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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDAM IAM I DIVISION
CASE No. 1:09-M D-02036-JLK
IN RE: CHECM NG ACCOUNT
OVERDRAFT LITIGATION
M DL No. 2036
17HIS DOCUM ENT RELATES TO:
FOURTH TRANCHE ACTION
Eno v. M (f I Marshall tf Ilsley BankS.D. Fla. Case No. 1:10-cv-22730-JLK
M ,D. Fla. Case No. 2:10-376
ORDER OF FINAL APPROVAL OF SETTLEM ENT AUTHORIZING SERVICE
AWARDS.AND GRANTING APPLICATION FJR ATTORNEYS' FEES
On M ay 17, 2013, Plaintiffs and Class Counsel filed their Amended M otion for Final
Approval of Settlement, and Application for Service Awards, Attorneys' Fees and Expenses, and
lncomorated Memorandum of Law (1çMotion''), seeking Final Approval of the Settlement
Agreement and Release CçAgreemenf') and Amendment to Settlement Agreement and Release
(lçAmendmenf') (the Agreement and the Amendment are collectively referred to as the
çdsettlemenf') with BMO Harris, N.A. f/k/a M & I Marshall & Ilsley Bnnk CGM & I Bnnk'').1
('DE # 3474). ln support, Plaintiffs and Class Counsel filed declarations from experts in class
action 1aw and attorneys' fees, as well as several other declarations supplementing the factual
record to enable the Court to evaluate the faimess and adequacy of this Settlement. (DE # 3474-
1 This Order incoporates the definitions of terms used in the Agreement and Amendment
attached to the Motion (DE # 3474-1, 3474-2).
Case 1:09-md-02036-JLK Document 3570 Entered on FLSD Docket 08/02/2013 Page 1 of 38
3, 3474-4, 3474-5, 3474-6, 3474-7).One objection to the Settlement was timely submitted on
behalf of a single Settlement Class Member. (DE # 3360).
This matter came before the Court on April 19, 2013, for a Final Approval Hearing
pursuant to the Court's Preliminary Approval Order dated October 4, 2012. (DE # 2989).
Pursuant to the Parties' request, the Court adjoumed the April 19, 2013 Final Approval Hearing
bn allow the Parties an oppodunity to address the Court's concerns relating to the disposition of
residual settlement funds. On May 15, 20 13, the Parties entered into the Amendment, and on
M ay 17, 2013, Plaintiffs and Class Counsel filed the M otion, attaching, inter alia, the
Amendment. (DE # 3474-2). On July 22, 2013, the Court entered an Order Setting Hearing, re-
setting the Final Approval Hearing for August 1, 2013. (DE # 3539).
The Court reviewed all of the filings related to the Settlement and heard argument on the
M otion. After careful consideration of the presentations of the Parties, the Court concludes that
this Settlement provides a fair, reasonable and adequate recovery for the Settlement Class,
representing approximately twenty-five (25%) of the most probable recoverable damages based
on the creation of a common fund consisting of $4,000,000 in cash and changes in M & I Bank's
Debit Card Transaction posting practices and other overdraft fee policies with a substantial
savings to Settlement Class Members over a three (3) year period.The Settlement constitutes an
excellent result for the Settlement Class under the circumstances and challenges presented by the
Action. The Court specifically finds that the Settlement is fair, reasonable and adequate, and a
satisfactory compromise of the Settlement Class' claims. The Setllement fully complies with
Fed. R. Civ. P. 23(e), and, thus, the Court grants Final Approval to the Settlement, certifies the
Settlement Class, and awards the fees and costs requested by Class Counsel as well as the
l'equested Service Awards for the representative Plaintiffs.
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BACKGROUND
The Court is familiar with the history of this consumer class action brought against M & I
Bazlks having presided over MDL 2036 for over three years. During that time, the Court has had
ample opportunity to observe Class Counsel and M & l Bank's counsel in action. These
attomeys, several of whom have practiced before this Court for many years, are extremely
skilled advocates, and a1l of them vigorously litigated this case up to the time of the Settlement.
The Settlement is quite obviously the result of arm's-length negotiations, and the Court so finds.
The present evidentiary record is more than adequate for the Court to consider the
fàilness, reasonableness and adequacy of the Settlement. A fundamental question is whether the
district judge has sufficient facts before him to evaluate and intelligently and knowledgeably
approve or disapprove the settlement. In re General Tire (Q Rubber Co. Sec. L itig. , 726 F.2d
1L075, 1084 n.6 (6th Cir, 1984) (citing Detroit v. Grinnells 495 F.2d 448, 463-68 (2d Cir. 1974:.
ln this case, the Court clearly has such facts before it in considering the M otion, including the
evidence and opinions of Class Counsel and their experts.
1. Factual and Procedural Background of the Action.
On Jtme 16, 2010, Plaintiffs Jeffrey M . Eno and Suzanne M . Cox filed the Class Action
Complaint in the United States District Court for the M iddle District of Florida, seeking
monetary dnmages, restitution and declaratory relief from M & I Bank based on its alleged
Imfair assessment and collection of Overdraft Fees on Debit Card Transactions. See Joint
Declaration of Robert C. Gilbert and Jeffrey M. Ostrow !! 7, 10 (dsloint Decl.'') (DE # 3474-3).
On July 27, 2010, the Judicial Panel on M ulti-District Litigation transferred the case to this
Court for inclusion in MDL No. 2036. Id at ! 10. The Action against M & I Bnnk was made
part of the Fourth Tranche.
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On November 15, 2010, M & I Bank filed a motion to compel arbitration and to stay a1l
proceedings in this Court CtO bitration Motion''). (DE # 916). On December 2, 2010,
Plaintiffs filed their response to the Arbitration Motion (DE # 983), and on December 9, 2010,
M & I Bank filed its reply. (DE # 1006).
On April 18, 201 1, the Court entered an Order denying M & I Brmk's Arbitration
Motion (ç(Order''). (DE # 1330). 0n April 29, 201 1, M & l Bnnk filed a notice of appeal of the
Order. (DE # 1375). Also on April 29, 201 1, M & 1 Bank tiled an unopposed motion to stay
pending appeal of the Order. (DE # 1380).On May 4, 201 1, the Court granted M & 1 Brmk's
motion to stay conditioned on the posting of a supersedeas bond in the amount of $50,000.
(DE # 1433). On May 6, 201 1, M & l Bank posted the bond. (DE # 1443).
On June 15, 201 1, M & 1 Bnnk filed its opening appellate brief with the Eleventh
Circuit CçAppea1''). See Joint Decl. ! 13. 0n August 22, 201 1, Plaintiffs filed their brief in
r'esponse to the Appeal. 1d. Also, on August 22, 201 1, Plaintiffs filed a motion for remand
l'equesting this Court's consideration of the impact of Concepcion on this case, which M & I
13rmk opposed on August 29, 201 1. Id. 0n September 14, 201 1, M & I Bank filed its reply
brief. Id. On October 2 1, 201 1, the Eleventh Circuit ordered the remand motion to be canied
with the case. f#.
2. Settlem ent Negotiations and Proceedings.
Beginning in late 201 1, the Parties engaged in preliminary settlement discussions. See
Joint Decl. ! 14. On November 30, 201 1, the Parties pm icipated in a formal mediation session
in Boston under the auspices of Professor Eric Green of Resolutions, LLC. 1d. at ! 15. As a
result of the mediation, the Parties reached an agreement on the material terms of the
Settlement and signed a Memorandum of Understanding.1d. at ! 16. Thereafter, the Parties
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spent several months negotiating the comprehensive terms of the Agreement. Id at ! 17. The
Agreement was signed on September 26, 2012. 1d.
On October 1, 2012, Plaintiffs tiled a Joint M otion for Partial Release from Stay and
Plaintiffs' Unopposed Motion for Preliminary Approval. (DE # 2980, 298 1). On October 4,
2012, the Court granted the Joint Motion for Partial Release from Stay and entered an Order
(Jranting Preliminary Approval (sfpreliminary Approval Order''). (DE # 2988, 2989). In
entering the Preliminary Approval Order, the Court preliminarily determined that the
Settlement is Stfair, reasonable and adequate'' and fotmd Sdthat the Settlement was reached in the
absence of collusion (andj is the product of informed, good-faith, arm's-length negotiations
between the pm ies and their capable and experienced counsel.'' (DE # 2989 ! 1 1).
Pursuant to the Preliminary Approval Order, Notice of the Settlement was mailed to
1.89,560 members of the Settlement Class. See Declaration of Cameron Azari ! 16 tsûAzari
Dec1.'') (DE # 3474-6). Notice of the Settlement was also timely published in twelve (12)
newspapers covering the major markets in which M & I Bnnk operated branches during the
Class Period. See Azari Decl, !( 23. In addition, a special Settlement Website and a toll-free
telephone mlmber were established to provide details regarding the Settlement to inquiring
members of the Settlement Class. Id. at !! 26-28.
As discussed below, the Court finds that the Notice Progrnm was properly effectuated,
1md that it was more than adequate to put the Settlement Class on notice of the terms of the
Settlement, the procedures for objecting to or opting-out of the Settlement, and the rights that
members of the Settlement Class will give up by remaining part of the Settlement. See Azari
Decl. !! 30, 38, 39.
