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Martinez. v. Medicredit, Inc.

United States District Court, E.D. Missouri, Eastern Division

May 15, 2018

MARILYNN MARTINEZ, et al., Plaintiffs,
v.
MEDICREDIT, INC., et al., Defendants. TODD HORNBERGER, et al., Plaintiffs,
v.
MEDICREDIT, INC., Defendant. Rajesh Verma, Plaintiff,
v.
MEMORIAL HEALTHCARE GROUP, INC., et al., Defendants.

          MEMORANDUM AND ORDER

          E. RICHARD WEBBER, SENIOR UNITED STATES DISTRICT JUDGE.

         This matter comes before the Court on Plaintiff's Motion for Final Approval of Class Action Settlement [99] and Plaintiff's Motion for Attorney Fees and Reimbursement of Expenses and Incentive Awards [98]. Defendants wrote a letter to the Court stating they agree with all the terms of the underlying proposed final order, except with respect to the cy pres recipient. Plaintiff proposed the National Consumer Law Center (“NCLC”), which Plaintiff argues is “closely aligned to the class' interests to be protected by” the Telephone Consumer Protection Act (the “TCPA”). Defendants state the NCLC's primary activity regarding the TCPA has been to lobby for expanded TCPA enforcement against organizations like Defendants. They state settlement funds should not be improperly used to support one party's counsel's agenda, citing S.E.C. v. Bear, Stears & Co., 626 F.Supp.2d 402, 415 (S.D.N.Y. 2009). Defendants propose this Court designate Legal Services Corporation (“LSC”) as the recipient. LSC is a nonprofit legal aid organization, and Defendants propose this Court direct funding to telephone services.

         I. BACKGROUND

         This case originated as a class action under the TCPA, 47 U.S.C. § 227. Plaintiffs alleged Defendants made prerecorded calls to cell phones without the prior express consent of the class plaintiffs or the putative class members. The case was resolved with a settlement agreement, which was preliminarily approved by this Court on December 15, 2017. The Court also set a series of deadlines for notice to be sent to class members. Notice was sent to 498, 418 class members and 463, 757 class members received a copy. Only eight opted out. The total settlement amount is $5, 000, 000 to be divided pro rata among class members after expenses are deducted. After attorneys' fees and litigation expenses, each of the 28, 406 class members who submitted a valid claim will receive approximately $91.25. On May 15, 2018, the Court held a final approval hearing, and the Court largely adopted parties' proposed final settlement order. However, the Court withheld resolving the issue as to identifying a cy pres recipient, should any funds remain for distribution.

         II. DISCUSSION

         Under Federal Rule of Civil Procedure 23(e), the Court may only approve a proposed settlement agreement if it finds that it is fair, reasonable, and adequate. In making that finding, the Court must consider four non-exclusive factors: (i) the merits of the plaintiff's case, weighed against the terms of the settlement; (ii) the defendant's financial condition; (iii) the complexity and expense of further litigation; and (iv) the amount of opposition to the settlement. Prof'l Firefighters Ass'n of Omaha, Local 385 v. Zalewski, 678 F.3d 640, 648 (8th Cir. 2012). “A strong public policy favors [settlement] agreements, and courts should approach them with a presumption in their favor.” Petrovic v. Amoco Oil Co., 200 F.3d 1140, 1148-49 (8th Cir. 1999). As part of evaluating whether to approve the settlement agreement, the Court must also assess the reasonableness of the attorneys' fees in the proposed settlement agreement. Jones v. Casey's General Stores, Inc., 266 F.R.D. 222, 230 (S.D. Iowa 2009).

         The Court has considered these four factors and finds the factors weigh in favor of approving the parties' proposed agreement. The Court accordingly concludes the settlement is fair, reasonable, and adequate. The Court likewise concludes Plaintiff's request for attorneys' fees and costs is also fair and reasonable. Accordingly, the parties' proposed settlement agreement will be adopted as set forth below.

         With respect to identifying an appropriate cy pres recipient should there be any remaining funds, the Eighth Circuit has held such a distribution “must be ‘for the next best use for indirect class benefit, ' and ‘for uses consistent with the nature of the underlying action and with the judicial function.'” In re BankAmerica Corp. Sec. Litig., 775 F.3d 1060, 1067 (8th Cir. 2015). This purpose should be “as near as possible to the legitimate objectives underlying the lawsuit, the interests of class members, and the interests of those similarly situated.” Id. To determine whether a recipient is “next-best, ” the district court must conduct a thorough investigation, whereby it “thouroughly explores alternatives” and looks for a recipient that “relates directly to the injury alleged in this lawsuit and settled by the parties.” Id. (quoting In re Airline Ticket Comm'n Antitrust Litig., 268 F.3d 619, 626 (8th Cir. 2001) and In re Airline Ticket Comm'n Antitrust Litig., 307 F.3d 679, 682-84 (8th Cir.2002) (“Airline Tickets II ”) (alterations omitted)). After thouroughly conducting an independent investigation, this Court finds Plaintiff's proposed recipient, the NCLC, closely approximates the interests of the class and is an appropriate cy pres recipient.

         Accordingly, IT IS HEREBY ORDERED, ADJUDGED and DECREED as follows:

         1. The Settlement Agreement and Release dated November 28, 2017, including its Exhibits (the “Agreement”), and the definition of words and terms contained therein, are incorporated by reference and are used hereafter. The terms and definitions of this Court's Preliminary Approval Order (Dkt. No. 95) are also incorporated by reference into this Final Approval Order.

         2. This Court has jurisdiction over the subject matter of the Action and over the Parties, including all Settlement Class Members with respect to the Settlement Class certified for settlement purposes in this Court's Preliminary Approval Order, as follows:

The approximately 627, 642 persons whose unique cellular telephone number has been identified in the call data produced in this litigation where the call records reflect Medicredit Inc. codes “WN” or “DNK” or NPAS Inc. Smart Codes 11, 13, 15, 42, 584, and 770.
A list of the telephone numbers that comprise the Settlement Class is attached as Exhibit 6 to the Agreement and was filed under seal.
Excluded from the Settlement Class are the Judge to whom the Action is assigned and any member of the Court's staff and immediate family, and all persons who are ...

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