VASSALLE v MIDLAND FUNDING LLC, ENCORE | U.S. Sixth Circuit Appeals Court Voids Nationwide Robo-Signing Settlement,

Remember that $5.2 Million dollar settlement against Midland Funding for "Robo-Signing"Affidavits? As it turns out, Midland employees had been signing between 200 and 400 computer-generated affidavits per day for use in debt-collection actions, without personal knowledge of the accounts. 

These judges thought this was an unfair settlement for consumers and get this, all class members would also release Midland from any future lawsuits related to affidavits.

UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT

MARTHA VASSALLE; JEROME JOHNSON; HOPE FRANKLIN; ANDREA BRENT, Plaintiffs-Appellees, ROBERT CLAWSON, CHRISTOPHER GUEST, and MANUELA RIVERA (11-3961); KELLI GRAY (11-4016); LADON HERRING, GILBERT JAMES, and ANN RUBIO (11-4019), Objectors-Appellants, ELAINE PELZER (11-3814 and 11-4021), Intervenor-Appellant, v. MIDLAND FUNDING LLC;MIDLAND CREDIT MANAGEMENT, INC.; ENCORE CAPITAL GROUP, INC., Defendants-Appellees. ---------------- Appeal from the United States District Court for the Northern District of Ohio at Toledo. No. 3:11-cv-00096—David A. Katz, District Judge. Argued: October 2, 2012 Decided and Filed: February 26, 2013 Before: MOORE and COLE, Circuit Judges; and ROSE, District Judge.* ______________ COLE, Circuit Judge. Midland Funding LLC, Midland Credit Management, Inc., and Encore Capital Group, Inc., the defendants-appellees, along with four plaintiffsappellees, Andrea Brent, Martha Vassalle, Jerome Johnson, and Hope Franklin, sought approval in district court of a nationwide class settlement that settled three related lawsuits. The district court certified the class and approved the settlement. Eight objectors-appellants objected to the settlement, arguing that the settlement was unfair, unreasonable, and inadequate, that the district court abused its discretion in certifying the nationwide settlement class, and that the notice to prospective class members did not satisfy due process. For the following reasons, we REVERSE the district court’s order approving the settlement, VACATE the judgment certifying the nationwide settlement class and the award of attorney fees, and REMAND for further proceedings consistent with this opinion. [...] The settlement provided for both monetary and injunctive relief. Midland agreed to pay $5.2 million into a common fund for the benefit of the class. From this fund, class counsel would receive attorney fees of no more than $1.5 million, and the costs of administration. From the remainder of the fund, eligible class members who timely returned a claim form would receive payments of $10.00 each. In fact, however, the response rate was such that each class member would receive $17.38. In addition, the four named plaintiffs were to receive $8,000 collectively.