awards.and granting application fjr … approval order.pdf · residual settlement funds. on may 15,...

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDAM IAM I DIVISION

CASE No. 1:09-M D-02036-JLK

IN RE: CHECM NG ACCOUNT

OVERDRAFT LITIGATION

M DL No. 2036

17HIS DOCUM ENT RELATES TO:

FOURTH TRANCHE ACTION

Eno v. M (f I Marshall tf Ilsley BankS.D. Fla. Case No. 1:10-cv-22730-JLK

M ,D. Fla. Case No. 2:10-376

ORDER OF FINAL APPROVAL OF SETTLEM ENT AUTHORIZING SERVICE

AWARDS.AND GRANTING APPLICATION FJR ATTORNEYS' FEES

On M ay 17, 2013, Plaintiffs and Class Counsel filed their Amended M otion for Final

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

lncomorated Memorandum of Law (1çMotion''), seeking Final Approval of the Settlement

Agreement and Release CçAgreemenf') and Amendment to Settlement Agreement and Release

(lçAmendmenf') (the Agreement and the Amendment are collectively referred to as the

çdsettlemenf') with BMO Harris, N.A. f/k/a M & I Marshall & Ilsley Bnnk CGM & I Bnnk'').1

('DE # 3474). ln support, Plaintiffs and Class Counsel filed declarations from experts in class

action 1aw and attorneys' fees, as well as several other declarations supplementing the factual

record to enable the Court to evaluate the faimess and adequacy of this Settlement. (DE # 3474-

1 This Order incoporates the definitions of terms used in the Agreement and Amendment

attached to the Motion (DE # 3474-1, 3474-2).

Case 1:09-md-02036-JLK Document 3570 Entered on FLSD Docket 08/02/2013 of 38

3, 3474-4, 3474-5, 3474-6, 3474-7).One objection to the Settlement was timely submitted on

behalf of a single Settlement Class Member. (DE # 3360).

This matter came before the Court on April 19, 2013, for a Final Approval Hearing

pursuant to the Court's Preliminary Approval Order dated October 4, 2012. (DE # 2989).

Pursuant to the Parties' request, the Court adjoumed the April 19, 2013 Final Approval Hearing

bn allow the Parties an oppodunity to address the Court's concerns relating to the disposition of

residual settlement funds. On May 15, 20 13, the Parties entered into the Amendment, and on

M ay 17, 2013, Plaintiffs and Class Counsel filed the M otion, attaching, inter alia, the

Amendment. (DE # 3474-2). On July 22, 2013, the Court entered an Order Setting Hearing, re-

setting the Final Approval Hearing for August 1, 2013. (DE # 3539).

The Court reviewed all of the filings related to the Settlement and heard argument on the

M otion. After careful consideration of the presentations of the Parties, the Court concludes that

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

representing approximately twenty-five (25%) of the most probable recoverable damages based

on the creation of a common fund consisting of $4,000,000 in cash and changes in M & I Bank's

Debit Card Transaction posting practices and other overdraft fee policies with a substantial

savings to Settlement Class Members over a three (3) year period.The Settlement constitutes an

excellent result for the Settlement Class under the circumstances and challenges presented by the

Action. The Court specifically finds that the Settlement is fair, reasonable and adequate, and a

satisfactory compromise of the Settlement Class' claims. The Setllement 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

l'equested Service Awards for the representative Plaintiffs.

2


BACKGROUND

The Court is familiar with the history of this consumer class action brought against M & I

Bazlks having presided over MDL 2036 for over three years. During that time, the Court has had

ample opportunity to observe Class Counsel and M & l Bank's counsel in action. These

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

skilled advocates, and a1l of them vigorously litigated this case up to the time of the Settlement.

The Settlement is quite obviously the result of arm's-length negotiations, and the Court so finds.

The present evidentiary record is more than adequate for the Court to consider the

fàilness, reasonableness and adequacy of the Settlement. A fundamental question is whether the

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

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

1L075, 1084 n.6 (6th Cir, 1984) (citing Detroit v. Grinnells 495 F.2d 448, 463-68 (2d Cir. 1974:.

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

evidence and opinions of Class Counsel and their experts.

1. Factual and Procedural Background of the Action.

On Jtme 16, 2010, Plaintiffs Jeffrey M . Eno and Suzanne M . Cox filed the Class Action

Complaint in the United States District Court for the M iddle District of Florida, seeking

monetary dnmages, restitution and declaratory relief from M & I Bank based on its alleged

Imfair assessment and collection of Overdraft Fees on Debit Card Transactions. See Joint

Declaration of Robert C. Gilbert and Jeffrey M. Ostrow !! 7, 10 (dsloint Decl.'') (DE # 3474-3).

On July 27, 2010, the Judicial Panel on M ulti-District Litigation transferred the case to this

Court for inclusion in MDL No. 2036. Id at ! 10. The Action against M & I Bnnk was made

part of the Fourth Tranche.

3


On November 15, 2010, M & I Bank filed a motion to compel arbitration and to stay a1l

proceedings in this Court CtO bitration Motion''). (DE # 916). On December 2, 2010,

Plaintiffs filed their response to the Arbitration Motion (DE # 983), and on December 9, 2010,

M & I Bank filed its reply. (DE # 1006).

On April 18, 201 1, the Court entered an Order denying M & I Brmk's Arbitration

Motion (ç(Order''). (DE # 1330). 0n April 29, 201 1, M & l Bnnk filed a notice of appeal of the

Order. (DE # 1375). Also on April 29, 201 1, M & 1 Bank tiled an unopposed motion to stay

pending appeal of the Order. (DE # 1380).On May 4, 201 1, the Court granted M & 1 Brmk's

motion to stay conditioned on the posting of a supersedeas bond in the amount of $50,000.

(DE # 1433). On May 6, 201 1, M & l Bank posted the bond. (DE # 1443).

On June 15, 201 1, M & 1 Bnnk filed its opening appellate brief with the Eleventh

Circuit CçAppea1''). See Joint Decl. ! 13. 0n August 22, 201 1, Plaintiffs filed their brief in

r'esponse to the Appeal. 1d. Also, on August 22, 201 1, Plaintiffs filed a motion for remand

l'equesting this Court's consideration of the impact of Concepcion on this case, which M & I

13rmk opposed on August 29, 201 1. Id. 0n September 14, 201 1, M & I Bank filed its reply

brief. Id. On October 2 1, 201 1, the Eleventh Circuit ordered the remand motion to be canied

with the case. f#.

2. Settlem ent Negotiations and Proceedings.

Beginning in late 201 1, the Parties engaged in preliminary settlement discussions. See

Joint Decl. ! 14. On November 30, 201 1, the Parties pm icipated in a formal mediation session

in Boston under the auspices of Professor Eric Green of Resolutions, LLC. 1d. at ! 15. As a

result of the mediation, the Parties reached an agreement on the material terms of the

Settlement and signed a Memorandum of Understanding.1d. at ! 16. Thereafter, the Parties

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spent several months negotiating the comprehensive terms of the Agreement. Id at ! 17. The

Agreement was signed on September 26, 2012. 1d.

