Jackson v. Wells Fargo Bank, N.A. (136 F. Supp. 3d 687, 2015)

OPINION

DAVID STEWART CERCONE, District Judge.

Thomas and Patricia Jackson (“plaintiffs”) commenced this action individually and as purported members of three putative classes seeking to hold Wells Fargo Bank (“WFB”) and Wells Fargo Insurance, Inc. (“WFI”) (collectively “defendants”) liable for alleged improper practices related to flood insurance undertaken in conjunction with the mortgage underwriting process. Presently before the court are plaintiffs’ motions for final approval of class áction settlement (Doc. No. 96) and attorneys’ fees and expenses (Doc. No. 91). For the reasons set forth below, the motions will be granted.

This case arises from demands by WFB that plaintiffs obtain flood insurance on real property purchased with a mortgage from WFB. Similar demands were made on other mortgagors by WFB and other mortgage lenders throughout the United States following a change in protocol for flood insurance pertaining to the amount of flood insurance a mortgagor is required to maintain' on eligible property. This practice was not unique to WFB and has become known as “force-placed flood insurance.”

This action was filed as a case “related” to Morris v. Wells Fargo Bank, et al., 2:11cv474, under Local Rule 40(D)(2). That case also arose from force-placed flood insurance practices that involved “alleged improper charges and expenses incurred as a result of unnecessary and unauthorized flood-insurance placed on real estate that was" purchased with a Federal Housing Administration (“FHA”) mortgage” issued by WFB. Opinibn on Motion to Dismiss issued on September 7, 2012, in Morris, 2:11cv474 (Doc. No. 99 in 2:11cv474). Plaintiffs in both the Morris action and this case were/are represented by Attorney Kai Richter (“Attorney Richter”) and the law firm Nichols Raster, PLLP (“Nichols Raster”).

. The claims the parties currently seek to compromise and settle through the pending motions pertain to fees that WFB charged for a Standard Flood Hazard Determination (“SFHD”) made in conjunction with the. National Flood Insurance Program (“NFIP”). As to these claims plaintiffs essentially maintain that- WFB charged an excessive fee for the determination. and then unlawfully engaged in a kickback or fee-splitting arrangement with ,WFI. The arrangement purportedly was implemented through a “soft-dollar” accounting program utilized by defendants.

- The pertinent allegations of plaintiffs’ Amended Complaint are briefly. summarrized below. On August 31, 2011, plaintiffs obtained a mortgage loan from WFB for $107,500.00. Amended Complaint at If 7. WFB charged plaintiffs $19.00 for a flood zone determination that was performed by WFI prior to closing. Id. at ¶ 19. The charge was reflected on. plaintiffs’ HUD-1 settlement statement. Id. Although WFB charged $19.00 for the SFHD, its actual cost to obtain the determination was closer to $5.00. Id. at ¶ 23.

In conjunction with the mortgage plaintiffs received a Truth-in-Lending Act (“TILA”) Disclosure (“TILA Disclosure”). Id. at ¶ 8. The initial version of the TILA Disclosure stated that flood insurance was required for plaintiffs’ property. (Id. at ¶ 8; Pis’ Ex. 2, (Doc. No. 18-2), at p. 3). However, this error was later corrected with both parties’ consent. In its unaltered form, the TILA Disclosure provided that flood insurance “is required.” But a handwritten alteration initialed by both plaintiffs purports to eliminate the requirement with the supporting text “n/a and confirmed NOT in a flood zone”. (Pls’ Ex. 2, at p. 3). The parties disagree as to both the erroneous nature of the TILA Disclosure’s flood zone requirement and the legal effect of any attempted amendment. Compare (Amend. Compl., at ¶8), with (WFB’s Answer, at ¶ 8).

Before closing plaintiffs obtained their own independent flood zone determination from CoreLogic Flood Services (“CoreLogic”). Id. at ¶ 17. CoreLogic determined that flood insurance was not required on plaintiffs property. Id.; Standard Flood Hazard Determination of August 26, 2011, Completed by CoreLogic (Doc. No. 18-9). This independent flood determination cost plaintiffs $6.00, which is the standard amount CoreLogic .charges for this service. Id. at ¶¶ 17, 21.

At closing plaintiffs signed a SFHD which had been prepared by WFI for WFB. Id. at ¶9. The parties at closing treated the SFHD as indicating that flood insurance was not required for any portion of plaintiffs’ property. Id.

On November 7, 2011, WFB sent plaintiffs a form letter stating that flood insurance “is a requirement of your loan.” Id. at ¶ 10; Letter of November 7, 2011 (Doc. No. 18-4). The letter indicated that if plaintiffs did not provide proof of flood insurance WFB would purchase it at plaintiffs’ expense. I'd.Plaintiffs repeatedly objected to this demand. Id at 11.

Plaintiffs wrote a letter to WFB on December 9, 2011, in which they asserted that flood insurance was not required for their loan. As proof they enclosed a copy of the SFHD that they and WFB had signed at closing. Id; Thomas Jackson’s Letter of December 9, 2011(Doc. No. 185). WFB did not immediately respond to plaintiffs’ letter. Feeling as if they had no choice,- plaintiffs purchased a policy providing $250,000.00 in coverage from NFIP in order to comply with WFB’s November 7, 2011, demand. Id at ¶ 12.

After purchasing the insurance plaintiffs sent a second letter to WFB on December 19, 2011, informing it that they had acquired the demanded insurance and providing proof of the same. Id.; Thomas Jackson’s Letter of. December 19, 2011(Doc. No. 18-6). The letter further explained that plaintiffs’ property was not in a Special Flood Hazard Area (“SFHA”); the loan would not have been taken out if it had been known that flood insurance was required; and at closing WFB had assured that plaintiffs were not required to obtain such insurance prior to signing the settlement documents. Id

WFB responded to plaintiffs in a letter dated January 5, 2012. Id at ¶ 13. Therein WFB acknowledged plaintiffs’ concerns about the flood insurance requirement and contended that the SFHD used at closing was for plaintiffs’ garage only, and included with the letter a separate SFHD for plaintiffs’ home. Id; Letter of January 5, 2012, by Christopher Cory (Doc. No. 18-7). Plaintiffs had not received this separate determination for their residence at, closing. Id Further, the comment section of the SFHD form indicated that WFI had made the determination regarding the status of plaintiffs’ residence on August- 23, 2011; however, the date of determination listed on the form , is August 17, 2011. Id; Standard Flood Hazard Determination of August 23, 2011, Section E, Comments (Doc. No. 18-3).

