Robinson v. Midland Funding, LLC, No. 3:2010cv02261 - Document 74 (S.D. Cal. 2018)
Court Description: ORDER Granting Joint Motion for Approval of Cy Pres Beneficiaries of Residual Settlement Funds. In sum, the Court grants the parties' joint motion for approval of cy pres distribution as set forth above, and further orders that: 1. Univer sity of Santa Clara Law School's Privacy Law Certificate and High Tech Law Institute, and Jump$tart Coalition for Personal Financial Literacy are designated the cy pres beneficiaries of the remaining balance of the Cash Component of the Settlement Fund and must share equally in the cy pres award; and 2. Kurtzman Carson Consultants, LLC, the claims administrator, must promptly distribute the cy pres award to University of Santa Clara Law School's Privacy Law Certificate and High Tech Law Institute, and Jump$tart Coalition for Personal Financial Literacy in equal amounts. Signed by Judge Michael M. Anello on 10/10/2018.(rmc)
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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 12 13 MDL No. 2286 Member Cases: 10cv2261-MMA (MDD) 10cv2600-MMA (MDD) 11cv2368-MMA (MDD) 11cv2370-MMA (MDD) IN RE: MIDLAND CREDIT MANAGEMENT INC., TELEPHONE CONSUMER PROTECTION ACT LITIGATION 14 15 ORDER GRANTING JOINT MOTION FOR APPROVAL OF CY PRES BENEFICIARIES OF RESIDUAL SETTLEMENT FUNDS 16 17 18 [Doc. No. 610] 19 20 Plaintiffs Christopher Robinson, Eduardo Tovar, and Dave Scardina, on behalf of 21 themselves and the Settlement Class as defined in the Amended Order Adopting Reports 22 and Recommendations (Doc. No. 434) (“Plaintiffs”), and Defendants Midland Funding 23 LLC, Midland Credit Management Inc., and Encore Capital Group (“Defendants”), 24 jointly move the Court for approval of cy pres distribution of remaining settlement funds 25 to certain beneficiaries. Doc. No. 610. For the reasons set forth below, the Court 26 GRANTS the joint motion. 27 // 28 // 1 11md2286-MMA (MDD) 1 BACKGROUND 2 The individual plaintiffs in this action generally allege that Defendants violated the 3 rights of plaintiffs and other unnamed class members by illegally making debt collection 4 calls to them, through use of an automatic dialer or pre-recorded voice, on their cellular 5 telephones without first obtaining their prior express consent in violation of the 6 Telephone Consumer Protection Act, 27 U.S.C. § 447, et seq. (“TCPA”). All plaintiffs 7 within this Multi-District Litigation (“MDL”) allege violations of the TCPA by 8 Defendants in substantially the same manner. 9 A consolidated complaint was filed on July 11, 2012. The consolidated complaint 10 alleges that Defendants violated the TCPA by using a predictive dialer to call the 11 plaintiffs on their cell phones regarding debts. The parties ultimately entered into a 12 settlement agreement and on November 30, 2016, the Court granted final approval of the 13 class action settlement, as amended (“the Settlement”).1 See Doc. Nos. 432, 434. For 14 purposes of settlement, the Court certified the following Settlement Class: 15 [A]ll persons in the United States who were called on a cellular telephone by Defendants or their subsidiaries, affiliates or related companies (other than calls made by Asset Acceptance LLC, Atlantic Credit & Finance, Inc. or Propel Financial Services) in connection with the collection of an alleged debt using a dialer or by artificial or prerecorded voice message without prior express consent during the period from November 2, 2006 through August 31, 2014, inclusive. 16 17 18 19 20 Doc. No. 434 at 4.2 21 Further, as part of the Settlement, Defendants established a Settlement Fund of 22 approximately $21.5 million, to be allocated as follows: (1) Net Settlement Amount - 23 $15,000,000.00; (2) Attorneys’ Fees and Costs - $2,400,000.00; (3) Cost of Notice and 24 25 26 27 28 1 The Court amended the paragraph XII of the Final Order and Judgment to conform to Subsection IV of the Court’s memorandum order. Doc. No. 434. The Court also made certain non-substantive formatting changes. Id. 2 Excluded from the Settlement Class are the judges to whom this litigation is assigned, any member of the judges’ staffs and immediate families, and any person who validly requests exclusion from the Class Agreement § 2.10(b). 2 11md2286-MMA (MDD) 1 Claims Administration - $4,003,975.17;3 (4) Incentive Awards - $2,500.00 per 2 representative; and (5) Special Master Fees - $31,905.00.4 The Net Settlement Amount 3 was comprised of a $2,000,000.00 Cash Component and a $13,000,000.00 Credit 4 Component. The Cash Component of the Settlement Fund was chiefly for those 5 Settlement Class Members who did not owe, or who disputed that they owed, Defendants 6 any money. Doc. No. 434 at 6. Each Settlement Class Member eligible to receive a 7 share of the Cash Component of the Settlement Fund was to receive a pro rata share. 