Opinion ID: 177521
Heading Depth: 3
Heading Rank: 4

Heading: The Modified Settlement

Text: As the parties were briefing the viability issue, the Settling Parties entered into new settlement negotiations to explore a possible enhancement to the [Initial] Settlement. (Settling Parties' Br. at 24.) Counsel for the Objectors initially participated in those negotiations, including unsuccessful mediation before retired District Court Judge Nicholas Politan of the District of New Jersey. During the summer of 2006, the Settling Parties (who were not joined by counsel for the Objectors) negotiated an enhanced settlement (the Modified Settlement) with the assistance of former Third Circuit Judge Timothy Lewis. According to the Settling Parties, [t]he renewed settlement negotiations considered the alleged monetary damages Class members ostensibly could have sought assuming ... that the posited TILA/HOEPA claims had been pleaded and could potentially survive a Rule 12(b) motion. (Settling Parties' Br. at 25.) The Settling Parties determined that the potential actual ( i.e., compensatory) damages the Objectors were claiming under TILA/HOEPA amounted to, on average, approximately $415 per loan. ( Id. ) However, because of Defendants' perception of the strength of their statute of limitations ... defenses, they refused to make any additional payments to any member of the Class in exchange for the release of their potential TILA/HOEPA liability without first determining whether a given Class Member had some basis for relying on equitable tolling. Accordingly, the Settling Parties proposed a claim form containing the following questions for class members to answer: 1. Did you read your Settlement Statement (Form HUD-1) prior to obtaining your loan? 2. At the time that you obtained your... loan, did you believe that the Statement of Settlement Charges listed on your HUD-1 was accurate? 3. At the time that you obtained your... loan, did you believe that the Settlement Charges listed on your HUD-1 were for services actually performed? 4. At the time that you obtained your CBNV [or GNBT] loan, did you believe that the Settlement Charges listed on your HUD-1 were reasonable and appropriate? The Modified Settlement provided that if a class member responds to these questions appropriately, he or she is entitled to an additional $332, representing approximately 80% of the class member's potential actual damages under TILA and HOEPA. The defendants agreed to pay up to an additional $14.6 million to those persons, for a total of $47.6 million. In addition, the Modified Settlement reduced the amount of attorneys' fees that class counsel would petition the Court to approve from $8.1 million to $7.5 million. Defendants also agreed to pay up to an additional $2 [million] in attorneys' fees and costspresumably, to counsel for the Objectorsif so ordered by the Court. The Modified Settlement followed the terms of the Initial Settlement in all other material respects.