Norton v. LVNV Funding, LLC

— 1 — — 2 — — 3 — 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA — 6 — 7 SONYA NORTON, Case No. 18-cv-05051-DMR 8 Plaintiff, ORDER GRANTING FINAL 9 v. APPROVAL OF CLASS ACTION SETTLEMENT AND AWARDING 10 LVNV FUNDING, LLC, et al., ATTORNEYS’ FEES AND COSTS 11 Defendants. Re: Dkt. Nos. 138, 143 12 Plaintiff Sonya Norton filed this putative class action against Defendants LVNV Funding, 13 LLC (“LVNV”) and Law Office of Harris & Zide (“H&Z”) (collectively, “Defendants”) alleging 14 violations of the federal Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq., 15 and California’s Fair Debt Collection Practices Act (“Rosenthal Act”), Cal. Civ. Code § 1788 et 16 seq. Norton also seeks injunctive relief under California’s Unfair Competition Law (“UCL”), Cal. 17 Bus. & Profs. Code § 17200 et seq. On July 23, 2021, the court granted preliminary approval of a 18 class action settlement (“Prelim. Approval Order”). [Docket No. 137.] Plaintiff now seeks final 19 approval of the settlement (“Approval Mot.”). [Docket No. 143.] Plaintiff also moves for an 20 award of attorneys’ fees and costs (“Fees Mot.”). [Docket No. 138.] Defendants do not oppose 21 the motion for attorneys’ fees but filed a limited opposition to the final approval motion 22 (“Opp’n”), to which Norton replied (“Reply”). [Docket Nos. 145, 146.] The court held a hearing 23 on January 13, 2022. For the reasons stated below, both motions are granted. 24 I. BACKGROUND1 25 On October 21, 2008, non-party Arrow Financial Services, LLC (“Arrow”) filed a — 26 — — 27 — 1 A more complete procedural history of this matter may be found in the court’s preliminary 1 collections action against Norton in San Mateo County Superior Court, alleging that Norton failed 2 to tender owed amounts to Arrow. See Third Amended Complaint (“TAC”) ¶ 14. [Docket No. 3 48.] On December 26, 2008, the state court entered a default judgment against Norton in the 4 amount of $3,986.60. Id. ¶ 15. On February 24, 2012, H&Z filed a substitution of counsel to 5 appear on behalf of Arrow in the state court action. Id. ¶ 16; Id., Ex. 2. On May 17, 2012, H&Z 6 caused a writ of execution to issue from a state court in the amount of $5,853.07. Id. ¶ 17. 7 Norton’s wages were garnished in the amount of $323.55 in August and September 2012. Id. 8 Defendants sought and obtained five more writs of execution between December 27, 2013 and 9 September 1, 2017. Id. ¶¶ 17-25. On November 29, 2017, Norton filed a claim of exemption in 10 response to the garnishment of her wages. Id. at ¶ 30. Through December 2017, Defendants 11 allegedly garnished over $1,000 from Norton’s paycheck. Id. ¶¶ 31-32. On December 15, 2017, 12 an attorney at Housing and Economic Rights Advocates (“HERA”) wrote a letter to H&Z on 13 Norton’s behalf stating that the wage garnishment appeared to be improper because, unknown to 14 Norton, Arrow had filed a Certificate of Cancellation with the California Secretary of State in 15 October 10, 2012. Id. ¶ 37. No other party had established itself as Arrow’s assignee of record. 16 Id. H&Z subsequently filed a notice terminating the garnishment of Norton’s wages. Id. Norton 17 was “reimbursed some, but not all” of her garnished wages. Id. ¶ 39. 18 On February 13, 2018, an H&Z attorney informed Norton’s attorney at HERA that H&Z 19 represented LVNV rather than Arrow. Id. ¶ 36. According to Norton, LVNV had acquired the 20 judgment against her from Arrow in 2012 but did not disclose this fact to the state court or to 21 Norton until 2018. Id. ¶¶ 41-43. On May 11, 2018, Norton filed a motion in the state court action 22 to quash the prior writs of execution. Id. ¶ 40. On June 29, 2018, the court granted the unopposed 23 motion on the grounds that “no acknowledgment of assignment of judgment has been filed as 24 required by Code of Civil Procedure § 673.” Id. On September 7, 2018, H&Z filed an 25 Acknowledgment of Assignment of Judgment in the state court action pursuant to California Code 26 of Civil Procedure § 673; it acknowledges the assignment of the judgment against Norton from 27 Arrow to LVNV. [Docket No. 37-1, Ex. B.] 1 action to enforce the judgment without first complying with section 673. She asserts individual 2 and class claims under the FDCPA, the Rosenthal Act, and the UCL. 3 On October 6, 2020, the court certified a class encompassing all California residents who 4 meet the following conditions defined as follows: 5 a. LVNV Funding, LLC, represented by Law Office of Harris & Zide, took judicial action (including obtaining Writs of Execution, wage garnishment, — 6 — and bank levy) after August 17, 2014 (four years prior to the filing of this 7 action) to collect a judgment based on a consumer debt obtained in a California court; — 8 — b. Arrow Financial Services, LLC was the plaintiff of record at the time the 9 judgment was entered; and 10 c. LVNV Funding, LLC did not file an Assignment of Judgment in conformity with California Code of Civil Procedure § 673 or otherwise — 11 — become the assignee of record. — 12 — See Order on Motion for Class Certification at 4 [Docket No. 103]. The certified class — 13 — encompassed a four-year class period corresponding to the statute of limitations for UCL claims. — 14 — The court also certified a subclass defined identically as the class but with a class period limited to — 15 — August 17, 2017 to the present, corresponding to the statute of limitations for FDCPA and — 16 — Rosenthal Act claims. — 17 — Thereafter, the parties engaged in mediation and reached a settlement to resolve all of — 18 — Norton’s claims. Norton filed a first motion for preliminary approval of the settlement on March — 19 — 11, 2021. [Docket No. 118.] During the hearing, the court raised several concerns about the — 20 — settlement. The parties agreed to withdraw the motion and renegotiate certain terms. They filed a — 21 — new motion for preliminary approval on May 28, 2021. [Docket No. 132.] The court held a — 22 — second hearing and granted the motion on July 23, 2021. — 23 — The settlement agreement (“Agreement”) provides for (1) reimbursement, with interest, of — 24 — all amounts Defendants collected from class members; (2) a total of $50,000 to be distributed to — 25 — subclass members equally; (3) withdrawal of all claims court costs and interest on court costs for — 26 — open counts, and (4) complete cessation of collective activity on closed activity. Agreement — 27 — 1 §§ 4.04-4.03.2 The specific terms of the Agreement and the court’s preliminary evaluation of 2 those terms are set forth in detail in the court’s preliminary approval order and are not repeated 3 here. Prelim. Approval Order at 4-8. 