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Richard Chakejian, Bruce A. Summerfield, and Tony Lee Webb v. Class Action Equifax Information Services

June 14, 2011

RICHARD CHAKEJIAN, BRUCE A. SUMMERFIELD, AND TONY LEE WEBB, PLAINTIFFS,
v.
CLASS ACTION EQUIFAX INFORMATION SERVICES, LLC, DEFENDANT.



The opinion of the court was delivered by: Anita B. Brody, J.

MEMORANDUM

I.Introduction

Plaintiffs brought a class action against Defendant Equifax ("Defendant" or "Equifax") under the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681 et seq. Pending before me are Plaintiffs‟ Motion for Final Approval of Class Action Settlement, ECF No. 131, as well as Plaintiffs‟ Motion for Award of Attorney‟s Fees and Costs and Award to Representative Plaintiffs, ECF No. 132. For the reasons set forth below, I will grant both motions.

II.Background

A.Chakejian Action

On May 31, 2007, Plaintiff Richard Chakejian ("Chakejian") filed suit against Equifax in the United States District Court for the Eastern District of Pennsylvania, alleging that Equifax willfully violated the FCRA by sending inaccurate form letters to those who disputed public records information in their Equifax credit reports. In January of 2007, Chakejian obtained a credit report from Equifax and noticed that a record of an involuntary bankruptcy filing appeared there in error. Chakejian v. Equifax Info. Servs., 256 F.R.D. 492, 495 (E.D. Pa. 2009). On January 16, 2007, Chakejian sent Equifax a letter disputing the accuracy of this entry. Id. When a customer disputes public record information appearing on a credit report, Equifax employs an independent public records vendor to go to the original source of the information, review the information, and report the results to Equifax. Id. On January 26, 2007, Equifax responded to Chakejian that"it contacted each source directly," and indicated that it reviewed Chakejian‟s "bankruptcy information" and "verified" that the bankruptcy item belonged to him. Id. Chakejian claims that Equifax‟s reinvestigation letter misrepresents the source of Equifax‟s public records information and misstates the results of its reinvestigation and its reinvestigation procedures in violation of the FCRA. Id. at 496.

In the litigation that followed, the parties exchanged thousands of pages of documents produced in discovery and took seven depositions. Mem. Supp. Mot. Final Approval 5, ECF No. 131. On August 18, 2008, Chakejian moved for class certification. On March 25, 2009, I granted that motion and certified the class. On April 29, 2009, the case was stayed pending a decision by the Third Circuit on Defendant‟s petition for permission to appeal pursuant to Federal Rule of Civil Procedure 23(f). On March 5, 2010, Equifax moved for summary judgment. On June 2, 2010, I denied that motion as stated on the record at the final pretrial conference. On May 24, 2010, both parties filed omnibus motions in limine, which I granted in part and denied in part on June 8, 2010. In the days prior to trial, the parties participated in two full-day mediation sessions with Judge Diane Welsh of JAMS, a private mediation service. Id. at 6. Counsel continued to negotiate by phone, in person, and before me as trial began. Id. at 6-7. On June 8, 2010, following jury selection and opening argument, but before the first witness testified, the parties agreed on the basic terms of a settlement. Id. at 7.

B.Summerfield Action

On March 21, 2008, Plaintiff Bruce Summerfield ("Summerfield") filed a class action complaint against Equifax in the District of New Jersey, alleging that Equifax falsely represents to consumers who have disputed the accuracy of public records information reported about them by Equifax that it has directly contacted the original source of the public records. Summerfield v. Equifax Info. Servs. LLC, 264 F.R.D. 133, 136 (D.N.J. 2009). Summerfield contends that Equifax reported false information when it issued a credit report stating that he had an outstanding judgment of $1,075 owed to a collection agency on behalf of AT&T. Id. On February 22, 2007, Summerfield disputed the record. Id. On March 2, 2007, Equifax sent Summerfield a letter indicating that it had contacted the source of the public record, Camden City, and verified that it belonged to Summerfield. Id. According to Summerfield, Equifax does not contact the original source of public records, and advises the consumer to take up his dispute with the source, but fails to disclose the true source of consumer public records. Id.

