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Barel v. Bank of America

January 16, 2009


The opinion of the court was delivered by: Surrick, J.



Presently before the Court are the Representative Plaintiff's Motion for Final Approval of Settlement and Certification of Settlement Class (Doc. No. 57) and Representative Plaintiff's Motion for Award of Attorneys' Fees and Reimbursement of Expenses (Doc. No. 58). After conducting a Fairness Hearing on the proposed final settlement and disbursement of attorneys' fees, and considering all documents filed in support the proposed settlement and fees, the Motions will be granted


Plaintiff Karen A. Barel ("Representative Plaintiff") filed a Complaint against Bank of America ("Defendant") on June 5, 2006. She alleges that Defendant violated the Fair Credit Reporting Act, 15 U.S.C. §§ 1681 et seq. ("FCRA"), by obtaining the credit reports of non-customers who were given power-of-attorney status by customers of Defendant. Representative Plaintiff alleges that Defendant obtained these consumer reports without a permissible purpose under the FCRA and that Defendant's conduct was willful.

The parties exchanged discovery and conducted a number of fact and expert depositions.

On May 25, 2007, Defendant filed a motion for summary judgment. (See Doc. No. 34.) On the same day, Representative Plaintiff filed a motion for class certification. (See Doc. No. 33.) While these motions were pending, the parties negotiated a settlement.

On September 22, 2008, a hearing was held after which we entered an Order preliminarily approving the settlement. In that Order, we certified a class for settlement purposes as follows:

All persons who, during the time period of June 5, 2004 through and inclusive of May 10, 2007, were added as attorney-in-fact pursuant to a power of attorney authorization (a "POA") to another individual's Bank of America deposit account at a time when the POA was not a customer of the Bank, and whose credit report was obtained by the Bank in connection was an application to be added as a POA to the account. (Doc. No. 52 ¶ 2.) We allowed each class member the right to exclude himself or herself from the settlement class by mailing a request for exclusion to the Settlement Administrator. (Id. at ¶ 8.) The request of exclusion had to be postmarked no later than thirty days after the mailing of the Class Notice. (Id.) We also designated James A. Francis, David A. Searles, and Glen H. Chulsky as Counsel for the Class ("Class Counsel"), and scheduled the Fairness Hearing for January 8, 2009. (Id. ¶¶ 4, 12.)

Under the terms of the settlement agreement, Defendant will provide four free months of "Privacy Assist Premier," a credit report monitoring service with a retail value of $12.99 a month, to each settlement class member who submits a claim form within 60 days after the date of this Memorandum and Order. At the end of the four months, the service will automatically terminate absent affirmative action from the class member to continue the service. Defendant will also that request the credit bureaus remove from the credit report of each class member who submits a claim form the credit inquiry made by them in connection with the class member's power-of-attorney application. In addition, Defendant has agreed not to resume the practice of obtaining credit reports of power-of-attorney applicants who are not Defendant's customers absent a change in the law or interpretation of the law which, in the Defendant's sole judgment, further demonstrates that this practice is permissible.

As of the time of the Fairness Hearing, Class Counsel had provided notice to 27,350 class members via first class mail. (Doc. No. 57, Memo. at 2.) The notice included information regarding: the pendency of the action; the terms of the proposed settlement; the opportunity to opt out, object or participate; and the date of the final Fairness Hearing. (Id.) Class Counsel also published the same notice in the national edition of USA Today on October 29, 2008.

At the Fairness Hearing on January 8, 2008, Class Counsel and counsel for Defendant expressed their satisfaction with the settlement agreement and their belief that the agreement was fair, reasonable, and adequate. Class Counsel advised that as of December 29, 2008, approximately 139 class members (or about .005%) had opted out of the settlement. (See Doc. No. 57, Memo. at 12; Doc. No. 57, Ex. A.) None of the opt-outs attended the hearing. Class Counsel further advised that they received no objections to the settlement agreement. No class members, objectors or otherwise, attended the hearing.


Pursuant to Federal Rule of Civil Procedure 23(e), a district court "may approve a settlement . . . that would bind class members only after a hearing and on finding that the settlement . . . is fair, adequate, and reasonable." Fed. R. Civ. P. 23(e)(1)(C). In assessing whether the proposed settlement is fair, adequate, and reasonable, we must "'independently and objectively analyze the evidence and circumstances . . . to determine whether the settlement is in the best interest of those whose claims will be extinguished.'" In re Gen. Motors Corp., 55 F.3d 768, 785 (3d Cir. 1995) (quoting 2 Herbert B. Newberg & Alba Conte, Newberg on Class Actions § 11.41, at 11-88 to 11-89 (3d ed. 1992)); see also id. (stating that "the district court acts as a fiduciary who must serve as a guardian of the rights of absent class members"). To do this effectively, we must engage in a two-step analysis, examining first whether the settlement class meets the requirements of Rule 23 and second whether the settlement meets the standards of fairness articulated by the Third Circuit in Girsh v. Jepson, 521 F.3d 153, 157 (3d Cir. 1975).

A. Rule 23 Class Certification

A settlement class must meet the Requirements of Rule 23 before a court can grant final approval of a class action settlement. See, e.g., Orloff v. Syndicated Office Sys., No. 00-5355, 2004 U.S. Dist. LEXIS 7151, at *6 (E.D. Pa. Apr. 22, 2005). "Settlement classes must satisfy the Rule 23(a) requirements of numerosity, commonality, typicality, and adequacy of representation, as well as the relevant 23(b) requirements . . . ." In re G.M., 55 F.3d at 778; see also Fry v. Hayt, Hayt, & Landau, 198 F.R.D. 461, 467-69 (E.D. Pa. 2000). Rule 23(b) requires that the class satisfy one of its three criteria. See Kaplan v. Chertoff, No. 06-5304, 2008 U.S. Dist. LEXIS 5082, at *20 (E.D. Pa. Jan. 24, 2008).