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On M ay 15, 2013, the Parties entered into the Amendment to address the Court's
concems relating to the disposition of residual settlement ftmds, and on M ay 17, 2013, Plaintiffs
pmd Class Counsel filed the Motion, attaching, inter alia, the Amendment. (DE # 3474-2).
3. Summary of the Settlement Terms.
The Settlement's terms are set forth in the Agreement and the Amendment. (DE # 3474-
1 , 3474-2). The Court now provides a summary of the material terms.
A. The Settlement Class.
The Settlement Class is arl opt-out class under Rule 23(b)(3) of the Federal Rule of Civil
Procedure. The Settlement Class is defined as;
Al1 holders of any M & I Bnnk Account in the United States who, during theClass Period, incurred one or more Overdraft Fees in connection with M & IBank's Debit Re-sequencing Overdraft Practices.
See Agreement ! 42.
B. M onetary Relief for the Beneft of the Class.
M & l Bnnk timely deposited $4,000,000 into the Escrow Account following
Preliminary Approval. See Joint Decl. ! 19. That deposit created the Settlement Fund, which
,&il1 be used to pay: (i) all distributions to Settlement Class Members who do not opt-out of the
Settlement; (ii) all attorneys' fees, costs and expenses of Class Counsel; (iii) the Service
Awards to the Plaintiffs; (iv) payment of expenses resulting from investing the Settlement
Fund, if any; (v) any Taxes; (vi) payment of any Escrow Agent or Tax Administrator costs;
(.'viil distribution of residual ftmds, if any, pursuant to Section XIV of the Agreement; (viii) that
portion of a1l settlement notice and administration fees, costs and expenses, if any, that in total
exceeds the guaranteed maximum price, as set forth in paragraph 55(c) of the Agreement; and
(ix) additional fees, costs and expenses not specifically enumerated in the Agreement, subject
to approval of Settlement Class Counsel and M & I Bnnk. See Agreement ! 54. ln addition to
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the $4,000,000 Settlement Fund, M & l Bank is responsible for paying the costs and fees
associated with Class Notice and Settlement administration pursuant to the Agreement, which
aTe estimated to be several hundred thousand dollars. See Agreement ! 55; Joint Decl. ! 19.
A11 identifiable Settlement Class Members who do not opt-out of the Settlement and
who experienced
Agreement) will receive pro rata distributions from the Net Settlement Fund. See Agreement !
82; Joint Decl. ! 20.
a Positive Differential Overdraft Fee (as defined in the Settlement
The Net Settlement Fund is equal to the Settlement Fund, plus interest
earned (if anyl, less Court-awarded attorneys' fees and costs and Service Awards to the
Plaintiffs. See Agreement ! 81. The Positive Differential Overdraft Fee analysis determines,
funong other things, which M & I Bnnk Accotmt holders were assessed additional Overdraft
Fees that would not have been assessed if M & I Bank had used an alternative posting
sequence or method for Debit Card Transactions other than Debit Re-sequencing, and how
lnuch in additional Overdraft Fees those Account holders paid. See Joint Decl. ! 20. The
calculation involves a complex multi-step process described in detail in the Agreement. See
Agreement !! 79-80; Joint Decl. ! 20.
Payments to Settlement Class M embers who do not opt-out of the Settlement will be
made by check mailed by the Settlement Administrator. See Agreement ! 86; Joint Decl. ! 23.
Any uncashed or rettmzed checks will remain in the Settlement Fund for one year from the date
the first distribution check is mailed by the Settlement Administrator, during which time the
Settlement Administrator will make reasonable efforts to effectuate delivery of the Settlement
Ftmd Payments. See Agreement ! 90.
Based on the Court's concerns relating to the disposition of residual ftmds, the Parties
entered into the Amendment that deleted the original paragraph 91 of the Agreement and
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replaced it with revised provisions relating to disposition of any funds remaining in the
Settlement Fund one year and thirty days after the Settlement Administrator mails the first
Settlement Class Member Payment. Paragraph 91 of the Amendment reads as follows:
91. W ithin one year plus thirty days after the date the Settlement Administrator mails
the first Settlement Class Member Payment, any funds remaining in the Settlement Fund shall be
clistributed as follows;
a. First, the funds shall be paid to M & l Bank in such nmotmt as to
reimburse M & I Bank for the actual amounts paid by M & I Bank to the Settlement
Administrator or Notice Administrator for costs of Class Notice and Settlement Administration;
b.
91(a) above shall be distributed on a pro rata basis to participating Settlement Class Members
who received Settlement Class Member Payments pursuant to Section X1I1 of the Agreement, to
Second, any funds remaining after distribution pursuant to subparagraph
the extent feasible and practical in light of the costs of administering such subsequent payments
unless the amounts involved are to small to make individual distributions economically viable or
other specifk reasons exist that would make such further distributions impossible or unfair; or
c. Third, in the event the costs of preparing, transmitting and administering
such subsequent payments pursuant to subparagraph 91(b) above are not feasible and practical to
lnake individual distributions economically viable or other specific reasons exist that would
make such further distributions impossible or unfair, Settlement Class Counsel and cotmsel for
M & I Bnnk shall jointly propose a plan for distribution of the residual funds consistent with the
zimerican Law lnstitute, Principles ofAggregate L itigation j 3.07 (c), and shall bring the matter,
together with supporting materials and argument, for consideration by the Court. After
consultation with the Parties, the Court shall have the discretion to approve, deny, nmend or
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modify, in whole or in part, the proposed plan for distribution of the residual funds in a mnnner
consistent with the American Law lnstitute, Principles ofAggregate Litigation j 3.07 (c). The
residual funds shall not be used for any litigation purpose or to disparage any Party. The Parties
agree that the Court's approval, denial, nmendment or modification, in whole or in part, of the
proposed plan for distribution of the residual funds pursuant to this paragraph shall not constimte
grounds for termination of the Settlement pursuant to paragraph 107 of the Agreement;
d. A1l costs associated with the disposition of residual ftmds - whether
tlmlugh additional distributions to Settlement Class M embers or through an altemative plan
approved by the Court - shall be borne solely by the Settlement Ftmd. Under no circumstances
shall M & l Bnnk have responsibility for any costs associated with the disposition of residual
brunds whether through additional distributions to Settlement Class Members and/or through an
altemative plan approved by the Court;
e. ln the event no money remains in the Settlement Fund after distribution
under subparagraph 91(a), the Parties shall have no obligation whatsoever to make any
distributions as contemplated by subparagraphs (b) or (c) above.
(DE # 3474-2).
Non-M onetary Relief.
As additional consideration for the releases of the claims of the Settlement Class
C.
Members who do not opt-out of the Settlement, M & I Banb agrees to implement (if not
already in place), the practice changes detailed below with respect to Debit Card Transactions
tmd Overdraft Fees. See Agreement ! 50.
(a) Current Posting Order.
Commencing no later than M arch 31, 2013, M & I Bnnk shall change its posting order
of transactions to the following; (1) credits; (2) priority debits with ATM withdrawals posted
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by date and time, or, if the date and time information is unavailable, then low to high by
fkmount; (3) a11 other priority debits (e.g. outgoing wires, internal transfers, cash
withdrawal/cashed checks at teller window, etc.) grouped together and posted low to high by
ltmount; (4) Debit Card Transactions (including Pm and non-pm transactions) posted by date
Cmd time of authorization, or, if date and time information is tmavailable, then 1ow to high by
Junount; (5) ACH transactions posted 1ow tohigh by nmount; (6) checks sorted by check
nurnber, with lowest check number posted first, or, if check number is unavailable, then low to
high by amount; and (7) bank initiated transactions(e.g. maintenance fees, overdrah fees,
AT'M fees, etc.) posted low to high by nmount.See Agreement ! 50(a).
(b) Overdraft Fee Limit.
Commencing no later than March 31, 2013, M & I Bank shall: (i) limit the number of
Overdraft Fees assessed to a single Account to four (4) on any given day; and (ii) refrain from
assessing an overdraft fee unless an Account has a negative balance of $5.0 1 or more. See
Agreement ! 50(b).
(c) Three Year Period.
M & I Bnnk agrees not to change the posting order and Overdraft Fee limits described above in
1my material mnnner that would be less beneficial for its customers, for a period of at least three
(3) years following the datets) of their implementation, except that M & I Bank at a1l times
retains the right on a prospective basis to modify its policies and practices based on amendments
or claritscations of applicable law as enacted or interpreted by the courts, Congress, or federal
regulators, or as necessary for M & l Brmk to comply with any such amendment, intemretation
or clarification. See Agreement ! 50(c).
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D. Class Release.
In exchange for the benefits conferred by the Settlement, all Settlement Class M embers
who do not opt-out of the Settlement will be deemed to have released M & I Bank from claims
as detailed in Section XV1 of the Agreement. See Agreement j IXVI.
