Somogyi v. Freedom Mortg. Corp., Civil No. 17-6546 (RMB/JS)

495 F.Supp.3d 337

Joshua SOMOGYI, et al., Plaintiffs,

v.FREEDOM MORTGAGE CORP., Defendant.

Civil No. 17-6546 (RMB/JS)

United States District Court, D. New Jersey, Camden Vicinage.

Signed October 20, 2020

Lane L. Vines, Berger Montague PC, Philadelphia, PA, Stefan Louis Coleman, Lakewood, NJ, Eric Lechtzin, Edelson Lechtzin LLP, Newtown, PA, for Plaintiffs.

Meredith C. Slawe, Michael W. McTigue, Jr., Cozen O'Connor, Philadelphia, PA, for Defendant.

AMENDED OPINION

JOEL SCHNEIDER, United States Magistrate Judge This Opinion addresses the nationwide class action settlement of plaintiffs' claims under the "Telephone Consumer Protection Act" ("TCPA"), 47 U.S.C. § 227, et. seq. Plaintiffs seek approval to certify a class of approximately 1.5 million people who received defendant's alleged unsolicited sales calls. If approved 79,330 participating class members will each receive $75.30.

This matter is before the Court on plaintiffs' "Motion for Final Approval of Class Action Settlement" [Doc. No. 101].¹ After the final fairness hearing was held on September 10, 2020, and in order to expedite the distribution to the class, the Court entered its Order approving the parties' settlement. [Doc. No. 112]. This Opinion further explains the Court's reasoning for granting plaintiffs' motion.²

BACKGROUND

Joshua and Kelly Somogyi ("Somogyi") filed this lawsuit on August 30, 2017. On December 14, 2017, Stewart Sieleman ("Sieleman") filed a related case (C.A. No. 17-13110 (JBS/JS)). On August 9, 2018, the cases were consolidated for discovery and case management purposes [Doc. No. 51]. The cases were later consolidated for all purposes following which the Sieleman action was dismissed.

Plaintiffs allege that beginning in 2013, Freedom Mortgage Corp. ("FMC") made unsolicited phone calls to plaintiffs' residential and cellular phones using an automated telephone dialing system ("ATDS") without their prior written consent in violation of the TCPA. Plaintiffs allege FMC placed calls even after its customers requested the calls stop. Plaintiffs also allege FMC's managers deleted certain "do-not-call" requests from its computers so that their customers could be called again. Plaintiffs contend FMC's actions were willful and/or knowing violations of the TCPA, and they seek actual and statutory damages, treble damages, and other relief. Defendants deny all liability allegations and do not concede that any member of the class was called by FMC or its vendor in violation of the TCPA or otherwise.

The case has been vigorously litigated. FMC filed motions to dismiss in Somogyi and Sieleman which were denied. Somogyi, 2018 WL 3656158 (D.N.J. August 2, 2018) ; Sieleman, 2018 WL 3656159 (D.N.J. Aug. 2, 2018). Thereafter the parties engaged in extensive discovery involving numerous interviews, depositions, interrogatories, and document productions from defendants and non-parties. In early 2019, the parties agreed to mediate the matter and held three mediation session with a retired United States Magistrate Judge. Afterwards, the parties continued their discussions and reached an agreement in principal to settle in May 2019. The parties entered into their Settlement Agreement on July 31, 2019. The Court preliminarily approved the settlement in an Order entered on February 24, 2020. [Doc. No. 96].

The preliminary and final certified class is defined as follows:

All portfolio clients of FMC in the United States whose mortgages FMC serviced and who, during the Class Period September 1, 2013 through July 22, 2019, received one or more calls or voicemails made by or on behalf of FMC to any one or more of the client's cellular, voice over internet protocol (VOIP), residential, or landline phone numbers. For purposes of the Settlement Class, FMC's "clients" means borrowers and co-borrowers, spouses, and successors-in-interest, who shall collectively be deemed one client. Excluded from the Settlement Class are (1) FMC; (ii) any affiliates of FMC; (iii) any employee of FMC or members of their Immediate Family; (iv) Plaintiffs' Counsel; (v) the Judges who have presided over the Action; (vi) those persons who file a timely and valid request to be excluded from the Settlement Class; and (vii) the legal representatives, heirs, successors and assigns of any excluded person or entity.

Insofar as the settlement terms are concerned, they are set forth in the parties' Settlement Agreement which includes monetary and non-monetary terms.³ Regarding money, the settlement provides that FMC will pay $9.5 million into a non-reversionary account maintained by the designated Escrow Agents. From this sum, plaintiffs propose an attorney fee of $3 million and a cost reimbursement of $61,198.75. In addition, the claims administrator, Heffler Claims Group, will be paid $450,000.00. Plaintiffs also propose that the three (3) named plaintiffs be paid a total of $15,000 or an incentive award of $5,000 each. The settlement sum to be distributed will be paid pro rata to all qualifying persons. To claim an award, a class member was simply required to mail in a claim form indicating that he/she was called by FMC.

