Summary
The United States District Court for the Eastern District of California granted final approval of a class action settlement resolving allegations that defendants illegally charged excess rent to participants in the Section 8 Housing Choice Voucher Program. The order also approved a $4.5 million award for attorneys' fees and costs, calculated using the lodestar method with an upward adjustment for contingency risk and case complexity. The settlement provides injunctive relief, direct reimbursements to class members, and cy pres payments to tenant-focused legal aid organizations.
Topics
Practice areas
Questions Presented
- Whether the proposed settlement is fair, reasonable, and adequate under Fed. R. Civ. P. 23(e)(2).
- Whether the attorneys' fees award of $4,188,000 is reasonable under the California Consumer Legal Remedies Act and the lodestar method.
Holdings
- The court finds the settlement agreement to be fair, reasonable, and adequate and therefore grants final approval.
- The court awards attorneys' fees of $4,188,000 as reasonable under the CLRA and the lodestar method, including appropriate adjustments.
Key quotations
“The court may approve a settlement agreement that would bind class members “only after a hearing and only after finding that it is fair, reasonable, and adequate.” Fed. R. Civ. P. 23(e)(2).”
“The basic point of reference when considering the award of attorney’s fees is the bedrock principle known as the American Rule: Each litigant pays his own attorney’s fees, win or lose, unless a statute or contract provides otherwise.”
Factual background
Tenants participating in the federal Section 8 Housing Choice Voucher Program alleged that Wasatch Advantage Group overcharged rent in violation of federal and California law, and also asserted False Claims Act claims on behalf of the United States.
Procedural history
The district court certified two classes, oversaw extensive pre‑trial litigation, and issued preliminary approval of a settlement. After a hearing, the court now grants final approval of the settlement and awards fees and costs.