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Jordan v. Nationstar Mortgage, LLC

United States District Court, E.D. Washington

May 2, 2019

LAURA ZAMORA JORDAN, as her separate estate, and on behalf of others similarly situated, Plaintiff,
v.
NATIONSTAR MORTGAGE, LLC, a Delaware limited liability company, Defendant, and FEDERAL HOUSING FINANCE AGENCY, Intervenor.

          ORDER GRANTING FINAL APPROVAL OF CLASS ACTION SETTLEMENT AND GRANTING MOTION FOR AWARD OF ATTORNEYS' FEES, COSTS AND SERVICE AWARD

          THOMAS O. RICE CHIEF UNITED STATES DISTRICT JUDGE

         BEFORE THE COURT are Plaintiff's Motion for Final Approval of Class Action Settlement (ECF No. 388) and Motion for Award of Attorney's Fees, Costs and Service Award (ECF No. 376), the Special Master's Request for Approval of Payment of Fees and Costs (ECF No. 383) and Nationstar's Joinder in Plaintiff's Motion for Final Approval of Settlement (ECF No. 393). These matters were heard with oral argument on March 21, 2019, for the purpose of determining the fairness of the proposed terms of the class action settlement and the requested fees and costs. The Court has reviewed the record and files herein, and is fully informed. For the reasons discussed below, Plaintiffs' Motion for Final Approval of Class Action Settlement (ECF No. 388) and Nationstar's Joinder (ECF No. 393) are GRANTED, Plaintiff's Motion for Award of Attorney's Fees, Costs and Service Award (ECF No. 376) is GRANTED, and the Special Master's Request for Approval of Fees and Costs (ECF No. 383) is GRANTED.

         BACKGROUND

         This case arises from actions taken by Defendant Nationstar Mortgage LLC affecting Washington homeowners' residential properties in default. ECF No. 2-4. In her Second Amended Complaint, Plaintiff and Class Representative Laura Zamora Jordan (“Ms. Jordan”) asserted the following causes of action: trespass; intentional trespass, RCW 4.24.630; violation of the Consumer Protection Act (CPA), RCW 19.86 et seq.; and breach of contract. ECF No. 2-19 at 10-16. The Chelan County Superior Court certified the class under Washington Civil Rule 23 on May 19, 2014. ECF No. 1-3 (Ex. C). Thereafter, Defendant removed the action to this Court and moved to decertify the class. ECF Nos. 1; 119. This Court denied Defendant's motion and certified the following class:

All persons who own or owned real property in Washington subject to a deed of trust or a mortgage serviced or held by Nationstar, whose property Nationstar or its agents deemed vacant prior to the completion of a foreclosure sale and between April 3, 2008 and July 31, 2016.

ECF No. 207 at 25.

         On November 25, 2017, Ms. Jordan moved for partial summary judgment on liability. ECF No. 217. The Court granted partial summary judgment as to liability for common law trespass and CPA violations for all class members who had their properties rekeyed prior to foreclosure. ECF No. 262.

         The parties entered into mediation on November 27, 2017, with the assistance of Louis D. Peterson of Hillis Clark Martin & Peterson P.S. ECF No. 361 at ¶ 7. The parties did not reach a settlement during mediation, but continued negotiations with Mr. Peterson's assistance. Id. The parties reached an agreement in principle just before trial was set to commence on December 18, 2017, but were unable to reach a final agreement on several settlement terms. Id. at ¶ 8. The Court set a new trial date of July 30, 2018. Id. at ¶ 9.

         The parties had filed trial briefs and were set to start trial when they once again reached a settlement, this time including final agreement on the remaining disputed settlement terms. Id. The parties then sought preliminary approval of their class action settlement and moved the Court to schedule a final fairness hearing. ECF No. 360. On November 26, 2018, the Court granted the motion for preliminary approval and scheduled a final fairness hearing for March 21, 2019. ECF No. 369.

         DISCUSSION

         I. Approval of Class Action Settlement

         Approval of a proposed class action settlement is governed by Federal Rule of Civil Procedure 23(e). As Class Counsel observes, Rule 23 was recently amended to address issues related to settlement, and also to take account of issues that have emerged since the rule was last amended in 2003. ECF No. 388 at 11-12; see Fed. R. Civ. P. 23 advisory committee's note to 2018 amendment. Particularly relevant here, the 2018 amendment to Rule 23(e) establishes core factors district courts must consider when evaluating a request to approve a proposed settlement. As amended, Rule 23(e) now provides that the Court may approve a class action settlement “only after a hearing and only on a finding that it is fair, reasonable, and adequate after considering whether”:

(A) the class representatives and class counsel have adequately represented the class;
(B) the proposal was negotiated at arm's length;
(C) the relief provided for the class is adequate, taking into account:
(i) the costs, risks, and delay of trial and appeal;
(ii) the effectiveness of any proposed method of distributing relief to the class, including the method of processing class-member claims; (iii) the terms of any proposed award of attorney's fees, including timing of payment; and (iv) any agreement required to be identified under Rule 23(e)(3); and
(D) the proposal treats class members equitably relative to each other.

Fed. R. Civ. P. 23(e)(2). The amendments took effect on December 1, 2018.

