Paniani Taafua v. Quantum Global Technologies, LLC

Background

Paniani Taafua brought this proposed class action against Quantum Global Technologies, LLC (QGT), alleging violations of the Fair Credit Reporting Act (FCRA). Taafua challenged QGT’s standard form for obtaining consumer reports from First Contact HR. He alleged that the form combined the required disclosure about a consumer report with an unrelated liability waiver, violating the FCRA’s requirement that the disclosure stand alone. He also alleged that QGT therefore did not obtain valid authorizations for the reports it procured.

The parties reached an original settlement, but the court denied preliminary approval because the proposed allocation appeared to account for QGT’s possible statute-of-limitations defense at the expense of about half the proposed class. The court also questioned the requested attorneys’ fees, which exceeded the Ninth Circuit’s 25 percent benchmark, and the requested $5,000 service award.

The parties then agreed to an amended settlement. The amended agreement provided for a $174,980 non-reversionary settlement fund covering claims from October 30, 2013, through December 31, 2018. The proposed class consisted of people in the United States who applied for employment with or were employed by QGT and whose consumer reports were procured by QGT through First Contact HR during that period.

Notice and Class Certification

QGT identified 1,040 potential class members. The settlement administrator mailed notice to all of them, updated addresses for some members, and remailed notices when updated information was found. Ultimately, nine notices remained undeliverable, and 1,029 members were presumed to have received notice. Two people requested exclusion, and no class member objected.

The court found that the requirements for certification under Federal Rule of Civil Procedure 23 were met. Those requirements included numerosity, common legal or factual questions, typical claims, adequate representation, predominance of common questions, and superiority of the class-action procedure. The court also found that the notice clearly explained the case, the class definition, and class members’ rights to participate or exclude themselves. The court therefore granted final class certification.

Settlement Terms and Fairness

The settlement fund was to be reduced by estimated administrator expenses of $15,592, attorneys’ fees of $41,967.33, costs of $1,993.72, and a $3,500 service award to Taafua. The remaining estimated net settlement fund was $111,926.95 for 1,040 class members. Thirteen percent was to be distributed to members whose claims fell outside the two-year limitations period, and 87 percent was to be distributed among members whose claims were unquestionably timely. Payments were to be based on the number of consumer reports obtained for each member. Unclaimed funds were to go to the Education Fund of the National Association of Consumer Advocates as a charitable distribution.

The court evaluated the settlement under Rule 23(e), which requires a class-action settlement to be fair, adequate, and reasonable. The court considered the risks and costs of further litigation, the possible recovery, the information exchanged by the parties, counsel’s experience, the lack of objections, the small number of exclusions, and the equitable treatment of class members. It found that the settlement fell within the range of reasonableness and provided class members with an immediate recovery without requiring them to file claims or take further action.

Attorneys’ Fees, Costs, and Service Award

Taafua’s counsel requested $41,967.33 in attorneys’ fees and $1,993.72 in costs. Counsel reported spending 152.40 hours, producing a claimed lodestar—the amount calculated from reasonable hourly rates multiplied by hours worked—of $74,727. The court found the requested fees substantially lower than the claimed lodestar, consistent with prevailing rates in the district, and reasonable in light of the work performed, the results obtained, and the risks counsel accepted on a contingency-fee basis. The court also found the requested costs reasonably incurred.

Although the court had concerns that the $3,500 service award was about three times the highest estimated payment to other class members, it found the award appropriate in light of Taafua’s assistance with investigating the claims, gathering information, reviewing the settlement, and helping obtain a benefit for the class. The court noted that a service award could not properly compensate a representative for signing a general release, but it nevertheless granted the requested award based on the benefit Taafua helped obtain.

Disposition

The court granted Taafua’s motion for final approval of the class-action settlement, granted his motion for final class certification, and granted the motion for payment of $41,967.33 in attorneys’ fees and $1,993.72 in costs. It also granted the $3,500 service award. The parties and the settlement administrator were directed to implement the amended settlement agreement, and the clerk was ordered to enter judgment and close the case.