MEMORANDUM OPINION
TIMOTHY J. KELLY UNITED STATES DISTRICT JUDGE.
Plaintiffs
in this class action are tenants of a low-income housing
development in the District of Columbia. They allege that
Defendants, management companies overseeing the development,
violated federal laws by adjusting their utility
allowances-rent reductions that should reflect reasonable
utility use-improperly and without adequate notice. After
lengthy negotiations, the parties reached a settlement
agreement under which the named plaintiffs and other class
members will receive both monetary and non-monetary relief.
In November 2018, the Court preliminarily approved the
settlement agreement and conditionally certified the class,
and in April 2019, it held a fairness hearing. Before the
Court is the parties' Joint Motion for Final
Certification of Class for Settlement Purposes and for
Approval of Class Action Settlement. ECF No. 35. For the
reasons explained below, the motion will be granted.
I.
Background
A.
Factual and Procedural History
Capitol
Gateway Family Rental (“Capitol Gateway”) is a
low-income housing development in the District of Columbia,
which includes 86 family rental units. ECF No. 1
(“Compl.”) ¶¶ 1, 27-28. Defendant East
Capitol Management Family Rental, L.P., (“East
Capitol”) owns a portion of Capitol Gateway.
Id. ¶ 9. Some of the units in Capitol Gateway-
61 of the 86-are designated as low-income housing, and
therefore must be operated in accordance with regulations
governing the Low-Income Housing Tax Credit (LIHTC) Program.
Id. ¶¶ 22, 29, 32. In addition, according
to Plaintiffs, East Capitol entered into a “Regulatory
and Operating Agreement” (“R&O
Agreement”) with the District of Columbia Housing
Authority (DCHA), under which it agreed to operate those
units subject to regulations promulgated by the U.S.
Department of Housing and Urban Development
(“HUD”). Id. ¶¶ 29, 30.
Defendant A&R Management, Inc., served as the managing
agent at Capitol Gateway from 2007 until mid-2014, when
Defendant Kettler Management, Inc., took over. Id.
¶¶ 10-11. Plaintiffs are past and present residents
of the low-income units in Capitol Gateway. Id.
¶¶ 5-8, 34. Mildred Kinard began living there in
2008, and the other named plaintiffs started the year before
that. Id. ¶¶ 5-8. The proposed class
consists of all tenants who were residents of Capitol Gateway
in one of the low-income units at any time between January 1,
2014 and December 31, 2015. ECF No. 32-2 (“Settlement
Agreement”) ¶ 8(e).
Plaintiffs
allege that, according to their lease agreements and the
R&O Agreement, East Capitol had to provide them a utility
allowance in the form of a rent reduction. Compl. ¶ 36.
Prior to 2013, their utility allowances remained constant.
Id. ¶ 46. Around October 2013, however,
Defendants notified them that their allowances were being
reduced that December. Id. ¶ 47. Plaintiffs
allege that the notice failed to adequately describe the
reason for the reduced allowance and did not give them an
opportunity to comment about it or request individual relief
from it. Id. ¶ 48. Moreover, Plaintiffs assert,
less than two years later the same thing happened to them
again. Id. ¶¶ 51-52. More specifically,
Plaintiffs allege that in early 2015, some tenants received
written notice either immediately before or after a second
reduction to their allowances, and some received no notice at
all. Id. ¶ 52. And once again, the notice that
was provided to some Plaintiffs was deficient because it
failed to describe the reason for the reduction or provide an
opportunity for them to comment or request individual relief.
Id. ¶ 53. Finally, Plaintiffs contend that,
starting in December 2013, the amounts of their reduced
individual allowances were unlawful under the United States
Housing Act and its implementing regulations. See
Id. ¶¶ 15, 59.
