Weiner v. Ocwen Financial Corporation

• Court: District Court, E.D. California
• Decided: March 25, 2024
• Docket: 2:14-cv-02597
• Status: Unknown

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 DAVID WEINER, individually, and on No. 2:14-cv-02597-DJC-DB behalf of other members of the public 12 similarly situated, 13 Plaintiff, ORDER GRANTING MOTION FOR 14 PRELIMINARY APPROVAL OF CLASS v. SETTLEMENT AND DIRECTION OF 15 NOTICE UNDER FED. R. CIV. P. 23(E) OCWEN FINANCIAL CORPORATION, 16 a Florida corporation and OCWEN 17 LOAN SERVICING, LLC, a Delaware limited liability company, 18 Defendants. 19 20 21 Plaintiff David Weiner, on behalf of himself and a national and California class of 22 borrowers who had their home mortgage loans serviced by Defendants Ocwen 23 Financial Corporation and Ocwen Loan Servicing, LLC (“Ocwen”), moves for 24 preliminary approval of the Settlement and approval of the proposed plan to notify 25 the classes of national and California borrowers. Ocwen does not oppose the Motion 26 or the Settlement Agreement, which is the byproduct of a second round of mediation 27 between the parties. For the reasons set forth below, the Court grants Plaintiff’s 28 1 Motion for Preliminary Approval of Class Settlement and Direction of Notice Under 2 Federal Rule of Civil Procedure 23(e) (ECF No. 244). 3 BACKGROUND 4 I. Factual Background 5 The Court takes the following facts from Plaintiff’s unopposed Motion. (See 6 Mot. Prelim. Approval Class Settlement and Direction of Not. Under Fed. R. Civ. P. 7 23(e) (ECF No. 244) (“Motion” or “Mot.”).) Plaintiff’s suit generally revolves around 8 allegations that Ocwen misled borrowers into believing that certain fees they paid 9 were for “reimbursing Ocwen for the amounts it paid to vendors for property valuation 10 products known as Broker Price Opinions (‘BPOs’) and Hybrid Valuations (‘Hybrids’)” 11 but “included a hidden vendor ‘reconciliation’ service, which Plaintiff alleges was 12 neither disclosed nor a necessary or appropriate component of the BPOs and Hybrid 13 Valuations.” (Mot. at 1.) Plaintiff alleged that the fees charged to – and in many cases 14 paid by – borrowers for the property valuations were neither a fair market price, nor 15 consistent with industry standards. (See id. at 3.) Plaintiff also alleged that Ocwen 16 rebranded its in-house loan servicer, Ocwen Solutions, into a “supposed third-party 17 loan servicer named Altisource,” through which Ocwen “concealed from borrowers 18 that their property valuation charges were secretly bundled with additional fees for 19 unnecessary and undisclosed ‘reconciliations’ of their property valuation.” (Id.) 20 Plaintiff alleged that these fees “were neither authorized by the Uniform Deed of Trust, 21 nor offered by any other vendor, and only served to line the pockets of Ocwen’s 22 executives, who also owned shares in Altisource.” (Id.) As a result, borrowers were 23 charged tens of millions of dollars for hidden junk fees. (Id. at 1.) 24 II. Procedural Background 25 Plaintiff filed the Complaint on November 5, 2014. (See Compl. (ECF No. 1).) 26 Plaintiff brought seven claims for violations of: (1) California’s Unfair Competition Law, 27 California Business and Professions Code section 17200, et seq.; (2) the federal 28 Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. Sections 1962(c) and 1 (d) (“RICO”); (3) the Rosenthal Fair Debt Collection Practices Act, California Civil Code 2 section 1788, et seq.; (4) unjust enrichment under California law; (5) fraud; and 3 (6) breach of contract. Plaintiff prevailed over an early Motion to Dismiss from Ocwen. 4 (See ECF Nos. 6, 9, 10–16.) Plaintiff then overcame an attempt to stay litigation in this 5 case pending the outcome of another case. (See ECF Nos. 20, 24–25, 39–30, 31, 33.) 6 Discovery ensured, during which time, Plaintiff on several occasions moved to compel 7 production or testimony. (See ECF Nos. 40, 43, 61, 65, 73, 106, 130, 146, 207.) 8 Plaintiff was also able to defeat a motion for interlocutory review of the Court’s prior 9 Order denying Ocwen’s Motion to Dismiss. (See ECF Nos. 48, 52, 54, 100.) 10 Plaintiff initially moved to certify the proposed litigation classes on January 30, 11 2017, which the Court granted on September 29, 2017. (See ECF No. 93, 102.) 12 Ocwen then petitioned for permission to appeal the Court’s Class Certification Order 13 on October 13, 2017. (See ECF No. 104.) Ocwen’s petition was summarily denied. 14 (See Mot. at 5.) On June 28, 2019, Ocwen moved for partial summary judgment, 15 seeking to dismiss Plaintiff’s RICO claims, his claim for violations of California’s Unfair 16 Competition Law, and his claim for unjust enrichment, and to limit Plaintiff’s damages 17 to any out-of-pocket losses a class member suffered, that is, what a member actually 18 paid as a result of the deceptive charges. (See ECF No. 164.) The Court denied 19 Ocwen’s requests to dismiss certain claims but granted Ocwen’s request to limit the 20 measure of damages. (See ECF No. 181.) 21 Following the summary judgment motion, the parties began preparing for trial, 22 which was set to begin on March 7, 2022. (See ECF Nos. 183–85, 187, 192.) On 23 September 20, 2021, however, Ocwen moved to decertify the class in light of the 24 Supreme Court’s decision in TransUnion LLC v. Ramirez, 594 U.S. 413 (2021), which 25 the Court initially granted. (See ECF Nos. 194, 219; Mot. at 5.) Plaintiff immediately 26 sought reconsideration of the Court’s Class Decertification Order, which the Court 27 eventually granted. (See ECF Nos. 220, 227.) Afterward, the Court rescheduled the 28 jury trial to begin on November 27, 2023. (See ECF No. 232.) 1 Plaintiff filed a notice of settlement on October 11, 2023 (see ECF No. 238), and 2 filed the instant Motion on December 18, 2023. (See ECF No. 244.) Rather than hear 3 oral arguments on the Motion, the Court asked for supplemental briefing, which the 4 parties filed on March 8, 2024. (See Defs.’ Br. re Class Settlement (ECF No. 247) 5 (“Ocwen’s Supplemental Briefing” or “Ocwen’s Suppl. Br.”); Pl.’s Suppl. Br. in Supp. of 6 Mot. for Preliminary Approval of Class Settlement and Direction of Notice under Fed. 7 R. Civ. P. 23(e) (ECF No. 248) (“Plaintiff’s Supplemental Briefing” or “Pl.’s Suppl. Br.”).) 8 The matter is now fully briefed. 9 III. The Proposed Settlement 10 The general terms of the Settlement Agreement are clear, as is the parties’ 11 intent to settle this matter. For instance, it appears Settlement Counsel will seek fees 12 of $8 million plus costs estimated to be about $950,000. (See Settlement Agreement 13 Ex. B (ECF No. 244-1 at 48–61), at 2 (“Class Notice”); Pl.’s Suppl. Br. at 3–4.) The 14 Settlement Cass includes a National Settlement Class and a California Settlement Sub- 15 Class. (See Mot. at 7.) 16 The National Settlement Class includes: 17 All residents of the United States of America who have or had a loan serviced by Ocwen Financial Corporation or 18 Ocwen Loan Servicing LLC (together, “Ocwen”) and who paid for one or more Broker Price Opinions (“BPOs”) or 19 Hybrid Valuations (“Hybrids”) charged by Ocwen through Altisource, from November 5, 2010 through September 29, 20 2017, the date of the class certification order in this action[.] 21 (Id.) The National Settlement Class will receive either $60 or $70 in reimbursement for 22 a BPO fee or Hybrid Valuation fee paid. (See id.) 23 The California Settlement Sub-Class includes: 24 All residents of the State of California who have a loan serviced by Ocwen and to whom charges for one or more 25 BPOs or Hybrids were assessed to their mortgage account by Ocwen through Altisource, from November 5, 2010 26 through September 29, 2017. 