4 II. CAFA NOTICE 5 The Class Action Fairness Act (“CAFA”) requires that each defendant serve a notice 6 containing certain required information upon the appropriate state and federal officials within ten 7 days of the filing of a proposed settlement. 28 U.S.C. § 1715 (b). CAFA also prohibits a court 8 from granting final approval until ninety days have elapsed since notice was served under that 9 provision. Id. § 1715(d). This case is subject to CAFA’s requirements. 10 The Claims Administrator for this case, CPT Group, Inc., (“CPT”) confirmed that it 11 provided CAFA notice on June 7, 2021. Declaration of Katie Tran (“Tran Decl.”) ¶ 4 [Docket No. 12 143-2.] The parties also represented at the second preliminary approval hearing that CAFA Notice 13 was complete. See Prelim. Approval Order at 26. Accordingly, the CAFA notice requirement has 14 been satisfied. 15 III. MOTION FOR FINAL APPROVAL 16 “The Ninth Circuit maintains a ‘strong judicial policy’ that favors the settlement of class 17 actions.” McKnight v. Uber Techs., Inc., No. 14-cv-05615-JST, 2017 WL 3427985 , at *2 (N.D. 18 Cal. Aug. 7, 2017) (quoting Class Plaintiffs v. City of Seattle, 955 F.2d 1268, 1276 (9th Cir. 19 1992)). The settlement of a certified class action must be “fair, reasonable, and adequate.” Fed. 20 R. Civ. P. 23(e)(2). “The court’s role in reviewing a proposed settlement is to represent those 21 class members who were not parties to the settlement negotiations and agreement.” Tadepalli v. 22 Uber Techs., Inc., No. 15-cv-04348-MEJ, 2016 WL 1622881 , at *6 (N.D. Cal. Apr. 25, 2016). 23 The court maintains an independent duty to examine the fairness of the settlement under Rule 24 23(e) and the factors articulated in Churchill Village, L.L.C. v. General. Electric, 361 F.3d 566 , — 25 — — 26 — 2 The Agreement is attached as Exhibit 1 to the Declaration of William E. Kennedy in support of 27 Norton’s motion for final approval (“Kennedy Decl.”). [Docket No. 143-1.] At the hearing, class counsel indicated that given the number of valid claims processed, each sub-class member will 1 575 (9th Cir. 2004). See In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935, 946 (9th Cir. 2 2011). 3 In granting the motion for preliminary approval, the court thoroughly examined the 4 fairness of the settlement under the Rule 23(e)(2) factors, the Churchill Village factors, and the 5 Northern District of California’s Procedural Guidance for Class Action Settlements (“Procedural 6 Guidance”).3 Prelim. Approval Order at 8-27. The court need not revisit its prior findings and 7 addresses only the matters that could not be resolved at preliminary approval: (1) whether notice 8 to the class was effective; (2) whether the class member response was favorable; (3) whether the 9 requested attorneys’ fees and costs are reasonable; and (4) whether Norton is entitled to a service 10 payment, also known as an incentive award.4 The court also addresses the suitability of the 11 parties’ intended cy pres recipient. 12 A. Adequacy of Notice 13 Rule 23 requires the court to consider “the effectiveness of any proposed method of 14 distributing relief to the class, including the method of processing class-member claims.” Fed. R. 15 Civ. P. 23(e)(2)(C)(ii). “Adequate notice is critical to court approval of a class settlement under 16 Rule 23(e).” Hanlon v. Chrysler Corp., 150 F.3d 1011, 1025 (9th Cir. 1998). “[N]otice must be 17 ‘reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of 18 the action and afford them an opportunity to present their objections.’” Tadepalli, 2016 WL 19 1622881, at *6 (quoting Mullane v. Cent. Hanover Bank & Tr. Co., 339 U.S. 306, 314 (1950)). 20 The court previously found that the Agreement’s provisions for class notice were adequate 21 and reasonably calculated to apprise class members of their rights under the settlement. Prelim. 22 Appr. Order at 18-20; see Agreement § 5.05, Ex. A. The court also found that the claims process 23 was not burdensome. Prelim. Appr. Order at 20; see Agreement, Ex. B. 24 The Procedural Guidance requires class counsel to provide the numbers of undeliverable — 25 — — 26 — 3 Available at https://www.cand.uscourts.gov/ClassActionSettlementGuidance. — 27 — 4 See also Procedural Guidance, “Final Approval” (establishing guidelines on class members’ 1 class notices and class members who submitted valid claims. According to CPT’s declaration, the 2 class notice was sent via U.S. Mail to 453 class members on September 21, 2021. Tran Decl. ¶ 6. 3 Of those, the post office forwarded five notices to new addresses and returned thirty notices to 4 CPT as undeliverable and without a forwarding address. Id. ¶ 7. CPT then located new addresses 5 for twelve individuals and re-mailed the notices to them. Id. Ultimately, eighteen class notices 6 remain undeliverable. CPT established a settlement website as well as a twenty-four-hour toll-free 7 hotline and email address to communicate with class members. Id. ¶¶ 5, 8-9. 