The opinion of the court was delivered by: Louis F. Oberdorfer United States District Judge
The parties have settled this class-action suit and now move for court approval of the settlement agreement, as required under Federal Rule of Civil Procedure 23. See Motion for Final Approval of Class Action Settlement [dkt # 242]. Class counsel also move for approval of attorneys' fees, costs, and incentive awards to the named plaintiffs. See Joint Petition of Class Counsel for an Award of Attorneys' Fees, Reimbursement of Litigation Expenses, and Awards to Class Plaintiffs ("Joint Pet.") [dkt # 241]. For the reasons discussed below, both motions will be granted.
In 1998, Plaintiff Eunice Wells, a policyholder of Defendant Allstate Insurance Company, was hit by a car while crossing the street. She sought to recover for her injuries under her Allstate uninsured-motorist coverage. After Allstate refused to settle, Wells sued Allstate in the District of Columbia Superior Court for benefits. She also moved for certification as representative of a class claiming injuries from Allstate's alleged violations of the District of Columbia Consumer Protection Procedures Act, D.C. Code Ann. § 28-3901 ("Consumer Protection Act" or "Act"). Among other things, the Act creates liability for "failure to state a material fact if such failure tends to mislead." Id. § 28-3904. Wells alleged that Allstate's violations included failing to disclose that it resisted paying on uninsured-motorist claims, and that it adopted a "scorched-earth litigation tactic" against policyholders who litigated after refusing to settle.
Allstate removed the case to this court. Wells settled her personal-uninsured-benefits claim, but her class claim under the Consumer Protection Act proceeded. Plaintiffs' amended complaint alleged that, if uninsured-motorist claimants were represented by counsel, Allstate referred their claims to a special unit, which, as a tactic, deliberately and regularly took far more time to pay than Allstate took to pay claimants who did not have counsel. On May 17, 2002, this court denied Allstate's Motion for Summary Judgment.
On August 12, 2002, this court certified a class of Allstate policyholders to include those who "(1) between March 20, 1997 and October 19, 2000, (2) made a claim for uninsured motorist benefits which Allstate paid in part or in full, (3) for, inter alia, bodily injury, and (4) at some or all points during the claims process were represented by counsel." This class was limited to policyholders who made claims before October 19, 2000, the effective date of an amendment to the D.C. Consumer Protection Act. This amendment made it easier for consumers to sue by eliminating certain requirements of injury-in-fact and causation. The Court of Appeals for the District of Columbia dismissed Allstate's appeal from the certification.
In April 2003, Plaintiffs moved to join Charles Rawlings as a party plaintiff and to expand the class to include policyholders who, like Rawlings, had filed uninsured-motorist claims after the Act's October 2000 amendment. In October 2004, Plaintiffs moved to qualify Rawlings as a class representative. In November 2004, Allstate moved for summary judgment on Rawlings's claims, arguing that he waived those claims by signing a general release. On January 24, 2006, this court denied Allstate's motion, concluding that Rawlings did not waive his claims. On July 6, 2006, the court issued an order qualifying Rawlings as a class representative and amending the class definition to extend the time period for which claims were filed: the class now includes Allstate policyholders or beneficiaries who made an uninsured-motorist claim between March 20, 1997, and July 6, 2006, and otherwise meet the original class definition. In March 2007, the parties began mediation before Jonathan Marks, a mediator with extensive experience in complex litigation.
The mediation culminated in a settlement agreement stating that the approximately 1,200 class members would receive a total of $800,000. Settlement Agreement [dkt # 234-2]. Each class member would receive one of three cash amounts-$150, $600, or $1,200-depending on the length of time it took to receive payment on his or her claim:
Days Between Loss Report and Claim PaymentAmount of Settlement Payment
0 - 180 days$150
181 - 635 days$600
Id. ¶ 6(A). Additionally, Allstate agreed not to oppose class counsel's request for $700,000 in fees and $25,000 in costs, to be awarded at the court's "sole discretion." Id. ¶ 5(A). Finally, under the agreement, the two named class plaintiffs receive an additional "incentive award" of $10,000 each. Id. ¶ 6(B).
On December 18, 2008, counsel for both parties presented their Settlement Agreement to the court for preliminary approval. On January 7, 2008, the court issued an order granting such approval. The parties then issued notice to the class members of the proposed settlement and of the final settlement hearing. In addition to stating the terms of the $800,000 class settlement noted above, the notice stated that class counsel would request court approval of awards of $700,000 for attorneys' fees, $25,000 for costs, and $10,000 for the two named plaintiffs. No objections were filed. Only one member of the class, Ms. Donna Ridley, also known as Donna Ridley Ramrattan, has requested exclusion from the class and the settlement (and is therefore not a member of the class). On May 13, 2008, Judge Thomas F. Hogan presided over the final settlement hearing. At the conclusion of the hearing, Judge Hogan stated his recommendation that this court approve the settlement award to the class members, the incentive awards to the named plaintiffs, and-subject to further consideration-the award for attorneys' fees and costs. On May 16, 2008, at Judge Hogan's request, class counsel filed documents detailing the time and expense costs previously summarized in support of their motion for approval of fees and costs.
This court must address three items: (1) the award to class members ($800,000 total); (2) the attorneys' fees and costs ($725,000 total); and (3) the incentive awards to the two named plaintiffs ($10,000 each). As discussed below, each of these amounts are reasonable in the context of this unique case and will be approved.
A. The $800,000 Award to Class Members
Under Federal Rule of Civil Procedure 23, "[t]he claims, issues, or defenses of a certified class may be settled, voluntarily dismissed, or compromised only with the court's approval." Fed. R. Civ. P. 23(e). "Approval of the proposed class action settlement lies within the discretion of this Court." Livengood Feeds, Inc. v. Merck KgaA (In re Vitamins Antitrust Litig.), 305 F. Supp. 2d 100, 103 (D.D.C. 2004). "The Rule 23 requirements are fully consistent with the long-standing judicial attitude favoring class action settlements." Id. "The Court must eschew any rubber stamp approval . . . yet, at the same time, must stop short of the detailed and thorough investigation that it would undertake if it were actually trying the case." Id. (citation omitted). "The exercise of this discretion, however, is constrained by the 'principle of preference' favoring and encouraging settlements in appropriate cases." Id.
"There is no single test in this Circuit for determining whether a proposed class action settlement should be approved under Rule 23(e)." Id. "Generally, in determining whether settlement should be approved, courts consider whether the proposed settlement is fair, reasonable, and adequate under the circumstances and whether the interests of the class as a whole are being served if the litigation is resolved by settlement rather than pursued." Id. "In making this determination, courts in this Circuit have examined the following factors: (a) whether the settlement is the result of arm's length negotiations; (b) the terms of the settlement in relation to the strength of plaintiffs' case; (c) the status of the litigation at the time of ...