United States District Court, D. Maryland
AMY JERNIGAN, et al. Plaintiffs,
PROTAS, SPIVOK & COLLINS, LLC, Defendant.
September 15, 2017, the Court conducted a Class Action
Fairness Hearing with respect to the proposed "Class
Action Settlement Agreement And Release"
("Settlement Agreement"), docketed at ECF 18-1. By
Final Order and Judgment of September 15, 2017 (ECF 29), this
Court granted final approval of the Settlement Agreement, and
dismissed all claims against defendant Protas, Spivok &
Collins, LLC ("PSC"), for the reasons stated in
open court. In the Order, the Court also approved three
incentive awards of $4, 000 each (totaling $12, 000);
designated the class of approximately 331 persons; appointed
Class Counsel; awarded court costs of $884.23; approved pro
rata payments from the Common Fund to the Class Members; and
approved a cy pres award in accordance with the
terms and designations in the Settlement Agreement.
Counsel had also moved for attorneys' fees (ECF 26),
supported by a memorandum (id.) and a supplement
(ECF 27), which includes time records for counsel
(collectively, "Motion"). Declarations of Class
Counsel were also submitted. See ECF 18-3,
Declaration of Scott Borison, Esquire and Declaration of
Phillip Robinson, Esquire; ECF 25-2, Declaration of Phillip
Robinson, Esquire. The matter of counsel fees was fully
addressed at the hearing. But, for the reasons stated in open
court, the Court held the matter of attorneys' fees under
additional hearing is needed as to the Motion. See
Local Rule 105.6. For the reasons stated below, I shall grant
the Motion and award the requested counsel fees of $42, 000.
background of this case is set forth in the parties'
submissions and was also set forth at the hearing held on
September 15, 2017. I need not restate it here. I note,
however, that the case is rooted in the filing of two class
action suits in July 2016, both initiated in the Circuit
Court for Anne Arundel County. One was filed by Amy Jernigan
and William Bonilla ("Named Plaintiffs") and the
other by Leo Farber ("Class Member"). The
Jernigan/Bonilla case was removed to this Court; the Farber
case was not removed. Both cases arise under the Fair Debt
Collection Practices Act, 15 U.S.C. § 1692, et
seq. ("FDCPA") and include state law claims.
Protas, Spivok & Collins, LLC, a law firm in Bethesda,
Maryland, is the sole defendant.
particular, plaintiffs seek statutory damages arising from
PSC's efforts on behalf of LVNV Funding, LLC
("LVNV") to collect debts from the Named
Plaintiffs, the Class Member, and a class of similarly
situated persons, all of whom are consumers. The debt
collection activity was allegedly based on void and
unenforceable judgments obtained by LVNV while it was not a
licensed collection agency in Maryland. ECF 2, ¶ 2; ECF
25-1 at 3. Defendant denied liability.
context of this case, the FDCPA caps the recovery of
statutory damages at "the lesser of $500, 000 or 1 per
centum of the net worth of the debt collector." 15
U.S.C. § 1692k(a)(2)(B). PSC's net worth was
represented to be less than $1, 000, 000. ECF 25-1 at 3.
on the 1% FDCPA cap, the total class recovery, if the case
were to go to trial, would be no more than $10,
Class Counsel obtained a settlement fund of $105, 000, which
covers, inter alia, three incentive payments,
counsel fees, and pro rata payments to class members. ECF 26
at 2. Of relevance here, Class Counsel seeks an award of
attorneys' fees equal to 40% of the Common Fund,
i.e., $42, 000. Id. at 8.
Relevant Legal Principles
FDCA allows for the recovery of a "reasonable
attorney's fee." See 15 U.S.C. §
1692k(a)(3). Section 1692k(a)(3) states:
[A]ny debt collector who fails to comply with any provision
of this subchapter with respect to any person is liable to
such person in an amount equal to the sum of ... (3) in the
case of any successful action to enforce the foregoing
liability, the costs of the action, together with a
reasonable attorney's fee as determined by the court. . .
Fed. R. Civ. P. 23(h) is also pertinent. It governs
attorneys' fees in class actions and provides that a
court may award "reasonable attorneys' fees . . .
that are authorized by law or by the parties'
agreement." Class Counsel represented at the hearing
that their three original clients had agreed to a contingency
fee of 40%.
a court bears the responsibility to determine that fees are
reasonable, even in the absence of any objections.
