Gehrich v. Chase Bank United States, N.A., 12 C 5510

• Court: United States District Courts. 7th Circuit. United States District Court (Northern District of Illinois)
• Writing for the Court: Judge Feinerman
• Parties: JONATHAN I. GEHRICH, ROBERT LUND, COREY GOLDSTEIN, PAUL STEMPLE and CARRIE COUSER, individually and on behalf of all others similarly situated, Plaintiffs, v. CHASE BANK USA, N.A., and JPMORGAN CHASE BANK, N.A., Defendants.
• Decision Date: 02 March 2016
• Docket Number: 12 C 5510

JONATHAN I. GEHRICH, ROBERT LUND, COREY GOLDSTEIN, PAUL STEMPLE and CARRIE COUSER,
individually and on behalf of all others similarly situated, Plaintiffs,
v.
CHASE BANK USA, N.A., and JPMORGAN CHASE BANK, N.A., Defendants.

12 C 5510

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION

March 2, 2016

Judge Feinerman

MEMORANDUM OPINION AND ORDER

Jonathan Gehrich filed this suit in July 2012 as a putative class action against Chase Bank for alleged violations of the Telephone Consumer Protection Act ("TCPA"), 47 U.S.C. § 227 et seq. Doc. 1. By July 2013, the parties were actively engaged in settlement discussions, Doc. 78, and in August 2014, they moved for preliminary approval of the settlement and conditional certification of a settlement class, Doc. 107. The court granted the motion and approved a notice program for the class. Docs. 116-117. Plaintiffs now move to certify the settlement class, Doc. 168, for attorney fees and expenses and an incentive award for the five class representatives, Doc. 186, and for final approval of the settlement, Doc. 198. The motions for class certification and incentive awards are granted, and the motions for attorney fees and settlement approval are granted in part and denied in part.

Background

The TCPA prohibits the use of "any automatic telephone dialing system or an artificial or prerecorded voice" to call or send text messages to cell phones for non-emergency purposes without prior express consent from the recipient of the calls or messages. 47 U.S.C. § 227. The

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statute provides a private right of action; for each violation, a consumer may recover $500 in damages and up to $1500 if a "court finds that the defendant willfully or knowingly violated" the TCPA. 47 U.S.C. § 227(b)(3). Plaintiffs allege that Chase violated the TCPA by placing automated calls and sending automated alerts regarding account updates or debt collection to their cell phones using automatic dialing systems, without their consent and after they asked that the calls and alerts cease. Doc. 96 at ¶¶ 3, 16, 31-40. Two other putative class actions were consolidated with this one, Goldstein v. JPMorgan Chase Bank, N.A., No. 2:12-cv-10252-DMG-SH (C.D. Cal. filed Nov. 30, 2012), and Lund v. Chase Bank, N.A., No. 3:12-cv-2554-H-DHB (S.D. Cal. filed Oct. 19, 2012). Docs. 94, 96. This case is one of several recent TCPA-related class actions in which at least one of Plaintiffs' lawyers has appeared. See, e.g., In re Capital One Tel. Consumer Prot. Act Litig., 80 F. Supp. 3d 781 (N.D. Ill. 2015); Wilkins v. HSBC Bank Nev.. N.A., 2015 WL 890566 (N.D. Ill. Feb. 27, 2015); Martin v. Comcast Corp., 2015 WL 163052 (N.D. Ill. Jan. 13, 2015).

On April 25, 2013, nine months after the initial complaint was filed and before any non-discovery motion practice, the parties entered settlement negotiations. Doc. 107-5 at ¶ 14; Doc. 198 at 6. Prior to commencing negotiations, Plaintiffs had moved to compel certain discovery, Doc. 56, but with both parties moving to stay the case during settlement discussions, Docs. 71, 76, 78, Plaintiffs withdrew the motion before the court could rule on it, Doc. 78. On November 25, 2013, the parties reported that they had reached a class-wide settlement in principle, Doc. 81, and they subsequently moved for preliminary approval of the settlement, Doc. 107, which the court granted, Docs. 116-117. At the court's request, Docs. 120, 123, the parties directly addressed whether the settlement complied with the principles set forth in Pearson v. NBTY, Inc., 772 F.3d 778 (7th Cir. 2014), Redman v. RadioShack Corp., 768 F.3d 622 (7th Cir. 2014), and

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Eubank v. Pella Corp., 753 F.3d 718 (7th Cir. 2014). Doc. 124. Prior to the final approval hearing, the parties realized that Chase possessed the records of approximately 7.1 million additional class members, and the hearing was postponed while Class Counsel provided notice to those individuals. Doc. 186-1 at 14; Doc. 186-2 at ¶¶ 2-4; Doc. 188 at ¶ 18.

Class Counsel and Garden City Group ("GCG"), a third-party administrator, provided notice through mail, email, and publication in three national magazines, ultimately reaching close to 80% of the known class members. Doc. 107-6 at ¶¶ 9-24; Doc. 186-1 at 13-15; Doc. 188 at ¶¶ 9-17, 24; Doc. 197 at 12; Doc. 202 at 8-9. The proposed Settlement Class, which has 32,297,356 members, Doc. 186-1 at 13; Doc. 186-2 at ¶ 5; Doc. 197 at 10, is defined as follows:

All persons to whom, on or after July 1, 2008 through December 31, 2013, Chase USA and/or JPMC Bank placed a non-emergency call, SMS text message or voice alert call to a cellular telephone through the use of an automatic telephone dialing system and/or an artificial or prerecorded voice.

