lèeers, et al. v. us bank na

UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF FLORIDA

M IAM I DIVISION

CASE No. 1:09-M D-02836-JLK

IN RE: CHECKING ACCOUNT

OVERDRAFT LITIGATION

M DL No. 2036

THIS DOCUM ENT RELATES TO:

Waters, et al. v. US. Bank, N A.S.D. Fla. Case No. 1:09-cv-23034-JLK

N.D. Cal. Case No. 09-2071-JSW

lèeers, et al. v. US. Bank NA.S.D. Fla. Case No. 1:09-cv-23126-JLK

D. Or. Case No. 3;09-cv-00409-HU

Brown v. US. fJ?;k, N A.

S.D. Fla. Case No. 1 ; 10-24147-JLKE.I). W ash. Case No. 2:10-00356-RM P

ORDER OF FINAL APPROVAL OF SETTLEM ENT, AUTHORIZING SERVICE

AW ARDSNAND GRANTING APPLICATION FOR ATTORNEYS' FEES

On October 23, 2013, Plaintiffs and Class Counsel filed their M otion for Final Approval

of Settlement, and Application for Service Awards, Attorneys' Fees and Expenses, and

lncorporated Memorandum of Law (çfMotion''), seeking Final Approval of the Amended and

Restated Settlement Agreement and Release (çdAgreement'' or Sssettlemenf') with U.S. Bank

'N tional Association (ûtU S Bnnk'' or çsthe Bank'') l (DE # 3681). In support, Plaintiffs filed. a . , .

declarations from experts in class action law and attorneys' fees, as well as several other

1 This Order incorporates the definitions of terms used in the Agreement attached to the Motion

(DE #3681-1).

Case 1:09-md-02036-JLK Document 3753 Entered on FLSD Docket 01/06/2014 of 36

declarations supplementing the factual record to enable 1he Court to evaluate the fairness and

adequacy of this Settlement. (DE # 3681-2, 3681-3, 3681-4, 3681-5, 3681-6, 3681-7).

This matter came before the Court on December 18, 2013, for a Final Approval Hearing

pursuant to the Court's Preliminary Approval Order dated July 29, 2013. (DE # 3559). The

Court reviewed a1l of the filings related to the Settlement and heard argument on the Motion.

After careful consideration of the presentations of the Parties, the Court concludes that

this Settlement provides a fair, reasonable and adequate recovery for Settlement Class Members,

representing approximately thirtten percent (13%) of the most probable recoverable dnmages

based on the creation of a $55,000,000 common fund. The Settlement constitutes an excellent

result for the Settlement Class tmder the circumstances and challenges presented by the Action.

The Court specitically tinds that the Settlement is fair, reasonable and adequate, and a

satisfactory compromise of the Settlement Class M embers' claims. The Court approves the

withdrawal of eight (8) objections (DE # 3693, 3694, 3695, 3698, 3700, 3706, 3710, 3711) and

ovemlles the remaining six (6) objections to the Settlement (DE # 3665 (including DE # 3714

and 3736), 3701, 3709, 3713 (including Class Member Brenda Gordon's Amended Motion for

lntervention of Right/permissive Intervention to the Proposed Class Action Settlement

Agreement dated December 16, 2013, and the accompanying Affidavit of Class Member Brenda

Gordon, that were received and reviewed by the Court but not filed on the CM/ECF system),

m1d the two (2) objections submitted by Donald Null and Todd J. Luh attached to Plaintiffs' and

Class Cotmsel's Response to Objections to Motion for Final Approval of Settlement and

Application for Service Awards and Attomeys' Fees (DE # 3720). The Settlement fully

complies with Fed. R. Civ. P. 23(e), and, thus, the Court grants Final Approval to the Settlement,

certifies the Settlement Class, and awards the fees and costs requested by Class Counsel as well

as the requested Service Awards for the twelve (12) representative Plaintiffs.

2


BACKGROUND

The Court is familiar with the history of this consumer class action brought against U.S.

Bank, having presided over M DL 2036 for more than three years. During that time, the Court

has had ample opporttmity to observe Class Counsel and U.S. Bnnk's cotmsel in action. These

attorneys, several of whom have practiced before this Court for many years, are extremely

skilled advocates, and vigorously litigated the Action up to the time of the Settlement. The

Sedlement is quite obviously the result of nrm's-length negotiations, and the Court so finds.

The present evidentiary record ismore than adequate for the Court to consider the

fàirness, reasonableness and adequacy of the Settlement.

district judge has sufficient facts before him to evaluate and intelligently and knowledgeably

approve or disapprove the settlement. In re General Tire (f Rubber Co. Sec. L itig., 726 F.2d

1075, 1084 n.6 (6th Cir. 1984) (citing Detroit v. Grinnell, 495 F.2d 448, 463-68 (2d Cir. 1974)).

In this case, the Court clearly has such facts before it in considering, the M otion, including the

A fundnmental question is whether the

evidence and opinions of Class Counsel and their experts.

1. Factual and Procedural Background of the Action.

Plaintiffs brought this case seeking monetary damages, restitution and declaratory relietl

c'hallenging U.S. Bank's High-to-Low Posting of Debit Card Transactions in a mrmner Plaintiffs

contend was designed to increase the number of Overdraft Fees the Bnnk's customers incurred.

See generally Waters Fourth Amended Class Action Complaint (DE. # 464). Plaintiffs alleged

that as a result of U.S. Bank's High-to-Low Posting practice, customers' funds were depleted

rnore rapidly than they should have been, and that Plaintiffs and Settlement Class M embers paid

more Overdraft Fees than they should have paid. 1d.

U.S. Bnnk denied Plaintiffs' allegations of wrongdoing. U.S. Bnnk initially asserted that

Plaintiffs' claims were preempted by the NBA and advanced a medley of other defenses. See

3


Joint Declaration of Aaron S.Podhtlrst, Bruce S. Rogow and Robert C. Gilbert !! 7 (Etloint

Decl.'') (DE # 3681-2).Ten months into the case, U.S. Bank asserted that its right to compel

individual arbitration precluded Plaintiffs and a1l Settlement Class Members from pursuing the

Action, individually or as a class action. Id

On April 17, 2009, April Speers filed Speers v. U S. Bank 1,4., Case No. 09-cv-00409-

HU (çQspeers T') in the United States District Court for the District of Oregon, alleging improper

assessment and collection of Overdrah Fees and seeking, inter alia,monetary damages,

restitution and equitable relief. Joint Decl. ! 9. On September 10, 2009, Speers I was transferred

to this Court where, pursuant to an order of the Judicial Panel for Multi-District Litigation

($7PML''), it was made part of MDL 2036. See DE # 58.

On October 19, 2009, Plaintiff Speers filed Speers v.U S. Bank, NA., Case No. 09-

23126-.1L11 (Gspeers 11''4 in this Cotlrt, asserting identical allegations to those asserted in Speers

1. Joint Decl. ! 10. On October 22, 2009, Speers 11 was made part of MDL 2036. See DE # 1 14.

vbjoeers I was thereafter dismissed without prejudice. See DE # 16 1.

On M ay 12, 2009, W illyum W aters and Frank Smith tiled Waters et al. v. US. Bancorp,

A'.W., Case No. 09-cv-2071-JSW (çWaterf') in the United States District Court for the Northem

District of California, asserting substantially identical allegations to those raised in Speers 1.

Joint Decl. ! 1 1. On September 10, 2009, Waters was transferred to this Court and joined other

adions in M DL 2036. See DE # 54.

On October 9, 2009, Donald Kimenker filed Kimenker v. U S Bancorp, N A., Case No.

09-cv-2232-DMS-NLS (ximenker''j in the United States District Court for the District of New

Jersey, asserting substantially identical allegations against U.S. Bank. Joint Decl. ! 12. On

November 18, 2009, Kimenker was transferred to this Court and joined other actions in MDL

2036. See DE # 153.

4


On December 22, 2009, U.S. Bnnk and other defendants assigned to M DL 2036's first

tranche filed an omnibus motion to dismiss and/or for judgment on the pleadings. See DE # 217.

On March 11, 2010, following extensive briefing and oral argllment, the Court denied in part and

granted in part the omnibus motion to dismiss. See DE # 305.

On April 12, 2010, Plaintiffs filed a Third Amended Complaint in Waters, adding Glenda

Lawrence and Susan Ledbetter as Plaintiffs. See DE # 351.

On May 14, 2010, Plaintiff Kimenker moved for voltmtary dismissal of Kimenker and

joined the Waters action on the snme day, See DE # 464, 465. On June 7, 2010, a final order of

dismissal was entered in Kimenker. See DE # 562.

On May 14, 2010, Plaintiffs filed a Fourth Amended Complaint in Waters, adding

W illyum W aters, Frnnk Smith, Shane Parkins, Kara Parkins, Steven Barnes, Carolyn Barnes,

Glenda Lawrence, Susan Ledbetter and Donald Kimenker as Plaintiffs (collectively, the GGWaters

Plaintiffs'). See DE # 464. On May 14, 2010, Plaintiff Speers filed her Second Amended

Class Action Complaint in Speers I1. See DE # 466.

