constitute "associated in fact enterprises" for purposes of
RICO; whether Defendants breached the terms of their
standardized contracts with customers by purchasing pesos at one
exchange rate and then selling them, in effect, to customers at
a higher, less favorable rate; and whether Defendants have an
obligation to disclose the existence and amount of the FX spread
to their customers.
3. Typicality: Class members claims need not be identical,
as long as they are substantially similar. Binion v.
Metropolitan Pier & Exposition Auth., 163 F.R.D. 517, 524-25
(N.D.Ill. 1995). The typicality test is met if named plaintiffs'
claims "arise from the same event or practice or course of
conduct that gives rise to the claims of other class members and
. . . are based on the same legal theory." De La Fuente v.
Stokely-Van Camp, Inc., 713 F.2d 225, 232 (7th Cir. 1983)
(quotations omitted). Here, all class members' claims arise from
Defendants' practice of giving class members a lower exchange
rate for their dollars than Defendants themselves receive when
they trade dollars for pesos in the wholesale or interbank
market. Every class member, in each of the lawsuits filed, has
asserted similar theories: that Defendants' FX practices
constitute a fraudulent scheme carried out through a pattern of
racketeering, conversion, breaches of fiduciary duty, and
breaches of contract. Defendants' defenses to the claims of the
named Plaintiffs are also identical to their defenses to the
claims of all class members.
4. Adequacy of Representation: The purpose for examining the
adequacy of class representation is to expose incompetent or
ineffective class counsel and uncover any potential conflicts of
interest between the class representatives and the remaining
class members. Amchem Prods., Inc. v. Windsor, 521 U.S. 591,
625-27, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997). There can be no
genuine dispute concerning the competence or effectiveness of
the attorneys who have represented these classes. National Class
Counsel are experienced litigators who have vigorously
prosecuted these cases. Nor does the court perceive conflicts
between the named representatives and the other class members;
as discussed more fully below, the court has concluded that
California residents have no different claims, nor any stronger
claims for relief, than do other members of the settlement
classes. Representation is adequate here.
5. Predominance of Common Questions, Superiority of Class
Action: For a class certified under Rule 23(b)(3), the court
must find that common questions predominate over questions
affecting individual class members and that a class action is
superior to other available methods of adjudicating class
members' claims. Those requirements are met here because all
class members share a common grievance: all received fewer pesos
in exchange for dollars than the number of pesos that Defendants
were able to purchase for those dollars; and, all paid a
transaction fee or service fee under circumstances that could
have led them to believe this fee was the only compensation that
Defendants received for their money exchange services. Although
individual issues relating to reliance, causation, and damages
exist, they do not predominate and do not preclude class
certification. As discussed more fully below, the court
concludes that to the extent California class members may press
other claims, these claims are not superior to the common claims
set forth in the complaints in these cases, including claims
Further, because individual compensation claims average
approximately $25 per transaction, the court concludes that
individual claims would allow for a far
less efficient and fair resolution of the class members' claims.
Nor do the manageability issues that might arise if this case
were to be litigated preclude certification of a class for
purposes of settlement.
E. Fairness and Adequacy of Settlement
Courts favor the resolution of a class action by way of
settlement and will approve such a settlement if it is fair,
reasonable, and adequate when viewed in its entirety. Isby v.
Bayh, 75 F.3d 1191, 1196 (7th Cir. 1996). In evaluating a
proposed settlement, the court recognizes that the "essence of
settlement is compromise" and will not represent a total win for
either side. Id. at 1200, quoting Armstrong v. Board of Sch.
Dir., 616 F.2d 305, 315 (7th Cir. 1980). Accordingly, the court
is not called upon to determine whether the settlement reached
by the parties is the best possible deal, nor whether class
members will receive as much from a settlement as they might
have recovered from victory at trial. See In re Prudential Ins.
Co. of Am. Sales Practices Litig., 962 F. Supp. 450, 534 (N.J.
1997), aff'd, 148 F.3d 283 (3d Cir. 1998); E.E.O.C. v. Hiram
Walker & Sons, 768 F.2d 884, 889 (7th Cir. 1985). In assessing
the fairness, reasonableness and adequacy of a class settlement,
the court must balance six factors:
(a) the strength of plaintiffs' case, weighed against
the settlement offer;
(b) the complexity, length, and expense of further
(c) the presence of collusion between the parties;
(d) the opinion of competent counsel;
(e) the reaction of class members to the proposal;
(f) the stage of proceedings and discovery completed.