8 CPT reports that it received fifty-six total responses to the notice, of which twelve were 9 duplicates and thus deemed invalid. Tran Decl. ¶ 11-12. CPT determined that forty-four class 10 members—of which twenty-five were sub-class members—submitted valid claims. Id. ¶ 14. (The 11 court addresses a dispute over two claims in the next sections). CPT collected $140,575.51 from 12 the class members with valid claims. Id. Of the 453 notices mailed, only eighteen were ultimately 13 not delivered, meaning that 96 percent of notices were successfully mailed. Only forty-four 14 notices mailed resulted in actual claims, which the court independently calculates as a claims rate 15 of about ten percent. This rate falls at the high end of the expected claim rate of five to ten percent 16 that the parties previously represented to the court. See Prelim. Approval Order at 19. Therefore, 17 the court finds that the notice distribution plan was the “best notice that is practicable under the 18 circumstances,” consistent with Rule 23(c)(2). 19 1. Rosa Castaneda’s Claim 20 The parties contest the validity of two class member’s claims.5 CPT received a claim 21 request from an individual named Rosa Vazquez, who enclosed a name change petition with her 22 claim form. Tran Decl. ¶ 13; Supplemental Declaration of Katie Tran (“Tran Suppl. Decl.”) ¶ 3 — 23 — — 24 — 5 The Agreement provides that “[i]n the event that Class Counsel or Defendants’ Counsel disagree 25 with the decision of the Class Administrator to accept or reject a Claim Form, Counsel shall meet and confer in good faith to attempt to reach a resolution. In the event that Counsel reach an — 26 — agreement as to how to treat the disputed Claim Form, the Class Administrator must comply with 27 that agreement, as long as it is consistent with terms of this Agreement. In the event that Counsel cannot reach an agreement as to how to treat the disputed Claim Form, they will jointly raise the 1 [Docket No. 146-1.]6 Defendants’ affidavit includes this individual’s initial claim form signed by 2 Rosa Castaneda. Declaration of R. Travis Campbell (“Campbell Decl.”) Ex. A [Docket No. 1453 1.] The enclosed petition—which the Central District of California granted on March 1, 2011— 4 reflected a request by an individual named Rosa Maria Castaneda Robles to legally change her 5 name to Rosa Maria Castaneda as part of her naturalization process. Id. On December 10, 2021, 6 CPT emailed a spreadsheet to class and defense counsel containing responses it received from 7 class members, including one by a claimant named Rosa Vazquez or Rosa Castaneda. Campbell 8 Decl. ¶ 2; Supplemental Declaration of William Kennedy (“Kennedy Suppl. Decl. ¶¶ 2-3) [Docket 9 No. 146-2.] The spreadsheet marked Castaneda’s claim form as deficient. Kennedy Suppl. Decl. 10 ¶ 3. Class counsel William Kennedy acknowledged receipt of the spreadsheet, informed CPT that 11 he would challenge that determination, and requested further information about it. Campbell Decl. 12 Ex. B. The class administrator replied on December 13, 2021 that “Rosa Vazquez’s claim form is 13 deficient since we were unable to locate her name in the provided name change document. The 14 name on the provided document shows Rosa Maria Castaneda Robles.” Campbell Decl. Ex. B.; 15 see Kennedy Suppl. Decl. ¶ 4. Kennedy attests that “[t]he email did not mention that CPT was, or 16 would be in communication with Ms. Castaneda to obtain additional information.” Kennedy 17 Suppl. Decl. ¶ 4. 18 Kennedy then wrote Castaneda a letter informing her that her claim form was deemed 19 invalid out of concern that she might “lose out on her opportunity to obtain financial benefits from 20 the class settlement.” Kennedy Suppl. Decl. ¶ 5. He said he “believe[d] it was his duty as class 21 counsel to assist class members . . . and did not realize that CPT would be working with Ms. 22 Castaneda to obtain the additional information.” Id. 23 On December 21, 2021, class counsel replied that he “made contact with [Castaneda] and 24 ha[s] worked with her to prepare the attached declaration.” Id. Ex. C. His email enclosed a sworn 25 declaration from Castaneda in which she stated that her given name at birth was Rosa Maria — 26 — 27 6 The Tran Declaration and Supplemental Tran Declaration refer to this class member as Rosa Vazquez. In light of how the class member identifies herself in her declaration, the court refers to 1 Castaneda Robles, but that she “generally used the name Rosa Vazquez” after she married and 2 adopted her husband’s last name. Id. Ex. D. ¶¶ 2-3. After she naturalized, she decided to change 3 her name to “Rosa Maria Castaneda.” Id. ¶ 4. She received a claim form addressed to “Rosa 4 Vazquez,” although the wages garnished from her employer were under “Rosa Castaneda.” Id. 5 ¶ 6. Castaneda provided her marriage certificate, wage garnishment order, a pay stub, a letter 6 from San Bernardino County, and her driver’s license that alternate between using the names Rosa 7 Vazquez and Rosa Castaneda. Id. ¶¶ 8-10. After receiving this email and declaration, CPT 8 determined that Castaneda presented a valid claim and updated her claim form to reflect her name 9 as Rosa Maria Castaneda Robles. Campbell Decl. ¶ 6; Tran Decl. ¶ 13. 10 According to the class administrator, CPT mailed a letter to Castaneda on December 21, 11 2021 requesting additional documentation about her name change. Tran Suppl. Decl. ¶ 4. 12 Castaneda replied by phone and email to CPT on December 29. Id. ¶¶ 4-5. CPT communicated 13 with her and reviewed her supporting documentation, and thereafter determined her information 14 was sufficient, approved her name change, and updated her claim form as “Rosa Maria Castaneda 15 Robles.” Id. ¶ 7. 