United States District Court, D. Kansas
EMERALD LENGEL, on behalf of herself and all those similarly situated, Plaintiffs,
HOMEADVISOR, INC., Defendant.
MEMORANDUM AND ORDER
KATHRYN H. VRATIL, UNITED STATES DISTRICT JUDGE
January 13, 2015, Emerald Lengel filed this lawsuit on behalf
of all persons who applied for employment with HomeAdvisor,
Inc., between January 13, 2013 and June 10, 2015. Plaintiffs
claim that HomeAdvisor violated the Fair Credit Reporting Act
(“FCRA”), 15 U.S.C. § 1681b(b)(2)(A)(i).
Specifically, plaintiffs allege that HomeAdvisor failed to
provide job applicants a stand-alone disclosure stating that
it would obtain a consumer report for employment
January 25, 2017, the Court sustained in part plaintiffs'
unopposed Motion For Preliminary Approval Of Class Action
Settlement (Doc. #49) filed November 18, 2015. See
Memorandum And Order (Doc. #55) (incorporated herein by
reference). The Court preliminarily certified the class,
appointed Lengel as settlement class representative and
appointed Lengel's attorneys as class counsel. The Court
overruled the motion for preliminary approval of the proposed
settlement and reserved ruling on the proposed form of
notice. See id. at 18-19. This matter comes before
the Court on Plaintiff[s'] Motion For Preliminary
Approval Of Updated Class Action Settlement (Doc. #56)
filed February 6, 2017. For reasons set forth below, the
Court sustains the motion.
Preliminary Approval Of Amended Settlement
ask the Court to preliminarily approve the amended settlement
agreement. In deciding whether to approve a settlement, the
Court assesses the reasonableness of the compromise, taking
into account the context in which the parties reached the
settlement. See In re Motor Fuel Temp. Sales Practices
Litig., 258 F.R.D. 671, 675 (D. Kan. 2009) (citing
Nat'l Treasury Emp. Union v. United States, 54
Fed.Cl. 791, 797 (2002)). Although the Court must assess the
strength of plaintiffs' claims, it should “not
decide the merits of the case or resolve unsettled legal
questions.” Id. (citing Carson v. Am.
Brands, Inc., 450 U.S. 79, 88 n.14 (1981)).
determining whether a proposed settlement is fair, reasonable
and adequate, the Court considers the following factors:
(1) whether the proposed settlement was fairly and honestly
(2) whether serious questions of law and fact exist, placing
the ultimate outcome of the litigation in doubt;
(3) whether the value of an immediate recovery outweighs the
mere possibility of future relief after protracted and
expensive litigation; and
(4) the judgment of the parties that the settlement is fair
Rutter & Wilbanks Corp. v. Shell Oil Co., 314
F.3d 1180, 1188 (10th Cir. 2002). While the Court will
consider these factors in greater depth at the final approval
hearing, they are a useful guide at the preliminary approval
stage as well. See In re Motor Fuel Temp. Sales Practices
Litig., 258 F.R.D. at 675; Lucas v. Kmart
Corp., 234 F.R.D. 688, 693 (D. Colo. 2006); Am. Med.
Ass'n v. United Healthcare Corp., No. 00-2800 (LMM),
2009 WL 1437819, at *3 (S.D.N.Y. May 19, 2009).
overruling the original settlement agreement, the Court found
that the first, second and fourth factors weighed in favor of
preliminary approval. Those findings apply to the amended
settlement agreement, and the Court incorporates them herein
by reference. See Doc. # 55 at 14-15. The Court
noted, however, that as to the third factor, although most
terms of the original settlement agreement appeared fair and
reasonable, the settlement was unclear as to the scope of the
release and two points related to payment to class members.
the scope of the release, the Court noted as follows:
The settlement provides that in exchange for a monetary
payment, class members will release all claims “arising
out of or relating to the facts alleged in the complaint
including but not limited to any and all claims under the
FCRA, including specifically 15 U.S.C. § 1681b(b)(2)(A),
and any parallel or similar state or common-law
claims.” Id. at ¶ 38. The broad release
of claims relating to the facts alleged in the complaint and
not limited to claims under the FCRA potentially covers a
range of employment claims far broader than the FCRA claims
in the complaint. See In re Adelphia Commc'ns Corp.
Sec. & Derivative Litig., 272 Fed.Appx. 9, 13 (2d
Cir. 2008) (although broad class action settlements common,
released claims must be limited to claims arising out of
factual predicate of lawsuit). Here, the settlement amount
appears reasonable only if plaintiffs release any FCRA ...