DISCUSSION
Federal courts have long recognized a strong policy and presllmption in favor of class
action settlements. The Rule 23(e) analysis should be çtinformed by the strong judicial policy
favoring settlements as well as the realization that compromise is the essence of settlement.'' fn
re Chicken Antitrust Litig. Am. Poultry, 669 F.2d 228, 238 (5th Cir. Unit B 1982); see also Isby
v. Bayh, 75 F.3d 1 19 1, 1 196 (7th Cir. 1996). ln evaluating a proposed class action settlement,
the Court çlwill not substitute its business judgment for that of the parties; tthe only question . . .
is whether the settlement, taken as a whole, is so tmfair on itsface as to preclude judicial
approval.''' Rankin v. Rots, 2006 WL 1876538, at *3 (E.D. Mich. June 27, 2006) (quoting Zerkle
v. Cleveland-clfjj Iron Co., 52 F.R.D. 151, 159 (S.D.N.Y. 1971)). Sfsettlement agreements are
highly favored in the 1aw and will be upheld whenever possible because they are a means of
lr icably resolving doubts and tmcertainties and preventing lawsuits.'' In re Nissan M otor Corp.
ala/f/r?.fJ'/ f itig-, 552 F.2d 1088, 1 105 (5th Cir. 1977).
As explained below, the Settlement here is more than suffkient under Rule 23(e). The
Settlement includes a Settlement Fund of $4,000,000 and substantial future savings to Settlement
Class Members and other accotmt holders. See Joint Decl. ! 43. The $4,000,000 Settlement
'Fund alone represents approximately twenty-five percent (25%) of Plaintiffs' and the Settlement
Class' most probable recovery. 1d.The vast majority of the Settlement Class will receive their
Case 1:09-md-02036-JLK Document 3570 Entered on FLSD Docket 08/02/2013 Page 11 of 38
recovery as a matter of course, without needing to take any action, based on an analysis by Class
Counsel's expert of infonnation in M & l Bnnk's possession.
1. The Court's Exercise of Jurisdiction Is Proper.
In addition to having personal jurisdiction over the Plaintiffs, who are parties to this
litigation, the Court also has personal jurisdiction over al1 members of the Settlement Class
because they received the requisite notice and due process.See Phillès Petroleum Co. v. Shutts,
472 U.S. 797, 8 1 1-12 (1985) (citing Mullane v. Cent. Hanover Bank tf Trust Co., 339 U.S. 306,
3 14-15 (1950:9 see also In re Prudential lns. Co. ofAm. Sales Practices Litig', 148 F.3d 283,
306 (3d Cir. 1998). The Court has subject matter jurisdiction over the Action pursuant to 28
U.S.C. jj 1332(d)(2) and (6).
a.
As discussed above, Notice of the Settlement in the form approved by the Court was
mailed to over 189,560 members of the Settlement Class. See Azari !! 13-17. Notice of the
Setllement was also published in twelve (12) newspapers. f#. at !! 21-25. ln addition, a special
Setllement W ebsite and toll-free telephone number were established to enable members of the
The Best Notice Practicable W a: Provided to the Settlement Class.
Settlement Class to obtain detailed information about the Action and the Settlement. Id. at ! 26.
b. The Notice W as Reasonably Calculated to lnform the Settlement
Class of Their Rights.
The Notices and Notice Progrnm satisfied all applicable requirements of law including,
but not limited to, Federal Rule of Civil Procedure 23 and the constitutional requirement of due
2 i fied due process requirementsprocess. See Azari Decl. ! 39. The Court-approved Notice sat s
because it described tithe substantive claims (and) contained information reasonably
1 s Preliminary Approval Order at ! 13. (DE # 2989).ee
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necessary to make a decision to remain a class member and be bound by the final judgment.'' In
l.e CV/JJ'Ja Motor Corp. Antitrust L itig., 552 F.2d 1088, 1 104-05 (5th Cir. 1977).
The Notice, among other things, defined the Settlement Class; described the release
provided to M & l Bnnk tmder the Settlement as well as the nmount, mmmer of allocating, and
proposed distribution of Settlement proceeds; and informed members of the Settlement Class of
their right to opt-out and object, the procedures for doing so, and the time and place of the Final
Approval Hearing. Further, the Notice stated that Class Cotmsel intended to seek attonzeys' fees
of up to thirty-tlzree percent (33%) of the Settlement Fund. ln addition to disclosing the material
terms of the Settlement, the Notice informed the Settlement Class that a class judgment would
bind them tmless they opted-out, and told them where they could get more information - for
example, at the Settlement W ebsite that posts a copy of the fully executed Agreement, as well as
other important court documents such as the Motion. See Azari Decl. ! 30.
The M otion and exhibits thereto contain Class Cotmsel's considered opinion that the
$4,000,000 Settlement Fund represents approximately twenty-five percent (25%) of the most
probable damages Plaintiffs and the Settlement Class could recover at trial. See Joint Decl. ! 43.
'rhe disclosure of this percentage was suftkient to put members of the Settlement Class on notice
of their potential recovery based on their personal history with M & I Bank and to allow them to
make an informed decision about whether to accept the Settlement, object to it or opt-out of it.
The Court finds that the Settlement Class was provided with the best practicable notice;
the notice was dçreasonably calculated, tmder (the) circumstances, to apprise interested parties of
'the pendency of the action and afford them an opporttmity to present their objections.'' Shutth
472 U.S. at 812 (quoting Mullane, 339 U.S. at 314-1 5). This Settlement with M & I Bank was
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widely publicized, and any Settlement Class slenlber yvho yvished to express conAnaents or
objections had ample opportunity and means to do so. See Azari Decl. !! 7, 33.
2. The Settlement Is Fair, Adequate and Reasonable, and Therefore Is Finally
Approved Under Rule 23.
ln determining whether to approve the Settlement, the Court considers whether it is Sçfair,
adequate, reasonable, and not the product of collusion.'' f everso v. SouthTrust BankofAl., NA.,
18 F.3d 1527, 1530 (1 1th Cir. 1994); see also Bennett v. Behring Corp., 7?7 F.2d 982, 986 (1 1th
Cir. 1984). A settlement is fair, reasonable and adequate when Eithe interests of the class as a
whole are better served if the litigation is resolved by the settlement rather than pursued.'' In re
Lorazepam (f Clorazepate Antitrust L itig., MDL No. 1290, 2003 WL 22037741, at *2 (D.D.C.
Jtme 16, 2003) (quoting Manualfor Complex L itigation (Third) j 30.42 (1995:. The Court is
ddnot called upon to determine whether the settlement reached by the parties is the best possible
deal, nor whether class members will receive as much from a settlement as they might have
recovered from victory at trial.'' In re Mexico Money Trans#r L itig., 164 F. Supp. 2d 1002, 1014
4SN.D. 111. 2000) (citations omitted).
The Eleventh Circuit has identifed six factors to be considered in analyzing the faim ess,
reasonableness and adequacy of a class action settlement tmder Rttle 23(e):
(1) the existence of fraud or collusion behind the settlement;
(2) the complexity, expense, and likely duration of the litigation;
(3) the stage of the proceedings and the nmotmt of discovery completed;
(4) the probability of the plaintiffs success on the merits;
(5) the range of possible recovery; and
(6) the opinions of the class counsel, class representatives, and the substance
and amotmt of opposition to the settlement.
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Leverso, 18 F.3d at 1530 n.6; see also Bennett, 7?7 F.2d at 986.
a. There W as No Fraud or Collusion.
Thç Court has readily concluded there was no fraud or collusion behind this Settlement.
See, e.g., In re Sunbeam Sec. L itig., 176 F. Supp. 2d 1323, 1329 n.3 (S.D. Fla. 2001); Ingram v.
Coca-cola fb., 200 F.R.D. 685, 693 (N.D. Ga. 2001) (court had tdno doubt that this case has
been adversarial, featuring a high level of contention between the parties'); ln re Motorsports
jverchandise Antitrust L itig., 1 12 F. Supp. 2d 1329, 1338 (N.D. Ga. 2000) (ttltlhis was not a
quick settlement, and there is no suggestion of collusion'); Warren v. City of Tampas 693 F.
Supp. 1051, 1055 (M.D. Fla. 1988) (record showed no evidence of collusion, but to the contrary
showed tsthat the parties conducted discovery and negotiated the terms of settlement for an
extended period of time'), a.ff'd 893 F.2d 347 (1 1th Cir. 1989).
b. The Settlement W ill Avert Years of Highly Complex and Expensive
Litigation.
The Action involves over 189,560 members of the Settlement Class and alleged wrongful
Overdraft Fees in the tens of millions of dollars. See Joint Decl. ! 39. The claims and defenses
làre complex; litigating them has been and would continue to be difficult and time-consuming.
Id. Although the Action was litigated for over two years before the Parties reached an agreement
in principle to resolve it, recovery by any means other than settlement would require additional
years of litigation. See United States v. Glens Falls Newspapers, lnc. , 160 F. 3d 853, 856 (2d
Cir. 1998) (noting that $ça principal function of a trial judge is to foster an atmosphere of open
discussion nmong the parties'
promptly and fairly so as to avoid the uncertainty, expense and delay inherent in a trial.''); In re
Domestic Air Transp. Antitrust L itig., 148 F.R.D. 297, 317, 325-26 & n.32 (N.D. Ga. 1993)
CtlzMdjudication of the claims of two million claimants could last half a millennium').
attorneys and representatives so that litigation may be settled
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The Settlement provides immediate and subsfnntial benefits to over 189,560 current and
lbrmer M & I Bank customers. See Joint Decl. j 39; see ln re Shell Oi1 Rejlnery, 155 F.R.D.
