flUNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF MICHIGAN

RAY M. HARRISON, )

Individually and on behalf of others ) Case No.: 5:09-cv-12684-JCO-DAS

similarly situated )

Plaintiff, )

) Judge John C. O’Meara

v. )

) Magistrate Judge Donald A. Scheer

FIRST INDEPENDENCE BANK, )

)

Defendant. )

JOINT MOTION FOR PRELIMINARY

APPROVAL OF A CLASS ACTION SETTLEMENT

Plaintiff Ray M. Harrison and Defendant First Independence Bank hereby move this Court for

an order: (1) certifying the proposed Settlement Class under Federal Rule of Civil Procedure 23(b)(3)

for settlement purposes only; (2) preliminarily approving all terms and conditions of the proposed Class

Action Settlement Agreement and Release (the “Settlement Agreement”); (3) approving and directing

Notice to the Class Members; and (4) setting dates for submitting claims, exclusions (“Opt-Outs”),

objections and a Final Approval Hearing.

In support of this motion, the parties state as follows:

1. This case arises out of Defendant’s alleged failure to provide on-machine posted notice to

consumer patrons of a funds withdrawal fee charged to non-customers at its automated teller machines

at the following locations (the “Subject ATMs”), as allegedly required by the Electronic Funds Transfer

Act, 15 U.S.C. §1693 et seq. (the “Act”).

93361104 Greektown Branch - 400 Monroe - Detroit, MI 48226

9336Y002 Fishbones - 23722 Jefferson - St Clair Shrs, MI 48826

9336Y003 Holiday Inn Express - 1020 Washington - Detroit, MI 48226

9336Y007 Pegasus - 558 Monroe - Detroit, MI 48226

9336Y008 Stroh's - 300 Joseph Campau - Hamtramck, Mi 48207

9336Y010 U of D Dental School - 2700 MLK Jr Blvd - Detroit, MI 48208

9336Y011 Marquette Building - 243 W Congress - Detroit, MI 48226

9336Y015 U of D Law School - 651 E Jefferson - Detroit, MI 48207

93362202 Int'l Bldg 400 Monroe - 1St Floor Greektown - Detroit, MI 48226

93362206 Atheneum - 1000 Brush Ave - Detroit, MI 48226

93369001 Detroit Northwest Precinct - 11450 Warwick - Detroit, MI 48228

93362408 Motor City - 2901 Grand River Ave - Detroit, MI 48201

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93362409 Motor City - 2901 Grand River Ave - Detroit, MI 48201

93362411 Motor City - 2901 Grand River Ave - Detroit, MI 48201

93362412 Motor City - 2901 Grand River Ave - Detroit, MI 48201

93362413 Motor City - 2901 Grand River Ave - Detroit, MI 48201

93362414 Motor City - 2901 Grand River Ave - Detroit, MI 48201

2. Counsel for Plaintiff and Defendant have reviewed and analyzed the legal and factual issues

presented in this case and the risks and expenses likely associated with litigating this case to

conclusion. Although Plaintiff’s counsel believes Defendant’s liability to be clear in this case,

Defendant strongly disputes this and the parties recognize that there is significant risk and expense in

proceeding through litigation of Plaintiff’s claims, including the adjudication of Plaintiff’s class

allegations. Further, Plaintiff’s counsel recognizes that, although the Act affords Plaintiff and the class

a potential statutory award in addition to their actual damages, the Act caps the potential statutory

award at a figure that exacerbates the risk of protracted class litigation. The parties further recognize

that significant practical barriers exist simply to ascertain the identify of the non-customer cardholders

who used the Subject ATM during the class period, which would likely require issuance of subpoenas

to each of the many financial institutions that issued the cards used by class members.

3. Because of these risks, the parties spent a considerable amount of time from January 2011 to

the present discussing the possibility of settlement of both Plaintiff’s claims and those of the class. 

4. In the course of those discussions, the parties have shared information regarding the relative

strengths and weaknesses of their cases. Plaintiff’s counsel has learned that, during the year preceding

the ATM withdrawal conducted by Plaintiff, 130,700 transactions involving an estimated 40-60,000

different non-customer cardholders were conducted at the Subject ATMs. Although Plaintiff believes

that his evidence of Defendant’s violation of the Act may be conclusive, Plaintiff may not be able to

establish the length of any alleged violation, a fact that typically impacts the amount of statutory

penalties awarded in cases brought under the Act. Plaintiff’s counsel is aware of, and has considered,

typical defenses in similar cases which could provide a significant defense in this case or, at the very

least, mitigate statutory penalties, including the defense that a sign posted prior to Plaintiff’s

withdrawal had been removed and/or vandalized by a third party without Defendant’s knowledge or

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consent. Further, neither party disputes that at all times the Subject ATMs contained an “on the screen”

notice of the fee charged to non-customers, in compliance with 15 U.S.C. § 1693b(d)(3)(B)(ii).

