JAMES ORENSTEIN, Magistrate Judge.
Plaintiff Joseph Baum, purporting to act on behalf of a class, has accused defendant Ability Recovery Service, LLC ("Ability") of violating the Fair Debt Collection Practices Act (the "FDCPA"). See Docket Entry ("DE") 1 (Complaint); 15 U.S.C. §§ 1692, et seq. Ability has not responded, and Baum now asks for leave to serve a subpoena seeking documents and testimony in order to gather evidence that he hopes will support a motion to certify a class. See DE 6. For the reasons set forth below, I deny the motion.
Baum properly served Ability on November 15, 2017, and its answer was due by December 6, 2017. See DE 5. Ability did not respond by that date, but Baum did not then take further action to prosecute his claim until prompted to do so. By Order dated January 4, 2018, I directed Baum to seek a default by January 25, 2018 (unless Ability appeared by that date), on pain of possible dismissal for failure to prosecute. Baum did not do so. Instead, on January 22, 2018, he filed the instant request. He "seeks to subpoena class discovery and depositions" (the precise discovery demands and deponents being left unspecified) so that he may later seek a default judgment on a class-wide basis. DE 6 at 1. Baum argues that he cannot seek class certification — and therefore cannot seek a default judgment on behalf of the putative class — without such discovery. Id. at 1-2. Finally, he argues that "Plaintiff's rights, and those of their [sic] fellow class members, should not be impaired because Defendant has selected avoidance as its method to dodge adjudication on the merits of their claims. This would be a drastically unfair result to the Plaintiffs and to their fellow class members." Id. at 2.
I agree that the rights of putative class members should not be impaired by Ability's default. I also agree that it would be wholly unfair to allow Ability to withhold the discovery at issue if producing such information to Baum would prevent such a curtailment of the putative class members' rights. But I disagree that the discovery is necessary to prevent such injustice. To the contrary, it is class certification itself that would harm the interests of the putative class. Briefly stated, the problem arises from both the nature of the proposed class and the differing statutory remedies available to plaintiffs who proceed as individuals and as members of a class, respectively.
Baum alleges that he is one of many people to whom Ability sent an unlawfully deceptive debt-collection letter. Baum further alleges that he lacks the sophistication to have seen through the opaque language of Ability's letter, and he purports to act on behalf of a class of similarly unsophisticated consumers. See Complaint at ¶¶ 76-90; 100-09.
As I recently explained at length in Etienne v. Reliant Capital Solutions, LLC, 16-CV-2359, slip op. (E.D.N.Y. Sept. 25, 2018) (report and recommendation) (copy attached hereto), prosecuting a claim under the FDCPA on behalf of a putative class can risk two forms of injustice to absent members. First, a putative class member who wishes to seek relief on an individual basis — unlike the members of many other types of a properly certified class — has few if any obstacles to finding counsel to prosecute such a claim. Upon successfully prosecuting the claim, the individual plaintiff can secure an award of statutory damages of up to $1,000.00. In contrast, a member of a plaintiff class is entitled to no more than one percent of defendant's net worth — which may be much less than $1,000.00.
Accordingly, I conclude that permitting the discovery Baum now proposes would do nothing more than put him into a position to seek a class certification that the court would likely have strong reason to deny. Moreover, denying Baum the requested discovery would not impair either his own interests or those of the putative class members. Each would in any event be in a position to seek an award of full statutory damages on an individual basis — and if Ability's response to the instant action provides any useful indication of its likely reaction to future actions, each is likely to prevail. Thus, allowing class discovery would impose a burden on Ability that is not necessary to protect any person's cognizable interest in prosecuting a viable legal claim. For that reason, I deny the motion.
SO ORDERED.
