United States District Court, E.D. New York
LEILANI TORRES, on behalf of herself and all others similarly situated, Plaintiff,
TOBACK, BERNSTEIN & REISS LLP, et al., Defendants.
MEMORANDUM AND ORDER
V. POHORELSKY, UNITED STATES MAGISTRATE JUDGE
the completion of all terms of the settlement of this class
action brought pursuant to the Fair Debt Collection Practices
Act, 15 U.S.C. §§ 1692-1692p (the
“FDCPA”), the plaintiff's counsel has moved
for an order approving an agreed upon award of attorneys'
fees and costs. The motion is unopposed. For the reasons
below their application is granted.
plaintiff's amended complaint alleged various violations
of the FDCPA in connection with the defendants' conduct
in seeking to collect various student loan debts. The alleged
transgressions included improperly calculating the interest
owed, assessing excessive collection fees, and engaging in
collection activities in New York City without being licensed
to do so. After a period of discovery and the amendment of
the original complaint, the parties engaged in settlement
negotiations that achieved a settlement of all claims on
behalf of two sub-classes, one comprising student loan
debtors who were overcharged for interest and fees and the
other comprising student loan debtors who were subject to the
defendants' unlicensed collection efforts. The settlement
received conditional approval and final approval after a
settlement achieved substantial benefits for the members of
both sub-classes. It included separate payments of maximum
statutory damages to each sub-class, as well as a
recalculation of interest and fees for the members of the
overcharged sub-class. Thus the members of each sub-class
received approximately $80 in statutory
damages. More importantly, the members of the
overcharged sub-class received reductions in their
indebtedness totaling approximately $2.4
million. This included repayments totaling more
than $59, 000 to 21 class members who had overpaid their
accounts. The settlement also contemplated the
defendants' payment of the plaintiff's attorneys'
fees and costs in an amount that would be negotiated by the
parties, but which did not affect any of the other settlement
amounts. The parties have now agreed that the award would be
no more than $195, 000, and that is the amount the
plaintiff's counsel now seek.
approving the settlement of a class action, the court has the
responsibility to insure that the terms of the settlement are
fair and reasonable, including the amount of fees and costs
obtained by class counsel. See generally Amchem Prod.,
Inc. v. Windsor, 521 U.S. 591, 621 (1997); Fed.R.Civ.P.
23(e). To examine attorneys' fee awards for that purpose,
courts have typically employed one of two analytical
approaches, the percentage method and the lodestar method.
Under the former approach, the court awards fees as a
percentage of the “common fund” - i.e., the
recovery - obtained for the class by counsel's efforts.
Under the later approach - one that is used when calculating
fee awards in cases brought under fee-shifting statutes such
as the one underlying the claims here - the court awards fees
based on an assessment of the number of hours reasonably
expended by counsel on the litigation multiplied by the
reasonable hourly rate of the attorneys who provided their
labor, with an appropriate adjustment, or “multiplier,
” if warranted. Regardless of which approach is used,
however, the court's determination is guided by the
following criteria: “(1) the time and labor expended by
counsel; (2) the magnitude and complexities of the
litigation; (3) the risk of the litigation . . .; (4) the
quality of representation; (5) the requested fee in relation
to the settlement; and (6) public policy
considerations.” Goldberger v. Integrated Res.,
Inc., 209 F.3d 43, 50 (2d Cir. 2000) (quoting In re
Union Carbide Corp. Consumer Prod. Bus. Sec. Litig., 724
F.Supp. 160, 163 (S.D.N.Y. 1989).
both the percentage and the lodestar methods, the award
sought by the plaintiff here is fair and reasonable. Taking
first the percentage method, the financial benefits to class
members here approximate $2.5 million dollars. Although
approximately $2.4 million is provided in the form of debt
reduction rather than cash payments, the benefit is no less
worthy of consideration for it constitutes money that remains
in the pockets of the class members rather than being paid
out. The fee award of $195, 000 amounts to about 8% of the
total financial benefit achieved for class members. This is
well under the percentage awarded in numerous cases where the
percentage approach was used. See, e.g., Silverman v.
