(1) Final Approval of Class Action Settlement; (2)

187 Pages·2015·5.4 MB·English

by  Janet Kohnenberger

Case 1:13-cv-01091-LMB-TCB Document 135 Filed 04/27/15 Page 1 of 40 PageID# 2857

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF VIRGINIA
ALEXANDRIA DIVISION

MARGARET MURR and DAVID REIGN, on Civil Action No.: 1:13-cv-1091 LMB/TCB
behalf of themselves and all others similarly
situated, CLASS ACTION

Plaintiffs, JURY TRIAL DEMANDED

v. Judge: Hon. Leonie M. Brinkema
Filed: August 30, 2013
CAPITAL ONE BANK (USA), N.A.,

Defendant.

PLAINTIFFS’ MEMORANDUM IN SUPPORT OF MOTION FOR: (1) FINAL
APPROVAL OF CLASS ACTION SETTLEMENT; (2) CLASS CERTIFICATION; AND
(3) AWARD OF ATTORNEYS’ FEES, REIMBURSEMENT OF EXPENSES, AND
PAYMENT OF SERVICE AWARDS TO CLASS REPRESENTATIVES
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TABLE OF CONTENTS
Page
I. INTRODUCTION ............................................................................................................1
II. HISTORY OF THE LITIGATION ..................................................................................2
A. Pleadings, Discovery and Motion Practice ...........................................................2
B. Settlement Negotiations ........................................................................................3
III. SETTLEMENT TERMS ..................................................................................................3
A. The Settlement Class.............................................................................................3
B. Relief to Settlement Class Members .....................................................................4
1. Monetary Relief ........................................................................................4
2. New 0% Offers .........................................................................................6
3. Notice and Administration Costs, Attorney’s Fees and Costs, and
Plaintiffs’ Service Awards ........................................................................6
IV. CLASS NOTICE SATISFIED THE REQUIREMENTS OF DUE PROCESS ...............7
V. THE PROPOSED SETTLEMENT MEETS THE FINAL APPROVAL
CRITERIA ........................................................................................................................8
A. The Proposed Settlement Agreement Is Fair ........................................................9
1. The Advanced Stage of This Litigation and the Extensive Amount
of Discovery Conducted Favor Final Approval ........................................9
2. Arms’-Length Negotiations Conducted by Experienced Class
Counsel Favor Final Approval ................................................................10
B. The Proposed Settlement Agreement Is Adequate and Reasonable ...................11
1. The Strength of Plaintiffs’ Case on the Merits and the Risks
Inherent in Continued Litigation Favor Final Approval .........................11
2. Expected Duration and Expense Favor Final Approval .........................13
3. The Likelihood of Recovery on a Litigated Judgment ...........................13
4. The Degree of Opposition to the Settlement...........................................14
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VI. THE FEE AND EXPENSE REQUEST SHOULD BE APPROVED ............................14
A. Courts Accord Great Weight to the Fee Negotiated by the Parties ....................14
B. Legal Standards for Consideration of the Fee and Expense Award ...................16
1. A Fee Representing 19% of the Settlement is Fair and Reasonable .......16
a. Results Obtained for the Settlement Class ..................................19
b. The Efficiency, Skill, and Experience of Counsel ......................20
c. The Risk of Nonpayment ............................................................20
d. Objections by Settlement Class Members ..................................21
e. Awards in Similar Cases .............................................................21
f. The Complexity and Duration of the Litigation .........................22
g. Public Policy ...............................................................................22
2. The Lodestar/Multiplier Cross-Check ....................................................23
a. The Hourly Rates Are Reasonable ..............................................24
b. The Hours Expended Are Reasonable ........................................26
C. Plaintiffs’ Expenses Are Reasonable and Compensable ....................................27
VII. THE SERVICE AWARDS ARE REASONABLE AND APPROPRIATE ...................28
VIII. CONCLUSION ...............................................................................................................30

