United States District Court, E.D. Pennsylvania
JESSE KRIMES, on behalf of himself and all others similarly situated, Plaintiff,
JPMORGAN CHASE BANK, N.A., et al., Defendants.
EDUARDO C. ROBRENO, J.
before the Court are Plaintiffs' Unopposed Motion for
Final Approval of Class Action Settlement and Plaintiffs'
Unopposed Motion for Attorneys' Fees, Costs, and Service
Awards. After private mediation, Plaintiff, Jesse Krimes, and
Defendant, JP Morgan Chase Bank, have agreed to settle
Krimes' claims that Chase charged unreasonable fees for
the use of a prepaid debit card issued to recently released
prisoners. In short, the settlement fund provides for all
debit card users to obtain a refund of all card service
charges and ATM fees and allows them to obtain any remaining
balances from their account via check. Chase has also agreed
to pay from a separate fund, attorney fees, costs, and a
reasons that follow, the Court will grant both motions.
September of 2013, Krimes was released from federal prison.
ECF No. 1 ¶ 27. Upon his release, the Bureau of Prisons
(“BOP”) provided to him a prepaid Chase debit
card pursuant to the U.S. Debit Card program. Id.
¶ 28. The card was loaded with money that Krimes
possessed when he was initially incarcerated and funds he
accrued while incarcerated. Id.
to Krimes, if he and the other releasees “want[ed]
their own money after they [were] released from prison, they
[were] forced to accept a ‘consumer relationship'
with Chase” and “accept the Chase U.S. Debit
Card's terms.” Id. ¶¶ 2, 17
(emphasis original). Krimes also contends that Chase charged
excessive fees for using the card. Id. ¶¶
5, 29. For example, card holders were charged for using the
card at a bank teller window, using non-network ATMs,
checking their account balances, and were charged an
inactivity fee. Id. ¶¶ 5-6, 29-30, 35.
initiated this action on behalf of himself and others
similarly situated on September 11, 2015 against Defendants
Chase and Does 1-10, alleging unjust enrichment, conversion,
and violations of Pennsylvania's Unfair Trade Practices
and Consumer Protection Law. Id. ¶¶ 52-60,
86-108. The Court has jurisdiction under the Class Action
Fairness Act. 28 U.S.C. § 1332(d).
March 31, 2016, the parties filed a joint motion to stay the
proceedings pending mediation. ECF No. 27. The Court granted
that motion on April 20, 2016. ECF No. 28. The parties
engaged a neutral mediator, Jonathan Marks, and had multiple
joint and ex parte telephone conferences with him,
culminating in an all-day in-person mediation session on May
12, 2016. These negotiations resulted in the present
August 1, 2016, Plaintiff filed a motion for preliminary
approval of a class action settlement. ECF No. 31. The Court
set the hearing to consider the motion for August 30, 2016.
ECF No. 32. Before the hearing, a potential class member and
plaintiff in his own similar suit, Brett Sheib, filed an
objection to Plaintiff's motion. ECF No. 33.
the September 23, 2016 preliminary approval hearing, ECF No.
42, the Court granted the motion for preliminary approval of
the class action settlement and overruled the objection
thereto. ECF Nos. 43-44. The Order also set, inter alia,
notice procedures, dates for opting in and out of the
settlement, and a date for the final approval hearing.
filed his unopposed motions for final approval and for
attorneys' fees, costs, and service award on February 20,
2017. ECF Nos. 48-50. On April 12, 2017, the Court held the
final settlement approval hearing.
Proposed Class Action Settlement
terms of the proposed class action settlement are set forth
in the Settlement Agreement and Release (“Settlement
Agreement”), ECF No. 31-1, and are outlined below.
Proposed Settlement Class
Settlement Agreement provides for a settlement class defined
All persons in the United States who, up to and including the
date of preliminary approval, were issued BOP Debit Cards
upon their release from federal correctional facilities as
part of the U.S. Debit Card program operated by JPMorgan
Chase Bank, N.A. for the United States Treasury Department
and the Federal Bureau of Prisons.
ECF No. 31-1 ¶ 43.
Proposed Settlement Terms
Settlement Agreement provides that Chase will pay up to $446,
822 to the settlement class. Id. ¶¶ 45,
71. From this amount, each class member will be entitled to
reimbursement of all fees imposed by Chase as well as all
third-party ATM surcharges that were incurred on BOP debit
cards before the date of preliminary approval. Id.
class members who still have active BOP debit card accounts
will receive their settlement payments via deposit back into
their accounts. Id. ¶ 73. Alternatively, they
may choose to receive either a paper check or replacement
debit card at no charge. Id. Class members who no
longer possess an active BOP debit card account can request
their payment via a paper check. Id. ¶ 75. Any
class member requesting a check may also request that it
include, in addition to his or her settlement payment, any
residual balance in his or her debit card account.
