NEW YORK, June 3 A group of 38 state attorneys
general are opposing a proposed class action settlement with
Encore Capital Group Inc's (ECPG.O) Midland unit over
The proposed settlement is "paltry" and unfair to
consumers, the group said in a June 1 court filing.
The settlement, which would provide up to $5.7 million for
1.4 million class members, was announced in February. San
Diego-based Encore, which often buys debt from credit card
companies, agreed to settle claims that the company <relied on>
false affidavits to bring debt collection lawsuits.
"Under any interpretation, the ten-dollar-per-class-member
settlement is not fair, reasonable, or adequate to address the
harm incurred," the attorneys general, led by New York Attorney
General Eric Schneiderman, said in the brief, filed in federal
court in Ohio.
The attorneys general, from states including California,
Ohio and Massachusetts, also said the agreement unfairly forces
class members to release any claims against the company,
allowing Midland to pursue claims against plaintiffs.
"The settlement strips class members of their right to
defend against existing lawsuits and to seek to vacate
judgments obtained through defendants' use of false and
misleading affidavits," the attorneys general wrote.
The attorneys general also objected to $1.5 million of fees
for plaintiffs counsel, and the "generous" payment of $8,000
for the named plaintiffs in the case.
U.S. District Judge David Katz in Toledo, Ohio,
preliminarily approved the settlement in March and set June 1
as the deadline for any objections. A fairness hearing is
scheduled for July 11.
Plaintiffs' lawyer Dennis Murray Sr. at Murray & Murray
didn't immediately return a call seeking comment.
A spokesman for Encore didn't immediately have a comment.
All 50 states are investigating robo-signing and other
improper practices by banks in the mortgage industry.
In May, in a separate case, Minnesota sued Midland for
filing robo-signed affidavits.
The case is Vassalle et al v. Midland Funding LLC, U.S.
District Court, Northern District of Ohio, No. 11-00096.
(Reporting by Carlyn Kolker; Editing by Steve Orlofsky)