UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF FLORIDA

GAINESVILLE DIVISION

IN RE:

THE PROGRESSIVE CORPORATION ) MDL Docket No. 1519

INSURANCE UNDERWRITING ) Consolidated Cases:

AND RATING PRACTICES LITIGATION ) No.: 1:00-210; No. 5:02-2384;

No.: 3:01-1465;No. 3:02-2552;

and No. 3:03-1176.

Judge: Maurice Paul

UNOPPOSED MOTION OF CONSOLIDATED PLAINTIFFS FOR 

ORDER APPROVING AND ADOPTING SETTLEMENT,

DISMISSING THE CONSOLIDATED CASES WITH PREJUDICE, AND

DIRECTING ENTRY OF FINAL JUDGMENT,

AND INCORPORATED MEMORANDUM OF LAW

Consolidated Plaintiffs (hereinafter “Plaintiffs”) move this Honorable Court for an

order of final approval of the settlement and class certification, preliminarily approved on

July 28, 2004, and on August 16, 2004, and for entry of final judgment herein on all

consolidated cases. As grounds therefor, Plaintiffs submit the following memorandum of

law.

MEMORANDUM OF LAW

I. INTRODUCTION

Plaintiffs ask this Court to approve a settlement reached by the parties after several

months of arms-length negotiation between opposing counsel highly experienced in complex

litigation; a settlement which provides to Class members relief which in large part restores

Case 1:03-cv-01519-MP-AK Document 63 Filed 10/26/04 Page 1 of 28
1 Consolidated Plaintiffs v. Consolidated Defendants, 1:03-cv-1519 (N.D. Fla., 

Gainesville Div.)

2Eugenia Fiala and Jeanine Schweinberg withdrew their objections.

2

to them the rights and relief to which they would have been entitled under applicable law as

set forth in the Amended Complaint, together with improvements in Defendants’ statutory

compliance procedures. The Court has previously considered and granted Plaintiffs’ motion

for preliminary approval of the Settlement. (MDL Doc. 47 & 52)1 The notice procedures

have been implemented as directed by this Court, and the final hearing is scheduled for

October 29, 2004. With over ten million class members eligible for benefits under the

settlement, only 162 individuals have objected to the negotiated terms, a vote of

overwhelming confidence in the fairness and adequacy of the Settlement by the Class

members themselves. Five separate lawsuits are consolidated herein, and the Settlement

achieves final resolution of all five cases.

It is well-settled that “compromises of disputed claims are favored by the courts.”

Williams v. First Nat’l Bank, 216 U.S. 582, 585 (1910). In this jurisdiction, as elsewhere:

“[t]here is an overriding public interest in favor of settlement, particularly in class actions

that have the well-deserved reputation as being most complex.” Cotton v. Hilton, 559 F.2d

1326, 1331 (5th Cir. 1977). In considering final approval of the Settlement herein, “the clear

policy in favor of encouraging settlements must ... be taken into account, particularly in an

area where voluntary compliance by the parties over an extended period will contribute

significantly toward ultimate achievement of statutory goals.” Patterson v. Newspaper &

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3

Mail Deliverers’ Union, 514 F.2d 767, 771 (2nd Cir. 1975). Thus, a class action settlement

should be approved as long as it is “fair, adequate and reasonable and is not the product of

collusion between the parties.” Bennett v. Behring Corp., 737 F.2d 982, 986 (11th Cir. 1984).

II. THE SETTLEMENT IS FAIR, ADEQUATE AND REASONABLE

In the Eleventh Circuit, there are seven factors a court should consider when

evaluating a class action settlement: (A) the likelihood of success at trial and potential

recovery; (B) the complexity, expense and duration of litigation; (C) the terms of the

settlement; (D) the procedures afforded to notify the class members of the proposed

settlement, and to allow them to present their views; (E) the judgment of experienced counsel

for the plaintiff class; (F) the substance and amount of opposition to the settlement; and (G)

the stage of the proceedings at which the settlement was achieved. Elkins v. Equitable Life

Ins. Co., 1998 WL 133741 *25 (M.D. Fla. 1998), citing Warren v. City of Tampa, 693 F.

Supp. 1051, 1055 (M.D. Fla. 1988); In re Corrugated Container Antitrust Litigation, 643

F. 2d 195, 212 (5th Circuit 1981). In the end, a determination of the fairness of a class action

settlement is left to the sound discretion of the trial court. Bennett, supra at 986.

A. The Likelihood of Success at Trial and Potential Recovery

 A court does not try a case on the merits when evaluating a settlement. Cotton, supra

at 1330; In re Corrugated Container, supra at 212. The Court should limit its inquiry to

whether the benefits of the settlement outweigh the possible risks and rewards of continued

litigation. Elkins, supra at * 25. “The very uncertainty of outcome in litigation, as well as

the avoidance of wasteful litigation and expense, lay behind the Congressional infusion of

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3

e.g. Plaintiffs’ Motion for Summary Judgment (Smith Doc. 59); Plaintiffs’ 

Motion for Class Certification (Smith Docket 113); Plaintiffs’ Renewed Motion for

Summary Judgment (Smith Doc. 116). (Hereinafter “Smith Doc.” is a reference to the

docket in Smith v. Progressive, 1:00-cv-210 (N.D. Fla., Gainesville Div.)

