United States District Court, D. Nebraska
TIMOTHY J. SHANAHAN JR. and MOLLI M. LARSEN, on behalf of themselves and all others similarly situated,, Plaintiffs,
LEE LAW OFFICES, et al., Defendants.
MEMORANDUM AND ORDER
M. Gerrard Chief United States District Judge.
matter is before the Court on the parties' Joint Motion
for Final Approval of Class Settlement (filing 46) and the
plaintiffs' Unopposed Motion for Approval of
Plaintiffs' Incentive Awards & Damages and
Plaintiffs' Attorneys' Fees and Costs (filing 43).
Having heard the statements of counsel at a fairness hearing,
and reviewed and considered the entire record, the Court will
grant the motions in their entirety.
action was filed on March 23, 2018, and the settlement
agreement at issue was executed by the parties on October 30,
2018. See filing 1; filing 40-1. The parties filed a
joint motion, pursuant to Fed.R.Civ.P. 23(b) and (e), to
certify the settlement class, preliminarily approve the
settlement agreement, and approve the form and manner of
notice to the class. Filing 38. In an order entered February
19, 2019, the Court granted that motion, finding, among other
things, that this action could be maintained as a class
action; that the prerequisites to class certification under
Rule 23(a) had been satisfied; and that certification of the
settlement class was superior to other available methods for
the fair and efficient resolution of this controversy,
satisfying Rule 23(b)(3). Filing 41. The Court designated
class representatives, appointed settlement class counsel and
a claims administrator, and scheduled a fairness hearing.
Filing 41. And the Court reviewed the forms of notice
submitted by the parties, approved them as to form, and
approved their plan for directing notice to the class
members, finding that their plan provided the best notice
practicable under the circumstances and was in compliance
with Rule 23 and the requirements of due process. Filing 41.
was mailed to identified class members on April 5, 2019,
giving the class members until May 20 to request exclusion
from the class or object to the settlement. Filing 48-1 at
2-3. Notices were also sent as required by 28 U.S.C. §
1715. Filing 42. No. objections to the settlement agreement
were received by the claims administrator or the Court.
See filing 48-1 at 2. On June 4, the present motion
to approve the class settlement was filed, along with a brief
and index of evidence in support. Filing 46, filing 47;
filing 48. The scheduled fairness hearing was held on June
20, at which no objecting class members or other objectors
appeared. Filing 49.
purposes of the discussion below, when terms are used that
are expressly defined in the settlement agreement, they are
intended to have the same meaning as in the settlement
claims, issues, or defenses of a certified class may be
settled, voluntarily dismissed, or compromised only with the
Court's approval. Fed.R.Civ.P. 23(e). Under Rule 23(e)
the district court acts as a fiduciary who must serve as a
guardian of the rights of absent class members. In re
Wireless Tel. Fed. Cost Recovery Fees Litig., 396 F.3d
922, 932 (9th Cir. 2005); In re BankAmerica
Corp. Secs. Litig., 350 F.3d 747, 751 (8th Cir. 2004);
Grunin v. Int'l House of Pancakes, 513 F.2d 114,
123 (8th Cir. 1975). The Court's role in reviewing a
negotiated class settlement is to ensure that the agreement
is not the product of fraud or collusion and that, taken as a
whole, it is fair, adequate, and reasonable to all concerned.
Keil v. Lopez, 862 F.3d 685, 693 (8th Cir. 2017);
Marshall v. Nat'l Football League, 787 F.3d 502,
509 (8th Cir. 2015). If the proposed settlement would bind
the class members, the Court may approve it only after a
hearing and upon finding that it is fair, reasonable, and
adequate. Rule 23(e)(2). But a class action settlement is a
private contract negotiated between the parties.
Marshall, 787 F.3d at 509; In re Wireless Tel.
Fed. Cost Recovery Fees Litig., 396 F.3d at 934. And a
settlement agreement is presumptively valid. In re
Uponor, Inc., F1807 Plumbing Fittings Prod. Liab.
Litig., 716 F.3d 1057, 1063 (8th Cir. 2013).
case, the Court finds that the appointed class
representatives and their counsel fairly and adequately
represented the interests of the class members in connection
with the settlement agreement, and that the class
representatives and the settling defendants were represented
by able and experienced counsel. The settlement agreement was
the product of good-faith, arm's-length negotiations by
the class representatives, settling defendants, and their
respect to notice, the Court reaffirms its earlier finding
that the form, content, and method of disseminating notice to
the class members was adequate and reasonable and constituted
the best notice practicable under the circumstances,
satisfying Rule 23(c)(2)(B). By virtue of the fact that an
action maintained as a class suit under Rule 23 has res
judicata effect on all members of the class, due process
requires that notice of a proposed settlement be given to the
class. Grunin, 513 F.2d at 120. The notice given
must be reasonably calculated, under all of the
circumstances, to apprise interested parties of the pendency
of the action and afford them an opportunity to present their
objections. Id. In addition, the notice must
reasonably to convey the required information and it must
afford a reasonable time for those interested to make their
appearance. Id. The contents must fairly apprise the
prospective members of the class of the terms of the proposed
settlement and of the options that are open to them in
connection with the proceedings. Id. at 122.
notice given in this case met those requirements; it informed
the class members of the action and their options, accurately
characterized all the pertinent terms of the settlement
agreement (including attorney fees and expenses), and
afforded the class members a reasonable opportunity to
object. As established in the Court's preliminary order
approving notice, notices were sent directly to class members
using the best available contact information. In short, the
notice satisfied the requirements of Rule 23 and due process.