On October 1, 2012, Plaintiffs tiled a Joint M otion for Partial Release from Stay and

Plaintiffs' Unopposed Motion for Preliminary Approval. (DE # 2980, 298 1). On October 4,

2012, the Court granted the Joint Motion for Partial Release from Stay and entered an Order

(Jranting Preliminary Approval (sfpreliminary Approval Order''). (DE # 2988, 2989). In

entering the Preliminary Approval Order, the Court preliminarily determined that the

Settlement is Stfair, reasonable and adequate'' and fotmd Sdthat the Settlement was reached in the

absence of collusion (andj is the product of informed, good-faith, arm's-length negotiations

between the pm ies and their capable and experienced counsel.'' (DE # 2989 ! 1 1).

Pursuant to the Preliminary Approval Order, Notice of the Settlement was mailed to

1.89,560 members of the Settlement Class. See Declaration of Cameron Azari ! 16 tsûAzari

Dec1.'') (DE # 3474-6). Notice of the Settlement was also timely published in twelve (12)

newspapers covering the major markets in which M & I Bnnk operated branches during the

Class Period. See Azari Decl, !( 23. In addition, a special Settlement Website and a toll-free

telephone mlmber were established to provide details regarding the Settlement to inquiring

members of the Settlement Class. Id. at !! 26-28.

As discussed below, the Court finds that the Notice Progrnm was properly effectuated,

1md that it was more than adequate to put the Settlement Class on notice of the terms of the

Settlement, the procedures for objecting to or opting-out of the Settlement, and the rights that

members of the Settlement Class will give up by remaining part of the Settlement. See Azari

Decl. !! 30, 38, 39.

5


On M ay 15, 2013, the Parties entered into the Amendment to address the Court's

concems relating to the disposition of residual settlement ftmds, and on M ay 17, 2013, Plaintiffs

pmd Class Counsel filed the Motion, attaching, inter alia, the Amendment. (DE # 3474-2).

3. Summary of the Settlement Terms.

The Settlement's terms are set forth in the Agreement and the Amendment. (DE # 3474-

1 , 3474-2). The Court now provides a summary of the material terms.

A. The Settlement Class.

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

Procedure. The Settlement Class is defined as;

Al1 holders of any M & I Bnnk Account in the United States who, during theClass Period, incurred one or more Overdraft Fees in connection with M & IBank's Debit Re-sequencing Overdraft Practices.

See Agreement ! 42.

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

M & l Bnnk timely deposited $4,000,000 into the Escrow Account following

Preliminary Approval. See Joint Decl. ! 19. That deposit created the Settlement Fund, which

,&il1 be used to pay: (i) all distributions to Settlement Class Members who do not opt-out of the

Settlement; (ii) all attorneys' fees, costs and expenses of Class Counsel; (iii) the Service

Awards to the Plaintiffs; (iv) payment of expenses resulting from investing the Settlement

Fund, if any; (v) any Taxes; (vi) payment of any Escrow Agent or Tax Administrator costs;

(.'viil distribution of residual ftmds, if any, pursuant to Section XIV of the Agreement; (viii) that

portion of a1l settlement notice and administration fees, costs and expenses, if any, that in total

exceeds the guaranteed maximum price, as set forth in paragraph 55(c) of the Agreement; and

(ix) additional fees, costs and expenses not specifically enumerated in the Agreement, subject

to approval of Settlement Class Counsel and M & I Bnnk. See Agreement ! 54. ln addition to

6


the $4,000,000 Settlement Fund, M & l Bank is responsible for paying the costs and fees

associated with Class Notice and Settlement administration pursuant to the Agreement, which

aTe estimated to be several hundred thousand dollars. See Agreement ! 55; Joint Decl. ! 19.

A11 identifiable Settlement Class Members who do not opt-out of the Settlement and

who experienced

Agreement) will receive pro rata distributions from the Net Settlement Fund. See Agreement !

82; Joint Decl. ! 20.

a Positive Differential Overdraft Fee (as defined in the Settlement

The Net Settlement Fund is equal to the Settlement Fund, plus interest

earned (if anyl, less Court-awarded attorneys' fees and costs and Service Awards to the

Plaintiffs. See Agreement ! 81. The Positive Differential Overdraft Fee analysis determines,

funong other things, which M & I Bnnk Accotmt holders were assessed additional Overdraft

Fees that would not have been assessed if M & I Bank had used an alternative posting

sequence or method for Debit Card Transactions other than Debit Re-sequencing, and how

lnuch in additional Overdraft Fees those Account holders paid. See Joint Decl. ! 20. The

calculation involves a complex multi-step process described in detail in the Agreement. See

Agreement !! 79-80; Joint Decl. ! 20.

Payments to Settlement Class M embers who do not opt-out of the Settlement will be

made by check mailed by the Settlement Administrator. See Agreement ! 86; Joint Decl. ! 23.

Any uncashed or rettmzed checks will remain in the Settlement Fund for one year from the date

the first distribution check is mailed by the Settlement Administrator, during which time the

Settlement Administrator will make reasonable efforts to effectuate delivery of the Settlement

Ftmd Payments. See Agreement ! 90.

Based on the Court's concerns relating to the disposition of residual ftmds, the Parties

entered into the Amendment that deleted the original paragraph 91 of the Agreement and

7


replaced it with revised provisions relating to disposition of any funds remaining in the

Settlement Fund one year and thirty days after the Settlement Administrator mails the first

Settlement Class Member Payment. Paragraph 91 of the Amendment reads as follows:

91. W ithin one year plus thirty days after the date the Settlement Administrator mails

the first Settlement Class Member Payment, any funds remaining in the Settlement Fund shall be

clistributed as follows;

a. First, the funds shall be paid to M & l Bank in such nmotmt as to

reimburse M & I Bank for the actual amounts paid by M & I Bank to the Settlement

Administrator or Notice Administrator for costs of Class Notice and Settlement Administration;

b.

91(a) above shall be distributed on a pro rata basis to participating Settlement Class Members

who received Settlement Class Member Payments pursuant to Section X1I1 of the Agreement, to

Second, any funds remaining after distribution pursuant to subparagraph

the extent feasible and practical in light of the costs of administering such subsequent payments

unless the amounts involved are to small to make individual distributions economically viable or

other specifk reasons exist that would make such further distributions impossible or unfair; or

c. Third, in the event the costs of preparing, transmitting and administering

such subsequent payments pursuant to subparagraph 91(b) above are not feasible and practical to

lnake individual distributions economically viable or other specific reasons exist that would

make such further distributions impossible or unfair, Settlement Class Counsel and cotmsel for

M & I Bnnk shall jointly propose a plan for distribution of the residual funds consistent with the

zimerican Law lnstitute, Principles ofAggregate L itigation j 3.07 (c), and shall bring the matter,

together with supporting materials and argument, for consideration by the Court. After

consultation with the Parties, the Court shall have the discretion to approve, deny, nmend or

8


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

consistent with the American Law lnstitute, Principles ofAggregate Litigation j 3.07 (c). The

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

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

proposed plan for distribution of the residual funds pursuant to this paragraph shall not constimte

grounds for termination of the Settlement pursuant to paragraph 107 of the Agreement;

d. A1l costs associated with the disposition of residual ftmds - whether

tlmlugh additional distributions to Settlement Class M embers or through an altemative plan

approved by the Court - shall be borne solely by the Settlement Ftmd. Under no circumstances

shall M & l Bnnk have responsibility for any costs associated with the disposition of residual

brunds whether through additional distributions to Settlement Class Members and/or through an

altemative plan approved by the Court;

e. ln the event no money remains in the Settlement Fund after distribution

under subparagraph 91(a), the Parties shall have no obligation whatsoever to make any

distributions as contemplated by subparagraphs (b) or (c) above.