Upon receiving this letter plaintiffs spoke to an executive mortgage specialist at WFB. Id at ¶ 14. During the telephone conversation plaintiffs expressed their dismay that WFB had not disclosed its flood insurance requirement at closing. Id Thereafter, WFB. sent a letter to plaintiffs stating that “flood insurance was not required on your loan at the time of closing” and that this was reflected in both the SFHD and the TILA Disclosure provided at closing. Id; Letter of February 17, 2012 (Doc. No. 18-8). WFB avers that this letter was the product of an inadequate investigation by the. employee who authored it. (WFB’s Answer, at ¶ 14).

Plaintiffs further maintain that WFB charged $19.00 for the SFHD. WFI received this fee and kicked-back or split the charge with WFB or WFB received the fee and did not pay the full amount to WFI. Id at ¶¶ 24, 26. This practice repeatedly has been utilized by defendants. Id at ¶¶ 25, 27. Through its “soft dollars” program WFI typically kicks back a portion of the charge it earns from referral business from WFB and the pass-back of these amounts is reflected on the general ledger and is reported on a “Profitability Passback Report.” Id at ¶ 25. This charge did not reflect a reasonable fee in compliance with those authorized under the National Flood Insurance Act (“NFIA”) and the practice of kick-backs or fee-splitting constituted an illegal arrangement under the Real Estate Settlement Procedures Act (“RESPA”). Id at ¶¶ 22, 26.

Defendants counter in part by asserting that plaintiffs’' house is within a SFHA but their garage is not. The August 17, 2011, determination by WFI thus properly determined that plaintiffs were required to obtain flood insurance as a condition of their loan. A TILA disclosure was prepared in accordance therewith. The SFHD was refined by a re-assessment on August 23, 2011, which determined that only plaintiffs’ garage was not within the applicable SFHA. Thereafter, the August 17, 2011, determination improperly was displaced by using the August 23, 2011, SFHD at closing and amending the TILA disclosure by hand to indicate plaintiffs were not required to obtain flood insurance on the entire property.

WFB further contends that it is required by federal law to monitor the flood zone status of improved property throughout the life of any mortgage it issues. Pursuant to this duty it was required to rectify the mistake made at closing and have plaintiffs obtain the proper insurance coverage if the home was within a SFHA, which it was according to both determinations made by WFI in August of 2011. And plaintiffs agreed to expressed contractual provisions which authorized the $19.00 charge for a life-of-the-loan SFHD. As a result they will be unable to establish that the fee charged for the “life-of-the-loan” SFHD was unreasonable, which in turn will undermine the ability to prove liability on ail of their claims, including their fee splitting/kickback claim(s).

In their Amended Complaint plaintiffs assert four causes of action. First, they contend that WFB violated the Truth in Lending Act, 15 U.S.C. § 1601-1667f (“TILA”), by forcing class members to purchase flood insurance without disclosing the requirement to do so in a TILA disclosure. (Amend. Compl., at ¶¶ 39-45). Second, defendants violated Sections 8(a) and 8(b) of the Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C. § 2607(a), (b), by orchestrating a scheme to split or kickback a portion of the $19 received for SFHD flood zone determinations. (Id at ¶¶ 46-54). Third, WFB breached mortgage contracts by charging fees prohibited “by applicable law.” (Id at ¶¶ 57-59). It also breached the covenant of good faith and fair dealing. (Id at ¶60). Finally, plaintiffs claim that WFI was enriched unjustly at the expense of class members by its receipt of the SFHD fees. (Id at ¶¶ 67-71).

Defendants filed motions to dismiss on December 20, 2012. (Doc. Nos. 28, 30). Pursuant to an opinion issued on November 6, 2013, the motions were granted in part and denied in part. WFB’s motion was granted as to plaintiffs’ breach of contract claim to the extent it (1) seeks to advance a cause of action for breach of the covenant of good faith and fair dealing as an independent basis for recovery and (2) is predicated on a violation of the reasonable fee authorization in section 4012a(h) of the FDPA. WFI’s motion was granted as to plaintiffs’ unjust enrichment claim to the extent it seeks relief based solely on a showing that the SFHA determination was inaccurate or the SFHD fee was unreasonable. The motions were-denied in all other aspects.

Pursuant to discussions with counsel, the parties were permitted to defer their participation in this courfls mandatory Alternative'Dispute Resolution Program until the pending motions to dismiss were resolved. As part of those discussions the court suggested and recommended that the parties consider using Louis B. Kushner, Esquire (“Attorney Kushner”) as the designated neutral for that process. Following the opinion and rulings on November 6, 2013, the parties were referred to mediation with Attorney Kushner. (Doc. No. 50).

Prior to starting mediation the parties continued to litigate the matter. Plaintiffs served interrogatories and requests for production of documents on November 15, 2013. (January 16, 2015, Richter Declaration (Doc. No. 93), at ¶ 14). Defendants responded to these requests on December 23, 2013 and “produced a significant number of documents” over the next two months. (Id.). The parties also negotiated and agreed that for the purposes of mediation plaintiffs could use over 200,000 pages of documents produced in the Morris case. (Id. at ¶¶ 1, 15). Plaintiffs additionally served deposition notices on each defendant and four individuals during this timeframe. (Id. at ¶ 16).

Mediation was commenced on February 26, 2014, and continued for the full day. (Id. at ¶ 17). During the session Attorney Kushner acted as an intermediary between the parties. (Id.). The parties failed to reach an agreement in principle that day. Attorney Kushner continued the process through a series of telephonic discussions. In the interim plaintiffs’ counsel continued to litigate the case through following up on outstanding discovery requests and pursuing depositions. After lengthy negotiations under the auspice of Attorney Kushner an agreement in principle was reached on May 12, 2014. (Id. at ¶¶ 18-19). The parties then exchanged a number of drafts in an effort to arrive at a comprehensive settlement agreement and related court submissions. The parties executed the Settlement Agreement in August of 2014. (Id. at ¶ 19). The motion for preliminary approval was filed on October 27, 2014.

The Settlement Agreement defines the Settlement Class as:

All persons who obtained a loan from [WFB] that was secured by a first- or subordinated lien on residential real property who. were charged by [WFB] for a Flood Hazard Determination between August 30, 2011 and December 31, 2013, inclusive.

(Settlement Agreement, (Doc. No. 87-1), at ¶ 2(cc)). Pursuant to this agreement, class members who submit a valid claim form certifying that they paid WFB for their flood zone determination are entitled to a settlement payment of $9.50. (Id. at 132).

