Perks v. T.D. Bank, N.A.
- Valerie Caproni
- 1:18-cv-11176
- U.S. District Court · Southern District of New York
- 11
In Perks v. TD Bank, Judge Caproni granted in part and denied in part fee requests, awarding class counsel $5,446,875 plus expenses and service awards.
Class counsel received $5,446,875 in attorneys’ fees and $84,734.37 in expense reimbursement; Mary Jennifer Perks and Maria Navarro-Reyes each received a $7,500 service award; the settlement class was affected by the court’s valuation of debt forgiveness; and TD Bank was responsible for the settlement payments and administration costs described in the opinion.
What happened
In Perks v. TD Bank, plaintiffs Mary Jennifer Perks and Maria Navarro-Reyes asked the court to approve payments to their lawyers, reimburse litigation expenses, and provide service awards as part of a class-action settlement. The request was unopposed, and no class member or Attorney General objected.
The settlement included $20,750,000 in cash, $20,750,000 in debt forgiveness, and $500,000 in administration costs paid by TD Bank. The lawyers requested $10,375,000 in fees, $95,286.87 in expenses, and $7,500 for each class representative. The court valued the debt forgiveness at 5% of its stated amount because the record did not show that much of the debt would have been collected and some debts would only be reduced, not eliminated.
Judge Valerie Caproni granted in part and denied in part the motion. She awarded class counsel $5,446,875 in attorneys’ fees, $84,734.37 in expense reimbursement after reducing the expert-fee portion, and $7,500 to each class representative.
The detailed version
- Perks v. T.D. Bank, N.A. · No. 1:18-cv-11176
- Valerie Caproni
- May 9, 2022
Background
In connection with final approval of a class-action settlement, Mary Jennifer Perks and Maria Navarro-Reyes moved for approval of attorneys’ fees, litigation expenses, and service awards. TD Bank, N.A. did not oppose the motion, and the opinion states that no class member or Attorney General objected.
The settlement concerned claims involving insufficient-funds fees charged when merchants resubmitted items that had previously been returned for insufficient funds. The settlement provided a $20,750,000 cash fund, $20,750,000 in debt forgiveness, and $500,000 in settlement-administration costs paid by TD Bank. Settlement payments and debt forgiveness were to be distributed directly to class members without a claims process. The opinion states that no funds would return to TD Bank.
Requested payments
The plaintiffs requested $10,375,000 in attorneys’ fees, which they calculated as 25% of the combined cash and debt-forgiveness amounts. They also requested $95,286.87 in expense reimbursement and service awards of $7,500 each for the two class representatives.
Attorneys’ fees
The court used a percentage-of-the-fund method, checked against the lawyers’ lodestar—the number of hours reasonably worked multiplied by reasonable hourly rates. The court held that the debt forgiveness should not be treated as equivalent to cash for purposes of calculating the settlement’s value. It cited the lack of evidence that TD Bank had sought to collect the debts, the likely expiration of the limitations period for much of the debt, and the fact that some class members’ debts would be reduced rather than eliminated.
The court therefore valued the debt-forgiveness portion at 5% of its stated value, or $1,037,500. Adding that amount to the $20,750,000 cash fund, the court determined that the settlement’s value for fee purposes was $21,787,500. Twenty-five percent of that amount was $5,446,875. The court found that amount reasonable after considering the time and labor spent, the litigation’s complexity, the risks of litigation, the quality of representation, the fee’s relationship to the settlement, and public-policy considerations. The court also noted concerns about the amount of partner time billed for discovery and the 309 hours spent on pre-litigation investigation, pleading, and research, but used the lodestar only as a cross-check.
Expenses
Class counsel requested reimbursement for filing and service costs, admission fees, expert fees, litigation-support vendors, and mediation. The court found most expenses reasonable but reduced the amount payable for expert Arthur Olsen’s work by 15%. The court found his billing records sparse and his total fee high for an expert who was not deposed. The resulting expense award was $84,734.37.
Service awards and disposition
The court found the requested $7,500 service awards reasonable because the class representatives spent significant time assisting with the case, including interviews, document collection, discovery, conferences with counsel, and, for Perks, a deposition. Judge Valerie Caproni granted in part and denied in part the motion and approved awards from the settlement fund of $5,446,875 in attorneys’ fees, $84,734.37 in expenses, and $7,500 to each of the two class representatives, for $15,000 total in service awards.
Read the full 11-page opinion on CourtListener, the free public archive maintained by the Free Law Project.