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TABLE OF AUTHORITIES
Page(s)
Cases
Anselmo v. West Paces Hotel Group, LLC,
No. 09-2466, 2012 U.S. Dist. LEXIS 164618 (D.S.C. Nov. 19, 2012) ...................................22
In re Bear Steans Cos.,
909 F. Supp. 2d 259 (S.D.N.Y. 2012)......................................................................................24
Boeing Co. v. Van Gemert,
444 U.S. 472 (1980) .................................................................................................................17
Boyd v. Coventry Health Care, Inc.,
299 F.R.D. 451 (D. Md. 2014) ......................................................................................... passim
Chavez v. Netflix, Inc.,
162 Cal. App. 4th 43 (2008) ....................................................................................................26
Clark v. Experian Info. Solutions, Inc.,
No. 00-1217, 2004 U.S. Dist. LEXIS 32063 (D.S.C. Apr. 20, 2004)......................................16
Cohn v. Nelson,
375 F. Supp. 2d 844 (E.D. Mo. 2005)......................................................................................15
Decohen v. Abbasi, LLC,
299 F.R.D. 469 (D. Md. 2014) .....................................................................................17, 21, 29
Dennis v. Kellogg Co.,
No. 09-1786, 2013 U.S. Dist. LEXIS 163118 (S.D. Cal. Nov. 14, 2013) ...............................25
Domonoske v. Bank of America, N.A.,
790 F. Supp. 2d 466 (W.D. Va. 2011) ...............................................................................14, 23
Eisen v. Carlisle & Jacquelin,
417 U.S. 156 (1974) ...................................................................................................................7
In re Enron Corp. Sec.,
586 F. Supp. 2d 732 (S.D. Tex. 2008) .....................................................................................26
Faile v. Lancaster County,
No. 10-2809, 2012 U.S. Dist. LEXIS 189610 (D.S.C. Mar. 8, 2012) .....................................28
Flinn v. FMC Corp.,
528 F.2d 1169 (4th Cir. 1975) .................................................................................................14
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Goldberger v. Integrated Resources, Inc.,
209 F.3d 43 (2d Cir. 2000).......................................................................................................26
Goldenberg v. Marriott PLP Corp.,
33 F. Supp. 2d 434 (D. Md. 1998) ...........................................................................................23
Hanlon v. Chrysler Corp.,
150 F.3d 1011 (9th Cir. 1998) ...................................................................................................9
Helmick v. Columbia Gas Transmission,
No. 07-743, 2010 U.S. Dist. LEXIS 65808 (S.D.W. Va. July 1, 2010) ..................................21
Hemphill v. S.D. Ass’n of Realtors, Inc.,
225 F.R.D. 616 (S.D. Cal. 2004) .............................................................................................26
Hensley v. Eckerhart,
461 U.S. 424 (1983) .................................................................................................................15
In re Ikon Office Solutions, Inc. Sec. Litig.,
194 F.R.D. 166 (E.D. Pa. 2000) ...............................................................................................13
Ingram v. The Coca-Cola Co.,
200 F.R.D. 685 (N.D. Ga. 2001) ..............................................................................................15
In re Ins. Brokerage Antitrust Litig.,
579 F.3d 241 (3d Cir. 2009).....................................................................................................26
In re: Jiffy Lube Sec. Litig.,
927 F.2d 155 (4th Cir. 1991) .........................................................................................9, 10, 11
Johns v. Bayer Corp.,
No. 09-1935, 2013 U.S. Dist. LEXIS 14933 (S.D. Cal. Feb. 1, 2013) ......................................7
Johnson v. General Mills, Inc.,
No. 10-61, 2013 U.S. Dist. LEXIS 90338 (C.D. Cal. June 17, 2013) .....................................25
Johnston v. Comerica Mortg. Corp.,
83 F.3d 241 (8th Cir. 1996) .....................................................................................................16
Jones v. Dominion Res. Servs.,
601 F. Supp. 2d 756 (S.D. W.Va. 2009) ..................................................................................23
Kay Co. v. Equitable Prod. Co.,
749 F. Supp. 2d 455 (S.D.W. Va. 2010) .......................................................................... passim
Kirven v. Cent. States Health & Life Co.,
No. 11-2149, 2015 U.S. Dist. LEXIS 36393 (D.S.C. Mar. 23, 2015) ............................. passim
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LandAmerica 1031 Exch. Servs. v. Chandler,
No. 09-415, 2012 U.S. Dist. LEXIS 159630 (D.S.C. Nov. 7, 2012) .......................................25
Lewis v. Capital Mortg. Invs.,
78 F.R.D. 295 (D. Md. 1977) ...................................................................................................22
Lingenfelter v. Astrue,
No. 03-264, 2009 U.S. Dist. LEXIS 87685 (C.D. Cal. Sep. 3, 2009) .....................................25
Lobatz v. U.S. W. Cellular of Cal., Inc.,
222 F.3d 1142 (9th Cir. 2000) .................................................................................................26
Lomascolo v. Parsons Brinckerhoff, Inc.,
No. 08-1310, 2009 U.S. Dist. LEXIS 89136 (E.D. Va. June 23, 2009) ....................................8
Lonardo v. Travelers Indem. Co.,
706 F. Supp. 2d 766 (N.D. Ohio 2010) ....................................................................................18
Lucas v. Kmart Corp.,
234 F.R.D. 688 (D. Colo. 2006) ..............................................................................................15
Masters v. Wilhelmina Model Agency, Inc.,
473 F.3d 423 (2d Cir. 2007).....................................................................................................17
In re MicroStrategy, Inc. Sec. Litig.,
148 F. Supp. 2d 654 (E.D. Va. 2001) ............................................................................8, 10, 11
In re The Mills Corp. Sec. Litig.,
265 F.R.D. 246 (E.D. Va. 2009) ...................................................................................... passim
Miracle v. Bullitt County,
No. 05-130, 2008 U.S. Dist. LEXIS 94217 (W.D. Ky. Nov. 19, 2008) ..................................19
Muhammad v. Nat’l City Mortg., Inc.,
No. 07-423, 2008 U.S. Dist. LEXIS 103534 (S.D.W. Va. Dec. 19, 2008)............17, 21, 28, 29
Mullane v. Cent. Hanover Bank & Trust Co.,
339 U.S. 306 (1950) ...................................................................................................................7
In re Online DVD-Rental Antitrust Litig.,
779 F.3d 934 (9th Cir. 2015) ...................................................................................................18
People Who Care v. Rockford Bd. of Educ.,
90 F.3d 1307 (7th Cir. 1996) ...................................................................................................24
POM Wonderful, LLC v. Purely Juice, Inc.,
No. 07-2633, 2008 U.S. Dist. LEXIS 110460 (C.D. Cal. Sept. 22, 2008) ........................25, 26
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Protective Committee for Indep. Stockholders of TMT Trailer Ferry v. Anderson,
390 U.S. 414 (1968) .................................................................................................................12
In re Prudential Ins. Co. Am. Sales Practice Litig. Agent Actions,
148 F.3d 283 (3d Cir. 1998).....................................................................................................26
Rodriguez v. West Publ’g Corp.,
563 F.3d 948 (9th Cir. 2009) .....................................................................................................9
S. Carolina Nat’l Bank v. Stone,
749 F. Supp. 1419 (D.S.C. 1990) ...............................................................................................8
Singleton v. Domino’s Pizza, LLC,
976 F. Supp. 2d 665 (D. Md. 2013) ................................................................................. passim
Smith v. Krispy Kreme Doughnut Corp.,
No. 05-187, 2007 U.S. Dist. LEXIS 2392 (M.D.N.C. Jan. 10, 2007) ...............................21, 29
Spell v. McDaniel,
852 F.2d 762 (4th Cir. 1988) ...................................................................................................27
In re SPX Corp. ERISA Litig.,
No. 04-192, 2007 U.S. Dist. LEXIS 28072 (W.D.N.C. Apr. 13, 2007) ..................................21
Strang v. JHM Mortgage Sec. Ltd. Partnership,
890 F. Supp. 499 (E.D. Va. 1995) ...........................................................................................17
Strube v. Am. Equity Inv. Life Ins. Co.,
No. 01-1236, 2006 U.S. Dist. LEXIS 28582 (M.D. Fla. May 5, 2006) ...................................15
Temp. Servs. v. Am. Int’l Group, Inc.,
No. 08-271, 2012 U.S. Dist. LEXIS 86474 (D.S.C. June 22, 2012) ...........................17, 20, 21
United Steelworkers of Am. v. Phelps Dodge Corp.,
896 F.2d 403 (9th Cir. 1990) ...................................................................................................24
In re Veeco Instruments Inc. Sec. Litig.,
MDL No. 05-1695, 2007 U.S. Dist. LEXIS 85629 (S.D.N.Y. Nov. 7, 2007) .........................14
Vista Healthplan, Inc. v. Warner Holdings Co. III, Ltd.,
246 F.R.D. 349 (D.D.C. 2007) .................................................................................................17
Vizcaino v. Microsoft Corp.,
290 F.3d 1043 (9th Cir. 2002) .................................................................................................17
Williams v. MGM-Pathe Commc’ns Co.,
129 F.3d 1026 (9th Cir. 1997) .................................................................................................17
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Winingear v. City of Norfolk, Va.,
No. 12-560, 2014 U.S. Dist. LEXIS 97392 (E.D. Va. July 14, 2014) ...................10, 11, 13, 14
Statutes and Rules
15 U.S.C. § 1640(a)(3) ...................................................................................................................16
Fed. R. Civ. P. 23 .........................................................................................................................7, 9
Fed. R. Civ. P. 23(b)(3)....................................................................................................................3
Fed. R. Civ. P. 23(c)(2)(B) ..............................................................................................................7