On July 2, 2010, U.S. Bnnk filed a motion to compel arbitration and to stay proceedings

as to the Speers 11 and Waters Plaintiffs (Gspeers 11 and Waters Arbitration Motion'). See DE #

632. On July 16, 2010, Plaintiffs filed an omnibus motion to compel further discovery

responses from U.S. Bank. See DE # 691. On July 26, 2010, the Speers 11 and Waters Plaintiffs

5led their opposition to U.S. Bank's Speers 11 and Waters Arbitration M otion. See DE # 723.

On October 13, 2010, Lori Brown and Mitchell Brown sled Brown v. US. Bank 1W.,

Case No. CV-10-356-RMP Qsrown'') in the United States District Court for the Eastem District

of W ashington, asserting substantially similar allegations against U.S. Bank to those asserted in

Speers f, Speers #, Waters and Kimenker. Joint Decl. ! 19. On November 16, 2010, Brown was

5


transferred to this Court and made part of MDL 2036, where it joined Speers 11 and Waters

pending against U.S. Bank. See DE # 922.

On October 26, 2010, the Court denied U.S. Bnnk's Speers 11 and Waters Arbitration

M otion. See DE # 855. 0n October 27, 2010, U.S. Brmk appealed the denial of its Speers 11 and

Waters Arbitration M otion. See DE # 856, On October 29, 2010, U.S. Bnnk filed a motion to

stay proctedings in this Court pending its appeal. See DE # 861.On November 3, 2010, the

Court denied the motion to stay. See DE # 874.

On November 29, 2010, U.S. Bnnk filed a motion to compel the Speers 11 and Waters

Plaintiffs to produce documents and answer interrogatories. See DE # 955. On December 6,

2010, the Speers 11 and Waters Plaintiffs filed their opposition to that motion. See DE # 987.

On December 17, 2010, the United States Court of Appeal for the Eleventh Circuit

granted U.S. Bank's motion for stay pending appeal. See DE # 1019. ln early 2011, U.S. Bank

and the Speers 11 and Waters Plaintiffs filed their respective appellate briefs in the Eleventh

Circuit. Joint Decl. ! 22.

On M ay 2, 201 1, U.S. Bnnk filed a motion to compel arbitration and stay proceedings

against the Brown Plaintiffs (QGBrown Arbitration Motion'). See DE # 141 1. On May 17, 201 1,

the Brown Plaintiffs filed a motion to defer ruling on and their opposition to that motion. See DE

# 1491, 1493. On June 30, 201 1, the Court granted the Brown Plaintiffs' motion to defer ruling

and ordered the parties to conduct limited arbitration-related discovery. See DE # 1673.

On Jtme 30, 2011, U.S. Bnnk filed a notice of appeal of the Order defening ruling on the

Brown Arbitration M otion. See DE # 1676. On July 5, 201 1, U.S. Bnnk filed a m otion to stay

further proceedings in Brown pending the outcome of its interlocutory appeal. See DE # 1682.

On July 22, 201 1, this Court denied U.S. Bank's motion to stay. See DE # 2750. On October 5,

201 1, the Eleventh Circuit dismissed U.S. Bank's appeal for lack of jurisdiction.

6


On December 14, 2011, U.S. Bnnk filed a successor motion to compel arbitration and

stay proceedings against the Brown Plaintiffs. See DE # 2220. On December 20, 201 1, the

Srown Plaintiffs movtd to strike the Bank's successor motion. See DE # 2282.

2.

In late 201 1, Settlement Class Cotmsel and counsel for U.S. Bank initiated preliminary

Settlem ent Negotiations and Proceedings.

settlement discussions. Joint Decl. ! 26. The preliminary discussions resulted in the scheduling

of mediation in the Spring of 2012. Id.

ln early 2012, the Eleventh Circuit granted the joint motion of U.S. Bank and the Speers

11' and Wàters Plaintiffs to stay further proceedings to allow the parties to proceed with

2 Joint Decl. ! 27. In late January 2012, the Brown Plaintiffs and U.S. Bnnk filed amediation.

joint motion in this Court to suspend briesng on U.S. Bank's successor motion to compel

rbitration to facilitate the forthcoming mediation.See DE # 2412. Tht Court granted that joint

motion, and subsequently extended the temporary suspension. See DE # 2417.

On May 10, 2012, Class Counsel and U.S. Bank participated in mediation with Professor

Eric Green of Resolutions LLC, Joint Decl. ! 28. Although an agreement was not reached at

that mediation session, both sides continued settlement discussions thereafter with the assistance

of Professor Green. 1d. On June 29, 2012, the Parties reached an agreement in principle and,

shortly thereaher, executed a Summary Agreement that memorialized the material terms of the

Settlement. Id. at ! 29. On July .3, 2012, the Parties filed a joint notice of settlement that

requested a suspension of all deadlines pending the drafting and execution of a final settlement

agreement. See DE # 2805. On July 6, 2012, the Court entered an Order suspending deadlines

for supplemental arbitration briefing pending the filing of a settlement agreement. See DE #

2 The Eleventh Circuit extended the stay several times to allow the parties to complete the

settlement process. Joint Decl. ! 27 n.2.


28 12. Following months of extensive discussions, negotiations and drahing, the Parties resolved

all remaining issues, culminating in the Agreement. Joint Decl. ! 29.

On July 24, 2013, Plaintift-s and Class Counsel filed their motion for preliminary

approval. See DE # 3543. On July 29, 2013, the Court entered the Preliminary Approval Order.

See DE # 3559. Ptlrsuant to the Preliminary Approval Order, Notice was disseminated to the

Settlement Class. Joint Decl. ! 30.

3. Sum m ary of the Settlement Term s.

The terms of the Settlement are set forth in the Agreement. (DE # 368 1-1). The Court

now provides a summary of the material terms.

A. The Settlement Class.

The Settlement Class is an opt-out class under Rule 23(b)(3) of the Federal Rule of Civil

Procedure. The Settlement Class is defined as;

All holders of any U.S. Bnnk Accotmt who, during the Class Period applicable tothe state in which the Account was opened, incurred one or more Overdraft Fees

as a result of U.S. Bank's High-to-Low Posting. Excluded from the Class are all

current U.S. Bnnk employees, officers and directors, and the judge presiding overthis Action.

3Agreement ! 76.

B. M onetary Relief for the Benefit of the Class.

U.S. Bank deposited $55,000,000 into the Escrow Account following Preliminary

Approval. Joint Decl. ! 32. That deposit created the Settlement Fund, which will be used to

pay: (i) a1l Automatic Distributions of payments to the Settlement Class; (ii) a11 Court-ordered

3 idclass Period'' means, for Settlement Class Members who opened accounts in: (i) Iowa,

lllinois, lndiana, Kentucky, Montana, Ohio, and W yoming, the period from April 1, 2003

tkough August 15, 2010; (ii) Arkansas, Idaho, Kansas, Missouri, Nebraska, and Washington, theperiod from October 19, 2004 through August 15, 2010; (iii) Arizona, Minnesota, North Dakota,Nevada, Oregon, South Dakota, Tennessee, Utah, W isconsin, the period from October 19, 2003

through August 15, 2010; (iv) California, the period from May 12, 2005 through August 15,2010; and (v) Colorado, the period from October 19, 2006 through August 15, 2010. Agreement! 46.

8


awards of attorneys' fees, costs and expenses of Class Colmsel; (iii) all Court-ordered service

awards to the Plaintiffs; (iv) reimburse U.S. Bnnk for the payment of costs as set forth in Section

XlI1'. of the Agreement; (v) distribute any residual funds as set forth in Section XIIl; (vi) all

Taxes pursuant to paragraph 102 of the Agreement; (vii) any costs of Settlement Administration

other than those to be paid by U.S. Bank pursuant to Section IV of the Agreement; and (viii) any

additional fees, costs and expenses not specifically enumerated in paragraph 103 (a)-(g) of the

Agreement, subject to approval of Settlement Class Counsel and U.S. Bank. Agreement ! 103.

ln addition to the $55,000,000 Settlement Fund, U.S. Bnnk is responsible for paying all costs and

fees of the Settlement Administrator and Notice Administrator incurred in connection with the

administration of the Notice Program and Settlement administration. 1d. at ! 80.

All identifiable Settlement Class M embers who experienced a Positive Overdraft

Diffkrential will receive pro rata distributions from the Net Settlement Ftmd, provided they do

4 A t ! 108not opt-out of the Settlement. greemen .The Positive Differential Overdraft analysis

determines, among other things, which U.S. Bank Account holders were assessed additional

Overdraft Fees that would not have been assessed if the Bnnk had used an alternative posting

sequence or method for posting Debit Card Transactions other than High-to-lwow Posting, and

how much in additional Overdraft Fees those Account holders paid. 'The calculation involves a

multi-step process that is described in detail in the Agreement. Id at !! 104-107.