In
November 2015, Plaintiffs filed this class action under
Federal Rule of Civil Procedure 23(b)(2) and (b)(3),
challenging both Defendants' alleged failure to provide
proper notice of the reduced utility allowances and the
reduced allowances themselves. Id. ¶ 82. In
their five-count complaint, Plaintiffs assert that Defendants
violated 42 U.S.C. § 1983; the United States Housing Act
of 1937, 42 U.S.C. §§ 1437a and 1437a(a)(1); the
Low-Income Housing Tax Credit Program, 26 U.S.C. § 42;
Plaintiffs' lease agreements; and the Indenture of
Restrictive Covenants for Low-Income Housing Tax Credits.
Id. ¶¶ 89-120.
The
next month, Defendants moved to dismiss the complaint. ECF
No. 11. Following briefing on the motion, the parties agreed
to mediate the case with the assistance of Magistrate Judge
G. Michael Harvey. ECF No. 23. In advance of mediation, the
parties exchanged informal discovery and engaged in extended
settlement negotiations. ECF No. 32-1 at 12. Just when those
negotiations appeared to be breaking down, the parties
accepted one of two alternative “mediator's
proposals” suggested by Judge Harvey, which led to a
settlement in principle in March 2017. Id. The
parties then negotiated and memorialized a formal settlement
agreement, which they executed over a year later, in May
2018. See Id. at 5.
B.
The Settlement Agreement
In June
2018, the parties jointly moved for preliminary approval of
the settlement agreement, conditional certification of the
class for purposes of settlement, appointment of class
counsel, approval of notice to the class, and for the
scheduling of a fairness hearing. ECF No. 32. Under the terms
of the settlement agreement, Defendants have agreed to
designate $100, 000 to compensate the named plaintiffs and
other class members. Settlement Agreement ¶ 8(r). Of
that $100, 000, the agreement allocates $15, 000 for fees for
Plaintiffs' counsel and $5, 000 for service awards for
each of the four named plaintiffs. Id. ¶¶
11-12. The remaining amount is available for distribution to
class members according to a formula that sets individualized
awards based on the length of time the class member lived in
Capitol Gateway and size of the class member's unit.
Id. ¶ 16. The settlement agreement also
includes non-monetary relief for class members. Id.
¶ 21. Defendants have agreed to adjust class
members' utility allowances for two years according to
another formula, and to do so subject to agreed-upon notice
provisions. Id. ¶¶ 21-22. For their part,
class members have agreed to release all claims in the
complaint and all claims relating to the calculation of
utility allowances by Defendants during those two years.
Id. ¶¶ 23, 57.
The
Court preliminarily approved the settlement agreement and
conditionally certified the class in November 2018. ECF No.
33. Pursuant to the terms of the settlement agreement, on
December 18, 2018, Defendants provided the claims
administrator identifying and contact information for the 64
members of the class. ECF No. 35-5 ¶ 3. On January 11,
2019, the claims administrator mailed a “Notice to
Class of Proposed Settlement” and a claim form to the
last known address of each class member. Id. ¶
4. The notice form provided an explanation of the basis for
the lawsuit and of the class members' rights with respect
to the suit, including the right to opt out of the suit and
to object to the settlement terms. See ECF No. 32-3.
The notice also informed class members that they had to
complete an enclosed claim form and return it by a date
certain to participate in the settlement. Id. at 5.
Class members also received separate, individualized notices
with a preliminary calculation of the award they would
receive under the settlement. Id. at 4-5. For each
notice returned as undeliverable, the claims administrator
tried to locate an updated address for the class member and
re-sent the notice to any identified updated address. ECF No.
35-5 ¶ 5. By February 22, 2019-the deadline for a class
member to opt-out from the settlement, object to the
settlement, or challenge the monetary amount that he or she
would receive-the claims administrator had received no
opt-outs, objections, or challenges.[1] Id. ¶¶
8-10. On February 25, 2019, the claims administrator mailed
reminder postcards to the 19 class members who had not
returned a claim form by then. Id. ¶ 6. By
March 22, 2019-the deadline for class members to submit claim
forms-the claims administrator had received forms from 57 out
of 64 class members. Id. ¶ 7.