In exchange, class members who do not validly opt-out agree to release defendants from all claims “based upon the same factual predicates as those alleged” in the action which were or could have been asserted as of the date the Settlement Agreement was executed. (Id. at ¶ 1(y)(2)). These include claims arising from or related to “Flood Hazard Determinations performed or procured” by defendants and any communications relating to such determinations, and any.charges relating to such determinations, “including ... any overcharges or markups by defendants of or related to any Flood Hazard Determinations; any alleged “kickbacks” or alleged improper payments of anything made by or received by Defendants or either of them in connection with Flood Hazard Determinations; and/or any payment by or to Defendants or either of them to or from any third party in connection with the performance or provision of Flood Hazard Determinations.” (Id.)

This release does not, however, extend to claims that defendants required borrowers to maintain flood insurance in “an amount that the Settlement Class Member believes is greater than what is required or permitted by applicable law or is greater than what is necessary to protect-the lender’s interest in the Settlement Class Member’s property securing his or' her loan” and any right to pursue relief on the premise that “Wells Fargo require[ed] a borrower who obtained a loan from Wells Fargo secured by residential real property to, after loan closing, obtain flood insurance for. the property securing the loan where Wells Fargo informed the borrower at the time the borrower’s loan closed that the borrower . did not need to obtain flood insurance and there was no 'intervening change in FEMA’s flood zone map affecting the property.”(Id.).

Settlement Class members were provided with notice sent to their last-known address that included a claim form consisting of a two-sided postcard. (Id. at ¶¶ 15-19; Claim Form, (Doc. No. 87-1), at pp. 38-39), The claims administrator was to use change of address information and utilize automated skip traces to ensure that notice had the best possible chance of reaching class members. (Settlement Agreement, at ¶¶ 18, 20). The claims administrator was, required to set up an informational website and toll-free telephone call center under the Settlement Agreement; (Id. at ¶¶ 21-23, 30). Nevertheless, mailing a physical copy of the enclosed claim form was the only method made available for filing a valid claim.

In comparison with the specific release that settlement class members must provide, plaintiffs have agreed to execute a general release under the Settlement Agreement. (Id. at ¶ 1(y)(1)). Subject to court approval plaintiffs are to receive $25,000 in exchange for this release. (Id. at ¶ 43). In addition to any other potential claims plaintiffs might have, plaintiffs’ TILA claim pertaining to the disclosures they received regarding the actual need for flood insurance is referenced as a basis for this payment. (Id.).

Beyond the' settlement payments to class members and plaintiffs, the Settlement Agreement provides that subject to court approval defendants also will bear the costs of séttlement administration and attorneys’ fees and expenses up to $1,500,000.00. (Id. at ¶¶ 36, 38). Defendants agree not to oppose plaintiffs’ request for attorneys’ fees in any way. (Id. at ¶38). With respect to settlement administration, the costs include those necessary to (1) set up the settlement website and toll-free call center (2) provide notice to potential class members, (3) review claim forms, and (4) ultimately mail checks. (Id. at ¶ 36). Such costs are expected to exceed $1,500,000.00. (January 16,2015 Richter Declaration, at ¶ 22).

Pursuant to Federal Rule of Civil Procedure 23, the court certified the proposed Settlement Class on October 27, 2014, for the sole purpose of effectuating settlement. (Preliminary Approval Order, (Doc. No. 89), at ¶¶ 2-3). Plaintiffs were designated as class representatives, Nichols Raster was appointed as class counsel for the Settlement Class, and Rust Consulting, Inc. (“Rust”) preliminarily was approved as claims administrator. (Id. at ¶¶ 67, 10). The Settlement Agreement was given preliminary approval and the parties were directed to begin the class notice process. (Id. at ¶¶ 8, 11-12).

On December 1, 2014, notice was sent to 2,315,364 Settlement Class members. (Botzet Declaration, (Doc. No. 99), ¶ 7), Of these, 11,572 were undeliverable despite Rust’s best efforts to update class member addresses. (Id. at ¶ 10). As of February 18, 2015, over two weeks after the established deadline for responses, Rust had received 300,995 timely claim forms. (Id. at ¶ 17). In contrast, 354 opt-out requests and ten objections were submitted. (Id. at ¶¶ 14-15).

Per the Preliminary Approval Order, a Final Approval . Hearing was held on March 5, 2015. (Preliminary Approval Order, at ¶ 17). Plaintiffs, defendants and representatives for objectors Alejandro Diaz, Mayda Nahhas, and Wei Cyrus Hung argued their respective positions. (Hearing Transcript, (Doc. No. 113), at pp. 4-33). The objectors assert that the settlement is unfair because insufficient relief is provided to class members, receiving relief has been unduly restricted, plaintiffs’ receipt of additional relief renders them inadequate class representatives, and a review of class counsel’s request for “excessive” fees improperly has been sheltered from the adversarial process and court review. Class counsel and defendants continue to maintain that approval of the settlement and fee request is warranted.

Class actions settlements are distinguished from those in most normal suits because Federal Rule of Civil Procedure 23(e) mandates that “[a] class action shall not be dismissed or compromised without the approval of the court.” Fed.R.Civ.P. 23(e); In re GMC Pick-Up Truck Fuel Tank Products Liability Litigation, 55 F.3d 768, 785 (3d Cir.1995) ("G.M. Trucks”). This rule “imposes’ on the trial judge the duty of protecting absentees, which is executed by the court’s assuring the settlement represents adequate compensation for the release , of the class claims.” In re Prudential Ins. Co. America Sales Litigation, 148 F.3d 283, 316 (3d Cir.1998) (quoting G.M. Trucks, 55 F.3d at 805).

In order to fulfill this duty the court is required to “independently and objectively analyze the evidence and circumstances before it in order to determine whether the settlement is in’the best interest of those whose claims would be extinguished.” In re Cendant Corp. Litig., 264 F.3d 201, 231 (3d Cir.2001), cert, denied sub nom., Mark v. California Public Employees’ Retirement Sys., 535 U.S. 929, 122 S.Ct. 1300, 152 L.Ed.2d 212 (2002). “The court cannot accept a settlement that the proponents have not shown to be fair, reasonable and adequate.” G.M. Trucks, ’ 55 F.3d at 785. While the court is to employ a vigorous analysis in fulfilling its fiduciary duty to protect the rights of absent class members, it must also “guard against demanding too large a settlement based on its view of the merits of the litigation; after all, settlement is a compromise, a yielding of the highest' hopes in exchange for certainty and resolution.” In re Prudential, 148 F.3d at 317 (quoting G.M. Trucks, 55 F.3d at 806).