4 The Net Settlement Ftmd is equal to the Settlement Fund, plus interest earned (if anyl, less theamount of Court-awarded attom eys' fees and costs to Class Counsel, the nmount of Court-

awarded service awards to the Plaintiffs, a reservation of a reasonable nmount of funds forprospective costs of Settlement administration that are not U.S. Bnnk's responsibility pursuant to

Section IV of the Agreement, and any other costs and/or expenses incurred in comwction with

the Settlement that are not specifically enumerated in paragraph 109 (a)-(c) that are provided forin the Agreement and have been approved by Settlement Class Counsel and U.S. Bank.

Agreement ! 109.

9


Eligible Settlement Class M embers do not have to submit claims or take any other

affirmative step to receive relief under the Settlement.The amount of 'theirpr/ rata distributions

will be determined by Settlement Class Cotmsel and their expert through analysis of U.S. Bank's

electronic data. Agreement !! 104-107. As soon as practicable after Final Approval, but no later

than 120 days from the Effective Date (Agreement ! 50), the Settlement Administrator will

distribute the Net Settlement Fund t() al1 eligible Settlement Class M embers who had a Positive

Overdrah Differential and did not timely opt out of the Settlement. f#. at !! 108-1 13.

Payments to Settlement Class M embers who are current Account Holders will be made

by crediting such Settlement Class Members' Accounts,and notifying them of the credit.

Agreement ! 1 13. U.S. Bnnk will then be entitled to a reimbursement for such credits from the

Net Settlement Fund. Id at ! 1 14. Former Account Holders tand current Account Holders

whose Accotmts cnnnot feasibly be automatically credited) will receive their payments by checks

mailed by the Settlement Administrator. 1d. at !! 1 13-1 14.Any tmcashed or returned checks

will remain in the Settlement Ftmd for one year from the date the first distribution check is

mailed, during which time the Settlement Administrator will make reasonable efforts to

effectuate delivery of the Settlement Ftmd Payments. Agreement ! 1 15.

Any residual funds remaining in the Settlement Fund one year after the first Settlement

Fund Payments are mailed will be distributed as follows: first, to U.S. Ballk to reimburse it for

a11 fees and costs it paid to the Notice Administrator and Settlement Administrator associated

with the Notice Program and Settlement administration; second, any remaining funds will be

distributed on a pro rata basis to pm icipating Settlement Class Members who received an

Automatic Distribution pursuant to Section XII of the Agreement, to the extent feasible and

practical in light of the costs of administering such subsequent payments, unless the amotmts

involved are too small to make individual distributions economically viable or other specifc

10


reasons exist that would make such further distributions impossible or unfair; or third, if the costs

of preparing, transmitting and administering subsequent payments to participating Settlement

Class Members are not feasible and practical to make individual distributions economically

viable, or other specitic reasons exist that make such further distributions impossible or tmfair,

Settlement Class Counsel and cotmsel for U.S. Bnnk will jointly propose a plan for distribution

of the residual funds consistent

f itigation j 3.07(c),

consultation with the

modify, in whole or in parq the proposed plan for distribution of the residual funds in a mnnner

consistent with the American Law lnstitute, Princ+les ofAggregate L itigation j 3.07(c). The

with the American Law Institute, Principles of Aggregate

and will present the plan to the Court for its consideration. After

Parties, the Court will have the discretion to approve, deny, nmend or

residual funds shall not be used for any litigation purpose or to disparage any Party. The Parties

agree that the Court's approval, denial, amendment or modification, in whole or in part, of the

proposed plan for distribution of the residual ftmds will not constitute grounds for termination of

the Settlement pursuant to paragraph 126 of the Agreement, Agreement ! 1 16.

C. Class Release.

In exchange for the benefits conferred by the Settlement, all Settlement Class Members

who do not opt out will be deemed to have released U.S. Bnnk from claims as set forth in the

detailed release language fotmd in Section XIV of the Agreement.

DISCUSSION

Federal courts have long recognized a strong policy and presumption in favor of class

action settlements. The Rule 23(e) analysis should be Gçinfonned by the strong judicial policy

favoring settlements as well as the realization that compromise is the essence of settlement.'' In

re Chicken Antitrust Litig. Am. Poultry 669 F.2d 228, 238 (5th Cir. Unit B 1982); see also Isby

v. Bayh, 75 F.3d 1 1 91, 1 196 (7th Cir. 1996). In evaluating a proposed class action settlement,


the Court ûçwill not substitute its business judgment for that of the parties; 'the only question . . .

is whether the settlement, taken as a whole,is so tmfair on its face as to preclude judicial

approval.''' Rankin v. Rots, 2006 WL 1876538, at *3 (E.D. Mich. June 27, 2006) (quoting Zerkle

v. Cleveland-clfà Iron C/., 52 F.R.D. 151, 159 (S.D.N.Y. 1971)). Sssettlement agreements are

highly favored in the 1aw and will be upheld whenever possible because they are a means of

amicably resolving doubts and tmcertainties and preventing lawsuits.'' In re Nissan M otor Corp.

Antitrust L itig., 552 F.2d 1088, 1105 (5th Cir. 1977).

As discussed below, the Court finds and concludes that the Settlement is a good, fair and

appropriate result for the Settlement Class in this very difficult case and easily satisfes Rule

23(e). The Settlement includes a Settlement Fund of $55,000,000, plus the Bank's payment of

the fees and costs associated with the Notice Progrnm and administration of the Settlement. Joint

Decl. !! 2, 5, 90. A11identisable Settlement Class Members who experienced a Positive

Differential Overdrah and did not timely opt-out will automatically receive their recovery as a

matter of course, without needing to take any action, based on an analysis by Settlement Class

Counsel's expert of information in U.S. Bnnk's possession. Agreement ! 108.

The Court's Exercise of Jurisdiction Is Proper.

ln addition to having personal jurisdiction over the Plaintiffs, who are parties to the

Action, the Court also has personal jurisdiction over all members of the Settlement Class because

they have received the requisite notice and due process. See 'Jp//#zC Petroleum Co. v. Shutts,

472 U.S. 797, 81 1-12 (1985) (citing Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306,

314- 15 (1950:9 see also In re Prudential Ins.Co. ofAm. Sales Practices L itig., 148 F.3d 283,

306 (3d Cir. 1998). The Court has subject matter jurisdiction over the Action pursuant to 28

U.S.C. jj 1332(d)(2) and (6).


a. The Best Notice Practicable W as Provided to the Settlement Class.

As discussed above, Notice of the Settlement in the form approved by the Court was

mailed to 2,712,743 members of the Settlement Class. See Declaration of Shnnnon R.

Wheatman Decl. !jI 12-15 (tûWheatman Dec1.'') (DE # 3681-4); Declaration of Ryan McNnmee

!J! 6-10 (tGMcNnmee Decl.'') (DE # 3681-5). Notice of the Settlement was also published

through advertisements in People and ESPN magazines, two weekly national publications.

Wheatman Decl. T! 16-17. ln addition, a special Settlement Website and toll-free telephone

number were established to enable Settlement Class M embers to obtain detailtd information

about the Action and the Settlement. McNamee Decl. !! 4-5.

b. The Notice W as Reasonably Calculated to Inform Settlement Class

M embers of Their Rights.

5 isfied due process requirements because it described EitheThe Court-approved Notice sat

substantive claims , . . (and) contained information reasonably necessary to make a decision to

remain a class member and be bound by the final judgment.'' In re Nissan Motor Corp. Antitrust

L itig., 552 F.2d at 1 1 04-05. The Notice, nmong other things, defned the Settlement Class;

described the release provided to U,S. Bnnk tmder the Settlement as well as the amount, manner

of allocating, and proposed distribution of the Settlement proceeds; and informed Settlement

Class Members of their right to opt-out and object, the procedures for doing so, and the time and

place of the Final Approval Hearing. Further, the Notice stated that Class Counsel intended to

seek attomeys' fees of up to thirty percent (30%) of the $55,000,000 Settlement Fund. In

addition to disclosing these material terms, the Notice informed Settlement Class Members that a

class judgment would bind them unless they opted out, and told them where they could get more

5 See Preliminary Approval Order at ! 12 (DE # 3559).


information - for exnmple, at the Settlement W ebsite that posts a copy of the fully executed

Agreement, as well as other important court documents such as the M otion.

The Motion and exhibits thereto contain Class Counsel's considered opinion that the

$55,000,000 Settlement Fund represents approximately thirteen percent (13%) of the most

probable damages Plaintiffs and the Settlement Class could recover at trial. Joint Decl. ! 66.

The disclosure of this percentage was sufûcient to put Settlement Class Members on notice of

their potential recovery based on their personal history with U.S. Bank and to allow them to

make an informed decision about whether to accept the Settlement, object to it or opt out of it.

The Court finds that the Settlement Class M embers were provided with the best

practicable notice; the notice was çtreasonably calculated, under (thel circumstances, to apprise

interested parties of the pendency of the action and afford them an opportunity to present their

objections.'' Shutts, 472 U.S. at 812 (quoting Mullane, 339 U.S. at 314-15). This Settlement

with U.S. Bnnk was widely publicized, and any Settlement Class M ember who wished to express

comments or objections had ample opporttmity and means to do so. Wheatman Decl. !! 8-25.