4

e.g., Defendants’ Memorandum in Opposition to Plaintiffs’ Motion for 

Summary Judgment (Smith Doc. 65); Defendants’ Memorandum in Opposition to

Plaintiffs’ Motion for Class Certification (Smith Doc. 124); Defendants’ Response to

Plaintiffs’ Renewed Motion for Summary Judgment (Smith Doc. 125); Defendants’

Motion for Summary Judgment (Smith Doc. 125).

4

a power to compromise. This is a recognition of the policy of the law generally to encourage

settlements. This could hardly be achieved if the test on hearing for approval meant

establishing success or failure to a certainty.” In re Corrugated Container at 212, quoting

Florida Trailer & Equipment Co. v. Deal, 284 F.2d 567, 571 (5th Cir. 1960). Instead, the

Court should rely upon the judgment of experienced counsel and “should be hesitant to

substitute its own judgment for that of counsel.” Cotton supra at 1330. This is because

settlements are compromises, and each provision in the settlement should not be subject to

a “hypothetical or speculative measure of what concessions might be gained.” Id. “Above

all, the Court must be mindful that inherent in compromise is a yielding of absolutes and an

abandoning of highest hopes” for each side. Ruiz v. McKaskle, 724 F.2d 1149, 1152 (5th Cir.

1984) (citations omitted.)

The Docket is replete with evidence that Plaintiffs believe wholeheartedly in the

strength of their case.3 A full review of the Docket also indicates, however, that the

Defendant believes strongly in the strengths of its defenses.4 The status of the law as it

relates to an insurance company’s obligation to provide adverse action notice under the

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FCRA is somewhat unsettled. There are decisions that are favorable for Plaintiffs. See

Mirabal v. GMAC, 537 F.2d 871 (7th Cir. 1976); Braxton v. Farmer’s Ins. Group, 209

F.R.D. 654 (N.D. Ala. 2002). In Oregon, however, Federal District Court Judge Brown has

ruled that the Fair Credit Reporting Act does not apply to new business because there is no

“increase in premium.” Mark v. Valley Ins. Co., 275 F.Supp.2d 1307, 1316 (D.Or. 2003).

That issue is currently before the Ninth Circuit on appeal. Were Judge Brown’s interpretation

to be sustained by the appellate courts Plaintiffs’ claims against Progressive would be further

limited, since discovery herein showed that Progressive only uses credit scores for new

business.

Plaintiffs also faced challenges in proving that Progressive’s failure to provide an

adequate FCRA notice was willful, as required for an award of statutory damages. There are

varying standards for defining the term “willful.” As evidenced by the record before this

Court, whether Progressive’s conduct rose to the level of willfulness was a matter of much

debate. Moreover, the Defendants in this action provided a form of notice to all applicants

against whom it took adverse action. The issue before this Court was whether the notice the

Defendants provided to applicants was adequate as a statutory adverse action notice. (Smith

Doc. 1, 59, 116, 125) In addition to the various challenges Plaintiffs faced in proving that

Progressive’s conduct was willful, Plaintiffs also faced a potential argument that a class

based upon willful conduct could give rise to an annihilative damages defense by

Progressive. See In re TransUnion Corp. Privacy Litigation, 211 F.R.D. 328 (N.D. Ill. 2002)

Discovery revealed that Progressive had never been accused by a consumer of willfully

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failing or refusing to provide adequate adverse action notice in violation of the FCRA. 

Presently pending before this Court are competing motions for summary judgment

filed by Plaintiffs and Defendants and Plaintiffs’ Motion for Class Certification. (Smith Doc.

59, 113, 116, 125) “It cannot be overemphasized that neither the trial court in approving the

settlement nor this Court in reviewing the approval have the right or the duty to reach any

ultimate conclusions on the issues of fact and law which underlie the merits of the dispute.”

Cotton, supra at 1330 (Citations omitted). Moreover, “compromise is the essence of a

settlement.” Id. 

The parties have vigorously litigated this case for four years. The compromise

Settlement now before this Court was the result of strenuous arms-length negotiations had

between Plaintiffs’ counsel, who have considerable experience in prosecuting complex

consumer law cases, and Defense counsel, eminently experienced in the defense of complex

litigation. Thus the risks and costs inherent in continuing this litigation are substantial. 

Conversely, the benefits conferred upon the Class through this Settlement are

appreciable as well. The notice provisions of the Fair Credit Reporting Act (“FCRA”) are

designed to protect consumers from unfair and inaccurate credit reporting. 15 U.S.C. § 1681.

See also Guimond v. TransUnion Credit Info., Co., 45 F.3d 1329, 1333 (9th Cir. 1995)

(stating that “FCRA was crafted to protect consumers from the transmission of inaccurate

information about them.”). The purpose behind the adverse action notice requirement of

FCRA is to provide a consumer with notice of the fact that the consumer may be harmed by

inaccurate information in the consumer’s credit report. See Senate Report No. 91-517

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(1969); See also, February 14, 2000 Federal Trade Commission informal opinion (“Section

615(a) is designed to require consumer report users to provide consumers with a notice that

informs them of what has occurred, and of certain rights they have under FCRA.”). 