Seeking class certification and settlement approval simultaneously heightens the court’s obligation to undertake a scrupulous review to determine whether the proposed settlement is fair, reasonable and adequate for the class. In re Prudential, 148 F.3d at 317. “This heightened standard is intended to ensure that class counsel has engaged in sustained advocacy throughout the course of the proceedings, particularly in settlement negotiations, and has protected the interests of all class members.” In re Warfarin Sodium Antitrust Litig., 391 F.3d 516, 534 (3d Cir. 2004).

There is an overriding public interest in settling class action litigation, and it is to be encouraged by the courts, particularly in complex settings that will consume substantial judicial resources and have the potential to linger for years. In re Warfarin, 391 F.3d at 535 (collecting cases in support). A presumption of fairness attaches to a proposed settlement where (1) the settlement negotiations occurred at arm’s length; (2) there was sufficient discovery; (3) the proponents of the settlement are experienced in similar litigation; and (4) only a small fraction of the class objects. Id. (citing In re Cendant, 264 F.3d at 232 n. 18).

“The decision of whether to approve a proposed settlement of a class action is left to the sound discretion of the district court.” In re Prudential, 148 F.3d at 317 (quoting Girsh v. Jepson, 521 F.2d 153, 156 (3d Cir.1975)). The exercise of this discretion is guided by what have become known as the Girsh factors. In re Warfarin, 391 F.3d at 535. These are:

(1) the complexity, expense and likely duration of the litigation;

(2) the reaction of the class to the Settlement;

(3) the stage of the proceedings and the amount of discovery completed;

(4) the risks of establishing liability;

(5) the risks of establishing damages;

(6) the risks of maintaining the class action through trial;

(7) the ability of the defendants to withstand a greater judgement;

(8) the range of reasonableness of the settlement fund in light of the best possible recovery; [and,]

(9) the range of reasonableness of the settlement fund to a possible recovery in light of all the attendant risks of litigation.

Girsh, 521 F.2d at 157. The proponents of a settlement bear the burden of proving consideration of these factors on balance warrants approval of the proposed settlement. In re Cendant, 264 F.3d at 232; In re Rent-Way Sec. Litig., 305 F.Supp.2d 491, 499 (W.D.Pa.2003).

The record here demonstrates circumstances that give rise to an initial presumption of fairness. First, settlement negotiations were conducted at arm’s length. Nearly three months elapsed from the beginning of mediation until the parties reached an agreement in principle. (See January 16, 2015 Richter Declaration, at ¶¶ 17-19). At all times negotiations were conducted through Attorney Kushner, an experienced, court-ordered mediator. (Id.). Once Attorney Kushner facilitated the forging of a settlement in principle, the parties exchanged multiple revisions of the material settlement terms before arriving at the version of the Settlement Agreement which was ultimately executed. (Id.).

Second, sufficient discovery provided a foundation for negotiating the Settlement Agreement. Class counsel asserts that defendants responded to discovery requests by providing “a significant number of documents” which were specifically related to the asserted claims. (Id. at ¶¶ 14). The negotiated use of over 200,000 documents originally produced in the Morris case provided additional support to class counsel during mediation. (Id. at ¶ 15). Finally, two depositions conducted within the context of-the Morris case of individuals who were also, noticed in the instant matter also provided some additional clarity to the strengths and .weaknesses of the claims. (Id. at ¶ 16).

Third, those endorsing the settlement are quite experienced in similar litigation. Both class counsel and counsel for defendants have practiced extensively in class action litigation, a substantial amount of which has involved claims against consumer mortgage lenders.

Finally, the percentage of class members who have objected is incredibly small. The ten objectors amount to approximately .0004% of the Settlement Class.

Given these facts, the Settlement Agreement enjoys an initial presumption of fairness. Application- of each of the Girsh factors further cements the determination that the proposed settlement is fair, reasonable and adequate- for the class and should be approved.

The complexity, expense and likely duration of the litigation

“The first [Girsh ] factor ‘captures the probable costs, in both time and money, of continued litigation.’ ” In re Warfarin, 391 F.3d at 535-36 (quoting In re Cendant, 264 F.3d at 233). “By measuring the costs of continuing on- the adversarial path, a court can gauge the benefit of settling the claim amicably.” G.M. Trucks, 55 F.3d at 812. Here, there is little question that litigating this matter to its conclusion would be time-consuming and expensive and require the resolution of multiple unsettled questions of fact and law.

It is important to note that, despite nearly 3 years having elapsed since its initiation, this case is still in a relatively early stage. Previously noticed depositions have yet to be conducted, (January 16, 2015 Richter Declaration, at ¶ 16), and there would unquestionably be additional document discovery. Class counsel has yet to move for unconditional class certification, which defendants have promised to contest. (Defs’ Response to Objections, (Doc. No. 100), at p. 6). Motions for summary judgment would likely be filed. It is not unreasonable to expect that the ultimate trial and any subsequent appeal could take years to be resolved.

Further, as was.discussed in the adjudication of defendants’ motions to dismiss, attaining favorable resolutions of. several complex questions of fact and law stand between the class and any recovery at trial. (See generally, M.D. Opinion (Doc. No. 46)). For example, plaintiffs’ RE SPA claim is dependent on a finding that WFB was given or retained “a payment or thing of value” in connection with flood, zone determinations for which WFI was paid. (Id. at p. 16). Defendants consistently have maintained that the so-called “management accounting credits” (“MACs”) allocated to WFB for referring the determinations are not things of value. (Defs’ Response to Objections, at p. 11). Instead, MACs .are simply a mechanism for tracking revenue in Wells Fargo’s accounting system. (Id.). Resolution of this complex issue would likely require expert testimony at substantial additional cost in terms of time and money to both parties. As such, the first Girsh factor clearly points in favor of approving the settlement.

Reaction of class members to the proposed settlement .

The second factor in the Girsh analysis “attempts to gauge whether members of the class support the settlement” based on their overall response. In re Prudential, 148 F.3d at 318. Although the practical realities of a class action dictate a cautious approach to recognizing an inference of support based, on . the lack of a significant number of objectors, the receipt of only a small number of objections provides some support for the approval of a proposed settlement. Id. Such is the case here.

The 10 objections and 354 opt-out requests received in response to the proposed settlement amount to approximately .0004% and .02% of the Settlement Class of 2,315,362 members, respectively. By any measure, these results are a positive indicator of fairness. See In re Cendant, 264 F.3d 201, 234-35 (3d Cir.2001) (finding that the second Girsh factor “weighed strongly in favor of the Settlement,” where .0008% of the class objected and .04% opted-out); Newberg on Class Actions § 13:54 (5th ed.2011) (explaining that on average 1% of a class objects and less than 1% opts-out). By comparison, the 300,995 claims filed equates to 13% of the Settlement Class. While this response rate might seem low at first glance, there is nothing to suggest that it is in any way abnormal given the relatively small individual payouts here. See Newberg on Class Actions § 12:17 (explaining that “[h]igher claiming rates tend to correspond with smaller classes and larger payouts”). Given all of this, the response of the class to the proposed settlement clearly weighs in favor of approval.

