Floyd v. First Data Merchant Services LLC

Background

Louis Floyd and Terry Fabricant brought a putative class action against First Data Merchant Services LLC, Sam’s Club Merchant Services, National Payment Systems, LLC, and National Payment Systems OR, LLC, doing business as One Connect Processing. The complaint alleged unsolicited telemarketing calls and text messages to cellular telephone numbers using an automated telephone dialing system or prerecorded messages, in violation of the Telephone Consumer Protection Act.

The parties reached a settlement before formal class certification after negotiations assisted by a mediator. The court had previously granted preliminary approval and conditionally certified the settlement class. The settlement class covered people in the United States who received qualifying calls or text messages promoting First Data or Sam’s Club Merchant Services from March 30, 2016, through the date of preliminary approval, subject to stated exclusions, including people with prior express written consent and people who opted out.

Settlement and Notice

The defendants agreed to pay $1,600,000 into a common settlement fund without admitting liability. The fund included attorneys’ fees and costs, notice and settlement-administration expenses, service awards, and taxes on settlement payments. After those deductions, approximately $744,048.98 remained for distribution to participating class members. The 3,673 people who filed timely and valid claims would receive pro rata payments, averaging approximately $202.57 each. Unclaimed funds would first be distributed to class members who cashed their initial checks if administratively and economically feasible; otherwise, they would go to the National Consumer Law Center as the approved cy pres recipient.

The administrator received 8,533 claims, of which 3,673 were eligible for payment. Notice reached approximately 99% of the identified class members with mailing addresses, and digital publication supplemented direct-mail efforts. The court received no objections and no opt-out requests by the deadline.

Court’s Analysis

Under Federal Rule of Civil Procedure 23, a court may approve a class settlement after finding that it is fair, reasonable, and adequate and that class-certification requirements are met. The court considered the settlement factors previously identified in the opinion, including the strength and risks of the claims, the amount offered, the stage of the case, counsel’s experience, and the class members’ reaction. It also applied heightened scrutiny because the settlement occurred before formal class certification.

The court found that the settlement class met the certification requirements, that notice was adequate, and that the settlement and allocation plan treated class members equitably. The court approved certification of the settlement class and approved the National Consumer Law Center as the cy pres recipient. The opinion states that the settlement resolved claims arising from the covered telemarketing calls, but it does not decide whether the defendants actually violated the Telephone Consumer Protection Act.

Fees, Costs, and Service Awards

The court granted the motion for attorneys’ fees, costs, and service awards. It awarded class counsel $533,280.00 in attorneys’ fees and $43,671.02 in litigation costs. The court found that the requested fee was below counsel’s calculated lodestar of $547,873.00 and that the claimed hours and hourly rates were reasonable. It also found the litigation expenses reasonable.

The court awarded Floyd and Fabricant $5,000 each. In approving those awards, the court considered their work on behalf of the class, including responding to discovery, searching for evidence, reviewing the complaint and settlement documents, preparing for mediation, communicating with counsel, and assuming the risks of litigation.

Disposition

The court granted the motion for final approval of the class settlement. It also granted the motion for attorneys’ fees, costs, and service awards, confirmed the class representatives and class counsel, approved the settlement, and entered final judgment under its terms. The court retained jurisdiction over matters concerning interpretation, administration, implementation, effectuation, and enforcement of the order and settlement. The parties were required to file a post-distribution accounting, with a compliance deadline of January 4, 2023.