In other words, if a consumer’s credit report indicates that the consumer has bad

credit and the consumer consequently has to pay more for insurance, FCRA requires that the

consumer be so notified by the insurance company. This notice thus provides the consumer

an opportunity to contact the credit agency that provided the report, review information in

his consumer report, correct any inaccuracies, and prevent further harm from the credit

bureau’s mistake. At the very least, the consumer will learn that current information in his

consumer report is having a negative impact on him. 

Here, the proposed Settlement is designed to fulfill the purposes of FCRA. Class

members are being informed of adverse action and are being given an opportunity to do

something about it. Further, Progressive has agreed to injunctive relief requiring it to change

its method for providing FCRA notices. Future consumers will know if they are paying more

for insurance from Progressive because of information in their credit report, thus enabling

consumers to contact the credit agency that provided the reports, and discover any potential

inaccuracies in the offending report. 

Plaintiffs learned during discovery that credit reporting agencies are continually

updating credit reports and do not keep records of outdated credit information. Thus, the

Class and Progressive are unable simply to go back in time and determine whether there were

inaccuracies in the credit reports at the time Progressive used the credit reports at issue in this

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case, which in some instances was several years ago. As a surrogate for that lost remedy,

however, the parties have agreed that all Class members will now be provided with the

opportunity to receive a current credit report. If there are inaccuracies in that report,

consumers will learn of them and can take steps to correct them. 

Further, current policyholders who discover inaccuracies in their credit reports can

obtain adjustments to their premiums when the inaccuracies are corrected, and may receive

a premium reduction going forward. Given that it is a near impossibility to go back in time

to determine the accuracy of a credit report from several years ago, this surrogate relief

comes as close to meeting the purposes of the Fair Credit Reporting Act as can reasonably

and practically be done. Given these factors, adopting the Settlement to serve as a surrogate

for effectuating the purposes of the Fair Credit Reporting Act is in the best interests of the

Class. 

B. The Complexity, Expense and Duration of Litigation

Analyzing the complexity of the litigation necessarilyoverlapswith the balancing test

examining the likelihood of success at trial. Whether the Progressive form “Notice of

Underwriting Decisions & Information Practices” complied with the FCRA adverse action

notice requirements was heavily disputed in this case. The original complaint was filed

against Progressive in November 2000 alleging that Progressive did not fully comply with

its obligations under the adverse action notice provisions of the FCRA. (Smith Doc. 1). 

Progressive contended, and continues to contend, that its form endorsement attached to all

new policies adequately complies with the requirements of the FCRA. (Smith Doc. 65)

Case 1:03-cv-01519-MP-AK Document 63 Filed 10/26/04 Page 8 of 28
5Dikeman v. Progressive Corp., 3:01-cv-1465BR (D. Or., Portland Div.)

9

After full discovery conducted by the parties, including written interrogatories, requests for

the production of documents, depositions of each of the Class representatives, depositions

of corporate representatives at Defendants’ home offices, and depositions of other witnesses,

Plaintiffs filed a motion for summary judgement. (Smith Doc. 59) Both parties filed

affidavits from experts in support of their respective positions. An extensive hearing was

held before the Court, which took the matter under advisement. (Smith Doc. 80) After

further discovery, Plaintiffs filed a renewed motion for summary judgment (Smith Doc. 116)

and Progressive cross-filed a motion for summary judgment. (Smith Doc. 125)

Additionally, the Dikeman Plaintiffs in the Oregon action5, consolidated herein, likewise

sought and received discovery from Progressiveprior to consolidation, including depositions

of several Progressive corporate representatives, and production of voluminous documents.

The record thus reflects that each side fought zealously for nearly four years on behalf of

their respective positions regarding liability under the FCRA.

In addition, Plaintiffs filed a motion for class certification (Smith Doc. 113), which

motion was opposed vigorously by Defendants. (Smith Doc. 124) After briefing by each

side, and a case management conference scheduling hearing dates, the parties entered into

settlement discussions which stretched over a ten month period. On April 16, 2003, the

MDL Panel consolidated the FCRA cases against Progressive and transferred the

consolidated cases to this Court. (MDL Doc. 1) Several proposals and counter-proposals

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were made, and the Settlement Agreement filed with the Court is the result of compromises

by each side. (MDL Doc. 49) Only after all elements of the Settlement for Class members

were reached did the parties then negotiate an agreement regarding attorneys’ fees and costs,

which matter is presented to the Court by separate motion. (Smiljanich Affidavit ¶ 52, 53)

The record is thus clear that this case presents complex issues requiring years of contested

litigation. The Settlement results are a fair compromise between ardently opposed parties.

C. The Terms of the Settlement

The Settlement herein involves the requirement set forth in the Fair Credit Reporting

Act (“FCRA”) that if an insurance company uses a consumer report to adversely impact the

consumer in setting premiums, it must give notice (“adverse action notice”) to the consumer

that such a report has been used, the source of the report, and a recitation of the consumer’s

right to obtain a free copy of the offending report and correct any errors that may have

appeared therein. 15 U.S.C. § 1681m. Having done so, the obligations of the insurance

company are fulfilled under the FCRA. Plaintiffs have alleged, on behalf of Class members,

that Progressive did not comply with this requirement of the FCRA in connection with the

form notice attached to all Progressive insurance policies. 