Plaintiff Esther Etienne ("Etienne"), purporting to act on behalf of a class, has accused defendant Reliant Capital Solutions, LLC ("Reliant") of violating the Fair Debt Collection Practices Act (the "FDCPA"). See Docket Entry ("DE") 18 (Amended Complaint); 15 U.S.C. §§ 1692, et seq. The parties now jointly seek certification of a settlement class, final approval of a proposed classwide settlement, and an award of attorneys' fees and costs. See DE 28 (motion for certification and approval); DE 30 (motion for fees). Upon referral from the Honorable William F. Kuntz, II, United States District Judge, I now make this report and, for the reasons set forth below, respectfully recommend that the court deny the motions.
Etienne filed her initial Complaint on May 10, 2016. DE 1. With Reliant's consent, see DE 17, she filed an amended pleading on October 2, 2016. DE 18. The Amended Complaint added no new claims or factual allegations, but instead added assertions about the legislature's intent in enacting the FDCPA, descriptions of recent case law, and an explanation of the assertion previously made without — of how the conduct at issue had caused Etienne to suffer actual damages. See Am. Compl. ¶¶ 5-6, 31-35 (paragraphs added in amended pleading). The crux of Etienne's FDCPA claim was that Reliant, seeking to collect a debt it asserted she owed to Touro College, had sent her a collection letter that disclosed the "Total Balance" Etienne owed "As Of' the letter's date. See Am. Compl. ¶ 24; DE 1-1 (Am. Compl. Ex. A) (the "Letter"). Etienne claims the Letter thus violated the FDCPA because, by failing to state explicitly that the continuing accrual of interest or other charges might cause the balance to increase in the future, Reliant caused Etienne, "like any least sophisticated consumer," to mistakenly conclude that the stated balance would forever remain static until paid. See id. ¶¶ 25-27; Avila v. Riexinger & Assocs., LLC, 817 F.3d 72, 76 (2d Cir. 2016) ("Because the statement of an amount due, without notice that the amount is already increasing due to accruing interest or other charges, can mislead the least sophisticated consumer . . . the FDCPA requires debt collectors . . . to disclose that the balance may increase due to interest and fees.").
After the close of discovery, the parties reported on December 27, 2016, that they had agreed to settle the case on a class-wide basis. DE 23. They filed a motion for preliminary approval on February 28, 2017, which the court granted on July 7, 2017. See DE 25; DE 26. In October 2017, the parties filed the instant motions seeking certification of a settlement class, approval of the proposed settlement, and an award of attorneys' fees and costs. See DE 28 (class settlement approval motion); DE 28-1 at 3 ("Memo."); DE 28-2 (counsel's supporting declaration); DE 28-3 (Kratz Aff.); DE 30 (fee application); DE 30-1 (supporting memorandum); DE 30-2 (settlement agreement) ("Agreement"); DE 30-3 (counsel's billing records); DE 30-4 (counsel's supporting declaration) ("Marcus Aff. I"); DE 30-5 (same). The court referred the matters to me by orders dated July 27 and October 16, 2017.
I held a fairness hearing on October 19, 2017, at which no member of the putative class appeared or otherwise sought to be heard. At that hearing, I discussed with the parties' counsel several concerns I had with the proposed class settlement and afforded them an opportunity to file supplemental papers addressing those concerns. See DE 31 (minute entry); DE 32 (transcript) ("Tr."). Etienne did so on November 2, 2017. See DE 33 ("Supp. Memo."); DE 33-1 (counsel's supporting declaration) ("Marcus Aff. II"); DE 33-2 (supplemental billing records).
The parties mailed a notice describing the proposed settlement to 66 putative class members at the last known address for each. See DE 25-3 (the "Notice"). Five of those notices were undeliverable. None of the recipients responded in any way at all before the fairness hearing. See Kratz Aff. ¶¶ 6-10; Tr. at 10.
To certify a settlement class, the court must make several findings:
See Fed. R. Civ. P. 23(a), (b)(3), (e); In re Am. Int'l Grp., Inc. Sec. Litig., 689 F.3d 229, 238 (2d Cir. 2012); Hayes v. Harmony Gold Mining Co. Ltd., 509 F. App'x. 21, 22 (2d Cir. 2013); Joel A. v. Giuliani, 218 F.3d 132, 138 (2d Cir. 2000) (citation omitted).