552, 560 (E.D. La. 1993) (&$The Court should consider the vagmies of litigation and compare the
signifcance of immediate recovery by way of the compromise to the mere possibility of relief in
the future, after protracted and expensive litigation.'') (quoting Oppenlander v. Standard Oi1
4-0., 64 F.R.D. 597, 624 (D. Colo. 1974:; see also In re US. Oi1 dr Gas L itig., 967 F.2d 489,
493 (1 1th Cir. 1992) (noting that complex litigation tçcan occupy a court's docket for years on
end, depleting the resources of the parties and taxpayers while rendering meaningful relief
increasingly elusive'). Particularly because the çsdemand for time on the existing judicial system
must be evaluated in determining the reasonableness of the settlement,'' Ressler v. Jacobson, 822
F. Supp. 1551, 1554 (M.D. Fla. 1992) (citation omitted), there can be no reasonable doubt as to
the adequacy of this Settlement. If the Plaintiffs survived the motion to compel arbitration and
litigated in court, it <'would have probably consumed millions of dollars of class cotmsel's time
1md delay any payments to class members for several years.'' See Declaration of Brian T.
Fitzpatrick Decl. ! 15 (çsFitzpatrick Decl.''). (DE # 3474-4).
The nmount of the recovery is extremely reasonable in light of the risks Plaintiffs faced.
See Joint Decl. !! 43-45.The $4,000,000 Settlement Fund represents approximately twenty-five
percent (25%) of the most probable aggregate dnmages that Class Counsel believe could have
been recovered on behalf of the Settlement Class if the Action were successful in a11 respects.
.Id. at ! 43. That percentage constitutes a very fair settlement.Id. at ! 44. The combined risks
here were real - and potentially catastrophic for the Settlement Class.
First, assuming Plaintiffs won the Appeal, M & l Bank would have argued that the
National Bnnk Act (1çNBA'') preempted Plaintiffs' claims at all stages of the litigation. See Joint
16
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Decl. ! 69. This Court stressed that its original preemption nlling, on motions to dismiss filed by
First Tranche bnnks, applied only ççlalt this stage . . .'' In re Checking Account Overdrajt
f///gJ/ft)n, 694 F. Supp. 2d 1302, 1313 (S.D. Fla. 2010). When it subsequently approved the
Bnnk of America settlement in M DL 2036, the Court observed that ftwhether Plaintiffs' claims
ltre preempted by the NBA and related regulations remains an open question. . . . (Njo federal
appeals court has yet reached the NBA preemption issue in this specific context. The preemption
defense ttwas a Slight switch' which, if successfully tum ed ton' . . . would have led to dismissal
of the entire case . . .'' Checking Account Overdra#, 830 F. Supp. 2d at 1347 (citations omitted).
Had the Action proceeded, M & l Bnnk would likely have raised the Ninth Circuit's recent
decision in Gutierrez v Wells Fargo Bank NA., 704 F.3d 712 (9th Cir. 2012), that reversed and
remanded a $203 million judgment against Wells Fargo on the grounds that certain provisions of
Califomia's Unfair Competition Law are preempted by federal laws and regulations. See Joint
Decl. ! 69. While Class Counsel assert that Gutierrez is not applicable because its preemption
lmalysis was limited to particular provisions of Califomia's Unfair Competition Law and also
that most of the claims asserted in this Action are based on allegations of bad-faith conduct
brought under state laws of general applicability that Gutierrez held are not preempted, M & 1
Bnnk would likely have argued that the NBA preempts these claims on the grounds that they
(dsignificantly interfere'' with its federally-authorized bnnking powers. Id. Thus, there can be no
doubt that the federal preemption issue involves complex issues of 1aw and fact, and presented a
serious and ongoing risk to Plaintiffs' and the Settlement Class's claims against M & I Bank. Id.
at ! 70; see also Tr. of Nov. 7, 201 1, FinalApproval Hearing Regarding Bnnk of America
Settlement, at 1 14; 14-18 (this Court stated that preemption tGseemed to me to be a very close
issue. It caused me a 1ot of problems').
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Second, another major risk derives from the fact that the language in M & I Bank's
Account agreements suggests that, to some extent, M & 1 Bnnk adequately disclosed its practice
of Debit Re-sequencing. See Joint .Dec1. ! 71. M & 1 Bnnk would likely have argued that there
can be no breach of the implied promise or covenant of good faith and fair dealing where the
contract expressly permits the actions being challenged, and the defendant acts in accordance
with the express terms of the contract. Id.Thus, M & l Bank would have likely asserted that its
disclosure was adequate and that it could not be held liable for Plaintiffs' decisions to maintain
M & I Bnnk checking accounts under a contract authorizing such practices. f#.
c. The Factual Record is Sufficiently Developed to Enable Class Counsel
to M ake a Reasoned Judgment Concerning the Settlement.
The Court considers tçthe degree of case development that class counsel have
accomplished prior to settlement'' to ensm e that çscounsel had an adequate appreciation of the
merits of the case before negotiating.'' In re General M otors Corp. Pick-up Truck Fuel Tank
ùDrt?#J. Liab. L itig., 55 F.3d 768, 813 (3d Cir. 1995). At the snme time, ttltlhe 1aw is clear that
early settlements are to be encouraged,and accordingly, only some reasonable amount of
discovery should be required to make these determinations.'' Ressler, 822 F. Supp. at 1555.
Suffkient discovery was conducted in the Action to enable Class Counsel to make a
reasoned judgment concerning the benefits of settlement compared to the risks attendant to
continued litigation. See Joint Decl. ! 41. In addition, prior to mediation M & 1 Bnnk provided
Class Cotmsel and their expert with certain confidential information that enabled Class Cotmsel
to estimate the amount of wrongful Overdraft Fees incurred by the Settlement Class under a
series of altemative posting scenarios. f#. This infonnation afforded Class Cotmsel insight into
the strengths and weaknesses of the claims against M & I Bank, as well as the range of possible
dnmages that could be recovered in the Action. Id. Prior to settling, Class Cotmsel had
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developed nmple information and performed analyses from which dfto determine the probability
of . . . success on the merits, the possible range of recovery, and the likely expense and duration
of the litigation.'' Mashburn v. Nat 1 Healthcare, Inc., 684 F. Supp. 660, 669 (M.D. Ala. 1988).
The stage of the proceedings when the Parties reached an agreement to settle supports granting
Final Approval. See Fitzpatrick Decl. ! 16.
d. Plaintiffs W ould Have Faced Signilkant Obstacles to Obtaining
Relief.
The Court also considers 'dthe likelihood and extent of any recovery from the defendants
absent . . . settlement-''In re Domestic Air Transp., 14# F.R.D. at 314 (N.D. Ga. 1993); see also
zkcxu/dr, 822 F. Supp. at 1555 CW Court is to consider the likelihood of the plaintiffs success on
the merits of his claims against the nmotmt and form of relief offered in the settlement before
judging the fairness of the compromise.').
Plaintiffs and Class Counsel faced several major risks in this litigation, including those
discussed above relating to arbitration, federal preemption under the NBA, and the M & I Bnnk
Account agreement. See Fitzpatrick Decl. !! 10- 13, 25.Absent this Settlement, this litigation
likely would have continued for additional years, at tremendous expense to the Parties. See Joint
Decl. ! 67. Given the myriad risks attending these claims, the Settlement is a fair compromise.
See, e.g., Bennett, 96 F.R.D. at 349-50 (plaintiffs faced a Stmyriad of factual and legal problems''
that led to ççgreat uncertainty as to the fact and amount of damage,'' which made it ttunwise (for
plaintiffs) to risk the substantial benefhs which the settlement confers . to the vagaries of a
1:rial''), aftnd, 737 F.2d 982 (1 1th Cir. 1984).
e. The Benefits Provided by the Settlem ent Are Fair, Adequate and
Reasonable W hen Compared to the Range of Possible Recovery.
In determining whether a settlement is fair in light of the potential range of recovery, the
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Court is guided by the lçimportant muimu'' that ttthe fact that a proposed settlement nmounts to
only a fraction of the potential recovery does not mean the settlement is unfair or inadequate.''
Behrens, 1 18 F.R.D. at 542. This is because a settlement must be evaluated flin light of the
attendant risks with litigation.'' Thompson v. Metropolitan L f/'e Ins. Co., 216 F.R.D. 55, 64
(S.D.N.Y. 2003)9 see Bennett, 7?7 F.2d at 986 (sslclompromise is the essence of settlement.');
Linney v. Cellular Alaska P 'ship, 151 F.3d 1234, 1242 (9th Cir. 1998) (*igTlhe very essence of a
settlement is . a yielding of absolutes and an abandoning of highest hopes.'') (internal
quotation omitted). Thus, courts regularly find settlements to be fair where fdlpqlaintiffs have not
received the optimal relief '' Warren, 693 F. Supp. at 1059; see, e.g., Great Neck Capital
Appreciation Investment P 'sç/1f#, L .P. v. Price WaterHousecoopers, L .L .P., 212 F.R.D. 400, 409-
z110 (E.D. W is. 2002) Cç-f'he mere possibility that the class might receive more if the case were
lklly litigated is not a good reason for disapproving the settlement.').
