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Burke v. Shapiro, Brown & ALT, LLP

United States District Court, E.D. Virginia, Richmond Division

May 17, 2016

FLOYD RONALD BURKE, Plaintiff,
v.
SHAPIRO, BROWN & ALT, LLP, et al., Defendants. R. DANTE DECAPRI, Plaintiff,
v.
LAW OFFICE OF SHAPIRO, BROWN & ALT, LLP, Defendant.

          MEMORANDUM OPINION

          David J. Novak United States Magistrate Judge

         These matters come before the Court on the consent of the parties pursuant to 28 U.S.C. § 636(c)(1) on Plaintiffs' Motion for Final Approval of Class Action Settlement, for Attorney's Fees, Expenses, and Service Award Pursuant to the Settlement Agreement (the "Motion for Final Approval") (DeCapri ECF No. 53; Burke ECF No.32)[1] filed on April 16, 2016. The Court held a Final Fairness Hearing on May 16, 2016. For the reasons set forth below, the Court hereby GRANTS Plaintiffs' Motion for Final Approval.

         I. BACKGROUND

         The Motion for Final Approval represents the culmination of nearly two years of contested litigation and negotiations between the parties. The parties now seek the Court's final approval of the settlement and dismissal of this lawsuit.

         A. Litigation History

         On March 21, 2014, Plaintiff R. Dante DeCapri ("DeCapri") commenced this class action on behalf of himself and all others similarly situated, alleging that Defendant Law Office of Shaprio Brown & Alt, LLP ("SBA") violated the Fair Debt Collection Practices Act ("FDCPA"). by (1) failing to include "by the debt collector" or similar language in the required component of the thirty-day validation notice disclosure in violation of 15 U.S.C. § 1692g(a)(3); (2) contradicting and creating confusion in its § 1692g(a)(3) disclosure in violation of 15 U.S.C. § 1692g(a)(4); (3) using a false representation or deceptive means to collect a debt by omitting the "by debt collector" or similar language in the required component of the thirty-day validation notice disclosure in violation of 15 U.S.C. 1692e(10); (4) falsely stating that if the debtor chooses to dispute the debt he must do so within thirty days, in violation of 15 U.S.C. § 1692e(10); and (5) omitting the "in writing" requirement from the statement of the consumer's rights in violation of 15 U.S.C. 1692e(10). (DeCapri Compl. (ECF No. 1).)

         On March 21, 2014, Plaintiff Floyd Ronald Burke ("Burke") commenced this class action on behalf of himself and all others similarly situated. Burke alleged that SB A violated the FDCPA by (1) failing to include "by the debt collector" or similar language in the required component of the thirty-day validation notice disclosure in violation of 15 U.S.C. § 1692g(a)(3); (2) falsely stating that if the debtor chooses to dispute the debt, he must do so within thirty days in violation of 15 U.S.C. § 1691g(a)(4); (3) failing to include "by the debt collector" and thus using a false or deceptive means to collect a debt in violation of 15 U.S.C. § 1692e(10); (4) falsely stating that if the debtor chooses to dispute the debt he must do so within thirty days, in violation of 15 U.S.C. § 1692e(10); (5) omitting the "in writing" requirement from the statement of the consumer's rights, which is a false and deceptive means of debt collection in violation of 15 U.S.C. § 1692e(10); and (6) threatening non-judicial dispossession of Mr. Burke's property when there was no present right of possession in violation of 15 U.S.C. § 169 If. (Burke Compl. (ECF No. 1).) Burke also alleged that SBA breached its common law fiduciary duty to Burke by initiating foreclosure when it had no right to do so (Burke Compl.), but he voluntarily dismissed this claim. (Notice of Voluntary Dismissal of Count I of the Complaint (ECF No. 19).)

         Shortly after the cases were filed, the parties engaged in significant discovery and related disputes. In DeCapri, SBA filed a Motion to Dismiss (ECF No. 10), and this Court denied the Motion (ECF No. 32). In Burke, Defendants filed a Motion to Dismiss as to Count I (ECF No. 11), and Plaintiff voluntarily dismissed Count I (ECF No. 19).

         B. Settlement

         On September 28, 2015, the parties attended a Settlement Conference facilitated by the undersigned. The parties settled both matters and memorialized the terms in a Memorandum of Understanding. Defendants denied, and still deny, any liability, but agreed to the settlement to avoid the burden and risks of continuing the litigation. On February 2, 2016, the parties entered into a Settlement Agreement and Release (the "Settlement Agreement"), which was amended with the Court's approval on February 5, 2016 (DeCapri ECF No. 52; Burke ECF No. 31). The Parties settled the FDCPA claims on a class basis for $112, 500.00 (the "Settlement Fund"). After the class claims were settled, the parties also resolved Plaintiffs' individual claims. The individual settlements are not part of the resolution of class issues.

         On December 17, 2015, the Court entered an Order of Preliminary Approval of Class Action Settlement (the "Order of Preliminary Approval") (DeCapri ECF No. 48; Burke ECF No. 27) after a hearing on the matter. The Court certified a settlement class (the "Settlement Class") for the purpose of settling the case on a class basis. The Order of Preliminary Approval appointed American Legal Claim Services, LLC ("Settlement Administrator") as the settlement administrator and approved the Notice of Class Action Settlement (the "Notice"). The Court also appointed Plaintiffs as class representatives ("Class Representatives") and Plaintiffs' Counsel as class counsel ("Class Counsel").

         II. ANALYSIS

         Plaintiffs ask the Court to approve the Settlement Agreement, the request for attorneys' fees of $150, 000.00 and the $3, 000.00 service award for each Class Representative.

         A. Settlement Agreement

         Unlike most other civil suits, the Court must approve class action settlements. Federal Rule of Civil Procedure 23(e) provides that the parties can settle and dismiss a class action only with court approval against the standards of fairness, reasonableness and adequacy. Manual for Complex Litigation (Fourth) § 21.62 (2004) (citing Fed.R.Civ.P. 23(e)(1)(C)). Rule 23(e) requires that courts considering proposed class action settlements assess whether the settlement serves the best interests of represented class members. When the proposed settlement intends to preclude further litigation by absent persons, due process requires the adequate representation of their interests. In re Jiffy Lube Securities Litigation, 927F..2d 155, 158(4th Cir. 1991). Though the parties enjoy a "strong initial presumption that the compromise is fair and reasonable, " the Court must still "appraise the reasonableness of particular class-action settlements on a case-by-case basis, in light of the relevant circumstances." In re ...


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