Consequently, Defendant contends that neither the Plaintiff nor any of the settlement class he represents

have suffered any actual harm or damages as a result of the absence of an on-the-machine posted

notice, and the existence of only an “on the screen” fee notice on the Subject ATM is consistent with

the FDIC’s June 2006 Compliance Examination Handbook (the “Handbook”), which expressly gives

“the ATM operator the choice of either posting the notice that a fee will be charged and the amount of

the fee in a prominent and conspicuous location, or in the alternative, providing such notice on the

screen.” See Helkowski v. Sewickley Savings Bank, 2009 U.S. Dist. LEXIS 96134, at *18 (W.D. Pa.

Oct. 15, 2009). Defendant contends that such exclusive “on the screen” notice is also consistent with

the language of the Act itself, which has “no conjunctive term connecting” the on-the-machine and onthe-screen ATM fee notices. Id. at *14 (citing 15 U.S.C. § 1693b(d)(3)(B)(i) and (ii)).

5. Given the risks and expense of litigation, the parties have agreed to a settlement of Plaintiff’s

claims. The terms of the parties’ proposed settlement and the arguments in support thereof are set forth

fully in the following paragraphs, as well as the proposed Settlement Agreement (Exhibit 1) to this

Joint Motion.

6. The parties have stipulated to certification of the following Settlement Class for settlement

purposes only: All persons who, from June 18, 2008 to June 17, 2009, were charged a transaction fee

for making withdrawal(s) from a personal (not business) account using the automated teller machine

operated by First Independence Bank at the locations specified in paragraph (1) above.

7. Plaintiff meets all of the requirements enumerated in Federal Rule 23(a) to certify this case

as a class action:

(a) Numerosity. The class is so numerous in this case that joinder of all members would

be impracticable. According to Defendant’s records, approximately 40-60,000 separate

non-customer cardholders conducted 130,700 withdrawal transactions at the Subject

ATMs during the class period, although it would require issuance of subpoenas to a

large number of separate financial institutions to determine which of those cardholders

are “consumers” within coverage of the Act and, hence, within the Class itself.

(b) Commonality. Essentially all of the issues of law and fact in this matter are

common to the class. This case involves standardized conduct directed toward the entire

class, and a common nucleus of operative fact exists. The factual and legal questions

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applicable to Plaintiff’s case of whether Defendant failed to provide necessary

disclosures at the relevant ATMs are identical to those of each absent class member.

(c) Typicality. The claims of Plaintiff are typical of the claims of the entire class.

Plaintiff’s claim that he was charged $2.75 for a transaction at the relevant ATM and

that there was no on-machine disclosure regarding non-customer transactions fees is

factually and legally indistinguishable from the claims of the class members.

(d) Adequacy of Representation. Plaintiff will fairly and adequately protect the

interests of the class. Plaintiff has no claim that conflicts with a claim of any absent

class member, and Plaintiff has sufficient interest in the outcome of this action to ensure

vigorous advocacy. As set forth above and more fully in the paragraphs below, Plaintiff

was a vigorous advocate for the rights of the absent class members throughout the

settlement process as evidenced by the settlement terms and potential recovery by class

members in view of their actual damages. Plaintiff and the class members all have

claims of equal or similar strength because the facts for each class member would be the

same, as would be the applicable law and expected potential recovery. Plaintiff has no

knowledge of any potential class member and has communicated and participated in

thorough discussions with his counsel regarding the litigation and settlement. Moreover,

Plaintiff’s counsel is competent, experienced, and qualified to represent the interests of

the class. Plaintiff’s counsel has practiced law for approximately 30 years and has

prosecuted multiple class actions alleging violations of the Electronic Funds Transfer

Act. Plaintiff's counsel served for 10 years in the United States Department of Justice,

7-1/2 as an Assistant United States Attorney and two as a Deputy Assistant Attorney

General in the Office of Policy Development; served for two years as Staff Director for

Oversight and Investigations for the U.S. House Committee on Veterans Affairs; and has

worked on many class actions during his 15-plus years in private practice with the law

firms of Debevoise & Plimpton in New York City and Dickstein Shapiro in Washington,

DC, and in his own practice.