See Fed. R. Civ. P. 23(h), 1993 Advisory Committee
notes. As the Advisory Committee notes indicate, "[t]he
agreement by a settling party not to oppose a fee application
up to a certain amount ... is worthy of consideration, but
the court remains responsible to determine a reasonable
class action, "[t]here are two methods commonly used for
calculating an attorney's fee award: the lodestar method
and the 'percentage of recovery' method."
Decohen v. Abbasi, LLC, 299 F.R.D. 469, 481 (D. Md.
2014) (footnote omitted); see also Advisory
Committee Notes to Rule 23(h) (indicating that a court may
evaluate whether a fee award in a "common fund"
case is reasonable based on either a percentage-of-recovery
method or the lodestar method). "With either method, the
goal is to make sure that counsel is fairly
compensated." Singleton v. Domino's Pizza,
LLC, 976 F.Supp.2d 665, 681 (D. Md. 2013).
United States Supreme Court has said that the
"common-fund doctrine" entitles '"a
litigant or a lawyer who recovers a common fund for the
benefit of persons other than himself or his client ... to a
reasonable attorney's fee from the fund as a
whole."' U.S. Airways, Inc. v. McCutchen,
__U.S.__, 133 S.Ct. 1537, 1545 (2013) (quoting
Boeing Co. v. Van Gemert, 444 U.S. 472, 478 (1980)
(emphasis added)). Conversely, "the percentage of
recovery method" is an "inappropriate" method
for determining attorneys' fees where "the
attorneys' fees are not being deducted from the
Plaintiffs' recovery." Cerrato v. All. Material
Handling, Inc., WDQ-13-2774, 2014 WL 7190687, at *4 (D.
Md. Dec. 16, 2014); see also Fangman v. Genuine Title,
LLC, RDB-14-081, ECF 411 at 9 (filed Nov. 18, 2016);
Durm v. American Honda Finance Corp., WDQ-13-223,
2015 WL 6756040 at *6 (D. Md. Nov. 4, 2015).
in a common fund case, courts favor the
percentage-of-recovery method. Decohen, 299 F.R.D.
at 481. See, e.g., In re Diet Drugs, 582 F.3d 524
(3d Cir. 2009) (endorsing percentage-of-recovery method to
calculate attorney fee award out of settlement fund in
nationwide products liability class action); Durm,
2015 WL 6756040, at *6; see also The Manual for
Complex Litigation § 14.231 (4th ed. 2011) (reporting
that "the vast majority of courts of appeals now permit
or direct district courts to use the percentage method in
common-fund cases”). In particular, the
“percentage of the recovery method involves an award
based on a percentage of the class recovery, set by the
weighing of a number of factors by the court.”
Whitaker v. Navy Fed. Credit Union, RDB-09-2288,
2010 WL 3928616, at *4 (D. Md. Oct. 4, 2010). It “is
designed to allow courts to award fees from the fund 'in
a manner that rewards counsel for success' . . . .”
In re Cendant Corp. PRIDES Litigation, 243 F.3d 722,
732 (3rd Cir. 2001).
note, “the percentage method is more efficient and less
burdensome than the traditional lodestar method, and offers a
more reasonable measure of compensation for common fund
cases.'” Singleton, 976 F.Supp.2d at 681
(citation omitted). “An attractive aspect of the
'percentage of recovery' method is its results-driven
nature which 'ties the attorneys' award to the
overall result achieved rather than the hours
expended.” Id. (citing Jones v. Dominion
Res. Servs., 601 F.Supp.2d 756, 759 (S.D. W.Va. 2009)).
“because of the percentage of recovery method's
limitations, courts often employ a lodestar multiplier
cross-check to ensue the reasonableness of the award.”
Decohen, 299 F.R.D. at 481. See, e.g.,
Goldberger v. Integrated Res., Inc., 209 F.3d 43, 50
(2d Cir. 2000) (“encourag[ing] the practice of
requiring documentation of hours as a 'cross check'
on the reasonableness of the requested percentage”);
Domonoske v. Bank of Am., N.A., 790 F.Supp.2d 466,
475 (W. D. Va. 2011). Under the lodestar method, the
appropriate fee award is determined by multiplying the
reasonable hourly rate by the number ...