2. The Settlem ent Is Fair, Adequate and Reasonable, and Therefore ls Finally

Approved Under Rule 23.

In determining whether to approve the Settlement, the Court considers whether it is çsfair,

adequate, reasonable, and not the product of collusion.'' f everso v. SouthTrust Bank ofAl., NA.,

18 F.3d 1527, 1530 (11th Cir. 1994); see also Bennett v. Behring Corp., 737 F.2d 982, 986 (1 1th

Cir. 1984). A settlement is fair, reasonable and adequate when tdthe interests of the class as a

whole are better served if the litigation is resolved by the settlement rather than pursued.'' In re

L orazepam & Clorazepate Antitrust Litig., MDL No. 1290, 2003 W L 2203774 1, at *2 (D.D.C.

Jtme 16, 2003) (quoting Manualfor Complex L itigation (Third) j 30.42 (1995:. The Court is

ç'not called upon to determine whether the settlement reached by the parties is the best possible

deal, nor whether class members will receive as much from a settlement as they might have

14


recovered from victory at trial.'' In re Mexico Money Transfer L itig., 164 F. Supp. 2d 1002, 1014

(N.D. 111. 2000) (citations omitted).

The Eleventh Circuit has identified six factors to be considered in analyzing the faimess,

reasonableness and adequacy of a class action settlement tmder Rule 23(e):

(1) the existence of fraud or collusion behind the settlement;

(2) the complexity, expense, and likely duration of the litigation;

(3) the stage of tht proceedings and the amount of discovery completed;

(4) the probability of the plaintiffs' success on the merits;

(5) the range of possible recovery; and

(6) the opinions of the class counsel, class representatives, and the substance

and amount of opposition to the settlement.

f everso, 18 F.3d at 1530 n.6; see J/Jt) Bennett, 7?7 F.2d at 986.

a. There W as No Fraud or Collusion.

The Court has readily concluded there was no fraud or collusion behind this Settlement.

See, e.g., In re Sunbeam Sec. Litig., l 76 F. Supp. 2d 1323, 1329 n.3 (S.D. Fla. 2001); Ingram v.

Coca-cola Co., 200 F.R.D. 685, 693 (N.D. Ga. 2001) (court had Ssno doubt that this case has

been adversarial, featuring a high level of contention between the parties'); In re Motorsports

Merchandise Antitrust L itig., 1 12 F, Supp. 2d 1329, 1338 (N.D. Ga. 2000) Cû-l-his was not a

quick settlement, and there is no suggestion of collusion.'); Warren v. Cit.v of Tampa, 693 F.

Supp. 1051, 1055 (M.D. Fla. 1988) (record showed no evidence of collusion, but to the contrary

showed Séthat the partiesconducted discovery and negotiated the terms of settlement for an

extended period of time'), aft''ti 893 F.2d 347 (1 1th Cir. 1989).

The Settlement was reached after more than three years of litigation before this Court and

the Eleventh Circuit, and following formal mediation with a nationally recognized mediator.

15


W hen the initial mediation session did not result in an agreement, the mediator continued his

efrol'ts through repeated telephone calls with counsel for both sides, ultimately resulting in the

Settlement now before the Court. Based on these facts, the Court concludes there was no fraud

or collusion behind this Settlement.

b. The Settlement W ill Avert Years of Highly Complex and Expensive

Litigation.

The claims and defenses involved in the Action are complex, and litigating them has been

diffkult and time consuming. Joint Decl. !! 56-57. Although the Action was litigated for over

three years, recovery by any means other than settlement would require additional years of

litigation in this Court and appellate courts. 1d. at ! 62; Declaration of Professor Brian

Fitzpatrick ! 14 (tTitzpatrick Dec1.'') (DE # 3681-3); see United States v. Glens Falls

Newspapers, Inc., 160 F.3d 853, 856 (2d Cir. 1998) (noting that ç1a principal function of a trial

judge is to foster an atmosphere of open discussion among the parties' attorneys and

representatives so that litigation may be settled promptly and fairly so as to avoid the uncertainty,

expense and delay inherent in a tria1.'')', In re Domestic Air Transp. Antitrust L itig., 148 F.R.D.

297 at 317, 325-26 & 11.32 (N.D. Ga. 1993) (ççadjudication of the claims of two million claimants

could last half a millennium').

Instead, the Settlement providesimmediate and substantial benefits to approximately

2,700,000 Settlement Class M embers, all of whom are current or former U.S. Bank customers.

Joint Decl. ! 62; see In re Shell Oil Ae/nery, 155 F.R.D. 552, 560 (E.D. La. 1993) ($The Court

should consider the vagaries of litigation and compare the signiticance of immediate recovery by

way of the compromise to the mere possibility of relief in the future, after protracted and

expensive litigation.'') (quoting Oppenlander v. Standard Oil Co., 64 F.R.D. 597, 624 (D. Colo.

1974)); see also In re US. Oil (:17 Gas L itig., 967 F.2d 489, 493 (11th Cir. 1992) (noting that

complex litigation tçcan occupy a court's docket for years on end, depleting the resources of the


parties and taxpayers while rendering meaningful relief increasingly elusive''). Particularly

because the dçdemand for time on the existing judicial system must be evaluated in determining

the reasonableness of the settlements'' Ressler v. Jacobson, 822 F. Supp. 1551, 1554 (M.D. Fla.

1992) (citation omitted), there can be no reasonable doubt as to the adequacy of this Settlement.

The Factual Record is Sufficiently Developed to Enable Class Counselt

o M ake a Reasoned Judgment Concerning the Settlement.

The Court considers dithe degree of case development that class counsel have

accomplished prior to settlement'' t() ensure that Elcounsel had an adequate appreciation of the

merits of the case before negotiating.'' In re General Motors Corp. Pick-up Truck Fuel Tank

Proffs'. L iab. L itig., 55 F.3d 768, 813 (3d Cir. 1995). At the snme time, tGltlhe 1aw is clear that

eltrly settlements are to be encouraged, and accordingly, only some reasonable amount of

discovery should be required to make these determinations.'' Ressler, 822 F. Supp. at 1555.

Settlement Class Counsel negotiated the Settlement with tNe benetk of signitkant

arbitration-related proceedings before this Court and the Eleventh Circuit involving U.S. Bnnk

and other bnnks in M DL 2036, as well as consdential Overdraft Fee data provided by U .S. Bnnk

in advance of mediation. Joint Decl. ! 63. An tmderstanding of the legal obstacles involving

arbitration, as well as analysis of U.S. Bnnk's Overdraft Fee data positioned Settlement Class

Counsel to evaluate with confidence the strengths and wenknesses of Plaintiffs' claims and

defenses relating to arbitration, as well as the range and nmotmt of dnmages that were potentially

recoverable if the Action successfully proceeded to judgment on a class-wide basis. Id

tllnformation obtained from other cases may be used to assist in evaluating the merits of a

proposed settlement of a different case.'' f ipuma, 406 F. Supp. 2d at 1325. çt-l-he lawsuits in this

M DL are at a mature stage; they have not been rushed to settlement for a quick fee award.''

Fitzpatrick Decl. ! 15.

17


d. Plaintiffs W ould Have Faced Signifcant Obstacles to Obtaining

Relief.

The Court also considers çdthe likelihood and extent of any recovery from the defendants

absent . . . settlement.'' In re Domestic Air Transp., 148 F.R.D. at 314; see also Ressler, 822 F.

Supp. at 1555 ($W Court is to consider the likelihood of the plaintifps success on the merits of

his claims against the amount and fonm of relief offered in the settlement before judging the

fairness of the compromise.').

Plaintiffs and Class Counsel faced several major risks in this litigation, including

individual arbitration and federal preemption of state 1aw claims. Fitzpatrick Decl. !! 10-12;

Joint Decl. ! 64. Given the myriad risks attending these claims, the Settlement is a fair

compromise. See, e.g., Bennett, 96 F.R.D. at 349-50 (plaintiffs faced a idmyriad of factual and

legal problems'' that led to tçgreat tmcertainty as to the fact and nmotmt of damage,'' which made

it çiunwise gfor plaintiffs) to risk the substantial benefts which the settlement confers . . . to the

vagmies of a trial'), aftnd, 7?7 F.2d 982 (1 1th Cir. 1984).

According to Professor Fitzpatrick, '%U.S. Bnnk's arbitration clause alone - but certainly

when combined with the other uncertainties outlined above with regard to the merits - paints a

very challenging picture for the class had these lawsuits gone forward.'' Fitzpatrick Decl. ! 12.

If U.S. Bnnk were ultimately successful in enforcing mandatory, individual mbitration of the

claims raised in the Action,this litigation would have effectively ground to a halt. See

Declaration of Thomas E. Scott ! 15 (sfscott Decl.'') (DE # 3681-7).

In addition to arbitration, U.S. Bnnk would also have continued to

preemption defense.

press its NBA

Joint Decl. ! 64; Fitzpatrick Decl. ! 1 1; Scott Decl. ! 15. This Court

stressed that its original preemption ruling, on motions to dismiss, applied only çélalt this stage . .