27 (Id.) California Settlement Sub-Class members will have a credit applied or the charge 28 reversed, which is worth $60 for a BPO and $70 for a Hybrid Valuation. (See id.) 1 The parties will appoint JND Legal Administration as the Settlement 2 Administrator, and Ocwen will pay for the Settlement Administrator to implement the 3 notice program and administrate the claims process up to $600,000. (See Mot. at 8.) 4 The Settlement Administrator estimates that the costs will be $586,000 based on the 5 final tally of the claims administrated. (See id.) The Settlement Administrator will 6 identify and locate Settlement Class Members to mail them notices as soon as 7 practicable once the parties provide the Settlement Administrator all available 8 records, data and information necessary to identify and locate Settlement Class 9 Members. (See Decl. of Roland Tellis in Supp. of Pl.’s Mot. Ex. 1 (ECF No. 244-1 at 7– 10 34), at 7 (“Settlement Agreement”).) To obtain relief, a Settlement Class Member must 11 submit a claim, which only requires the Class Member to claim that they are a member 12 of the Sub-Class, which the Settlement Administrator will confirm. (See id. at 8.) 13 As for the Gross Settlement Amount the parties have informed the Court that 14 “the maximum potential gross settlement award obtainable by Class Members is 15 $53,826,220.” (Ocwen’s Suppl. Br. at 1; see Pl.’s Suppl. Br. at 1.) Ocwen, however, 16 informed the Court that Ocwen has not agreed to a total settlement amount, but, 17 instead, has agreed to an “uncapped claims-made settlement, wherein Ocwen will pay 18 for the total amount of submitted and verified claims.” (Ocwen’s Suppl. Br. at 2.) The 19 Court also understands that there are 322,958 class members in the National 20 Settlement Class and 7,419 class members in the California Settlement Sub-Class, for 21 a total of 330,377 borrowers. (See Ocwen’s Suppl. Br. at 1; Pl.’s Suppl. Br. at 2.) 22 Finally, Settlement Counsel has clarified with the Court that “Plaintiff’s counsel will file 23 their motions for attorneys’ fees, expenses, and service awards at least 30 days before 24 the proposed objection/opt-out deadline.” (Pl.’s Suppl. Br. at 3.) 25 DISCUSSION 26 IV. The Proposed Settlement 27 Plaintiff seeks to certify the Settlement Class pending final approval. (See Mot. 28 at 17.) Under Federal Rule of Civil Procedure 23, in order to approve a preliminary 1 settlement agreement, a court must determine if it “will likely be able to” both 2 (1) “certify the class for purposes of the judgment on proposal” under Rule 23(a) and 3 23(b), and (2) “approve the proposal under Rule 23(e)(2).” Fed. R. Civ. P. 23(e)(1)(B). 4 See Staton v. Boeing Co., 327 F.3d 938, 952 (9th Cir. 2003). For classes likely to be 5 certified under Rule 23(b)(3), "the court must direct to class members the best notice 6 that is practicable under the circumstances, including individual notice to all members 7 who can be identified through reasonable effort," imposing specific requirements on 8 the contents of the notice. Fed. R. Civ. P. 23(c)(2)(B). After determining certification is 9 appropriate, the Court must then decide whether the proposed settlement is 10 “fundamentally fair, adequate, and reasonable.” Staton, 327 F.3d at 952. At the 11 preliminary approval stage, the court considers the likelihood that it will ultimately 12 approve the proposed settlement. Fed. R. Civ. P. 23(e)(1)(B). The determination as to 13 whether to grant final approval is given after class members have been notified and 14 given the opportunity to provide feedback. Fed. R. Civ. P. 23(e)(2). 15 A. Plaintiff Has Twice Demonstrated That Rule 23(b)(3) Classes Exist 16 1. Legal Standard 17 Whether a class exists depends on whether the class can be certified, which is a 18 two-step process. See In re: Volkswagen “Clean Diesel” Mktg., Sales Pracs., and Prod. 19 Liab. Litig., No. 2672-CRB-JSC, 2016 WL 4010049, at *10 (N.D. Cal. July 26, 2016) (“In 20 re Volkswagen”) (citing Amchem Prod., Inc. v. Windsor, 521 U.S. 591, 613 (1997)); In re 21 Hyundai and Kia Fuel Econ. Litig., 926 F.3d 539, 556 (9th Cir. 2019) (en banc) (“In re 22 Hyundai”) (citing Fed. R. Civ. P. 23(a)–(b)). First, representative plaintiffs must establish 23 the four requirements of numerosity, commonality, typicality, and adequacy under 24 Federal Rule of Civil Procedure 23(a). See In re Volkswagen, 2016 WL 4010049, at *10 25 (citing Fed. R. Civ. P. 23(a)); In re Hyundai, 926 F.3d at 556 (same). In addition to 26 meeting the numerosity, commonality, typicality, and adequacy prerequisites, the 27 class action must fall within one of the three types specified in Rule 23(b). In re 28 Hyundai, 926 F.3d at 556. A class cannot be certified until the district court is 1 “satisfied, after a rigorous analysis, that the prerequisites” of both Rule 23(a) and 23(b) 2 have been satisfied. See Olean Wholesale Grocery Coop., Inc. v. Bumble Bee Foods 3 LLC, 31 F.4th 651, 664 (9th Cir. 2022) (en banc) (fist quoting Gen. Tel. Co. of Sw. v. 4 Falcon, 457 U.S. 147, 161 (1982); and then citing Comcast Corp. v. Behrend, 569 U.S. 5 27, 35 (2013)), cert. denied sub nom. StarKist Co. v. Olean Wholesale Grocery Coop., 6 Inc., On Behalf of Itself & All Others Similarly Situated, 143 S. Ct. 424 (2022) (mem.). 7 The criteria for class certification are applied differently in litigation classes and 8 settlement classes. In re Hyundai, 926 F.3d at 556. District courts should not consider 9 whether the action would be manageable at trial under Rule 23(b)(3)(D) because the 10 point of the proposed settlement is to avoid trial and such difficulties. See id. at 557 11 (quoting Amchem Prod., Inc., 521 U.S. at 620). But other specifications of the Rule — 12 those designed to protect absentees by blocking unwarranted or overbroad class 13 definitions — demand undiluted, even heightened, attention in the settlement context. 14 Amchem Prod., Inc., 521 U.S. at 620. Such attention is of vital importance, for a court 15 asked to certify a settlement class will lack the opportunity, present when a case is 16 litigated, to adjust the class, informed by the proceedings as they unfold. Id. (citing 17 Fed. R. Civ. P. 23(c)–(d)). 18 2. Analysis 19 Plaintiff has twice litigated the issue of class certification and ultimately 20 prevailed. (See Mot. at 17–21 (quoting ECF No. 102 (providing the Court’s Order 21 granting class certification)); also ECF Nos. 194 (providing Ocwen’s motion for 22 decertification in light of TransUnion, arguing that Plaintiff could not satisfy the 23 predominance requirements of Rule 23(b)(3)); 227 (providing the Court’s Order 24 granting Plaintiff’s Motion for Reconsideration of ECF No. 219, which granted Ocwen’s 25 decertification motion, holding that the Ninth Circuit’s decision in Olean, 31 F.4th at 26 682, foreclosed Ocwen’s argument).) Ocwen provides no further opposition. The 27 Court’s prior rulings are sufficient for approval should no objections be raised. See 28 Carlin v. DairyAm., Inc., 380 F. Supp. 3d 998, 1008 (E.D. Cal. 2019) (collecting cases). 