8 Pursuant to the Settlement, any checks distributed from the Cash Component of the 9 Settlement Fund which remained uncashed 180 days after they were issued would be 10 distributed to one or more cy pres recipients, to be agreed upon by the parties, and upon 11 Court approval. Id. 12 Now, Plaintiffs and Defendants jointly move for Court approval of cy pres 13 distribution of the remaining balance of the Settlement Fund, which amounts to 14 approximately $284,719.98. Doc. No. 610 at 2. Specifically, the parties request that the 15 balance be divided equally and distributed to: (1) the University of Santa Clara Law 16 School’s Privacy Law Certificate and High Tech Law Institute; and (2) Jump$tart 17 Coalition for Personal Financial Literacy. Id. 18 LEGAL STANDARD “[T]he ‘cy pres’ doctrine allows a court to distribute unclaimed or non- 19 20 distributable portions of a class action settlement fund to the ‘next best’ class of 21 beneficiaries.’” Lane v. Facebook, Inc., 696 F.3d 811, 819 (9th Cir. 2012) (quoting 22 Nachshin v. AOL, LLC, 663 F.3d 1034, 1036 (9th Cir. 2011)). “[A] district court should 23 not approve a cy pres distribution unless it bears a substantial nexus to the interests of the 24 class members,” meaning that the distribution “‘must account for the nature of the 25 26 27 28 3 Defendants agreed to pay the claims administration fees separately and in addition to the Settlement Fund. 4 See Transcript of Final Approval Hearing, Doc. No. 410 at 9:20-22. 3 11md2286-MMA (MDD) 1 plaintiffs’ lawsuit, the objectives of the underlying statutes, and the interests of the silent 2 class members.’” Id. (quoting Nachshin, 663 F.3d at 1036); see also Six (6) Mexican 3 Workers v. Arizn Citrus Growers, 904 F.2d 1301, 1308 (9th Cir. 1990) (setting aside 4 district court’s cy pres application where distribution to the chosen recipient organization 5 would have “benefit[ed] a group far too remote from the plaintiff class”). 6 DISCUSSION 7 Here, “[t]he purpose of the TCPA is to ‘protect the privacy interests of residential 8 telephone subscribers by placing restrictions of unsolicited, automated telephone calls to 9 the home and to facilitate interstate commerce by restricting certain uses of facsimile 10 machines and automatic dialers.’” Aboudi v. T-Mobile USA, Inc., No. 12CV2169 BTM 11 (NLS), 2015 WL 4923602, at *5 (S.D. Cal. Aug. 18, 2015) (quoting Satterfield v. Simon 12 & Schuster, Inc., 569 F.3d 946, 954 (9th Cir. 2009)). In enacting the TCPA, Congress 13 sought to protect people from unsolicited, automated phone calls because they cause a 14 nuisance and constitute invasions of privacy. See Satterfield, 569 F.3d at 954; Cabiness 15 v. Educ. Fin. Sols., LLC, No. 16-CV-01109-JST, 2016 WL 5791411, at *6 (N.D. Cal. 16 Sept. 1, 2016). 17 Keeping in mind the foregoing, the Court discusses each of the proffered cy pres 18 beneficiaries and their nexus to class interests and TCPA claims in turn below. 19 A. The University of Santa Clara Law School’s Privacy Law Certificate and High 20 Tech Law Institute 21 The Privacy Law Certificate program (“PLC”) at Santa Clara University School of 22 Law (“SCU”) is a program committed to teaching lawyers how to protect and enforce 23 privacy laws. See Doc. No. 610-3 (“Goldman Decl.”). The High Tech Law Institute 24 (“HTLI”) of SCU works closely with the PLC. Id. at ¶ 9. HTLI is SCU’s “umbrella 25 administrator of all its high tech initiatives,” including the High Tech Law Journal, which 26 regularly publishes papers on privacy matters and sponsors symposia on privacy matters. 27 Id. Additionally, HTLI includes the Privacy Law Students Organization, which provides 28 mentoring and events directed to privacy law students. Id. Cy pres funds, if approved, 4 11md2286-MMA (MDD) 1 “would be used to advance the privacy interests of residential and cellular telephone 2 subscribers, all consistent with the purpose of the [TCPA], and to promote and preserve 3 the privacy rights of American consumers and residents, among others.” Doc. No. 610 at 4 7. The funds would indirectly benefit class members by training privacy lawyers 5 employed in the private and public sectors, thereby adding to the expertise in this field. 