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Powers v. Credit Management Services, Inc.

United States District Court, D. Nebraska

November 29, 2016

LAURA POWERS, on behalf of herself and all others similarly situated; NICHOLE PALMER, AND JASON PALMER, Plaintiffs,
v.
CREDIT MANAGEMENT SERVICES, INC., Defendant.

          MEMORANDUM AND ORDER

          Robert F. Rossiter, Jr. United States District Judge

         This matter is before the Court on the plaintiff's Unopposed Motion for Approval of Plaintiffs' Incentive Awards, Attorneys' Fees and Costs (Filing No. 217). This is a class action for violations of the Fair Debt Practices and Collection Act (“FDPCA”), 15 U.S.C. § 1692 et seq. and the Nebraska Consumer Protection Act (“NCPA”), Neb. Rev. Stat. § 59-1601 et seq. The plaintiffs request fees in the negotiated amount of $315, 000 and costs in the amount of $3, 112.29. They also seek an award in the amount of $7000 to each plaintiff for service as class representatives.

         I. FACTS

         The parties have entered into a Class Settlement Agreement (“Agreement”) that resolves this litigation, including payment of plaintiffs' costs and attorney fees (Filing No. 207-1). In the Agreement, the parties agree to attorney fees of $315, 000. This amount is separate from and in addition to the payments to the class members. Class members received notice of the plaintiffs intention to request approval of attorney fees and of the amount requested (Filing No. 207-4, Ex. 1B(b), Website Notice). The defendants do not oppose the plaintiffs' motion. Further, the defendants acknowledge in the Agreement that the plaintiffs are prevailing parties in this litigation.

         In the Agreement, the defendants have agreed to pay statutory damages of $198, 000 to the Class, as defined in the Court's Final Order Approving Class Settlement, and $7, 000 each to Laura Powers, Nichole Palmer, and Jason Palmer for service as class representatives. The plaintiffs represent to the Court that plaintiffs' counsel received and reviewed the defendants' net worth documentation in negotiating the settlement. Based on the defendants' representations, it is the parties' understanding that the amount designated for the FDPCA component of the settlement represents the maximum amount of statutory FDPCA damages available.[1] The defendants also agreed to pay all administrative expenses of the settlement. Also, the defendants agreed to stop using the county court complaints at issue in Nebraska in the future.

         The plaintiffs have shown the negotiated fee amount represents substantial reductions in both the usual hourly rate and time actually spent on the case by plaintiffs' counsel. The plaintiffs represent that the attorney fee figure reflects a discount of $61, 117.79 from counsels' lodestar amount of $376, 117.69.

         The Court held a fairness hearing on the parties' Joint Motion for Final Approval of Class Settlement and objections thereto, and on lead plaintiffs' Motion for Approval of Plaintiffs' Incentive Awards, Attorneys' Fees and Costs on November 23, 2016. The Court overruled two objections (Filing No. 213 and 221) to the class settlement. The Court has approved the settlement. There were no objections to the amount of attorney fees or to the incentive awards.

         The Court has reviewed the documents filed in support of the plaintiffs' motion for fees (Filing Nos. 219-1 through 219-10). The plaintiffs have shown that attorney O. Randolph Bragg has expended a total of 137.1 hours through November 2, 2016, at the hourly rate of $375 per hour and his paralegal, Shannon Carter, expended a total of .5 hours on this litigation at the rate of 62.50 per hour. (Filing No. 219-1, Declaration of O. Randolph Bragg). Attorney Pamela A. Car expended a total of 373 hours on the litigation through November 2, 2016 at the rate of $350 per hour (Filing No. 219-4, Declaration of Pamela Car). The plaintiffs' attorney William L. Reinbrecht expended 593.8 hours of work at the rate of $325 per hour (Filing No. 219-6, Declaration of William L. Reinbrecht). Also, plaintiffs have shown they incurred a total of $3, 112.29 in compensable expenses for filing fees, photocopies, and depositions.

         Attorneys Bragg, Reinbrecht and Car have also shown they have extensive experience litigating consumer cases and have achieved similar awards in other cases. Further, counsel have shown they reduced the hours billed where appropriate. The plaintiffs have shown that, as class representatives, they assisted counsel in gathering information and documents, and they attended hearings and depositions, and expended other efforts over the lengthy course of this litigation.

         The Court is familiar with the litigation. There has been extensive discovery, significant motion practice and briefing, an interlocutory appeal to the Eighth Circuit Court of Appeals followed by a remand and additional motions for summary judgment. The parties vigorously prosecuted and defended their respective positions. Also, the record shows that the parties engaged in extended arms-length negotiations regarding settlement.

         II. LAW

         The FDPCA “does contemplate an award of costs and ‘a reasonable attorney's fee as determined by the court' in the case of ‘any successful action to enforce the foregoing liability.'” Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich LPA, 559 U.S. 573, 598 (2010) (quoting 15 U.S.C. § 1692k(a)(3)). Courts have discretion in calculating reasonable attorney fees under the statute. Id. at 598 & n.16; see, e.g., Tolentino v. Friedman, 46 F.3d 645, 651 (7th Cir. 1995) (holding that the award of attorney fees to plaintiffs for a debt collector's violation of “any provision” of the FDPCA is mandatory); Pipiles v. Credit Bureau of Lockport, Inc., 886 F.2d 22, 28 (2d Cir. 1989) (concluding the award of attorney fees to a successful plaintiff in an FDPCA action is mandatory); Carroll v. Wolpoff & Abramson, 53 F.3d 626, 628-29 (4th Cir. 1995) (deciding an award of attorney fees under the FDPCA is mandatory in the absence of bad faith conduct on the part of the plaintiff); but see Johnson v. Eaton, 80 F.3d 148, 150-152 (5th Cir. 1996) (“attorney's fees . . . are only available [under § 1692k] where the plaintiff has succeeded in establishing that the defendant is liable for actual and/or additional damages”; this reading “will deter suits brought only as a means of generating attorney's fees”).

         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); Johnston v. Comerica Mortg. 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 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.

         “Where a plaintiff has obtained excellent results, his attorney should recover a fully compensatory fee.” Hensley v. Eckerhart, 461 U.S. 424, 435 (1983) (stating that “[n]ormally this will encompass all hours reasonably expended on the litigation, and indeed in some cases of exceptional success an enhanced award may be justified.”). Although there is no precise formula for determining a reasonable fee, the district court generally begins by calculating the lodestar-the attorney's reasonable hourly rate multiplied by the number of hours reasonably expended. Id. at 433-37; Marez v. Saint-Gobain Containers, Inc., 688 F.3d 958, 965 (8th Cir. 2012). The standards set forth in Hensley are generally applicable in all cases in which Congress has authorized an award of fees to a “prevailing party.” Hensley, 461 U.S. at 433 n.7. In assessing attorney fees, the district court should consider the twelve factors set forth in Johnson v. ...


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