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Cox v. Branch Banking and Trust Co.

United States District Court, S.D. West Virginia, Beckley Division

January 10, 2019

WAYNE COX and KATHY COX, Individually and on behalf of a class of persons, Plaintiffs,
BRANCH BANKING AND TRUST COMPANY, Defendant. LATRICIA E. GOODWIN, individually and on behalf of a class of persons Plaintiff,



         Pending is Plaintiffs' Unopposed Motion for Final Approval of Settlement, Attorneys' Fees and Costs, and Service Awards. For the reasons stated in the Plaintiffs' memorandum and for good cause shown, the Motion is GRANTED. Accordingly, the Court hereby FINDS, ORDERS, ADJUDGES, AND DECREES as follows:

         I. Background

         In these actions, Plaintiffs Wayne Cox, Kathy Cox, and Latricia Goodwin ("Plaintiffs"), on behalf of a putative class of similarly situated individuals, claimed that the Defendant violated the West Virginia Consumer Credit and Protection Act (“WVCCPA”) by threatening “legal action” and the collection of foreclosure and attorney's fees. The Court preliminarily approved the Settlement Agreement on August 20, 2018 (ECF No. 37) and subsequently approved the First Amended Class Settlement Agreement on November 21, 2018 (the “Settlement”) (ECF No. 45). Those Orders outlined the terms of the proposed settlement. The Court adopts and incorporates herein those portions of the two Orders.

         II. The Settlement Merits Final Approval

         A. Notice is complete.

         The Court finds that Plaintiffs and Defendant (the "Parties") have completed all settlement notice obligations imposed in the Order Preliminarily Approving Settlement as well as the Order Granting Motion to Modify Settlement Agreement, Class Notice and Order Preliminarily Approving Settlement. The class notice, which included first-class mailed notice to each class member, constitutes the “the best notice practicable under the circumstances, ” as required by Rule 23(c)(2). The amended class notice, sent to a subset of the class, corrected the incorrect settlement notice originally sent to these class members.

         B. The settlement is fair, adequate, and reasonable.

         Settlement of class actions must be approved by the Court. Fed.R.Civ.P. 23(e); Scardelletti v. Debarr, 43 Fed.Appx. 525, 528 (4th Cir. 2002); In re Jiffy Lube Sec. Litig., 927 F.2d 155, 158 (4th Cir. 1991); Domonoske, 790 F.Supp.2d at 472; Muhammad, 2008 WL 5377783, at *3. “The primary concern addressed by Rule 23(e) is the protection of class members whose rights may not have been given adequate consideration during the settlement.” In re Jiffy Lube Sec. Litig., 927 F.2d at 158; see also Groves, 2011 WL 4382708, at *4.

         Such approval typically involves a two-step process of “preliminary” and “final” approval. See Manual for Complex Litigation § 21.632, at 414 (4th ed. 2004); Grice v. PNC Mortgage Corp. of Am., No. 97-3804, 1998 WL 350581, at *2 (D. Md. May 21, 1998) (endorsing Manual's two-step process); Horton v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 855 F.Supp. 825, 827 (E.D. N.C. 1992). In the first stage, the Parties submit the proposed settlement to the Court for preliminary approval. In the second stage, following preliminary approval, the Class is notified and a fairness hearing scheduled at which the Court will determine whether to approve the settlement. See Bicking v. Mitchell Rubenstein & Assocs., No. 3:11-cv-78, 2011 WL 5325674, at *4 (E.D. Va. Nov. 3, 2011) (“Prior to granting final approval, the court must direct reasonable notice to all potentially affected class members, allow time for objection, and provide a ‘fairness hearing.'”). The Court has already granted preliminary approval.

         In determining whether a settlement meets the requirements of Rule 23, the Fourth Circuit has adopted a bifurcated analysis involving inquiries into the fairness and adequacy of the settlement. Scardelletti, 43 Fed.Appx. at 528; In re Jiffy Lube Sec. Litig., 927 F.2d at 158; Groves, 2011 WL 4382708, at *4. A class settlement is fair when it is “reached as a result of good faith bargaining at arm's length, without collusion.” In re Jiffy Lube Sec. Litig., 927 F.2d at 159; Bicking, 2011 WL 5325674, at *4. The Court should be satisfied that “the proposed settlement appears to be the product of serious, informed, non-collusive negotiations, has no obvious deficiencies, does not improperly grant preferential treatment to class representatives or segments of the class, and falls within the range of possible approval.” Samuel v. Equicredit Corp., No. 00-6196, 2002 WL 970396, at *1 n.1 (E.D. Pa. 2002); In re Vitamins Antitrust Litig., MDL No. 1285, 2001 U.S. Dist. LEXIS 25071, at *29-30; In re Shell Oil Refinery, 155 F.R.D. 552, 555 (E.D. La. 1993). “Absent evidence to the contrary, the court may presume that settlement negotiations were conducted in good faith and that the resulting agreement was reached without collusion.” Muhammad, 2008 WL 5377783, at *4.

