On July 18, 2017, Plaintiff filed his Amended Complaint (the “Complaint”) alleging violations of the FCRA, 15 U.S.C. § 1681 et seq. on behalf of a Putative Class comprising similarly situated persons, discussed infra. (Am. Compl. ¶¶ 39–53, ECF No. 43). Plaintiff alleges that in October of 2004, he obtained a loan from Defendant and as of November 2008, the account was reported as closed. (Id. ¶¶ 15–17). On May 15, 2010, Plaintiff filed for bankruptcy in the United States Bankruptcy Court for the District of Nevada and subsequently received a bankruptcy discharge on October 27, 2015, thus extinguishing any relationship between Plaintiff and Defendant. (Id. ¶¶ 18–22). Upon reviewing his credit report dated February 15, 2016, Plaintiff discovered that on January 15, 2016, Defendant submitted an unauthorized credit inquiry to Experian, a credit reporting agency. (Id. ¶ 24). Plaintiff alleges that the credit inquiry, which was undertaken without Plaintiff’s consent, constituted an unlawful and willful violation of the FCRA. (Id. ¶¶ 25–32). Based upon these allegations, the Complaint alleges one cause of action for violation of the FCRA, for which Plaintiff seeks statutory damages, punitive damages, and reasonable attorneys’ fees and costs from Defendant. (Id. ¶¶ 51–53). . . On October 6, 2017, the parties reached a settlement through mediation and subsequently submitted the Proposed Settlement now before the Court. (See Joint Mot. for Order 5:12–26, ECF No. 55). Under the Proposed Settlement, Defendant agrees to create a common fund in the amount of $600,000, of which each class member to make a claim will receive a pro rata share. (Id. 6:15–17). The Putative Class, pursuant to the Proposed Settlement, is defined as: “All persons whose consumer credit report from any of the three major credit reporting agencies (Transunion, Equifax, and Experian) reflects an unauthorized consumer credit report inquiry by Defendant within the past 5 years. For purposes of settlement only the parties define this class as all One Nevada Credit Union members with closed or unclosed memberships within five years preceding the filing of this action.”
The Court’s discussion of some of the settlement facts was illustrative.
While Plaintiff’s counsel represents that the “claims asserted in the actions have merit,” (see Kazerounian Decl. ¶ 29, ECF No. 55-1); (Kind Decl. ¶ 34, ECF No. 55-2), Defendant denies any liability and asserts it has meritorious defenses to all claims. (See Joint Mot. for Order 4:9–19). In particular, Defendant states that even if “the credit pull was impermissible under the FCRA, it was not the result of willful conduct.” (Id. 4:10–11). Plaintiff’s counsel acknowledges that even if it were able to prove Defendant’s conduct was unlawful, Plaintiff faces challenges in “proving that Defendant’s actions were willful and proving the damages, if any, sustained by the class members.” (Id. 18:13–15); see Edwards v. Toys “R” Us, 527 F. Supp. 2d 1197, 1210 (C.D. Cal. 2007) (noting that “[w]illfulness under the FCRA is generally a question for the jury.”) (citing Guimond v. Trans Union Credit Info. Co., 45 F.3d 1329, 1333 (9th Cir. 1995)). Accordingly, the Court finds that the first two Churchill factors weigh in favor of approval. . . Under the fourth Churchill factor, the Court considers the amount offered in settlement. In assessing the consideration obtained by class members in a class action settlement, “[i]t is the complete package taken as a whole, rather than the individual component parts, that must be examined for overall fairness.” Officers for Justice v. Civil Service Com’n of City & Cnty. of San Francisco, 688 F.2d 615, 628 (9th Cir. 1982). In this regard, “[t]he fact that a proposed settlement may only amount to a fraction of the potential recovery does not, in and of itself, mean that the proposed settlement is grossly inadequate and should be disapproved.” Linney v. Cellular Alaska P’ship, 151 F.3d 1234, 1242 (9th Cir. 1998). Plaintiff’s counsel argues that the instant Proposed Settlement “exceeds the results in other similar FCRA impermissible account review cases.” (Joint Mot. for Order 21:25–26). For this proposition, Plaintiff cites to Duncan, where a court approved an $8,750,000 settlement for a class of approximately 2.2 million members, and Pastor, in which the court approved a $1.6 million settlement for a class of 537,000 members. See Duncan v. JP Morgan Chase Bank, N.A., No. SA-14-CA-00912-FB, 2016 WL 4419472, at *10 (W.D. Tex. May 24, 2016); (see also Order Granting Preliminary Approval, Pastor v. Bank of Am., NA, No. 3:15-cv-03831-VC (N.D. Cal. July 7, 2017), Ex. 4 to Kazerounian Decl., ECF No. 55-8)). Plaintiff’s Counsel also point out that “[o]ther known class action [FCRA] account review cases that have settled have provided non-cash relief.” (Joint Mot. for Order 22:2–3). Here, the Settlement Agreement provides for the creation of a $600,000 common fund, “inclusive of all attorneys’ fees, costs, expenses, the Service Award, as well as the costs of Settlement Administration and the Notice Program.” (Settlement Agreement ¶ 72). The remainder will be available to a class of potentially 115,000 persons, with each person receiving a pro rata share. (Id. ¶ 69; Joint Mot. for Order 14:5–6). At this stage, the Court is satisfied that the amount offered in settlement is within the range of reasonableness.