The primary purpose of the FCRA is to insure accuracy and fairness in the use of

consumer reports. Congress created a “self help” system for consumers to correct

inaccuracies in the consumer reporting system, but as the FTC has noted “a critical first step”

is the issuance of an adverse action notice informing a consumer that an adverse consequence

has resulted from a review of the consumer’s credit report. Hendricks Affidavit ¶ 13. Ex. A

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Since the gravamen of the class complaint is Progressive’s failure to give adequate

notice to class members that their consumer reports were used to set higher premiums, the

principle feature of the settlement reached precisely targets that very problem. Each class

member, by virtue of the Settlement reached and the notice to the Class member, has now

been provided that which he or she was arguably denied by Progressive’s form endorsement

to insurance policies, the adequacy of which was the subject of the lawsuit. Receiving a class

notice herein, just as receiving an adequate adverse action notice, informs the Class member

of valuable information, including the fact that because of the adverse consequence resulting

from use of that person’s consumer report, access to a free credit report is now available to

that person. That is the very obligation owed by Progressive to Class members that Plaintiffs

in this action contended was not fulfilled, and that is the precise relief afforded to Class

members as a result of the Settlement. Class members, numbering over ten million, have

now each been specifically advised that his or her consumer report was used by Progressive

adverse to the consumer’s interests and that Progressive has made available a free credit

report as a result thereof. In addition, if a Class member has a current Progressive policy he

or she may be entitled to a reduction in premiums and a partial refund of past premiums if

corrections to the report would result in an entitlement to a lower premium. The

recalculation of premiums under the Settlement terms will be executed pursuant to

Progressive’s established underwriting protocols approved by the various state insurance

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6 Some objectors’ counsel incorrectly argue that this recalculation of premiums

is at the discretion of Defendants. In fact, Defendants must use the protocols 

authorized by regulations in each state.

12

regulators.6 These underwriting protocols were the subject of discovery by Plaintiffs in this

action. Arguably, this goes even beyond that to which the Class member may have been

entitled under the FCRA, since premium refunds are not contemplated by the Act. Finally,

all Class members, and indeed untold numbers of future Progressive policyholders, will

receive the significant benefit of changes to Progressive’s new FCRA compliance

procedures, effectuated as a result of the lawsuit and this Settlement. 

Courts have held that a settlement “will not be rejected solely because it does not

provide a complete victory for the plaintiffs.” Isby v. Bayh, 75 F.3d 1191, 1200 (7th Cir.

1996). Although courts have approved settlements providing minimal relief to class

members, this Settlement arguably provides full relief, and then some, for negligent

violations of the FCRA. Each of the more than 10 million Class members is entitled to

receive a free copy of his or her credit report, a benefit totaling $90 million in value to the

Class. Hendricks Affidavit ¶¶ 16, 34, 37; Camden I Condominium Assoc. v. Dunkle, 946

F.2d 768 (11th Cir. 1991). The changes to Progressive’s procedures add approximately $9

million dollars in additional value. Hendricks Affidavit ¶ 37. Progressive has estimated the

cost of providing Notice to the Class Members at an additional $7 million (Hendricks’

Affidavit ¶ 35, 37) and the Class receives the benefit of Progressive’s payment of fees and

costs to Class Counsel in an amount not to exceed $4.5 million. Thus, the value of the relief

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provided to the Class through this negotiated Settlement is in excess of $110.5 million.

Hendricks’ Affidavit ¶ 37. This total, significant though it is, is a minimum value, and does

not even include the amount of money that will be refunded to the Class members or the

value of the premium reductions that Class members will receive, as this value cannot be

calculated until Class members discover and correct any mistakes identified on the free credit

report with which they will be provided.

D. The Procedures Afforded to Notify the Class Members of the 

Proposed Settlement, and to Allow Them to Present Their Views

Over 7,100,000 current and former Progressive Policyholders received individual

mailed notices informing them of this Settlement and its benefits. Waugh Affidavit ¶ 4 (filed

under separate cover) In addition, national advertising of the settlement through USA Today,

USA Weekend, Parade and Vista (a Spanish language weekly publication) reached several

million more consumers who never obtained a Progressive policy but only received a quote

for automobile insurance. Pines Affidavit ¶¶ 6, 7. Through the inclusion of the Notice in

these national publications, the Notice reached in excess of 60 million people in two

languages. Pines Affidavit ¶¶ 6, 7, 8. Thus, some number well over 10,000,000 people have

had the benefits of the settlement made available to them. 

In addition to the mailed and published Notices, previously approved by this Court,

the Parties made available to all Class members a website through the Claims Administrator

containing further information regarding the settlement. Ex. B. The website included

frequently asked questions and answers; copies of court documents (including the Notice,

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Claim Form, Settlement Agreement, and Order Preliminarily Approving the Settlement);

information on how to reach the Claims Administrator and a link to a website maintained

exclusively by Class Counsel. The website provided by Class Counsel contained additional

frequently asked questions and answers, an opportunity for Class Members to e-mail Class

Counsel with any questions and a toll-free telephone number Class Members could use to

call Class Counsel with questions. Ex. C. Finally, if anyone called Progressive directly with

questions about the Settlement Agreement, the Class Members were directed to a toll-free

telephone number manned by the Claims Administrator.

