A District Court judge in Utah has given final approval to a settlement in a Fair Debt Collection Practices Act suit that began more than five years ago and accused the defendant of including unredacted confidential protected health information in state court debt collection proceedings.
The background: The case was filed after the plaintiff alleged that the defendant publicly disclosed private medical information while attempting to collect unpaid healthcare debts.
- The disclosures were alleged to violate the FDCPA, the Utah Consumer Sales Practices Act, and common law privacy protections.
- The defendant denied any wrongdoing but spent years litigating the matter, including summary judgment motions and a contested class certification process.
- After months of negotiations, the parties reached a classwide settlement providing each class member with $900 and three years of credit monitoring.
The ruling: In granting final approval, Judge David Nuffer of the District Court for the District of Utah found the agreement to be “fair, reasonable, and adequate.”
- Judge Nuffer noted that the deal was reached after arms length negotiations and that “serious questions of law still exist that would place the outcome of this litigation in doubt if it were to proceed to trial,” including issues involving damages, agency relationships, and allocation of fault. Because of these uncertainties, the court concluded that “the value of immediate recovery and dismissal of claims outweighs the mere possibility of a more favorable outcome after further litigation.”
- The ruling also approved a cy pres award directing any unclaimed funds to Utah Legal Services, stating that supporting debt collection defense services is an appropriate next best use of the funds.
- Judge Nuffer approved incentive awards of $3,500 per class representative and $75,000 in attorney’s fees, noting that class counsel spent more than 300 hours on the case and that the lodestar value “far exceeds” the negotiated fee amount.