The Settlement provides substantial value to the Settlement Class. See Joint Decl. !! 43-
45. Under the Settlement, Plaintiffk and Settlement Class M embers have recovered $4,000,000
in cash, plus significant changes in M & I Bank's Debit Card and Overdraft Fee policies for a
minimum of three (3) years that will result in substantial savings to the Settlement Class and
other Account holders. f#. $û(Iqn light of the risks class counsel faced'' here, the settlement is
t'timpressive.'' See Fitzpatrick Decl. ! 25. The automatic distribution process for the
overwhelming majority of Settlement Class Members further supports the conclusion that the
Settlement is reasonable. f#. at ! 17.
f. The Opinions of Class Counsel, Class Representatives, and AbsentSettlem ent Class M em bers Strongly Favor Approval of the
Settlem ent.
The Court gives tçgreat weight to the recommendations of counsel for the parties, given
20
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their considerable experience in this type of litigation.'' Warren, 693 F. Supp. at 1060; see also
Jklz/3lfra, 684 F. Supp. at 669 (fç1f plaintiffs' counsel did not believe these factors a11 pointed
substantially in favor of this settlement as presently structtlred, this Court is certain that they
would not have signed their names to the settlement agreement.''); In re Domestic Air Transp.,
148 F.R.D. at 312-13 Ctln determining whether to approve a proposed settlement, the Court is
entitled to rely upon the judgment of the parties' experienced counsel. G (Tlhe trial judge, absent
fraud, collusion, or the like, should be hesitant to substitute its own judgment for that of
()otmsel-''') (citations omitted).
Class Counsel and the representative Plaintiffs believe that this Settlement is deserving of
Final Approval, and the Court agrees. See Joint Decl. ! 47.Furthermore, the Court also finds it
telling that, of 1 89,560 members of the Settlement Class, only thirty-four (34) timely requests for
exclusion from the Settlement were received, and one objection to the Settlement was timely
submitted. f +uma v. American Express Co., 406 F. Supp. 2d 1298, 1324 (S.D. Fla. 2005)
(finding that a low percentage of objections EGpoints to the reasonableness of a proposed
settlement and supports its approval').
3. The Settlem ent Class.
This Court previously found the requirements of Rule 23(a) and 23(b)(3) satisfied in this
Action in a settlement posture (DE, # 2989), and in similar actions in MDL 2036 on contested
motions for class certifkation (see, e.g., DE # 1763 (Union Bnnk, N.A.); DE # 2615 (TD Bnnk,
N.A.); DE # 2697 (PNC Bank, N..A.)) and in the context of settlement (see, e.g. , DE # 1520,
2150 (Bank of America, N.A.); DE # 2712, 3134 tlpMorgan Chase Bank, N.A.)). The Court
hereby reiterates its findings that: (a) the members of the Settlement Class are so numerous that
jioinder of them is impracticable; (b) there are questions of 1aw and fact common to the
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Settlement Class that predominate over any individualquestions; (c) the claims of the
l'epresentative Plaintiffs are typical of the claims of the Settlement Class; (d) the representative
Plaintiffs and Class Counsel fairly
Settlement Class; and (e) a class action is superior to other available methods for the fair and
effkient adjudication of the present controversy.
and adequately represent and protect the interests of the
The thirty-four (34) individuals listed in Exhibit A to the Final Judgment being entered
contemporaneously herewith timely elected to opt-out of the Settlement. The Court therefore
linds and decrees that they are not part of the Settlement Class, are not bound by the Settlement
or release contained therein, and will not receive any distribution from the Settlement Fund.
4. The Application for Service Awards to the Class Representatives Are
Approved.
Service awards Sçcompensate named plaintiffs for the services they provided and the risks
they incurred during the course of the class action litigation.'' Allapattah Services, Inc. v. Exxon
Ct?r.p., 454 F. Supp. 2d 1185, 1218 (S.D. Fla. 2006). fçl-flhere is ample precedent for awarding
incentive compensation to class representatives at the conclusion of a successful class action.''
David v. American Suzuki Motor Corp., 2010 W L 1628362, at *6 (S.D. Fla. Apr. 15, 2010).
Courts have consistently found service awards to be an effkient and productive way to
encourage members of a class to become class representatives. See, e.g., fapw-, 200 F.R.D. at
694 (awarding class representatives $300,000 each, explaining that ûçthe magnitude of the relief
the Class Representatives obtained on behalf of the class warrants a substantial incentive
award.''); Spicer v. Chi. Bd Options Exchange, Inc., 844 F. Supp. 1226, 1267-68 (N.D. 111. 1993)
(collecting cases approving service awards ranging from $5,000 to $100,000, and awarding
$ 10,000 to each nnmed plaintifg. The factors for detennining a service award include; (1) the
actions the class representatives took to protect the interests of the class; (2) the degree to which
Case 1:09-md-02036-JLK Document 3570 Entered on FLSD Docket 08/02/2013 Page 22 of 38
the class benefited from those actions;and (3) the amount of time and effort the class
representatives expended in pursuing the litigation. See, e.g., Cook v. Niedert, 142 F.3d 1004,
1L01.6 (7th Cir. 1998).
The Court finds that the named Plaintiffs/class representatives expended time and effort
in representing the Settlement Class, and deserve to be compensated for such time and effort on
behalf of the Settlement Class. The nnmed Plaintiffs provided invaluable assistance to counsel in
this litigation by, among other things, engaging in significant interviews and conferences with
counsel. See Joint Decl. ! 54. The Service Award represents only 0.125% of the Settlement
Fund, and the nmount of the Service Awards is fair and reasonable in view of the efforts of the
named Plaintiffs that benefited the Settlement Class.Id at ! 55. Therefore, the Court approves
the requested Service Awards of $2,500 for each of the Plaintiffs/class representatives to be paid
lkom the Settlement Ftmd.
5. Class Counsel's Application for Attorneys' Fees Is Granted.
Pursuant to paragraph 101 of the Agreement, Class Counsel originally requested a fee
equal to thirty-tllree (33%) of the Settlement Fund created tllrough their efforts in litigating this
case and reaching the Settlement. At the Final Approval Heming, Plaintiffs' Co-Lead Counsel
advised the Court that Class Counsel are seeking a fee equal to thirty percent (30%) of the
Setllement Fund, consistent with this Court's prior fee awards in M DL 2036 approved
settlements. The Court analyzes this fee request under Camden 1 Condo Ass 'n. v. Dunkle, 946
F.2d 768 (1 1th Cir. l 991). As set forth below, after considering the Camden 1 factors and this
Court's prior fee awards in M DL 2036, the Court concludes that Class Counsel's application for
fees in the nmount of $1,200,000, equal to thirty percent (30%) of the $4,000,000 Settlement
Ftmd will be granted.
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a. The Law Awards Class Counsel Fees from the Common Fund
Created Through Their Efforts.
It is well established that when a representative party has conferred a substantial benefit
upon a class, counsel is entitled to attomeys' fees based upon the benefit obtained. Camden f,
946 F.2d at 771; Boeing Co. v. Van Gemert, 444 U.S. 472, 478 (1980). The common benefit
doctrine is an exception to the general rule that each party must bear its own litigation costs. The
doctrine serves the tçtwin goals of removing a potential financial obsucle to a plaintiff s pursuit
of a claim on behalf of a class and of equitably distributing the feesand costs of successful
litigation among all who gained from the nnmed plaintifps efforts.'' ln re Gould Sec. L itig., 727
F. Supp. 1201 , 1202 (N.D. 111. 1989) (citation omitted). The common beneft doctrine stems
lkom the premise that those who receive the benefit of a lawsuit without contributing to its costs
llre ''unjustly enriched'' at the expense of the successful litigant. Van Gemert, 444 U.S. at 478.
As a result, the Supreme Court, the Eleventh Circuit, and courts in this District have al1
recognized that Stlaq litigant or a lawyer who recovers a common fund for the benefit of persons
other th% himself or his client is entitled to a reasonable attorney's fee from the fund as whole.''
Sunbeam, 176 F. Supp. 2d at 1333 (citing Van Gemert, 444 U.S. at 478); see also Camden 1, 946
'
.F.2d at 771 CçAttomeys in a class action in which a common fund is created are entitled to
compensation for their services from the common fund, but the nmotmt is subject to court
approval-').
ln the Eleventh Circuit, class counsel are awarded a percentage of the fund generated
through a class action settlement. As the Eleventh Circuit held, itthe percentage of the fund
approach (as opposed to the lodestar approachl is the better reasoned in a common fund case.
Henceforth in this circuit, atlorneys' fees awarded from a common fund shall be based upon a
Jreasonable percentage of the fund established for the benefit of the class.'' Camden 1, 946 F.2d at
24
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--,! -;, kqk
This Court has substantial discretion in determining the appropriate fee percentage
awarded to counsel. dd-rhere is no hltrd and fast rule mandating a certain percentage of a common
biznd which may be awarded as a fee because the amount of any fee must be determined upon the
bkcts of each case.'' In re Sunbeam, 176 F. Supp. 2d at 1333 (quoting Camden 1, 946 F.2d at
7744. However, dûltlhe majority of common ftmd fee awards fall between 20 percent to 30
percent of the fundp''although dïan upper limit of 50 percent of the f'und may be stated as a
general 1'ule.'' 1d (quoting Camden Jk 946 F.2d at 774-75); see also Waters v. Int '1 Precious
avetals Corp., 190 F.3d 1291 (1 lth Cir. 1999) (approving fee award where the district court
determined that the benchmmk should be 30% and then adjusted the fee award higher based on
the circumstances of the case).