The previously reviewed and approved printed Notices fully comply with the

requirements of Rule 23(c) as amended December 1, 2003. The available websites and

manned toll-free telephone numbers provided extensive and full information to Class

members about the Settlement. Thus, the Notices, websites and manned toll-free telephone

numbers provided full disclosure to the Class members about every significant aspect of the

case and literally every aspect of the resulting Settlement Agreement, and provided multiple

ways for the Class members to express their views about the Settlement.

E. The Judgment of Experienced Counsel for the Plaintiff Class

Class Counsel consists of several attorneys experienced in complex class action

litigation and in FCRA liability cases. “Even in class action contexts, the trial court is

entitled to rely upon the judgment of experienced counsel for the parties.” Elkins, supra at

*28 (citations omitted) 

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James. Hoyer, Newcomer & Smiljanich (hereinafter James Hoyer), has dedicated

itself to the representation of consumers. Counsel at James Hoyer, including the

undersigned, Terry Smiljanich, has been co-counsel or lead counsel in several dozen

nationwide class actions representing consumers. Ex. D Terry Smiljanich, court appointed

Lead Counsel for this Class is a member of The National Association of Consumer

Advocates, a nationally recognized consumer watchdog organization whose mission “is to

promote justice for all consumers by maintaining a forum for communication, networking,

information sharing among consumer advocates across the country and by serving as a voice

for its members and consumers in the ongoing struggle to curb unfair and abusive business

practices that adversely affect consumers.” NACA Membership Directory 2003. NACA

counts among its members: attorneys, including representatives from numerous legal aid

organizations;state and local consumer affairs department representatives; assistant attorneys

general from various states; representatives of AARP; representatives from the National

Consumer Law Center; representatives of various state and local regulatory agencies; and

professors from various universities and colleges of law.

The Class members in this case are represented by a number of other experienced and

highly qualified counsel as well, likewise dedicated to the representation of consumers. The

counsel combined have considerable litigation experience, primarily in the area of consumer

protection law and have participated in countless complex litigation cases throughout the

nation. Ron Parry, Rob Sparks, Earl Underwood, and David Szwack are all members of

NACA.

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7 No objector provided a factual basis establishing that they are members of the 

Class. The parties were unable to determine whether a number of the objectors are

actually members of the Class as they do not allege that they received a Notice, nor do

they provide identifying information about themselves. Those individuals include

Theresa Martin, of the Schweinberg objectors and Kristopher Harris, William Welch

 and Ronald Watkins, of the Harris objectors. 

16

F. The Substance and Amount of Opposition to the Settlement

As the Class numbers in excess of 10 million members, it is striking and extremely

instructive that only 16 class members served a total of 9 objections.7 “Such overwhelming

support by class members is strong circumstantial evidence supporting the fairness of the

settlement.” Mangone v. First USA Bank, 206 F.R.D. 222, 227 (N.D. Ill. 2001). Courts have

previously noted that where the percentage of class members who objected to settlements

was in the 10% - 15% range, settlement is “strongly favored.” Stoetzner v. U.S. Steel Corp.,

897 F.2d 115, 118-119 (3rd Cir. 1990); Boyd v. Bechtel Corp., 485 F. Supp. 610, 624 (N.D.

Cal. 1979). In the instant matter, the percentage of objectors amounts to .00016 of a percent

of the total Class members. This vanishingly small number demonstrates beyond argument

that the Settlement has met the approval of virtually the entire Class. Moreover, it should

not be forgotten that “all class members had the opportunity to opt out of the settlement and

preserve their right to independently seek full recovery of their alleged damages if they

believed that they could achieve a better result.” In re Warfarin Sodium Antitrust Litigation,

212 F.R.D. 231, 258 (D. Del. 2002).

The 9 objections themselves are indeed inherently suspect, as counsel for the

objectors, including the pro se attorney objector, routinely file objections to class actions

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8

It is also interesting to note that although the objections launched are not 

publically available, Mr. Pentz, counsel for the Bells, appeared at Mr. Davis’ 

deposition. Davis Depo. 5; 4:21.

17

throughout the country. Various objector counsel have attempted repeatedly to block Class

Counsels’ attempts to confirm the objector class members’ knowledge of the case and the

basis of their objections. One deposition of an objector taken to date likely provides a

window into their counsels’ concern. Napoleon Davis was deposed by Earl Underwood, an

attorney representing the Class. Ex. E Mr. Davis testified that he did not read the entire

Notice. Davis Depo. 17:5-15; 37:9-17. He explained that he did not understand the portion

of the Notice that he read and contacted an attorney he knows for assistance. Davis Depo.

17:5-17. Mr. Davis was referred to Mr. Hutsler, the attorney who filed the objection on Mr.

Davis’ behalf. Davis Depo 16:13-21. Mr. Davis testified that he is a current Progressive

policyholder. Davis Depo 13:18-21; 24:14-16. Mr. Davis further testified that he did not

know that the settlement provided for premium reductions and premium refunds if inaccurate

information in his credit report, corrected through the Settlement, would qualify him for a

lower premium. Davis Depo 35:3-18. As Mr. Davis did not read the Notice and is not

familiar with the relief available to the Class members, it is difficult to believe that the

objections launched on his behalf are his own.8 See Davis Depo. 32:17-23; 33:1-16.