The stage of the proceedings and the amount of discovery completed

This Girsh factor permits the court to take into account the degree of case development that has occurred prior to reaching a compromise. In re Cendant, 264 F.3d at 235. Its purpose is to assure that the parties had-an “‘adequate appreciation of the merits of the case before negotiating.’ ” In re Prudential, 148 F.3d at 319 (quoting G.M. Trucks, 55 F.3d at 813). The pertinent assessment concerns the degree to which counsel have been able to gain access to sufficient information to permit an informed, competent and supported evaluation of the legal and factual issues involved.

The parties litigated the instant matter for 18 months before beginning mandatory mediation." During this time they gained a solid understanding of the relative strengths and weaknesses of the claims. Following the resolution of the motions to dismiss, “Wells Fargo produced a significant number of documents relating to flood zone determinations, related charges, soft dollars/[MACs], plaintiffs’ loan file, and other matters relevant to the litigation.” (August 15, 2014 Richter Declaration, at ¶ 16). These documents, as well as the 200,000 documents previously reviewed in the Morris action, were available to plaintiffs for the purposes of mediation. (Id. at ¶¶ 16-17). All of this supports a finding that class counsel “adequately appreciated the merits of the case before negotiating.” In re Warfarin Sodium, 391 F.3d at 537. Accordingly, “this factor strongly favors approval of the settlement.” Id. (citing In re Prudential, 148 F.3d at 319).

The risks of establishing liability and damages

The fourth and fifth Girsh factors provide the , means to balance the likelihood of success and the potential damage award if the ease were to proceed to trial against the benefits of an immediate settlement. In re Prudential, 148 F.3d at 319. Through this lens the court can review “ “what the potential ,rewards (or downside) of litigation might have been had class counsel decided to litigate the claims rather than settle them.’ ” In re Cendant, 264 F.3d at 237 (quoting G.M. Trucks, 55 F.3d at 814).

Plaintiffs would face significant risks in establishing defendants’ liability under each of- its asserted claims. With respect to plaintiffs’ RESPA claim, defendants have continued to maintain that the MACs provided to WFB in conjunction with flood zone determinations performed by WFI are not “things of value,” and that the $19 paid by borrowers for those determinations was passed by WFB to WFI, untouched. (Defs’ Response to Objections, at p. 11). If a finder of fact were to determine that WFB neither received from WFI nor retained from the borrowers anything of value as part of these transactions, plaintiffs’ RESPA claim would fail. See Opinion of November 6, 2013 (Doc. No. 46 in 2:12cv1262 at 14-16) (citing Galiano v. Fidelity National Title Ins. Co., 684 F.3d 309, 314 (2d Cir.2012) (“[a] violation of § 8(a) involves three elements: (1) a payment or thing of value; (2) given and received pursuant to an agreement to refer settlement business; and (3) an actual referral.”); Santiago v. GMAC Mortgage Grp., Inc., 417 F.3d 384, 389 (3d Cir.2005) (A violation of § 8(b) involves: (1) a payment or thing of value; (2) given and received for the completion of a settlement service; and (3) the retention of a portion of the payment or thing of value by the recipient without the recipient providing any part of the settlement service used in the closing.)).

Further, defendants have set forth multiple legal defenses to plaintiffs’ RESPA claim, including that any payments made by WFI to WFB were pursuant to an “affiliated business arrangement” and therefore exempt from liability under 12 U.S.C. § 2607(c)(4). (See WFB’s Answer, at p. 20). Payments which defendants could prove WFI made to WFB in observance of the requirements of § 2607(c)(4) would fall into a safe-harbor, and could not be the basis for RESPA liability. See § 2607(c)(4). Given all of this, a verdict that defendants are liable under RESPA is less than assured.

Plaintiffs’ remaining claims for breach of contract and unjust enrichment both are premised on the assertion that the $19 charged by WFB was somehow improper under the terms of the relevant mortgages, being either illegal or set in bad faith. (Amend. Compl., at ¶¶ 58, 68). As just discussed, a finding that these fees were illegal under RESPA is far from certain, and there does not appear to be another law that prohibited the transferring of the fees.

A determination that WFB set fees for flood zone determinations in bad faith likewise stands on less than secure footing. Defendants have continued to argue that its $19 fee is not unreasonable when compared with CoreLogic’s $6 charge for a one-time determination, as their $19 SFHD additionally provides for WFI’s continued performance of “life-of-loan monitoring and re-determinations of flood risk.” (Defs’ Response to Objections, at p. 10). A finding that such..a fee is lawful and reasonable is well within the realm of possibility. Given the uncertainty as to defendants’ liability, the fourth Girsh factor militates in favor of settlement approval.

Plaintiffs’ risks with respect to establishing damages, however, do not appear to be nearly as great. Section 8(d) sets out in detail what the possible damages are in relation to a RESPA claim. 12 U.S.C. § 2607(d). Damages stemming from WFB’s .breaches of contract or the unjust enrichment, of WFI would, be only slightly more nebulous. WFB is generally required by the NFIP to conduct a flood zone determination in conjunction with its decision “to. make, increase,, extend, or renew” a mortgage. 42 U.S.C.. §. 4012a(b)(1). The NFIP permits WFB to charge the borrower a “reasonable fee” for such a determination. 42 U.S.C. § 4012a(h)(1). As such, damages with, respect to plaintiffs’ breach of contract claim and unjust-enrichment claims would necessarily equal the amount that each borrower paid for the flood zone determination minus the amount of the fee determined to be reasonable. As there would be very little risk concerning the establishment of damages, the fifth Girsh factor weighs against the settlement. However, because proving damages is contingent upon first proving liability, the net effect of the fourth and fifth Girsh factors continues to provide support for approval of the settlement. Compare Erie Cnty. Retirees Ass’n v. Cnty. of Erie, Pennsylvania, 192 F.Supp.2d 369, 375 (W.D.Pa.2002) (noting that “[i]n the normal course, proving damages- involves many of the same risks as proving liability because the former is contingent upon the latter” and highlighting that proving damages frequently carries formidable risk on a number of separate variables as well) (citing In re Safety Components, Inc. Sec. Litig., 166 F.Supp.2d 72, 90 (D.N.J.2001)).