1. Numerosity

Rule 23(a)(1) requires that a class be so numerous "that joinder of all members is impracticable." Fed. R. Civ. P. 23(a)(1). The Third Circuit has held that while "[n]o minimum number of plaintiffs is required to maintain a suit as a class action . . . generally if the named plaintiff demonstrates that the potential number of plaintiffs exceeds 40, the first prong of Rule 23(a) has been met." Stewart v. Abraham, 275 F.3d 220, 226-27 (3d Cir. 2001). Pursuant to our granting of preliminary approval of the settlement, Class Counsel notified 27,350 class members via first class mail. (See Doc. No. 57, Memo at 2.) Clearly, a class of 27,350 individuals is so numerous as to make joinder of all class members impracticable. See Fed. R. Civ. P. 23(a)(1). Therefore, the numerosity requirement is met.

2. Commonality

Rule 23(a)(2) requires that "there are questions of law or fact common to the class." Fed. R. Civ. P. 23(a)(2). "The commonality requirement will be satisfied if the named plaintiffs share at least one question of fact or law with the grievances of the prospective class." Stewart, 275 F.3d at 227 (citing Baby Neal v. Casey, 43 F.3d 48, 56 (3d Cir.1994))."[T]he commonality standard of Rule 23(a)(2) is not a high bar: it does not require identical claims or facts among class members." Chiang v. Veneman, 385 F.3d 256, 265 (3d Cir. 2004).

There are common questions of law and fact here that affect the entire class. The primary issue to be determined is whether Defendant willfully violated the FCRA by obtaining consumer reports of non-customers. This question is common to every member of the class, and the answer to this question will apply to every class member. The commonality requirement is satisfied.

3. Typicality

"The typicality inquiry centers on whether the interests of the named plaintiffs align with the interests of the absent members."Stewart, 275 F.3d at 227."[C]ases challenging the same unlawful conduct which affects both the named plaintiffs and the putative class usually satisfy the typicality requirement irrespective of the varying fact patterns underlying the individual claims." Id. (citing Baby Neal, 43 F.3d at 58). Here, Representative Plaintiff challenges the conduct that Defendant uniformly applied to every other plaintiff in the class. Representative Plaintiff's interests are identical to the interests of every class member. The typicality requirement is satisfied.

4. Adequacy of Representation

Rule 23(a) requires that the representative parties fairly and adequately protect the interests of the class. A representative plaintiff is adequate if (1) the representative plaintiff's counsel is competent to conduct a class action; and (2) the representative plaintiff's interests are not antagonistic to the class's interests. See In re G.M., 55 F.3d at 800-01.

A number of courts in this district have found Class Counsel, David Searles, of Donovan Searles, LLC, and James A. Francis and Mark D. Mailman, of Francis & Mailman, PC, to be competent, experienced and well-qualified to prosecute class actions such as this one. See Orloff, 2004 U.S. Dist. LEXIS 7151, at *4 (holding Francis & Mailman P.C. and Donovan Searles LLC are "competent to prosecute class actions"); see also Perry v. FleetBoston Fin. Corp., 229 F.R.D. 105, 112 (E.D. Pa. 2005); Saunders v. Berks Credit and Collections, Inc., No. 00-3477, 2002 WL 1497374, at *8 (E.D. Pa. July 11, 2002); Oslan v. Collection Bureau of Hudson Valley, 206 F.R.D. 109, 112 (E.D. Pa. 2002) ("Francis & Mailman P.C. and Donovan Searles LLC, possess sufficient qualifications, skill, and experience in consumer law and class action practice to prosecute this suit to its conclusion."). Moreover, Class Counsel have done an excellent job in representing the class in the instant litigation.

"A class representative must be part of the same class and possess the same interest and suffer the same injury as class members." Amchem Prods., Inc., v. Windsor, 521 U.S. 591, 625-26 (1997) (quoting East Tex. Motor Freight Sys., Inc., v. Rodriguez, 431 U.S. 395, 403 (1977) (citation omitted)). "The adequacy-of-representation requirement 'tends to merge' with the commonality and typicality criteria of Rule 23(a), which 'serve as guideposts for determining whether . . . maintenance of a class action is economical and whether the named plaintiff's claim and the class claims are so interrelated that the interests of the class members will be fairly and adequately protected in their absence.'" Amchem, 521 U.S. at 626 n.20 (quoting Gen. Tel. Co. of Sw. v. Falcon, 457 U.S. 147, 157 n.13 (1982)). Here, Representative Plaintiff has suffered the same injury as the rest of the class members. As reflected in the discussion of commonality and typicality, she adequately represents the interests of the class.

Furthermore, Representative Plaintiff appears to have no interests that are antagonistic to the interests of the Class, and there are no actual or apparent conflicts of interest between Representative Plaintiff and the Class. The representation here by Class Counsel and by the Class Representative has been more than adequate.

5. Rule 23(b)

"In addition to satisfying Rule 23(a)'s prerequisites, parties seeking class certification must show that the action is maintainable under Rule 23(b)(1), (2), or (3)." Amchem, 521 U.S. at 614. Representative Plaintiff seeks certification under the requirements of Rule 23(b)(3).

Rule 23(b)(3) requires that "the court finds that the questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and ...

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