         Under Rule 23(e), both its prior version and as amended, fairness, reasonableness, and adequacy are the touchstones for approval of a class-action settlement. Over the years, courts have generated lists of factors to analyze whether a proposed settlement meets these requirements. In the Ninth Circuit, for example, courts consider the eight Churchill factors when assessing the fairness of a post-certification settlement.[1] Rodriguez v. W. Publ'g Corp., 563 F.3d 948, 963 (9th Cir. 2009) (citation omitted); Churchill Vill., L.L.C., v. Gen. Elec., 361 F.3d 566, 575 (9th Cir. 2004)). The purpose of the amendment to Rule 23(e)(2) is establish a consistent set of approval factors to be applied uniformly in every circuit, without displacing the various lists of additional approval factors the circuit courts have created over the past several decades. As the Advisory Committee Notes explain, “[t]he goal of this amendment is not to displace any factor, but rather to focus the court and the lawyers on the core concerns of procedure and substance that should guide the decision whether to approve the proposal.” Fed.R.Civ.P. 23(e)(2) advisory committee's note to 2018 amendment. While the Ninth Circuit has yet to address the amendment to Rule 23(e)(2), the Court observes that the factors in amended Rule 23(e)(2) generally encompass the list of relevant factors previously identified by the Ninth Circuit.

         For reasons discussed below, the Court concludes that the Settlement Agreement satisfies the requirements of amended Rule 23(e)(2).

         A. Adequate Representation

         First, the Court finds that Class Counsel and the Class Representative, Ms. Jordan, have adequately represented the Class. As discussed in the Court's preliminary approval of the proposed settlement agreement, Class Counsel engaged in extensive discovery while actively litigating this case over the past six years. Class Counsel produced multiple sets of written discovery, took numerous depositions, and engaged in significant expert work in preparation for trial. ECF No. 361 at ¶¶ 3-5. Class Counsel's work produced significant results for the Class, including class certification in state court, a favorable ruling by the Washington Supreme Court on questions certified by this Court, and various other rulings beneficial to the Class. Class Counsel survived dispositive motion practice and proceeded not only toward, but past, class certification. Moreover, Class Counsel's work, professionalism and performance during the mediation process ultimately resulted in an excellent settlement for the Class.

         As Class Representative, Ms. Jordan has expended significant time and effort assisting class counsel in this case over the past six years. Ms. Jordan participated in responding to discovery, she was deposed by Defendant, and she prepared for both the December 2017 and July 2018 trials. ECF No. 362 at 2-3. Notably, in 2013, Ms. Jordan rejected a settlement offer from Defendant of $25, 000 because it would have provided no relief to the Class. Id. at 3, ¶6.

         Accordingly, the Court finds that Class Counsel and Ms. Jordan have been diligent in their representation of the class.

         B. Arm's Length Negotiations

         Regarding the negotiation process, the Court finds that the Settlement Agreement is the result of an adversarial, non-collusive, and arms-length negotiation. As discussed in the Court's Preliminary Approval Order, the parties initially entered into mediation on November 27, 2017, with the assistance of Louis D. Peterson, who has substantial experience litigating and settling complex civil cases. ECF No. 361 at ¶ 7. Although they reached an agreed settlement, the parties were unable to agree on several settlement terms at that time. The parties resumed litigation, but continued settlement discussions. ECF No. 360 at 24. The parties had filed trial briefs and were set to start trial when they once again reached a settlement with Mr. Peterson's assistance, this time including final agreement on the remaining disputed settlement terms. ECF No. 361 at ¶ 9. Thus, the Settlement Agreement was achieved under the supervision of a trusted third-party mediator following extensive settlement negotiations, which assures the Court that the negotiations were conduct at arm's-length and without collusion among the parties. Accordingly, the Court finds no signs of conflicts of interest, collusion, or bad faith in the parties' settlement negotiation process.

         C. Adequate Relief

         The Court concludes that the relief provided for the Class is adequate. First, the amount offered in settlement and the proposed payment to class members appears fair. The Settlement Agreement requires Defendants to pay $17, 000, 000 into the non-reversionary Settlement Fund. ECF No. 361-1 at 5, III. ¶ 1 (Ex. 1). Class counsel estimates that class members will receive awards ranging between $75 and $52, 165.34. ECF Nos. 361 at ¶ 18; 388 at 15. In view of the substantial amount offered in settlement and the estimated range of awards, the Court concludes that the settlement amount is fair and reasonable.

         The Court also finds that the expected relief for Class Members is adequate considering the four factors listed in Rule 23(e)(2)(C). As noted, amended Rule 23(e)(2)(C) identifies four discrete subtopics that courts should always consider when assessing the adequacy of relief provided for a class. The Court discusses each subtopic below.

         (i) Costs, risks, and delay of trial and appeal

         Given the circumstances of this case, it is difficult to predict the precise range and likelihood of class-wide recovery had this case proceeded to a litigated outcome. While the Court granted partial summary judgment in Plaintiff's favor on her claims for trespass and CPA violations, Defendant maintains that the measure of damages and individual class members' entitlement to any relief remained hotly disputed. ECF No. 393 at 3. Specifically, had the case proceeded to trial, Defendant was prepared to show that Plaintiff's expert's methodology for calculating damages was fundamentally flawed and Class Members were only be entitled to a fraction of the damages Plaintiff claimed for them. Id. at 5-6. Given the uncertainty of recovery, the Court agrees with Class Counsel that the $17, 000, 000 settlement, which provides between $75 and $52, 165.34 to each Class Member, is an excellent result for the Class.

         Moreover, regardless of the result at trial, a lengthy and expensive trial and appeals process would be expected in this case. Defendant confirms that at the time the parties reached the proposed settlement, it remained prepared to appeal any significant award of damages on numerous grounds, including liability, the propriety of adjudicating liability and damages on a class-wide basis, and the measure of damages. Id. at 7; ECF No. 364 at 6. It is certainly possible that the outcome of an appeal would result in no recovery or substantially reduced ...


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