16 Nevertheless, Defendants challenged Castaneda’s claim because of Kennedy’s 17 communications with her. Opp’n at 2. The Agreement prohibits counsel from “attempting to 18 affirmatively contact Class Members to discuss the litigation, the Settlement or the contents of or 19 response to the Claim Form. Class Counsel may, however, respond to any questions from 20 potential Class Members if the potential Class Members contact Class Counsel first.” Agreement 21 § 5.09. Kennedy’s own email to CPT and Defendants’ counsel plainly states that he contacted 22 Castaneda after CPT’s attempts. Campbell Decl. Ex. C. However, Kennedy admits that he “did 23 not think about the prohibition in the Settlement Agreement on direct communications with class 24 members when [he] sent the letter to Ms. Castaneda.” Kennedy Suppl. Decl. ¶ 5. He avers that he 25 “believe[d] the provision was negotiated by Defendants to prohibit Class Counsel from advising 26 Class Members as to the definition of ‘consumer debt’ during the claim process, and did not think — 27 — 1 of the applicability of the provision outside of that context.” Id.7 2 Based on Castaneda’s documentation and the class administrator’s sworn affidavits, the 3 court is satisfied that Rosa Vazquez and Rosa Castaneda is the same person. Therefore the court 4 overrules Defendants’ objection and permits her claim. As the court stated at the fairness hearing, 5 while the plain language of the Agreement bars communications initiated by class counsel to class 6 members, the appropriate remedy for this violation is not invalidating an otherwise valid claim. 7 CPT communicated with Castaneda apart from Kennedy. CPT’s own independent investigation of 8 Castaneda’s name and claim, as attested by the claim administrator, resulted in its determination 9 that she had a valid claim—not any steps taken by Kennedy. Because there is no evidence that 10 Castaneda’s claim is invalid, the court will not penalize her for actions performed by class 11 counsel. 12 The court finds that Kennedy did violate the terms of the settlement, even if not 13 purposefully or willfully, and admonishes him for initiating an improper communication with a 14 class member. 15 2. Rosa Della Porta’s Claim 16 Norton also challenges CPT’s ruling invalidating a late claim by Rosa Della Porta as 17 untimely.8 Della Porta claims $232.86 from the settlement and an equal share of $50,000 as a sub18 class member. [Docket No. 148-2.] Della Porta represents that she signed and mailed her claim — 19 — — 20 — 7 Kennedy also objected that the parties failed to sufficiently meet and confer about Castaneda’s 21 claim before Defendants challenged it. On December 21, he sent an email to defense counsel explaining that he disagreed with CPT’s decision that Castaneda’s claim was invalid. Kennedy 22 Suppl. Decl. Ex. 1. He explained that Castaneda “submitted a timely Claim Form, accurately checked the ‘Yes’ box, and accurately wrote and signed her true name, address, and last four digits 23 of her social security number,” thereby satisfying the claim requirements. Id. Defense counsel replied the next day that they would “look at this and circle back.” Id. Kennedy represents that — 24 — “at no time has Defendants’ counsel contacted [him] to meet and confer” and only responded by 25 adding a footnote to the motion indicating they did not concede the validity of her claim. Kennedy Suppl. Decl. ¶ 7. — 26 — 8 Norton initially advised the court of a likely dispute over the timeliness of Della Porta’s claim in 27 her reply brief filed the day before the fairness hearing. See Reply at 4. At that time, CPT had not made a determination about the claim. At the hearing, the court ordered CPT to issue its ruling by 1 form to CPT on November 15, 2021 (before the December 6 deadline for responses). Kennedy 2 Suppl. Decl. Ex. 2 (Declaration of Rosa M. Della Porta (“Della Porta Decl.”)) ¶ 2 [Docket No. 3 146-3]; see Della Porta Decl. Ex. 2 (Della Porta’s claim form dated November 15, 2021). 4 However, she inadvertently switched the addresses on her envelope, thereby placing CPT’s 5 address where her return address should go, and vice versa. Id. ¶ 2. The post office returned her 6 envelope to her on January 6, 2022. Id. ¶ 4. Della Porta then contacted Kennedy and CPT. Id. ¶ 7 5. CPT instructed her to send them a copy of the envelope and claim form, which she did on 8 January 10. Id. ¶ 5. CPT determined that her claim form was “untimely but otherwise valid.” 9 Declaration of William Kennedy Ex. 1 [Docket No. 148-1.] Class counsel thereafter challenged 10 CPT’s ruling; Defendants did not file an opposition or statement of non-opposition. [Docket No. 11 1487.] 12 “A district court has discretion to allow late claims to a settlement fund.” Lemus v. H & R 13 Block Enters., LLC, No. C 09-03179 SI, 2013 WL 3831866 , at *2 (N.D. Cal. July 23, 2013) (citing 14 In re Valdez, 289 F. App’x 204, 206 (9th Cir. 2008)); see In re Gypsum Antitrust Cases, 565 F.2d 15 1123, 1128 (9th Cir. 1977). Multiple circuits had held that the court maintains an inherent 16 equitable power to “allow late-filed proofs of claim and late-cured proofs of claim.” In re 17 Cendant Corp. Prides Litig., 233 F.3d 188, 195 (3d Cir. 2000); accord Burns v. Elrod, 757 F.2d 18 151, 155 (7th Cir. 1985); Zients v. LaMorte, 459 F.2d 628, 630 (2d Cir. 1972); cf. Silber v. Mabon, — 19 — 18 F.3d 1449 , 1454 (9th Cir. 1993) (recognizing that “the district court has discretion to extend a 20 class member’s time to opt out” of a class settlement). The Manual for Complex Litigation also 21 recommends that “[t]he court should allow adequate time for late claims before any refund or 22 other disposition of settlement funds occurs.” Manual for Complex Litigation (Fourth) § 21.662 23 (2004). Courts regularly permit late-filed claims for “excusable neglect” or “good cause.” See 24 Silber, 18 F.3d at 1455; Gypsum, 565 F.2d at 1128 ; see also Valdez, 289 F. App’x at 206 (noting 25 that district court permitted late-filed claims by claimants with “plausible excuses for not filing 26 timely”). The excusable neglect inquiry contemplates “the danger of prejudice to the [opposing 27 party], the length of the delay and its potential impact on judicial proceedings, the reason for the 1 movant acted in good faith.” Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P’ship, 507 U.S. 2 380, 395 (1993). 