The first four matters are straightforward: the record sufficiently demonstrates that Reliant sent a collection letter to 66 putative class members that was materially similar to the one about which Etienne complains. See Consol. Rail Corp. v. Hyde Park, 47 F.3d 473, 483 (2d Cir. 1995). Predominance is similarly apparent: the legal question of whether Reliant's Letter violated the FDCPA by failing to state explicitly that the recipient's debt might continue to accrue interest is common to all putative class members, and there appear to be no individualized issues at all.
However, the parties have not persuaded me that Etienne's representation fairly and adequately protects the interest of the class, that class form is superior to individual litigation, or that the proposed settlement is fair. To the contrary, as discussed below, I conclude that individual litigation is preferable to a class action in the circumstances of this case and that the proposed settlement is wholly unfair to members of the putative class. I will address the proposed settlement's fairness first, as my concerns about that also inform my reservations about Etienne's adequacy as class representative and the superiority of class litigation.
Before approving a class-wide settlement, the court must satisfy itself that the proposal "is fair, adequate, and reasonable, and not a product of collusion." Joel A., 218 F.3d at 138. Where, as here, the parties have negotiated a settlement before asking the court to certify a class, their proposal "is subject to a higher degree of scrutiny than is usual in assessing a settlement's fairness." Cty. of Suffolk v. Long Island Lighting Co., 907 F.2d 1295, 1323 (2d Cir. 1990) (citing Weinberger v. Kendrick, 698 F.2d 61, 73 (2d Cir. 1982), cert. denied, 464 U.S. 818 (1983)). The fairness assessment requires an evaluation of both process and substance. See Wal-Mart Stores, Inc. v. Visa U.S.A., Inc., 396 F.3d 96, 116 (2d Cir. 2005); Hayes, 509 F. App'x. at 22. As discussed below, I will assume that the proposed settlement is procedurally fair, but I conclude that it is substantively unfair.
In the procedural fairness inquiry, a court must analyze the negotiation process "in light of the experience of counsel, the vigor with which the case was prosecuted, and the coercion or collusion that may have marred the negotiations themselves." In re Payment Card Interchange Fee & Merch. Disc. Antitrust Litig., 986 F.Supp.2d 207, 221 (E.D.N.Y. 2013), rev'd and vacated on other grounds, 827 F.3d 223 (2d Cir. 2016) (internal quotation marks and citations omitted). A presumption of procedural fairness exists "where a class settlement [is] reached in arm's-length negotiations between experienced, capable counsel after meaningful discovery." McReynolds v. Richards-Cantave, 588 F.3d 790, 803 (2d Cir. 2009) (internal quotation marks and citation omitted). This presumption is consistent with the "strong judicial policy in favor of settlements, particularly in the class action context." In re Painewebber Ltd. P'ships Litig., 147 F.3d 132, 138 (2d Cir. 1998) (citation omitted).
The parties report that they "voluntarily exchanged documents and, thereafter, engaged in substantive arm's length negotiations that took place over several months to resolve the case on a class basis." Memo. at 8. They further explain that "there's no evidence of fraud or collusion" in the settlement process because Reliant "has consistently denied all individual and class liability." Id. Neither assertion is particularly persuasive.
I have no doubt that there was some exchange of documents, at least as to the size of the putative class. That hardly establishes that the parties engaged in the kind of "meaningful discovery" before settlement discussions that courts rely on as a signal of procedural fairness. The parties report few details of their discovery and, in particular, do not specify whether they exchanged any information as to the likelihood that the Letter deceived Etienne, whether she engaged in any dialogue with Reliant about its Letter or her debt, or any other element of liability.