1 Previously, the Court certified three total sub-classes: (1) a national class of 2 borrowers who paid for one or more BPOs or Hybrid Valuations and who could obtain 3 relief under RICO; (2) a California sub-class of borrowers who paid for one or more 4 BPOs or Hybrid Valuations and could obtain relief under California’s Unfair 5 Competition Law and for unjust enrichment; and (3) a California sub-class of 6 borrowers who were charged for one or more BPOs or Hybrid Valuations and could 7 obtain relief under California’s Unfair Competition Law. (See Mot. at 4–5 (quoting ECF 8 No. 102 at 12); ECF No. 93 at 10 and n.9.) Now, Plaintiff seeks to consolidate the 9 national and California sub-classes who paid for one or more BPOs or Hybrid 10 Valuations into one national sub-class. (See Mot. at 7 and n.2.) Given the similarities 11 between the three sub-classes the Court previously approved and the two sub-classes 12 Plaintiff proposes now, the Court concludes that Plaintiff has shown that the Court will 13 likely be able to certify the class for purposes of judgment. Fed. R. Civ. P. 14 23(e)(1)(B)(ii). 15 a. The Proposed Classes Satisfy Rule 23(a) 16 To take advantage of Rule 23’s procedure for aggregating claims, plaintiffs 17 must make two showings. Olean, 31 F.4th at 663. First, the plaintiff must satisfy the 18 four requirements of Rule 23(a): (1) numerosity, that is, “that joinder of all members is 19 impracticable;” (2) commonality, that is, that “there are questions of law or fact 20 common to the class;” (3) typicality, that is, that “the claims or defenses of the 21 representative parties are typical of the claims or defenses of the class; and” 22 (4) adequacy, that is, that “the representative parties will fairly and adequately protect 23 the interests of the class.” Fed. R. Civ. P. 23(a). As explained below, Plaintiff satisfies 24 all four requirements under Rule 23(a) with respect to the Settlement Class. 25 i. The Proposed Classes Are Numerous 26 In general, for numerosity, classes smaller than fifteen are not permissible. See 27 Gen. Tel. Co. of the Nw., Inc. v. Equal Emp. Opportunity Comm’n, 446 U.S. 318, 330 28 (1980). Classes exceeding 40 parties are normally needed, as that is when joinder 1 becomes impracticable, but classes between 20 to 40 members may suffice, 2 depending on the circumstances of the case, see, e.g., Dilts v. Penske Logistics, LLC, 3 267 F.R.D. 625, 632 (S.D. Cal. 2010) (first citing Consol. Rail Corp. v. Town of Hyde 4 Park, 47 F.3d 473, 482 (2d Cir. 1995); and then citing Ikonen v. Hartz Mountain Corp., 5 122 F.R.D. 258, 262 (S.D. Cal. 1998)). 6 Here, the California Settlement Sub-Class contains over 7,000 potential 7 members, and the National Settlement Class contains over 300,000 members. (See 8 Ocwen’s Suppl. Br. at 1; Pl.’s Suppl. Br. at 1.) The two classes exceed 40 individuals 9 and are therefore sufficiently numerous. See Dilts, 267 F.R.D. at 632. 10 ii. The Settlement Class Has Common Questions 11 To establish commonality, the plaintiff need only establish a single significant 12 question of law or fact. See Mazza v. Am. Honda Motor Co., Inc., 666 F.3d 581, 589 13 (9th Cir. 2012) (citing Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 359 (2011) 14 (“Dukes”)), overruled on other grounds by Olean, 31 F.4th at 682 n.32 (overruling 15 Mazza to the extent it held that “no class may be certified that contains members 16 lacking Article III standing, which does not apply when a court is certifying a class 17 seeking injunctive or other equitable relief.”). A common question “must be of such a 18 nature that it is capable of classwide resolution—which means that determination of its 19 truth or falsity will resolve an issue that is central to the validity of each one of the 20 claims in one stroke.” Olean, 31 F.4th at 663 (quoting Dukes, 564 U.S. at 350). By 21 contrast, an individual question is one where members of a proposed class will need 22 to present evidence that varies from member to member. Id. (citing Tyson Foods, Inc. 23 v. Bouaphakeo, 577 U.S. 442, 453 (2016)). 24 Here, there are several common questions that exist among the National 25 Settlement Class and the California Settlement Sub-Class, all of which ultimately 26 derive from the Uniform Deed of Trust. (See Compl. ¶¶ 54–58, 72–84, 121.) For 27 instance, the Court previously found that the “classwide claims alleged here depend 28 on whether or not the BPOs and Hybrid Valuations charged to Plaintiff and members 1 of the purported class were unlawful.” (ECF No. 102 at 8.) This required looking to 2 the language of the Uniform Deed of Trust, and resolution of this issue would 3 establish liability. Thus, there were common questions on the merits. The same still 4 holds true for the Settlement Class. Therefore, Plaintiff has established that there exist 5 common questions among the Settlement Class. See Mazza, 666 F.3d at 589. 6 iii. Plaintiff Is Typical Under Rule 23(a) 7 As both the Supreme Court and Ninth Circuit have recognized: 8 Rule 23(a)’s commonality and typicality requirements occasionally merge: “Both serve as guideposts for 9 determining whether under the particular circumstances maintenance of a class action is economical and whether 10 the named plaintiff’s claim and the class claims are so interrelated that the interests of the class members will be 11 fairly and adequately protected in their absence.” 12 Parsons v. Ryan, 754 F.3d 657, 685 (9th Cir. 2014) (quoting Dukes, 564 U.S. at 349 13 n.5). 14 “Under the rule’s permissive standards, representative claims are ‘typical’ if they 15 are reasonably coextensive with those of absent class members; they need not be 16 substantially identical.” Id. (quoting Hanlon v. Chrysler Corp., 150 F.3d 1011, 1020 17 (9th Cir. 1998)). “The test of typicality ‘is whether other members have the same or 18 similar injury, whether the action is based on conduct which is not unique to the 19 named plaintiffs, and whether other class members have been injured by the same 20 course of conduct.’” Ellis v. Costco Wholesale Corp., 657 F.3d 970, 984 (9th Cir. 2011) 21 (quoting Hanon v. Dataproducts Corp., 976 F.2d 497, 508 (9th Cir. 1992)). “Typicality 22 refers to the nature of the claim or defense of the class representative, and not to the 23 specific facts from which it arose or the relief sought.” Ellis, 657 F.3d at 984 (quoting 24 Hanon, 976 F.2d at 508). Typicality under “Rule 23(a)(3) requires only that [the 25 representative’s] claims be ‘typical’ of the class, not that they be identically positioned 26 to each [ ]other or to every class member[,]” Parsons, 754 F.3d at 686, as “[d]iffering 27 factual scenarios resulting in a claim of the same nature as other class members does 28 not defeat typicality.” Ellis, 657 F.3d at 985 n.9. 1 Here, the Court concludes that Plaintiff is typical of the Settlement Class. 2 Ocwen previously argued that Plaintiff was an atypical member because Plaintiff had 3 some unique defenses that applied to him. (See ECF No. 85 at 5–7, 23–24) (providing 4 Ocwen’s Class Certification Opposition where Ocwen summarized Plaintiff’s “unique 5 loan history” and argued that it precluded a finding of typicality); ECF No. 197-1 at 6– 6 7, 18–20 (providing Ocwen’s Class Decertification Motion where Ocwen noted that 7 Plaintiff’s own class-wide evidence for showing damages and injury-in-fact did not 8 establish by Plaintiff’s methodology that Plaintiff himself paid any charges or suffered 9 any damages).). However, Ocwen’s argument regarding Plaintiff’s alleged unclean 10 hands (see ECF No. 97 at 2 (providing Plaintiff’s Class Certification Reply)), and 11 convoluted theory of standing distinct from the class-wide evidence (see ECF No. 197- 12 1 at 19–20 (providing Ocwen’s Class Decertification Motion)), do not detract from the 13 fact that Plaintiff was harmed as a result of Ocwen’s allegedly unlawful conduct that 14 stems from the Uniform Deed of Trust. Thus, Plaintiff has suffered the same or similar 15 injury as the rest of the Settlement Class. See Ellis, 657 F.3d at 984. 