Federal Judge David Katz heard argument yesterday in the Northern District of Ohio on a controversial class action settlement that would allow Encore Capital Group to pay $5.7 million to settle claims that its debt collection unit, Midland Funding, used fraudulent, “robosigned” affidavits to collect debts.
The judge did not make an immediate ruling at the fairness hearing. After argument, an apparently frustrated Judge Katz stated that he would “review the argument for the umpteenth time and in due course release an opinion.”
The judge had preliminarily approved the settlement in March, and lead attorney for the class action plaintiffs, Dennis E. Murray agreed to the settlement, saying he thought the settlement amount was above normal and that Midland had been appropriately punished. (See Thompson Reuters article re Midland Encore settlement here).
However, attorneys representing a number of individual plaintiffs argued that the settlement, which amounts to about $17 per plaintiff, is unfair. Additionally, as we wrote here earlier, the Federal Trade Commission and the attorneys general from 38 states objected to the settlement, concerned that, under the terms of the settlement, the plaintiff class, comprised of about 1.4 million members, would be giving up key defenses – such as robosigning – in existing state litigations brought by Midland or Encore.
-Sheril Stanford