Case 0:11-cv-62628-RNS Document 149 Entered on FLSD Docket 05/22/2014 Page 1 of 8 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA RUTH MUZUCO, on behalf of herself and all others similarly situated, Plaintiff, CASE NO. 11 cv 62628 (RNS) v. Re$ubmitIt, L.L.C.; BSG Financial, L.L.C.; and BankAtlantic, Defendants. / PLAINTIFF S MEMORANDUM IN SUPPORT OF MOTION FOR PRELIMINARY APPROVAL I. INTRODUCTION With this unopposed motion, named plaintiff and certified class representative Ruth Muzuco seeks the Court s preliminary approval to settle this case, which spans three years, two courts (this Court and 11 th Circuit Court of Appeals) and involves two significant decisions one denying defendants motion to dismiss 1 and the other certifying plaintiff s proposed classes. 2 The proposed settlement provides at least 100 cents on the dollar of compensatory damages to all Florida residents who fit within the certified classes. It separately provides a fair payment to plaintiffs attorneys for their services and further provides a class representative award to named plaintiff Ruth Muzuco for her services in prosecuting this action. The proposed settlement meets all the requirements necessary for preliminary 1 Muzuco v. Re$ubmitIt, LLC, et al., 2012 WL 3242013 (S.D. Fla. Aug. 7, 2012). 2 Muzuco v. Re$ubmitIt, LLC, et al., 297 F.R.D. 504 (S.D. Fla. 2013). 1
Case 0:11-cv-62628-RNS Document 149 Entered on FLSD Docket 05/22/2014 Page 2 of 8 approval. II. LEGAL STANDARD Federal Rule of Civil Procedure 23(e)(i)(C) provides: The court may approve a settlement, voluntary dismissal or compromise that would bind class members only after a hearing and on finding that the settlement, voluntary dismissal or compromise is fair, reasonable and adequate. The Manual for Complex Litigation, Fourth, 21.632 (2004), sets forth the procedures for preliminary approval of settlements: The judge must make a preliminary determination on the fairness, reasonableness and adequacy of the settlement terms and must direct the preparation of notice of the certification, proposed settlement, and date of the final fairness hearing. At this preliminary approval stage, the Court must decide whether the proposed settlement falls within the range of possible approval, and is sufficiently fair, reasonable and adequate to warrant distribution of a notice that informs class members of the proposed settlement and to establish procedures for a final settlement hearing. 3 This settlement as described in this motion satisfies this standard. III. THE LITIGATION A. The allegations On December 12, 2011, Muzuco filed a class action lawsuit against BankAtlantic, Re$ubmitIt, LLC and BSG Financial, LLC challenging the Re$ubmittIt check representment program purchased by BankAtlantic from BSG Financial, LLC and asserting claims under the Fair Debt Collection Practices Act, the Electronic Funds Transfer Act, as well as common law claims of conversion, unjust enrichment and civil conspiracy. 3 Molski v. Gleich, 318 F.3d 937, 944 (9 th Cir. 2003). 2
Case 0:11-cv-62628-RNS Document 149 Entered on FLSD Docket 05/22/2014 Page 3 of 8 B. History of the litigation The lawsuit s first activity was defendants filing of a motion to dismiss. On August 7, 2012, this Court denied the motion, though found the Complaint s pleading deficient in some minor respects, and permitted Muzuco leave to amend, to address and fix the pleading issues. Muzuco filed an Amended Complaint that satisfied the Court. The parties conducted discovery, which led to motion practice. Plaintiff Muzuco filed a motion to quash certain discovery of the defendants; in turn, the defendants filed a motion to compel. Muzuco filed a motion for class certification, which the Court heard on May 23, 2013. In August, the Court granted Muzuco s motion. 4 One month later, defendants filed a Rule 23(f) petition for interlocutory appellate review to the 11 th Circuit. On motion by the defendants, the trial court action was stayed pending defendants petition, which was denied by the 11 th Circuit. As discovery closed, the parties renewed settlement negotiations (they had engaged in formal mediation earlier in the case) and, in April, the parties agreed to settle the case for a total of $1,825,000, all in. C. The proposed settlement According to defendants records, there are a total of 16,328 class members in the certified class. The total compensatory damages in this case are $710,859. Under any formulation, the proposed settlement will account for at least 100 cents on the dollar recovery. Injunctive relief is not part of the settlement; because BankAtlantic did not renew its contract with BSG Financial, LLC, injunctive relief is neither possible nor appropriate. 4 Muzuco v. Re$ubmitIt, LLC, et al., 297 F.R.D. 504 (S.D. Fla. 2013). 3
Case 0:11-cv-62628-RNS Document 149 Entered on FLSD Docket 05/22/2014 Page 4 of 8 D. Notice Under Fed. R. Civ. P. 23(e)(1), [t]he court must direct notice in a reasonable manner to all class members who would be bound by a [proposed settlement]. The proposed forms of notice are reasonable and designed to advise members of the class of their rights. The proposed notice, to be mailed to class members, is attached as Exhibit A to the Stipulation and Settlement Agreement. Muzuco requests that the date that the Court sets for the Final Approval Hearing no sooner than 100 days after the Court s grant of Preliminary Approval, or as soon thereafter as the Court s schedule permits. E. Opting Out Any Settlement Class member wishing to opt out of the Settlement Class must individually sign and timely submit written notice of such intent to Edward F. Haber; Shapiro, Haber & Urmy LLP; 53 State Street; Boston, MA 02109. The written notice must