No objections to the settlement were filed. See Filing No. 127, Ex. 1, Declaration of Jeffrey Gyomber at 3. Defendants state that although they have admitted no wrongdoing, they have agreed to modify their standard form collection letter "in order to avoid future nuisance lawsuits of this kind." Filing No. 123, Defendants' Brief in Support of Opposition to Plaintiff's Motion for an Award of Costs and Attorneys' Fees at 2. The court will enter a Final Order Approving the Settlement upon resolution of the fee issue.

At the hearing, the court took judicial notice of the documents filed in connection with the plaintiff's motion for fees. See Filing Nos. 119, 121, 125, 122, 128, and 129. The notice disseminated to the class informed class members that the lead plaintiff would seek an award of fees. See Filing No. 103, Index of Evid., Ex. 2, Proposed Notice of Proposed Settlement at 3. Other than the defendants' objection, no objections or other responses to the motion for an award of fees have been filed and the time for filing objections has expired. At the hearing, the parties represented to the court that the settlement amount of $25,000 represented 1% of the defendants' total net worth and thus was the maximum amount the plaintiff class could recover under 15 U.S.C. § 1692k(2).

The court is familiar with the litigation. Although the action may have been settled before either side took depositions, there was extensive written discovery and significant motion practice and briefing. The record also shows that the parties engaged in extended negotiations regarding settlement.

In support of their motion, plaintiffs have shown that attorney O. Randolph Bragg has expended a total of 111.8 hours through December 9, 2012. Filing No. 121, Index of Evid., Ex. A, Declaration of O. Randolph Bragg. Mr. Bragg's paralegal, Shannon Carter, expended a total of 2.5 hours on this litigation. Id. Attorney O. Randolph Bragg requests an hourly rate for his services in the amount of $450.00 per hour, which is lower than his regular hourly rate of $495.00 per hour, and Ms. Carter requests compensation at the rate of $125.00 per hour. Id. The total lodestar calculation for Mr. Bragg's office regarding this litigation through December 9, 2012, is $50,631.50. Id., Ex. A-5, time records.

Lead counsel Pamela A. Car has shown she expended a total of 68.97 hours on the litigation through December 9, 2012.*fn1 Filing No. 121, Ex. B, Declaration of Pamela Car ("Car Decl."), Ex. B-6, time records.Ms. Car seeks an hourly rate of $275.00 for time expended on the matter. Id., Ex. B, Car Decl. at 5. At that hourly rate, Ms. Car seeks $18,499.25 in attorney fees. Id. at 6. Plaintiff's attorney William L. Reinbrecht seeks fees for 105.34 hours of work at the rate of $250.00 per hour, amounting to $25,384.00.*fn2 Filing No. 121, Index of Evid., Ex. C, Declaration of William L. Reinbrecht ("Reinbrecht Decl."). Ex. C-7, time records. All attorneys have submitted detailed time records. Filing No. 121, Exs. A-5, B-6, & C-7. Attorneys Bragg, Reinbrecht and Car have also shown they have extensive experience litigating consumer cases and have achieved similar awards in other cases. Id., Exs. A, B, & C. Further, Mr. Reinbrecht has shown he has reduced the hours billed where appropriate. Id., Ex. C, Reinbrecht Decl. at 5. Plaintiffs further seek an award of costs in the amount of $689.37. Filing No. 121, Ex. 7, Bill of Costs.

Plaintiffs have also filed supplemental declarations and supporting documentation seeking fees for work performed since their original application for fees in the amounts of $3,517.50 for William Reinbrecht, $2,090 for Pamela Car and $6,847.50 for O. Randolph Bragg. Filing No. 128, Index of Evid., Ex. E, Supplemental Declaration of Pamela A. Car; Ex. E-2, Supplemental Time Records; Ex. F: Supplemental Declaration of William L. Reinbrecht; Ex. F-3, supplemental time records; Ex. G: Supplemental Declaration of O. Randolph Bragg; Ex. G-4, supplemental time records. In total, plaintiffs seek fees and costs in the amount of $107,659.12. Id., Ex. D, Chart.

The defendants object to the award of fees. Filing No. 122. They argue that the hourly rate of $450 per hour for work performed by plaintiffs' Chicago counsel is unreasonable in the local market. Further, they assert that the hourly rates sought by local counsel are unreasonable, arguing that a reasonable rate would be no more than $225.00 per hour. Defendants contend that any fee award be limited to no more than a maximum of $60,000, which is double the total amount of benefits obtained for the class and lead plaintiff combined. They also argue that certain charges are duplicative and or excessive.

II. LAW

A thorough judicial review of fee applications is required in all class action settlements. In re Diet Drugs, 582 F.3d 524, 537-38 (3d Cir. 2009); Johnson v. Comerica Mortgage Corp., 83 F.3d 241, 246 (8th Cir. 1996) (noting that the district court bears the responsibility of scrutinizing attorney fee requests). Courts utilize two main approaches to analyzing a request for attorney fees: (1) the "lodestar" methodology (multiplying the hours expended by an attorney's reasonable hourly rate of compensation to produce a fee amount that can be adjusted to reflect the individualized characteristics of a given action); and (2) the "percentage of the benefit" approach (permitting an award of fees that is equal to some fraction of the common fund that the attorneys were successful in gathering during the course of the litigation). Johnston, 83 F.3d at 244-45. It is within the court's discretion to decide which method to apply. Id. The percentage-of-recovery methodology has been approved in common-fund settlement class action cases. See, e.g., In re US Bancorp Litig., 291 F.3d 1035, 1038 (8th Cir. 2002) (approving an award of 36% of the settlement fund); Petrovic v. Amoco Oil Co., 200 F.3d 1140, 1157 (8th Cir. 1999) (approving award of 24% of monetary compensation to the class). To recover fees from a common fund, attorneys must demonstrate that their services were of some benefit to the fund or that they enhanced the adversarial process. In Re US Bancorp Litig., 291 F.3d at 1038

Under the FDCPA, in addition to compensatory damages, district courts are empowered to award individual plaintiffs "additional damages" of up to $1,000 per consumer. 15 U.S.C. ยง 1692k(a)(1) &(2). In the case of a class action, each named plaintiff can recover compensatory and "additional damages" of up to $1,000, and "such amount as the court may allow for all other class members, without regard to a minimum individual recovery, not to exceed ...


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