16 Moreover, Ocwen’s arguments always went more towards damages 17 calculations issues, which do not prevent granting preliminary approval. “[A] district 18 court is not precluded from certifying a class even if plaintiffs may have to prove 19 individualized damages at trial, a conclusion implicitly based on the determination 20 that such individualized issues do not predominate over common ones.” Olean, 31 21 F.4th at 669 (citing Vaquero v. Ashley Furniture Indus., Inc., 824 F.3d 1150, 1155 (9th 22 Cir. 2016)). Thus, Plaintiff’s claim is typical of the Settlement Class, even though his 23 damages calculations may have differed from some portions of the class at trial, which 24 in any event is not relevant for purposes of approving a settlement class. See In re 25 Hyundai, 926 F.3d at 557. 26 27 28 1 iv. Plaintiff and Settlement Counsel Are Adequate Representatives 2 3 Federal Rule of Civil Procedure 23(a)(4) requires the representatives show that 4 they will “fairly and adequately protect the interests of the class.” Fed. R. Civ. P. 5 23(a)(4). For adequacy of representation, “courts must resolve two questions: ‘(1) do 6 the named plaintiffs and their counsel have any conflicts of interest with other class 7 members and (2) will the named plaintiffs and their counsel prosecute the action 8 vigorously on behalf of the class?’” Ellis, 657 F.3d at 985 (quoting Hanlon, 150 F.3d at 9 1020). Adequate representation depends on, among other factors, an absence of 10 antagonism between representatives and absentees, and a sharing of interests 11 between representatives and absentees. Id. (citing Molski v. Gliech, 318 F.3d 937, 955 12 (9th Cir. 2003), overruled on other grounds by Dukes v. Wal-Mart Stores, Inc., 603 F.3d 13 571, 620–23 (9th Cir. 2010)). 14 Here, Plaintiff and Settlement Counsel declare that they will both continue 15 vigorously litigating this case. (See Mot. at 19–20; Decl. of Roland Tellis in Supp. of 16 Pl.’s Mot. (ECF No. 244-1) ¶¶ 11, 15 (“Tellis Decl.”).) Their assertion is supported by 17 the lengthy docket in this case, which has been the subject of a significant amount of 18 motion practice. Therefore, for purposes of preliminary approval, the Court 19 concludes that Plaintiff and Settlement Class are adequate representatives based on 20 their prior work and declared intent to continue vigorously litigating this case. See 21 Fed. R. Civ. P. 23(a)(iv). 22 b. The Proposed Classes Satisfy Rule 23(b)(3) 23 After establishing the four requirements of Rule 23(a), the plaintiff must show 24 that the proposed class falls within the scope of one of Rule 23(b)’s three categories. 25 See Olean, 31 F.4th at 663. The plaintiff has the burden of proving facts necessary for 26 certifying a class under Rule 23 by a preponderance of the evidence, and the plaintiff 27 may use any admissible evidence. See Olean, 31 F.4th at 665 (citing Tyson Foods, 28 Inc., 577 U.S. at 454–55). 1 Rule 23(b) permits certification of three types of classes: (1) where case-by-case 2 adjudication would lead to inconsistent results or judgments, see Fed. R. Civ. P. 3 23(b)(1); (2) where the class seeks injunctive or declaratory relief, see Fed. R. Civ. P. 4 23(b)(2); or (3) where (a) common questions predominate over individual questions 5 and (b) aggregating the claims in a class action is superior to other available methods 6 for fairly and efficiently adjudicating the controversy, see Fed. R. Civ. P. 23(b)(3). 7 Where, as here, the plaintiff seeks monetary damages, the plaintiff must satisfy the 8 requirements of Rule 23(b)(3). 9 i. Common Questions Predominate 10 The predominance requirement under Rule 23(b)(3) is a more demanding test 11 than what is required under Rule 23(a). See Amchem Products, Inc., 521 U.S. at 623– 12 24. In considering whether the questions of fact and law predominate, the Court must 13 determine “whether proposed classes are sufficiently cohesive to warrant adjudication 14 by representation.” Id. at 623. Though it is the plaintiff’s burden to prove that class 15 issues predominate, “a plaintiff need not rebut every individualized issue that possibly 16 could be raised[ ]” because that “would be akin to demanding proof ‘that plaintiffs 17 would win at trial.’” Van v. LLR, Inc., 61 F.4th 1053, 1066–67 (9th Cir. 2023) (first citing 18 Olean, 31 F.4th at 664–65; and then quoting Olean, 31 F.4th at 667). 19 Previously Ocwen argued that Plaintiff was atypical because he lacked standing. 20 However, Plaintiff has established his standing, as has the rest of the Settlement Class, 21 because of the temporary loss of use of money from allegedly unlawful charges 22 decreasing the equity available in the home. See Maya v. Centex Corp., 658 F.3d 23 1060, 1071 (9th Cir. 2011) (citing Gladstone Realtors v. Vill. of Bellwood, 441 U.S. 91, 24 101–11 (1979)); Van, 61 F.4th at 1064. 25 Ocwen also argued that Plaintiff lacked evidence to establish class-wide injury. 26 (See, e.g., ECF No. 206-1 at 4–7.) However, Plaintiff was only required to provide 27 evidence that “establishes that a common question is capable of class-wide resolution, 28 not whether the evidence in fact establishes that plaintiffs would win at trial.” Olean, 1 31 F.4th at 667. As it is, Plaintiff provided substantial evidence suggesting that 2 Ocwen’s conduct was unlawful, pointing to documents indicating that no other 3 businesses engaged in the same practice as Ocwen, and that Ocwen’s conduct 4 caused class-wide injury, pointing to a spreadsheet using information provided by 5 Ocwen that showed which Class Members were charged an unlawful fee and paid for 6 it. (See ECF No. 181 at 3–10, 13–14 (providing the Partial Summary Judgment Order); 7 ECF No. 175 at 4–9, 10–18 (providing Plaintiff’s Partial Summary Judgment 8 Opposition).) In light of this evidence, Plaintiff provided sufficient material to show 9 that the questions of whether Ocwen’s practices were unlawful and whether Plaintiff 10 and other Class Members were injured could be resolved class-wide at trial. See 11 Olean, 31 F.4th at 667. 12 Accordingly, the Court concludes that class issues predominate. 13 ii. A Class Action Is Superior 14 The superiority requirement is used to decide whether a class action suit is 15 preferable to other methods by reducing costs and promoting efficiency. Amchem 16 Products, Inc., 521 U.S. at 620. Rule 23(b)(3) class actions are permitted where the 17 only realistic chance for recovery is by aggregating their claims because of how little 18 each claim is worth. See Local Joint Exec. Bd. of Culinary/Bartender Tr. Fund v. Las 19 Vegas Sands, Inc., 244 F.3d 1152, 1163 (9th Cir. 2001). 20 As evidenced by the Proposed Settlement, the value of each claim is relatively 21 small. Each class member is entitled to $60 or $70 per marked-up fee that was paid. 22 Thus, the only real shot of recovery was by aggregating those claims. See id. at 1163. 23 B. The Proposed Settlement Is Fair, Reasonable, and Adequate 24 1. Legal Standard 25 Under Federal Rule of Civil Procedure 23(e)(2), a district court may approve a 26 class action settlement only after finding that the settlement is “fair, reasonable, and 27 adequate.” Campbell v. Facebook, Inc., 951 F.3d 1106, 1120–21 (9th Cir. 2020). 