After two rounds of mediation and two years of settlement discussions, a judge in Florida has approved a settlement of almost $31.8 million between Capital One Bank NA and nearly 611,000 plaintiffs in multidistrict litigation. The lawsuit alleges that Capital One imposed deceptive overdraft fees. According to the judge, the amount of the recovery is “extremely reasonable,” “fair,” and “adequate” considering the risks faced by banking customers. The settlement fund represents 35% of the maximum amount of damages that plaintiffs could recover had the matter gone to trial.
The judge also awarded attorneys’ fees totaling nearly $10 million and two service awards of $10,000 each to both of the class representatives, who took on a highly risky and undesirable case on a contingency fee basis.
Capital One tried to have the case dismissed on the grounds of preemption three times, ultimately failing to convince the judge.
The lawsuits, which began cropping up throughout the country in the late 2000s, all accused the bank of maximizing overdraft fees by deducting money from accounts based on transaction size rather than in chronological order. Most of the suits originated in Florida, which is where class certification was achieved.
Representing the plaintiffs was Golomb Legal, P.C., Lieff Cabraser Heimann & Bernstein LLP Podhurst Orseck PA, Bruce S. Rogow PA, Trief & Olk, Grossman Roth PA, Baron & Budd PC, and Webb Klase & Lemond LLC, among others.
Capital One was represented by Covington & Burling LLP, Morrison & Foerster LLP, and Jones Walker Waechter Poitevent Carrere & Denegre LLP.