.'' In re Checking Account Over#rc./i f itigation, 694 F. Supp. 2d 1302, 1313 (S.D. Fla. 2010).

W hen it subsequently approved the Bnnk of America settlement, this Court observed that

18


ççwhdher Plaintiffs' claims art preempted by the NBA and related regulations remains an open

question. . gN)o federal appeals court has yet reached the NBA preemption issue in this

specitic context. The preemption defense dfwas a tlight switch' which, if successfully turned ton'

. . would have led to dismissal of the entire case . . .'' Checking Account Over#rtz/i, 830 F.

Supp. 2d at 1347 (citations omitted).Since that time, one federal appeals court has addressed the

preemption issue. See Gutierrez v. Wells Fargo Bank NA., 704 F.3d 712 (9th Cir. 2012).

In the face of the tmcertainties and risks faced by Plaintiffs - pmicularly those associated

with U.S. Bnnk's mbitration clause - the Settlement recovery of approximately thirteen percent

(13f4) of the most probable sum Plaintiffs anticipated recovering at trial constitutes a fair

settlement.

e. The Benefits Provided by the Settlement Are Fair, Adequate and

Reasonable W hen Compared to the Range of Possible Recovery.

ln determining whether a settlement is fair in light of the potential range of recovery, the

Court is guided by the Eçimportant maximgl'' that Sdthe fact that a proposed settlement amounts to

only a fraction of the potential recovery does not mean the settlement is unfair or inadequate.''

Behrens, 1 18 F.R.D. at 542. This is because a settlement must be evaluated ttin light of the

attendant risks with litigation.'' Thompson v. Metropolitan L f/'c Ins. Co., 216 F.R.D. 55, 64

(S.D.N.Y. 2003); see Bennett, 737 F.2d at 986 (sdlclompromise is the essence of settlement.');

L inney v. Cellular Alaska P 'JW1/, 151 F.3d 1234, 1242 (9th Cir. 1998) (t1(T1he very essence of a

settlement is . . . a yielding of absolutes and an abandoning of highest hopes.'') (intemal

quotation omitted). Thus, courts regularly find settlements to be fair where çtgpllaintiffs have not

received the optimal relief.'' Warren, 693 F. Supp.at 1059; see, e.g. , Great Neck Capital

Appreciation Investment P 'sh+, L .P. v. PriceWaterHousecoopers, L .L .P., 212 F.R.D. 400, 409-

410 (E.D. Wis. 2002) (çdThe mere possibility that the class might receive more if the case were

fully litigated is not a good reason for disapproving the settlement.').

19


This case involves alleged wrongfulOverdrah Fees exceeding $400,000,000. See

Declaration of Arthtlr Olson. ! 17 (DE # 3681-6). Under the Settlement, Plaintiffs and the

Settlement Class have recovered $55,000,000 in cash, which represents approximately thirteen

percent (13%) of the most probable aggregate dnmages that Class Counsel believe Plaintiffs

could have recovered on behalf of the Settlement Class if the Action were successf'ul in all

respects. Joint Decl. !! 60-61, 66-67. U.S. Bnnk''s agreement to pay all fees, costs and expenses

of the Notice Administrator and Settlement Administrator (as well as the Automatic Distribution

process) further enhances the value the Settlement, Id. at !! 61, 68.

In the Court's view, there is no doubt that this was a very diftkult case with significant

risks. The case was resolved as a result of the efforts of extremely well qualitied and capable

counsel for both sides in a mnnner that provides a good, fair and appropriate result for the

Settlement Class. The Court finds that the recovery achieved through the Settlement is

reasonable in light of the risks Plaintiffs faced. Fitzpatrick Decl. !! 10-16. dtFor a11 these

reasons, I believe this settlement is not only fair, adequate and reasonable, but an impressive

result.'' Id. at ! 17.

f. The Opinions of Class Counsel, Class Representatives, and Absent

Settlement Clas: M ember: Strongly Favor Approval of the

Settlem ent.

The Court gives ttgreat weight to the recommendations of counsel for the parties, given

their considerable experience in this type of litigation.'' Warren, 693 F. Supp. at 1060; see also

Mashburn, 684 F. Supp. at 669 (ûç1f plaintiffs' counsel did not believe these factors al1 pointed

substantially in favor of this settlement as presently stm ctured, this Court is certain that they

would not have signed their nnmes to the settlement agreement.'); In re Domestic Air Transp.,

148 F.R.D. at 312-13 ($fIn determining whether to approve a proposed settlement, the Court is

entitled to rely upon the judgment of the parties' experienced counsel. $ (Tjhe trial judge, absent

20


fraud, collusion, or the like, should be hesitant to substitute its own judgment for that of

counsel-'''l (citations omitted).

Class Counsel and the representative Plaintiffs believe that this Settlement is deserving of

Final Approval, and the Court agrees. Joint Decl. !! 69-70. Furthermore, the Court also finds it

telling that, of the 2.7 million Settlement Class Members, only one hundred thirty-two (132)

timely requests for exclusion from the Settlement were received, and only fourteen (14)

objections were submitted, eight (8) of which were later withdrawn. f lpuma v. American

Emress Co., 406 F. Supp. 2d 1298, 1324 (S.D. Fla. 2005) (finding that a 1ow percentage of

objections Sçpoints to the reasonableness of a proposed settlement and supports its approval').

The extraordinarily small number of exclusion requests and objectionsfurther supports the

Court's findings and conclusion that the Settlement is fair, adequate and reasonable.

g. The Remaining Objections Regarding the Fairness of the Settlement AreW ithout M erit.

The Court reviewed and considered the remaining six (6) Objections, including those that

were not timely. Specitkally, the Court carefully reviewed and considered the objections

submitted by: (1) Harold Myers (I)E # 3665, as supplemented by DE # 3736); (2) Denise

Quinehan (DE # 3701); (3) William Lichvarcik (DE # 3709); (4) Brenda Gordon (DE # 3713),

including the untimely Amended Motion for Intervention of Rightgermissive lntervention to the

Proposed Class Action Settlement Agreement dated December 16, 2013, and accompanying

6Affidavit; (5) Donald Null; and (6) Todd J. Luh.

The six (6) objections generally raise three arguments: first, that the nmount of the

Settlement Fund ($55,000,000) is insufficient and should also include, inter alia, interest and

6 Although the Null and Luh objections were not filed on the Court's CM/ECF System, theywere attached to Plaintiffs' and Class Cotmsel's Response to Objections to Motion for FinalApproval of Settlement and Application for Service Awards and Attorneys' Fees (DE # 3720).


other penalties; second, that the Bank's agreement to continue its recently-adopted posting order

applicable to consumer checking accounts for a minimum of two (2) years following Final

Approval is insufficient; and third,that the amount of the attorneys' fees sought by Class

Counsel, and the Service Awards for the twelve (12) nnmed Plaintiffs, are excessive. None of

the objectors submitted an expert affidavit or provided any evidence undermining the

conclusions reached by Class Cotmsel and their nationally recognized experts. See Hanlon v.

Chrysler Corp. , 150 F.3d

class action settlement

101 1, 1021 (9th Cir. 1998) (affrming final approval of nationwide

where fçltjhe objectors presented no evidence'' to support their

argtlments).

The Court finds that the arguments contained in the six (6) ohjections lack merit and are

riddled with mistmderstnndings of the Settlement and basic class action jurisprudence.

Therefore, based on the foregoing analysis of the Settlement underthe factors set forth in

f everso and Bennett, the Court overrules the six (6) remaining objections to the Settlement.

3. The Settlem ent Class.

This Court previously fotmd the requirements of Rule 23(a) and 23(b)(3) satisfied in this

Action in a settlement posture (DE # 3559), and in similar actions in MDL 2036 on contested

motions for class certifkation (see, e.g., DE # 1763 (Union Bnnk, N.A.); DE # 2615 (TD Bnnk,

N.A.); DE # 2673 Bancorpsouth); DE # 2697 (PNC Bank, N.A.); DE # 2875 (Comerica); DE #

2847 (Capital One)) and in the context of settlement (see, e.g., DE # 1520, 2150 (Bnnk of

America, N.A.); DE # 2712, 3134 tlpMorgan Chase Brmk, N.A.); DE # 2959, 3331 (Citizens

Financiall). The Court hereby reiterates its findings that: (a) the Settlement Class Members are

so numerous that joinder of them is impracticable; (b) there are questions of law and fact

common to the Settlement Class that predominate over any individual questions; (c) the claims

of the representative Plaintiffs are typical of the claims of the Settlement Class; (d) the

22


representative Plaintiffs and Class Counsel fairly and adequately represent and protect the

interests of the Settlement Class Members; and (e) a class action is superior to other available

methods for the fair and efficient adjudication of the present controversy.

The 132 individuals listed in Exhibit A to the Final Judgment being entered

contemporaneously herewith timely elected to opt out of the Settlement. The Court therefore

finds and decrees that they are not part of the Settlement Class, are not botmd by the Settlement

or release contained therein, and will not receive any distribution from the Settlement Fund.