Moreover, the fact that Reliant denies liability, standing alone, does nothing to ensure procedural fairness in the context of a claim under the FDCPA. Most such claims are more expensive for a defendant to litigate than to settle or to lose. Accordingly, the fact that Reliant does not acknowledge liability does not mean that it lacks the incentive to enter into a collusive class settlement with Etienne. To the contrary, it has a strong incentive to do so if, as is the case here, the settlement to which its adversary agrees extinguishes the claims of dozens of potential plaintiffs at the likely cost of litigating or settling those of just a few.
My experience in overseeing the pretrial phase of many similar actions is that FDCPA cases typically involve minimal discovery, that the parties to such cases typically use boilerplate demands, and that they can and do complete their exchanges in far less time than most other civil cases require. They often settle on an individual basis under terms that give the plaintiff the maximum statutory award of $1,000.00 and the plaintiffs counsel a few thousand dollars in fees. Those features of FDCPA litigation do little to guard against procedural unfairness in class-wide settlements, and the parties' conclusory assertions to the contrary neither provide any reason to believe this case is atypical nor appear capable of withstanding scrutiny. Nevertheless, I recognize that my skepticism on this point rests more on my general familiarity with this kind of case than on specific indicia of procedural unfairness in the record. Because I conclude that the proposed settlement is in any event substantively unfair, I do not rely on my concerns about process in recommending that the court deny the motion for approval and class certification.
A court assessing a proposed settlement's substantive fairness should consider the following nine Grinnell factors:
See City of Detroit v. Grinnell Coo., 495 F.2d 448, 463 (2d Cir. 1974); see also Hayes, 509 F. App'x at 22. As explained below, I conclude that none of the factors, considered individually or together, favor approval of the proposed class-wide settlement.
Complexity, expense, and duration of the litigation. The parties acknowledge the lack of complexity in this case. See Supp. Memo. at 2. Still, Etienne argues that, because "continuing to litigate this action would result in additional delay and expense[,]" Supp. Memo. at 2, this factor should weigh in favor of approval. I respectfully disagree. Claims under the FDCPA are a regular staple of the court's docket, and they impose little meaningful work on the parties or the court. The attorneys on both sides generally file, as they did here, boilerplate pleadings that require little tailoring to the circumstances of the individual case, and most such cases are quickly settled, abandoned, or otherwise resolved.
Class members' reactions. The reaction — or more pertinently, non-reaction — of the putative class to the proposed settlement also weighs against approval. "It is well settled that the reaction of the class to the settlement is perhaps the most significant factor to be weighed in considering its adequacy." Babcock v. C. Tech Collections, Inc., 2017 WL 1155767, at *6 (E.D.N.Y Mar. 27, 2017) (quoting Maley v. Del Global Tech. Cop., 186 F.Supp.2d 358, 362 (S.D.N.Y. 2002)). While some courts have found that the lack of objections may evidence the fairness of the settlement, see Maley, 186 F. Supp. 2d at 362, the history of this case undermines any such inference.
The putative class, by definition, consists of persons similarly situated to Etienne. But for purposes of interpreting the total lack of response to the Notice, it is important to bear in mind that Etienne — and thus, every member of the putative class — is a person who, "like any least sophisticated consumer," misunderstood Reliant's Letter. Am. Compl. ¶ 25. That document explicitly stated that Etienne owed a stated sum "As Of" the Letter's date. Id. ¶ 24. Etienne asserts that she, like every other putative class member, is too unsophisticated to have understood that stating the amount of a debt "as of" a specific date implies that the amount owed might change with the passage of time. Notwithstanding that lack of sophistication, the parties somehow expect the absent class members to fully comprehend the several legal rights set out in the proposed eight-page, single-spaced notice. In that regard, I note two aspects of the proposed notice that render any such assumption unsupportable.
First, the Notice does not explicitly recite, as the Amended Complaint itself does, the language in the collection letter that allegedly violates the FDCPA by stating a debt in a way likely to confuse the least sophisticated consumer. Instead, it advises that Reliant "sent a collection letter between May 16, 2015, and the present, which the letter contained [sic] language that may have falsely represented the amount of the debt." Notice at 3. The Notice then goes on to advise recipients that the putative class consists of
Id.
