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Powers v. Credit Management Services, Inc.

United States District Court, D. Nebraska

July 25, 2016

LAURA POWERS, on behalf of herself and all others similarly situated; NICHOLE PALMER; and JASON PALMER; Plaintiffs,
v.
CREDIT MANAGEMENT SERVICES, INC.; DANA K. FRIES; JESSICA L. V. PISKORSKI; BRADY W. KEITH; MICHAEL J. MORLEDGE; and TESSA HERMANSON; Defendants.

          MEMORANDUM AND ORDER

          ROBERT F. ROSSITER, JR. UNITED STATES DISTRICT JUDGE

         This matter is before the Court on the plaintiff’s unopposed motion for class certification and for preliminary approval of class action settlement (Filing No. 205). This is an action for damages and injunctive relief under the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692 et seq., and the Nebraska Consumer Protection Act (NCPA), Neb. Rev. Stat. § 59-1601 et seq.

         The plaintiffs allege the defendants violated the FDCPA and NCPA by filing and serving certain collection complaints and discovery requests on consumers in Nebraska. This Court’s initial certification of classes was reversed by the United States Court of Appeals for the Eighth Circuit and the action was remanded for further proceedings (Filing Nos. 169, 170, 171). Thereafter, the plaintiffs withdrew the discovery-based claims and filed a second motion to certify, which was granted on February 2, 2016 (Filing No. 187, Memorandum and Order at 24-25). See Powers v. Credit Mgmt. Servs., Inc., 313 F.R.D. 103 (D. Neb. 2016). The Court also granted the plaintiffs’ motion for a partial summary judgment on liability (Filing No. 186, Memorandum and Order at 27-32). See Powers v. Credit Mgmt. Servs., Inc., 2016 WL 612251 (D. Neb. February 2, 2016). The defendants filed for leave to file an interlocutory appeal of the second certification order, but leave was denied by the Eighth Circuit (Filing Nos. 191, 194, 195). At the parties’ request, United States Magistrate Judge Thalken held a settlement conference on April 13, 2016, resulting in this settlement (Filing Nos. 198, 199).

         I. CLASS ACTION

         Under the Federal Rules of Civil Procedure, “one or more members of a class may sue or be sued as representative parties on behalf of all members only if: (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); see Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 613 (1997) (describing requirements as (1) numerosity; (2) commonality; (3) typicality; and (4) adequacy of representation). “In order to obtain class certification, a plaintiff has the burden of showing that the class should be certified and that the requirements of Rule 23 are met.” Coleman v. Watt, 40 F.3d 255, 258-59 (8th Cir. 1994).

         For the purposes of settlement, the parties agree to certification of the following class:

(i) All persons with addresses in Nebraska upon whom Defendants served county court collection complaint in the form of Exhibit C after January 1, 2008, for purposes of the NCPA, and after December 18, 2010, for purposes of the FDCPA (ii) which sought to recover attorneys’ fees, prejudgment interest, and costs, pursuant to Neb. Rev. Stat. § 25-1801 (iii) where CMS did not personally provide the ninety-day presentation of the claim (iv) in an attempt to collect an alleged debt which, as shown by the nature of the alleged debt, defendants’ records, or the records of the original creditors, was primarily for personal, family, or household purposes. (The Neb. Rev. Stat. § 25-1801 Class)
AND
(i) All persons with addresses in Nebraska upon whom Defendants served a county court collection complaint in the form of Exhibit A after January 1, 2008, for purposes of the NCPA, and after December 18, 2010, for purposes of the FDCPA (ii) which sought to recover prejudgment interest pursuant to Neb. Rev. Stat. § 45-104 (iii) in an attempt to collect an alleged debt which, as shown by the nature of the alleged debt, Defendants’ records, or the records of the original creditors, was primarily for personal, family, or household purposes. (The Neb. Rev. Stat. § 45-104 Class).

(Filing No. 207-1, Index of Evid., Class Action Settlement Agreement; Filing No. 187, Memorandum and Order at 3-4, 25). The Court previously certified the above class (Filing No. 187, Memorandum and Order at 25). The Court found the plaintiffs’ proposed class satisfied the Fed.R.Civ.P. 23 requirements and class certification was appropriate (Id. at 21-25). For the reasons stated in the Court’s earlier order, the Court finds that class certification for purposes of settlement is also appropriate (See Id. at 21-24).

         II. PRELIMINARY APPROVAL OF SETTLEMENT

         A. Law

         In considering preliminary approval, the Court makes a preliminary evaluation of the fairness of the settlement, prior to notice. Manual of Complex Litigation (Fourth) § 21.632 (2010); see also Fed. R. Civ. P. 23(e). First, the Court must make a preliminary determination of the fairness, reasonableness and adequacy of the settlement terms and must direct the preparation of notice of the proposed settlement and the date of the fairness hearing. Id. After an agreement is preliminarily approved, the second step of the process ensues: notice is given to the class members of a hearing, at which time class members and the settling parties may be heard with respect to final court approval. Id.

         A district court is required to consider four factors in making a final determination that a settlement is fair, reasonable, and adequate: (1) the merits of the plaintiff’s case, weighed against the terms of the settlement; (2) the defendant’s financial condition; (3) the complexity and expense of further litigation; and (4) the amount of opposition to the settlement. In re Wireless Tel. Fed. Cost Recovery Fees Litig.,396 F.3d 922, 931 (8th Cir. 2005). A court may also consider procedural fairness to ensure the settlement is “not the product of fraud or collusion.” Id. at 934. The experience and opinion of counsel on both sides may be considered, as well as whether a settlement resulted from arm’s length negotiations, and whether a skilled mediator was involved. See DeBoer, 64 F.3d at 1178. A court may also consider the ...


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