4. The Application for Service Awards to the Plaintiffs Is Approved.

Service awards dçcompensate nnmed plaintiffs for the services they provided and the risks

they incurred during the course of the class action litigation.'' Allapattah Services, Inc. v. Exxon

Corp., 454 F. Supp. 2d 1 185, 1218 (S.D. Fla. 2006).Sll-l-lhere is ample precedent for awarding

incentive compensation to class representatives at the conclusion of a successful class action.''

David v. American Suzuki Motor Corp., 2010 WL 1628362, at *6 ('S.D. Fla. Apr. 15, 2010).

Courts have consistently found service awards to be an eftkient and productive way to

encourage members of a class to become class representatives.See, e.g., Ingram, 200 F.R.D. at

694 (awarding class representatives $300,000 each, explaining that tçthe magnitude of the relief

the Class Representatives obtained on behalf of the class warrants a substantial incentive

award.''); Spicer v. Chi. Bd. Options Exchange, Inc., 844 F.supp. 1226, 1267-68 (N.D. 111. 1993)

(collecting cases approving service awards ranging from $5,000 to $100,000, and awarding

$10,000 to each named plaintift).The factors for determining a senice award include: (1) the

actions the class representatives took to protect the interests of the class; (2) the degree to which

the class benetked from those actions; and (3) the amotmt of time and effort the class

representatives expended in pursuing the litigation. See, e.g., Cook v. Niedert, 142 F.3d 1004,

1016 (7th Cir. 1998).


The Court finds that the twelve (12) named Plaintiffs expended substantial time and

effort in representing the Settlement Class, and deserve to be compensated for such time and

effort. Joint Decl. ! 76. Therefore, the Court approves the requested service awards of $10,000

for each of the twelve (12) Plaintiffs, or $5,000 per Plaintiff for married couples in which both

spouses are representative Plaintiffs, to be paid from the Settlement Fund.

5. Class Counsel's Application for Attorneys' Fees Is Granted.

Class Counsel request a fee equal to thirty percent (30%) of the $55,000,000 Settlement

Flmd created through their efforts in litigating this case and reaching the Settlement. Several

objectors objected to the amount of Class Counsel's fee request. The Court analyzes Class

Counsel's fee request under Camden I Condo. Ass 'n. v. Dunkle, 946 F.2d 768 (1 1th Cir. 199 1).

As set forth below, after considering the Camden I factors, the Court concludes that Class

Counsel's application for fees in the nmount of $16,500,000, equal to thirty percent (30%) of the

$55,000,000 Settlement Ftmd, is well justiGed and will be granted. The Court overrules the

objections to Class Cotmsel's fee request, including the argument that the requested fee is

excessive because this is the sixteenth or seventeenth settlement reached and approved as part of

this multidistrict litigation proceeding. These settlements, including the Settlement with U.S.

Baùk, do not happen by accident.They are the result of incredible and massive amounts of work

W hile al1 of the cases in this multidistrict litigationby excellent lawyers on both sides.

proceeding involve claims and defenses regarding the banks' overdraft fee policies and practices,

each case includes a unique set of facts, and the application of legal arguments by both sides to

those facts. For that reason, this Court rejects the argument that a fee award equal to thirty

percent (30%) of the common fund recovery is excessive. ln the Court's view, a thirty percent

(30%) fee award may be lower than appropriate in certain of these cases.

24


a. The Law Awards Class Counsel Fees from the Common FundCreated Through Their Efforts.

It is well established that when a representative party has conferred a substantial benetk

upon a class, counsel is entitled to attomeys' fees based upon the benefit obtained. Camden 1,

946 F.2d at 771; Boeing Co. v. Van Gemert, 444 U.S. 472, 478 (1980). The common benetk

doctrine is an exception to the general rule that each party must bear its own litigation costs. The

doctrine serves the ittwin goals of removing a potential financial obstacle to a plaintiffs pursuit

of a claim on behalf of a class and of equitably distributing the fees and costs of successful

litigation among a1l who gained from the named plaintiff's efforts.''In re Gould Sec. L itig., 727

F. Supp. 1201, 1202 (N.D. 111. 1989) (citation omitted). The common benest doctrine stems

from the premise that those who receive the benefit of a lawsuit without contributing to its costs

are ttunjustly enriched'' at the expense of the successful litigant. Van Gemert, 444 U.S. at 478.

As a result, the Supreme Court, the Eleventh Circuit, and courts in this District have all

recognized that $$(a) litigant or a lawyer who recovers a common fund for the benefit of persons

other than himself or his client is entitled to a reasonable attorney's fee from the fund as whole.''

Sunbeam, 176 F. Supp. 2d at 1333 (citing Van Gemert, 444 U.S. at 478); see also Camden 1, 946

F.2d at 771 (tsAttorneys in a class action in which a common fund is created are entitled to

compensation for their services from thecommon fund, but the amount is subject to court

approval.').

In the Eleventh Circuit, class counsel are awarded a percentage of the fund generated

through a class action settlement. As the Eleventh Circuit held, çtthe percentage of the fund

approach (as opposed to the lodestar approachl is the better reasoned in a common fund case.

Henceforth in this circuit, attorneys' fees awarded from a common fund shall be based upon a

reasonable percentage of the fund established for the benefk of the class.'' Camden 1, 946 F.2d at

774.


This Court has substantialdiscretion in determining the appropriate fee percentage

awarded to counsel. tdfrhere is no hard and fast nlle mandating a certain percentage of a common

fund which may be awarded as a fee because the amount of any fee must be determined upon the

facts of each case.'' In re Sunbeam, 176 F. Supp. 2d at 1333 (quoting Camden 1, 946 F.2d at

774). However, çfltlhe majority of common fund fee awards fall between 20 percent to 30

percent of tht fund,'' although $:an upper limit of 50 percent of the fund may be stated as a

general rule.'' f#. (quoting Camden J;946 F.2d at 774-75); see J/â'tp Waters v, 1nt 1 Precious

A/C/J/J Corp., 190 F.3d 1291 (1 1th Cir. 1999) (approving fee award where the district court

determined that the benchmark should be 30% and then adjusted the fee award higher based on

the circumstances of the case).

Based on the fndings below, this Court finds that Class Counsel are entitled to an award

of thirty percent (30%) of the $55,000,000 Settlement Fund secured tllrough their efforts. Scott

Decl. !! 13-26; Fitzpatrick Decl. M 18-25.Class Counsel achieved an outstanding result and

overcame mlmerous procedural and substantive hurdles to obtain this Settlement benefiting the

Settlement Class. They undertook a risky and undesirable case and, tlzrough diligence,

perseverance and skill, obtained an outstanding result. Class Counsel are to be commended and

should be compensated in accord with their request, which is both warranted and reasonable

given similar fee awards. The Court firmly believes this kind of initiative and skill must be

adequately compensated to insure that counsel of this caliber is available to undertake these

kinds of risky but important cases in the future. See Muehler v. f and O 'L akes, Inc., 617 F. Supp.

1370, 1375-76 (D. Minn. 1985).

b. A s Applied H ere, the Camden I Factors Dem onstrate the RequestedFee Is Reasonable and Justined.

The Eleventh Circuit's factors for evaluating the reasonable percentage to award class-

action counsel are:

26


(1) the time and labor required;

(2) the novelty and diftkulty of the questions involved;

(3) the skill requisite to perform the legal service properly;

(4) the preclusion of other employment by the attorney due to acceptance ofthe case;

(5) the customary fee;

(6) whether the fee is fixed or contingent;

(7) time limitations imposed by the client or the circumstances;

(8) the nmotmt involved and the results obtained;

(9) the experience, reputation, and ability of the attomeys;

(10) the ççundesirability'' of the case;

(1 1) the nature and the length of the professional relationship with the client; and

(12) awards in similar cases.

Camden 1, 946 F.2d at 772 n.3 (citing factors originally set forth in Johnson v. Georgia Highway

Express, Inc., 4#8 F.2d 714, 71 7-19 (5th Cir. 1 974:.

These twelve factors are guidelines; they are not exclusive.çtother pertinent factors are

the time required to reach a settlement, whether there are any substantial objections by class

members or other parties to the settlement terms or the fees requested by counsel, any non-

monetary benefits conferred upon the class by the settlement, and the economics involved in

prosecuting a class action.'' Sunbeam, 176 F. Supp. 2d at 1333 (quoting Camden f, 946 F.2d at

775). In addition, the Eleventh Circuit has çfencouraged the lower courts to consider additional

factors unique to the particular case.'' Camden J, 946 F.2d at 775.

