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Theresa Garland, On Behalf of Herself and Others Similarly Situated v. Cohen & Krassner

November 29, 2011


The opinion of the court was delivered by: Matsumoto, United States District Judge:


On November 14, 2008, plaintiff Theresa Garland ("Garland" or "plaintiff") filed the instant class action lawsuit, on behalf of herself and others similarly situated, against Cohen & Krassner ("C&K") and one of its named partners, Steven Cohen (collectively, "defendants"), alleging violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. ("FDCPA"). On May 31, 2011, the court entered a Preliminary Approval Order that (i) certified a settlement class; (ii) preliminarily approved the settlement; (iii) directed notice to the settlement class; and (iv) established deadlines for opt outs, objections, and a fairness hearing, which was held on October 31, 2011. Presently before the court is plaintiff's motion for final approval of the proposed class action settlement agreement and an application by class counsel for reasonable attorney's fees and costs, and an award to plaintiff. For the reasons that follow, the court (i) approves the settlement; (ii) awards class counsel attorneys' fees in the amount of $16,710.00 and costs in the amount of $350.00; and (iii) awards $3,000 to Garland as class representative.


I.Complaint and Defendants' Motion to Dismiss

Plaintiff filed the instant class action lawsuit, on behalf of herself and all others similarly situated, on November 14, 2008, alleging violations of the FDCPA by C&K and Steven Cohen as a result of defendants' efforts to collect an outstanding debt. (ECF No. 1, Complaint ("Compl.") ¶ 16.) Plaintiff claims that defendants violated the FDCPA by sending plaintiff a collection letter, dated November 16, 2007, which allegedly (i) failed to notify plaintiff that she must request verification of the debt "in writing," (id. ¶ 35); (ii) failed to advise plaintiff that she had 30 days from receipt of the letter in which to make a written demand for the name and address of the original creditor, (id. ¶ 36); (iii) improperly threatened to commence suit within the 30-day validation period, (id. ¶ 37); (iv) failed to provide the name of the current creditor, (id ¶ 38); (v) gave the false impression that a lawsuit already had been commenced against plaintiff, (id. ¶ 39); and (vi) gave the false impression that the letter was from an attorney, (id. ¶ 40). Plaintiff sought statutory damages and attorneys' fees and costs. (Id. at 8.)

On April 7, 2009, defendants requested a pre-motion conference, raising several defenses and indicating their intention to file a motion to dismiss the Complaint for failure to state a cause of action, pursuant to Federal Rule of Civil Procedure 12(b)(6). (See ECF No. 8, Motion for pre-motion conference, filed 4/7/2009.) Plaintiff opposed defendants' request by letter dated April 8, 2009. (See ECF No. 9, Response to Motion, filed 4/8/2009.) During a pre-motion conference held on April 20, 2009, however, the parties informed the court that they were actively engaged in settlement discussions and wished to hold in abeyance the motion to dismiss pending those discussions. (See Minute Entry, dated 4/20/2009.)

II.Proposed Settlement

On May 17, 2010, plaintiff and C&K filed a joint motion for settlement of the action as against C&K. (See ECF No. 16, Joint Motion for Preliminary Approval of Class Action Settlement, filed 5/17/2010.) Prior to entering into the settlement, plaintiff agreed to dismiss the claims against Steven Cohen. (See ECF No. 17, Stipulation of Dismissal, filed 5/21/2010.) The parties amended the settlement terms two times before filing the instant joint motion for approval of the settlement on April 22, 2011. (See ECF No. 26, Third Amended Joint Motion for Preliminary Approval, filed 4/22/2011 ("Third Mot. for Settlement"); see also ECF No. 18, Joint Motion for Preliminary of Amended Class Action Settlement, filed 6/30/2010; ECF No. 19, [Second Amended] Joint Motion for Preliminary of Amended Class Action Settlement, filed 7/13/2010.)

On May 17, 2011, at the court's request, C&K filed a financial affidavit setting forth the basis for the parties determination of C&K's net worth for settlement purposes. (See ECF No. 29, Ex Parte Financial Affidavit, filed 5/17/2011.) The parties represented to the court that in approximately September 2009, they had agreed that the combined net worth of defendants Steven Cohen, Mark Krassner, and the law firm of Cohen & Krassner during the years 2006, 2007, and 2008 was approximately $500,000. (Id. at 1-2.) The court finds that the financial affidavit and supporting documents support the defendants' combined net worth estimate.

