Marengo v. Miami Research Associates, LLC, No. 1:2017cv20459 - Document 56 (S.D. Fla. 2018)
Court Description: ORDER Denying 48 Final Motion Approval to Class Action Settlement and Motion for Attorney Fees. Signed by Senior Judge James Lawrence King on 6/7/2018. (jw)
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Marengo v. Miami Research Associates, LLC Doc. 56 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT O F FLO RIDA CASE NO.17-cv-20459-JLK DESIREE M ARENGO, lndividually and on behalfofa11 Otherssimilarly situated, Plaintiff, M IAM IRESEARCH A SSOCIATES, LLC, d/b/aQPS M IAM IRESEARCH ASSOCIATES, a Floridacorporation, D efendant. ORDER DENYING FINAL APPRO VAL TO CLASS ACTION SETTLEM ENT AND M O TIO N FO R A TTO R N EY S'FEE S W ITH O UT PREJU D ICE TH IS C AU SE com es before the Courtupon Plaintiffs U nopposed M otion forA pproval ofSettlement,AttorneyFees, andExpenses(DE 48)filedM arch2,2018. On April26,2018,theCourtheld adulynoticed tlnalapprovalhearing to consider:(1) W hetherthetermsand conditionsoftheSettlementAgreementarereasonableand adequate;(2) whetherajudgmentshould beentered dismissing PlaintiffsComplainton themeritsand with prejudice in favorofDefendant,M iamiResearch Associates(d$M 1tA'');and (3)whetherand in whatam ountto award counselforthe settlementclass attorneys'feesand expensesand whether and in whatamountto award an incentive paym entto Plaintiff. Noobjectionswerefiled asto the term s of the Settlem ent A greem ent and the D efendant is in full agreem ent w ith the settlement,including the $390,000 award ofattorney'sfeesthatthe Plaintiffhasrequested. For Dockets.Justia.com the following reasons,the Courtdeniesapprovalto the parties'finalSettlem e ntAgreementand m otion forattorneys'feesand costs. ProceduralBackaround On February 5,2017,Plaintiff filed a class action complaint against Defendant M RA allegingthatMRA violated theTelephoneConsumerProtection Act(dçTCPA'') The TCPA isa . federalprivacy statute which affordsconsum ers a private rightofaction. The Plaintiffalleges thatin January 2017 she received three autom ated textmessage advertisements on hercellular telephone from M RA (DE 1,! 25). On March 22,2017, the Defendantfiled its answer and affirmativedefensesinresponsetoPlaintiff'sComplaint(DE 10) On M arch 24,2017,theCourt . entereditsSchedulingOrder(DE 14)anddiscoverycommencedthereafter . Between February to December2017, the partiesengaged in limited discovery. O n July 27,Plaintiffmovedtocompeldiscovery(DE 25).Defendant'sResponseobjectingtoPlaintiff's M otfontocompel(DE 32)wasfled on September1,2017 anddeniedon January 18, 2018(DE 45)asmoot. Otherthan thismotion,no othermotionswere filed. On October25, 2017,the partiesparticipated in aone-day court-ordered mediation thatresulted in a settlement(DE 39) . On Decem ber 18,2017,theCourtgranted prelim inary approvalto theproposed classsettlement, provisionally certified the class, approved theprocedure f0rgiving classnotice to thesettlement classmembers,andsetfairnesshearing(DE 44)forApril26,2018(DE 52). The Settlement Agreementprovides for a settlem ent fund requiring Defendantto pay $130 foreach textm essage subm itted by classm embers. Theclaimsaresubjectto verification. The settlementrequires Defendantto make available up to $1,236,300 to pay tim ely and valid claim subm issions,including $390,000 forattorneys'fees and costs associated with the notice program and settlem entadm inistration. Atthe Faim essHearing,PlaintiffClass Counselpresented legalargum entin supportof the Plaintiff's M otion forFinalApprovalofthe SettlementAgreementand presented the Court with the finalresultsofthe settlem entadministration process. Plaintiffcounselstated thatofthe apprxomiately 9,500 consum ers who received text m essage advertisements from Defendant , 8,263 individualswere mailed notices. Outofthe 8,263 noticesthatwere m ailed out atotalof , 3,159 claims were submitted forverification. Ultimately,only 211 claim swerevalidated. This resulted in a totalcash benefit potentially available to the Plaintiff class of $27,430. A t the