Court also finds that the settlement agreement is fair,
reasonable, adequate, and in the best interests of class
members. In determining whether a settlement agreement is
fair, the Court should consider (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 Target
Corp. Customer Data Sec. Breach Litig., 892 F.3d 968,
978 (8th Cir. 2018); Keil, 862 F.3d at 693;
Marshall, 787 F.3d at 508; Uponor, 716 F.3d
at 1063. The most important factor is the strength of the
case for plaintiffs on the merits, balanced against the
amount offered in settlement. See Target,
892 F.3d at 978; Keil, 862 F.3d at 695;
Prof'l Firefighters Ass'n of Omaha, Local 385 v.
Zalewski, 678 F.3d 640, 648 (8th Cir. 2012). If the
plaintiff class faced a strong unlikelihood of success, or an
initial defeat followed by another round at the appellate
level, virtually any benefit inuring to the class would be
better than the prospect of an ultimately unsuccessful
litigation. DeBoer v. Mellon Mortg. Co., 64 F.3d
1171, 1177 (8th Cir. 1995).
Court has neither the duty nor the right to reach any
ultimate conclusions on the issues of fact and law which
underlie the merits of the dispute. Grunin, 513 F.2d
at 123. In examining a proposed settlement for approval or
disapproval, the Court does not try the case; the very
purpose of a compromise is to avoid the delay and expense of
a trial. Id. at 124; see also DeBoer, 64
F.3d at 1178. So, the Court need not make a detailed
investigation consonant with trying the case; it must,
however, provide an appellate court with a basis for
determining that its decision rests on well-reasoned
conclusions, and is not mere boilerplate. Keil, 862
F.3d at 693; In re Wireless Tel. Fed. Cost Recovery Fees
Litig., 396 F.3d at 932-33. The views of the parties to
the settlement must also be considered; the fact that only a
handful of (or no) members object to the settlement
weighs in its favor. DeBoer, 64 F.3d at 1178.
defendants were sued under the federal Fair Debt Collection
Practices Act (FDCPA) and the Nebraska Consumer Protection
Act (NCPA) for sending an allegedly misleading debt
collection letter. See filing 29. The defendants
have agreed to provide a fund of $25, 000 for the settlement
class, consisting of $600 for the FDCPA claim and $24, 400
for the NCPA claim, to be divided equally among class members
who do not request exclusion. Filing 40-1 at 13.
Approximately 110 class members will receive funds ranging in
amounts from $221.81 to $235.76 each. Filing 48-4. Any
unclaimed funds will be distributed cy pres to
Nebraska Legal Aid. Filing 40-1 at 13.
begin with, under the FDCPA, the recovery to class members is
limited to the lesser of $500, 000 or 1 percent of the net
worth of the debt collector. 15 U.S.C. § 1692k(a)(2)(B).
The parties represent that information about the
defendants' net worth was provided during discovery, and
that "informed settlement negotiations" concerning
the size of the settlement fund. And under the FDCPA, an
individual plaintiff can recover actual damages plus
statutory damages "as the court may allow, but not
exceeding $1, 000." § 1692k(a)(2)(A). So, the
question is, how many members of the settlement class could
have proven actual damages and persuaded the Court to award
statutory damages in an amount greater than $221.81 to
$235.76, and if so, would the amount be sufficiently greater
to justify the burdens and hazards of individually litigating
their claims? The Court is not persuaded that many (if any)
members of the settlement class would have done substantially
better as individual plaintiffs. In addition, the statute of
limitations under the FDCPA is one year. § 1692(e). Many
of the plaintiffs faced a serious statute of limitations
obstacle to federal recovery.
NCPA also allows statutory damages-of up to $1, 000 for each
class member, with no cap on total recovery. See
Powers v. Credit Mgmt. Servs., Inc., 776 F.3d 567,
572 n.4 (8th Cir. 2015). And it has a 4-year statute of
limitations. Neb. Rev. Stat. § 59-1609. But the same
question is posed: what would the individual plaintiffs'
chances have been of persuading the Court to award more than
$221.81 to $235.76, and if so, would that amount be
sufficiently greater to justify the burdens and hazards of
individually litigating their claims? There is, again, a
strong argument that the risks of litigation would outweigh
any potentially larger award.
also worth noting that the defendants have agreed to cease
the allegedly deceptive practice underlying the lawsuit,
which is a positive result of the litigation beyond the
pecuniary recovery. And, of course, there are no objections
to the settlement.
on the foregoing, the Court finds that the settlement
agreement is fair, reasonable, and adequate within the
meaning of Rule 23(e)(2), and will approve it. The Court will
grant the Joint ...