W hen using the percentage-of-the-fund approach, courts compensate class counsel for
their work in extracting non-cash relief from the defendant in a variety of ways. W hen the non-
cash relief can be reliably valued, courts often include the value of this relief in the common ftmd
1md award class counsel a percentage of the total Gnd.See, e.g., Staton >'. Boeing Co. , 327 F.3d
938, 974 (9th Cir. 2003) CdlWlhere the value to individual class members of benefits deriving
from injunctive relief can be accurately ascertained . . . courts Emay) include such relief as part of
the value of a common ftmd for pumoses of applying the percentage method . . . .''); cases cited
in footnote 22, infta; see also Principles of the Law of Aggregate Litigation, j 3.13(b) (American
.'Law Institute, 2010) ($û(Aj percentage of the fund approach should be the method utilized in most
common-fund cases, with the percentage being based on both the monetary and nonmonetary
'value of the judgment or settlement.').
in substantial savings to Settlement Class M embers and other account holders, Class Cotmsel are
Here, although the practices changes are likely to result
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not seeking compensation directly related to the amount of the savings.See Joint Decl. ! 57; Jee
also Faught v. American Home Shield Corp., 668 F.3d 1233, 1243 (1 1th Cir. 2012) (rejecting
fkrgument that value of injunctive relief should not also be considered in addition to cash for
purposes of determining class counsel's fees).
The common fund for pumoses of determining the fee award in this case is $4,000,000.
llee Joint Decl. ! 57.Professor Fitzpatrick opined that due to the nmount of the cash recovery
cmd the substantial savings from the practice changes that will inure to the Settlement Class
lnembers, an award of thirty-three percent (33%) of the Settlement Fund is ttfully justifed in
light of the need to compensate class cotmsel for the practice restrictions they obtained for the
benefit of the class'' and Sswithin the range of reason.'' See Fitzpatrick Decl. ! 22. Similarly,
according to the Honorable Thomas Scott (Ret.), an award of thirty-three percent (33%) of the
common fund is tlreasonable and well justified'' and ttis consistent with other fee awards in
MDL 2036 and in other cases in this District.'' See Declaration of Thomas E. Scott !! 9, 12
Ctscott Dec1.''). (DE # 3474-7).
Class Counsel undertook a risky and undesirable case and, through diligence,
perseverance and skill, obtained an outstanding result.They are to be commended and should be
compensated in accord with their request, which is both warranted and reasonable given similar
fee awards. The Court firmly believes this kind of initiative and skill must be adequately
compensated to insure that counsel of this caliber is available to tmdertake these kinds of risky
but important cases in the future. See Muehler v. f and O 'L akes, Inc., 617 F. Supp. 1370, 1375-
'76 (D. Minn. 1985).
b. As Applied H ere, the Camden I Factors Dem onstrate the Requested
Fee Is Reasonable and Justised.
The Eleventh Circuit's factors for evaluating the reasonable percentage to award clmss-
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action counsel are:
(1) the time and labor required;
(2) the novelty and diffkulty of the questions involved;
(3) the skill requisite to perform the legal service properly;
(4) the preclusion of other employment by the attorney due to acceptance ofthe casc;
(5) the customary fee;
(6) whether the fee is fixed or contingent;
(7) time limitations imposed by the client or the circumstances;
(8) the amount involved and the results obtained;
(9) the experience, reputation, and ability of the attorneys;
(10) the Sdundesirability'' of the case;
(1 1) the nature and the length of the professional relationship with the client; and
(12) awards in similar cases.
Camden 1, 946 F.2d at 772 n.3 (citing factors originally set forth in Johnson v. Georgia Highway
fxrrexçuç, lnc. , 488 F.2d 7 1 4, 717-19 (5th Cir. 1974:.
These twelve factors are guidelines; they are not exclusive. ttother pertinent factors are
the time required to reach a settlement, whether there are any substantial objections by class
members or other parties to the settlement terms or the fees requested by counsel, any non-
monetary benefits conferred upon the class by the settlement, and the economics involved in
prosecuting a class action.'' Sunbeam, 176 F. Supp. 2d at 1333 (quoting Camden 1, 946 F.2d at
775). ln addition, the Eleventh Circuit has dtencouraged the lower courts to consider additional
factors unique to the particular case.'' Camden t 946 F.2d at 775.
Case 1:09-md-02036-JLK Document 3570 Entered on FLSD Docket 08/02/2013 Page 27 of 38
The Claims Against M & I Bank Required Sùbstantial Time
and Labor.
Prosecuting and settling these claims demanded considerable time and labor, making this
1ke request reasonable. See Scott Decl. ! 13.The internal organization of Class Counsel ensured
that Class Counsel were engaged in coordinated, productive work efforts to maximize eftkiency
1md minimize duplication of effort. See Joint Decl. ! 58. Class Counsel devoted a substantial
ltmount of time investigating the claims of many potential plaintiffs against M & l Bank. 1d. at !
.59. Class Counsel interviewed ntlmerous M & 1 Bank customers and potential plaintiffs to
gather information about M & I Ballk's conduct, both at the time the lawsuit was filed and in the
past, to determine the effect that M & I Brmk's conduct had on consumers. 1d. That information
was essential to Class Counsel's ability to lmderstand the nature of M & I Bank's conduct, the
language of the Accotmt agreements at issue, and potential remedies. Id. Class Counsel also
expended significant resources researching and developing the legal claims at issue and in
defending M & 1 Bnnk's Arbitration Motion and the subsequent Appeal. Id. at ! 60.
Settlement negotiations consllmed additional time and resources. See Joint Decl. ! 61.
Preliminary settlement discussions began in late 201 1, ultimately leading to a formal mediation
in November 201 1. Id. The mediation required substantial preparation and follow-up work. Id.
Many months of detailed discussions followed conceming the specific terms of the Settlement.
1d. Al1 told, Class Counsel's coordinated work paid great dividends for the Settlement Class.
Each of the above-described efforts was essential to achieving the Settlement before the Court.
1d. at ! 62. The time and resources Class Counsel devoted to prosecuting and settling this Action
readily justify the fee that requested.
The Eleventh Circuit made clear in Camden l that percentage of the fund is the exclusive
28
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3lnethod for awarding fees in common fund class actions. Camden f, 946 F.2d at 774. Even
before Camden f, courts in this Circuit recognized that tta percentage of the gross recovery is the
only sensible method of awarding fèes in common famd cases.'' Mashburn v. Nat 1 Healthcare,
ùrnc, 684 F. Supp. 660, 690 (M.D. Ala. 1988). More importantly, the Court observed firsthand
1he effort exerted by Class Counsel in this case and the other bank cases, and, given the
outstanding results achieved here, does not find it necessary or useful to review Class Cotmsel's
lodestar records.
Lodestar Gtcreates an incentive to keep litigation going in order to maximize the number
of hours included in the court's lodestar calculation.'' In re Quantum Hea1th Resources, Inc., 962
F. Supp. 1254, 1256 (C.D. Cal. 1997).ln Camden f, the Eleventh Circuit criticized lodestar and
the inefficiencies that it creates. 946 F.2d at 773-75. In so doing, the court Eçmandateld) the
exclusive use of the percentage approach in common fund cases, reasoning that it more closely
aligns the interests of client and attorney, and more faithfully adheres to market practice.''
Goldberger v. Integrated Resources, Inc., 209 F.3d 43s 50 (2d Cir. 2000) (emphasis added); see
tz/do Alba Conte, Attorney Fee Awards j 2.7, at 91 fn. 41 (ffThe Eleventh . . . Circuitl) repudiated
the use of the lodestar method in common-fund cases').Under Camden 1, courts in this Circuit
regularly award fees based on a percentage of the recovery, without discussing lodestar at all.
7$ ,' Eleventh Circuit attorneys fee 1aw governs this request. See Allapattah, 454 F. Supp. 2d at1200 (ççltlhe district court presidinq over a diversity-based class action pursuant to Fed. R. Civ.)?. 23 has equitable power to apply tederal common 1aw in determining fee awards irrespective of
state law.''); see also Weinberger v. Great Northern Nekoosa Corp., 925 F.2d 518, 522 n.5 (1stCir. 1991) (recognizing that district court presiding over diversity-based class action hasequitable power to apply federal common 1aw in determining fee award, irrespective of statelaw); Clark Equip. Co. v. Armstrong Equip. Co., 431 F.2d 54, 57 (5th Cir. 1970) (Erie doctrinedoes not deprive federal court in diversity case of power to employ equitable remedies not
available under state law).
29
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See, e.g., David v. American Suzuki Motor Corp., 2010 WL 1628362 (S.D. Fla. Apr. 15, 2010).4
ç'(A) common fund is itself the measure of success and represents the benchmark on which a
reasonable fee will be awarded. . . . ln this context, monetary results achieved predominate over
a1l other criterim'' Camden 1, 946 F.2d at 774 (citations and alterations omitted). This Court will
not deviate from that sound approach.
ii. The Issues Involved W ere Novel and Difscult and Required
the Exceptional Skill of a Highly Talented Group of Attorneys.
