Ward v. Flagship Credit Acceptance LLC

Ward v. Flagship Credit Acceptance LLC

Opinion

MEMORANDUM RE: MOTION FOR FINAL APPROVAL OF CLASS ACTION SETTLEMENT

Baylson, J.

February 13, 2020

Table of Contents

I. Introduction

II. Background

A. Procedural History

B. Preliminary Approval

C. Response from Class

D. The Court's May 9, 2019 Memorandum

E. Recommendation of Master

F. Final Approval Hearing

III. Legal Standard

IV. Considerations Under the Telephone Consumer Protection Act ("TCPA")

A. Statutory Damages under TCPA

B. Unsettled Areas of TCPA Litigation

1. Unsettled Definition of "Automatic Telephone Dialing System"

2. Impending Supreme Court Review of Constitutionality of TCPA's

"Government-Debt Exception"

C. TCPA Settlements

1. Features of Pro Rata Settlements

2. Incorporating a "High-Low" Model

V. Discussion

A. Initial Presumption of Fairness

B. Girsh Factors

1. Complexity, Expense and Likely Duration of [*2]  Litigation

2. Reaction of the Class to the Settlement

3. Stage of Proceedings and Amount of Discovery Completed

4 & 5. Risks of Establishing Liability and Damages

6. Risks of Maintaining the Class Action Through Trial

7. Ability of Defendant to Withstand a Greater Judgment

8 & 9. Range of Reasonableness of Settlement Fund in Light of the Best

Possible Recovery and All the Attendant Risks of Litigation

a. Reasonableness in Light of Best Possible Recovery

i. Comparison to Snyder v. Ocwen

ii. Consideration of Other TCPA Settlements

iii. Plaintiff's Potential Damages

iv. Per Claimant Recovery of $35.30 is De Minimis

b. Reasonableness in Light of Risks if Case Went to Trial

C. Prudential Considerations

D. Baby Products Considerations

VI. Conclusion

Appendix

I. Introduction

Settlement class representative Robert Ward ("Plaintiff") brought suit on behalf of himself and others similarly situated against Flagship Credit Acceptance LLC ("Flagship") alleging that Flagship violated the Telephone Consumer Protection Act by illegally calling class members' cell phones with an automatic telephone dialing system. After a mediation, Plaintiff and Flagship agreed to the terms of a class settlement, which the Court preliminarily [*3]  approved. Plaintiff's Motion for Final Approval of Class Action Settlement and Motion for An Award of Attorneys' Fees and Expenses and an Incentive Award to the Named Plaintiff is now pending.

When, as here, parties reach a class action settlement agreement that conclusively terminates the claims of all class members (except those who have opted out, which is almost zero in this case), a judge may be inclined to approve the settlement. However, the recently amended Rule 23 provisions on judicial inquiry into class action settlements require careful scrutiny of the terms of the settlement to ensure they are fair, reasonable and adequate, and require a critical and independent review of the settlement provisions. It is now mandatory for the judge to examine the settlement agreement to protect the interests of the class members and ensure that they receive compensation that is fair in view of the statutory purposes.

Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.