United States District Court, D. Maryland
ADRIAN SINGLETON, et al.
DOMINO'S PIZZA, LLC
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For Adrian Singleton, individually and as a respresentative of the classes, Plaintiff: Alane Tempchin, LEAD ATTORNEY, Sullivan Talbott and Batt, Rockville, MD; Anna P Prakash, E Michelle Drake, Kai Heinrich Richter, Paul Joseph Lukas, Rebekah L Bailey, PRO HAC VICE, Nichols Kaster PLLP, Minneapolis, MN.
For Justin D'Heilly, individually and as a respresentative of the classes, Plaintiff: Rebekah L Bailey, LEAD ATTORNEY, PRO HAC VICE, Nichols Kaster PLLP, Minneapolis, MN; Anna P Prakash, E Michelle Drake, Kai Heinrich Richter, Paul Joseph Lukas, PRO HAC VICE, Nichols Kaster PLLP, Minneapolis, MN.
For Domino's Pizza, LLC, Defendant: Daniel F Katz, LEAD ATTORNEY, Williams and Connolly LLP, Washington, DC; David Simon Kurtzer Ellenbogen, PRO HAC VICE, Williams and Connolly LLP, Washington, DC.
DEBORAH K. CHASANOW, United States District Judge.
Presently pending and ready for resolution in this class action arising under the Fair Credit Reporting Act (" FCRA" ) are unopposed motions filed by Plaintiffs (ECF Nos. 73, 74) seeking an order that: (1) grants final approval of the Amended Class Action Settlement Agreement (" Amended Settlement Agreement" ) (ECF No. 67-1) between Plaintiffs and Defendant Domino's Pizza LLC (" Domino's" or " Defendant" ); (2) grants final certification of the Settlement Classes pursuant to Federal Rule of Civil Procedure 23; (3) approves a payment of $750,000.00 to class counsel for their attorneys' fees; (4) approves a payment of $13,339.84 to class counsel for litigation expenses; (5) approves a payment of $89,208.63 in administrative expenses to Kurtzman Carson Consultants, LLC (" KCC" or " Settlement Administrator" ), an independent third party that will administer the Settlement Agreement; (6) approves incentive payments to Adrian Singleton and Justin D'Heilly (" Named Plaintiffs" ) in the amount of $2,500 each; and (7) dismisses this action with prejudice, with the court to retain jurisdiction over the interpretation, enforcement, and implementation of the settlement agreement and the final order. For the following reasons, the motions will be granted, although the attorneys' fees will be reduced.
The Named Plaintiffs are former employees of Domino's. On July 1, 2011, Mr. Singleton filed this FCRA lawsuit against Domino's as a putative class action. (ECF No. 1). After Domino's moved to dismiss the complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) on August 15, 2011 (ECF No. 13), the Named Plaintiffs filed an amended complaint as of right on September 3, 2011 (ECF No. 19). The amended complaint alleges that Domino's willfully violated the FCRA in two ways:
(1) by using a " Background Investigation and Consent" form (" BIIC Form" ) containing a liability release to procure consumer reports on existing and prospective employees; and (2) by taking adverse employment actions against existing and prospective employees based, in whole or in part, on information contained in a consumer report without first providing the individuals with notice and a copy of the report. ( Id. ¶ ¶ 16-32). Based on these allegations, the amended complaint asserts the following three counts under the FCRA: (1) failure to provide a copy of consumer report in violation of the FCRA; (2) failure to make proper disclosure in violation of the FCRA; and (3) failure to obtain proper authorization in violation of the FCRA. ( Id. ¶ ¶ 62-78). On behalf of themselves and a putative class of Domino's employees and job applicants, the Named Plaintiffs sought a declaration that Domino's committed multiple willful violations of the FCRA; an award of statutory damages pursuant to the FCRA; and reasonable attorneys' fees and costs. ( Id. ¶ ¶ 52-61, 79).
On September 26, 2011, Domino's again moved to dismiss (ECF No. 22), but the motion was denied on January 25, 2012. (ECF Nos. 25 & 26). After Domino's answered on February 8, 2012 (ECF No. 34) and following the denial of the Named Plaintiffs' motion for class certification without prejudice (ECF No. 39), the parties jointly moved to stay the action pending mediation (ECF No. 44). Prior to the entry of the stay on August 13, 2012 (ECF No. 45), the parties had engaged in limited written discovery, including the exchange of initial disclosures and the issuance of interrogatories and requests for production ( see ECF No. 61-1, at 3).