(DE # 3474-2).

Non-M onetary Relief.

As additional consideration for the releases of the claims of the Settlement Class

C.

Members who do not opt-out of the Settlement, M & I Banb agrees to implement (if not

already in place), the practice changes detailed below with respect to Debit Card Transactions

tmd Overdraft Fees. See Agreement ! 50.

(a) Current Posting Order.

Commencing no later than M arch 31, 2013, M & I Bnnk shall change its posting order

of transactions to the following; (1) credits; (2) priority debits with ATM withdrawals posted

9


by date and time, or, if the date and time information is unavailable, then low to high by

fkmount; (3) a11 other priority debits (e.g. outgoing wires, internal transfers, cash

withdrawal/cashed checks at teller window, etc.) grouped together and posted low to high by

ltmount; (4) Debit Card Transactions (including Pm and non-pm transactions) posted by date

Cmd time of authorization, or, if date and time information is tmavailable, then 1ow to high by

Junount; (5) ACH transactions posted 1ow tohigh by nmount; (6) checks sorted by check

nurnber, with lowest check number posted first, or, if check number is unavailable, then low to

high by amount; and (7) bank initiated transactions(e.g. maintenance fees, overdrah fees,

AT'M fees, etc.) posted low to high by nmount.See Agreement ! 50(a).

(b) Overdraft Fee Limit.

Commencing no later than March 31, 2013, M & I Bank shall: (i) limit the number of

Overdraft Fees assessed to a single Account to four (4) on any given day; and (ii) refrain from

assessing an overdraft fee unless an Account has a negative balance of $5.0 1 or more. See

Agreement ! 50(b).

(c) Three Year Period.

M & I Bnnk agrees not to change the posting order and Overdraft Fee limits described above in

1my material mnnner that would be less beneficial for its customers, for a period of at least three

(3) years following the datets) of their implementation, except that M & I Bank at a1l times

retains the right on a prospective basis to modify its policies and practices based on amendments

or claritscations of applicable law as enacted or interpreted by the courts, Congress, or federal

regulators, or as necessary for M & l Brmk to comply with any such amendment, intemretation

or clarification. See Agreement ! 50(c).

10


D. Class Release.

In exchange for the benefits conferred by the Settlement, all Settlement Class M embers

who do not opt-out of the Settlement will be deemed to have released M & I Bank from claims

as detailed in Section XV1 of the Agreement. See Agreement j IXVI.

DISCUSSION

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

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

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

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 19 1, 1 196 (7th Cir. 1996). ln evaluating a proposed class action settlement,

the Court çlwill not substitute its business judgment for that of the parties; tthe only question . . .

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

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

v. Cleveland-clfjj Iron Co., 52 F.R.D. 151, 159 (S.D.N.Y. 1971)). Sfsettlement agreements are

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

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

ala/f/r?.fJ'/ f itig-, 552 F.2d 1088, 1 105 (5th Cir. 1977).

As explained below, the Settlement here is more than suffkient under Rule 23(e). The

Settlement includes a Settlement Fund of $4,000,000 and substantial future savings to Settlement

Class Members and other accotmt holders. See Joint Decl. ! 43. The $4,000,000 Settlement

'Fund alone represents approximately twenty-five percent (25%) of Plaintiffs' and the Settlement

Class' most probable recovery. 1d.The vast majority of the Settlement Class will receive their


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

Counsel's expert of infonnation in M & l Bnnk's possession.

1. The Court's Exercise of Jurisdiction Is Proper.

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

litigation, the Court also has personal jurisdiction over al1 members of the Settlement Class

because they received the requisite notice and due process.See Phillès Petroleum Co. v. Shutts,

472 U.S. 797, 8 1 1-12 (1985) (citing Mullane v. Cent. Hanover Bank tf Trust Co., 339 U.S. 306,

3 14-15 (1950:9 see also In re Prudential lns. Co. ofAm. Sales Practices Litig', 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.

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

mailed to over 189,560 members of the Settlement Class. See Azari !! 13-17. Notice of the

Setllement was also published in twelve (12) newspapers. f#. at !! 21-25. ln addition, a special

Setllement W ebsite and toll-free telephone number were established to enable members of the

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

Settlement Class to obtain detailed information about the Action and the Settlement. Id. at ! 26.

b. The Notice W as Reasonably Calculated to lnform the Settlement

Class of Their Rights.

The Notices and Notice Progrnm satisfied all applicable requirements of law including,

but not limited to, Federal Rule of Civil Procedure 23 and the constitutional requirement of due

2 i fied due process requirementsprocess. See Azari Decl. ! 39. The Court-approved Notice sat s

because it described tithe substantive claims (and) contained information reasonably

1 s Preliminary Approval Order at ! 13. (DE # 2989).ee


necessary to make a decision to remain a class member and be bound by the final judgment.'' In

l.e CV/JJ'Ja Motor Corp. Antitrust L itig., 552 F.2d 1088, 1 104-05 (5th Cir. 1977).

The Notice, among other things, defined the Settlement Class; described the release

provided to M & l Bnnk tmder the Settlement as well as the nmount, mmmer of allocating, and

proposed distribution of Settlement proceeds; and informed members of the Settlement Class 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 Cotmsel intended to seek attonzeys' fees

of up to thirty-tlzree percent (33%) of the Settlement Fund. ln addition to disclosing the material

terms of the Settlement, the Notice informed the Settlement Class that a class judgment would

bind them tmless they opted-out, and told them where they could get more information - for

example, at the Settlement W ebsite that posts a copy of the fully executed Agreement, as well as

other important court documents such as the Motion. See Azari Decl. ! 30.

The M otion and exhibits thereto contain Class Cotmsel's considered opinion that the

$4,000,000 Settlement Fund represents approximately twenty-five percent (25%) of the most

probable damages Plaintiffs and the Settlement Class could recover at trial. See Joint Decl. ! 43.

'rhe disclosure of this percentage was suftkient to put members of the Settlement Class on notice

of their potential recovery based on their personal history with M & I 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 was provided with the best practicable notice;

the notice was dçreasonably calculated, tmder (the) circumstances, to apprise interested parties of

'the pendency of the action and afford them an opporttmity to present their objections.'' Shutth

472 U.S. at 812 (quoting Mullane, 339 U.S. at 314-1 5). This Settlement with M & I Bank was

13


widely publicized, and any Settlement Class slenlber yvho yvished to express conAnaents or

objections had ample opportunity and means to do so. See Azari Decl. !! 7, 33.

2. The Settlement Is Fair, Adequate and Reasonable, and Therefore Is Finally

Approved Under Rule 23.

ln determining whether to approve the Settlement, the Court considers whether it is Sçfair,

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

18 F.3d 1527, 1530 (1 1th Cir. 1994); see also Bennett v. Behring Corp., 7?7 F.2d 982, 986 (1 1th

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

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

Lorazepam (f Clorazepate Antitrust L itig., MDL No. 1290, 2003 WL 22037741, at *2 (D.D.C.

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

ddnot 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

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

4SN.D. 111. 2000) (citations omitted).

The Eleventh Circuit has identifed six factors to be considered in analyzing the faim ess,

reasonableness and adequacy of a class action settlement tmder Rttle 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 the proceedings and the nmotmt 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 amotmt of opposition to the settlement.