On February 2, 2009, Summerfield moved to certify the class. A hearing was held on September 24, 2009, and Judge Rodriguez certified the class on September 30, 2009. Equifax moved for reconsideration on October 15, 2009, but Judge Rodriguez denied that motion on January 4, 2010. Throughout the course of the litigation, the parties filed several discovery-related motions. Following a July 13, 2010 consent motion and a July 20, 2010 consent order, the case was transferred to the Eastern District of Pennsylvania for consolidation with the Chakejian action for settlement purposes.

C.Webb Action

Finally, on February 26, 2010, Tony Lee Webb ("Webb") filed a class action complaint against Equifax in the Eastern District of Virginia, alleging that Equifax falsely represents the identity of the entity from which it obtains public records in response to consumer disputes. First Am. Compl. ¶ 3, Feb. 26, 2010, ECF No. 3. In July of 2009, Webb disputed a judgment that appeared on his credit report. Id. ¶ 14. On August 14, 2009, Equifax responded that it had contacted the source of the inaccurate public record, the Roanoke City General District Court. Id.

¶ 15. Equifax also stated that it had verified that the record belonged to Webb. Id. However, Webb contends that Defendant never contacted that court, but rather obtained the public record information from an intermediary that resells its database to Equifax. Id. ¶ ¶ 16-17.

In the Webb litigation, the parties briefed a Motion to Change Venue before Webb‟s claims were severed and transferred to the Eastern District of Pennsylvania on July 16, 2010, to be consolidated with the Chakejian action for settlement purposes.

D.Steps Towards Settlement Approval

After Chakejian and Equifax agreed on the basic terms of a settlement on June 8, 2010, and after the Summerfield and Webb actions were transferred to this district in July of 2010, the parties continued to negotiate the details of their agreement. They submitted a settlement for my review on August 31, 2010.

Pursuant to the agreement, Equifax will cease the practice that gave rise to the suit: Equifax will no longer represent that the government, a court, or courthouse is the furnisher of information in response to a consumer‟s dispute, nor will Equifax represent that the government, a court, or courthouse was contacted directly by Equifax or actually investigated a consumer‟s dispute. Mem. Supp. Mot. Final Approval 8.*fn1 Furthermore, class members will receive eighteen months of credit monitoring service free of charge. Id. at 2, 7.*fn2 While class members who do not opt out will be bound by the terms of the settlement with regard to statutory damages under the FCRA, they retain their rights to bring individual suits against Equifax for any actual damages sustained. Id. at 2.*fn3 The settlement agreement also provides that Equifax will pay class counsel $1,075,000, subject to court approval. Mot. Final Approval App. I at 26. Equifax has also contracted to pay each representative Plaintiff $15,000, again subject to court approval. Id. at 27.

On October 21, 2010, I consolidated the Chakejian, Summerfield, and Webb actions and preliminarily approved the settlement as fair, reasonable, and adequate. Preliminary Approval Order ¶ ¶ 2, 3, Oct. 21, 2010, ECF No. 124. I also provisionally certified a class for settlement purposes only of:

All persons in the Commonwealths of Pennsylvania and Virginia and the State of New Jersey, who were sent the letter at issue in this litigation by Equifax that contained language substantially similar to the letter attached to the complaint filed in the Chakejian Action, beginning September 28, 2005 for Pennsylvania Class Members, March 21, 2006 for New Jersey Class Members and February 26, 2008 for Virginia Class Members through June 6, 2010, seeking statutory damages only for an alleged willful violation of 15 U.S.C. § 1681i(a)(6)(B)(iii) and 15 U.S.C. § 1681i(a)(6)(A).