fairness hearing,no objections were raised and the Defendantvoiced thatthey were in full agreement with the term s of the settlem ent. No witnesses were called or any exhibits or documentsoffered by eithercounsel. Upon being questioned by the Court about plaintiff s theory of calculation of his attorneysfeethetranscriptretlects: Pg.9 4 THE COURT: So letm e getthis straight. You setup a fund ofcloseto one-and-a-quarterm illion 6 dollars.Outofthatfundyou'regoingto pay $27,000,and 7 you'regoingto walk away with $390,000;isthatwhatyou're 8 telling me? 9 M R.LEHRM AN: YourHonor,thatisthesettlem entthat 10 the partieshave reached. 11 Thatisaccurate,w hatY our Honorhasrecited. 12 THE COURT: Butmy obligation isto makea determination whetherthatisfairand reasonable. 14 And m y question is, isitfairand reasonable thatyou 15 shouldwalkawaywith $390,000whentheclaimantsarewalking 16 away with $27,0002 M R.LEHRM AN: YourHonor, thank you.Iunderstand the question.ljustwantto- 1thinkthere'sactually- ljust wantto clarify - severalquestions, potentially,the Court's posing. One iswhetherthe settlementitselfisfair, reasonableand adequategiven allthesecircum stancesthat YourHonor'sidentified. Anotherquestion would be,ifthe Courtfindsthatthe settlementisnotfair,reasonableandadequatePg.10 1 THE COURT: Right. 2 M R.LEHRM AN : 3 grantedprelim inary-approvaland providednotice of- the 4 Courtnow decidesto- 5 THE COURT: 6 theclaimantsto befairandreasonable,butnottheattom ey 7 fee portion ofit. -- AND THE Courtdecides- having And Ican find thesettlem entportion for #*#** Pg.11 THE COURT: lguessm y question therewouldbe,what 21 relationship doesyourcom mon fund haveto reality, when the 22 reality isthatyou'repaying out$27,000? 1mean,youmightaswell- whydon'tyoujustcallit a billion dollarfund? M R.LEHRM AN : W ell,YourHonor,becausea billion Pg.12 dollarswasnotmade availableto thesettlem entclass. THE COURT: Butwhy not? lfyou know you're only going To- the reality isyou're going to pay out$27,000,why not Justcallitany num beryou w antand then base yourfee aw ard On somearbitrary settlementfund? Faim essHearingTrancript April26,2018(pp9-10;11-12) D iscussion Class counselbase theirlegalarguments forattorneys'fees and costs totaling $390,000 upon a comparison of percentages of fees awarded in class action cases where the class has benetited and seek an award of $390,000 in attom eys' fees and expenses or approxim ately 31.5% ofthetotalproposed settlem entfund. Class counselarguesthatin the Eleventh Circuit, attorneys'fees are based upon a reasonable percentage of the fund established forthe benefitof the class. M oreover,class counselargues that their fee requestis w ithin the range of reason underthefactorssetforth inCamden1Condo.Ass'nv.Dunkle,946F.2d768(11thCir.1991). ln supportof their fee request,class counsel states that the settlem ent here represents a successful result. That is, each class m em ber who subm itted a valid claim w ill receive a settlementbenefitin the amountof$130 from the settlementfund. Classcounselstatesthattheir feerequestisjustified and appropriatebecause ltthe case wasvigorously contested during the time before settlem ent,''thatthe claim s againstdefendants lûdemanded considerable time and labor,''and thatthe Slissues involved were novelmzd difficult, and required the skillofhighly talented lawyers.'' Pls.M ot.for Final Approvalat 22. Class counselcontends thatthe fee requested of approximately 31.5% is in line with various other cases that have found thata 33.33% iswithin arangeofreason. Based onthem inim aldocketactivity,few pleadingssubm itted, and evidencepresented at oralargum ent,the Courtfindsthatthe cases cited by the Plaintiff are distinguishable from the fads atbar. Plaintiff's cited cases allinvolved a significantamountofwork and effol'tforthe resultsthatwere obtained. Here,beyond stating that$tal1ofthis work eonsum ed a substantial am ountoftim e,''neitheroftheaffidavitssubmittedby classcounselcontainsabreakdown ofthe time devoted to thismatter.Therecord reflectsthattherewasnom inaldiscovery undertaken and