On September 24, 2012, after Domino's produced additional documents, the parties engaged in all-day arms-length settlement negotiations with the aid of a private mediator. ( Id. ). After several extensions of the stay and further negotiations, the parties prepared a Settlement Agreement on March 11, 2013 to resolve this action on a class basis, subject to approval by the court. (ECF No. 61-3). On that same day, the Named Plaintiffs filed an unopposed motion seeking an order that: (1) preliminarily approved the Settlement Agreement; (2) conditionally certified the three settlement classes proposed in the Settlement Agreement; (3) appointed the Named Plaintiffs as class representatives; (4) appointed Nichols Kaster, PLLP, as class counsel; (5) approved the form and method of notice proposed in the Settlement Agreement; and (6) scheduled a final fairness hearing. (ECF No. 61).
On May 7, 2013, counsel for the parties appeared for a hearing on Plaintiffs' unopposed motion to address certain areas of concern with the proposed Settlement, including: the periods of time encompassed by the proposed settlement classes; the claims submission process; the readability of the proposed short- and long-form notices; the need for the proposed notices to distinguish between statutory and actual damages under the FCRA; the documentation that will be needed to support any award of attorneys' fees and incentive awards for the Named Plaintiffs; the estimated costs of notice and settlement administration; the likelihood that the settlement funds will be depleted depending on estimated response rates; the cy pres beneficiaries selected by the parties; and the timeline for distributing notice, submitting claims, raising objections, and granting final approval and final certification. (ECF No. 65).
After the May 7, 2013 hearing, the parties submitted an Amended Settlement Agreement and renewed their motion for
preliminary approval of the settlement. (ECF. No. 67-1).  In very basic terms, the Amended Settlement Agreement proposes three settlement classes: an " Applicant Class," a " Multiple MVR Check Class," and an " Adverse Action Class" (collectively, " Settlement Classes" ) ( Id. ¶ 1). The Amended Settlement Agreement further provides that Domino's will contribute $2.5 million to a " Settlement Fund" to be distributed - after deductions for a court-approved award of attorneys' fees in an amount up to thirty (30) percent of the total Settlement Fund, litigation expenses, and settlement administration costs - in pro rata amounts among the members of the three proposed settlement classes who submit a timely claim, subject to certain caps. ( Id. ¶ ¶ 21-26). In exchange, the members of the proposed Settlement Classes who do not exclude themselves from the settlement in a timely manner agree to release Domino's from any and all claims that relate directly or indirectly to the facts that are, or could have been, alleged in the amended complaint, including but not limited to any and all claims under the FCRA. ( Id. ¶ 29). In consideration for a $2,500 incentive award to each Named Plaintiff that is subject to court approval, the Named Plaintiffs agree to a general release of Domino's. ( Id. ¶ 30). Any amounts remaining in the Settlement Fund after these distributions shall be divided equally between Domino's and a cy pres charitable donation, half of which will be given to the Center for Employment Opportunities and the other half to St. Jude Children's Research Hospital. ( Id. ¶ 28). 
On May 13, 2013, the court issued a memorandum opinion and order (" the Preliminary Approval Order" ) preliminarily approving the Settlement Agreement as fair, reasonable, and adequate within the meaning of Fed.R.Civ.P. Rule 23(e), subject to further consideration at the final fairness hearing. (ECF No. 69). The Preliminary Approval Order conditionally certified the three Settlement Classes, appointed Nichols Kaster, PLLP, as class counsel and KCC as Settlement Administrator, and provided that completed Claim Forms must be postmarked on or before August 26, 2013 and Opt-Out requests must be postmarked by July 27, 2013. (ECF No. 67-1, at 51-52).
On June 27, 2013, KCC mailed 45,668 postcards to potential class members, after removing duplicative entries in the member list Domino's provided. (ECF No. 80 ¶ 6). By the time for filing claims and opting out expired, 6,739 individuals submitted Claim Forms and seven (7) individuals opted-out. ( Id. ¶ 19; see also ECF No. 78, at 19).
On September 16, 2013, Plaintiffs filed an unopposed motion seeking final approval of the Amended Settlement Agreement (ECF No. 73) and an unopposed motion for attorneys' fees, litigation expenses, administrator
costs, and incentive awards for the Named Plaintiffs (ECF No. 74). Although Domino's continues to deny vigorously the allegations of the amended complaint and any liability under the FCRA, it agreed to the Amended Settlement Agreement based on, inter alia, the expense and disruption posed by further litigation. Class counsel, in turn, represents that the Amended Settlement Agreement is in the best interests of the Named Plaintiffs and the members of the Settlement Classes, considering the substantial risks associated with continued litigation, including the possibility that Domino's might prevail.
The following issues remain: whether the Rule 23 Settlement Classes should receive final certification; whether the Amended Settlement Agreement is fair, reasonable, and adequate; and whether class counsel's request for attorneys' fees and litigation expenses, as well as payment for administrative ...