28 Courts reviewing class action settlements must “ensure[ ] that unnamed class 1 members are protected ‘from unjust or unfair settlements affecting their rights,’” while 2 also accounting for “the ‘strong judicial policy that favors settlements, particularly 3 where complex class action litigation is concerned.’” Id. at 1121 (quoting In re 4 Hyundai, 926 F.3d at 556, 568) (alteration in Campbell). “To survive appellate review, 5 the district court must show [that] it has explored comprehensively all [Rule 23(e)(2)] 6 factors, and must give a reasoned response to all non-frivolous objections.” In re 7 Apple Inc. Device Performance Litig., 50 F.4th 769, 782 (9th Cir. 2022) (quoting 8 McKinney-Drobnis v. Oreshack, 16 F.4th 594, 606 (9th Cir. 2021)) (first alteration 9 added; second alteration included). 10 2. Analysis 11 Because this is the preliminary approval stage, some parts of the Rule 23(e)(2) 12 analysis cannot be completed yet. Moreover, as other courts have recognized, the 13 Court need not consider all of the fairness factors at the preliminary approval stage. 14 See, e.g., In re Volkswagen, 2016 WL 4010049, at *13 (citing Alberto v. GMRI, Inc., 252 15 F.R.D. 652, 665 (E.D. Cal. 2008)). Preliminary approval of the settlement is proper 16 where the proposed settlement appears to be the product of serious, informed, non- 17 collusive negotiations, has no obvious deficiencies, does not improperly grant 18 preferential treatment to class representatives or segments of the class, and falls 19 within the range of possible approval. See In re Tableware Antitrust Litig., 484 F. 20 Supp. 2d 1078, 1079–80 (N.D. Cal. 2007) (citation omitted). In light of this lesser 21 showing required, the Court concludes that the Settlement Agreement should be 22 submitted to the Settlement Class members for consideration. See In re Toyota Motor 23 Corp. Unintended Acceleration Mktg., Sales Pracs., & Prod. Liab. Litig., No. 8:10-ML- 24 2151-JVS-FMOx, 2012 WL 7802852, at *6 (C.D. Cal. Dec. 28, 2012). 25 a. Plaintiff and Counsel Are Adequate Representatives 26 Because the Court has previously held that Settlement Counsel and Plaintiff 27 adequately represent the class for purposes of Rule 23(a)(4), Plaintiff and Settlement 28 Counsel satisfy the requirements of Rule 23(e)(2)(a), as the determinations are 1 identical. See Mejia v. Walgreen Co., No. 2:19-cv-00218-WBS-AC, 2020 WL 6887749, 2 at *9 (E.D. Cal. Nov. 24, 2020) (collecting sources). Moreover, Plaintiff has expressed 3 his continued willingness to represent and protect the interests of the class. (See Mot. 4 at 10 (citing Tellis Decl. ¶ 10.) Thus, the Court concludes that Plaintiff and Settlement 5 Counsel will continue to vigorously litigate the case. 6 b. The Settlement Arose After Two Mediations 7 Plaintiff and Ocwen have twice gone to mediation. (See Tellis Decl. ¶¶ 4–5.) 8 The parties first tried mediation following the Court’s Order on October 25, 2018, 9 after Ocwen had already sought dismissal and Plaintiff certified the class. (See ECF 10 No. 148.) On July 24, 2018, the parties convened for arbitration and engaged in 11 good-faith discussions concerning all matters in dispute. (See Tellis Decl. ¶ 4.) The 12 first round of mediation was unsuccessful, but the parties resumed settlement 13 negotiations on July 26, 2023, after the partial motion for summary judgment was 14 decided and after the motion to decertify the class was denied following 15 reconsideration. (See id. ¶ 5.) This second round of mediation culminated in the 16 Settlement Agreement. (See id. ¶¶ 5–6.) Between these two rounds of mediations, 17 the parties exchanged large amounts of discovery, which also ultimately supports 18 approving the Settlement Agreement. See In re Mego Fin. Corp. Sec. Litig., 213 F.3d 19 454, 459 (9th Cir. 2000) (“In re Mego”), as amended (June 19, 2000). Here, the parties 20 exchanged documents totaling over 1.5 million pages. (See Mot. at 12; Tellis Decl. 21 ¶ 10.) Considering this case has taken nearly a decade to reach this point, the Court 22 may fairly presume that the parties know the value and merits of the case. Moreover, 23 the parties agree “[e]ach of the Settling Parties assumes the risk of mistake as to facts 24 or law.” (Settlement Agreement at 20.) In light of these mediations that were 25 separated by years of continued discovery and motion practice, the Court, at this 26 stage, finds that the Settlement Agreement was the product of arm’s length 27 negotiations and is fair. Fed. R. Civ. P. 23(e)(2)(B); see also Chambers v. Whirlpool 28 Corp., 980 F.3d 645, 669 (9th Cir. 2020). 1 c. The Relief Appears Adequate 2 Determining the adequacy of the relief requires the Court to consider four 3 factors: (1) the costs, risks, and delay of trial and appeal; (2) the effectiveness of any 4 proposed method of distributing relief to the class, including the method of 5 processing class-member claims; (3) the terms of any proposed award of attorney's 6 fees, including timing of payment; and (4) any agreement required to be identified 7 under Rule 23(e)(3). Fed. R. Civ. P. 23(e)(2)(C)(i)–(iv). 8 i. The Costs and Risks of Trial Are Considerable, Whereas the Relief Will be Concrete and 9 Immediate 10 Plaintiff’s argument here is that the Settlement Class Members will receive $60 11 for charges that cost them, on average, $56 for BPOs, or $70 for charges that cost 12 them, on average, $66 for Hybrid Valuations, which is a considerable amount when 13 factoring in the costs and risks of trial, and that “the issue as to whether the Class 14 Members would be entitled to recovery of the full amount of the BPO and Hybrid fees 15 assessed or just the amount of the markups was heavily disputed but unresolved.” 16 (Mot. at 14.) Moreover, this is a complex civil lawsuit involving federal RICO claims, 17 which are notoriously difficult claims to prove, and an appeal would be likely 18 regardless of the outcome at trial, thus favoring approval of the Proposed Settlement. 19 See Churchill Village, L.L.C. v. Gen. Elec., 361 F.3d 566, 576 (9th Cir. 2004). 20 ii. The Proposed Method of Relief Will Be Effective 21 The National Settlement Class will receive a settlement check mailed to them. 22 (See Settlement Agreement at 10.) The California Settlement Sub-Class will have their 23 accounts credited or have charges reversed. (See id. at 11.) Such relief will be 24 immediate. The California Settlement Sub-Class will be identified by whether a fee is 25 marked as “FB36” during the class period but not marked “paid” in Ocwen’s loan 26 database at any point. (See id.) Considering that the National Settlement Class would 27 include any members not in the California Settlement Sub-Class, that means that both 28 classes may easily be identified through Ocwen’s loan database. 1 Moreover, the Class Notice provides comprehensive information about the 2 Settlement Agreement. For instance, the Class Notice provides a Table of Contents 3 where the Settlement Class can learn about the following topics: what the Class 4 Notice contains; what the Class Notice is about; who is part of the Settlement Class; 5 submitting a claim; receiving payment; understanding the class action process; the 6 claims and rights released or waived; the consequences of doing nothing; how to opt- 7 out and the consequences for doing so; how the lawyers will be paid; how to object to 8 the settlement and the difference between objecting and opting-out; when and where 9 the Final Fairness Hearing will be; and how to obtain more information. (See Class 10 Notice at 3.) The Class Notice seems likely to apprise a Settlement Class Member of 11 their rights and what steps to take, thus making it more likely that the Settlement Class 12 Members will receive relief. The Class Notice, therefore, adds to the effectiveness of 13 the Settlement Agreement and supports finding that the Settlement Agreement is fair, 14 reasonable, and adequate. 