14


Leverso, 18 F.3d at 1530 n.6; see also Bennett, 7?7 F.2d at 986.

a. There W as No Fraud or Collusion.

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

See, e.g., In re Sunbeam Sec. L itig., 176 F. Supp. 2d 1323, 1329 n.3 (S.D. Fla. 2001); Ingram v.

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

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

jverchandise Antitrust L itig., 1 12 F. Supp. 2d 1329, 1338 (N.D. Ga. 2000) (ttltlhis was not a

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

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

showed tsthat the parties conducted discovery and negotiated the terms of settlement for an

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

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

Litigation.

The Action involves over 189,560 members of the Settlement Class and alleged wrongful

Overdraft Fees in the tens of millions of dollars. See Joint Decl. ! 39. The claims and defenses

làre complex; litigating them has been and would continue to be difficult and time-consuming.

Id. Although the Action was litigated for over two years before the Parties reached an agreement

in principle to resolve it, recovery by any means other than settlement would require additional

years of litigation. See United States v. Glens Falls Newspapers, lnc. , 160 F. 3d 853, 856 (2d

Cir. 1998) (noting that $ça principal function of a trial judge is to foster an atmosphere of open

discussion nmong the parties'

promptly and fairly so as to avoid the uncertainty, expense and delay inherent in a trial.''); In re

Domestic Air Transp. Antitrust L itig., 148 F.R.D. 297, 317, 325-26 & n.32 (N.D. Ga. 1993)

CtlzMdjudication of the claims of two million claimants could last half a millennium').

attorneys and representatives so that litigation may be settled


The Settlement provides immediate and subsfnntial benefits to over 189,560 current and

lbrmer M & I Bank customers. See Joint Decl. j 39; see ln re Shell Oi1 Rejlnery, 155 F.R.D.

552, 560 (E.D. La. 1993) (&$The Court should consider the vagmies of litigation and compare the

signifcance 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 Oi1

4-0., 64 F.R.D. 597, 624 (D. Colo. 1974:; see also In re US. Oi1 dr Gas L itig., 967 F.2d 489,

493 (1 1th 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 çsdemand for time on the existing judicial system

must be evaluated in determining the reasonableness of the settlement,'' 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. If the Plaintiffs survived the motion to compel arbitration and

litigated in court, it <'would have probably consumed millions of dollars of class cotmsel's time

1md delay any payments to class members for several years.'' See Declaration of Brian T.

Fitzpatrick Decl. ! 15 (çsFitzpatrick Decl.''). (DE # 3474-4).

The nmount of the recovery is extremely reasonable in light of the risks Plaintiffs faced.

See Joint Decl. !! 43-45.The $4,000,000 Settlement Fund represents approximately twenty-five

percent (25%) of the most probable aggregate dnmages that Class Counsel believe could have

been recovered on behalf of the Settlement Class if the Action were successful in a11 respects.

.Id. at ! 43. That percentage constitutes a very fair settlement.Id. at ! 44. The combined risks

here were real - and potentially catastrophic for the Settlement Class.

First, assuming Plaintiffs won the Appeal, M & l Bank would have argued that the

National Bnnk Act (1çNBA'') preempted Plaintiffs' claims at all stages of the litigation. See Joint

16


Decl. ! 69. This Court stressed that its original preemption nlling, on motions to dismiss filed by

First Tranche bnnks, applied only ççlalt this stage . . .'' In re Checking Account Overdrajt

f///gJ/ft)n, 694 F. Supp. 2d 1302, 1313 (S.D. Fla. 2010). When it subsequently approved the

Bnnk of America settlement in M DL 2036, the Court observed that ftwhether Plaintiffs' claims

ltre preempted by the NBA and related regulations remains an open question. . . . (Njo federal

appeals court has yet reached the NBA preemption issue in this specific context. The preemption

defense ttwas a Slight switch' which, if successfully tum ed ton' . . . would have led to dismissal

of the entire case . . .'' Checking Account Overdra#, 830 F. Supp. 2d at 1347 (citations omitted).

Had the Action proceeded, M & l Bnnk would likely have raised the Ninth Circuit's recent

decision in Gutierrez v Wells Fargo Bank NA., 704 F.3d 712 (9th Cir. 2012), that reversed and

remanded a $203 million judgment against Wells Fargo on the grounds that certain provisions of

Califomia's Unfair Competition Law are preempted by federal laws and regulations. See Joint

Decl. ! 69. While Class Counsel assert that Gutierrez is not applicable because its preemption

lmalysis was limited to particular provisions of Califomia's Unfair Competition Law and also

that most of the claims asserted in this Action are based on allegations of bad-faith conduct

brought under state laws of general applicability that Gutierrez held are not preempted, M & 1

Bnnk would likely have argued that the NBA preempts these claims on the grounds that they

(dsignificantly interfere'' with its federally-authorized bnnking powers. Id. Thus, there can be no

doubt that the federal preemption issue involves complex issues of 1aw and fact, and presented a

serious and ongoing risk to Plaintiffs' and the Settlement Class's claims against M & I Bank. Id.

at ! 70; see also Tr. of Nov. 7, 201 1, FinalApproval Hearing Regarding Bnnk of America

Settlement, at 1 14; 14-18 (this Court stated that preemption tGseemed to me to be a very close

issue. It caused me a 1ot of problems').

17


Second, another major risk derives from the fact that the language in M & I Bank's

Account agreements suggests that, to some extent, M & 1 Bnnk adequately disclosed its practice

of Debit Re-sequencing. See Joint .Dec1. ! 71. M & 1 Bnnk would likely have argued that there

can be no breach of the implied promise or covenant of good faith and fair dealing where the

contract expressly permits the actions being challenged, and the defendant acts in accordance

with the express terms of the contract. Id.Thus, M & l Bank would have likely asserted that its

disclosure was adequate and that it could not be held liable for Plaintiffs' decisions to maintain

M & I Bnnk checking accounts under a contract authorizing such practices. f#.

c. The Factual Record is Sufficiently Developed to Enable Class Counsel

to M ake a Reasoned Judgment Concerning the Settlement.

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

accomplished prior to settlement'' to ensm e that çscounsel had an adequate appreciation of the

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

ùDrt?#J. Liab. L itig., 55 F.3d 768, 813 (3d Cir. 1995). At the snme time, ttltlhe 1aw is clear that

early 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.

Suffkient discovery was conducted in the Action to enable Class Counsel to make a

reasoned judgment concerning the benefits of settlement compared to the risks attendant to

continued litigation. See Joint Decl. ! 41. In addition, prior to mediation M & 1 Bnnk provided

Class Cotmsel and their expert with certain confidential information that enabled Class Cotmsel

to estimate the amount of wrongful Overdraft Fees incurred by the Settlement Class under a

series of altemative posting scenarios. f#. This infonnation afforded Class Cotmsel insight into

the strengths and weaknesses of the claims against M & I Bank, as well as the range of possible

dnmages that could be recovered in the Action. Id. Prior to settling, Class Cotmsel had

18


developed nmple information and performed analyses from which dfto determine the probability

of . . . success on the merits, the possible range of recovery, and the likely expense and duration

of the litigation.'' Mashburn v. Nat 1 Healthcare, Inc., 684 F. Supp. 660, 669 (M.D. Ala. 1988).

The stage of the proceedings when the Parties reached an agreement to settle supports granting

Final Approval. See Fitzpatrick Decl. ! 16.

d. Plaintiffs W ould Have Faced Signilkant Obstacles to Obtaining

Relief.

