Chakejian v. Equifax Info. Servs. LLC, 2011 Dist. LEXIS 63455 (E.D. Pa., June 14, 2011)
Facts: Plaintiff brought a §1681i claim related to Equifax's standard reinvestigation procedures letter related to a reinvestigation of public record information appearing on his Equifax credit file. Equifax employed an independent records vendor to go to the original source of information, review the information, and report the results to Equifax. Equifax then responded directly back to Plaintiff that "it contacted each source directly," and indicated it reviewed Plaintiff's "bankruptcy information" and "verified" that the bankruptcy item belonged to him. Plaintiff claimed that Equifax's reinvestigation letter misrepresented the source of Equifax's public records information and misstated the result of its reinvestigation. After some discovery, Plaintiff sought and was granted certification to move forward as a class action claim. In the litigation that followed, the parties engaged in significant discovery and the case was eventually consolidated with two similar class actions pending in New Jersey and Virginia. In August 2010, the parties agreed to basic terms of settlement and submitted the settlement for the Court's review. The settlement included the following terms: an agreement that Equifax would cease the practice giving rise to the suit; each class member would receive eighteen months of credit monitoring services free of charge; class members who did not opt out would be bound by the terms of the settlement with regard to statutory damages under the FCRA, retaining their rights to bring individual suits against Equifax for any actual damages sustained; Equifax making payment to class counsel in the amount of $1,075,000, subject to court approval. After review, the Court: certified the class; found the settlement to be fair, reasonable, and adequate; approved the awards to the attorneys and named Plaintiffs; and entered a final judgment dismissing the case pursuant to the terms of the parties' agreement.
Class Certification. The Court found that the class, which consisted of all persons in New Jersey, Pennsylvania and Virginia who were sent a letter similar to the one identified in Plaintiff's Complaint, for time periods specific to each state, met the requirement for class certification under Federal Rules of Civil Procedure 23(a) and 23(b). Specifically the class met the requirements of numerosity, commonality, typicality, and adequacy outlined by 23(a) and the predominance and superiority requirements of 23(b).
Settlement Approval. The Court, as required by the Federal Rules, also examined the proposed settlement and determined that was fair, reasonable and adequate. In the Third Circuit that determination is assessed according to the factors listed in Girsh v. Jepson, 521 F.2d 153, 157 (3d Cir. 1975) and relevant factors outlined in In re Prudential Ins. Co. Am. Sales Practice Litig., 148 F.3d 283, 309 (3d Cir. 1998). Here the Court considered the following in approving the settlement: 1) the complexity, expense, and likely duration of the litigation; 2) the reaction of the class to settlement; 3) the stage of the proceedings and the amount of discovery completed; 4) the risks of establishing liability; 5) the risks of establishing damages; 6) the risks of maintaining the class action through the trial; 7) the ability of the defendants to withstand a greater judgment; 8) the range of reasonableness of the settlement fund in light of the best possible recovery and all the attendant risks of litigation; and 9) the Prudential considerations.
Attorney's Fees and Costs. Because the FCRA includes a mechanism for attorneys' fees, the Court employed the lodestar method in approving the attorneys fees requested by the attorneys for the class and then cross-checked that with the percentage-of-recovery method which is generally favored in cases involving a common fund. The lodestar award is calculated by multiplying the number of hours reasonably worked on a client's case by a reasonable hourly billing rate for such services based on the given geographical area, the nature of the services provided, and the experience of the attorneys.
Award to Class Representatives. The Court also approved the $15,000 individual settlement award for each representative plaintiff. The Court found that the representative Plaintiffs merited incentive awards because: 1) they played a role in enforcement of the FCRA; 2) they brought substantial benefit to a large group of people; 3) they participated substantially and crucially in the litigation; 4) gave up their right to bring suit for actual damages; and 4) the $15,000 sum is within the range of incentive awards recently accepted by other courts.
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