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Fellows v. American Campus Communities Services, Inc.

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

June 20, 2018

BRIAN FELLOWS, on his own behalf and on behalf of all others similarly situated, Plaintiff,
v.
AMERICAN CAMPUS COMMUNITIES SERVICES, INC., et al., Defendants.

          MEMORANDUM AND ORDER GRANTING FINAL APPROVAL OF CLASS ACTION SETTLEMENT AND FOR AN AWARD OF ATTORNEYS' FEES

          HON. JOHN A. ROSS JUDGE

         This matter comes before the Court on Plaintiffs motion, to which Defendants have consented, for final approval of the proposed class action settlement of the above-referenced case (the "Settlement"), and for an award of attorneys' fees and expenses for Class Counsel. Being duly advised, the Court makes the following findings of fact and conclusions of law, and rules as follows:

         I. FACTUAL AND PROCEDURAL BACKGROUND

         Plaintiff Brian Fellows brings this case on behalf of a class of all those similarly situated with respect to Defendants' alleged marketing practices with respect to their student-focused housing located in Columbia, Missouri. Plaintiffs case stems from Defendants' alleged conduct in the marketing of their lease rates for Defendants' apartment units. Specifically, Plaintiff alleges that Defendants advertised "monthly" lease rates for their apartment units that are lower than the actual monthly rate charged to their student tenants in their lease agreements. Dkt. 29, First Amended Complaint, at ¶1. For example, in their marketing materials, Defendants would advertise "monthly" rent rates, even though the lease itself only lasted eleven and a half months even though tenants were expected to pay twelve full months at the "monthly" rate of rent. Id., at ¶¶2-3. Thus, for the first half month of occupancy, Plaintiff alleges that tenants were paying 200% of the monthly rate of rent for the time they were actually permitted to occupy the premises. Id. at ¶3. Plaintiff alleged this marketing was deceptive, and asserted claims pursuant to the Missouri Merchandising Practices Act, and for unjust enrichment. Id., passim. In the wake of the filing of this case, Defendants changed the manner in which their market their properties, replacing the "monthly" verbiage to instead refer to "installment" payments.

         The proposed Settlement's details are contained in the Notice of Settlement signed by the parties, which was submitted to the Court on January 30, 2018 [Dkt. 39] (which was then supplemented on February 22 [Dkt. 43-1]) and incorporated into this Court's Preliminary Approval Orders [Dkts. 42 & 46]. The Settlement Class is defined as follows:

Any and all persons who entered into a residential lease with ACC (as used herein "ACC" shall mean, collectively and individually, Defendants and all of their respective past, present, and future affiliates, parents, subsidiaries, sister companies, and all of their respective past, present and future officials, agents, employees, representatives, shareholders, partners, members, directors, officers, insurers, reinsurers, predecessors, successors, heirs, assigns, and attorneys) for housing located in the State of Missouri where: (1) the lease contract was not based on a standard calendar month occupancy, (2) the person paid ACC the full monthly advertised rate for the first month when occupancy began (and the eleven subsequent months), and (3) the person was not permitted to occupy some portion of the first month when occupancy began without paying an additional amount to do so but nonetheless paid rent at the advertised "monthly" rate. The Settlement Class shall refer to persons who entered into this new lease who occupied the property after November 1, 2012[1] through the date that ACC sold the properties on November 15, 2016.

         The Settlement Class does not include customers who only entered into Renewal Leases, which are defined as leases which immediately follow an existing lease, without a surrender of occupancy, and which include a full twelve month occupancy of the premises. The Settlement Class also excludes members of the Court overseeing this Lawsuit, and officers, directors, and employees of the Defendant.

         This Court previously preliminarily approved the proposed settlement (the "Settlement") of this action on behalf of a Class on February 2, 2018 [Dkt. 42], which approval was later amended on March 6, 2018 [Dkt. 26]. Notice issued per the Notice Plan approved by this Court, and Class Members were afforded the opportunity to submit claims, opt out of the Settlement, or object to the Settlement. This matter now comes before the Court for final approval and for approval of attorneys' fees and a service award for the Class Representative. For the reasons that follow, the Court finds that the settlement is fair, reasonable, and in the best interests of the Class. The Court further finds that the Class, which was preliminarily certified for settlement purposes, should now be finally certified for Settlement. Finally, the Court concludes that the award of attorneys' fees and costs in the amount of $125, 000 is appropriate, and that the Service Award of $5, 000 is appropriate, and therefore grants Plaintiffs' motion on those matters as well.

