This case was filed on behalf of a class of New Yorkers against debt collector United Collection Bureau (UCB) for violations of the Fair Debt Collection Practices Act. That Act entitles successful plaintiffs to actual damages or statutory damages of up to $1000, but for a class action, the Act caps the total damages at 1% of the company’s net worth. In that case, the parties calculated the damages cap as $39,819.
After some discovery, the parties proposed a settlement of a nationwide class of more than 500,000 individuals, under which no money would be paid to the class members. Under the settlement, UCB would pay $39,819 to a non-profit consumer advocacy organization, $2,500 to the named plaintiff, and attorney fees to class counsel. The postcard notices sent to class members did not explain that the settlement gave away class members’ rights to statutory damages of up to $1000 or the amount of attorneys’ fees.
Together with Cary Flitter of Flitter Lorenz, PC, in New Jersey, Public Citizen filed an objection to the class action settlement on behalf of class member Bradley Good. The objection asserted (among other things) that the proposed settlement was not fair, reasonable, or adequate because it would provide no money to class members and a more narrowly-defined class would have enabled class members to receive compensation. The objection also argued that the settlement notice was defective because it failed to inform class members what they were giving up and failed to inform them about the amount of attorney fees.
In a January 6, 2016 decision, based on our client’s objections, the court rejected the proposed settlement.