27


The Claim s Against U.S. Bank Required Substantial Tim e and

Labor.

lnvestigating, prosecuting and settling these claims demanded considerable time and

1.

labor. Scott Decl. ! 14. Throughout the pendency of the Action, the intemal organization of

Class Counsel ensured that Class Cotmsel were engaged in coordinated, productive work efforts

to maximize efficiency and minimize duplication of effort.Class Counsel devoted a substantial

amount of time investigating the claims of many potential plaintiffs against U.S. Bank. Class

Counsel interviewed numerous U.S. Bnnk customers and potential plaintiffs to gather

information about U.S. Bnnk's conduct and its effect on consumers. This information was

essential to Class Counsel's ability to tmderstand the nature of U.S. Bank's conduct, the

language of the accotmt agreements atissue, and potential remedies. Class Counsel also

expended significant resources researching, developing, pleading and prosecuting the legal

claims at issue. For example, signiticant resources were dedicated to researching and developing

the legal theories and arguments presented in Class Counsel's opposition to U.S. Bank's

numerous arbitration motions, before this Court and the Eleventh Circlzit. Joint Decl. ! 82.

A lengthy mediation

session was held that required substantial preparation and follow-up work. Post-mediation

settlement negotiations required additional time and effort. After Class Counsel reached an

agreement in principle,months of detailed negotiations and discussions ensued regarding

specific terms of the Agreement.This work consumed a significant nmount of time. Joint Decl.

!! 83-84.

Settlement negotiations consllmed f'urther time and resotlrces.

The Eleventh Circuit made clear in Camden 1 that percentage of the fund is the exclusive

28


h d for awarding fees in common fund class actions.; Camden 1, 946 F.2d at 774. Evenm et o

before Camden f, courts in this Circuit recognized that tta percentage of the gross recovery is the

only sensible method of awarding fees in common fund cases.'' Mashburn, 684 F. Supp. at 690.

M ore importantly, the Court observed firsthand the effort exerted by Class Counsel in this case

and the other bnnk cases, and, given the outstanding results achieved here, does not find it

necessary or useful to review Class Cotmsel's lodestar records.

In view of the excellent results obtained here, the Court deems it llnnecessary to

scrutinize Class Counsel's lodestar. Lodestar Sçcreates an incentive to keep litigation going in

order to maximize the number of hours included in the court's lodestar calculation.'' In re

Quantum Health Resources, lnc., 962 F. Supp. 1254, 1256 (C.D. Cal. 1997). ln Camden 1, the

Eleventh Circuit criticized lodestar and the inefficiencies that it creates. 946 F.2d at 773-75. In

so doing, the court dçmandategd) the exclusive use of the percentage approach in common ftmd

cases, reasoning that it more closely aligns the interests of client and attorney, and more

faithfully adheres to market practice.'' Goldberger v. Integrated Resources, Inc., 209 F.3d 43, 50

(2d Cir. 2000) (emphasis added); see also Alba Conte, Attorney Fee Awards j 2.7, at 91 fn. 41

($$The Eleventh . . . Circuitl) repudiated the use of the lodestar method in common-fund cases').

Under Camden 1, courts in this Circuit regularly award fees based on a percentage of the

recovery, without discussing lodestar at all. See, e.g., David v. American Suzuki Motor Corp.,

1 Eleventh Circuit attorneys' fee 1aw governs this request. See Allapattah, 454 F. Supp. 2d at

1200 (tt-l-he district court presiding over a diversitpbased class action pursuant to Fed. R. Civ. P.23 has equitable power to apply federal com mon law in determ ining fee awards irrespective ofstate 1aw.''); see also Weinberger v. Great Northern Nekoosa Corp., 925 F.2d 518, 522 n.5 (1stCir. 1991) (recognizing that district court presiding over diversity-based class action hasequitable power to apply federal common 1aw in determining fee award, irrespective of statelaw); Clark Equip. Co. v. Armstrong Equip. Co., 431 F.2d 54, 57 (5th Cir. 1970) (Erie doctrinedoes not deprive federal court in diversity case of power to employ equitable remedies not

available under state law).

29


8 '' A1 common fund2010 W L 1628362 (S.D. Fla. Apr. 15, 2010). ( is itself the measure of

success and represents the benchmark on which a reasonable fee will be awarded. . . . ln this

context, monetary results achieved predominate over all other criteria.'' Camden 1, 946 F.2d at

774 (citations and alterations omitted). This Court will not deviate from that sound approach.

II. The Issues Involved W ere Novel and Difficult and Required

the Exeeptional Skill of a Highly Talented Group of Attorneys.

The attorneys on both sides of this case displayed a very high level of skill. Scott Decl. !

15; Joint Decl. ! 86; see Walco, 975 F. Supp. at 1472 (explaining that çtlgliven the quality of

defense counsel from prominent national 1aw firms, the Court is not confident that attomeys of

lesser aptitude could have achieved similar results''); see also Camden 1, 946 F.2d at 772 n.3 (in

assessing the quality of representation by class counsel, Court also should consider the quality of

their opposing counsel.); Johnson, 488 F.2d at 718; Ressler, 149 F.R.D. at 654. Class Counsel's

work is emblematic of the effort and outcomes witnessed by this Court on a regular basis in this

MDL. Nor can there be any legitimate dispute that, based on the novel and very complex issues

confronted by Class Counsel in this case, detailed here and elsewhere, that an extraordinary

group of lawyers was required to prosecute this case. Scott Decl. ! 16. The Court knows many

of these lawyers from years of presiding over cases in this District, and has come to expect this

level of performance from them.That is not to say, however, that such performance should be

taken for granted. lnstead, the fact that this level of legal talent was available to the Settlement

Class is another compelling reason in support of the fee requested.As with most things, you get

what you pay for, and the Settlement Class received a truly impressive nmount and quality of

legal services. In the private marketplace, counsel of exceptional skill commands a significant

8 See also Stahl v. Maslkc, In q , 2008 WL 2267469 (M .D. Fla. May 20, 2008); Sands Point

Partners L .P. v. Pediatrix Med G:rt?l/ ,p Inc., 2002 WL 34343944 (S.D. Fla. May 3, 2002);Fabricant v. Sears Roebuck (f Co., 2002 WL 34477904 (S.D. Fla. Sept. 18, 2002).

30


premium. So too should it here.

iii.

The risks facing the Plaintiffs in this case have been discussed above, in the M otion, and

elsewhere. Joint Decl. !! 56-57. There were myriad ways in which Plaintiffs could have lost

The Claim s Against U.S. Bank Entailed Considerable Risk.

this case - yet they managed to achieve a successful Settlement. A large amount of the credit for

this must be given to Class Counsel's strategic choices, effort and legal acumen. ds-l-his was no

ordinary class action. The novelty and difficulty of the issues involved created significant risks

fbr Class Counsel.'' Scott Decl. ! 15; see also Fitzpatrick Decl. ! 23.

fçA court's consideration of this factor recognizes that colmsel should be rewarded for

tktking on a case from which other 1aw firms shrunk. Such aversion could be due to any number

of things, including social opprobritlm surrounding the parties, thomy factual circumstances, or

the possible tinancial outcome of a case. Al1 of this and more is enveloped by the term

éundesirable.''' In re Sunbeam, 176 F. Supp. 2d at 1336. In addition, tçltqhe point at which

plaintiffs settle with defendants . . . is simply not relevant to determining the risks incurred by

their counsel in agreeing to represent them.'' Skelton v. General M otor Corp., 860 F.2d 250, 258

(7th Cir. 1988), cer/. denied, 493 U.S. 810 (1989). çdundesirability'' and relevant risks must be

e'valuated from the standpoint of plaintiffs' counsel as of the time they commenced the suit, not

rdroactively, with the benefit of hindsight. f indy Bros. Builders, Inc. v. American Radiator &

Standard Sanitary Corp., 540 F.2d 102, 1 12 (3d Cir. 1976); Walco, 975 F. Supp. at 1473.

The most undesirable aspect of this case was the long odds on success. Class Counsel

had to contest issues relating to mandatory individual arbitration and federal preemption, among

others. Scott Decl. ! 22; Fitzpatrick Decl. ! 23. The Court expresses no opinion on the merits of

these arguments by this or any other defendant.The critical point for present purposes is that,

heading into this case, Class Cotmsel confronted these issues without any assurances as to how


the Court would rule. Class Cotmsel nonetheless accepted the case and the risks that

accompanied it. Given the positive societal benefits to be gained from attorneys' willingness to

undertake this kind of difficult and risky, yet important, work, such decisions must be properly

incentivized. The Court believes, and holds, that the proper incentive here is a thirty percent

(30%) fee based on the $55,000,000 Settlement Fund.

iv. Class Counsel Assumed Substantial Risk to Pursue the Actionon a Pure Contingency Basis, and W ere Precluded From Other

Em ployment as a Result.

Class Counsel prosecuted the Action entirely on a contingent fee basis. Joint Decl. ! 95.

In undertaking to prosecute this complex action on that basis, Class Cotmsel assumed a

significant risk of nonpayment or tmderpayment.Scott Decl. !! 17, 19; Fitzpatrick Decl. ! 23.

Numerous cases recognize such a risk as an important factor in determining a fee award.