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I. INTRODUCTION
Class Representatives Margaret Murr and David Reign (“Plaintiffs”) respectfully submit
this memorandum in support of their motion for: (1) final approval of the class action settlement;
(2) certification of the Settlement Class; (3) an award of attorneys’ fees and reimbursement of
expenses; and (4) service awards to the named Plaintiffs.1 The proposed Settlement is an
outstanding result, which was only obtained after vigorous, hard-fought litigation against a well-
financed opponent, and three in-person and numerous additional telephonic mediation sessions
with Magistrate Judge Theresa C. Buchanan. The Settlement provides substantial compensation
to Settlement Class Members, and reflects improved disclosures made by Capital One Bank
(USA), N.A. (“Defendant” or “Capital One”) on its 0% Offers that will enable consumers to
better evaluate whether a 0% Offer is right for them. In short, the Settlement is both
procedurally and substantively fair and should, therefore, be finally approved.
In its Preliminary Approval Order, the Court found that the proposed Settlement fell
within the range of a reasonable settlement and approved the plan to notify the Settlement Class
about the proposed Settlement. Dkt. No. 132. The thorough Class Notice program has been
fully implemented. To date, the Settlement Class has responded positively to the Settlement: a
minimum of more than $4.9 million in Cash Awards are expected to be paid by Capital One and
no objections have been filed by Settlement Class Members.
Moreover, the award of attorneys’ fees requested by Class Counsel, and to which the
Parties agreed after extensive mediation, is well within the ranges established by the case law
and will not impact the Cash Award amount the Settlement Class will receive. The Settlement
provides that Capital One will not oppose an award of attorneys’ fees and costs up to $1.5