Any consumer too unsophisticated to have understood the Letter's "as of language to signal that interest or other charges were accruing would necessarily be too unsophisticated to determine her membership in the putative class based on this definition. That is, in order to identify herself as a class member entitled to relief, a person receiving the Notice would have to figure out that it referred to a letter received some time in the past (possibly years ago), and (assuming she could find the letter) realize that it "state[d] an amount due on which interest or other charges were accruing[.]" But if, as must be presumed, the person receiving the notice had a letter similar to the one Etienne received and was as unsophisticated as Etienne, she would be unable to make that determination. Such a person would be at risk, if the court approved the proposed settlement, of extinguishing her right to sue and easily recover $1,000.00 without understanding that she was doing so.
Second, the Notice provides the following description of the FDCPA and its application to this case:
Notice at 6.
Thus, while there are of course circumstances in which the absence of putative class members' objections might indicate support for a proposed settlement, such an inference would necessarily rest on the assumption that those members understood the proposal to which they did not object. The circumstances here permit no such inference for the reasons set forth above.
Moreover, while no putative class member had responded to the Notice by the time of the fairness hearing, later developments further undermine the proposition that the absence of objections indicated an informed acceptance of the proposed settlement. After the hearing ended, Etienne's counsel reported that two putative class members had contacted him with questions. See Supp. Memo. at 3-4; Marcus Aff. II ¶ 3. Counsel responded to these inquiries by "explain[ing] to these class members what the settlement entailed, their rights to object or opt out if they so wished, and what they could expect to receive if they stayed in the class versus what they could receive if they opted out of the class." Id. 113. In other words, counsel needed to explain to two putative class members precisely what the Notice should have sufficed to make clear. That the only responses to the Notice showed such incomprehension bolsters the conclusion that the remaining putative class members may have similarly been in the dark about their rights and the potential consequences of their silence. Accordingly, there is no reason to conclude that the putative class supports the proposed settlement.
The stage of the action and completed discovery. Etienne reports that she issued "extensive written discovery [requests] in the form of Interrogatories, Document Demands and Requests for Admission." Supp. Memo. at 4. But that does not mean that the parties actually exchanged any meaningful discovery. To the contrary, Etienne's assertion elides the reality that although she made discovery requests, there is no indication in the record of how, if at all, Reliant responded. The formal discovery period closed on November 30, 2016. See DE 16; DE 22. Several days later, the parties made a belated request to extend (or, more accurately, reopen) discovery because Etienne had only served her initial discovery demands three weeks earlier and had not yet received any responses.
The risk of establishing liability This factor likewise weighs against approval. Etienne's claim rests squarely on Avila's holding that "the FDCPA requires debt collectors . . . to disclose that the balance may increase due to interest and fees." 817 F.3d at 76; see also Am. Compl. 1125 (alleging that Reliant's Letter did not "state that the amount of the debt might vary from day to day because of, for example, interest, late charges or other charges"). She nevertheless argues that "this is not necessarily a case where liability is a foregone conclusion" and insists that while she "strongly believes the FDCPA was violated here[,]" the "potential uncertainty" of a favorable ruling under controlling case law weighs in favor or settlement. Supp. Memo. at 5. Such argument amounts to little more than a shrug and the observation that anything can happen. See id. at 6 ("[l]itigation inherently involves risks') (quoting In re PaineWebber Ltd. P' ships Litig., 171 F.R.D. at 126). Perhaps so, but Etienne has not explained how the risk to herself and other putative class members is so high as to justify what otherwise (as explained below in the context of the next Grinnell factor) seems to be an unfavorable result. If the proposition that litigation inherently involves risks, without more, sufficed to establish this Grinnell factor, the factor itself would be useless in helping courts to distinguish fair class settlements from unfair ones.