The risks of maintaining the class action through trial

“Because ‘the prospects for obtaining certification have a great impact on the range of recovery one can expect to reap from the [class] action,’ this factor measures the likelihood of obtaining and keeping a class certification if the action were to proceed to trial.” In re Warfarin, 391 F.3d at 537 (quoting G.M. Trucks, 55 F.3d at 817) (alteration in original). However, “[t]here will always be a ‘risk’ or possibility of decertification,” given that district courts have the ability, under Rule 23, to “decertify or modify a class at any time during the litigation if it proves to be unmanageable.” In re Prudential, 148 F.3d at 321. Because courts generally can claim it weighs in favor of settlement, “the manageability inquiry,in settlement-only class actions may not be significant.” Id.

Whatever weight the sixth Girsh factor carries, it falls in favor of settlement approval here. The Settlement Class has only been certified for the purposes of settlement. (Preliminary Approval Order, at ¶¶ 4-5). Defendants have indicated that any general class certification motion would be contested. (Defs’ Response to Objections, at pp. 11-12). In particular, defendants argue that determining class membership will be difficult because WFB’s records do not reliably reflect which borrowers paid' the fee or, if they did, how much each applicant paid. (Id. at p. 12). The settlement circumvents this obstacle by allowing Settlement .Class members to self-certify that they paid the fee. As obstacles exist that could prevent the certification of the class at trial, the sixth Girsh- factor supports settlement approval.

The ability of the defendants to withstand a greater judgment ■

This factor focuses on “whether the defendants could withstand a judgment for an amount significantly greater than the settlement.” In re Cendant, 264 F.3d at 240. Defendants freely admit that they “would be able to bear any judgment likely to be rendered in this case.” (Defs’ Response to Objections, at p. 12 n. 4). However, just because defendants could pay more does not necessarily mean they should have to pay more than the parties negotiated to settle these claims. See In re Warfarin, 391 F.3d at 538. Further, there is no indication that defendants’ financial resources factored into the settlement in any way. Id. Accordingly, while the seventh Girsh factor leans against settlement in a general sense, little weight is accorded to it.

The range of reasonableness of the settlement fund in light of the best possible recovery and all the attendant risks of litigation

“The last two Girsh factors ask whether the settlement is reasonable in light of the best possible recovery and the risks the parties would face if the case went to trial.” In re Prudential, 148 F.3d at 322. In cases seeking primarily monetary relief, courts should compare “the present value of the damages plaintiffs would likely recover if successful, appropriately discounted for the risk of not prevailing, ... with the amount of the proposed settlement.” In re Warfarin, 391 F.3d at 538. In conducting this economic valuation, a court must “guard against demanding too large a settlement based on its view of the merits of the litigation.” G.M. Trucks, 55 F.3d at 806.

Under optimal circumstances at trial, the class’ best possible recovery would be under RESPA. With the full amount paid for the flood zone determinations and trebled damages, the class’ recovery under RESPA theoretically could exceed $131 million. See. § 2607(d)(2); Kahrer v. Ameriquest Mortgage Co., 418 F.Supp.2d 748, 756 (W.D.Pa.2006) (“the proper measure of damages under RESPA is three times the entire amount paid for the settlement services involved”). At first glance, the $2,859,452.50 that actually will be put into the hands of class members appears small in comparison. This perception disappears however when these two numbers are considered in context.

First, $131 million is far too high a recovery to evaluate the benefit to the class. To begin with, “we know of no authority that requires a district court to assess the fairness of a settlement in light of the potential for trebled damages.” In re Cmty. Bank of N. Virginia, 622 F.3d 275, 312 (3d Cir.2010) (citing cases). Beyond that, without fully evaluating the class’ RESPA claim, the defenses advanced could very realistically result in no class recovery under that claim. If otherwise successful, the class’ actual damages would likely be determined to be the amount cumulatively paid for flood zone determinations to WFI minus what those determinations reasonably should have cost. At best, this would amount to $13 per determination, or $30,099,706 in total. This calculation of the class’ best possible recovery, which is based on actual damages, is the appropriate one to use in assessing the fairness of the settlement. But even this amount could he. further reduced or eliminated pursuant to defendants’ assertion that WFI was to provide “life-of-loan monitoring and "re-determinations of flood risk,”'whereas the $6 charge by CoreLogic was for only a “single" flood hazard determination.” (Defs’ Response to Objections, at p. 10). Thus, the mathematical calculations pertaining to potential damages must be viewed circumspectly in light of the attendant risks in proceeding with the litigation.

Second, the $2.8 million to be, paid directly to Settlement Class members.represents less than half of the total value of the settlement. Under the Settlement Agreement, defendants also will pay $1.5 million for attorneys’ fees and expenses and what is estimated to be at least $1.5 million for the costs of administering the settlement. These are costs for which the class would otherwise be responsible, and therefore properly are considered in valuing the settlement. These amounts bring the total value of the settlement to, at minimum, $5,859,452.50. This equals approximately 19.5% of the class’ best possible recovery at trial based on its actual damages. After considering the present-day-value of money, the likelihood that the class would recover less than its maximum actual damages, all" of the attendant risks of litigation, and the interests in resolution, such a recovery is well within the range , of reasonableness.

. This finding is made notwithstanding the fact that only approximately 13% of the Settlement Class filed claims and will receive a recovery. Under the Settlement Agreement $9.50 was made available to any Settlement Class member who submitted a valid claim form. (Settlement Agreement, at ¶ 32). This amount represents half of the total amount paid for each of the subject flood zone determinations and approximately 73% of each member of the class’ actual damages. Assuming there were more members who actually paid the $19 fee, the fact that $9.50 was not enough to motivate them to write their name, address, and signature on the provided postcard, and mail it is no indication that the settlement, which offers such a high percentage of actual damages, is somehow unreasonable. Further, there is no indication, given the relatively small amount of each individual recovery, that the 13% response rate was unusually small. See Zimmer Paper Products, Inc, v. Berger & Montague, P.C., 758 F.2d 86, 93 (3d Cir.1985) (accepting a 12% response rate where the settlement’s opponent “has come forward with nothing to suggest that the rate is uncharacteristically low”); Gascho v. Global Fitness Holdings, LLC, 2014 WL 1350509, at *30 (S.D.Ohio Apr. 4, 2014) (accepting expert testimony “that response rates in class actions "generally range from one to 12 percent with a median response rate, and a normal consumer response rate, of approximately five to eight percent”). To the contrary, by percentage the response rate appears to be fairly high in the area of consumer lending and supports settlement.