Depositions of other objectors revealed similarly detrimental evidence of the lack of good

faith in the objections made.

The few objections, with little or no explanation or analysis, argue that the Settlement

Case 1:03-cv-01519-MP-AK Document 63 Filed 10/26/04 Page 17 of 28
9Mr. Hendricks has been certified as an expert in federal courts and has testified 

about consumer matters before Congress on numerous occasions. Hendricks 

Affidavit ¶¶ 3, 6, 7.

18

is unfair because it only gives Class members that to which the Class members are already

entitled. Not only does this argument sorely understate the full benefits of the settlement, it

also misses the point entirely. Giving Class members “what they’re entitled to” was the very

purpose of the lawsuit. It is precisely because the Settlement starts by giving Class members

that which they were previously deprived of which makes the Settlement fair and reasonable.

 Evan Hendricks, a recognized expert on privacy matters and the FCRA

9

, states in his

affidavit in support of this settlement:

25. Thus, an important value in the Settlement is the notice to class

members. In effect, this notice serves as a surrogate adverse action notice,

advising class members that they experienced an adverse action in relation to

their application for Progressive insurance because of information in their

credit report. Accordingly, the settlement notice paves the way for class

members for the first time to become fully informed (1) in regards to their

transaction with Progressive, and (2) that negative information in their credit

reports was the cause of them either being quoted a higher rate or being

denied altogether.

Mr. Hendricks is one of very few experts with extensive knowledge of the FCRA and the

newly revised FACT Act. His passion for consumers’ rights is evident from even a cursory

review of his attached Affidavit. 

The objectors argue that the FCRA provides for statutory remedies for violations of

the FCRA in the range of $100 to $1,000. What each objector fails to note, however, is that

such statutory relief is available only upon a showing by Plaintiffs that Progressive willfully

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19

violated the FCRA. As discussed more fully above, this is a hotly contested issue in this

litigation. Armchair objector counsel may ignore this, but Class counsel, who have fought

this battle for four years, recognize the inherent difficulty in proving such a high level of

culpability against a defendant accused not of failing or refusing to have any FCRA adverse

action notice procedures whatsoever, but instead of having arguably flawed procedures.

The objectors all argue that the settlement only gives to Class members that to which

they were already entitled, but all ignore the plain fact that the Settlement attempts to restore

to Class members exactly those rights previously denied them. Although the exact data which

may have led to adverse action in the past is no longer available to consumers, it is possible

to let Class members see their current reports free of charge and allow current policyholders

to determine whether existing mistakes in their current reports are resulting in higher

premiums at this time. Obviously, only Class members are in a position to determine whether

there are mistakes in their credit reports. Contrary to the suggestion of objectors, the fact that

the consumer reporting agency Experian is not a party to this litigation provides additional

protection to Class members. Experian must initiate specific statutory procedures to

investigate and resolve reported mistakes in credit reports, as brought to its attention by Class

members. 15 U.S.C. § 1681i. Because Experian is specifically not included as a party to this

settlement, Class members retain all enforcement rights against Experian with regard to these

required procedures to which they are entitled. In other words, Experian still has to perform

its full statutory obligations and is not protected by the terms of this Settlement.

Case 1:03-cv-01519-MP-AK Document 63 Filed 10/26/04 Page 19 of 28
10The FTC is charged with enforcement of the FCRA. 15 U.S.C. § 1681s.

20

Additionally, all objectors completely gloss over the important benefit provided to

existing policyholders to reduce their premiums and obtain a credit or refund for past

premiums if in fact mistakes in their current reports are contributing to higher premiums. The

dollar value of this benefit has not been included in the overall value of the Settlement

benefits by the valuation expert Evan Hendricks because any number would be speculative.

The value to each Class member of having received adverse action notice, together with

access to a new credit report is more than sufficient standing on its own to justify the fairness

and adequacy of this settlement. Premium reductions and refunds represent, however, untold

bonus value to class members.

Objectors also uniformly and completely ignore the Settlement benefits resulting

from changes in Progressive’s FCRA compliance procedures as set forth in the Settlement

Agreement. These changes will significantly alter Progressive’s FCRA procedures and

provide more complete information to Class members and all future Progressive

policyholders with regard to the effect consumer reports have on their premiums. Thus, at

no expense to the Federal Trade Commission10 or taxpayers, Progressive has altered its

procedures in furtherance of the objectives of the FCRA. Indeed, the changes agreed to by

Progressive are not even uniformly recognized at this time by the courts as necessary under

the Act. See Marks, supra.. In obtaining this Agreement with Progressive to improve its

compliance procedures, Plaintiffs have bestowed a valuable benefit not only on current Class

Case 1:03-cv-01519-MP-AK Document 63 Filed 10/26/04 Page 20 of 28
11In Clark v. Experian, et al., a class settlement was approved in which class 

members received entitlement to a free credit report. The Court found that this 

provision of the settlement provided real benefit to the class. Ex. F 

21

members, but also on the millions of future Progressive policyholders who will reap the

benefit of this Settlement term.