3 The court overrules CPT’s determination and permits Della Porta’s claim. The evidence in 4 her declaration shows that she mailed her claim well before the deadline for filing claims— 5 December 6, 2021. Her error addressing the envelope was inadvertent, and she received her mis6 addressed envelope back after the deadline expired because of processing delays by postal service. 7 Promptly thereafter she contacted class counsel and provided a sworn affidavit testifying as to 8 what happened, evidencing her good faith attempts to fix the problem. CPT expressly declared 9 her claim otherwise valid. Good cause accordingly supports class counsel’s request to permit 10 Della Porta’s claim. 11 B. Class Members’ Response 12 “Courts have repeatedly recognized that the absence of a large number of objections to a 13 proposed class action settlement raises a strong presumption that the terms of a proposed class 14 settlement action are favorable to the class members.” De Leon v. Ricoh USA, Inc., No. 18-cv15 03725-JSC, 2020 WL 1531331 , at *11 (N.D. Cal. Mar. 31, 2020) (citation omitted); Churchill 16 Vill., L.L.C., 361 F.3d at 577 . “A low number of opt-outs and objections in comparison to class 17 size is typically a factor that supports settlement approval.” In re Linkedin User Privacy Litig., — 18 — 309 F.R.D. 573, 589 (N.D. Cal. 2015). The Procedural Guidance requires class counsel to provide 19 the numbers of class members who opted out of the settlement, and class members who objected 20 to the settlement 21 Here, no class members have opted out of the settlement. Tran Decl. ¶ 15. Nor has the 22 clerk’s office or the Claims Administrator received any objections to the settlement by the 23 deadline. Id. ¶ 16; see also Dec. 22, 2021 Report on Exclusions of Class Members [Docket No. 24 142.]. The lack of exclusions or objections “indicat[es] overwhelming support among the class 25 members.” McLeod v. Bank of Am., N.A., No. 16-CV-03294-EMC, 2019 WL 1170487 , at *3 26 (N.D. Cal. Mar. 13, 2019) (quotation omitted); see also Schuchardt v. L. Off. of Rory W. Clark, — 27 — 314 F.R.D. 673, 686 (N.D. Cal. 2016) (final approval warranted in FDCPA and Rosenthal Act 1 overwhelmingly support from the class weighs strongly in favor of granting final approval. 2 C. Cy Pres Award 3 A cy pres award is “a tool for ‘distributing unclaimed or non-distributable portions of a 4 class action settlement fund to the next best class of beneficiaries.’” In re Google Inc. St. View 5 Elec. Commc’ns Litig., 21 F.4th 1102 , 1111 (9th Cir. Dec. 27, 2021) (quoting Nachsin v. AOL, 6 LLC, 663 F.3d 1034, 1036 (9th Cir. 2011). “It is well established in this circuit that district courts 7 may approve settlements with cy pres provisions that affect only a portion of the total settlement 8 fund.” Id. “Cy pres distributions must account for the nature of the plaintiffs’ lawsuit, the 9 objectives of the underlying statutes, and the interests of the silent class members, including their 10 geographic diversity.” Nachshin, 663 F.3d at 1036 . 11 The court previously acknowledged but did not rule on the parties’ proposed cy pres 12 distribution. See Prelim. Approval Order at 7, 17. The court finds that the cy pres proposal is fair 13 and reasonable. The Agreement provides that the aggregate amount of any uncashed settlement 14 checks shall be distributed to the Katherine & George Alexander Law Center. Agreement § 5.20. 15 The Law Center is the clinical civil program for Santa Clara School of Law and a unit of Santa 16 Clara University. Declaration of Scott Maurer (“Maurer Decl.”) ¶ 3 [Docket No. 143-3.] The 17 Law Center provides regular brief service advice clinics, including at the Santa Clara County 18 Superior Court, and full representation to primarily low-income clients with consumer and/or debt 19 issues. Id. ¶¶ 4-5. The most common issue for clinic clients at the superior court relate to 20 collection activity by debt buyers. Id. ¶ 4. Other courts have previously approved the Law Center 21 as an appropriate cy pres recipient in settlements in other consumer-debt related class actions. 22 See, e.g., Newton v. Am. Debt Servs., Inc., No. 11-cv-3228-EMC, 2016 WL 7757521 (N.D. Cal. 23 July 1, 2016); Maurer Decl. ¶ 6 (citing cases in state court). 24 The Law Center’s mission to provide legal assistance to low-income individuals with 25 consumer is sufficiently related to the subject at the heart of this case and the objectives of the 26 FDCPA and the Rosenthal Act to protect consumers against abusive and deceptive practices by 27 debt collectors. See Turner v. Cook, 363 F.3d 1219, 1226 (9th Cir. 2004); Cal. Civ. Code 1 D. Service Award 2 Norton also seeks a $7,000 service award for her work on behalf of the class. Defendants 3 counter that she should receive “no more than $5,000,” which is this district’s presumptively 4 reasonable service award amount. Opp’n at 3. The Agreement provided that she would apply for 5 an award up to $7,000; Defendants would not oppose an award up to $2,000 and reserved their 6 right to object to an award in excess of that amount. Agreement § 6.01. 7 “Incentive awards are payments to class representatives for their service to the class in 8 bringing the lawsuit.” Radcliffe v. Experian Info. Sols. Inc., 715 F.3d 1157, 1163 (9th Cir. 2013). 