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

absent . . . settlement-''In re Domestic Air Transp., 14# F.R.D. at 314 (N.D. Ga. 1993); see also

zkcxu/dr, 822 F. Supp. at 1555 CW Court is to consider the likelihood of the plaintiffs success on

the merits of his claims against the nmotmt and form 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 those

discussed above relating to arbitration, federal preemption under the NBA, and the M & I Bnnk

Account agreement. See Fitzpatrick Decl. !! 10- 13, 25.Absent this Settlement, this litigation

likely would have continued for additional years, at tremendous expense to the Parties. See Joint

Decl. ! 67. 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 Stmyriad of factual and legal problems''

that led to ççgreat uncertainty as to the fact and amount of damage,'' which made it ttunwise (for

plaintiffs) to risk the substantial benefhs which the settlement confers . to the vagaries of a

1:rial''), aftnd, 737 F.2d 982 (1 1th Cir. 1984).

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

Reasonable W hen Compared to the Range of Possible Recovery.

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


Court is guided by the lçimportant muimu'' that ttthe fact that a proposed settlement nmounts 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 flin light of the

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

(S.D.N.Y. 2003)9 see Bennett, 7?7 F.2d at 986 (sslclompromise is the essence of settlement.');

Linney v. Cellular Alaska P 'ship, 151 F.3d 1234, 1242 (9th Cir. 1998) (*igTlhe very essence of a

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

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

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

Appreciation Investment P 'sç/1f#, L .P. v. Price WaterHousecoopers, L .L .P., 212 F.R.D. 400, 409-

z110 (E.D. W is. 2002) Cç-f'he mere possibility that the class might receive more if the case were

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

The Settlement provides substantial value to the Settlement Class. See Joint Decl. !! 43-

45. Under the Settlement, Plaintiffk and Settlement Class M embers have recovered $4,000,000

in cash, plus significant changes in M & I Bank's Debit Card and Overdraft Fee policies for a

minimum of three (3) years that will result in substantial savings to the Settlement Class and

other Account holders. f#. $û(Iqn light of the risks class counsel faced'' here, the settlement is

t'timpressive.'' See Fitzpatrick Decl. ! 25. The automatic distribution process for the

overwhelming majority of Settlement Class Members further supports the conclusion that the

Settlement is reasonable. f#. at ! 17.

f. The Opinions of Class Counsel, Class Representatives, and AbsentSettlem ent Class M em bers Strongly Favor Approval of the

Settlem ent.

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

20


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

Jklz/3lfra, 684 F. Supp. at 669 (fç1f plaintiffs' counsel did not believe these factors a11 pointed

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

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

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

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

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

()otmsel-''') (citations omitted).

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

Final Approval, and the Court agrees. See Joint Decl. ! 47.Furthermore, the Court also finds it

telling that, of 1 89,560 members of the Settlement Class, only thirty-four (34) timely requests for

exclusion from the Settlement were received, and one objection to the Settlement was timely

submitted. f +uma v. American Express Co., 406 F. Supp. 2d 1298, 1324 (S.D. Fla. 2005)

(finding that a low percentage of objections EGpoints to the reasonableness of a proposed

settlement and supports its approval').

3. The Settlem ent Class.

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

Action in a settlement posture (DE, # 2989), 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 # 2697 (PNC Bank, N..A.)) and in the context of settlement (see, e.g. , DE # 1520,

2150 (Bank of America, N.A.); DE # 2712, 3134 tlpMorgan Chase Bank, N.A.)). The Court

hereby reiterates its findings that: (a) the members of the Settlement Class are so numerous that

jioinder of them is impracticable; (b) there are questions of 1aw and fact common to the


Settlement Class that predominate over any individualquestions; (c) the claims of the

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

Plaintiffs and Class Counsel fairly

Settlement Class; and (e) a class action is superior to other available methods for the fair and

effkient adjudication of the present controversy.

and adequately represent and protect the interests of the

The thirty-four (34) individuals listed in Exhibit A to the Final Judgment being entered

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

linds and decrees that they are not part of the Settlement Class, are not bound 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 Class Representatives Are

Approved.

Service awards Sçcompensate named plaintiffs for the services they provided and the risks

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

Ct?r.p., 454 F. Supp. 2d 1185, 1218 (S.D. Fla. 2006). fçl-flhere 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 W L 1628362, at *6 (S.D. Fla. Apr. 15, 2010).

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

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

694 (awarding class representatives $300,000 each, explaining that ûçthe 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 nnmed plaintifg. The factors for detennining a service award include; (1) the

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


the class benefited from those actions;and (3) the amount of time and effort the class

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

1L01.6 (7th Cir. 1998).

The Court finds that the named Plaintiffs/class representatives expended time and effort

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

behalf of the Settlement Class. The nnmed Plaintiffs provided invaluable assistance to counsel in

this litigation by, among other things, engaging in significant interviews and conferences with

counsel. See Joint Decl. ! 54. The Service Award represents only 0.125% of the Settlement

Fund, and the nmount of the Service Awards is fair and reasonable in view of the efforts of the

named Plaintiffs that benefited the Settlement Class.Id at ! 55. Therefore, the Court approves

the requested Service Awards of $2,500 for each of the Plaintiffs/class representatives to be paid

lkom the Settlement Ftmd.

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

Pursuant to paragraph 101 of the Agreement, Class Counsel originally requested a fee

equal to thirty-tllree (33%) of the Settlement Fund created tllrough their efforts in litigating this

case and reaching the Settlement. At the Final Approval Heming, Plaintiffs' Co-Lead Counsel

advised the Court that Class Counsel are seeking a fee equal to thirty percent (30%) of the

Setllement Fund, consistent with this Court's prior fee awards in M DL 2036 approved

settlements. The Court analyzes this fee request under Camden 1 Condo Ass 'n. v. Dunkle, 946

F.2d 768 (1 1th Cir. l 991). As set forth below, after considering the Camden 1 factors and this

Court's prior fee awards in M DL 2036, the Court concludes that Class Counsel's application for

fees in the nmount of $1,200,000, equal to thirty percent (30%) of the $4,000,000 Settlement

Ftmd will be granted.


a. The Law Awards Class Counsel Fees from the Common Fund

Created Through Their Efforts.

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

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

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

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

doctrine serves the tçtwin goals of removing a potential financial obsucle to a plaintiff s pursuit

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

litigation among all who gained from the nnmed plaintifps efforts.'' ln re Gould Sec. L itig., 727

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

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

llre ''unjustly 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 al1

recognized that Stlaq litigant or a lawyer who recovers a common fund for the benefit of persons

other th% 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 CçAttomeys in a class action in which a common fund is created are entitled to

compensation for their services from the common fund, but the nmotmt is subject to court

approval-').

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

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

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

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

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

24


--,! -;, kqk

This Court has substantial discretion in determining the appropriate fee percentage

awarded to counsel. dd-rhere is no hltrd and fast rule mandating a certain percentage of a common

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

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

7744. However, dûltlhe majority of common ftmd fee awards fall between 20 percent to 30

percent of the fundp''although dïan upper limit of 50 percent of the f'und may be stated as a

general 1'ule.'' 1d (quoting Camden Jk 946 F.2d at 774-75); see also Waters v. Int '1 Precious

avetals Corp., 190 F.3d 1291 (1 lth Cir. 1999) (approving fee award where the district court

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

the circumstances of the case).