C.
Joint Motion for Final Approval and Fairness Hearing
In
March 2019, the parties jointly moved for final certification
of the class and for approval of the settlement. ECF No. 35.
As required by Federal Rule of Civil Procedure 23(e), the
Court held a fairness hearing on April 10, 2019, which was
attended by counsel for the parties and one of the named
plaintiffs. As described above, although class members had
been advised of their right to appear at the hearing and to
object to the settlement, no objectors appeared.
II.
Legal Standards
A.
Class Certification
When
certifying a class for settlement purposes, the Court must
consider whether Plaintiffs have established “that each
of the elements of Rule 23(a) are met and that the class is
maintainable pursuant to one of Rule 23(b)'s
subdivisions.” Radosti v. Envision EMI,
LLC, 717 F.Supp.2d 37, 50 (D.D.C. 2010). Under Rule
23(a), Plaintiffs must establish that (1) the class is so
numerous that joinder of all members is impracticable; (2)
there are questions of law or fact common to the class; (3)
the claims or defenses of the representative parties are
typical of the claims and defenses of the class; and (4) the
representative parties will fairly and adequately protect the
interests of the class. These requirements are generally
referred to as “numerosity, commonality, typicality,
and adequacy of representation.” Cohen v.
Chilcott, 522 F.Supp.2d 105, 113 (D.D.C. 2007).
In
addition, the parties have moved the Court to certify the
class under Rule 23(b)(3), which requires Plaintiffs to show
that “questions of law or fact common to class members
predominate over any questions only affecting individual
members, and that a class action is superior to other
available methods for fairly and efficiently adjudicating the
controversy.” See ECF No. 35-1 (“Joint
Mot.”) at 19. “These requirements are referred to
as predominance and superiority.” Chilcott, 522
F.Supp.2d at 113.
B.
Final Approval of Class Settlement
Rule
23(e) provides that “[t]he claims, issues, or defenses
of a certified class may be settled . . . only with the
court's approval” and upon its finding that the
proposed settlement is “fair, reasonable, and
adequate.” Fed.R.Civ.P. 23(e)(2). In evaluating
proposed class action settlements under Rule 23(e), courts in
this Circuit generally consider the following factors: (1)
whether the settlement is the result of arm's-length
negotiations; (2) the terms of the settlement in relation to
the strength of the plaintiffs' case; (3) the status of
the litigation at the time of settlement; (4) the reaction of
the class; and (5) the opinion of experienced counsel.
See Howard v. Liquidity Servs. Inc., No. 14-1183
(BAH), 2018 WL 4853898, at *4 (D.D.C. October 5, 2018); In re
Vitamins Antitrust Litig., 305 F.Supp.2d 100, 104 (D.D.C.
2004). In so doing, the Court “must strike a balance
between a rubber stamp approval and the detailed and thorough
investigation that it would undertake if it were actually
trying the case.” Chilcott, 522 F.Supp.2d at
113 (internal quotations omitted). It is the role of the
Court to “provide[] a check against settlement dynamics
that may lead the negotiating parties-even those with the
best intentions-to give insufficient weight to the interests
of at least some class members.” In re Vitamins
Antitrust Class Actions, 215 F.3d 26, 30 (D.C. Cir.
2000) (internal quotations omitted). However, there is a
“long-standing judicial attitude favoring class action
settlements.” In re Vitamins Antitrust Litig.,
305 F.Supp.2d at 103 (citing Mayfield v. Barr, 985
F.2d 1090, 1092 (D.C. Cir. 1993)). Therefore, “[a]bsent
evidence of fraud or collusion, such settlements are not to
be trifled with.” Osher v. SCA Realty I, Inc.,
945 F.Supp. 298, 304 (D.D.C. 1996) (quoting Granada
Invs., Inc. v. DWG Corp., 962 F.2d 1203, 1205 (6th Cir.
1992)).
III.
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