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Harper v. The Law Office of Harris and Zide LLP

United States District Court, N.D. California

March 15, 2017

JOYCE HARPER, et al., Plaintiffs,


          HAYWOOD S. GILLIAM, JR. United States District Judge


         Pending before the Court is Plaintiff Joyce Harper and Leila Emerson's (“Plaintiffs”) unopposed motion for final approval of class action settlement. Dkt. No. 70 (“Mot.”). Also pending is Plaintiffs' motion for attorneys' fees and costs. Dkt. No. 71 (“Fees Mot.”). The Court held a final fairness hearing on August 4, 2016. Dkt. No. 78. For the reasons stated below, the Court GRANTS final approval, as well as Plaintiffs' motion for attorneys' fees and costs.


         A. Litigation History

         Plaintiffs filed suit against Defendants The Law Office of Harris and Zide (“Defendant”) and Bank of America, National Association (“BOA”), the latter of which has been dismissed from the action, for violation of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. (“FDCPA”), and California's Rosenthal Fair Debt Collection Practices Act, Cal. Civ. Code § 1788 et seq. (“RFDCPA”). See Dkt. No. 29 (“Compl.”) ¶ 1.

         Plaintiffs allege that Defendant, while acting to collect debts from the putative class on behalf of BOA, failed to provide the exact disclosure required by 15 U.S.C. § 1692g(a)(4). Id. ¶¶ 1-2. Specifically, § 1692g(a)(4) requires that debt collectors send certain “validation notices” to debtors when attempting to collect a debt, which advise debtors about their rights to dispute the debt and to request, “in writing, ” that the debt collector provide verification of the debt. See 15 U.S.C. § 1692g(a)(4). Unless this information is included in the initial communication with a debtor, a debt collector must provide notice within five days. Id. § 1692g(a). Plaintiffs allege that Defendant failed to inform them that verification of their purported debt had to be requested in writing, thereby implying that an oral request for verification of the debt is valid. Compl. ¶¶ 22-34. On that basis, Plaintiffs sought statutory damages, injunctive and declaratory relief, pre-judgment and post-judgment interest, and attorneys' fees and costs. Id. ¶ 70.

         Defendant answered the complaint on June 17, 2015. Dkt. No. 36. Plaintiffs stipulated to dismiss BOA from the action and filed a notice of settlement on September 17, 2015. See Dkt. Nos. 51, 52. Plaintiffs filed their unopposed motion for preliminary approval of class action settlement on November 2, 2015. Dkt. No. 56. The Court granted the motion on May 4, 2016, appointing Plaintiffs as class representatives, Greenwald Davidson Radbil PLLC as class counsel, and provisionally certifying a Rule 23(b)(3) damages class for statutory damages and a Rule 23(b)(2) injunctive relief class for changed debt collection practices. See Dkt. No. 67. The Court also approved Bay Area Legal Aid as a cy pres recipient. Id. at 15. Plaintiffs represented that they would file a motion for attorneys' fees and costs not to exceed $45, 000, and Defendant agreed not to oppose any request for $25, 000 or less. Dkt. No. 56-1 (“SA”).

         On June 23, 2016, Plaintiffs moved for final approval of the class action settlement and for attorneys' fees and costs in the amount of $45, 000. See Dkt. Nos. 70, 71. Defendant opposed Plaintiffs' motion for attorneys' fees and costs, Dkt. No. 73, and Plaintiffs replied, Dkt. No. 76.

         B. Overview of the Proposed Settlement

         On November 2, 2015, the parties submitted a class action settlement agreement that details the provisions of the proposed settlement. See SA. The key terms are as follows:

         Class Definition: All persons with a California address to whom Defendant mailed an initial debt collection communication that stated, “If you notify this firm within thirty (30) days after your receipt of this letter, that the debt or any portion thereof, is disputed, we will obtain verification of the debt or a copy of the judgment, if any, and mail a copy of such verification or judgment to you, ” between March 10, 2014 and March 10, 2015, in connection with the collection of a consumer debt on behalf of Bank of America, N.A. Id. ¶ 1.B. The parties have represented that there are a total of 1, 111 persons who fall within this class definition, despite initially estimating that there would be 1, 156 people in the class. Dkt. No. 77-1 ¶ 6; see also SA ¶ 10.A.

         Monetary Relief: Each class member will receive $10 regardless of the ultimate size of the class. SA ¶ 10.A. Given the currently estimated class size, the class will receive an aggregate payment of $11, 110. See Id. (stating that ‘[s]hould the Parties discover that there are additional, or fewer, Class Members, the Settlement Fund will be adjusted accordingly such that the Settlement Fund consists of $10.00 per Class Member.”). Plaintiffs, as named plaintiffs, will receive an additional $1000 each as statutory damages awarded under 15 U.S.C. § 1692k(a)(2)(A). Id. ¶ 10.E; Dkt. No. 56. at 14. To the extent that any funds remain after all claims are paid, Bay Area Legal Aid will receive the balance as a cy pres recipient. Id. ¶ 10.D.

         Injunctive Relief: Defendant will no longer use the language quoted in the class definition in its initial debt collection communications. Id. ¶ 10.F.

         Release: The class will release Defendant and any associated persons or entities from any and all known and unknown claims that arise out of or relate to the use of the language quoted in the class definition from Defendant's initial debt collection communications. Id. ¶ 1.C.

         Attorneys' Fees and Costs: The settlement agreement authorizes class counsel to seek attorneys' fees and costs not to exceed $45, 000. Id. ¶ 10.G.1. However, Defendant only agreed not to oppose an application for fees and costs totaling no more than $25, 000. Id. Settlement is not contingent on the outcome of this fee application, which remains subject to the discretion of the Court. Id. ¶ 10.G.2.


         A. Motion for Final Approval of Class Action Settlement

         i. Class Certification

         Final approval of a class action settlement requires, as a threshold, an assessment of whether the class satisfies the requirements of Federal Rule of Civil Procedure 23(a) and (b). Hanlon v. Chrysler Corp., 150 F.3d 1011, 1019, 1022 (9th Cir. 1998). Because no facts that would affect these requirements have changed since the Court preliminarily approved the class on May 4, 2016, this order incorporates by reference its prior analysis under Rules 23(a) and (b) as set forth in the order granting preliminary approval. See Dkt. No 67. The Court affirms its previous findings and certifies the settlement class.

         ii. The Settlement

         “The claims, issues, or defenses of a certified class may be settled . . . only with the court's approval.” Fed.R.Civ.P. 23(e). The Court may finally approve a class settlement “only after a hearing and on finding that it is fair, reasonable, and adequate.” Fed.R.Civ.P. 23(e)(2); Hanlon v. Chrysler Corp., 150 F.3d 1011, 1025 (9th Cir. 1998). To assess whether a proposed settlement comports with Rule 23(e), courts should consider the following factors:

the strength of the plaintiff's 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; the presence of a governmental participant; and the reaction of the class members to the proposed settlement.

Hanlon, 150 F.3d at 1025 (hereinafter, the “Hanlon factors”). No single factor is the “most significant, ” Officers for Justice v. Civ. Serv. Comm'n of City & Cnty. of S.F., 688 F.2d 615, 625 (9th Cir. 1982), and “the decision to approve or reject a settlement is committed to the sound discretion of the trial judge, ” Hanlon, 150 F.3d at 1026. In addition, “[a]dequate notice is ...

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