         In assessing the fairness of a proposed settlement, the Court must look to the following factors: (1) posture of the case at the time the settlement is proposed; (2) extent of discovery that has been conducted; (3) circumstances surrounding the negotiations; and (4) experience of counsel in the relevant area of class action litigation. Scardelletti, 43 Fed.Appx. at 528; In re Jiffy Lube Sec. Litig., 927 F.2d at 159; Groves, 2011 WL 4382708, at *4; Loudermilk Servs., Inc., No. 3:04-cv-966, 2009 WL 728518, at *8 (S.D. W.Va. Mar. 18, 2009). In determining the adequacy of the proposed settlement, the Court must consider: (1) relative strength of Plaintiff's case on the merits; (2) existence of any difficulties of proof or strong defenses Plaintiff is likely to encounter if the case proceeds to trial; (3) anticipated duration and expense of additional litigation; (4) solvency of defendant and likelihood of recovery of a litigated judgment; and (5) degree of opposition to the settlement. Scardelletti, 43 Fed.Appx. at 528; In re Jiffy Lube Sec. Litig., 927 F.2d at 159; Groves, 2011 WL 4382708, at *5; Loudermilk Servs., Inc., 2009 WL 72818, at *3.

         Consideration of the applicable factors reveals that the Parties' proposed Settlement merits final approval. The Parties' Settlement was indeed the product of serious, informed, arm's-length, and non-collusive negotiations. At the time this action was settled, the parties had engaged in written discovery, informal negotiations, and three formal mediation sessions with a retired United States Federal District Court Judge experienced in the matters at issue in these actions. By the time these sessions occurred, Plaintiffs' Counsel and Defendant's Counsel, who are both experienced in prosecuting and defending complex class action claims such as these, had “a clear view of the strengths and weaknesses” of their cases and were in a strong position to make an informed decision regarding the reasonableness of a potential settlement. In re Warner Commc'ns Sec. Litig., 618 F.Supp. 735, 745 (S.D.N.Y. 1985) aff'd, 798 F.2d 35 (2d Cir. 1986).

         The Settlement has no obvious deficiencies. All class members will be compensated. The intrinsic value of the net settlement payment to Class Members is readily apparent when one considers the risks inherent in continued and protracted litigation, including that the Court could deny a motion to certify class and foreclose any possibility of class recovery, the costs and uncertainty of litigation, and the expense and delay that accompany the appeal process.

         The Settlement is particularly valuable to absent Class Members who, but for the Settlement, likely would be unaware of the existence of their legal claims. Even if they were aware, given the relatively small amounts of money involved, absent class members and attorneys who may represent them would have little financial incentive to prosecute individual actions. The alternative to bringing this case as a class action is bringing hundreds of individual claims. Realistically, the alternative to a class action under the present circumstances is no action at all.

         “[C]ompromise and settlement are favored by the law.” Groves, 2011 WL 4382708, at *4. The proposed Settlement serves the overriding public interest in settling litigation. Van Bronkhorst v. Safeco Corp., 529 F.2d 943, 950 (9th Cir. 1976). The complexity, expense, and duration of class action litigation are factors that mitigate in favor of preliminary approval of a settlement. In re Corp. Litig., 264 F.3d 201, 231, 233 (3d Cir. 2001); Girsh v. Jepson, 521 F.3d 153, 157 (3d Cir. 1975); City of Detroit v. Grinnell Corp., 495 F.2d 448, 463 (2d Cir. 1974). While the Parties could have litigated the case to judgment and taxed the resources of the litigants and the Court, they chose instead to rationally and reasonably forgo the expense and uncertainty of continued litigation and focus their efforts on achieving a fair and adequate settlement that took the risks of further litigation into account.

         Finally, the “opinion of class action counsel, with substantial experience in litigation of similar size and scope, is an important consideration.” Muhammad, 2008 WL 4382708, at *4. “‘When the parties' attorneys are experienced and knowledgeable about the facts and claims, their representations to the court that the settlement provides class relief which is fair, reasonable and adequate should be given significant weight.'” Id. at *4 (quoting Rolland v. Cellucci, 191 F.R.D. 3, 10 (D. Mass. 2000)). In the present case, proposed class counsel, who recommend the Settlement, is skilled and experienced in consumer class actions. See Muhammad, 2008 WL 5377783, at *4 (recognizing that Plaintiff's counsel, Bailey & Glasser, particularly John W. Barrett and Jonathan R. Marshall, are “skilled and experienced in class action litigation, and have served as class counsel in several cases, including consumer lending cases”).

         III. The Requested Attorneys' Fees and ...

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