8. In addition, Plaintiff meets all of the requirements enumerated in Federal Rule 23(b)(3) to

certify this case as a class action:

(a) Predominance. Common questions of law and fact predominate this action because

the factual and legal issues faced by Plaintiff and the class members are identical. Those

questions include (i) whether Defendant posted on-machine notice of the transaction fee,

(ii) whether Defendant charged a withdrawal fee, (iii) whether Defendant has any

defenses; and (iv) whether Defendant violated the Electronic Funds Transfer Act 15

U.S.C. §1693 et seq.

(b) Superiority. A class action is superior to all other available methods for the

adjudication of this controversy. The class device presents the most efficient means of

adjudicating the rights of the class members, of whom there are potentially 40-60,000,

presumably most, if not all, of whom are unaware of their rights and thus would not

undertake litigation on their own. In addition, the costs of pursuing individual litigation

in this matter are likely prohibitive. Under the terms of the Act, potential class members

who opt to bring an individual action would be limited to actual damages and a statutory

penalty not to exceed $1,000.00. It is very unlikely that class members would pursue

individual actions to receive the protections and relief contemplated by the Act and that

will be afforded them through class adjudication. 

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9. Pursuant to the Settlement Agreement, the parties have agreed that Defendant will establish

an Escrow Amount of $190,000.00. The Escrow Amount shall be disbursed as follows, pursuant to

Section 2.3 of the Settlement Agreement:

(a) Payment to Class Representative. The Class Representative will receive

$2,000.00 for his individual claims and as an incentive award for his services as Class

Representative.

(b) Payment to Class Counsel. Class Counsel shall receive $40,000.00 in attorneys’

fees and costs. This payment is subject to Court approval and Defendant agrees not to

object to the Court awarding this amount to Class Counsel. This amount is 27 percent

of the estimated amount of the settlement fund available for class recovery after

deduction of the award to Plaintiff and the payment to Class Counsel.

(c) Notice Costs. The costs of published notice in The Detroit News/Detroit Free

Press, posted notice on the subject ATM referring to the website, website notice, and

settlement administration will also be deducted from the Settlement Fund. Plaintiff’s

counsel estimates that the cost of class notice and administration of the settlement will

be no more than $5,000.00.

(d) Class Recovery. The amount remaining in the Escrow Amount after deducting

the amounts set forth in paragraphs (a), (b) and (c) above is equal to approximately

$143,000. Participating Claimants will receive $100.00 each, or their pro rata share of

the settlement fund in the event the number of Participating Claimants is such that the

pro rata share of each Participating Claimant is less than $100.00. Counsel believes this

relief to be fair and reasonable to the absent class members when the following factors

are accounted for: the risks of further litigation; actual damages suffered by the absent

class members; costs of prosecution of individual actions; and the potential statutory

recovery under the Act. Counsel for Plaintiff notes that, given the number of claims

made in other ATM cases, it is highly likely that each claimant will receive the full

$100.00. Counsel for Plaintiff further notes that for transactions conducted at

Defendant's ATMs located in the Motor City Casino, which are a large majority of the

total transactions, Motor City Casino, not Defendant, received most of the fees from the

transactions. Plaintiff took this fact into account in agreeing to the per claim amount of

$100.00.

(e) Reverter. Any money remaining in the Escrow Amount, after payments are

made pursuant to paragraphs (a) through (d) above, will be distributed as follows: any

amount remaining up to $20,000.00 shall be donated as a cy pres to the Karmanos

Cancer Institute; any further amount remaining up to $10,000.00 shall be donated as a

cy pres to Freedom Institute, 15800 W. McNichols #224, Detroit, Mich 48235 (Phone

313-347-2834); and any further remaining amount shall be returned to Defendant. All

such distributions shall be made shall be made within thirty (30) days after

determination and final payment of all settlement amounts.

10. The parties have agreed on the forms of Class Notice to be given to Class Members,

pursuant to Section 2.5 of the Settlement Agreement: publication notice in The Detroit News/Detroit

Free Press (Exhibit B to the Settlement Agreement), posted notice on the ATMs at Issue (Exhibit C to

the Settlement Agreement), and website notice (Exhibit D to the Settlement Agreement).