          II. STANDARD OF REVIEW

         It has long been the case that the negotiated resolution of litigation is favored by federal courts. MSK EyEs Ltd. v. Wells Fargo Bank, Nat'l Ass'n, 546 F.3d 533, 541 (8th Cir. 2008) (noting "our strong public policy of encouraging settlement"); Thompson v. Edward D. Jones & Co., 992 F.2d 187, 191 (8th Cir. 1993) (noting "the paramount policy of encouraging settlements"); Little Rock Sch. Dist. v. Pulaski County Special Sch. Dist. No. 1, 921 F.2d 1371, 1383 (8th Cir. 1990) ("Courts should hospitably receive [settlements]."). "[C]ourts have long recognized that public policy favors settlements as a cost-efficient and convenient means of resolving disputes and conserving judicial resources." United States v. Bliss, 133 F.R.D. 559, 567 (E.D. Mo. 1990). This is particularly true in the context of complex class actions. Schoenbaum v. E.I. Dupont De Nemours & Co., No. 4;O5CVOl 108 ERW, 2009 U.S. Dist. LEXIS 114080, at *12 (E.D. Mo. Dec. 8, 2009), citing Cohn v. Nelson, 375 F.Supp.2d 844, 852 (E.D. Mo. 2005) ("The law favors settlement, particularly in class actions and other complex cases where substantial judicial resources can be conserved by avoiding formal litigation."). Because settlements are favored by the courts, they are generally assumed to be fair and reasonable and courts should approach them with a presumption in their favor. Petrovic v. Amoco Oil Co., 200 F.3d 1140, 1148 (8th Cir. 1999).

         The Court's role in evaluating this Settlement is to ensure that the agreement is fair, reasonable, and adequate under the circumstances, and that it is not the product of fraud or collusion. Keil v. Lopez, 862 F.3d 685, 693 (8th Cir. 2017). The Eighth Circuit has identified four factors to be considered in determining whether a class action settlement is fair, reasonable and adequate: (1) the merits of the plaintiffs case, weighed against the terms of the settlement; (2) the defendant's financial condition; (3) the complexity and expense of further litigation; and (4) the amount of opposition to the settlement. Huyer v. Njema, 847 F.3d 934, 939 (8th Cir. 2017), citing Van Horn v. Trickey, 840 F.2d 604 (8th Cir. 1988); see also In re Wireless Tel. Fed. Cost Recovery Fees Litig., 396 F.3d 922, 932 (8th Cir. 2005).

         III. EVALUATION OF THE SETTLEMENT

         A. Settlement Structure

         1.The Notice Program and Claims Process

         Notice has been issued to the Class per this Court's Order. The Court previously approved Signal Interactive Media LLC ("Signal") to serve as the Settlement Administrator, and Signal has provided a report, which has been made available to the Court, outlining the results of the notice program and the claims received. See Dkt. 52-1. The Notice program implemented in this case as described in the report, which included direct notice via mail and email, and supplemented by publication notice on Facebook, was the best notice practicable under the circumstances and readily met the standard set forth in Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306, 314 (1950).

         The Court finds that parties implemented a highly streamlined claims process designed to make it very easy for eligible claimants to participate in the Settlement. For individuals who were already in Defendants' database, claimants were sent notice via email and postcard with a unique code that could be entered directly in the settlement website. Once entered, the claimant's information was pre-populated, such that all he or she would need to do to perfect a claim would to be confirm the information was correct (or correct it as necessary), attest to their eligibility, and elect how to receive settlement benefits. In the alternative, the postcard notice contained a tear off claim form that would allow a claimant to immediately verify the information and mail it back. This robust notice program and simplified claims process had the intended effect of maximizing participation in the Settlement, with a claims rate of over 30%. See Dkt. 52-1. The opportunity to so easily submit a claim is a benefit to the Class that further supports the Settlement.

         All costs of notice and claims administration are being paid by Defendants in addition to the Class Benefit Fund and will not reduce the amounts available to Class Members. Based upon work done to date and the work that remains to be done, the administrative cost is estimated to total approximately $39, 775. Id. The highly effective notice program and claims administration is itself a significant benefit to the Class.

         2. Settlement Benefits for Class Members

         The Court finds that the Settlement provides significant cash benefits for the Class Members. Defendant has agreed to pay $275, 000 into a fund for the benefit of Class Members (the "Class Benefit Fund" or "Fund"), which will be divided and distributed in equal parts and in its entirety to all Class Members who submitted valid claims - no portion of the fund will revert to Defendants under any circumstances.

         The Court notes that the difference in damages of any individual class member per lease is relatively small, and that the streamlining of the claims process realized by equally sharing on a per lease basis is preferable to a more complex claims structure. The Court further finds that the class members with more than one eligible lease were able to claim the number of shares to match the number of leases they ...


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