Doc. 117 at ¶ 3. The Settlement Class comprises two subclasses, which correspond to different TCPA violations. The Alert Call Subclass consists of:

Persons whom, on or after July 1, 2008 through December 31, 2013 received one or more Short Message Service ("SMS") text messages or voice alert calls to a cellular telephone using an automatic telephone dialing system and/or prerecorded voice placed either directly or indirectly by Chase USA or JPMC Bank in connection with providing account information ("Automatic Alert Calls"). The Alert Call Subclass includes, without limitation, persons to whom such Automatic Alerts were placed notwithstanding that they are not Chase customers and/or not the person to whom the Automatic Alert was intended to be directed .... Alert Call Subclass Members did not also receive Collection Calls.

Ibid. The Alert Call Subclass has 13,927,106 members. Doc. 107-5 at ¶ 13; Doc. 186-1 at 13. The Collection Call Subclass consists of:

Persons whom, on or after July 1, 2008 through December 31, 2013 received one or more non-emergency telephone calls to cellular telephones placed either directly or indirectly by Chase USA or JPMC Bank using an automatic telephone dialing system and/or artificial prerecorded voice in connection with attempts to collect debts relating to Chase credit card accounts or JPMC

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Bank accounts ("Collection Calls"). The Collection Call Subclass includes, without limitation, persons to whom such Collection Calls were placed notwithstanding that they are not Chase customers and/or not the person to whom the Automatic Collection Call was intended to be directed.

Doc. 117 at ¶ 3. The Collection Call Subclass has 18,370,250 members. Doc. 186-1 at 13; Doc. 186-2 at ¶ 5.

The Settlement Agreement, Doc. 107-2, requires a non-reversionary payment by Chase of $34 million, to be distributed as follows:

to pay (1) Settlement Class Member claims in the amount of $18,331,967.49; (2) a dedicated cy pres distribution of $1,000,000; (3) settlement administration expenses of approximately $5,152,929.51; (4) court-approved incentive awards to the five named Plaintiffs in the amount of $1,500 each ($7,500 total); and (5) court-approved attorneys' fees and costs of $9,507,603.

Doc. 198 at 6. The distribution subsumes all litigation costs. Doc. 186-1 at 8. Depending the nature of the TCPA violation for a particular class member, including the subject of the call and whether and in what capacity she was a Chase customer, Doc. 107-2 at 15 (giving examples), the Agreement provides that each Collection Call Subclass member filing a timely claim will receive between $19.40 and $77.60, and possibly more if a sufficient number of claimants fail to cash their settlement checks within the prescribed period, allowing for a second pro rata distribution. Id. at 14-15, 17; Doc. 197 at 9-11, 20; Doc. 202 at 10. The Agreement further provides that any funds remaining after the second pro rata distribution will go to the Electronic Frontier Fund ("EFF") as a residual cy pres distribution. Doc. 107-2 at 18; Doc. 197 at 11. The Agreement does not provide for any monetary distribution to Alert Call Subclass members. Doc. 107-2 at 17-18; Doc. 197 at 11. Rather, the Agreement provides for a dedicated $1 million cy pres distribution to the Consumer Federation of America ("CFA") to serve as consideration to extinguish their TCPA claims against Chase. Doc. 107-2 at 17-18; Doc. 197 at 11.

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Settlement Class Members submitted 349,206 timely claims, representing 1.08% of the class. Doc. 202 at 9. Chase has agreed that untimely claims received by the date of the final approval order will be honored. Doc. 197 at 10. Several class members filed objections to the request for attorney fees, Docs. 121, 122, 142, 143, 145, 152, 153, 155, 158, 162, 192, 221; the dedicated cy pres distribution, Docs. 122, 142, 150, 153, 158, 222; and other provisions, Docs. 118, 119, 142, 152, 153, 158. 225 members opted out of the class. Doc. 202 at 9.

As noted, Plaintiffs have moved for class certification, settlement approval, attorney fees, and the incentive awards for the five class representatives. Docs. 168, 186, 198. After an approval hearing on October 22, 2015, the court asked Class Counsel to file lodestar data, Doc. 212, which Class Counsel did on November 5, 2015, Doc. 219. The approval hearing continued on December 15, 2015. Doc. 228.

Discussion

I. Class Certification

A court's analysis of class certification "is not free-form, but rather has been carefully scripted by the Federal Rules of Civil Procedure." Chi. Teachers Union, Local No. 1. v. Bd. of Educ. of City of Chi, 797 F.3d 426, 433 (7th Cir. 2015). To be certified, a proposed class must satisfy the four requirements of Rule 23(a): "(1) the class is so numerous that joinder of all members is impracticable; (2) there are questions of law or fact common to the class; (3) the claims or defenses of the representative parties are typical of the claims and defenses of the class; and (4) the representative parties will fairly and adequately protect the interests of the class." Fed. R. Civ. P. 23(a); see Bell v. PNC Bank, Nat'l Ass'n, 800 F.3d 360, 373 (7th Cir. 2015). If Rule 23(a) is satisfied,...