In summary, review of the Girsh factors clearly supports the conclusion that the proposed settlement is fair, reasonable and adequate. See G.M. Trucks, 55 F.3d at 785. With this backdrop, we turn to the objections.

Ten objections were submitted. -Of these, two challenge the settlement with no further explanation and four others assert at least some argument that the settlement is unfair.

The first objection pertaining to the fairness of the proposed settlement was submitted by Douglas. H. and Lorraine K. Porter (the “Porters”). (Porter Objection, (Doc. No. 94)). The Porters argue that $9.50 is inadequate compensation when compared with the $600 it cost them “for a land survey company to come out and survey [their] property” after WFB told them they “had to pay for flood insurance,” apparently inaccurately. Id. The Porters misunderstand the nature of this settlement. Claims arising out of a requirement by WFB that borrowers maintain unnecessary flood insurance are explicitly excepted from those released by the Settlement Class. (Settlement Agreement, at ¶ l(y)(2)). Any claim the Porters may have for costs incurred to escape from an errant requirement of flood insurance is unaffected by the settlement. As such, the costs asserted by the Porters are irrelevant to the proposed Rule 23(e) determination.

Alejandro Diaz and Mayda Nahhas (“Diaz and Nahhas”) jointly submitted the second and third objections to the proposed settlement. (Diaz/Nahhas Objection, (Doc. No. 99-31), at pp. 817). The appeared through counsel at the March 5, 2015, hearing. Their sole objection is that “[t]he proposed settlement is violative of the well-established doctrine that unclaimed settlement funds must first be-utilized to -make class members whole, before being put to a secondary use,” (Id. at p. 8), which, they further augmented at the hearing. Specifically, Diaz and Nahhas argue that those Settlement Class members who filed a claim should receive an additional $9.50, to “make them whole” before “unclaimed funds ... revert to the defendant.” (Id.). This objection ignores the structure of the proposed settlement.

Diaz and Nahhas cite to In re Baby Products Antitrust Litigation for the proposition that “[Reversion to the defendant risks undermining the deterrent effect of class actions by rewarding defendants for the failure of. class members to collect their share of the settlement.” 708 F.3d 163, 172 (3d Cir.2013). Holding that a cy pres distribution is superior to a reversion of funds to the defendant, the United States Court of Appeals for the Third Circuit was considering a settlement fund established with a $35,500,000 deposit from the defendants, from which some residual amount potentially could remain after all claims-filed by the class were paid. Id. The instant settlement, fund is distinguishable. By entering. into the Settlement Agreement, defendants agreed to pay “a sum equal to the total amount of settlement payments due to all Settlement Class members who submitted a valid claim form.” (Settlement Agreement, at ¶34). Where defendants will pay the exact amount necessary to satisfy the claims filed, there can be no residual amount which would revert to defendants. The objection of Diaz and Nahhas therefore is irrelevant to the settlement at issue.

The final objection relating to the fairness of tfie proposed settlement was submitted by Wei Cyrus Hung (“Hung”). (Hung Objection, (Doc. No. 95)). Hung first argues that the claims process is unnecessary and intentionally designed to depress class relief. (Hung Objection, at pp. 14-20). Plaintiffs are also inadequate representatives of the class given the $25,000 individual award under the Settlement Agreement. (Id. at pp. 28-31). Further, the Settlement Agreement’s inclusion of a “clear sailing” provision is also a “telltale indication of an unfair deal.” (Id. at p. 25). "Finally, Hung contends that the use of a “constructive common fund” prevents the court from directly correcting insufficient awards to class members by reducing awards to class counsel and/or plaintiffs. (Id. at pp. 26-28).

The parties to the Settlement Agreement respond that there is nothing inherently suspect about a claims process. (Pl.s’ Final Approval Brief, (Doc. No. 97), at p. 23). Requiring Settlement Class Members to submit a claim form was necessary-in order to. determine the right of each to receive payment under the settlement because the available records do not reflect which of the class members paid the $19 charge. (Defs’ Response to Objections, at p. 16). The $25,000 awarded to plaintiffs is in settlement of their. separate TILA claim, and thus does not undermine the adequacy of their representation of the class. Lastly, the settling parties argue that the proposed settlement’s segregated fund does not make the class recovery unfair, and any perceived excess in the requested fee award can still be eliminated despite the “clear sailing” clause. (Defs’ Response to Objections, at pp. 21-22).

Hung fails to cite any controlling authority in support of his argument that the use of a claims process makes the settlement unfair.. After warning the court to “Be alert!” to the likelihood that the proponents of the settlement would focus on the Girsh factors in support of settlement approval, Hung then ignores those factors completely in his own analysis. (Hung Objection, at pp. 13). instead, he relies on the premise that a settlement in which a $9.50 check is simply issued and sent to each class member would be more fair than the one proposed. (Id. at pp. 14-18). This premise is based, at least in part, on the belief that the claims process “is employed for no ostensible reason other than to depress class recovery (and thus maximize the share of the settlement received by the attorneys).” (Id. at p. 15). Hung’s argument is wide of the mark.

Hung concedes that “a claims-made structure can be justified by the fact that the defendant either is unable to identify specific class members or is unable to identify the value of those class members’ claims.” (Id.). This concession is appropriate given that “there is nothing inherently suspect about requiring class members to submit claim forms in order to receive payment.” Schulte v. Fifth Third Bank, 805 F.Supp.2d 560, 593 (N.D.Ill. 2011) (citing Milliron v. T-Mobile, 2009 WL 3345762, *6 (D.N.J.2009)). This is particularly true when, as here, the claim submission process places very little burden .on class members. As discussed above, to submit a claim class members simply had to write their name, address, Wells Fargo Loan number (if known), and date on a postcard attached to the notice sent to them. After signing the completed form in attestation that the class member paid WFB flood zone determination fees, the borrower only had to place it in the mail, (See Claim Form, at p. 39).

The number of class members who would receive payment would certainly be higher if defendants were to send each of the 2,315,362 Settlement Class members a check without requiring the submission .of claim forms. However, the fact that some conceivable arrangement would have been “more fair” from the perspective of orie class member does not necessarily -suggest that the proposed settlement is unfair. As defendants very aptly put it, the choice here “is not between the settlement that the parties have proposed arid [Hung’s] dream settlement but between the proposed settlement and none at all.” (Defs’ Response to Objections, at pp. 18-19); see In re Prudential Ins., 962 F.Supp. 450, 534-35 (D.N.J.1997) (“the issue is whether the settlement is adequate and reasonable, not whether one could conceive of a better settlement.”) (citing Cotton v. Hinton, 559 F.2d 1326, 1331 (5th Cir.1977) (in assessing fairness and reasonableness of settlement, the court is “not free to delete, modify or substitute certain provisions of the settlement”)).