W hen using the percentage-of-the-fund approach, courts compensate class counsel for

their work in extracting non-cash relief from the defendant in a variety of ways. W hen the non-

cash relief can be reliably valued, courts often include the value of this relief in the common ftmd

1md award class counsel a percentage of the total Gnd.See, e.g., Staton >'. Boeing Co. , 327 F.3d

938, 974 (9th Cir. 2003) CdlWlhere the value to individual class members of benefits deriving

from injunctive relief can be accurately ascertained . . . courts Emay) include such relief as part of

the value of a common ftmd for pumoses of applying the percentage method . . . .''); cases cited

in footnote 22, infta; see also Principles of the Law of Aggregate Litigation, j 3.13(b) (American

.'Law Institute, 2010) ($û(Aj percentage of the fund approach should be the method utilized in most

common-fund cases, with the percentage being based on both the monetary and nonmonetary

'value of the judgment or settlement.').

in substantial savings to Settlement Class M embers and other account holders, Class Cotmsel are

Here, although the practices changes are likely to result


not seeking compensation directly related to the amount of the savings.See Joint Decl. ! 57; Jee

also Faught v. American Home Shield Corp., 668 F.3d 1233, 1243 (1 1th Cir. 2012) (rejecting

fkrgument that value of injunctive relief should not also be considered in addition to cash for

purposes of determining class counsel's fees).

The common fund for pumoses of determining the fee award in this case is $4,000,000.

llee Joint Decl. ! 57.Professor Fitzpatrick opined that due to the nmount of the cash recovery

cmd the substantial savings from the practice changes that will inure to the Settlement Class

lnembers, an award of thirty-three percent (33%) of the Settlement Fund is ttfully justifed in

light of the need to compensate class cotmsel for the practice restrictions they obtained for the

benefit of the class'' and Sswithin the range of reason.'' See Fitzpatrick Decl. ! 22. Similarly,

according to the Honorable Thomas Scott (Ret.), an award of thirty-three percent (33%) of the

common fund is tlreasonable and well justified'' and ttis consistent with other fee awards in

MDL 2036 and in other cases in this District.'' See Declaration of Thomas E. Scott !! 9, 12

Ctscott Dec1.''). (DE # 3474-7).

Class Counsel undertook a risky and undesirable case and, through diligence,

perseverance and skill, obtained an outstanding result.They 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 tmdertake 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. As Applied H ere, the Camden I Factors Dem onstrate the Requested

Fee Is Reasonable and Justised.

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

26


action counsel are:

(1) the time and labor required;

(2) the novelty and diffkulty 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 casc;

(5) the customary fee;

(6) whether the fee is fixed or contingent;

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

(8) the amount involved and the results obtained;

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

(10) the Sdundesirability'' 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

fxrrexçuç, lnc. , 488 F.2d 7 1 4, 717-19 (5th Cir. 1974:.

These twelve factors are guidelines; they are not exclusive. ttother 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 1, 946 F.2d at

775). ln addition, the Eleventh Circuit has dtencouraged the lower courts to consider additional

factors unique to the particular case.'' Camden t 946 F.2d at 775.


The Claims Against M & I Bank Required Sùbstantial Time

and Labor.

Prosecuting and settling these claims demanded considerable time and labor, making this

1ke request reasonable. See Scott Decl. ! 13.The internal organization of Class Counsel ensured

that Class Counsel were engaged in coordinated, productive work efforts to maximize eftkiency

1md minimize duplication of effort. See Joint Decl. ! 58. Class Counsel devoted a substantial

ltmount of time investigating the claims of many potential plaintiffs against M & l Bank. 1d. at !

.59. Class Counsel interviewed ntlmerous M & 1 Bank customers and potential plaintiffs to

gather information about M & I Ballk's conduct, both at the time the lawsuit was filed and in the

past, to determine the effect that M & I Brmk's conduct had on consumers. 1d. That information

was essential to Class Counsel's ability to lmderstand the nature of M & I Bank's conduct, the

language of the Accotmt agreements at issue, and potential remedies. Id. Class Counsel also

expended significant resources researching and developing the legal claims at issue and in

defending M & 1 Bnnk's Arbitration Motion and the subsequent Appeal. Id. at ! 60.

Settlement negotiations consllmed additional time and resources. See Joint Decl. ! 61.

Preliminary settlement discussions began in late 201 1, ultimately leading to a formal mediation

in November 201 1. Id. The mediation required substantial preparation and follow-up work. Id.

Many months of detailed discussions followed conceming the specific terms of the Settlement.

1d. Al1 told, Class Counsel's coordinated work paid great dividends for the Settlement Class.

Each of the above-described efforts was essential to achieving the Settlement before the Court.

1d. at ! 62. The time and resources Class Counsel devoted to prosecuting and settling this Action

readily justify the fee that requested.

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

28


3lnethod for awarding fees in common fund class actions. Camden f, 946 F.2d at 774. Even

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

only sensible method of awarding fèes in common famd cases.'' Mashburn v. Nat 1 Healthcare,

ùrnc, 684 F. Supp. 660, 690 (M.D. Ala. 1988). More importantly, the Court observed firsthand

1he effort exerted by Class Counsel in this case and the other bank cases, and, given the

outstanding results achieved here, does not find it necessary or useful to review Class Cotmsel's

lodestar records.

Lodestar Gtcreates an incentive to keep litigation going in order to maximize the number

of hours included in the court's lodestar calculation.'' In re Quantum Hea1th Resources, Inc., 962

F. Supp. 1254, 1256 (C.D. Cal. 1997).ln Camden f, the Eleventh Circuit criticized lodestar and

the inefficiencies that it creates. 946 F.2d at 773-75. In so doing, the court Eçmandateld) the

exclusive use of the percentage approach in common fund 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 43s 50 (2d Cir. 2000) (emphasis added); see

tz/do Alba Conte, Attorney Fee Awards j 2.7, at 91 fn. 41 (ffThe 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.

7$ ,' Eleventh Circuit attorneys fee 1aw governs this request. See Allapattah, 454 F. Supp. 2d at1200 (ççltlhe district court presidinq over a diversity-based class action pursuant to Fed. R. Civ.)?. 23 has equitable power to apply tederal common 1aw in determining fee awards irrespective of

state law.''); 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


See, e.g., David v. American Suzuki Motor Corp., 2010 WL 1628362 (S.D. Fla. Apr. 15, 2010).4

ç'(A) common fund 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

a1l other criterim'' 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 Difscult and Required

the Exceptional Skill of a Highly Talented Group of Attorneys.

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

Decl. ! 15; Joint Decl. !! 63-669Walco, 975 F. Supp. at 1472 (explaining that ttlgqiven the

quality of defense counsel from prominent national law firms, the Court is not confident that

attorneys of lesser aptitude could have achieved similar results'); see also Camden f, 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 v. Jacobson, 149

F.R.D. 651, 654 (M.D. Fla. 1992). is emblematic of the effort and

on a regular basis in this MDL. Nor can there be any

Class Cotmsel's work

outcomes witnessed by this Court

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. See Scott Decl. !! 14-15. 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.

(nstead, 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

'f S lso Stahl v. MasTec, Inc., 2008 WL 2267469 (M .D. Fla. May 20, 2008); Sands Pointee aPartners, L .P. v. Pediatrix Med. Grou ,p Inc., 2002 WL 34343944 (S.D. Fla. May 3, 2002);Fabricant v. Sears Roebuck tt Co., 2002 W L 34477904 (S.D. Fla. Sept. 18, 2002).

