United States District Court, E.D. Tennessee, Knoxville
DUSTIN HARBIN and JIMMY PRUITT, on behalf of themselves and the class defined herein, Plaintiffs,
EMERGENCY COVERAGE CORPORATION and ACCOUNT RESOLUTION TEAM, INC., Defendants.
REPORT AND RECOMMENDATION
case is before the undersigned pursuant to 28 U.S.C. §
636(b), the Rules of this Court, Standing Order 13-02, and
the referral Order [Doc. 44] of the District Judge.
parties appeared before the Court on March 26, 2018, for a
fairness hearing. Attorney Alan Lee was present on behalf of
Plaintiffs. Attorney John Lawhorn was present on behalf of
Defendants. The Court observes that no objections were filed
to the proposed settlement agreement and that no objections
were presented at the fairness hearing. Accordingly, the
Court RECOMMENDS that the Settlement
Agreement [Doc. 43-1] be approved in its entirety.
Complaint [Doc. 1] in this case was filed on March 16, 2016.
The Complaint alleges that Defendant Emergency Coverage
Corporation (“Emergency Coverage”) issued
garnishments against Plaintiffs' employers in Hamblen
County General Sessions Court, requesting post-judgment
interest that exceeded the amount allowed under Tennessee
state law and resulted in wrongful garnishments. [Doc. 1 at
¶ 1]. Plaintiffs seek restitution in the amounts
received by Defendant Emergency Coverage in excess of the
legal rate of post-judgment interest, pre-judgment interest
on the restitution, and punitive damages. [Id.]. In
addition, Plaintiffs allege that Defendant Account Resolution
Team, Inc., (“ART”) violated the Fair Debt
Collection Practices Act (“FDCPA”) in its illegal
efforts to collect consumer debts. [Id.].
March 23, 2017, the District Judge granted [Doc. 29] class
certification. Specifically, the District Judge certified the
(a) All persons sued by Defendants; (b) [i]n the General
Session Court of Hamblen County, Tennessee; (c) [t]hat had
garnishments issued against their wages that included amounts
of post judgment interest or fees that exceed the amount
allowed under Tennessee state law; (d) [t]hat made payments
to Defendants as a result of the wrongful garnishments issued
to their employers by garnishment of wages or direct payment
to the clerk; (e) [i]n the six years preceding the filing of
this action, for all persons as to the state law claims; and
(f) [i]n the one year preceding the filing of this action,
and on or before a date 20 days after the filing of this
action, as to the FDCPA claims.
[Id.]. Later, the District Judge dismissed several
of Plaintiffs' claims, including Plaintiffs' unjust
enrichment claim against Defendant Emergency Coverage and
Plaintiffs' request for punitive damages. [Doc. 38]. In
addition, the District Judge found that Plaintiffs'
remaining unjust enrichment claim is governed under the
three-year statute of limitations provided in Tennessee Code
Annotated § 28-3-105. [Id.].
September 28, 2017, the parties filed a Joint Motion for an
Order Conditionally Certifying Class and Granting Preliminary
Approval of Class Settlement Agreement [Doc. 43], requesting
that the Court (i) preliminarily approve the Class Settlement
Agreement; (ii) certify for settlement purposes the
Settlement Class; (iii) appoint Alan C. Lee, Peter A.
Holland, and Scott C. Borison as Class Counsel; (iv); appoint
Plaintiffs as representatives of the Settlement Class; (v)
sets dates for Settlement Class members to opt-out of, or
object to, the Settlement Agreement; (vi) schedule a hearing
for final approval of the agreement; (vii) approve the
mailing of notice to Settlement Class members; and (viii)
find that the mailing of such notices satisfies the
requirements of due process. The undersigned recommended
[Doc. 47] that the Joint Motion be granted, and the District
Judge accepted and adopted the undersigned's Report and
Recommendation [Doc. 48]. Specifically, the District Judge
preliminary approved the Settlement Agreement [Doc. 43-1 at
1-15], subject to final consideration at the fairness hearing
on March 26, 2018. In addition, the District Judge instructed
Defendants to send notice of the Settlement Agreement to the
March 9, 2018, Defendants filed the Affidavit of Bailey
Hughes, the case manager for First Class, Inc., the class
administrator. [Doc. 50]. The Affidavit explains that notices
were mailed on December 20, 2017, to 119 class members and
that seventeen (17) were returned as undeliverable with no
forwarding address or further information from the United
States Postal Service. [Id. at ¶¶ 6, 8].
As stated above, no objections were filed to the Class
initial matter, and as set forth in the Report and
Recommendation, the Court finds it unnecessary to conduct a
Rule 23 analysis. As previously explained, the Settlement
Class as defined in paragraph 10 of the Settlement Agreement
provides as follows:
(a) All persons sued by Defendants; (b) in the General
Session Court of Hamblen County, Tennessee; (c) that had
garnishments issued against their wages that included amounts
of post-judgment interest or fees that exceeded the amount
allowed under Tennessee state law; (d) that made payments to
Defendants as a result of the wrongful garnishments issued to
their employers by garnishments of wages or direct payment to
the clerk between March 16, 2013[, ] and ending on April 5,
[Doc. 43-1 at 4]. The District Judge has already certified
this litigation as a class action. See [Doc. 29].
The proposed class definition is the same definition that the
District Judge certified, except that the proposed class
definition includes a time period from March 16, 2013, to
April 5, 2016. The proposed definition, however, is in
accordance with the District Judge's finding that the
three-year statute of limitations governs this action.
Accordingly, because the District Judge has already certified
the class action and the definition outlined in paragraph 10
is in accordance with the District Judge's previous
ruling, the undersigned finds it unnecessary to conduct
another Rule 23 analysis.
actions may be settled or compromised only with the approval
of the Court and after giving notice of the proposed
settlement to the class. Fed.R.Civ.P. 23(e). There is a
three-step process that ...