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Corpac v. Rubin & Rothman, LLC

United States District Court, E.D. New York

January 28, 2013

John T. CORPAC, an individual; on behalf of himself and all others similarly situated, Plaintiffs,
v.
RUBIN & ROTHMAN, LLC, a New York, Limited Liability Company; and John and Jane Does Numbers 1 Through 25, Defendants.

Page 346

Law Offices of William F. Horn, by: William F. Horn, Esq., of Counsel, Fresh Meadows, NY, for Plaintiffs.

Rubin & Rothman, by: Joseph Latona, Esq., of Counsel, Islandia, NY, for Defendant Rubin & Rothman.

Robert L. Arleo, Esq., Haines Falls, NY, for Defendant Rubin & Rothman.

Bromberg Law Office, P.C., by: Brian L. Bromberg, Esq., of Counsel, New York, NY, for Objector, Patrick Sejour.

CAMBA Legal Services, by: Matthew A. Schedler, Esq., of Counsel, Brooklyn, NY, for Objector, Patrick Sejour.

AMENDED MEMORANDUM OF DECISION AND ORDER

SPATT, District Judge.

As stated by the Court in a prior Order, this case involves allegations by John T. Corpac, on behalf of himself and a putative class (the " class" or " the plaintiffs" ), that Rubin & Rothman, LLC (" the defendant" ) sent written collection communications that falsely represented or implied that an attorney had meaningfully reviewed the

Page 347

plaintiff's account and was meaningfully involved with the decision to send the communication, in violation of the federal Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692, et seq.

This law suit was commenced on September 8, 2010. On March 3, 2011, the parties notified the Court that they had settled the case. On January 16, 2012, the parties filed a motion to certify the class and grant preliminary approval of the class action settlement.

On June 25, 2012, the Court held a fairness hearing on the proposed settlement of the case. Patrick Sejour (" Sejour" or " the objector" ) opposed the settlement on the grounds that: (1) there was a conflict of interest between counsel for the plaintiffs, William F. Horn, Esq., of the Law Office of William F. Horn (" Horn" or " class counsel" ) and counsel for the defendant, Robert L. Arleo, Esq. (" Arleo" ); (2) the terms of the settlement relating to the size of the class; the defendant's net worth; and the release of claims were vague and unfair; and (3) the provision of the settlement providing for an award of attorney's fees for class counsel of $75,000 was excessive. The objector was represented at this hearing by Brian L. Bromberg, Esq., of Bromberg Law Office, P.C. (" Bromberg" ) and Matthew A. Schedler, Esq., of CAMBA Legal Services (" Schedler" and together with Mr. Bromberg, " objector's counsel" ).

At the conclusion of the hearing, the Court granted the parties an opportunity to submit papers addressing the alleged conflict of interest involving Horn and Arleo. Also reviewed in this decision is a charge of an alleged " kickback scheme" attributed to Bromberg and a request for disciplinary proceedings against Bromberg, Schedler and Horn.

I. BACKGROUND

The Court will now review the evolving law suit, the proposed settlement and the notice to potential class members events that proceeded this claim of " conflict of interest" and alleged attorney misconduct.

The proposed settlement of this class action law suit is for the total sum of $87,900, apportioned as follows:

To the named plaintiff, John T. Corpac consisting of $1,000 as damages and $2,500 for his services to the class members $ 3,500.00

To a charitable organization as a cy pres payment $ 9,400.00

For attorneys fees to plaintiff's counsel $75,000.00

Total: $87,900.00

The Fair Debt Collection Practices Act, 15 U.S.C. § 1692k provides in relevant part:

§ 1692k. Civil Liability
(a) Amount of damages
Except as otherwise provided by this section, any debt collector who fails to comply with any provision of this subchapter with respect to any person is liable to such person in an amount equal to the sum of—
(1) any actual damage sustained by such person as a result of such failure;
(2) (A) in the case of any action by an individual, such additional damages as the court may allow, but not exceeding $1,000; or
(B) in the case of a class action, (I) such amount for each named plaintiff as could be recovered under subparagraph (A), and (ii) such amount as the court may allow for all other class

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members, without regard to a minimum individual recovery, not to exceed the lesser of $500,000 or 1 per centum of the net worth of the debt collector; and
(3) in the case of any successful action to enforce the foregoing liability, the costs of the action, together with a reasonable attorney's fee as determined by the court. On a finding by the court that an action under this section was brought in bad faith and for the purpose of harassment, the court may award to the defendant attorney's fees reasonable in relation to the work expended and costs.

Under the provisions of this statute, the plaintiff would be entitled to damages in the sum of $1,000. The other class members would be entitled to 1 per centum of the net worth of the debt collector or the sum of $500,000 whichever is less. Here, according to the plaintiff's counsel the net worth of the defendant law firm is approximately ...


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