On May 31, 2011, the court entered a Preliminary Approval Order certifying the following class for settlement purposes (the "Settlement Class"):

All consumers in the State of New York who, according to Defendants' records: (a) from November 15, 2007 through March 30, 2009; (b) were sent collection letters in a form materially identical or substantially similar to the letter sent to the Plaintiff on or about November 16, 2007 and attached to the Complaint as Exhibit A; and (c) which were not returned by the postal service as undelivered.

(ECF No. 30, Preliminary Approval Order, dated 5/31/2011, at 3.) The court preliminarily approved the settlement of the action and found that (i) settlement of the case for a recovery to the Settlement Class of $6,650.00, plus the cost of notice and distribution, constitutes more than the maximum available recovery to a class under the FDCPA, and is therefore fair and reasonable; and (ii) payment to Garland of $3,000 for statutory damages and for her role in the litigation is fair and reasonable. (Id. at 2.) The court stated that class counsel "may apply to the court for a separate payment of fees and costs, based on appropriate documentation, not to exceed $25,000.00, which will not be taken from any recovery to the Settlement Class." (Id.) The Preliminary Approval Order directed notice to be given to the Settlement Class members, set dates for Settlement Class members to object to or opt out of the settlement, and scheduled a fairness hearing pursuant to Rule 23(e)(2). (See id. at 3-6.)

As directed in the Preliminary Approval Order, on June 13, 2011, the settlement administrator, Berdon Claims Administration, Inc. ("Settlement Administrator") mailed copies of the Notice to Settlement Class members whose names and addresses were provided by defendant's counsel. (ECF No. 33, Affidavit of Mailing of Notice and Exclusion Requests Received, filed 9/21/2011 ("Aff. of Mailing") ¶¶ 3-4.)*fn1 In addition, the Notice was posted on the Settlement Administrator's website on June 13, 2011.*fn2 (Id. ¶ 4.) The Settlement Administrator received two timely requests for exclusion. (Id. ¶ 9; ECF No. 35, Plaintiff's Memorandum in Support of Final Approval of Class Action Settlement, Attorney's Fees, and Representative Fees, filed 10/6/2011 ("Pl. Mem.") at 1.) No objections to the settlement were received. (ECF No. 35, Pl. Mem. at 1.) As of October 3, 2011, the Settlement Administrator had received 81 claim forms. (ECF No. 34, Affidavit of Claims Received, filed 10/3/2011, ¶ 2.) However, it was later determined that six of those forms were ineligible. (ECF No. 40, Letter Motion to Amend/Correct/Supplement the Final Approval Order of Judgment, filed 11/1/2011 ("11/1/2011 Ltr.") at 1; ECF No. 40-1, Supplemental Affidavit of Claims Mailed and Received, filed 11/1/2011 ("Supp. Aff. of Mailing") ¶ 6.)*fn3 Thus, 75 claim forms were timely and properly submitted.

At the fairness hearing held on October 31, 2011, no objectors appeared.


I.Certification of the Settlement Class "Before certification is proper for any purpose -- settlement, litigation, or otherwise -- a court must ensure that the requirements of Rule 23(a) and (b) have been met." Denney v. Deutsche Bank AG, 443 F.3d 253, 270 (2d Cir. 2006); see also Reade-Alvarez v. Eltman, Eltman & Cooper, P.C., 237 F.R.D. 26, 31 (E.D.N.Y. 2006). Rule 23(a) provides:

One or more members of a class may sue or be sued as representative parties on behalf of all members only if (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 or 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). Rule 23(b) provides, in relevant part, that a class action may be maintained if Rule 23(a) is satisfied and if: the court finds that the questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.

Fed. R. Civ. P. 23(b)(3). In making this determination, courts employ a "liberal rather than restrictive construction" of Rule 23, adopting a "standard of flexibility" in deciding whether to grant certification. Reade-Alvarez, 237 F.R.D. at 31 (citation omitted).