15 Finally, the Claim Form is streamlined and easy to understand and complete. 16 The Claim Form, totaling three pages, informs the Settlement Class how to submit a 17 claim online, via email, or via postmarked mail on the first page. The second page 18 requires the Settlement Class Member to provide basic information, like their address 19 and name. If a Class Member receives a unique identification in their Class Notice, the 20 member should list that. Finally, the Class Member must check a box to assert that 21 they are a member of the National Settlement Class or the California Settlement Sub- 22 Class before signing and dating the form and informing Ocwen how the member 23 would like to be paid. (See Settlement Agreement Ex. C (ECF No. 244-1 at 62–65).) 24 Considering the Class Notice, the Claim Form, and the Settlement Agreement, 25 the proposed method of relief will likely be effective. 26 iii. Fees Will Ultimately Be Determined by the Court 27 Following Supplemental Briefing from the parties, the Court has the 28 information needed to evaluate the Bluetooth factors. See, e.g., In re Bluetooth 1 Headset Prod. Liab. Litig., 654 F.3d 935, 943 (9th Cir. 2011) (“In re Bluetooth”). For 2 instance, it appears that fees and costs for Plaintiff’s counsel are reasonable compared 3 to the Gross Settlement Amount. Plaintiff’s Counsel will seek about $8 million in fees 4 and $950,000 in costs. (See Pl.’s Suppl. Br. at 2; Class Notice at 2.) The Gross 5 Settlement Amount might exceed $53 million. (See Ocwen’s Suppl. Br. at 1; Pl.’s 6 Suppl. Br. at 1.) Fees of around $8 million out of a potential settlement amount of $53 7 million would equate to of a rate of about 15%, meaning that Settlement Counsel 8 would not be able to recover more than 25%, which is the benchmark for attorney’s 9 fees. See In re Bluetooth, 654 F.3d at 942. 10 Thus, the Court concludes that the terms of the Settlement Agreement do not 11 preclude this Court from preliminarily approving it. Crucially, Settlement Counsel has 12 denied itself the right to object to the Court awarding less for costs and fees, and 13 Ocwen now takes the position that it will not object to whatever fees are awarded to 14 Plaintiff’s Counsel. (See Settlement Agreement at 15; Pl.’s Suppl. Br. at 3–4; Ocwen’s 15 Suppl. Br. at 2.) Therefore, because the Court will ultimately decide what to award 16 Settlement Counsel, nothing prevents the Court granting preliminary approval. 17 iv. The Court Will Also Determine Plaintiff’s Award 18 The Settlement Agreement includes a potential “incentive award” for Plaintiff of 19 up to $12,500. (See Mot. at 16.) The Court has some concerns with this “incentive 20 award.” See Roes, 1-2 v. SFBSC Mgmt., LLC, 944 F.3d 1035, 1056–58 (9th Cir. 2019). 21 Incentive awards of $5,000 are generally reasonable. See Alberto, 252 F.R.D. at 22 669. Yet here, Settlement Counsel seeks more than double the benchmark. 23 Settlement Counsel claim that they will seek an incentive award for Plaintiff because 24 he participated in litigation by collecting and preserving documents and information 25 related to his claims, providing such information to counsel upon request, working 26 with counsel to prepare responses to interrogatories, and sitting for a deposition. 27 (See Tellis Decl. ¶ 11.) However, incentive awards are normally provided “to 28 compensate class representatives for work done on behalf of the class, to make up for 1 financial or reputational risk undertaken in bringing the action, and, sometimes, to 2 recognize their willingness to act as a private attorney general.” Roes, 1–2, 944 F.3d at 3 1057 (quoting Rodriguez v. W. Publ’g Corp., 563 F.3d 948, 958–59 (9th Cir. 2009)). To 4 the Court’s knowledge, Plaintiff has incurred no financial or reputational risk in 5 bringing this action and has only sat for one deposition. Thus, an incentive award is 6 concerning because “special rewards for counsel’s individual clients are not 7 permissible when the case is pursued as a class action.” Id. (quoting Staton v. Boeing 8 Co., 327 F.3d 938, 976 (9th Cir. 2003)). 9 Moreover, the cases provided by Plaintiff in support are inapt. (See Mot. at 16.) 10 In the first case, the court declined to approve the incentive award of $5,000 and 11 decided to wait until the Final Fairness Hearing. See Cisneros v. Airport Terminal 12 Servs., Inc., No. 2:19-cv-02798-VAP-SPx, 2021 WL 3812163, at *9 (C.D. Cal. Mar. 26, 13 2021). In the second case, the court decided to approve the incentive award of 14 $15,000, but only after “Class Counsel dedicated no less than five pages of the Final 15 Approval Motion to this issue . . . .” La Fleur v. Med. Mgmt. Int’l, Inc., No. EDCV 13- 16 00398-VAP, 2014 WL 2967475, at *8 (C.D. Cal. June 25, 2014). The Motion and the 17 attached declaration each dedicate a paragraph to the issue. (See Mot. at 16; Tellis 18 Decl. ¶11.) That is not enough to justify the incentive award. 19 Finally, the Court has concerns that the incentive award to Plaintiff amounts to 20 “what is essentially a side settlement between [Plaintiff] and [Ocwen] covering 21 additional claims not covered in the class settlement.” Roes, 1–2, 944 F.3d at 1057. 22 When Plaintiff moved for class certification, Plaintiff sought to continue bringing some 23 of his claims individually. (See ECF No. 93 at 10 n.9 (“Although he is not seeking class 24 certification for all of the claims asserted in his Complaint, Plaintiff continues to seek 25 relief with respect to the other allegations in his Complaint on an individual basis.”).) 26 Thus, the $12,500 incentive award could be viewed as a side settlement for these 27 claims. This suggestion from the Settlement Agreement is buttressed by the fact that 28 1 Plaintiff is otherwise entitled to relief as a member of the Settlement Class. (See Mot. 2 at 16.) 3 Nonetheless, the amount of the incentive award for Plaintiff does not preclude 4 this Court from granting preliminary approval of the Settlement Agreement. Like with 5 fees for Settlement Counsel, the Settlement Agreement does not depend on Plaintiff 6 receiving any incentive award. (See Settlement Agreement at 15.) Accordingly, 7 because the Court will ultimately decide what to award Plaintiff, the incentive award 8 does not prevent the Court from preliminarily approving the Settlement Agreement. 9 The Court will revisit the issue of the incentive award at the Final Fairness Hearing. 10 See Cisneros, 2021 WL 3812163, at *9. 11 d. The Proposed Settlement Treats the Classes Equally 12 As for the two sub-classes, the Settlement Agreement provides the two classes 13 relief based on the alleged harm. For the National Settlement Class, it is reasonable 14 and fair to reimburse them for the marked-up fees. For the California Settlement Sub- 15 Class, it is reasonable and fair to credit their account or otherwise reverse any charges 16 from a marked-up fee that was assessed to their account but was never paid by the 17 borrower. Both sub-classes will submit the same form. Therefore, the Settlement 18 Agreement does not treat the classes differently. See In re Volkswagen, 2016 WL 19 4010049, at *16. 