clearly manifest an intent to be excluded from the Settlement Class. To be effective, written notice must be postmarked at least twenty one (21) days prior to the date set in the Notice for the Final Approval Hearing (the Opt Out Date ). Within seven (7) days after the Opt Out Date, Settlement Class Co Lead counsel shall furnish to counsel for Princeton Review a complete list of all timely and valid requests for exclusion. F. Objections Any class member wishing to object to any aspect of the settlement, including the attorneys fee application, shall file with the Court a timely written notice of his or her objection, which shall set forth the reasons for the objection and any documentation supporting his or her objection. To be timely, written notice of an objection in appropriate form must be mailed to the Court and postmarked at least 21 days before the date set in the 4
Case 0:11-cv-62628-RNS Document 149 Entered on FLSD Docket 05/22/2014 Page 5 of 8 Notice for the Final Approval Hearing, and served concurrently therewith upon class colead counsel Edward F. Haber, Shapiro, Haber & Urmy LLP, 53 State Street, Boston, MA 02109 and defendant s counsel, Lewis Murphy, Squire Sanders, 200 South Biscayne Boulevard, Suite 4100, Miami, FL 33131. G. Notifications under the Class Action Fairness Act Defendants shall comply with the obligation to give notice under Class Action Fairness Act, 28 U.S.C. 1715, in connection with the proposed settlement. No later than 10 calendar days before the Final Approval Hearing, defendants counsel will file with the Court one or more declarations stating that defendants have complied with its notice obligations under 28 U.S.C. 1715. IV. ANALYSIS In reviewing the Stipulation and Settlement Agreement for preliminary approval, this Court must determine whether it is within the range of fair, reasonable and adequate. 5 A district court has broad discretion with respect to the approval of class action settlements, and the court s decision is reviewed for an abuse of discretion. 6 The court, however, should always review the proposed settlement in light of the strong judicial policy that favors settlements. 7 Courts have adopted a relaxed standard for preliminary approval of class action settlements: If the preliminary evaluation of the proposed settlement does not disclose grounds to doubt its fairness or other obvious deficiencies, such as unduly preferential treatment of class representatives or of segments of the class, or excessive compensation for attorneys, and appears to fall within the range of possible approval, the court should direct that notice 5 Manual for Complex Litig. 30.41. 6 See e.g., In re Sunbeam Securities Litigation, 176 F.Supp.2d 1323, 1329 (S.D. Fla. 2001). 7 Id. (internal citation omitted). 5
Case 0:11-cv-62628-RNS Document 149 Entered on FLSD Docket 05/22/2014 Page 6 of 8 under [Federal] Rule 23(e) be given to the class members of a formal fairness hearing, at which arguments and evidence may be presented in support of and in opposition to the settlement. 8 Where, as here, the proposed settlement is the result of serious, arms length negotiations between the parties, has no obvious deficiencies, falls within the range of possible approval and does not grant preferential treatment to plaintiff or other segments of the class, courts generally grant preliminary approval and direct that notice of a formal final approval hearing be given to class members. 9 This case easily satisfies the standards required for preliminary approval. Class members will recover at least 100% of their actual losses in this case, without having to complete a claim form (which usually dramatically reduces the rate of recovery). The Court should grant the motion, approve the notice and schedule a fairness hearing. Dated: May 22, 2014. By: /s/ Jeffrey M. Liggio Jeffrey M. Liggio (FBN: 0357741) Liggio Benrubi 1615 Forum Place, Suite 3 B West Palm Beach, FL 33401 2737 Telephone: 561 616 3333 Facsimile: 616 3266 Email: jliggio@liggiolaw.com 8 Manual for Complex Litig. 30.41. 9 See e.g., Williams Foods, Inc. v. Eastman Chemical Co., 2001 WL 1298887, * 3 5 (D. Kan. Aug. 8, 2001); see also In re Minolta Camera Prods. Antitrust Litig., 668 F. Supp. 456, 459 60 (D. Md. 1987). 6
Case 0:11-cv-62628-RNS Document 149 Entered on FLSD Docket 05/22/2014 Page 7 of 8 and Jordan M. Lewis (FBN: 97997) Kristin E. Bianculli Kelley Uustal, PLC 700 S.E. 3rd Avenue, Suite 300 Fort Lauderdale, FL 33316 Telephone: 954 522 6601 Facsimile: 954 522 6608 Email: jml@kulaw.com Email: keb@kulaw.com and Edward F. Haber Patrick J. Vallely Shapiro Haber & Urmy, LLP 53 State Street, 13th Floor Boston, MA 02109 Telephone: 617 439 3939 Email: ehaber@shulaw.com Email: pvallely@shulaw.com Attorneys for Plaintiff 7
Case 0:11-cv-62628-RNS Document 149 Entered on FLSD Docket 05/22/2014 Page 8 of 8 CERTIFICATE OF SERVICE WE HEREBY CERTIFY that a true and correct copy of the foregoing has been furnished by CM/ECF Electronic Notification this 22nd day of May, 2014 to the following: William T. Repasky, Esquire Frost Brown Todd LLC 400 West Market Street Suite 3200 Louisville, Kentucky 40202 Counsel for BSG Financial LLC and Re$ubmitIt, LLC Robert W. Hudson, Esquire Alexis A. Calleja, Esquire Hudson & Calleja, LLC 3211 Ponce De Leon Blvd Suite 102 Coral Gables, FL 33134 Counsel for BSG Financial LLC and Re$ubmitIt, LLC Abigail G. Corbett Sterns Weaver Miller Weissler Alhadeff & Sitterson, P.A. 150 West Flagler Street Suite 2200 Miami, FL 33130 Counsel for BankAtlantic Lewis F. Murphy, Esquire Cristina B. Rodriguez, Esquire Rafael Langer Osuna, Esquire Squire Sanders 200 S. Biscayne Blvd 41 st Floor Miami, FL 33131 Counsel for BankAtlantic /s/ Jeffrey M. Liggio Jeffrey M. Liggio 8