II.Approval of the Final Settlement

Rule 23(e) requires court approval of any "settlement, voluntary dismissal, or compromise" of the claims of a certified class. Fed. R. Civ. P. 23(e). Adequate notice must be directed to "all class members who would be bound by the proposal" and a fairness hearing must be held. Fed. R. Civ. P. 23(e)(1), (2). In addition, a district court may approve a class action settlement only if it determines that the settlement is "fair, adequate, and reasonable, and not a product of collusion." Joel A. v. Giuliani, 218 F.3d 132, 138 (2d Cir. 2000). The court must consider both the procedural fairness of the negotiating process leading to the settlement, as well as the substantive terms of the settlement itself. See Wal-Mart Stores, Inc. v. Visa U.S.A. Inc., 396 F.3d 96, 116 (2d Cir. 2005); D'Amato v. Deutsche Bank, 236 F.3d 78, 85 (2d Cir. 2001).

a.Adequacy of Notice

To provide effective notice to class members, Rule 23(c)(2)(B) provides that:

For any class certified under Rule 23(b)(3), the court must direct to class members the best notice that is practicable under the circumstances, including individual notice to all members who can be identified through reasonable effort. The notice must clearly and concisely state in plain, easily understood language: (i) the nature of the action; (ii) the definition of the class certified; (iii) the class claims, issues, or defenses; (iv) that a class member may enter an appearance through an attorney if the member so desires; (v) that the court will exclude from the class any member who requests exclusion; (vi) the time and manner for requesting exclusion; and (vii) the binding effect of a class judgment on members under Rule 23(c)(3).

Fed. R. Civ. P. 23(c)(2)(B).

b.Procedural Fairness

"A court reviewing a proposed settlement must pay close attention to the negotiating process, to ensure that the settlement resulted from arm's-length negotiations and that plaintiffs' counsel have possessed the experience and ability, and have engaged in the discovery, necessary to effective representation of the class's interests." D'Amato, 236 F.3d at 85 (citation and internal quotation marks omitted). "A presumption of fairness, adequacy, and reasonableness may attach to a class settlement reached in arm's-length negotiations between experienced, capable counsel after meaningful discovery." Wal-Mart Stores, 396 F.3d at 116 (internal quotation marks and citation omitted).

c.Substantive Fairness

Courts in the Second Circuit examine nine factors in determining whether a settlement is substantively fair and reasonable, as required by Rule 23(e):

(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 proving 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 in light of the best possible recovery; and (9) the range of reasonableness of the settlement fund to a possible recovery in light of all the attendant risks of litigation.

McReynolds v. Richards-Cantave, 588 F.3d 790, 804 (2d Cir. 2009) (quoting City of Detroit v. Grinnell Corp., 495 F.2d 448, 463 (2d Cir. 1974), abrogated on other grounds by Goldberger v. Integrated Res., Inc., 209 F.3d 43 (2d Cir. 2000)).


I.Requirements for Class Certification

In the Preliminary Approval Order entered by the court on May 31, 2011, the court certified the class for settlement purposes only. Before doing so, the court was satisfied that the Settlement Class as defined met the requirements for class certification pursuant to Rule 23(a) and (b).

a.Rule 23(a) Requirements


The Joint Motion for Preliminary Approval for Class Action initially stated that the number of class members was 3,201. Some of those names were later discovered to have been included on the list in error. After the erroneously included names and addresses were removed from the class list, the number of individuals properly within the Settlement Class and eligible to return the claim forms totals 2,682. This more than satisfies the requirement of numerosity.

ii.Common Questions of Fact or Law

Commonality is satisfied "if plaintiffs' grievances share a common question of law or fact." Marisol A. v. Giuliani, 126 F.3d 372, 376 (2d Cir. 1997). The central issues in this case are whether the defendant mailed substantially similar or materially identical letters and whether those letters violated the FDCPA. These issues are common to all members of the Settlement Class.


Typicality is satisfied when "each class member's claim arises from the same course of events and each class member makes similar legal arguments to prove the defendant's liability." Robidoux v. Celani, 987 F.2d 931, 936 (2d. Cir. 1993) (citations omitted). "When it is alleged that the same unlawful conduct was directed at or affected both the named plaintiff and the class sought to be represented, the typicality requirement is usually met irrespective of minor variations in the fact patterns underlying the individual claims." Id. at 936-37 (citations omitted). Here, all the alleged members' claims arose out of identical or substantially ...

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