Id. ¶ 77.
and claims administration costs have been paid by Chase.
Id. ¶ 47. If any of the money remains unclaimed
after the initial distribution of payments, Chase will deduct
the costs of notice and claims administration before making a
supplemental distribution on a pro rata basis. Id.
¶ 76. Chase will also separately pay Plaintiff's
requested service award, attorneys' fees, and costs not
to exceed $250, 000. Id. ¶ 46-47. Specifically,
Plaintiff's Counsel has requested $230, 312.89 for
attorneys' fees, $14, 687.11 in costs, and a service
award of $5, 000 for Krimes. ECF No. 49 at 7.
exchange for the benefits provided by the settlement,
settlement class members agree to release all claims:
that were or could have been alleged in the Action and result
from, arise out of, are based upon, or in any way relate to
Chase's possession of Settlement Class Members'
funds, or Settlement Class Members' access to their
funds, as part of the BOP Debit Card Program; imposition on
Settlement Class Members of Chase Fees or ATM Surcharges in
relation to the BOP Debit Card Program; or any disclosures or
other communication to Settlement Class Members by Chase
concerning BOP Debit Cards.
ECF No. 31-1 ¶ 89.
parties selected, and the Court approved, Kurtzman Carson
Consultants (“KCC”) to disseminate notice and
handle claims administration. ECF No. 31-1 ¶ 37; see ECF
Nos. 43-44 (approving the employment of KCC and the notice
program). The notices were designed to apprise the settlement
class of their rights: (a) to make claims in the event they
wished to elect to receive checks in the amount of their
settlement share, and if requested, any residual balances
remaining in their debit card accounts, (b) to exclude
themselves from the settlement, or (c) to object to the
settlement's terms or class counsel's anticipated fee
application and request for Krime's service award. See
Id. ¶¶ 53-68.
Class Notice program was comprised of: (a) direct mail
notice; (b) publication notice in three periodicals; (c) a
Settlement Website; (d) a toll-free telephone number; and (e)
a long-form notice with more detail than the direct mail or
publication notices, which were available on the Settlement
Website or upon written or telephonic request. See
Id. ¶¶ 61, 64-66.
forms of notice included, inter alia: (a) a description of
the settlement; (b) the deadline for class members to make a
claim or form-of-payment election, exclude themselves from
the settlement class, or object to the settlement; (c) the
address of the settlement website; and (d) the number of the
toll-free telephone line. Id. ¶¶ 55-60.
Federal Rule of Civil Procedure 23(e), the settlement of a
class action requires court approval. Fed.R.Civ.P. 23(e)(2).
A district court may approve a settlement agreement only
“after a hearing and on finding that it is fair,
reasonable, and adequate.” Id. When presented
with a class settlement agreement, the court must first
determine that the requirements for class certification under
Rule 23(a) and (b) are met and then must separately determine
that the settlement is fair to the class under Rule 23(e).
In re Nat'l Football League Players Concussion Injury
Litig., 775 F.3d 570, 581 (3d Cir. 2014).
factual determinations necessary to make Rule 23 findings
must be made by a preponderance of the evidence. In re
Hydrogen Peroxide Antitrust Litig., 552 F.3d 305, 320
(3d Cir. 2008). “‘The decision of whether to
approve a proposed settlement of a class action is left to
the sound discretion of the district court.'” In re
Prudential Ins. Co. Am. Sales Practice Litig. Agent Actions,
148 F.3d 283, 299 (3d Cir. 1998) (quoting Girsh v.
Jepson, 521 F.2d 153, 156 (3d Cir. 1975)). Where, as
here, the court has not already certified the class prior to
evaluating the settlement, the court must determine whether
the proposed settlement class satisfies the requirements of
Rule 23(a) and (b). Amchem Prods., Inc. v. Windsor,
521 U.S. 591, 619 (1997); In re Pet Food Prods. Liab.
Litig., 629 F.3d 333, 341 (3d Cir. 2010).
Rule 23(h), at the conclusion of a successful class action,
class counsel may apply to a court for an award of
attorneys' fees. The amount of an attorneys' fee
award “is within the district court's discretion so
long as it employs correct standards and procedures and makes
finding of fact not clearly erroneous[.]” Sullivan