Norton v. LVNV Funding, LLC

Background

Sonya Norton brought this putative class action against LVNV Funding, LLC and the Law Office of Harris & Zide. She alleged violations of the federal Fair Debt Collection Practices Act, California’s Rosenthal Fair Debt Collection Practices Act, and California’s Unfair Competition Law. The claims arose from efforts to enforce a state-court judgment that had originally been entered in favor of Arrow Financial Services, LLC. Norton alleged that LVNV acquired the judgment but did not file the required acknowledgment of assignment before pursuing collection activity.

The court certified a class of California residents meeting specified conditions, including that LVNV, represented by Harris & Zide, had taken judicial action after August 17, 2014, to collect a consumer-debt judgment in a California court; Arrow had been the plaintiff of record when the judgment was entered; and LVNV had not filed an assignment of judgment under California law or otherwise become the assignee of record. The court also certified a subclass with a shorter period for claims under the federal and California debt-collection statutes.

After mediation, the parties agreed to settle all of Norton’s claims. The agreement provides for reimbursement, with interest, of all amounts collected from class members; $50,000 to be distributed equally among subclass members; withdrawal of claims for court costs and interest on court costs for open counts; and cessation of specified collective activity on closed activity. Any uncashed settlement checks are to be distributed to the Katherine & George Alexander Law Center as a cy pres recipient, meaning an organization that receives unclaimed or otherwise undistributable settlement funds because its work relates to the lawsuit’s purposes.

Final approval of the settlement

The court confirmed that notice under the Class Action Fairness Act had been provided. The claims administrator mailed notices to 453 class members. Eighteen notices ultimately remained undeliverable, and 44 class members submitted valid claims, including 25 subclass members. No class members opted out or objected. The court found that the notice plan was the best notice practicable under the circumstances and that the claims process was not burdensome.

The court considered two disputed claims. First, the court found that Rosa Vazquez and Rosa Castaneda were the same person based on her documentation and the claims administrator’s investigation, and it allowed her claim. The court found that class counsel William E. Kennedy had violated the settlement agreement by initiating an improper communication with a class member and admonished him, but it concluded that invalidating Castaneda’s otherwise valid claim was not an appropriate remedy.

Second, the court allowed Rosa Della Porta’s late claim. Della Porta had mailed the claim before the deadline but mistakenly switched the addresses on the envelope, causing the post office to return it after the deadline. The court found that her error was inadvertent, that she acted promptly and in good faith, and that the claim was otherwise valid.

The court found the settlement fair, reasonable, and adequate. It approved the cy pres recipient because the Law Center provides legal assistance to primarily low-income clients with consumer and debt issues, which the court found sufficiently related to the lawsuit and the purposes of the federal and California debt-collection laws. The court granted Norton’s motion for final approval of the class action settlement.

Service payment

Norton requested a $7,000 service award for her work as class representative. The court found that she had communicated with her attorneys, responded to discovery, prepared for and attended a deposition, and attended two mediation sessions. However, the court found that her work was typical of named plaintiffs in similar cases and that she had not shown the financial, reputational, or retaliation-related harms that might support a higher award. The court awarded Norton $5,000.

Attorneys’ fees and costs

Class counsel requested $239,373 in attorneys’ fees and $2,053.58 in costs. The court used the lodestar method, which calculates fees by multiplying reasonable hours by reasonable hourly rates. Counsel reported 541.77 hours, and the court found the hours reasonable because the case involved extensive litigation, including motions to dismiss, class certification, a challenge to the class-certification order, discovery, mediation, and settlement negotiations.

The court also found the requested hourly rates reasonable: $600 for William E. Kennedy; $400 for Gina Di Giusto; $475 for Noah Zinner; and $400 for Natalie Lyons. The resulting lodestar was $305,595.50, higher than the amount requested. The court found the requested fees reasonable and awarded $239,373 in attorneys’ fees and $2,053.58 in costs.

Disposition

Judge Donna Ryu granted Norton’s motion for final approval of the class action settlement and granted the motion for attorneys’ fees and costs. The order also awarded Norton a $5,000 incentive payment and required class counsel to file a post-distribution accounting within 21 days after the settlement funds and attorneys’ fees were distributed.