9 They are “intended to compensate class representatives for work done on behalf of the class, to 10 make up for financial or reputational risk undertaken in bringing the action, and, sometimes, to 11 recognize their willingness to act as a private attorney general. Awards are generally sought after a 12 settlement or verdict has been achieved.” Rodriguez v. W. Publ’g Corp., 563 F.3d 948 , 958-59 13 (9th Cir. 2009) 14 “In order to evaluate the reasonableness of the size of a service award, the Ninth Circuit 15 looks to ‘the number of named plaintiffs receiving incentive payments, the proportion of the 16 payments relative to the settlement amount, and the size of each payment.’” Nevarez v. Forty 17 Niners Football Co., LLC, 474 F. Supp. 3d 1041 , 1048 (N.D. Cal. 2020) (quoting In re Online 18 DVD-Rental Antitrust Litig., 779 F.3d 934, 947 (9th Cir. 2015)). Awards of $5,000 are 19 presumptively reasonable in this district. See, e.g., id.; In re Chrysler-Dodge-Jeep Ecodiesel 20 Mktg., Sales Practices, & Prod. Liab. Litig., No. 17-md-02777-EMC, 2019 WL 536661 , at *9 21 (N.D. Cal. Feb. 11, 2019); Villanueva v. Morpho Detection, Inc, No. 13-cv-05390-HSG, 2016 WL 22 1070523 (N.D. Cal. Mar. 18, 2016). The Procedural Guidance requires that “all requests for 23 incentive awards must be supported by evidence of the proposed awardees’ involvement in the 24 case and other justifications for the awards.” 25 As Norton seeks a service award higher than the presumptively reasonable level, the court 26 scrutinizes her request carefully. Norton recounts that she has been in frequent contact with her 27 attorneys through the litigation. Declaration of Sonia Norton (“Norton Decl.”) ¶ 6 [Docket No. 1 responses to Defendants’ discovery requests. Id. She had her deposition taken and spent several 2 hours preparing with her attorneys beforehand. Id. ¶ 3 . She also attended two mediation sessions. — 3 — Id. ¶¶ 4-5 . Norton does not quantify the amount of time that she spent working on the case. 4 Norton’s work on behalf of the class appears typical of other named plaintiffs in these 5 cases. Other courts have awarded $5,000 or less to class representatives for performing similar 6 tasks. See, e.g., Villanueva, 2016 WL 1070523 , at *7 (awarding $2,500 where “[p]laintiff helped 7 class counsel investigate the claims, connected class counsel with putative class members, helped 8 respond to written discovery, sat for a full-day deposition, and attended a full-day ADR session.”); 9 In re Toys R Us-Delaware, Inc.—Fair & Accurate Credit Transactions Act (FACTA) Litig., 295 10 F.R.D. 438, 471 (C.D. Cal. 2014) ($5,000 where “plaintiffs expended reasonable efforts on the 11 litigation” including responding to “intrusive discovery” and “regular[] and consistent[]” 12 communication with class counsel over seven years). 13 Norton points to class settlements in wage-and-hour cases in which the courts, including 14 this court, awarded $7,500 service awards. See, e.g., Cruz v. Sky Chefs, Inc., No. C-12-0250715 DMR, 2014 WL 7247065 , at *6 (N.D. Cal. Dec. 19, 2014) ($7,000 award); Jacobs v. Cal. State 16 Auto. Ass’n Inter-Ins. Bureau, No. C07-00362-MHP, 2009 WL 3562871 , at *5 (N.D. Cal. Oct. 27, 17 2009) ($7,500 award). In employment cases, plaintiffs often “undertake a significant reputational 18 risk by bringing suit against their former employers.” Bellinghausen v. Tractor Supply Co., 306 19 F.R.D. 245 , 287 (N.D. Cal. 2015). Norton does not establish that she suffered any financial or 20 reputational harm or retaliation for serving as class representative. Compare, e.g., McLeod v. 21 Bank of Am., N.A., 2019 WL 1170487 , at *9 ($15,000 service award reasonable where plaintiff 22 believed that the defendant “terminated her employment in part due to her prosecution of the 23 subject lawsuit”); Bellinghausen, 306 F.R.D. at 287 (awarding $15,000 where plaintiff averred he 24 lost job opportunities and feared future reputational harm); Cruz v. Sky Chefs, 2014 WL 7247065 , 25 at *6 (awarding $7,000 where plaintiff undertook a “financial risk” with the case). 26 Norton also points out that she is not eligible for any portion of the $50,000 fund reserved 27 for subclass members, even though she is a member of the subclass. Approval Mot. at 15; see 1 that is to be distributed to Subclass Members.”). At the hearing, Kennedy argued that because of 2 her role as a class representative, she is foregoing her claim to a statutory award of civil penalties. 3 However, under 15 U.S.C. § 1692k(2) expressly entitles a prevailing named plaintiff to a 4 maximum of $1,000 in civil penalties and “such amount as the court may allow for all other class 5 members, without regard to a minimum individual recovery.” See also Cal. Civ. Code § 6 1788.30(b) (authorizing statutory damages for an individual up to $1,000). Norton therefore is 7 entitled to only up to $2,000 by law; she did not waive her right to an additional payment because 8 she assumed the role of class representation. The court is thus persuaded that Norton’s eligibility 9 for FDCPA-related claims does not justify an exceptional service award. See also Harper v. L. 10 Off. of Harris & Zide LLP, No. 15-CV-01114-HSG, 2017 WL 995215 , at *6 (N.D. Cal. Mar. 15, 11 2017) (FCDPA case in which named plaintiffs did not even seek service awards because the 12 defendants agreed to pay $1,000 as statutory damages); Schuchardt, 314 F.R.D. at 691 (same). 13 The court values and recognizes Norton’s service on behalf of the class resulting in an 14 important settlement for judgment debtor. Nevertheless, her work does not justify deviation from 15 the Ninth Circuit’s presumptively reasonable standard of $5,000. Accordingly, the court awards a 16 $5,000 service payment to Norton, to be issued in accordance with the procedures set forth in 17 section 6.01 of the Agreement. 18 * * * 19 Considering the above factors and the factors evaluated in the Preliminary Approval Order, 20 the court finds that the Agreement is fair, adequate, and reasonable, and that the class members 21 received adequate notice. Accordingly, the court grants Norton’s motion for final approval of the 22 class action settlement. 23 IV. MOTION FOR ATTORNEYS’ FEES 24 Next, the court addresses Norton’s unopposed motion for attorneys’ fees. Class counsel 25 seek an award of $239,373.00 in attorney’s fees and $2,053.58 in costs. The Agreement provided 26 for an award “not to exceed $241.426.58,” which is the total sum that class counsel requests here. 27 Agreement § 7.01. Defendants agreed that they would not oppose a request for fees as long as the 1 approval stage and ruled that class counsel’s requested rates “appear to be within a reasonable 2 range” and their hours billed “are not clearly unreasonable.” Prelim. Approval Order at 21. 