The opinion of the court was delivered by: Hon. Nita L. Stormes Magistrate Judge United States District Court
ORDER: (1) GRANTING MOTION FOR FINAL APPROVAL OF CLASS ACTION SETTLEMENT AND FOR APPROVAL OF INCENTIVE PAYMENTS TO PLAINTIFF [Doc. No. 35]; (2) GRANTING MOTION FOR AWARD OF ATTORNEY'S FEES AND COSTS [Doc. No. 36]; and (3) DIRECTING ENTRY OF FINAL JUDGMENT AND DISMISSAL WITH PREJUDICE
Plaintiff Victor Catala, individually and on behalf of all others similarly situated (Catala or Plaintiff), filed two motions seeking (1) final approval of a class action settlement and approval of incentive payments to Plaintiff; and (2) and an award of attorney's fees and costs. Defendants Resurgent Capital Services L.P. (Resurgent ) and Plains Commerce Bank (Plains) (collectively, Defendants) do not oppose the motions. This court has already granted preliminary approval of the settlement.
With no objections having been filed, pursuant to Civil Local Rule 7.1.d.1 the court decides these motions on the papers and without oral argument. This court has reviewed all papers filed in support of the motions and for the reasons set forth below, GRANTS the motion for final approval of settlement and approval of incentive payments and GRANTS the motion for attorney's fees and costs.
Catala is a consumer allegedly delinquent and owing consumer debts. Resurgent is a limited partnership that attempted to collect debts from Catala. Catala alleges that in attempting to collect debts from him, Resurgent sent an envelope and/or collection letter that said "you are pre-approved for a new visa credit card" and that "arrangements have been made for you to obtain a pre-approved visa credit card issued through Plains Commerce Bank." Plains is allegedly the bank that underwrote new extensions for credit for any Resurgent accounts.
Catala filed a complaint against Resurgent and Plains on December 24, 2008, alleging that this mailing violated the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. (FDCPA) and the California Fair Debt Collection Practices Act, California Civil Code § 1788 et seq. (Rosenthal Act). Resurgent and Plains deny the allegations and argue that if any violation occurred, it resulted from an unintentional and bona fide error, notwithstanding the maintenance of procedures formulated to avoid the violation. Plains also argues that it is not a debt collector under the FDCPA or Rosenthal Act.
The court held a telephonic conference and then issued the Scheduling Order in this matter on May 18, 2009. As of July 22, 2009, the parties were engaged in settlement negotiations and requested to continue the class certification motion and expert designation deadlines. On September 21, 2009, the parties notified the court that they had agreed to settle the case.
On October 19, 2009 Catala and Resurgent filed a joint motion for preliminary approval of class action settlement. The court denied the joint motion without prejudice. The parties later filed a renewed joint motion, and on January 29, 2010, the court granted it and certified the class for settlement purposes only, preliminarily approved the settlement, class counsel and the class representative, and ordered that the notice be made to the class members.
The parties settled the case pursuant to these terms:
A. Defendant shall pay to San Diego County Legal Aid Society, through Plaintiff's counsel, as a cy pres distribution on behalf of the Class the total sum of $35,000, which is $10,000 more than 1% of Resurgent's net worth, the maximum amount of damages allowed in an FDCPA class action under 15 U.S.C. §1692K(a)(2)(B).
B. Defendant will pay Plaintiff as an incentive payment $2,500, subject to Court approval, for his efforts in litigating this action.
C. Defendants shall be responsible for, and shall bear the costs of, class notice by publication. Defendants shall also pay up to $5,000 to Gilardi & Company LLC, a third-party administrator, for settlement administration services performed by Gilardi pursuant to its separate agreement with Class Counsel.
D. Subject to approval of the Court, Defendant has agreed to pay to Class Counsel attorneys' fees and expenses not to exceed $35,000.
The conditional class covered by the settlement includes:
All individuals in the State of California, during the Class Period, who were sent an envelope by Resurgent Capital Services, L.P. that was light blue in color, bearing white clouds as a design, a stamp that indicated it was "PRESORTED FIRST CLASS MAIL," and/or the words "IMMEDIATE REPLY REQUESTED," and/or were sent a collection letter from Resurgent Capital Services, L.P. bearing the representations "YOU ARE PRE-APPROVED* FOR A NEW VISA(r) CREDIT CARD" and "Arrangements have been made for you to obtain a Pre-Approved* Visa credit card issued through Plains Commerce Bank."
The class period is from December 4, 2007 to December 24, 2008. The class includes 195,561 potential class members.
On March 15, 2010, Gilardi & Company (Gilardi), the settlement administrator, caused the court-approved notice to be published in the San Francisco and Los Angeles Print Market editions of the USA Today newspaper. Vasquez Decl. ¶ 2, Ex. A [Dkt. No. 34].
A. Approval of Class Action Settlement
Settlement of a class action lawsuit requires court approval. See Fed.R.Civ.P. 23(3). The court must find that the proposed settlement isfundamentally fair, adequate, and reasonable. Staton v. Boeing, 327 F.3d 938, 959 (9th Cir. 2003) (citing Hanlon v. Chrysler Corp. 150 F.3d 1011, 1026 (9th Cir. 1998)). In making that determination the court can consider:
 the strength of plaintiffs' case;
 the risk, expense, complexity and likely duration of further litigation;
 the risk of maintaining class action status throughout the trial;
 the amount offered in settlement;
 the extent of discovery completed, and the stage of the proceedings;
 the experience and views of counsel . . .; and
 the reaction of the class members to the proposed settlement.
Officers for Justice v. Civil Serv. Comm'n, 688 F.2d 615, 625 (9th Cir. 1982) (citation omitted). This is not an exclusive list and some factors may predominate over others, depending on the relevant facts.
Torrisi v. Tucson Elec. Power Co., 8 F.3d 1370, 1376 (9th Cir. 1993).
The court must be particularly vigilant where, as in this case, the parties agree to settle prior to class certification. Hanlon, 150 F.3d at 1026. The court, however, must likewise take into account the Ninth Circuit's policy favoring settlement, particularly in class action cases. See Officers, 688 F.2d at 625. While balancing these factors, the court is to satisfy itself that the settlement is not a product of collusion between the parties. Id. In evaluating the settlement, the ...