There is. no. indication that should the proposed settlement be disapproved, defendants would consider direct payments to Settlement Class members, which of course would roughly quadruple the value of the settlement. (Defs’ Response to Objections, at p. 18). To the contrary, they have repeatedly affirmed that they have no intention of paying more to settle these claims than the amount already negotiated. (Id.). Thus, the possibility- that class members could have fared better has virtually no impact on the determination at hand where the application of the Girsh factors has revealed that the proposed settlement is fair, reasonable and adequate notwithstanding the claims process.

Further, contrary to Hung’s assertion, the use of a claims process does appear' to have served a legitimate purpose. Under the Settlement Agreement, only those who obtained a loan from WFB and “were charged by [WFB] for a flood hazard determination between August 30, 2011 and December 31, 2013” are erititled to a settlement payment. (Settlement Agreement, at ¶ l(aa)). According to Botzet, defendants’ records, do not contain the information necessary to produce an accurate list of such individuals. (See Botzet Declaration Re: Hung Objection, (Doc. No. 100-1), at ¶¶ 4-8). Rust reviéwed the 244,610 claims which had been submitted as of January 20, 2015 and found that defendants’ records pertaining to 60,911 of the subject mortgages reflect no iriformation related to flood zone determinations. (Id. at if 5-6). Another 64,946 records show that the borrower paid “$0.00” for their determinations. (Id. at ¶ 7). Based on these findings and the criteria of the proposed settlement, over half of the filed claims likely would have been excluded by direct payments based on defendants’ records. Instead, the claims process provided a way to overeóme this deficiency in defendants’ records by simply asking potential class members to attest that they paid for a flood zone determination.

Hung also points to the inability of class members to file a claim electronically as supporting the notion that the proposed settlement is unfair. (Hung Objection, at pp. 18-19). In so arguing, Hung attempts to draw a distinction between electronic and physical claims processes, characterizing the latter as. “requiring] class members to expend unnecessary time, effort, and expense trekking over to their post office to return the claim form by postal mail.” (Id., at p. 18).. In reality, any additional., effort associated with completing and filing a paper claim form is far from onerous. Ignoring any negligible differences between typing information and handwriting it, the only plausible distinction of a physical claims, process is the necessity of mailing "the completed claim form as opposed to clicking' “submit” on a website form. Despite Hung’s assertion, the “trek” required for this endeavor is generally, no further than to one’s own mailbox. The assertion that it is unduly burdensome to utilize mail as opposed to electronic submission also reflects a disregard for the potential that a certain segment of class members may not be readily ablé to use a computer to file the form due to the. lack of technical familiarity or accessibility. Against this backdrop, the additional time, effort and expense to complete and mail a post card is insignificant in assessing an otherwise fair, reasonable and adequate settlement let alone a sound basis to invalidate such an, agreement.

Hung also takes aim at the additional $25,000 payment requested by plaintiffs. He contends. that this “incentive award” “renders the representatives inadequate under Rule 23(a)(4) and the settlement unfair under Rule 23(e)(2).” (Hung Objection, at p. 28). This argument mis-characterizes the nature of this payment.

An “incentive award” is a sum that is separately granted “to compensate named plaintiffs for the services they provided and the risks they incurred during the course of the class action litigation.” In re Flonase Antitrust Litig., 951 F.Supp.2d 739, 751 (E.D.Pa.2013). Requests for such awards are generally approved when they are “reasonable.” Id. However, it has been posited that circumstances in which large awards are requested or de minimis relief is offered to absent class members tend to “suggest that the payment to the class representatives may not have been an incentive for them to invest effort in the class’s litigation but rather an incentive for them to support a weak settlement.” Newberg on Class Actions § 13:59. Such concerns do not arise here as the payment in question is not an incentive award.

Per the Settlement Agreement, .defendants have agreed to pay plaintiffs $25,000 in settlement of their TILA claim. That claim is related to WFB’s requirement that plaintiffs obtain flood insurance. It thus is independent of the services plaintiffs provided as class representatives. (Settlement Agreement, at ¶ 43); Plaintiffs are providing a general release of all of their claims against defendants in' consideration for this settlement, (id.), whereas' claims related- to flood insurance by WFB are expressly excepted from the release provided by Settlement Class members, (id. at ¶ 1(y)(2)). Thus, class members may still pursue any such claims' separately.

With respect to the. claims arising out of payments to WFB for flood zone determinations performed by WFI, the only ones being settled on a class basis, there is an exact “alignment of interests and incentives between the representative plaintiffs and the rest of the class.” Dewey v. Volkswagen Aktiengesellschaft, 681 F.3d 170, 183 (3d Cir.2012). As to these claims plaintiffs will receive the same amount in settlement that was offered to every other class member: $9.50. Plaintiffs’ recovery on these claims was and remains co-extensive with all other participating class members. It follows that plaintiffs had every “incentive to represent the claims of the class vigorously.” Id. at 184. Moreover, plaintiffs’ TILA claim is premised on alleged facts and circumstances that are unique to their mortgage transaction. The mere presence of a reasonable payment for resolution of this claim does not give rise to an inference that impropriety is afoot. Under these circumstances, the $25,000 award requested by plaintiffs on a distinct, individual claim does not undermine this court’s prior certification of the class for settlement purposes, (see Preliminary Approval Order, at ¶ 3), or the fairness of the proposed settlement.

Hung posits that the presence of a “clear sailing” provision in the Settlement Agreement renders the proposed settlement is unfair. (Hung Objection, at p. 25). This provision provides that defendants will pay attorneys’ fees and costs up to $1.5 million and “stipulates that attorney awards will not be contested by the defendants.” (Id. (citing Settlement Agreement, at ¶ 38)). Hung advances two grounds to show this provision is improper. First, he relies on non-controlling authority for the proposition that a “clear sailing” clause “lays the groundwork for lawyers to ‘urge a class settlement at a low figure or on a less-than-optimal basis in exchange for red-carpet treatment on fees’ and ‘suggests, strongly,’ that its associated fee request should go ‘under the microscope of judicial scrutiny.’ ” (Id. (quoting Weinberger v. Great N. Nekoosa Corp., 925 F.2d 518, 524-25 (1st Cir.1991); citing Redman v. RadioShack Corp., 768 F.3d 622, 637 (7th Cir.2014))), Second, he asserts that “‘[s]uch a clause by its very nature deprives the court of the advantages of the adversary process.’” (Id. (quoting Weinberger,