3 Nonetheless, the court deferred ruling on the specific amount of attorneys’ fees and costs until the 4 final fairness hearing. Id. 5 “In a certified class action, the court may award reasonable attorney’s fees and nontaxable 6 costs that are authorized by law or by the parties’ agreement.” Fed. R. Civ. P. 23(h). Also, “[i]n 7 order to encourage private enforcement of the law . . . Congress has legislated that in certain cases 8 prevailing parties may recover their attorneys’ fees from the opposing side.” Camacho v. 9 Bridgeport Fin., Inc., 523 F.3d 973, 978 (9th Cir. 2008) (quoting Staton v. Boeing Co., 327 F.3d 10 938, 965 (9th Cir .2003)). The FDCPA is such a statute, as it authorizes that “any debt collector 11 who fails to comply with its provisions is liable ‘in the case of any successful action . . . [for] the 12 costs of the action, together with a reasonable attorney’s fee as determined by the court.’” Id. 13 (quoting 15 U.S.C. § 1692k(a)(3)) (alterations in original). “The FDCPA’s statutory language 14 makes an award of fees mandatory.” Id. 15 Even where, as here, the parties’ agreement provides for attorneys’ fees, “courts have an 16 independent obligation to ensure that the award, like the settlement itself, is reasonable.” 17 Bluetooth, 654 F.3d at 941 . The “lodestar method” is appropriate in class actions brought under 18 fee-shifting statutes.” Camacho, 523 F.3d at 978 (9th Cir. 2008); see Harper, 2017 WL 995215 , 19 at *6 (N.D. Cal. Mar. 15, 2017) (calculating attorneys’ fees in a FDCPA and Rosenthal Act class 20 settlement using the lodestar method); Schuchardt, 314 F.R.D. at 688 (same). The court 21 previously ruled that the lodestar method is appropriate here. Prelim. Approval Order at 20.9 22 “The lodestar figure is calculated by multiplying the number of hours the prevailing party 23 reasonably expended on the litigation (as supported by adequate documentation) by a reasonable — 24 — 25 9 Plaintiffs seek attorneys’ fees apart from the class members’ recovery. See Agreement § 7.01. Although the statutory fee award and forgiveness of court costs is not distributed on a claims26 made basis, the lodestar method is nevertheless appropriate since most of the monetary relief is 27 based on the number of claims submitted. The other method of calculating attorneys’ fees, as a percentage of recovery from the common fund, is inappropriate here. See also Schuchardt, 314 1 hourly rate for the region and for the experience of the lawyer.” Bluetooth, 654 F.3d at 941 . 2 “Though the lodestar figure is presumptively reasonable, the court may adjust it upward or 3 downward by an appropriate positive or negative multiplier reflecting a host of “reasonableness” 4 factors.” Id. at 941-42 (internal citations and quotations omitted). “Foremost among these 5 considerations, however, is the benefit obtained for the class.” Id. 6 A. Reasonable Hours 7 First, the court “must determine a reasonable number of hours for which the prevailing 8 party should be compensated.” Gonzalez v. City of Maywood, 729 F.3d 1196, 1202 (9th Cir. 9 2013). “The number of hours to be compensated is calculated by considering whether, in light of 10 the circumstances, the time could reasonably have been billed to a private client.” Moreno v. City 11 of Sacramento, 534 F.3d 1106, 1111 (9th Cir. 2008). The party seeking the fee award bears the 12 “the burden of submitting billing records to establish that the number of hours it has requested are 13 reasonable.” Gonzalez, 729 F.3d at 1202 . 14 Class counsel testifies that it billed 541.77 hours on this matter, divided between 438.7 15 hours by attorney William E. Kennedy and 103.07 hours by three attorneys at HERA. Fees Mot. 16 at 9; Declaration of William E. Kennedy (“Kennedy Fees Decl.”) ¶ 5; Declaration of Gina Di 17 Giusto (“Di Giusto Decl.”) ¶ 22 [Docket Nos. 139, 140.] Class counsel categorized their hours 18 spent on different stages of the case ranging from conducting the initial investigation to preparing 19 this fees motion. Kennedy Fees Decl. ¶ 5; Di Giusto Decl. ¶ 22. They do not seek reimbursement 20 of certain administrative costs. Kennedy Fees Decl. ¶ 3; Di Giusto Decl. ¶¶ 21, 24. 21 Class counsel’s chronological summary of their work is sufficient to evaluate their hours 22 worked. See Schuchardt, 314 F.R.D. at 690 . (“The Court may rely on summaries of hours 23 worked, and contemporaneous billing records are unnecessary.”). As the court previously 24 observed, while class counsel billed a large number of hours, this case has involved extensive 25 litigation, including two motions to dismiss, Defendants’ motion to amend its answer, class 26 certification (and opposing Defendants’ subsequent petition to appeal the class certification order), 27 Norton’s deposition, two mediation sessions, and multiple rounds of settlement negotiations and 1 there is no indication that any of the hours billed on each category of work is redundant, 2 duplicative, or excessive. See Gonzalez, 729 F.3d at 1203 . HERA’s attorneys further testified that 3 they removed any duplicate entries. Di Giusto Decl. ¶ 24. Accordingly, the court finds that class 4 counsel’s hours billed are reasonable. 5 B. Reasonable Rate 6 Next, the court “must determine a reasonable hourly rate to use for attorneys and 7 paralegals in computing the lodestar amount.” Gonzalez, 729 F.3d at 1205 . “Generally, when 8 determining a reasonable hourly rate, the relevant community is the forum in which the district 9 court sits.” Camacho, 523 F.3d at 979 . The court must rely on the prevailing rate in the 10 community “for similar work performed by attorneys of comparable skill, experience, and 11 reputation.” Id. (quoting Barjon v. Dalton, 132 F.3d 496, 502 (9th Cir. 1997)). The fee 12 applicants must testify that “the requested rates are in line with those prevailing in the community 13 for similar services by lawyers of reasonably comparable skill, experience and reputation.” Id. 14 (quoting Blum v. Stenson, 465 U.S. 886 , 895 n.11 (1984). Their “affidavits . . . and rate 15 determinations in other cases are satisfactory evidence of the prevailing market rate.” Id. (quoting 16 United Steelworkers of Am. v. Phelps Dodge Corp., 896 F.2d 403, 407 (9th Cir.1990)). 