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11. The parties submit that the proposed forms of Class Notice meet the requirements of

Rule 23. Rule 23(c)(2)(B) states, “For any class certified under Rule 23(b)(3), the court must direct to

class members the best notice that is practicable under the circumstances, including individual notice to

all members who can be identified through reasonable effort.” The parties submit that newspaper

publication notice (covering the geographic area in which the ATMs are located), posted notice, and

website notice, as set forth in Section 2.5 of the Settlement Agreement, is the best Class Notice

practicable under the circumstances. The parties’ proposed forms of Class Notice are reasonable given

that: (a) publication notice is being specifically targeted for circulation in the Subject ATMs' vicinity;

(b) a detailed notice which includes the full Settlement Agreement, the complaint, and other court

documents is being published on the Internet; and (c) notice is also being posted on the ATMs that are

the subject of this litigation.

12. Direct notice to the non-customer account holders who were charged a fee is not

practical because Defendant does not obtain sufficient personal identifying information relating to noncustomer cardholders in connection with processing ATM transactions. Defendant merely obtains a

portion of the card number for such non-customer transactions, from which it can determine the issuing

institution. Defendant is not provided and cannot ascertain the cardholder’s name, address, or any

other personal identifying information, including whether the cardholder is a business or consumer.

Other federal courts have recognized the impracticability of providing individual notice in the context

of such EFTA class actions. For example, in Mowry v. JP Morgan Chase Bank, N.A., 2007 U.S. Dist.

LEXIS 44222 (N.D. Ill. June 19, 2007), the court emphasized:

In the instant action, the only identifying information associated with the approximately

twenty million transactions in question are the sixteen digit personal account numbers

(“PAN”) that Chase’s ATMs record during each withdrawal. These PANs consist of a

six digit code identifying the bank that the cardholder has an account with, and a ten

digit personal identification number, which is known only to each respective bank. Due

to the vast number of transactions involved in a potential class action, identifying the

financial institutions that are not affiliated with Chase in order to identify the potential

class members will be difficult. In addition, once a financial institution that is not

affiliated with Chase is properly identified and contacted, that financial institution is not

likely to be willing to share identity information for security and privacy reasons.

Further, even if financial institutions that are not affiliated with Chase are willing to

identify and locate potential class members, the financial institutions may be unable to

do so if the potential class members no longer hold accounts with the financial

institution. Attempts to identify the potential class members individually will

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undoubtedly result in prolonged litigation, and even then it is likely that a large number

of potential class members will be left out. Id. at *17-19.

13. The parties note that the Settlement Agreement is identical in all relevant respects to the

Settlement Agreement in Harrison v. Flagstar Bank, Case No. 09-cv-12687-JCO-DAS, for which this

Court granted preliminary approval at a hearing on February 10, 2011.

14. In addition to the agreed-upon forms of notice, the parties have also agreed on a form of

a proposed Preliminary Approval Order (Exhibit E to the Settlement Agreement) and a proposed Final

Approval Order (Exhibit F to the Settlement Agreement).

WHEREFORE, for the foregoing reasons, the parties request that this Court enter an order: (1)

certifying the proposed Settlement Class for settlement purposes only; (2) preliminarily approving all

terms and conditions of the proposed Class Action Settlement Agreement and Release; (3) approving

and directing Class Notice to the Class Members; and (4) setting dates for submitting claims,

exclusions, objections and a Final Approval Hearing.

Dated: October 8, 2010 Respectfully submitted:

GEOFFREY BESTOR, ESQ.

/s/ Geoffrey Bestor 

4204 Maple Terrace

Chevy Chase, MD 20815

(240) 463-8503

Email: gbesq@bestorlaw.com

Counsel for Plaintiff

GERALD VAN WYKE, P.C.

By: /s/ Gerald Van Wyke

5440 Corporate Drive, Suite 250

Troy, Michigan 48098-2648 

Tel. (248) 641-7000

Email: jwv@uferspan.com

Counsel for Defendant 

CERTIFICATE OF SERVICE

The undersigned hereby certifies on this 17th day of May, 2011, that he filed Joint Motion to

Preliminary Approval of a Class Action Settlement in the Court's ECF system, thereby causing a copy

of the same to be served upon counsel for all parties in this matter by email at the email addresses

designated in the records of the Court.

 /s/ 

Geoffrey Bestor

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