30


fbr, 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 premium. So too

s'hould it here.

iii. The Claims Against M & I Bank Entailed Considerable Risk.

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

elsewhere. See Scott Decl. ! 14.There were a myriad of ways in which Plaintiffs could have

lost this case - yet Class Counsel nzanaged to achieve a successful Settlement. A lazge amount

of the credit for this must be given to Clmss Counsel's strategic choices, effort and legal acumen.

.i'd at ! 15.

($A court's consideration of this factor recognizes that counsel should be rewarded for

taking on a case from which other law firms shrunk.Such aversion could be due to any number

()f things, including social opprobrium surrounding the parties, thorny factual circumstances, or

the possible financial outcome of' a case. A11 of this and more is enveloped by the term

dundesirable.''' In re Sunbeam, 176 F. Supp. 2d at 1336. ln addition, çlgtlhe point at which

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

tzheir counsel in agreeing to represent them.''Skelton v. General Motor Corp., 860 F.2d 250, 258

(7th Cir. 1988), cer/. denied, 493 U.S. 8 10 (1989). Sdundesirability'' and relevant risks must be

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

retroactively, with the beneft of hindsight. f in# Bros. Builders, Inc. v. American Radiator &

Standardsanitaly 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 contend with the M & I Bank's Arbitration M otion and subsequent Appeal, federal

preemption defense as well as the language in M & l Bnnk's deposit Account agreement. See


Scott Decl. ! 14; Fitzpatrick Decl. ! 1 1. The Court expresses no opinion on the merits of these

arplments by this or any other defendant. The critical point for present pumoses is that, heading

into this case, Class Counsel 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 tmdertake 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 (30%) fee bmsed on the

$4,000,000 Settlement Fund.

iv. Class Counsel Assumed Substantial Risk to Pursue the Action

on a Pure Contingency Basis, and W ere Precluded From Other

Employment as a R esult.

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

74. In tmdertaking to prosecute this complex action on that basis, Class Counsel assumed a

significant risk of nonpayment or tmderpayment. See Scott Decl. !! 18, 22.

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

ttA contingency fee arrangement often justifies an increase in the award of attorney's fees.'' fn re

Sunbeam, 176 F. Supp. 2d at 1335 (quoting Behrens v. Wometco Enters., lnc. , 1 18 F.R.D. 534,

.548 (S.D. Fla. 1988), aftnd, 899 F.2d 21 (11th Cir. 1990:; see also In re Continental 111. Sec.

a(f//g., 962 F.2d 566 (7th Cir. 1992) (holding that when a common fund case has been prosecuted

on a contingent basis, plaintiffs' cotmsel 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), modsed, 803 F.2d 1 135 (1. 1th Cir.); York v. Alabama State Bd. of Education, 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 assurerepresentation when a person could not otherwise afford the

services of a lawyer'. . . . A contingency fee arrangement often

justifies an increase in the award of attorney's fees. This rule helpsassure that the contingency fee arrangement endures. If this

ç'bonus'' methodology did not exist, very few lawyers could takton the representation of a class client given the investment ofsubstantial time, efforq and money, especially in light of the risks

of recovering nothinp

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

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

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

Consequently, this factor supports the requested fee. See Joint Decl. ! 77.

Class Counsel Achieved an Excellent Result.

Given the signitkant litigation risks faced by the Settlement Class here, the Settlement

is excellent. See Scott Decl. ! 20. Rather than facing more yearsof costly and tmcertain

litigation, the majority of the Settlement Class will receive an immediate cash benetk. The

Settlement Fund will not be reduced by costs of Notice or settlement administration-related

expenses; such expenses have been and will continue to be borne separately by M & I Bank.

Moreover, payments to eligible Settlement Class M embers who do not opt-out of the

Settlement will be forthcoming automatically by check. Finally, it was due to Class Cotmsel's

efforts in negotiating the Settlement that M & I Bank agreed to make and/or maintain

significant practice changes. Class Counsel's efforts in pursuing and settling these consllmer

claims were, quite simply, outstanding. See Scott Decl. ! 25.

vi. The Requested Fee Comports with Fees Awarded in Similar

Cases.


The fee sought here matches the fee typically awarded in similar cases. See Joint Decl.

! 78. Legions of decisions have folmd that a thirty percent (30%) fee is well within the range

of a custommy fee. See, e.g., kska:et'za, 176 F, Supp. 2d at 1333-34. Several recent decisions

within this Circuit have awarded attorneys' fees of (or in excess o9 thirty percent (30%4,

confirming the faimess and reasonableness of the thirty percent (30%) fee requested here.

Joint Decl. ! 78.

As another member of this Court observed; tsllqederal district courts across the country

have, in the class action settlement context, routinely awarded class counsel fees in excess of

lb hmark ' even in so-called tmega-fund' cases.''sthe 25 percent enc ,

Allapattah Senw, Inc. v.

Exxon Corp., 454 F. Supp. 2d 1 185, 1210 (S.D. Fla. 2006) (emphasis added) (awarding fees

equaling 31% percent of settlement fund; citing, inter alia, In re Relajkn Antitrust L itig., No.

01-12239-WGY (D. Mass. Apr. 9, 2004) (33% percent); In re Lease Oi1 Antitrust L itig., 1 86

F.R.D. 403 (S.D. Tex.1999) (35.1 percentl); see also Gaskill v.Gordon, 942 F. Supp. 382,

387-88 (N.D. 111. 1996), affvd, 160 F.3d 361 (7th Cir. 1998) (finding that 33 percent is the

norm, and awarding 38 percent of settlement fund); In re Combustion, Inc., 968 F. Supp. 1 1 16

('W.D. La. 1997) (36 percent); fn re Crlzy Eddie Sec. L itig., 824 F. Supp. 320, 326 (E.D.N.Y.

'

.l 993) (33.8 percent); ln re Ampicillin Antitrust L itig., 526 F. Supp. 494, 498 (D.D,C. 198 1) (45

percent); Beech Cinema, Inc. v. Twentieth-century Fox Film Corp., 480 F. Supp. 1 l 95, 1 199

5 l 1 Court Awarded Attorney Fees, ! 2.06(31, at 2-88 (Matthew Bender 2010) (notingSee a sothat, déwhen appropriate circumstances have been identified, a court may award a percentage

significantly higher'' than 25 percent); 4 Newberg on Class Actions, j 14:6, at 55l (4th ed.2002) CtEmpirical studies show that, regardless whether the percentage method or the lodestarmethod is used, fee awards in class actions average around one-third of the recovery.'').


(S.D.N.Y. 1979), aftnd, 622 F.2d 1 106 (2nd Cir. 1980) (approximately 53 percent); Zinman v.

Avemco Corp., 1978 W L 5686 (E.D. Pa. Jan. 18, 1978) (Higginbothnm, J.) (50 percent).

Class Counsel's fee request falls within the range of the private marketplace, where

contingency fee arrangements often approach or equal 40 percent of any recovery. See

Continental, 962 F.2d at 572 (çç-f'he object in awarding a reasonable attorneys' fee . . . is to

simulate the market.''l; RJR Nabisco, Inc. Sec. L itig., Fed. Sec.L. Rep. (CCH) ! 94,268

(S.D.N.Y. 1992) (ltlWjhat should govem (feel awards is . . . what the market pays in similar

cases'). And, Stgiln tort suits, an attorney might receive one-third of whatever amotmt the

Plaintiff recovers. In those cases. therefore, the fee is directly proportional to the recovery.''