The majority of the objectors contend that opportunities to receive credit reports at

no cost to Class members have no value whatsoever, and that the Class members thus receive

nothing in this Settlement. Aside from ignoring the remaining benefits of the Settlement, this

argument is also completely without merit.11 Objectors’ counsel assume erroneously that

Class members have no need for more than one credit report a year. They blithely ignore the

advice of everyone in the consumer protection industry that - given the ubiquitous use of

credit reports in adversely affecting consumers, the day-to-day changes in the contents of

such reports, and the rising threat of identity theft - consumers should avail themselves of

every opportunity to review their credit reports. If objectors’ counsel truly want to advise all

Class members that they have no use for a free credit report through this Settlement, which

report is available in addition to any other credit report that might otherwise be available

throughout any given year, they should be prepared to explain to consumer advocates

everywhere and to the FTC their utter lack of concern for the safety of consumers, not to

mention the class on behalf of whom they purport to have concerns. 

Similarly, objectors refer to the new amendments enacted by Congress, the FACT

Act, which beginning at various times next year, will require consumer reporting agencies

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22

to provide a free credit report upon request. Not only is this provision not implemented at

this time, a fact objectors conveniently ignore, but even when it is implemented, the credit

report made available to Class members in this settlement is in addition to any other such

report, another fact likewise ignored by objectors. Hendricks Affidavit ¶¶ 20, 21. When

Congress passed the new law, it most decidedly did not eliminate the other existing

requirements for the availability of free credit reports for consumers already contained in the

FCRA (adverse action notices, identity theft, etc.). Since Congress and the FTC believe that

additional available credit reports retain their full value, this Court should likewise find that

the Settlement benefit provided for in this settlement retains its full value in today’s

consumer world and comports entirely with the letter and the spirit of the federal legislation

that formed the basis of the claims in this action. In addition, there is all the difference in the

world between Class members being told through individual notice and through national

publication that, as Class members against whom adverse action was taken, they are entitled

to a current free credit report, and an inchoate future right pursuant to a federal statute about

which they most likely have no knowledge. Hendricks Affidavit ¶ 23.

One objector, Dawn Wheelahan, a pro se attorney class member, has complained

about the scope of the release herein. She alleges that certain of her cases involving

impermissible use of credit reports would have been released by this Settlement had they

been against Progressive (which they are not). A simple reading of the release language,

however, demonstrates that only Progressive’s use of consumer reports in underwriting and

rating insurance policies are affected, not Progressive’s use of credit reports for any

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23

impermissible purpose. As is evident from a review of the FCRA, the underwriting of

insurance is an enumerated permissible purpose for the use of credit reports. The objection

is not well-taken.

Objectors attack the sufficiency of the mailed and published notices to the Class

alleging that the Notice was required to contain directions to the Class about how to object.

The exact language of these notices was, however, reviewed and approved by the Court in

connection with the preliminary approval and fully complies with Rule 23. The settlement

agreement provided for individual mailed notices, for publication notices in national

publications, and for access via the internet to complete and full information regarding the

Settlement. The parties also provided toll-free telephone numbers to the Class members so

that members of the Class had literally unlimited access to Class Counsel and to the Claims

Administrator. Objectors, all of whom timely filed their objections, argue that the mailed and

published notices should have set forth objection deadlines. The objectors, however,

uniformly fail to note that the notices direct Class members to a website containing a

complete copy of the Settlement Agreement together with the order of preliminary approval.

The Settlement Agreement and the order of preliminary approval each contain detailed

language with regard to such deadlines. The website also contains answers to frequently

asked questions, and directs Class members to a separate website run by Class Counsel for

the benefit of the Class members. The Class Counsel website contains yet more information

regarding objections to the settlement. Upon a complete review of the expansive amount of

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24

information available to the Class members, it is clear that the Class members have been

fully advised of their rights. 

Rule 23(c)(2)(B), Federal Rules ofCivil Procedure, governs the requirements of class

notices. The Rule specifically states that the notice “must contain and clearly state in plain,

easily understood language” six items of information, including the fact that “a class member

may enter an appearance through counsel if the member so desires.” The notices approved

by this Court contain the following: 

The interests of Class Members will be represented by Lead Counsel at the

Fairness Hearing except for those Class Members that choose to appear

individually or through counsel of their own choosing.

Thus, contrary to the baseless assertions of the objectors, the notices herein conformed

completely to the requirements of Rule 23, and advised all class members of their right to

appear through their own counsel and not be represented by class counsel herein. Moreover,

the legislature revisited Rule 23 as recently as last year. It is well-settled that the Notice to

class members is merely a summary of the settlement agreement at issue. The parties in the

instant case created a Notice that comports with Rule 23 and made the entire Settlement

Agreement readily available to the entire Class. The 16 objectors herein exercised that right

and their objections have been heard by the Court. Their complaints regarding the Notices

not only ignore the facts, they ignore the law. 

The few objectors who bother to cite any authority in their objections rely upon

Phillips Petroleum Co. v. Shutts, 472 U.S. 797 (1985) for the proposition that the Notice to

the Class was inadequate. Phillips simply does not stand for the proposition that class notice

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25

must include a delineation of the procedures for propounding an objection. A plain reading

of that case shows that the court merely stated that opt out requirements be spelled out in the

class notice, and that Class members generally must be afforded an opportunity to speak to

the proposed settlement. The notice approved by the Court herein fully complies with the

Shutts opinion, as well as Rule 23. 