The attorneys on both sides of this case displayed a very high level of skill. See Scott
Decl. ! 15; Joint Decl. !! 63-669Walco, 975 F. Supp. at 1472 (explaining that ttlgqiven the
quality of defense counsel from prominent national law firms, the Court is not confident that
attorneys of lesser aptitude could have achieved similar results'); see also Camden f, 946 F.2d at
772 n.3 (in assessing the quality of representation by class counsel, Court also should consider
the quality of their opposing counsel.); Johnson, 488 F.2d at 718; Ressler v. Jacobson, 149
F.R.D. 651, 654 (M.D. Fla. 1992). is emblematic of the effort and
on a regular basis in this MDL. Nor can there be any
Class Cotmsel's work
outcomes witnessed by this Court
legitimate dispute that based on the novel and very complex issues confronted by Class Counsel
in this case, detailed here and elsewhere, that an extraordinary group of lawyers was required to
prosecute this case. See Scott Decl. !! 14-15. The Court knows many of these lawyers from
'years of presiding over cases in this district, and has come to expect this level of performance
from them. That is not to say, however, that such performance should be taken for granted.
(nstead, the fact that this level of legal talent was available to the Settlement Class is another
compelling reason in support of the fee requested. As with most things, you get what you pay
'f S lso Stahl v. MasTec, Inc., 2008 WL 2267469 (M .D. Fla. May 20, 2008); Sands Pointee aPartners, L .P. v. Pediatrix Med. Grou ,p Inc., 2002 WL 34343944 (S.D. Fla. May 3, 2002);Fabricant v. Sears Roebuck tt Co., 2002 W L 34477904 (S.D. Fla. Sept. 18, 2002).
30
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fbr, and the Settlement Class received a truly impressive nmount and quality of legal services. In
the private marketplace, counsel of exceptional skill commands a significant premium. So too
s'hould it here.
iii. The Claims Against M & I Bank Entailed Considerable Risk.
The risks facing the Plaintiffs in this case have been discussed above, in the M otion, and
elsewhere. See Scott Decl. ! 14.There were a myriad of ways in which Plaintiffs could have
lost this case - yet Class Counsel nzanaged to achieve a successful Settlement. A lazge amount
of the credit for this must be given to Clmss Counsel's strategic choices, effort and legal acumen.
.i'd at ! 15.
($A court's consideration of this factor recognizes that counsel should be rewarded for
taking on a case from which other law firms shrunk.Such aversion could be due to any number
()f things, including social opprobrium surrounding the parties, thorny factual circumstances, or
the possible financial outcome of' a case. A11 of this and more is enveloped by the term
dundesirable.''' In re Sunbeam, 176 F. Supp. 2d at 1336. ln addition, çlgtlhe point at which
plaintiffs settle with defendants . . . is simply not relevant to determining the risks incurred by
tzheir counsel in agreeing to represent them.''Skelton v. General Motor Corp., 860 F.2d 250, 258
(7th Cir. 1988), cer/. denied, 493 U.S. 8 10 (1989). Sdundesirability'' and relevant risks must be
evaluated from the standpoint of plaintiffs' counsel as of the time they commenced the suit, not
retroactively, with the beneft of hindsight. f in# Bros. Builders, Inc. v. American Radiator &
Standardsanitaly Corp., 540 F.2d 102, 1 12 (3d Cir. 1976); Walco, 975 F. Supp. at 1473.
The most undesirable aspect of this case was the long odds on success. Class Counsel
had to contend with the M & I Bank's Arbitration M otion and subsequent Appeal, federal
preemption defense as well as the language in M & l Bnnk's deposit Account agreement. See
Case 1:09-md-02036-JLK Document 3570 Entered on FLSD Docket 08/02/2013 Page 31 of 38
Scott Decl. ! 14; Fitzpatrick Decl. ! 1 1. The Court expresses no opinion on the merits of these
arplments by this or any other defendant. The critical point for present pumoses is that, heading
into this case, Class Counsel confronted these issues without any assurances as to how the Court
would rule. Class Cotmsel nonetheless accepted the case and the risks that accompanied it.
Given the positive societal benefits to be gained from attorneys' willingness to tmdertake this
kind of difficult and risky, yet important, work, such decisions must be properly incentivized.
The Court believes, and holds, that the proper incentive here is a thirty (30%) fee bmsed on the
$4,000,000 Settlement Fund.
iv. Class Counsel Assumed Substantial Risk to Pursue the Action
on a Pure Contingency Basis, and W ere Precluded From Other
Employment as a R esult.
Class Counsel prosecuted the Action entirely on a contingent fee basis. See Joint Decl. !
74. In tmdertaking to prosecute this complex action on that basis, Class Counsel assumed a
significant risk of nonpayment or tmderpayment. See Scott Decl. !! 18, 22.
Nllmerous cases recognize such a risk as an important factor in determining a fee award.
ttA contingency fee arrangement often justifies an increase in the award of attorney's fees.'' fn re
Sunbeam, 176 F. Supp. 2d at 1335 (quoting Behrens v. Wometco Enters., lnc. , 1 18 F.R.D. 534,
.548 (S.D. Fla. 1988), aftnd, 899 F.2d 21 (11th Cir. 1990:; see also In re Continental 111. Sec.
a(f//g., 962 F.2d 566 (7th Cir. 1992) (holding that when a common fund case has been prosecuted
on a contingent basis, plaintiffs' cotmsel must be compensated adequately for the risk of non-
payment); Ressler, 149 F.R.D. at 656; Walters v. Atlanta, 652 F. Supp. 755, 759 (N.D. Ga.
1985), modsed, 803 F.2d 1 135 (1. 1th Cir.); York v. Alabama State Bd. of Education, 631 F.
Supp. 78, 86 (M.D. Ala. 1986).
Public policy concerns - in particular, ensuring the continued availability of experienced
Case 1:09-md-02036-JLK Document 3570 Entered on FLSD Docket 08/02/2013 Page 32 of 38
and capable counsel to represent classes of injured plaintiffs holding small individual claims -
support the requested fee here. As this Court has observed:
Generally, the contingency retainment must be promoted to assurerepresentation when a person could not otherwise afford the
services of a lawyer'. . . . A contingency fee arrangement often
justifies an increase in the award of attorney's fees. This rule helpsassure that the contingency fee arrangement endures. If this
ç'bonus'' methodology did not exist, very few lawyers could takton the representation of a class client given the investment ofsubstantial time, efforq and money, especially in light of the risks
of recovering nothinp
Behrens, 1 18 F.R.D. at 548.
The risks taken by Class Counsel have already been discussed. lt is uncontroverted that
the attorney time spent on the Action was time that could not be spent on other matters.
Consequently, this factor supports the requested fee. See Joint Decl. ! 77.
Class Counsel Achieved an Excellent Result.
Given the signitkant litigation risks faced by the Settlement Class here, the Settlement
is excellent. See Scott Decl. ! 20. Rather than facing more yearsof costly and tmcertain
litigation, the majority of the Settlement Class will receive an immediate cash benetk. The
Settlement Fund will not be reduced by costs of Notice or settlement administration-related
expenses; such expenses have been and will continue to be borne separately by M & I Bank.
Moreover, payments to eligible Settlement Class M embers who do not opt-out of the
Settlement will be forthcoming automatically by check. Finally, it was due to Class Cotmsel's
efforts in negotiating the Settlement that M & I Bank agreed to make and/or maintain
significant practice changes. Class Counsel's efforts in pursuing and settling these consllmer
claims were, quite simply, outstanding. See Scott Decl. ! 25.
vi. The Requested Fee Comports with Fees Awarded in Similar
Cases.
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The fee sought here matches the fee typically awarded in similar cases. See Joint Decl.
! 78. Legions of decisions have folmd that a thirty percent (30%) fee is well within the range
of a custommy fee. See, e.g., kska:et'za, 176 F, Supp. 2d at 1333-34. Several recent decisions
within this Circuit have awarded attorneys' fees of (or in excess o9 thirty percent (30%4,
confirming the faimess and reasonableness of the thirty percent (30%) fee requested here.
Joint Decl. ! 78.
As another member of this Court observed; tsllqederal district courts across the country
have, in the class action settlement context, routinely awarded class counsel fees in excess of
lb hmark ' even in so-called tmega-fund' cases.''sthe 25 percent enc ,
Allapattah Senw, Inc. v.
Exxon Corp., 454 F. Supp. 2d 1 185, 1210 (S.D. Fla. 2006) (emphasis added) (awarding fees
equaling 31% percent of settlement fund; citing, inter alia, In re Relajkn Antitrust L itig., No.
01-12239-WGY (D. Mass. Apr. 9, 2004) (33% percent); In re Lease Oi1 Antitrust L itig., 1 86
F.R.D. 403 (S.D. Tex.1999) (35.1 percentl); see also Gaskill v.Gordon, 942 F. Supp. 382,
387-88 (N.D. 111. 1996), affvd, 160 F.3d 361 (7th Cir. 1998) (finding that 33 percent is the
norm, and awarding 38 percent of settlement fund); In re Combustion, Inc., 968 F. Supp. 1 1 16
('W.D. La. 1997) (36 percent); fn re Crlzy Eddie Sec. L itig., 824 F. Supp. 320, 326 (E.D.N.Y.
'
.l 993) (33.8 percent); ln re Ampicillin Antitrust L itig., 526 F. Supp. 494, 498 (D.D,C. 198 1) (45
percent); Beech Cinema, Inc. v. Twentieth-century Fox Film Corp., 480 F. Supp. 1 l 95, 1 199
5 l 1 Court Awarded Attorney Fees, ! 2.06(31, at 2-88 (Matthew Bender 2010) (notingSee a sothat, déwhen appropriate circumstances have been identified, a court may award a percentage
significantly higher'' than 25 percent); 4 Newberg on Class Actions, j 14:6, at 55l (4th ed.2002) CtEmpirical studies show that, regardless whether the percentage method or the lodestarmethod is used, fee awards in class actions average around one-third of the recovery.'').