20 e. The Proposed Settlement Appears Fair, Reasonable, and Adequate in Light of the Other Factors Considered 21 22 i. Legal Standard 23 Previously, the Ninth Circuit held that district courts “should scrutinize 24 agreements for ‘subtle signs that class counsel have allowed pursuit of their own self- 25 interests . . . to infect the negotiations[ ]” where the matter settles before class 26 certification. See Briseño v. Henderson, 998 F.3d 1014, 1023 (9th Cir. 2021) (quoting 27 In re Bluetooth, 654 F.3d at 947); also Staton, 327 F.3d at 959–64 (providing factors 28 district courts considered under a prior version of Fed. R. Civ. P. 23(e)); Hanlon, 150 1 F.3d at 1026 (same). District courts were to consider the following factors: (1) the 2 strength of the plaintiff’s case; (2) the risk, expense, complexity, and likely duration of 3 further litigation; (3) the risk of maintaining class action status throughout the trial; (4) 4 the amount offered in settlement; (5) the extent of discovery completed and the stage 5 of the proceedings; (6) the experience and views of counsel; (7) the presence of a 6 governmental participant; and (8) the reaction of the class members to the proposed 7 settlement. See Briseño, 998 F.3d at 1023 (citations omitted). 8 In addition, the Ninth Circuit “identified three of those signs [that class counsel 9 have allowed pursuit of their own self-interests to infect the negotiations]:” 10 (1) “when counsel receive[s] a disproportionate distribution of the settlement”; (2) “when the parties negotiate a ‘clear 11 sailing arrangement,’” under which the defendant agrees not to challenge a request for an agreed-upon attorney’s 12 fee; and (3) when the agreement contains a ‘kicker’ or ‘reverter’ clause that returns unawarded fees to the 13 defendant, rather than the class. 14 Briseño, 998 F.3d at 1023 (quoting In re Bluetooth, 654 F.3d at 947). 15 Following amendments to Rule 23(e) in December 2018, however, the Ninth 16 Circuit has held that “courts must apply Bluetooth’s heightened scrutiny to post-class 17 certification settlements in assessing whether the division of funds between the class 18 members and their counsel is fair and ‘adequate.’” Briseño, 998 F.3d at 1025 (quoting 19 Fed. R. Civ. P. 23(e)(2)(C). The Court proceeds with analysis and determines that the 20 Settlement Agreement is fair, reasonable, and adequate. 21 ii. Analysis 22 The first factor on attorneys’ fees does not weigh against approving the 23 Settlement Agreement. Fees of around $8 million out of a potential Gross Settlement 24 Amount of over $53 million means that fees will not exceed the 25% benchmark. That 25 is not a disproportionate amount. See In re Bluetooth, 654 F.3d at 943. 26 The second factor regarding the risks, expense, complexity, and likely duration 27 of future litigation favors approving the Settlement Agreement. Going to trial to prove 28 a RICO conspiracy is no easy task, and this case involved complex processes 1 regarding property valuations, which would also be confusing to explain to a jury. 2 Moreover, an appeal is likely whatever the outcome at trial. Such a posture supports 3 approving the Settlement Agreement. See Churchill Village, L.L.C., 361 F.3d at 576. 4 The third factor on the risk of maintaining the class also favors approving the 5 Settlement Agreement. Although Plaintiff was able to produce evidence sufficient to 6 establish that common questions “are capable of being established through a 7 common body of evidence, applicable to the whole class[,]” Olean, 31 F.4th at 666, 8 the next stage requires Plaintiff to show that each class member has suffered an injury- 9 in-fact based on evidence adduced at trial, a much more difficult task, see id. at 667. 10 The amount offered in the settlement potentially weighs against approving the 11 Settlement Agreement given the possibility of treble damages from RICO claims, but 12 “[i]t is well-settled law that a cash settlement amounting to only a fraction of the 13 potential recovery does not per se render the settlement inadequate or unfair.” In re 14 Mego, 213 F.3d at 459 (quoting Officers for Justice v. Civil Serv. Comm’n, 688 F.2d 15 615, 628 (9th Cir. 1982)). However, “courts generally determine fairness of an antitrust 16 class action settlement based on how it compensates the class for past injuries, 17 without giving much, if any, consideration to treble damages.” Rodriguez, 563 F.3d at 18 964. RICO cases, like antitrust cases, similarly offer treble damages, and “treble 19 damages are a fact of life[,]” id., but the Ninth Circuit has “never precluded courts from 20 comparing the settlement amount to both single and treble damages[,]” and “[b]y the 21 same token, [has] not required them to do so in all cases.” Id. at 965. That is because, 22 at least in the Ninth Circuit, there is a strong tradition of deferring to the private 23 consensual decisions of the parties. See id. (citing Hanlon, 150 F.3d at 1027). As a 24 result, the Ninth Circuit has emphasized that: 25 ‘the court’s intrusion upon what is otherwise a private consensual agreement negotiated between the parties to a 26 lawsuit must be limited to the extent necessary to reach a reasoned judgment that the agreement is not the product 27 of fraud or overreaching by, or collusion between, the negotiating parties, and the settlement, taken as a whole, is 28 fair, reasonable and adequate to all concerned.’ 1 Id. (quoting Hanlon, 150 F.3d at 1027 (quoting Officers for Justice, 688 F.2d at 625)). 2 Here, the Court concludes that there is no reason to intrude upon the privately- 3 ordered agreement between the parties because there is no indication that the 4 agreement was produced by fraud, collusion, overreaching, or other bad-faith actions. 5 See id. In particular, and as explained before, see supra Parts IV.B.2.iii and Error! 6 Reference source not found., the payouts to Plaintiff and Settlement Counsel will be 7 determined by the Court and do not affect the validity of the Settlement Agreement. 8 Finally, this is the preliminary approval stage, and the Court must still consider 9 and respond to any objections. See Fed. R. Civ. P. 23(e)(5). As it is, the Settlement 10 Agreement includes a provision stating that Settlement Counsel or Ocwen may nullify 11 the Settlement Agreement if more than 1,000 individuals opt-out of it. (See 12 Settlement Agreement at 16 (“If 1,000 or more potential members of the Settlement 13 Class properly and timely opt out of the Settlement, then the Settlement may be 14 deemed null and void upon notice by Ocwen or Class Counsel without penalty or 15 sanction.”).) Thus, if some members believe that Plaintiff was a particularly weak 16 representative and they think they could do better than Plaintiff at trial, they may opt- 17 out of the Settlement Agreement, and the Court will consider whether such a clause 18 can be invoked at the Final Fairness Hearing. See In re Online DVD-Rental Antitrust 19 Litig., 779 F.3d 934, 948 (9th Cir. 2015); Churchill Village, L.L.C., 361 F.3d at 577. 20 The fifth factor favors approving the Settlement Agreement. As mentioned 21 before, there has been over one million pages of documents produced throughout 22 the course of this nearly decade-long litigation. The parties have sufficient information 23 to apprise themselves of the strengths and weaknesses of their case and plenty of 24 time to review that information. Thus, the fifth factor favors approval. 