17 Kennedy requests a $600 hourly billing rate. Kennedy Fees Decl. ¶ 6. He has over 18 twenty-nine years of relevant experience and has practiced law since 1990. Id. ¶ 11. Virtually all 19 of his cases involved consumer protection laws, including debt collection matters. Id. ¶ 11. 20 Kennedy has served as co-counsel in at least ten certified class actions, four putative class actions 21 that reached settlements, and many other cases resulting in published decisions in state or federal 22 court. Id. ¶¶ 11-14. 23 Kennedy does not provide an estimate of the reasonable prevailing hourly rate for 24 attorneys of his experience level in the San Francisco Bay Area. However, his rate falls well 25 within the prevailing hourly rates for civil rights attorneys here. Gonzales v. City of San Jose, No. 26 13-CV-00695-BLF, 2016 WL 3011791 , *4 (N.D. Cal. May 26, 2016) (surveying cases). At least 27 one court has previously confirmed a $600 hourly rate in a FDCPA case for an attorney 1 v. Performant Recovery, Inc., No. 14-cv-850-JD, 2016 WL 310268 , at *2 (N.D. Cal. Jan. 26, 2 2016). Also, over four years ago, another court in this district approved a fee award for Kennedy 3 at a $550 hourly rate. Castillo v. Nationstar Mortg. LLC, No. 15-CV-01743-BLF, 2017 WL 4 6513653, at *4 (N.D. Cal. Dec. 20, 2017). State courts in Santa Clara County and Napa County 5 previously approved a $475 hourly rate for Kennedy in 2012 and 2013. See Kennedy Fees Decl. 6 Ex. 3-4. In light of these decisions rendered over several years ago and the length of this lawsuit, 7 a normal adjustment of rates to reflect their present value is warranted. See Welch v. Metro. Life 8 Ins. Co., 480 F.3d 942, 947 (9th Cir. 2007) (“District courts have the discretion to compensate 9 plaintiff’s attorneys for a delay in payment by . . . using the attorneys’ historical rates and adding a 10 prime rate enhancement.”). The court therefore finds that Kennedy’s billing rate is reasonable. 11 HERA’s attorneys also request a billing rate of $400 for Gina Di Giusto, $475 for Noah 12 Zinner, and $400 for Natalie Lyons. Di Giusto Decl. ¶¶ 9, 16, 21. Di Giusto has practiced law 13 since 2013 and has substantial experience litigating consumer protection cases in federal and state 14 court. Id. ¶ 5, 8. Zinner has practiced since 2006 and also has substantial experience in consumer 15 protections, including serving as primary counsel in an important decision on fair debt collection 16 on mortgage loans. Id. ¶¶ 13-14. Lyons has practiced since 2013 and has litigated several class 17 actions. Id. ¶¶ 19-20. Another court in this district previously awarded attorneys’ fees to Di 18 Giusto and Zinner based on rates of $350 and $475, respectively, in a FDCPA class action. 19 Hanson v. JQD, LLC, No. 13-cv-5377-RS, slip op. at 1 (N.D. Cal. April 27, 2017) (ECF No. 92); 20 see id. (ECF No. 83-2) (declaration setting forth Zinner’s and Di Giusto’s billing rates). HERA’s 21 attorneys’ billing rates are in line with the prevailing rates for attorneys in this community of their 22 experience and subject-matter expertise. The court therefore finds that the rates for Di Giusto, 23 Zinner, and Lyons are reasonable. 24 C. Lodestar Calculation 25 Based on the billing hours and rates provided above, class counsel—and, independently, 26 the court—calculates its lodestar amount as $305,595.50. See Kennedy Fees Decl. ¶ 5; Di Giusto 27 Decl. ¶¶ 22, 25. “After determining the lodestar, the Court divides the total fees sought by the 1 requested are less than the lodestar, the calculation results in a negative multiplier, meaning that 2 || class counsel reduced their fees. “[C]ourts view self-reduced fees favorably.” Jd. (citing cases). 3 The negative multiplier “strongly suggests the reasonableness of [a] negotiated fee” in this case. 4 Rosado v. Ebay Inc., Case No. 12-cv-04005-EJD, 2016 WL 3401987 , at *8 (N.D. Cal. June 21, 5 || 2016). 6 For the foregoing reasons, the court finds that class counsel’s request for attorneys’ fees is 7 || reasonable. 8 D. Costs 9 The FDCPA and the Rosenthal Act authorize an award of costs. 15 U.S.C. § 10 1692k(a)(2)(3); Cal. Civ. Code § 1788.30 (c). Class counsel requests an award of $2,053.58 in 11 costs and expenses. Kennedy Fees Decl. 4] 10. These costs included filing, service of process, 12 || discovery, and court records fees. Jd. The court finds that these costs are reasonable. The motion 13 for attorneys’ fees is therefore granted. v 14 || VI. CONCLUSION 15 For the reasons set forth above, the court grants Norton’s motion for final approval and 16 || motion for attorneys’ fees and costs. Class counsel is awarded $239,373 in fees and $2,053.58 in = 17 costs. Norton is awarded $5,000 as an incentive award. 18 Within 21 days after the final distribution of settlement funds (including to the cy pres 19 || recipient) and payment of attorneys’ fees, class counsel shall file a Post-Distribution Accounting 20 || in accordance with the Procedural Guidance for Class Action Settlements, available at 21 https://www.cand.uscourts.gov/forms/procedural-guidance-for-class-action-settlements. The Post22 || Distribution Accounting must contain all information listed in the Guidance, and shall be filed 23 with the court and posted on the Settlement Website. DIST; KES DISTR 24 KP OF □□□ 25 IT IS SO ORDERED. &) □□ by ERED | □ 26 || Dated: February 24, 2022 Z2/INir 1S ~ < 27 fy o> Roupa Mi. R Re 28 ene Fs a ys Cu | Lats do 5 Tage ke An □□ □ [PAN