Lawyers Win $5.3M Fees in FCRA Suit

The Richmond U.S. District Court approves settlement of a consumer class action suit alleging defendant LexisNexis Risk & Information Analytics Group Inc. violated the Fair Credit Reporting Act, including attorney’s fees of $5,333,188.21.

Plaintiffs allege defendant violated the FCRA, 15 U.S.C. §§ 1681, by selling certain Accurint® brand reports to debt collectors without treating the reports as “consumer reports” under the FCRA. Defendants have consistently and explicitly taken the position that the Accurint® reports are not “consumer reports” and have not attempted to afford customers rights with respect to the Accurint® reports required under the FCRA. The parties engaged in a series of mediations with U.S. District Judge (then-Magistrate Judge) M. Hannah Lauck, U.S. Magistrate Judge Dennis Dohnal (Ret.) and Randall Wulff.

The Agreement provides for injunctive relief to the Rule 23(b)(2) Settlement Class of approximately 200 million people, and a monetary settlement benefiting the Rule 23(b)(3) Settlement Class members.

Under the settlement terms governing injunctive relief, defendants will overhaul their currently existing Accurint® for Collections suite of products for the Receivables Management market, which they currently do not treat as “consumer reports” and will split AFC into two newly developed suites of products and services. The first suite, “Collections Decisioning,” falls within the FCRA definition of a “consumer report,” and the second suite, “Contact & Locate,” will not be treated as involving “consumer reports.” A “Consumer Access Program” will be created for the Contact & Locate suite, to include procedures to allow an individual to obtain a free copy of a Contact & Locate Comprehensive Report regarding the individual once per year.

The Settlement Agreement approves an award for attorney’s fees, costs and other expenses in an amount up to $5.5 million in the aggregate. The amount will be paid entirely by LexisNexis. Defendants have agreed to pay this amount and plaintiffs’ counsel have agreed not to seek a higher amount.

Approximately 31,000 people fall within the Rule 23(b)(3) class definition. Under the Settlement Agreement defendants will create a common fund of $13.5 million to be distributed pro rata to the class members, which equates to about $435 per person in the class before attorney’s fees. If the full amount of attorney’s fees is awarded by the court, the amount per person will be about $300.

The court finds the settlement is fair, reasonable and adequate. In this case, all of plaintiffs’ claims are predicated on Accurint® reports being deemed “consumer reports” under the FCRA. However, the Federal Trade Commission in 2008 voted unanimously that Accurint® for Collection reports do not fall within the FCRA and do not involve credit reports. Absent some authority to the contrary, the merit of plaintiff’s claims – and necessarily, the absent class members’ theoretical future claims – is speculative at best. For this reason, the benefit of substantial relief without the risk of litigation demonstrates the adequacy of the Settlement Agreement.

Plaintiffs’ counsel expended large amounts of time and labor, demonstrated skill commensurate with their reputations and achieved an excellent result in this large and complex action. Plaintiffs negotiated a Settlement Agreement that provides substantial benefits for over 200 million consumers; and the Settlement Agreement forces defendants to comply with the FCRA and increases consumer privacy protection measures. The court notes that a multiplier of 1.99 is similar to those applied in similar cases.

The court also finds that an incentive award of $5,000 each is an appropriate award for the named plaintiffs’ service as class representatives. The named plaintiffs acted for the benefit of the class, reviewed documents provided to them by their counsel and discussed with their counsel aspects of the case, discovery issues and settlement negotiations. Defendants do not oppose the award. As such, service awards in the amount of $5,000 each are appropriate.

Berry v. LexisNexis Risk & Information Analytics Group Inc. (Spencer) No. 3:11cv754, Sept. 5, 2014; USDC at Richmond, Va. VLW 014-3-476, 26 pp.