6 Id. Specifically, “[t]he money would be used to support faculty, staff and students to 7 research and publish scholarly, practitioner-oriented, and consumer-oriented publications 8 that will improve the public’s understanding of their privacy rights, and to create a new 9 privacy-focused journal to expand the discourse about privacy issues.” Id. The money 10 “would also support privacy topic events to help educate practitioners and the public 11 about privacy issues.” Id. Based on PLC’s and HTLI’s previous and current commitment to the issues of 12 13 consumer privacy rights, distribution to SCU’s PLC and HTLI would “‘account for the 14 nature of [P]laintiffs’ lawsuit, the objectives of the underlying statutes, and the interests 15 of the silent class members.’” See Lane, 696 F.3d at 819 (quoting Nachshin, 663 F.3d at 16 1036); see also Fraley v. Facebook, Inc., 966 F. Supp. 2d 939, 946 n.7 (N.D. Cal. 2013) 17 (approving cy pres distribution to HTLI of SCU). Further, despite that the PLC program 18 and HTLI are located at SCU, which is in Silicon Valley, they both clearly have 19 nationwide impact. Cf. Nachshin, 663 F.3d at 1040 (disapproving of cy pres distribution 20 in part because the settlement class was nationwide yet “two-thirds of the donations 21 [would] be made to local charities in Los Angeles”). Accordingly, distribution to SCU’s 22 PLC and HTLI is appropriate. 23 B. 24 Jump$tart Coalition for Personal Financial Literacy Jump$tart Coalition for Personal Financial Literacy (“Jump$tart”) is a non-profit 25 organization that “operates an online clearinghouse of financial education resources,” 26 which is “free to both users and resource providers.” Doc. No. 610 at 8. According to 27 Laura Levine, the President and Chief Executive Officer of Jump$tart, Jump$tart “is the 28 publisher of the National Standards K-12 Personal Finance Education, made available to 5 11md2286-MMA (MDD) 1 all educators at no cost to them. The national standards have been the basis for many 2 state standards adopted by states with financial education requirements. Much of the 3 financial education curricula used today are aligned to these standards. The standards are 4 organized into six sections that address: Saving and Spending; Credit and Debt; 5 Employment and Income; Investing; Risk Management; and Financial Decision- 6 Making.” Doc. No. 610-2 (“Levine Decl.”), at ¶ 5. Specifically, the standard on credit 7 and debt addresses “consumer credit laws, including rights and responsibilities and debt 8 collection practices.” Id. Jump$tart also has a collaborative teacher training program and 9 hosts a National Educator Conference, which brings teachers from across the country 10 together to learn from experts, try new resources, and network with educators and the 11 financial literacy community. Id. at ¶ 7. If approved, cy pres funds would be used to 12 “further its efforts to educate and improve financial literacy of American youth, including 13 on the topic of credit and debt, which will benefit settlement Class Members by reducing 14 future debt collection calls.” Doc. No. 610 at 8 (internal citation omitted). Distribution to Jump$tart bears a sufficiently “substantial nexus to the interests of 15 16 the class members,” particularly based on Jump$tart’s focus on issues related to the 17 TCPA, such as personal financial literacy regarding credit and debt. See Lane, 696 F.3d 18 at 821. Accordingly, Jump$tart is sufficiently “tethered to the nature of the lawsuit and 19 the interests of the silent class members,” such as their interest in consumer education 20 and financial literacy. See Nachsin, 663 F.3d at 1039; see also Patel v. Trans Union, 21 LLC, No. 14-cv-00522-LB, 2018 U.S. Dist. LEXIS 40282, at *13 (N.D. Cal. Mar. 11, 22 2018); Blandina v. Midland Funding, LLC, No. 13-1179, 2016 U.S. Dist. LEXIS 71477, 23 at *31 (E.D. Pa. June 1, 2016) (approving cy pres distribution to Jump$tart). Further, 24 Jump$tart’s work benefits consumers nationwide. Thus, the Court approves distribution 25 of cy pres funds to Jump$tart. 26 // 27 // 28 // 6 11md2286-MMA (MDD) 1 CONCLUSION 2 In sum, the Court GRANTS the parties’ joint motion for approval of cy pres 3 4 distribution as set forth above, and further ORDERS that: 1. University of Santa Clara Law School’s Privacy Law Certificate and High 5 Tech Law Institute, and Jump$tart Coalition for Personal Financial Literacy are 6 designated the cy pres beneficiaries of the remaining balance of the Cash Component of 7 the Settlement Fund and must share equally in the cy pres award; and 8 9 2. Kurtzman Carson Consultants, LLC, the claims administrator, must promptly distribute the cy pres award to University of Santa Clara Law School’s Privacy 10 Law Certificate and High Tech Law Institute, and Jump$tart Coalition for Personal 11 Financial Literacy in equal amounts. 12 IT IS SO ORDERED. 13 Dated: October 10, 2018 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7 11md2286-MMA (MDD)
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