The objection filed for Harris, Welch and Watkins, who may or may not be Class

members, alleges that the Notice procedure approved by this Court does not comport with

due process requirements because not every Class member received a mailed Notice. Rule

23 requires that reasonable efforts are taken to send mailed Notice to the class. As detailed

in Sheila Brown’s Affidavit (filed under separate cover), reasonable efforts were taken to

identify the addresses of members of the Class. Additionally, as is more fully set forth

above, Notice was published in such a manner that Notice of this Settlement reached over

60 million consumers. Pines Affidavit (filed under separate cover) 

Under any analysis, the comprehensive efforts taken in this case to notify the Class of their

rights under the Settlement were entirely reasonable. 

Finally, several of the objectors argue that the $4.5 million Plaintiffs will seek from

the Court to be paid by Progressive for attorneys fees and costs is unreasonable. This

argument is simply without merit. To begin, the Court will rule separately on Plaintiffs’

Motion for Award of Attorneys Fees and Costs. Additionally, Progressive will pay

Plaintiffs’ and Class members’ attorneys fees in addition to the other benefits conferred upon

the Class through the Settlement. The bench mark in the Eleventh Circuit for attorneys fees

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26

in the class action context is 25% of the value of the recovery for the class. Camden I, supra

at 774. As previously stated, the value of the benefits conferred upon the Class in this

Settlement are approximately $110.5 million. Thus the $4.5 million fee Plaintiffs will

request totals less than 4% of the value of the benefit to the Class. 

G. The Stage of the Proceedings at Which the Settlement Was Achieved

The protracted nature of the litigation in the case at bar is a matter of record. The

Settlement Agreement presented to this Court for final approval arrives after nearly four

years of zealous and ardent litigation. Plaintiffs have filed, among other things, a complaint,

an amended complaint, two motions for partial summary judgment and a motion for class

certification. Voluminous documents have been exchanged and numerous depositions have

been taken and defended. The Settlement Agreement was reached only after Plaintiffs filed

their second motion for summary judgment and their motion for class certification.

Additionally, Defendants filed a cross-motion for summary judgment and had vigorously

opposed Plaintiffs’ motion for class certification. Moreover, cases from various parts of the

country, some litigated extensively in their original jurisdiction, were transferred to this

Court by the Panel on Multidistrict Litigation. Only at the eleventh hour did the parties reach

an agreement, thus avoiding the possibility that one or the other side to this litigation might

suffer an adverse ruling from the Court on the pending motions for summary judgment and

motion for class certification.

III. THE SETTLEMENT IS NOT THE RESULT OF FRAUD OR COLLUSION

The lengthy and vigorous litigation witnessed by this Court thus evidences the lack

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27

of collusion in the compromise settlement ultimately reached by the parties. As more fully

set forth above, the Court had before it competing motions for summary judgment and a

motion for class certification fully briefed when the parties reached the settlement agreement

through protracted arms-length negotiations. Further evidence of the absence of collusion

is the fact that the matter of attorneys’ fees was not discussed until the parties had agreed to

all other aspects of the Settlement. Smiljanich Affidavit ¶¶ 52, 53. The attorneys fees are to

be paid by Progressive separate and apart from the benefits conferred upon the Class.

Therefore, there existed no moment when the interests of the parties were aligned against the

Class. As stated by the United States District Court in the Northern District of Georgia, “The

conclusion that the parties did not collude in arriving at a settlement involves a negative

analysis: whether there is reason to believe otherwise.” In re Domestic Air Transportation

Antitrust Litigation, 148 F.R.D. 297, 313 (N.D. Ga. 1993). There is no reason to believe that

the Settlement before this Court is a result of collusion. This is quite simply because the

facts themselves demonstrate beyond cavil no such collusion. 

IV. CONCLUSION

The Court has overseen the litigation of this action for nearly four years, including

the consolidation of five separate lawsuits. The Settlement before this Court effects changes

in federal compliance procedures to one of the largest insurers in the nation. Additionally,

the compromise Settlement provides benefits to more than 10 million consumers, virtually

all of whom did not even know that they had potential claims against Progressive for alleged

violations of the FCRA. Moreover, the Settlement provides benefits that replicate, to the

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extent possible, the very benefits Plaintiffs alleged the Class was originally denied. Plaintiffs

respectfully request this Court exercise its discretion and find that this Settlement is fair

reasonable and adequate, and enter final judgment in accord with the Settlement Agreement

previously preliminarily approved.

Respectfully submitted,

JAMES, HOYER, NEWCOMER & 

 SMILJANICH, P.A.

/s/ Terry A. Smiljanich 

Terry A. Smiljanich

Florida Bar No. 145359

Kathleen Clark Ford

Florida Bar No. 047120

4830 W. Kennedy Blvd., Suite 550

Tampa, FL 33609

Telephone: (813) 286-4100

Facsimile: (813) 286-4174

Class Counsel

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that the foregoing has been served upon the following by filing

electronically and via e-mail this 26th day of October, 2004:

Barry Richard

Glenn Burhans

GREENBERG TRAURIG, P.A.

101 E. College Avenue

PO Drawer 1838

Tallahassee, FL 32302

/s/ Terry A. Smiljanich 

TERRY A. SMILJANICH

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