1 Unless stated otherwise, all capitalized terms are defined in the Settlement Agreement,
which was filed with the Court on December 19, 2014. Dkt. No. 127.
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million. After deducting costs of $71,281.38, the requested award of attorneys’ fees is
approximately 19% of the $7,334,000 minimum total amount paid by Capital One under this
Settlement. Moreover, Plaintiffs’ Counsel have prosecuted this litigation on a wholly contingent
basis, accruing over $1.5 million in attorneys’ fees alone. Thus, and as detailed below, the
agreed-to fee award represents a fractional (or “negative”) 0.94 multiplier of Plaintiffs’
Counsel’s lodestar. Accordingly, awarding Class Counsel’s requested attorneys’ fees and costs
on behalf of themselves and the other Plaintiffs’ Counsel is well below the accepted range of
attorney fee awards in class settlements. In re The Mills Corp. Sec. Litig., 265 F.R.D. 246, 264
(E.D. Va. 2009) (“Though varied, it is worth noting as a starting point that percentage awards are
‘often between 25% and 30% of the fund.’”) (quoting MANUAL FOR COMPLEX
LITIGATION (FOURTH) § 14.121 at 188); Kay Co. v. Equitable Prod. Co., 749 F. Supp. 2d
455, 470 (S.D.W. Va. 2010) (“Courts have generally held that lodestar multipliers falling
between 2 and 4.5 demonstrate a reasonable attorneys’ fee.”).
For the reasons set forth, Plaintiffs respectfully request an order: (1) granting final
approval of the Settlement; (2) certifying the Settlement Class; (3) approving the request for
attorneys’ fees and expenses; and (4) awarding service awards to Plaintiffs Murr and Reign in
the amount of 7,500 and $1,500, respectively, for their efforts in representing the Class.
II. HISTORY OF THE LITIGATION
A. Pleadings, Discovery and Motion Practice
Since the action was filed on August 30, 2013, it has been hard-fought and thoroughly
litigated. The Parties engaged in extensive written discovery, motions to compel, numerous
depositions of Capital One employees, the deposition of Plaintiff Murr, and the attainment,
review and analysis of more than 48,000 pages of electronic discovery. In addition, the Court
heard fully briefed motions to dismiss, class certification, and summary judgment and Capital
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