Amadeck v. Capital One Fin. Corp. (In re Capital One Tel. Consumer Prot. Act Litig. )

• Decision Date: 12 February 2015
• Docket Number: No. 12 C 1061,No. 12 C 10135,Master Docket No. 12 C 10064,MDL No. 2416,No. 11 C 5886,12 C 10135,11 C 5886,12 C 1061
• Citation: 80 F.Supp.3d 781
• Parties: In re Capital One Telephone Consumer Protection Act Litigation, Bridgett Amadeck, et al., v. Capital One Financial Corporation, and Capital One Bank (USA), N.A. Nicholas Martin, et al., v. Leading Edge Recovery Solutions, LLC, and Capital One Bank (USA), N.A. Charles C. Patterson, v. Capital Management Services, L.P. and Capital One Bank (USA), N.A.
• Court: U.S. District Court — Northern District of Illinois

80 F.Supp.3d 781

In re Capital One Telephone Consumer Protection Act Litigation

Bridgett Amadeck, et al.

v.Capital One Financial Corporation, and Capital One Bank (USA), N.A.

Nicholas Martin, et al.

v.Leading Edge Recovery Solutions, LLC, and Capital One Bank (USA), N.A.

Charles C. Patterson

v.Capital Management Services, L.P. and Capital One Bank (USA), N.A.

Master Docket No. 12 C 10064

MDL No. 2416

No. 12 C 10135

No. 11 C 5886

No. 12 C 1061

United States District Court, N.D. Illinois, Eastern Division.

Signed February 12, 2015

MEMORANDUM OPINION AND ORDER

JAMES F. HOLDERMAN, District Judge:

The three above-captioned, nationwide class actions were filed against Capital One, its subsidiaries, and its Participating Vendors (collectively, “Defendants”),¹ as a result of the Defendants' allegedly using automatic telephone dialing systems or artificial or prerecorded voice messages to contact consumers' cell phones without prior express consent, in alleged violation of the Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227(b)(1)(A). (Dkt. No. 120.) On December 10, 2012, the United States Judicial Panel on Multidistrict Litigation (the “JPML”) selected this court to coordinate pursuant to 28 U.S.C. § 1408 the pretrial proceedings in these three class actions, along with other individual lawsuits filed throughout the United States. (Dkt. No. 1.) The cases filed outside this district were transferred to this district and assigned to this court's calendar. On February 28, 2013, Plaintiffs filed a Consolidated Master Class Action Complaint (“Master Complaint”) superseding the complaints filed in the three class actions. (Dkt. No. 19.) On June 13, 2014, after reaching a settlement in principle, Plaintiffs filed an Amended Consolidated Master Class Action Complaint (“Amended Master Complaint”). (Dkt. No. 120 (“Am.Compl.”).)

On July 29, 2014, the court granted Plaintiffs' unopposed request for preliminary approval of class settlement,² (Dkt. No. 129), and entered an Order (Dkt. No. 137) conditionally certifying a settlement class, preliminarily approving the class action settlement, approving the notice plan, and appointing a claims and notice administrator. Since then, the parties have filed memoranda in support of Plaintiffs' motion (Dkt. No. 260) for final approval of the class action settlement. Class Counsel, consisting of the attorneys who collectively represent the class, have also filed a motion for approval of attorneys' fees and for service awards to the class representatives (the “Named Plaintiffs”). (Dkt. No. 175.) Fourteen people out of the more than 17 million settlement class members filed briefs or statements in opposition to the Amended Settlement Agreement and Release (“Settlement Agreement”) (Dkt. No. 131 Ex. 1) and Class Counsel's requested fee award. The court, after notice was provided, conducted a fairness hearing on January 15, 2015 to allow any class members who expressed the desire to address the court regarding the settlement to do so. (Dkt. No. 320.)

For the reasons explained below, the court grants the motion for final approval of the class action settlement, (Dkt. No. 260), because under the circumstances and the law the settlement reached in these three consolidated class action cases is fair, reasonable, and adequate. The court grants in part and denies in part Class Counsel's motion for approval of attorneys' fees, and grants Class Counsel's requested incentive awards to the five Named Plaintiffs in the amount of $5,000 each. (Dkt. No. 175.)

BACKGROUND

I. History of the Litigation

In 1991, Congress enacted the TCPA “to address telephone marketing calls and certain telemarketing practices that Congress found to be an invasion of consumer privacy.” Jamison v. First Credit Servs. , 290 F.R.D. 92, 96 (N.D.Ill.2013) (Kendall, J.). The “certain telemarketing practices” that drew Congress's legislative action were automatic telephone dialing systems and prerecorded voices. 47 U.S.C. § 227. The two technologies were relatively new in 1991 and greatly improved telemarketers' ability to contact consumers on their phones. In response to the “national outcry over the explosion of unsolicited telephone advertising,” Congress passed the TCPA. See 137 Cong. Rec. 30,817 (1991) (statement of Senator Pressler). The TCPA prohibits callers from using “any automatic telephone dialing system or an artificial or prerecorded voice” to make any non-emergency call to a cell phone, unless they have the “prior express consent of the called party.” 47 U.S.C. § 227(b)(1)(A)(iii). The penalties Congress enacted to answer the public outcry are harsh: the TCPA imposes on callers statutory damages of $500 per call, which can be trebled if the court finds the violation to have been willful or knowing. 47 U.S.C. § 227(b).

