The opinion of the court was delivered by: E. Thomas Boyle United States Magistrate Judge
MEMORANDUM OPINION AND ORDER
Plaintiffs bring this class action against defendant, MCS Claim Services, Inc. ("MCS") alleging violations of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692, et seq. After a period of productive negotiations in this action, the parties agreed to settle, which settlement is presently before the Court. The defendant has agreed to (1) pay $5,000.00 to the settlement class, plus the costs of notice and distribution; (2) pay $1,000.00 to the class representative Victor Cinelli ("Cinelli") for statutory damages and his role in this litigation; and (3) make a separate payment of $12,500.00 to class counsel for fees and costs. In return, the class promises to release the defendant from the claims in this case.
In a complaint filed on September 2, 2004, the named plaintiff, Victor Cinelli ("Cinelli"), asserted claims under the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692, et seq. The allegations arise from the defendant's attempt to collect alleged debts from New York consumers. (Am. Compl. ¶ 9.) In an effort to collect debt from Cinelli on behalf of New Island Hospital, MCS sent Cinelli a form letter, dated December 12, 2003, which constituted the first and initial communication from MCS to Cinelli regarding the debt. (Id. ¶¶ 12-13.) Plaintiffs allege that the form letter was sent 2,112 class member consumers in New York. (See id.) Plaintiffs allege that the letter violated Section 1692g of the FDCPA in that it failed to specify that if a consumer disputes the debt, the consumer must notify the debt collector in writing. (Id. ¶ 32.) Plaintiffs allege that by failing to specify that any dispute must be communicated in writing, the defendant attempted to lull consumers into believing that oral notification of a dispute was sufficient to preserve their rights under the statute. (Id. ¶ 33.) Plaintiffs also allege that defendant violated Section 1692g by failing to specify that a request for the name and the address of the original creditor must be in writing. (Id. ¶ 34.)
On October 18, 2005, the parties entered into a preliminary Class Action Settlement Agreement and Release ("Settlement Agreement"), which I approved on November 9, 2005. (See Order Preliminarily Approving Class Action Settlement by the undersigned, dated November 9, 2005 ("November 9, 2006 Order").) The parties stipulate that the settlement class in this action shall consist of "all consumers in the State of New York who, according to Defendant's records: (a) from September 1, 2003 through September 2, 2004; (b) were sent collection letters bearing Defendant's letterhead in a form materially identical or substantially similar to the letter sent to plaintiff Victor Cinelli on or about December 12, 2003; and (c) which were not returned by the postal service as undelivered." (November 9, 2006 Order at 1; Settlement Agreement ¶ 7.) The parties stipulate that the defendant will establish a fund totaling $6,000. (November 9, 2006 Order at 1-2; Settlement Agreement ¶ 30.) Out of the fund, $1,000 will be paid to Cinelli, as the class representative, and the balance of the $5,000 will be divided on a pro rata basis among class members who timely submit a claim form. (November 9, 2006 Order at 1-2; Settlement Agreement ¶ 30.) The stipulation provided that notice would be mailed by First Class, Inc., a third-party notice company, to all class members whose addresses have been identified. (Settlement Agreement ¶ 39.) In the notice, the class members were informed of the status of the case and their rights. (See Notice.) The Notice set forth generally the terms of the Stipulation of Settlement, and announced preliminary approval of the settlement, pending further consideration at the Fairness Hearing scheduled for April 3, 2006. (Id.) The Notice directed any class members who might object to the settlement to contact the parties' attorneys on or before February 15, 2005, and to appear at the Fairness Hearing. (November 9, 2006 Order at 2-3.)
At the Fairness Hearing on April 3, 2006, the Court was informed by both parties' counsel that no opposition to the settlement had been received. Plaintiffs' counsel submitted an affidavit of Michael Caines, Chief Executive Officer of First Class, Inc. (the third-party notice company), stating that on December 7, 2005, notice was mailed to 2,112 class members via first class mail with "Forwarding Service Requested." (Affidavit of Michael Caines, dated April 3, 2006 ("Caines Aff.") ¶ 4.) Caines stated in his affidavit that as of March 29, 2006, a total of 61 on-time claim forms and one late claim form were received (which the parties have agreed to accept), and that as of March 22, 2006, no requests for exclusion or objections were received. (Id. ¶¶ 9-11.) Accordingly, the Settlement Agreement is considered without objection.
Rule 23(e) of the Federal Rules of Civil Procedure requires Court approval for any settlement of a class action. Rule 23(e), Fed. R. Civ. P. A court may approve a class action settlement if it is "fair, adequate, and reasonable, and not a product of collusion." Wal-Mart Stores, Inc., et al. v. Visa, U.S.A, Inc., et al., 396 F.3d 96, 116 (2d Cir. 2005) (citing Joel A. v. Giuliani, 218 F.3d 132, 138 (2d Cir. 2000)). The trial court is granted the discretion to grant or deny the settlement, taking into consideration the general judicial policy in favor of settlements. Wal-Mart Stores, 396 F.3d 96 at 116 (citing In re Paine Webber Ltd. P'ships Litig., 147 F.3d 132, 138 (2d Cir. 1998)).
In order to evaluate the fairness of a class action settlement, the court should examine the negotiations that led to the settlement, and the substantive terms of the settlement. In re Visa Check/Mastermoney Antitrust Litigation, 297 F. Supp. 2d 503, 509-10 (E.D.N.Y. 2003) (citing In re Holocaust Victim Assets Litig., 105 F. Supp. 2d 139, 145 (E.D.N.Y. 2000)). At the Fairness Hearing, counsel for both parties stated that a productive negotiation process led to the settlement in this case, by which plaintiffs' counsel achieved the maximum recovery for the class. The Court is satisfied that the proposed settlement is the product of good faith arms-length negotiations between the parties, untainted by any specter of collusion.
When reviewing the substantive terms of a class settlement, the district courts in this Circuit are directed to apply the "Grinnell factors." Wal-Mart Stores, Inc., 396 F.3d 96 at 117 (citing Joel A., 218 F.3d at 138). The Grinnell factors are: (1) the complexity, expense and likely duration of the litigation; (2) the reaction of the class to the settlement; (3) the stage of the proceedings and the amount of discovery completed; (4) the risks of establishing liability; (5) the risks of establishing damages; (6) the risks of maintaining the class action through the trial; (7) the ability of the defendants to withstand a greater judgment; (8) the range of reasonableness of the settlement fund to a possible recovery in light of all the attendant risks of litigation. Wal-Mart Stores, Inc., 396 F.3d 96 at 117 (citing City of Detroit v. Grinnell Corp., 495 F.2d 448, 454 (2d Cir. 1974)).
1. The Complexity, Expense, and Likely Duration of the Litigation
The factual and legal issues in this case are moderately complex, and given the complexity of any class action lawsuit, it is reasonable to assume that continued litigation ...