THE Lee FAIRNESS HEARING: NO SURRENDER. Part One.

               In the case of Lee, et al v. Ocwen Loan Servicing LLC, et al, (S.D. Fla. Case No. 0:14-cv-60649-JG ), a United States Magistrate Judge named Jonathan Goodman is presiding by consent of all the parties.  Faced with a Fairness Hearing seeking his approval of a class action settlement, Judge Goodman entered a unique Order.  He required the parties and their counsel to explain before the Fairness Hearing why the determination of acceptability should not be postponed until after the Eleventh Circuit rules on two similar class action settlements, why the plaintiffs had chosen not to depose a defendant’s corporate representative on a crucial issue – and invited them but did not purport to require them to take that deposition, and why the objectors should not receive the discovery they requested even if the law did not require that particular discovery in this case, among other things.

              The Court’s Order in this regard is the first of three (3) extraordinary rulings by Judge Goodman in connection with the requested final approval of the class action settlement in this case:

 

   As noted, all categories of objections must be examined, but the Court is specifically flagging the following issues as being worthy of comprehensive discussion:

1. Why should the Undersigned not reschedule the final approval hearing until after the Eleventh Circuit issues its rulings in two appeals raising the same objections as have been raised here?  Those two appeals appear to be well underway.  In Hall v. Tripasso, 11th Cir. Case No. 14‐15712 (S.D. Fla. Case 12‐cv‐22700‐FAM), Objectors‐Appellants Michael and Jill Tripasso filed their initial brief on May 12, 2015.   The briefing in Nadeau v. Wells Fargo Bank, NA, 11th Cir. Case No. 14‐1500 (S.D. Fla. Case 13‐cv‐60721‐FAM) appears even further developed. Specifically, Appellants Pearson, Vanskyoit and Yoho filed their brief on December 24, 2014; Appellant Kirby filed an initial brief on January 14, 2015; Appellants Amirali Jabrani and Janet Jabrani filed their brief on February 9, 2015; Objector‐Appellant Jennifer Deachin n/k/a Jennifer Hinjosa filed her corrected brief on February 17, 2015 and the Pearson Appellants filed a supplemental authority on March 25, 2015.^[1]
2. Even if not required, why would the settling parties not want to provide the additional information demanded by the objectors? Would an order approving the settlement and the attorney’s fee award be less likely to be reversed on appeal if the Undersigned had more information to analyze?
3. Given the appellate decisions which the objectors pinpointed from the Seventh and Ninth Circuits, should the Undersigned by concerned that the proposed Settlement Agreement contains “clear sailing” and “kicker” provisions?
4. Why should the Court not wait until the claims period is over before having a final hearing?  Would that arrangement not provide for a clearer understanding of the actual value of the Settlement Agreement?
5. Would it not make sense for the Court to learn the actual dollar amount which will  be paid to the Settlement Class, or at least a reasonable understanding of the likely range, before determining whether the agreement and the proposed fees are fair? 
6. Why should the Court not postpone a ruling on attorney’s fees and expenses until after the settling parties advise how much Defendants will actually pay out under the settlement?
7. The Undersigned understands that class counsel reviewed a declaration from an Ocwen representative to support the conclusion that Ocwen’s databases cannot determine, on a systematic basis, which class members paid for lender‐placed insurance. Nevertheless, it appears as though counsel never took any discovery on this point. Under these circumstances, would it not be less risky for counsel to take the declarant’s deposition, to confirm the accuracy of his statements? Would discovery not shed additional light on the logic (or illogic) of a claims‐made procedure?
8. Should the Court be at all concerned that it is being asked to approve an attorney’s fee protocol without the submission of lodestar information and backup documentation? 
9. Would the analysis of the percentage of the recovery for an attorney’s fees award change significantly if the award were evaluated against the dollars actually paid, as opposed to the potential dollars if all claimants submitted claims and did not opt out?

Lee v. Ocwen Loan Servicing, LLC, Dkt No. 149, Order on Objections to Requested Final Approval of Class Action Settlement, filed on May 13, 2015 (S.D. Fla. Case No. 0:14-cv-60649)[emphasis in original]:  Download Lee v Ocwen Loan Servicing. Order on Objections to Requested Final Approval of Class Action Settlement. Dkt No 149. 051315 (SD Fla No 0.14.cv.60649).

            The Court did not approve or deny the requested final approval at the Fairness Hearing.  Instead, in what may be a first of its kind in lender force-placed insurance class action settlements, the Court took the motion “under consideration.”  Lee v. Ocwen Loan Servicing, LLC, Dkt No. 159, Post Fairness Hearing Order, filed on June 11, 2015 (S.D. Fla. Case No. 0:14-cv-60649):  Download Lee v Ocwen Loan Servicing. Post Fairness Hearing Order. Dkt No 159 (S.D. Fla. Case No. 0.14.cv.60649.JG).   This is the second of the three rulings by Judge Goodman which all deserve special attention, and this second ruling will be the subject of an article tomorrow on Insurance Claims and Issues blog.

Please Read The Disclaimer.  ©2015 by Dennis J. Wall, author of “Lender Force-Placed Insurance Practices” (American Bar Association 2015).  All Rights Reserved.  No Claim to Original U.S. Government Works.

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[1] Interested Parties‐Appellants Owings Law Firm, Wagoner Law Firm and Walker Law PLC filed their brief on January 30, 2015, but the Eleventh Circuit dismissed their appeal on March 30, 2015.