Id. ¶ 1.*fn4 I directed that Equifax furnish a list of class members within thirty days. Id. ¶ 8. I then directed that the notice proposed by the parties be sent by the claims administrator via first class mail to all class members within sixty days. Id. I also ordered class counsel to update their website, www.equifaxclassaction.info, with information about the settlement within thirty days.*fn5

Id. I found that this method of giving notice fully satisfied the requirements of Federal Rule of Civil Procedure 23 and due process, and constituted the best notice practicable under the circumstances. Id. ¶ 9. Finally, I scheduled a fairness hearing for March 29, 2011:

1. To finally determine whether this action satisfies the criteria for class certification set forth in Federal Rule of Civil Procedure 23(a) and (b);

2. To determine whether the proposed settlement is fair, reasonable and adequate and should be granted final approval;

3. To determine whether a final judgment should be entered dismissing the claims of the Class with prejudice;

4. To consider the application of class counsel for an award of attorneys‟ fees and expenses, and for an individual settlement award to the class representatives;

5. To rule upon other such matters as appropriate. Id. ¶ 7.

The parties involved adhered to the terms of the Preliminary Approval Order.*fn6 On March 8, 2011, Equifax submitted a Proof of Mailing of Settlement Notice, ECF No. 127; see also Preliminary Approval Order ¶ 11.*fn7 On March 9, 2011, lead class counsel filed a list of all persons who timely opted out of the settlement class. Certification/Declaration of Class Counsel Regarding Opt-Outs, ECF No. 128; see also Preliminary Approval Order ¶ 12. Lead class counsel supplemented this list on March 28, 2011. Supplemental Certification/Declaration of Class Counsel Regarding Opt-Outs, ECF No. 134. On March 18, 2011, lead class counsel submitted a list of all persons who timely objected to the settlement. Certification/Declaration of Class Counsel Regarding Objections, ECF No. 130; see also Preliminary Approval Order ¶ 14.

In the end, the claims administrator mailed 40,806 notices; 2,282 were returned as undeliverable, but 115 had a forwarding address and were remailed. Proof of Mailing of Settlement Notice ¶ 5. Seven class members requested exclusion from the settlement, and two class members objected. Praecipe to Substitute List of Opt-Outs, ECF No. 135; Certification/Declaration of Class Counsel Regarding Objections. Thomas J. Fieger, Jr.‟s objection contained no specificity. Mem. Supp. Mot. Final Approval 17 n.13; Hr‟g Tr. 5-7, ECF No. 137. Jeffrey Lichtenstein, on the other hand, submitted a brief letter to the court. Notice of Objection to Settlement, ECF No. 126.

On March 29, 2011, I held a fairness hearing, during which I received the testimony from Abraham C. Reich on the subject of attorney‟s fees. No objectors appeared in court.

III.Discussion

Having reviewed all of the materials submitted by the parties in connection with this settlement, and following the March 29, 2011 final fairness hearing, I will grant Plaintiffs‟ Motions for Final Approval of Class Action Settlement, and for Award of Attorney‟s Fees and Costs and Award to Representative Plaintiffs. I will certify the class; find the settlement to be fair, reasonable, and adequate; approve the awards to the attorneys and named Plaintiffs; and enter a final judgment dismissing the case pursuant to the terms of the parties‟ agreement.

A.Class Certification

Plaintiffs ask that I certify the following class:

All persons in the Commonwealths of Pennsylvania and Virginia and the State of New Jersey, who were sent the letter at issue in this litigation by Equifax that contained language substantially similar to the letter attached to the complaint filed in the Chakejian Action, beginning September 28, 2005 for Pennsylvania Class Members, March 21, 2006 for New Jersey Class Members and February 26, 2008 for Virginia Class Members through June 6, 2010, seeking statutory damages only for an alleged willful violation of 15 U.S.C. § 1681i(a)(6)(B)(iii) and 15 U.S.C. § 1681i(a)(6)(A).

To prevail on a motion for class certification, a plaintiff must satisfy all of the requirements of Federal Rule of Civil Procedure 23(a) and the requirements of one of the subsections of Rule 23(b). In re Prudential Ins. Co. Am. Sales Practice Litig., 148 F.3d 283, 309 (3d Cir. 1998). The four requirements of Rule 23(a) are:

(1) the class is so numerous that joinder of all members is impracticable [numerosity];

(2) there are questions of law or fact common to the class [commonality];

(3) the claims or defenses of the representative parties are typical of the claims or defenses of the class [typicality]; and

(4) the representative parties will fairly and adequately protect the interests of the class [adequacy].

Fed. R. Civ. P. 23(a). Plaintiffs seek certification under Rule 23(b)(3), which adds the requirements that "the questions of law or fact common to class members predominate over any questions affecting only individual members [predominance], and that a class action is superior to other available methods for fairly and ...


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