Motorola Solutions., Inc., 739 F.3d 956, 958 (7th Cir.
2013); In re U.S. Bancorp Litig., 291 F.3d 1035,
1038 (8th Cir. 2002) (36%); In re Mego Fin. Corp. Sec.
Litig., 213 F.3d 454, 457, 463 (9th Cir. 2000), as
amended (June 19, 2000) (33 1/3%); City of
Greenville v. Syngenta Crop Prot., Inc., 904 F.Supp.2d
902, 909 (S.D. Ill. 2012) (33 1/3%); Rubinstein v.
Dep't Stores Nat. Bank, No. 08 CIV 1596, 2011 WL
147721, at *1 (S.D.N.Y. Jan. 11, 2011) (23%); In re
Heritage Bond Litig., No. 02 ML 147, 2005 WL
1594403, at *19 (C.D. Cal. June 10, 2005) (33 1/3%). The
court notes as well, that this is not a typical “common
fund” case. In most such cases, the award of
attorneys' fees is paid out of the common fund and thus
depletes the amount of the financial benefit that devolves to
the class. Here, there is no such depletion, and the award of
attorneys' fees thus comes at no cost to the class. It is
also worth noting that the attorneys' fees are part of
the recovery in a typical common fund case and are therefore
part of the denominator in the calculation of the percentage.
Here, if the attorneys' fees are added to the financial
benefits received by the class, the total recovery amounts to
approximately $2.7 million, and the percentage of that amount
attributable to attorneys' fees falls to 7.2%.
the lodestar approach, the plaintiff's submission
includes billing records for the attorneys who worked on the
case which reflect $205, 605 in attorneys' fees and $7,
203.23 in expenses relating to their efforts. The
attorneys' fees concern the work of three attorneys. The
lion's share of the fees relate to Ahmad Keshavarz, Esq.,
whose billings totaled $152, 525 at a rate of $400 per hour.
Fees for work by Brian Bromberg, Esq. totaled $50, 920 at
$400 per hour, and fees for work by Bromberg's associate
Michael Litrownik, Esq. totaled $2, 160 at $200 per hour.
Although the hourly rates for Keshavarz and Bromberg are
slightly higher than those ordinarily awarded in FDCPA cases
in this district, their work in this case justifies the
higher rates. The case presented issues not ordinarily
encountered in such cases because the debts underlying the
class action claims were incurred in connection with student
loans regulated by federal law, and the settlement required
counsel to obtain an agreement by a non-party to the
reduction of the debts at issue. The time sheets submitted in
support of the fees reflect reasonable expenditures of time.
Thus, the lodestar amount of $205, 605 reflected in
counsel's billing records, which exceeds the amount they
seek by this motion, is a reasonable assessment of the value
of their services without even considering whether a
multiplier based on the success they achieved would be
foregoing analysis demonstrates, under either the percentage
method or the lodestar method, the award sought by counsel
here is fair and reasonable, and is entirely appropriate
under the Goldberger criteria identified above.
Counsel's efforts achieved very substantial benefits for
class members and have established guideposts for the proper
collection of student loan debts by other debt collectors.
Accordingly, their motion for approval of an award of
attorneys' fees and costs totaling $195, 000 is granted.
Pursuant to the terms of the settlement and the parties'
subsequent agreement, the defendants are directed to pay that
amount to the plaintiff's counsel.
Many, but not all, class members were
members of both sub-classes.
The settlement contemplated a corrected
accounting of the student loan debts, which was conducted
after final approval of the settlement. The accounting has
now been completed, after several extensions of the deadline
for doing so, setting the stage for the instant
Under the FDCPA, class action damages
are limited to “the lesser of $500, 000 or 1 per centum
of the net worth of the debt collector.” 15 ...