The calls at issue in these three consolidated class actions were made for the decidedly non-emergency purpose of debt collection. According to the Amended Master Complaint, between January 18, 2008 and June 20, 2014, Capitol One or one of its Participating Vendors (on behalf of Capital One) called class members' cell phones using an automatic telephone dialing system or an artificial or prerecorded voice in connection with an attempt to collect on a credit card debt. (Am.Compl.¶ 52.)

After Plaintiffs filed their Master Complaint on February 28, 2013, the parties engaged in six months of class-wide discovery “sufficient to engage in meaningful settlement discussions.” (Dkt. No. 129 at 13.) On July 2, 2013, November 4, 2013, and January 29, 2014, the parties participated in mediation sessions with retired United States Magistrate Judge Edward A. Infante. The parties also spoke with Judge Infante by phone on two other occasions. (Id. ) Capital One and Plaintiffs agreed thereafter to a settlement in February 2014. (Id. at 14.) The Participating Vendors agreed to join the settlement in the months thereafter. (Id. )

On June 13, 2014, Plaintiffs filed their request for an order certifying the proposed class for settlement purposes, preliminarily approving the settlement agreement, approving the notice plan, ordering the dissemination of notice as set out in the Settlement Agreement, and appointing BrownGreer as the Notice and Claims Administrator. (Dkt. No. 121.) Plaintiffs filed an amended motion seeking the same relief on July 13, 2014 and, on July 29, 2014, the court granted Plaintiffs' amended motion. (Dkt. No. 137.)

On August 12, 2014, BrownGreer began implementing the parties' notice plan, which entailed: (1) sending 12,342,000 summary notices via email to all potential class members who had email addresses reflected in Capital One's records; (2) mailing 4,303,218 postcard notices via first class mail to class members who had opted out of receiving email from Capital One, who did not have email addresses on file, or whose emails were undeliverable; (3) running internet banner notices on 40 websites BrownGreer determined class members were likely to visit; (4) establishing a settlement website and toll-free information telephone number dedicated to answering telephone inquiries; and (5) providing notice of the settlement to the officials designated pursuant to Class Action Fairness Act, 28 U.S.C. § 1715. (Dkt. No. 264.)

BrownGreer provided a thorough summary of its execution of the notice plan in two separate declarations provided to the court. (Dkt.Nos. 264, 305.) Here, it is sufficient to note that the notice plan reached 15,983,613 known, unique settlement class members, a figure that represents 96.03% of the known settlement class and 91.22% of the estimated total settlement class.³ (Dkt. No. 305 ¶ 6.) Despite the robust and effective notice plan, only 1,378,534 unique claimants—7.87% of the estimated class—filed claims with the administrator by the filing deadline. (Id. ¶ 14.) 462 class members have submitted valid opt-out requests and another 103 claimants have submitted opt-out requests that are invalid, either because they are incomplete or untimely. (Id. ¶ 8.) BrownGreer estimated that as of December 23, 2014 its total notice and administration costs were $5,093,000. (Id. ¶ 16.) No updated figures have been provided to the court.

II. The Settlement Agreement

The important provisions of the Settlement Agreement provide for both monetary and injunctive relief to class members.

The Settlement Agreement defines the settlement class as follows:

All persons within the United States who received a non-emergency telephone call from Capital One's dialer(s) to a cellular telephone through the use of an automatic telephone dialing system or an artificial or prerecorded voice in connection with an attempt to collect on a credit card debt from January 18, 2008 through June 20, 2014, and all persons within the United States who received a non-emergency telephone call from a Participating Vendor's dialer(s) made on behalf of Capital One to a cellular telephone through the use of an automatic telephone dialing system or an artificial or prerecorded voice in connection with an attempt to collect on a credit card debt from February 28, 2009, through June 20, 2014.

(Settlement Agreement § 2.39.) Plaintiffs estimate that the class includes 17,522,049 members.⁴

The Settlement Agreement requires Defendants to establish a non-reversionary settlement fund of $75,455,099.⁵ (Settlement Agreement § 2.42.) After subtracting notice and administration costs ($5,093,000), Class Counsel's requested service awards for the five Named Plaintiffs ($25,000), and Class Counsel's requested fee award ($22,636,530)—all of which will be paid out of the settlement fund—the value of the settlement to class members is $47,700,569. (Dkt. No. 305.); see Pearson v. NBTY, Inc. , 772 F.3d 778, 780–81 (7th Cir.2014) (citing Redman v. RadioShack Corp. , 768 F.3d 622, 630 (7th Cir.2014) (holding notice costs, administration costs, and attorneys' fees are not part of the value received from the settlement by class members). If all 17,522,049 class members had filed a...