The putative class consists of 1,523,970 members after eliminating duplicative addresses and requests for exclusion. See Supp. Kaufman Decl. ¶6. In total, 79,330 Proof of Claim forms were returned. Id. ¶8. Heffler only received twenty-four (24) requests for exclusion. See generally Heffler Decl.⁴ When the Court entered its Preliminary Approval Order it was estimated there would be a 10% claims rate resulting in a payment of approximately $37.61 per claim. See Doc. No. 96 at 12, 14. However, now that actual numbers exist, the present per claim estimated payment is $75.30.

As noted, the settlement includes non-monetary relief including:

(1) The designation of a senior manager responsible for assuring FMC's compliance with the TCPA who will report to the office of the CEO;

(2) Additional training regarding the TCPA's do-not-call lists; and

(3) Establishing, maintaining, and implementing procedures to facilitate TCPA compliance regarding do not call policies and lists. Seegenerally Settlement Agreement § 3.1.

DISCUSSION

The Court will first address whether final class certification should be granted and then turn to the fairness of the settlement.

1. Class Certification

Every class action must satisfy the requirements of Rule 23(a) and the requirements of Rule 23(b)(1), (2) or (3). To satisfy Rule 23(a): (1) the class must be so numerous that joinder of all members is impractical (numerosity); (2) there must be questions of law or fact common to the class (commonality); (3) the claims or defenses of the representative parties must be typical of the claims or defenses of the class (typicality); and (4) the named plaintiffs must fairly and adequately protect the interests of the class (adequacy of representation, or simply adequacy). In re Comty. Bank of N. Va. V.... Loan Litig. 622 F. 3d 275, 291 (3d Cir. 2010) (quoting Fed. R. Civ. P. 23 ). Plaintiffs seek certification under Rule 23(b)(3). This rule requires that: (1) common questions of law or fact predominate (predominance), and (2) the class action is the superior method for adjudication (superiority). Id. The Court must conduct a "rigorous analysis" of the arguments and evidence presented to decide if class certification is appropriate. In re Lamictal Direct Purchaser Antitrust Litig., 957 F.3d 184, 190-91 (3d Cir. 2020).

The requirements of Rule 23 are met here. Starting with Rule 23(a), "[n]o minimum number of plaintiffs is required to maintain a suit as a class action but generally if the named plaintiff demonstrates that the potential number of plaintiffs exceeds 40, the first paragraph of Rule 23(a) has been met." Stewart v. Abraham, 275 F. 3d 220, 226-27 (3d Cir. 2001). Plaintiffs' class of 1,523,970 members plainly meets the numerosity requirement.

Where, as here, the action proceeds under Rule 23(b)(3), the commonality requirement is subsumed by Rule 23(b)(3)'s predominance requirement. Danvers Motor Co. v. Ford Motor Co., 543 F.3d 141, 148 (3d Cir. 2008) (citing Georgine v. Amchem Prods., Inc., 83 F.3d 610, 626 (3d Cir. 1996) ("Because [ Rule] 23(b)(3)'s predominance requirement incorporates the commonality requirement, [the court] will treat them together.")). Commonality does not require perfect identity of questions of law or fact among all class members. Reyes v. Netdeposit, LLC., 802 F.3d 469, 486 (3d Cir. 2015). Instead, the named plaintiffs must demonstrate that the class members have suffered the same injury and that their claims "depend upon a common contention ... capable of classwide resolution – which means that determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke." Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350, 131 S.Ct. 2541, 180 L.Ed.2d 374 (2011). The Rule 23(b)(3) predominance analysis measures whether the class is significantly cohesive to warrant class certification. Newton v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 259 F. 3d 154, 187 (3d Cir. 2001) (citation omitted). The predominance requirement examines whether the defendant's conduct was common to the class members, and whether the class members were harmed by the defendant's conduct. Sullivan v. DB Inves., Inc., 667 F. 3d 273, 298 (3d Cir. 2011). In addition, the predominance inquiry "focuses [on] a common course of conduct by which the defendant may have injured class members." Barel v. Bank of Am., 255 F.R.D. 393, 399 (E.D. Pa. 2009).

The commonality requirement is met here. Plaintiffs and the class each allege they received unwarranted telemarketing calls from FMC or its vendors. Further, the focus of FMC's defense, that it did not use an ATDS, is common to the class. Even if some of FMC's defenses are individualized, they do not predominate over the common defenses. Other common issues of fact and law are whether FMC violated the TCPA, whether the...