Blum v. Stenson, 465 U.S. 886, 904 (1984) tBremzan, J., concuning); see also Kirchoff v.

Flynn, 786 F.2d 320, 323, 325 n.5 ('7th Cir. 1986) (noting ($40 percent is the customary fee in

tort litigation''); ln re Public Service Co. ofNew Mexico, 1992 WL 278452, at *7 (S.D. Cal.

July 28, 1992) (ç1lf this were a non-representative litigation, the customary fee arrangement

would be contingent, on a percentage basis, and in the range of 30% to 40% of the recovery.').

The record here leaves no doubt that Class Counsel's fee request is appropriate and

comports with attorneys' fees awarded in similar cases. Professor Fitzpatrick distilled several

rnajor empirical studies of attorneys' fees, including his own, awarded in connection with class

action settlements. See Fitzpatrick Decl. !! 2, 3, 4, 24. He found that the empirical data from

other Eleventh Circuit fee awards is ttin line with the award requested here.'' Id. at !

24. fçM oreover, even when compared to fee awards outside the Eleventh Circuit, the fee

r'equested in this case is within the range of other awards.'' Id.

Class Cotmsel's fee request also falls within the range of awards in numerous recent

cases in this Circuit and District. See, e.g., Waters, 190 F.3d 1291 (11th Cir. 1999) (affirming


fbe award of 33% percent on settlement of $40 million even though most of the fund ultimately

reverted to the defendant); In re Managed Care Litig. v. Aetna, MDL No. 1334, 2003 WL

22850070 (S.D. Fla. Oct. 24, 2003) (35.5 percent on settlement of $100 million); Gutter v. E.L

Dupont De Nemours <t7 Co., 95-2 152-C1V-Gold (S.D. Fla. May 30, 2003) (33% percent of

$77.5 million settlement); In re Terazosin Hydrochloride Antitrust L itig., 99-1317-MDL-Seitz

(S.D. Fla. Apr. 19, 2005) (33% percent on settlement of over $30 million); Sands Point

Partners, LP v. Pediatrix Med Group, lnc., 2002 U.S. Dist. LEXIS 2572 1 (S.D. Fla. 2002) (30

percent of $ 12 million settlement); In re CHS Elecs., Inc. Sec. L itig., 99-8 186-C1V-Gold (S.D.

F'la. 2002) (30 percent on settlement of over $1 1 million); Ehrenreich v. Sensormatic Elecs.

Ct)r#., 95-6637-ClV-Z1och (S.D. Fla. 1998) (30 percent on settlement of over $44 million);

Tapken v. Brown, 90-0691-CIV-Marcus (S.D. Fla. 1995) (33 percent of $10 million

6settlement).

vii. The Remaining Camden I Factors Also Favor Approving Class

Counsel's Fee Request.

The Court finds that the remaining Camden I factors further support Class Counsel's fee

request, and so holds. See Joint Decl. ! 79. The burdens of this litigation and the relatively

small size of most of the firms representing Plaintiff lend support to the fee awarded. This fee is

6 S lso In re Friedman 's, Inc. &c. f itig., No. 1:03-cv-3475-W SD 2009 W L 1456698 (N.D.ee J ,

Ga, May 22, 2009) (30 percent); Francisco v. Numismatic Guar. Corp. ofAm., No. 06-61677-Clv-Martinez, 2008 W L 649124 (S.D. Fla. 2008) (30 percent); Pinto v. Princess Cruise L ines,1/#., 513 F. Supp. 2d 1334 (S.D. Fla. 2007) (30 percent); In re Bellsouth Corp. Sec. L itig.,Civil Action No. 1:02-cv-2142-W SD (N.D. Ga. Apr. 9, 2007) (30 percent); In re Cryol#, Inc.Sdc. f itig., Civil Action No. 1:02-cv-1868-BBM (N.D. Ga. Nov. 9, 2005) (30 percent); In reJlr//? Recovery Group 1nt 'l, lnc. Sec. L itig., Civil Action No. 1 ;00-cv-1416-CC (N.D. Ga. May26, 2005) (33% percent plus interest and expenses); In re Clarus Corp. Sec. L itig., Civil ActionNo. 1:00-CV-2841-CAP (N.D. Ga. Jan. 6, 2005) (33% percent); In re Pediatric Servs. ofAm.,Inc. Sec. L itig., Civil Action No. 1:99-CV-0670-RI,V (N.D. Ga. Mar. 15, 2002) (33% percent);Ressler v. Jacobson, 149 F.R.D. 651. (M.D. Fla. 1992) (30 percent).

36


firmly rooted in ttthe economics involved in prosecuting a class action.'' ln re Sunbeam, 176 F.

Supp. 2d at 1333. The Court is convinced by its many years of presiding over significant cases

like this one that proper incentives must be maintained to instlre that attorneys of this caliber are

available to take on cases of significant public importance like this one. As Professor Fitzpatrick

correctly observed, these are not mere fçbenchmark'' lawyers.'' See Fitzpatrick Decl. ! 26. The

fàctual record in this case, and the Court's own observations, all of which are incorporated

herein, compel the result required by' this Order.

6. Class Counsel's Application

Expenses ls A pproved.

for Reimbursement of Litigation Costs and

Finally, the Court finds that Class Cotmsel's request for reimbursement of $67,362.50

representing certain out-of-pocket costs and expenses that Class Counsel incurred during the

prosecution and settlement of this Action against M & 1 Bnnk is reasonable and justified. These

costs and expenses consist of: (1) $64,075.00 in fees and expenses for experts; and (2) $3,287.50

in mediator's fees and expenses. See Joint Decl. ! 80. The Court hereby approves Class

Counsel's request for reimbursement of these costs and expenses. See M ills v. Electric Auto-L ite

Cö., 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 Settlement. See Joint Decl. ! 80.

expenses in the amount of $67,362.50 shall be made from the Settlement Fund following

Accordingly, reimbursement of costs and

disbursement of attomeys' fees.

CONCLUSION

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

appoints Plaintiffs Jeffrey M . Eno and Suzanne M . Cox as class representatives for this

Settlement, consisting of the Agreement and the Amendment; (3) appoints as Class Cotmsel and


Settlement Class Counsel the 1aw 5rms and attorneys listed in paragraphs 14 and 43 of the

Agreement, respectively; (4) ovenules the objection filed by the Settlement Class Member (DE #

3360); (5) awards Service Awards t() each of the nnmed Plaintiffs in the amount of $2,500 each;

(6) awards Class Counsel attomeys' fees in the nmotmt of $1,200,000, equal to thirty percent

(.30%) of the $4,000,000 Settlement Fund, plusreimbursement of costs in the amount of

$67,362.50; (7) directs Class Counsel, Plaintiffs, and M & I Bank to implement and consllmmate

the Settlement pursuant to its terms and conditions; (8) retains continuing jurisdiction over

P'laintiffs, the Settlement Class, and M & I Bnnk to implement, administer, consummate 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 JamesLa- ence King Federal Justice

Building and United States Courthouse in M iami, Florida, this 2nd day of August, 2013

t

JAM ES LAW RENCE KIN '

NITED STATES DISTRICT GEOUTHERN DISTRICT OF FL DA

cc: A11 Counsel of Record

38


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