Case 1:09-md-02036-JLK Document 3570 Entered on FLSD Docket 08/02/2013 Page 34 of 38
(S.D.N.Y. 1979), aftnd, 622 F.2d 1 106 (2nd Cir. 1980) (approximately 53 percent); Zinman v.
Avemco Corp., 1978 W L 5686 (E.D. Pa. Jan. 18, 1978) (Higginbothnm, J.) (50 percent).
Class Counsel's fee request falls within the range of the private marketplace, where
contingency fee arrangements often approach or equal 40 percent of any recovery. See
Continental, 962 F.2d at 572 (çç-f'he object in awarding a reasonable attorneys' fee . . . is to
simulate the market.''l; RJR Nabisco, Inc. Sec. L itig., Fed. Sec.L. Rep. (CCH) ! 94,268
(S.D.N.Y. 1992) (ltlWjhat should govem (feel awards is . . . what the market pays in similar
cases'). And, Stgiln tort suits, an attorney might receive one-third of whatever amotmt the
Plaintiff recovers. In those cases. therefore, the fee is directly proportional to the recovery.''
Blum v. Stenson, 465 U.S. 886, 904 (1984) tBremzan, J., concuning); see also Kirchoff v.
Flynn, 786 F.2d 320, 323, 325 n.5 ('7th Cir. 1986) (noting ($40 percent is the customary fee in
tort litigation''); ln re Public Service Co. ofNew Mexico, 1992 WL 278452, at *7 (S.D. Cal.
July 28, 1992) (ç1lf this were a non-representative litigation, the customary fee arrangement
would be contingent, on a percentage basis, and in the range of 30% to 40% of the recovery.').
The record here leaves no doubt that Class Counsel's fee request is appropriate and
comports with attorneys' fees awarded in similar cases. Professor Fitzpatrick distilled several
rnajor empirical studies of attorneys' fees, including his own, awarded in connection with class
action settlements. See Fitzpatrick Decl. !! 2, 3, 4, 24. He found that the empirical data from
other Eleventh Circuit fee awards is ttin line with the award requested here.'' Id. at !
24. fçM oreover, even when compared to fee awards outside the Eleventh Circuit, the fee
r'equested in this case is within the range of other awards.'' Id.
Class Cotmsel's fee request also falls within the range of awards in numerous recent
cases in this Circuit and District. See, e.g., Waters, 190 F.3d 1291 (11th Cir. 1999) (affirming
Case 1:09-md-02036-JLK Document 3570 Entered on FLSD Docket 08/02/2013 Page 35 of 38
fbe award of 33% percent on settlement of $40 million even though most of the fund ultimately
reverted to the defendant); In re Managed Care Litig. v. Aetna, MDL No. 1334, 2003 WL
22850070 (S.D. Fla. Oct. 24, 2003) (35.5 percent on settlement of $100 million); Gutter v. E.L
Dupont De Nemours <t7 Co., 95-2 152-C1V-Gold (S.D. Fla. May 30, 2003) (33% percent of
$77.5 million settlement); In re Terazosin Hydrochloride Antitrust L itig., 99-1317-MDL-Seitz
(S.D. Fla. Apr. 19, 2005) (33% percent on settlement of over $30 million); Sands Point
Partners, LP v. Pediatrix Med Group, lnc., 2002 U.S. Dist. LEXIS 2572 1 (S.D. Fla. 2002) (30
percent of $ 12 million settlement); In re CHS Elecs., Inc. Sec. L itig., 99-8 186-C1V-Gold (S.D.
F'la. 2002) (30 percent on settlement of over $1 1 million); Ehrenreich v. Sensormatic Elecs.
Ct)r#., 95-6637-ClV-Z1och (S.D. Fla. 1998) (30 percent on settlement of over $44 million);
Tapken v. Brown, 90-0691-CIV-Marcus (S.D. Fla. 1995) (33 percent of $10 million
6settlement).
vii. The Remaining Camden I Factors Also Favor Approving Class
Counsel's Fee Request.
The Court finds that the remaining Camden I factors further support Class Counsel's fee
request, and so holds. See Joint Decl. ! 79. The burdens of this litigation and the relatively
small size of most of the firms representing Plaintiff lend support to the fee awarded. This fee is
6 S lso In re Friedman 's, Inc. &c. f itig., No. 1:03-cv-3475-W SD 2009 W L 1456698 (N.D.ee J ,
Ga, May 22, 2009) (30 percent); Francisco v. Numismatic Guar. Corp. ofAm., No. 06-61677-Clv-Martinez, 2008 W L 649124 (S.D. Fla. 2008) (30 percent); Pinto v. Princess Cruise L ines,1/#., 513 F. Supp. 2d 1334 (S.D. Fla. 2007) (30 percent); In re Bellsouth Corp. Sec. L itig.,Civil Action No. 1:02-cv-2142-W SD (N.D. Ga. Apr. 9, 2007) (30 percent); In re Cryol#, Inc.Sdc. f itig., Civil Action No. 1:02-cv-1868-BBM (N.D. Ga. Nov. 9, 2005) (30 percent); In reJlr//? Recovery Group 1nt 'l, lnc. Sec. L itig., Civil Action No. 1 ;00-cv-1416-CC (N.D. Ga. May26, 2005) (33% percent plus interest and expenses); In re Clarus Corp. Sec. L itig., Civil ActionNo. 1:00-CV-2841-CAP (N.D. Ga. Jan. 6, 2005) (33% percent); In re Pediatric Servs. ofAm.,Inc. Sec. L itig., Civil Action No. 1:99-CV-0670-RI,V (N.D. Ga. Mar. 15, 2002) (33% percent);Ressler v. Jacobson, 149 F.R.D. 651. (M.D. Fla. 1992) (30 percent).
36
Case 1:09-md-02036-JLK Document 3570 Entered on FLSD Docket 08/02/2013 Page 36 of 38
firmly rooted in ttthe economics involved in prosecuting a class action.'' ln re Sunbeam, 176 F.
Supp. 2d at 1333. The Court is convinced by its many years of presiding over significant cases
like this one that proper incentives must be maintained to instlre that attorneys of this caliber are
available to take on cases of significant public importance like this one. As Professor Fitzpatrick
correctly observed, these are not mere fçbenchmark'' lawyers.'' See Fitzpatrick Decl. ! 26. The
fàctual record in this case, and the Court's own observations, all of which are incorporated
herein, compel the result required by' this Order.
6. Class Counsel's Application
Expenses ls A pproved.
for Reimbursement of Litigation Costs and
Finally, the Court finds that Class Cotmsel's request for reimbursement of $67,362.50
representing certain out-of-pocket costs and expenses that Class Counsel incurred during the
prosecution and settlement of this Action against M & 1 Bnnk is reasonable and justified. These
costs and expenses consist of: (1) $64,075.00 in fees and expenses for experts; and (2) $3,287.50
in mediator's fees and expenses. See Joint Decl. ! 80. The Court hereby approves Class
Counsel's request for reimbursement of these costs and expenses. See M ills v. Electric Auto-L ite
Cö., 396 U.S. 375, 391-92 (1970). These costs and expenses, advanced by Class Counsel for the
benefit of the Settlement Class, were necessarily incurred in furtherance of the litigation of the
Action and the Settlement. See Joint Decl. ! 80.
expenses in the amount of $67,362.50 shall be made from the Settlement Fund following
Accordingly, reimbursement of costs and
disbursement of attomeys' fees.
CONCLUSION
For the foregoing reasons, 'the Court: (1) grants Final Approval to the Settlement; (2)
appoints Plaintiffs Jeffrey M . Eno and Suzanne M . Cox as class representatives for this
Settlement, consisting of the Agreement and the Amendment; (3) appoints as Class Cotmsel and
Case 1:09-md-02036-JLK Document 3570 Entered on FLSD Docket 08/02/2013 Page 37 of 38
Settlement Class Counsel the 1aw 5rms and attorneys listed in paragraphs 14 and 43 of the
Agreement, respectively; (4) ovenules the objection filed by the Settlement Class Member (DE #
3360); (5) awards Service Awards t() each of the nnmed Plaintiffs in the amount of $2,500 each;
(6) awards Class Counsel attomeys' fees in the nmotmt of $1,200,000, equal to thirty percent
(.30%) of the $4,000,000 Settlement Fund, plusreimbursement of costs in the amount of
$67,362.50; (7) directs Class Counsel, Plaintiffs, and M & I Bank to implement and consllmmate
the Settlement pursuant to its terms and conditions; (8) retains continuing jurisdiction over
P'laintiffs, the Settlement Class, and M & I Bnnk to implement, administer, consummate and
enforce the Settlement and this Final Approval Order; and (9) will separately enter Final
Judgment dismissing the Action with prejudice.
DONE and ORDERED in Chambers at the JamesLa- ence King Federal Justice
Building and United States Courthouse in M iami, Florida, this 2nd day of August, 2013
t
JAM ES LAW RENCE KIN '
NITED STATES DISTRICT GEOUTHERN DISTRICT OF FL DA
cc: A11 Counsel of Record
38
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