The risk of establishing damages. For essentially the same reason, this factor also weighs against approval. Etienne concedes that she does not now seek actual damages and that no putative class member suffered "any ascertainable actual damages." Memo at 10; see Supp. Memo at 7. However, she argues that she and the class members "face a serious risk of establishing that they should each be entitled to the maximum $1,000 allowed by statute" because "whether to award statutory damages and the size of the award are matters committed to the sound discretion of the district court.'" Supp. Memo. at 7 (quoting Ayzelman v. Statewide Credit Servs. Corp., 242 F.R.D. 23, 27-28 (E.D.N.Y. 2007)). Etienne is of course correct that a prevailing plaintiff on a claim under the FDCPA risks the possibility that the court will award less than the thousand dollar statutory maximum, but she wholly ignores the more salient point: namely, that the proposed settlement poses an even greater risk to putative class members. If the court rejects the proposed settlement, each member of the putative class can establish liability as easily as Etienne, and has every reason to believe the court will award $1,000.00 — certainly Etienne has identified no reason to believe a court would exercise its discretion to award less or any factor that would favor such a result. In contrast, if the court approves the proposed settlement and certifies the class, every class member is guaranteed to recover less than one-fifth of that amount. Far from avoiding a risk that class members may not get the highest possible award, then, the proposed settlement serves only to lock in a cap on damages far lower than would otherwise exist.
The risk of establishing and maintaining the class. In seeking to argue that this factor favors approval, Etienne relies on vague assertions of "risks to this action," on the one hand, and "the sizeable individual recovery on the other." Supp. Memo. at 11. Such argument — which hyperbolically describes as "sizable" the putative class members' allocation of $174.25 — falls far short of a sufficient explanation as to why the potential availability of a class action favors a settlement that so significantly limits each putative class member's possible recovery. To the contrary, I conclude that in the circumstances of this case — where class certification would limit the recovery available to plaintiffs without meaningfully reducing any barriers to prosecuting their claims — establishing and maintaining a class presents a greater risk to putative class members than not doing so.
Reliant's ability to withstand a greater judgment. Etienne acknowledges, as she must, that Reliant "can likely withstand a greater judgment." Supp. Memo. at 9. The record thus clearly establishes that this factor does not support approval.
The range of reasonableness of the settlement fund in light of the best possible recovery and in light of all the attendant risks of litigation. The settlement fund needlessly limits putative class members' recovery to a fraction of what they could likely recover, regardless of whether the litigation proceeded as a class action or as several individual ones. These final two Grinnell factors thus do not favor approval.
For the reasons set forth above, I conclude that the court should deny the motion to approve a class-wide settlement because the parties' proposal is unfair as it needlessly harms the interests of putative class members while giving Etienne and her counsel a windfall to which they would not be entitled if the case proceeds on an individual basis. As explained below, that unfairness, in turn, creates a conflict between Etienne and the putative class members that renders her an inadequate class representative. See Fed. R. Civ. P. 23(a)(4).
"The adequacy inquiry rule serves to uncover conflicts of interest between named parties and the class they seek to represent." Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 625 (1997). An adequate class representative is one whose counsel is "qualified, experienced, and generally able to conduct the litigation" and whose interests are "not . . . antagonistic to those of the remainder of the class." Reade-Alaverez v. Eltman, Eltman & Cooper, P.C., 237 F.R.D. 26, 32 (E.D.N.Y. 2006). I have no concern as to the first element: Etienne's counsel has pertinent experience and expertise. See Marcus Aff. I ¶ 2; Tr. at 12. Accordingly, the first element is satisfied. The proposed settlement, however, creates a conflict of interest between Etienne and the class she seeks to lead.