thatno dispositive motionswere tiled orbriefed. Aside from the fairness hearing held on April 26,2018,the parties did notappearbeforethe Courtorprepare fororalargum ent. Finally,the record reflectsm inim aleffortsto publicize the terms ofthe settlem ent. Thatis,there wasonly one round ofnotificationssentoutviaU.S.mail. ltisroutineto send a second orthird round of notices to class m embers regarding the settlem entthe lawyers agrued or the date ofthe Court ordered Faim es Hearing,take advertisem ents in the localpaper,or radio advertisem ents. In short,there does notappear to have been substantial efforts to increase the number of valid claim ants to the settlem ent. Class counselsubm its that the settlem ent is very favorable to the plaintiffclass since each verified claim antwillreceive $130 dollars. However,only 211 class m emberscould potentially receive thatbenefit. The totalfinalbenefitconferred to the Plaintiff classwould be approximately $27,430. Counsel elected not to present adequate proof to enable the Court to approve the SettlementAgreementatthistime. On these facts,the Courtcannotmake the essentialfinding thatthis Settlem entAgreem ent is fair and reasonable to the Plaintiff class or thatthe record supportsthe M otion forAttorneys'Feesand Costs. The fairnesshearing held on April26,20l8 retlectsreliance on conclusionary statements from plaintiffsm otion thatplaintiffs lawyerhad liworked hard''on the case and that since defense counsel agreed,the $390,00 fee m ust be reasonableand shouldbeordered by the Court. Plaintiffdid notcallan attorneyfeeexpert(or submitan affidavit)regarding the numberofhoursspentby each counsel,orthe hourly rates each of Plaintiff s tltree counsel charged to dem onstrate consistency with the fee usual and regularchargesofthe Barforthese servicesand costs. Judge M iddlebrooksin M ahony v. TT of Pineridge, Inc.No 1780029 Civ, required counsel to subm it éddoclzm entation and sworn declarationssupporting alockestaranalysis,including information abouttheattorney experience foreach ofPlaintiffsattorneys,thenumberofhoursbilled,and thehourly ratethateach attonzey charged afterithadnotbeen subm itted by plaintiffathisFairnessHearing. The Fairness Hearing held on April 26, 2018 did not cover a number of elements essentialto convincing the Courtthatthe SettlementAgreem ent is fair and reasonable to the classanddefendant. Forexample, There was no explanation for why there was not more effortexerted to reaching other mem bersoftheplaintiffclass; There isno proofofthe processplaintiffused to verify the claims,orwhy outof3,159 totalclaimssubm itted,only 211were actually veritifed; There wasno proofprovided ofthe defendant'sfinancialability to respond to plaintiffs claim s;although plaintiffargued reliance on the defendant'slack offinancialworth asa majorreason plaintiffagreed to such a smallfinancialbenefitto the class individual claim ants. There w as no docum entation provided detailing the breakdow n of tim e spent on the matterby the Settlem entAdministrator;and There was no evidence submitted to substantiatethe hoursplaintiffattorneysworked,or reasonablenessoftheirhourlychargesin orderto supporta feerequestof$390,000. Accordingly,the motion isdenied withoutprejudice to refle afterthe parties furnish the coul' twith expertwitnesses,docum entsand/oraffidavits giving the Courtthe necessary factual basis, as outlined above, to establish the fairness and reasonableness of the Settlem ent Agreement and motion for attorneys' fees. Accordingly, based on the totality of the circum stances, lt is O R D ERE D, A DJU D G ED , and D EC R EED that the plaintiff s M otion for Attorney's Fees and forFinalApprovalofSettlement(D.E.#48)be and the same is hereby DENIED W ITHOUT PREJUDICE,to t5leagain inaccordance with thisorder. DO NE and O RDERED in Cham bersattheJamesLawrenceK ing FederalJustice Building and United States Courthouse in M iam i,Floridathis7thday ofJune, 2018. *Y JAM ES LA W N CE KIN G UNITED STATES DISTRICT JUD cc: A l1counselofrecord
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