ççA contingency fee arrangement oftenjustises an increase in the award of attorney's fees.'' In re

Sunbeam, 176 F. Supp. 2d at 1335 (quoting Behrens, 1 18 F.R.D. at 548, aftnd, 899 F.2d 21 (1 1th

Cir. 1990:; see also In re Continental 111. Sec. L itig., 962 F.2d 566 (7th Cir. 1992) (holding that

when a common fund case has been prosecuted on a contingent basis, plaintiffs' counsel must be

compensated adequately for the risk of non-payment); Ressler, 149 F.R.D. at 656; Walters v,

Atlanta, 652 F. Supp. 755, 759 (N.D. Ga. 1985), mod6ed, 803 F.2d 1 135 (11th Cir. 1986); York

v, Alabama State Bd. ofEducation, 631 F. Supp. 78, 86 (M.D. Ala. 1986).

Public policy concerns - in particular, ensuring the continued availability of experienced

and capable counsel to represent classes of injured plaintiffs holding small individual claims -

support the requested fee here. As this Court has observed;

Generally, the contingency retainment must be promoted to assure

representation when a person could not otherwise afford theservices of a lawyer. . . . A contingency fee arrangement often

justifies an increase in the award of attorney's fees. This rule helpsasstlre that the contingency fee arrangement endures. lf thisçlbonus'' m ethodology did not exist, very few lawyers could take


on the representation of a class client given the investment ofsubstantial time, effort, and money, especially in light of the risksof recovering nothing.

Behrens, 1 18 F.R.D. at 548.

The risks taken by Class Counsel have already been discussed. It is uncontroverted that

the attomey time spent on the Action was time that could not be spent on other matters. Joint

Decl. ! 97. Consequently, this factor supports the requested fee.

v. Class Counsel Achieved an Excellent Result.

The Court finds that this Settlement is excellent. Scott Decl. !! 21, 26. The common

fund created by this Settlement is $55,000,000.1d. at !! 10, 26. Rather than facing more years

of costly and uncertain litigation, over two million Settlement Class M embers will receive an

immediatt cash benefit from the Sttlltment Fund representing a signitkant percentage of their

most probable damages, assuming a Plaintiffs' verdict against U.S. Bnnk. The Settlement Fund

will not be reduced by the costs of Notice or Settlement administration; such fees and expenses

have been and will continue to be borne separately by U.S Bnnk. Moreover, payments to eligible

Settlement Class Members will be forthcoming automatically, through direct deposit for current

Accolmt Holders and checks for former Account Holders. Class Counsel's efforts in pmsuing

and settling these consumer claims were, quite simply, outstanding. 1d. at ! 26.

vi. The Requested Fee Comports with Fees Awarded in Similar

Cases.

ln MDL 2036, this Court awarded thirty percent (30%) in attonwys' fees in the Bank of

America case (1n re Checking Account Overdrajt L itigation, 830 F. Supp. 2d 1330, 1359 (S.D.

Fla. 201 1:, in the Bnnk of Oklahoma case (DE # 2949), in the Union Bank case (DE # 2986), in

the Bnnk of the West case (DE # 3128), and in the JpMorgan Chase case (DE # 3134).

Similarly, mlmerous recent decisions within this Circuit have awarded attorneys' fees up to and

in excess of thirty percent. See Allapattah Servs., Inc. v. Exxon Corp., 454 F. Supp. 2d 1 185


(S.D. Fla. 2006) (awarding fees of 31 1/3% of $1.06 billion); In re: Terazosin Hydrochloride

Antitrust Litigation, 99-1317-MDL-Seitz (S.D. Fla. April 19, 2005) (awarding fees of 33 1/3 %

of settlement of over $30 million); In re: Managed Care L itig. v. Aetna, MDL No. 1334, 2003

%VL 22850070 (S.D. Fla. Oct. 24, 2003) (awarding fees and costs of 35.5% of settlement of $100

million); Gutter v, E.L Dupont De Nemours & Co., 95-2152-Civ-Go1d (S.D. Fla. May 30, 2003)

(awarding fees of 33 1/3% of settlement of $77.5 million); Waters v.Int'l Precious hietals

C>,or#., 190 F.3d 1291 (1 1th Cir.

million).

1999) (affrming fee award of 33 1/3 % of settlement of $40

The Court finds that a fee of thirty percent (30%) of the $55,000,000 Settlement Fund

comports with customary fee awards in similar cases. Scott Decl. !! 18, 24-25. Professor

Fitzpatrick published a comprehensive study of class action settlements and attorneys' fees. See

An Empirical Study ofclass Action Settlements and Their Fee Awards, 7 1. Empirical L. Stud.

81 1 (2010). Based on the results of his study, Professor Fitzpatrick found that the empirical data

from other Eleventh Circuit fee awards is consistent with the award requested here. Fitzpatrick

Decl. ! 22. The Court agrees, and finds that the risks of this litigation, considered against the

favorable result, justify a thirty percent (30%) fee.

vii. The Remaining Camden I Factors Also Favor Approving Class

Counsel's Fee Request.

The Court tinds that the relnaining Camden I factorslikewise support granting Class

Counsel's fee request. tsl-llhis talented team of lawyers accomplished outstanding results for the

Settlement Class in the face of substantial risks. Had they not had the requisite skill to perform

the necessary services, it is highly doubtful Class Counsel could have achieved the results

obtained for the Settlement Class in this case.'' Scott Decl. ! 16.Gûl can say that class cotmsel

count among their number some of the most experienced and highly regarded lawyers in the

U'nited States. They are not mere (tbenchmark'' lawyers.'' Fitzpatrick Decl. ! 24. Moreover,


Avithout adequate compensation and financial reward, cases such as this simply could not be

pursued. The Court previously held that, çfgiven the positive societal benefits to be gained from

lawyers' willingness to undertake difficult and risky, yet important, work like this, such

decisions must be properly incentivized. The Court believes, and holds, that the proper incentive

here is a 30% fee.'' Checking Account Overdrah, 830 F. Supp. 2d at 1364. The record before

the Court compels the same outcome in this parallel M Dlw 2036 Action. Fitzpatrick Decl. ! 22;

Scott Decl. !! 24-25.

6. Class Counsel's Application for

Expenses Is Approved.Reim bursem ent of Litigation Costs and

Finally, the Court tinds that Class Counsel's request for reimbursement of $149,085.18,

representing certain litigation costs and expenses that Class Counsel incurred during the

prosecution and settlement of the Action against U.S. Bnnk is reasonable and justified. These

costs and expenses consist of: (1) $133,887.67 in fees and expenses incurred for expert Arthur

Olsen, whose services were critical in determining the dnmages for the Settlement Class, in

identifying Settlement Class Members, and in allocating the Settlement Fund; (2) $3,890.90 in

court reporter fees and transcripts associated with depositions and hearings in the Action; and (3)

$1 1,306.61 in mediator's fees and expenses incurred for the services rendered by Professor

Green. Joint Decl. ! 100. The Court hereby approves Class Counsel's request for

reimbtlrsement of these costs and expenses. See M ills v. F/ecfrfc Auto-Lite Co., 396 U .S. 375,

391-92 (1970). These costs and expenses, advanced by Class Counsel for the benefit of the

Settlement Class, were necessarily incurred in furtherance of the litigation of the Action and the

Sdtlement. f#. . Accordingly, reimbursement of costs and expenses in the amount of

$ 149,085.18 shall be made from the Settlement Fund following disbursement of attorneys' fees.


CONCLUSION

For the foregoing reasons, the Court: (1) grants Final Approval to the Settlement; (2)

appoints Plaintiffs W illyum W aters, Frnnk Smith, Shane Parkins, Kara Parkins, Steve Barnes,

Carolyn Bnrnes, Glenda Lawrence, Susan Ledbetter, Donald Kimenker, April Speers, Lori

Brown, and M itchell Brown, as class representatives for this Settlement; (3) appoints as Class

Colmsel and Settlement Class Counsel the 1aw firms and attorneys listed in paragraphs 45 and 70

of the Agreement, respectively; (4) overrules the two (2) remaining objections (Smith Objection,

Barnes Objection); (5) awards Service Awards to each of the twelve (12) nnmed Plaintiffs in the

amount of $10,000 each, or $5,000 per Plaintiff for married couples in which both spouses are

named Plaintiffs; (6) awards Class Counsel attorneys' fees in the nmount of $16,500,000, equal

to thirty percent (30%) of the $55,000,000 Settlement Fund, plus reimbursement of litigation

costs and expenses in the amount of $149,085.18; (7) directs Settlement Class Counsel,

Plaintiffs, and U.S. Bank to implement and consummate the Settlement pursuant to its terms and

conditions; (8) retains continuing jurisdiction over Plaintiffs, the Settlement Class, and U.S.

Bnnk to implement, administer, consllmmate and enforce the Settlement and this Final Approval

Order; and (9) will separately enter Final Judgment dismissing the Action with prejudice.

DONE and ORDERED in Chambers at the James Lawrence King Federal Justice

Bluilding and United States Courthouse in M inmi, Florida, this 3rd day of January, 2014.

x

Jav ss sx xcs Iu xc f' NITED STATES DISTRICT JUDUE

SOUTHERN olsTm c'r oF FLORIDA

cc: A1l Counsel of Record

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lèeers, et al. v. us bank na

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