In the absence of settlement approval, the case will proceed either as a class or as an individual action. If the court certifies a class for trial, rather than for settlement, Etienne will have little incentive to be its representative. Indeed, during the fairness hearing, Etienne's counsel alluded to cases where "the plaintiff refuses to cooperate at some point" because the amount of recovery is not worth litigating. Tr. at 12. Such a risk obviously arises where, as here, the defendant's net worth would cap the prevailing class plaintiffs potential recovery at approximately two-thirds of the thousand-dollar award she could secure as an individual litigant who suffered no actual damages. See Tr. at 3; 15 U.S.C. 1692k(a)(2)(A). Etienne thus has a disincentive to serve as a class leader unless she can do so in the context of a settlement — and it appears that the parties are willing to settle on a class-wide basis only by means of a bargain that harms the interests of absent class members.
In contrast, both Etienne and her counsel have strong incentives to enter into the bargain that is so unfavorable to the class. The proposed class settlement not only guarantees Etienne — alone out of the entire putative class — the maximum statutory award of one thousand dollars, it also gives her an additional payment of $500.00 to reward what the parties describe as her service to the putative class. As used here, however, "service" is a rather ironic description of what Etienne would provide to the putative class: the bargain she has struck on the class members' behalf does no more than impose a significant limit on their ability to recover damages. Similarly, Etienne's counsel would receive $14,000.00 in fees under the proposed class settlement (Agreement ¶ 15) — far more than would typically result from an individual settlement,
I hasten to acknowledge that the dynamic described above — in which a named class representative receives the benefit of a service award and her attorney enjoys higher fees — is neither uncommon nor inherently a reason to decide against class certification. In most class settlements — but not this one — the named plaintiff who (with counsel's assistance) negotiates a class-wide settlement unquestionably confers some benefit, however modest, on absent class members that they likely would not be willing and able to get on their own. In those circumstances, the named plaintiffs interests align with those of the class, and both the plaintiff and her counsel can properly claim an enhanced recovery on that basis. Thus, while [g]enerally class actions can be useful for cases with small individual recoveries because they create an incentive to litigate the dispute[,]" "where a statute already provides for the defendant to pay the prevailing plaintiffs attorneys' fees, as the FDCPA does, such an incentive already exists." Gallego v. Northland Grp., Inc., 102 F.Supp.3d 506, 510 (S.D.N.Y), ed in part, vacated in part, remanded, 814 F.3d 123 (2d Cir. 2016). I therefore conclude that Etienne has interests that materially diverge from those of the putative class, and that as a result, she is not an adequate class representative.
The same features that render the proposed settlement unfair and Etienne an inadequate representative also lead me to conclude that, in the circumstances of this case, a class action is not superior to individual litigation. Even accounting for the possibility that some members of the putative settlement class might refrain from pursuing individual litigation, the ease of doing so given the simplicity of the case, as well as the potential difference in recovery, indicates that in this circumstance, a class action is not "superior to other available class methods for fairly and efficiently adjudicating the controversy." Fed. R. Civ. P. Rule 23(b)(3); see also Gallego, 102 F. Supp. 3d at 510 (finding that parties have more incentive to pursue individual actions under the FDCPA because the statute provides for recovery of attorneys' fees); Jones v. CBE Grp., Inc., 215 F.R.D. 558, 570 (D. Minn. 2003) (denying class certification as not superior to individual litigation because "[t]here is no lack of incentive for either plaintiffs or counsel to pursue individual FDCPA actions").
If the court adopts the foregoing analysis, it will deny the motion to certify a settlement class and approve the proposed settlement. In such circumstances, the court should also deny as premature Etienne's motion to award attorneys' fees.
For the reasons set forth above, I respectfully recommend that the court deny the motions for approval of class certification, settlement approval, and attorneys' fees.
Any objections to this Report and Recommendation are due by October 9, 2018. Failure to file objections within this period designation the particular issues to be reviewed waives the right to appeal the district court's order. See 28 U.S.C. 636(b)(1); Fed. R. Civ. P. 72(b)(2); Wagner Wagner, LLP v. Atkinson, Haskins, Nellis, Brittingham, Gladd & Carwile, P.C., 596 F.3d 84, 92 (2d Cir. 2010).
