Danger v. Nextep Funding, LLC

Background

LuAnn Danger and the defendants agreed to settle the lawsuit, subject to court approval after notice to class members and a hearing. The order refers to Nextep Holdings, LLC, formerly known as Nextep Funding, LLC, as the defendant in the settlement recital. The opinion does not describe the underlying claims in detail, but it refers to statutory-damages limits for claims brought under the Consumer Leasing Act and the Truth in Lending Act.

Preliminary Class Certification

For settlement purposes only, the court preliminarily certified two Rule 23(b)(3) classes:

- The nationwide class consists of people with a United States address who signed a consumer pet lease agreement with Nextep Holdings, LLC, formerly known as Nextep Funding, LLC, between February 26, 2016, and January 9, 2019, for personal, family, or household purposes. - The Minnesota class consists of people with a Minnesota address who signed such an agreement during the same period.

The defendant represented that there were 2,506 potential nationwide class members and 28 potential Minnesota class members, including Danger. The court preliminarily found that the requirements for class treatment were satisfied, including sufficient numbers, common legal and factual questions, typical claims, adequate representation, and the superiority and manageability of a class action. The court appointed Danger as class representative and Jesse S. Johnson and James L. Davidson of Greenwald Davidson Radbil PLLC as class counsel.

Preliminary Settlement Approval and Notice

The court preliminarily found the proposed settlement fundamentally fair, reasonable, adequate, and in the class members’ best interests. In reaching that preliminary assessment, it considered the benefits to class members, the strengths and weaknesses of the case, the likely complexity and expense of further litigation, appeal and collection risks, statutory-damages limits, and class counsel’s experience.

The court appointed First Class, Inc. as the settlement administrator and approved the proposed direct-mail notices. The administrator was ordered to mail notices no later than August 7, 2020. Nationwide class members other than Minnesota class members generally had to submit a valid claim form by October 15, 2020, to receive a share of the nationwide fund. Minnesota class members did not need to submit a claim form to participate in the Minnesota fund. Class members could also request exclusion or object by October 15, 2020, subject to the order’s requirements.

The proposed settlement provided for pro-rata distributions, after notice and administration costs, from a $13,700 Minnesota Settlement Fund and a $33,500 Nationwide Settlement Fund. It also provided for a separate $3,000 payment to Danger for her service as class representative. The order stated that checks would be mailed only after final approval and expiration of the applicable appeal period, or after an appeal concluded without reversal of final approval.

Ruling and Further Proceedings

Judge Susan Richard Nelson granted Plaintiff’s unopposed motion for preliminary approval of the class-action settlement. The court scheduled a final fairness hearing for December 7, 2020, to consider final class certification for settlement purposes, the fairness and adequacy of the settlement, and whether to enter a final order and judgment dismissing the lawsuit with prejudice and releasing the claims covered by the settlement. Those matters were left for the later hearing.

The court retained continuing and exclusive jurisdiction over matters arising from or connected with the settlement. The settlement and the preliminary-approval order would become null and void if the settlement were terminated, a material component were rejected, or final approval were reversed on appeal and the reversal became final. In that event, the parties’ rights and defenses would be restored without prejudice to their positions as if the settlement and order had not been entered.