25 The sixth factor on the views of counsel also favors approving the Settlement 26 Agreement. Attorney Tellis declares that, based on his 27 years of complex litigation 27 experience and his personal involvement in the prosecution of this case from start to 28 finish, he believes that “the Settlement is not only fair, reasonable, adequate, but also 1 is in the best interests of all Class Members in light of all known facts and 2 circumstances and should therefore be given preliminary approval by the Court.” 3 (Tellis Decl. ¶ 8.) 4 The seventh factor on the presence of a government actor is irrelevant because 5 there are no government actors involved in this matter. The eighth factor on the 6 reaction of class members must wait until the Final Fairness Hearing. 7 As for the three Bluetooth factors, the only that potentially applies is the concern for 8 reversionary settlement agreements. See In re Bluetooth, 654 F.3d at 947. There is no 9 concern here that Settlement Counsel will receive a disproportionate distribution of 10 the Gross Settlement Amount because the Court will ultimately approve the award to 11 Settlement Counsel. Similarly, the Court has no concerns regarding a clear sailing 12 arrangement, as the Settlement Agreement prevents Plaintiff and Settlement Counsel 13 from objecting to the award of fees, not Ocwen. (See Settlement Agreement at 15.) 14 As for the potentially reversionary aspects of the Settlement Agreement, while the 15 Court may have its suspicions that, like with the Settlement Administrator, Ocwen has 16 already earmarked money to pay, ultimately, whatever money is not given to 17 Settlement Class Members will be too little to effectively redistribute and meaningfully 18 increase the award each Class Member receives, which significantly to the Court, is 19 already sufficient to make them whole from their injury. Granted, this may “create[ ] an 20 incentive for defendants to ensure as low a claims rate as possible so as to maximize 21 the funds that will revert[,]” which “might lead defendants to negotiate for a subpar 22 notice process, a more tedious claims process, or restrictive claim eligibility 23 conditions.” Roes, 1–2, 944 F.3d at 1058–59. However, the Court has no such concern 24 here because of the extended window to make a claim, the streamlined nature of the 25 Claim Form, and the comprehensive information provided by the Class Notice. 26 Even after considering the Bluetooth factors to “smoke out potential 27 collusion[,]” the Court concludes that the Settlement Agreement is fair, reasonable, 28 1 and adequate. Briseño, 998 F.3d at 1023. Therefore, the Court grants preliminary 2 approval of the Settlement Agreement. 3 V. The Proposed Notice 4 A. Legal Standard 5 Federal Rule of Civil Procedure 23(c)(2) requires the “best notice practicable 6 under the circumstances.” To ultimately approve a class action settlement, a district 7 court must ensure that class members were notified of the proceedings, had the 8 opportunity to opt out or (for those who remain in the settlement) object to any of the 9 settlement’s terms, and were provided the chance to appear at the fairness hearing. 10 Fed. R. Civ. P. 23(e)(1)-(5). Rule 23 lists seven items that must be included in the 11 required notice. See Fed. R. Civ. P. 23(c)(2)(B). However, “Rule 23(e) simply requires 12 notice that describes the terms of the settlement in sufficient detail to alert those with 13 adverse viewpoints to investigate and to come forward and be heard.” Roes, 1–2, 944 14 F.3d at 1044 (quoting In re Online DVD-Rental, 779 F.3d at 946) (internal quotation 15 marks omitted). 16 B. Analysis 17 The Court concludes that the Class Notice provides sufficient detail to alert 18 those with adverse viewpoints to investigate and to come forward and be heard. See 19 Roes, 1–2, 944 F.3d at 1044. The parties plan to appoint JND Legal Administration as 20 the Settlement Administrator, who is a reputable administrator with experience in 21 several prior cases involving complex and multi-district litigation. (See Mot. at 23; 22 generally Decl. of Gina Intrepido-Bowden on Proposed Settlement Not. Prog. (ECF 23 No. 244-2) (“Intrepido-Bodwen Decl.”) (providing the Vice President of JND Legal 24 Administration’s declaration disclosing the countless prior cases it has worked on and 25 providing copies of the proposed notices to be sent physically and digitally).) Ocwen 26 plans to pay for the costs of the Settlement Administrator up to $600,000, which the 27 Settlement Administrator estimates to cost no more than $586,000. (See Mot. at 8.) 28 As stated before, the Class Notice contains a Table of Contents covering all of the 1 topics discussed in the notice, and the Class Notice provides ample means of 2 contacting the parties and learning how to object to or opt out of the Settlement 3 Agreement. (See Class Notice at 3–11.) However, the Class Notice must fill in the 4 blanks for the contact information. Moreover, Settlement Counsel must finalize a date 5 by which time they will provide the Settlement Class notice of its request for attorneys’ 6 fees, although they represent now that they will file the motion for fees at least 30 days 7 before the proposed objection/opt-out deadline. (See Pl.’s Suppl. Br. at 3.) As for the 8 means of providing the Class Notice, the Settlement Administrator plans to send the 9 notice via physical mail and email where possible, to broadcast the notice online using 10 targeted search queries and advertising campaigns, and to run a website and call 11 center. (See Mot. at 23–24; Intrepido-Bodwen Decl. ¶ 13.) Overall, the Settlement 12 Administrator anticipates the Class Notice having an “expected reach [ ] on the high 13 end of the 70–95% reach standard set forth by the FJC and will exceed that of other 14 court approved programs.” (Intrepido-Bodwen Decl. ¶ 35.) In light of the above, the 15 Court concludes that the Class Notice satisfies the requirements of Rule 23(e) and the 16 Constitution. See In re Online DVD-Rental, 779 F.3d at 946. 17 ORDER 18 For the reasons set forth above, the Court GRANTS Plaintiff’s Motion for 19 Preliminary Approval of Class Settlement and Direction of Notice Under Federal Rule 20 of Civil Procedure 23(e) (ECF No. 244). The parties are to proceed with updating the 21 [Proposed] Preliminary Approval Order (ECF No. 244-1 at 35–47) to be consistent with 22 the terms of this Order. Specifically, the parties are to fill in any missing information 23 and update paragraph 25 to state that “Not fewer than thirty (30) days prior to the 24 date set by the Court to consider whether the Settlement should be finally approved, 25 Settlement Class Counsel shall file a motion or motions for Final Approval of the 26 Settlement Agreement and for Attorney’s Fees and Costs for work performed in 27 connection with the Action.” (See ECF No. 244-1 at 43.) Once the Court receives a 28 revised [Proposed] Preliminary Approval Order, the Court will sign it and set the date 1 | forthe Final Fairness Hearing, which will be scheduled for 150 days after entry of the 2 | [Proposed] Preliminary Approval Order. IT IS SO ORDERED. 3 A IT IS SO ORDERED. 5 | Dated: _March 22, 2024 “Darel A CDbnetto Hon. Daniel alabretta 6 UNITED STATES DISTRICT JUDGE 7 8 9 10 11 12 13 | C3 -Weiner.14cv2597.Mot Preliminary.Class.Settlement Approval 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28