Manouchehri v. Styles for Less, Inc. et al, No. 3:2014cv02521 - Document 66 (S.D. Cal. 2016)
Court Description: ORDER Granting 63 Preliminary Approval of Class Action Settlement and Provisional Class Certification. Final Approval Hearing set for 10/6/2016 02:30 PM in Courtroom 1A before Magistrate Judge Nita L. Stormes. Signed by Magistrate Judge Nita L. Stormes on 6/20/2016. (knb)
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Manouchehri v. Styles for Less, Inc. et al Doc. 66 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 13 14 v. 15 Case No.: 14cv2521 NLS ASAL SALLY MANOUCHEHRI, on behalf of herself and all others similarly situated, Plaintiff, STYLES FOR LESS, INC., a California corporation, and DOES 1 through 20, 12 16 17 ORDER GRANTING PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT AND PROVISIONAL CLASS CERTIFICATION [Dkt. No. 63] Defendant. 18 19 20 21 22 23 24 25 26 27 28 1 14cv2521 NLS Dockets.Justia.com 1 Plaintiffs Asal Manouchehri and Pooneh Mehrazar-Arzani filed this putative class 2 action seeking recovery on behalf of themselves and other customers of defendant Styles 3 for Less, Inc. for violation of the Telephone Consumer Protection Act (TCPA). Plaintiffs 4 now seek an order: (1) preliminarily approving the parties’ proposed Settlement 5 Agreement; (2) provisionally certifying the Class for settlement purposes only; (3) 6 appointing Asal Sally Manouchehri and Pooneh Mehrazar-Arzani as Class 7 Representatives; (4) appointing James R. Patterson of Patterson Law Group, APC and 8 Evan M. Meyers of McGuire Law, P.C. as Class Counsel; (5) approving the form and 9 dissemination of notice to Class Members; and (6) scheduling a final approval hearing. 10 Pl. Mem. 2:1-6. The parties also jointly move for leave to file an amended complaint, 11 adding Pooneh Mehrazar-Arzani as a plaintiff to this action. For the following reasons, 12 this Court GRANTS Plaintiffs’ motion for preliminary approval, and GRANTS the joint 13 motion for leave to file an amended complaint. 14 I. 15 Leave to File Amended Complaint On October 22, 2014, plaintiff Manouchehri filed a class action in the U.S. District 16 Court for the Southern District of California, alleging violations of the TCPA by Styles 17 for Less. Pl. Mem. 3:4-5. On August 4, 2015, plaintiff Mehrazar-Arzani filed a class 18 action in the U.S District Court for the Central District of California, alleging similar 19 violations of the TCPA by Styles for Less. Id. at 3:7-8. In this motion, the parties jointly 20 request leave to file an amended complaint adding plaintiff Pooney Mehrazer-Arzani to 21 this action. Id. at 1, n.2. For good cause shown, the Court GRANTS this joint motion and 22 ORDERS Plaintiffs to file Exhibit 2 of the James R. Patterson declaration as the first 23 amended class action complaint by June 27, 2016. 24 II. Relevant Background 25 A. Procedural Background 26 Plaintiffs allege that defendant Styles for Less, a retailor, obtained phone numbers 27 from its customers through its website and in its stores, then repeatedly and intentionally 28 sent marketing and advertising text messages to its customers’ cell phones. Compl. 1:272 14cv2521 NLS 1 28-2:6-10. Plaintiffs assert that Defendant sent them advertising and marketing text 2 messages using an automatic telephone dialing system without their granting of prior 3 consent to receiving these messages, in violation of the TCPA1 and 47 C.F.R. § 64.12002. 4 Id. at 4:23-28. Plaintiffs filed a class action on behalf of themselves “and all others 5 similarly situated pursuant to Federal Rules of Civil Procedure 23(a) and (b)(3),” which 6 includes: 7 All consumers who received a text message from styles for less from October 16, 2013, to December 15, 2015, which text message was not made for emergency purposes, was not made by a tax-exempt nonprofit organization, did not deliver a health care message, or was not made with the recipient’s prior express written consent. 8 9 10 11 Compl. 12:1-6. In approaching the deadline to complete class discovery, the parties 12 consented to participating in a full day mediation session presided over by former federal 13 Magistrate Judge Edward Infante, Ret., of JAMS-San Francisco on September 14, 2015. 14 Pl’s Mem. 3:18-20. Judge Infante then “made a mediator’s proposal for a class-wide 15 settlement, which was ultimately accepted by all Parties.” Pl’s Mem. 3:22-24. Plaintiffs 16 subsequently filed this unopposed motion for preliminary approval of the class action 17 Settlement. 18 B. Settlement Terms 19 Under the terms of the Settlement, defendant agrees to pay a $3,600,000 20 Settlement Fund to satisfy awards to class members, class representative payments, class 21 counsel fees and litigation expenses, and settlement administrative costs. Patterson Decl. 22 Ex. 1, at 6. Class members have the option of receiving a pro-rated Cash Award of up to 23 24 25 26 27 28 1 The TCPA makes unlawful the sending of text messages using an “automatic telephone dialing system.” 47 U.S.C.A. § 227(b)(1)(a); Satterfield v. Simon & Schuster, Inc., 569 F.3d 946, 952 (9th Cir. 2009). 2 No entity may send a text message “that includes or introduces an advertisement or constitutes telemarketing, using an automatic telephone dialing system” without “prior express written consent” of the receiving party. 47 C.F.R. § 64.1200. 3 14cv2521 NLS 1 $10 cash, or a $15 Voucher Award that is fully transferable, does not expire, and is as 2 good as cash toward merchandise at Styles for Less retail stores. Id; Pl. Mem. 11:16-18. 3 Known class members—those members for whom Defendant has a name and home or 4 email address on file—will receive the Voucher Award that may be used immediately 5 upon receipt, along with a Claim Form and Summary Notice. Patterson Decl. Ex. 1, at 4, 6 6. If these known class members select the Cash Award rather than the Voucher Award, 7 they must return the Voucher Award and the Claim Form indicating their selection. Id. at 8 11. Each known class member who fails to timely submit a Claim Form will be deemed 9 to have elected the $15 Voucher Award. Id. Those unknown class members for whom 10 defendant cannot reasonably obtain a home or email address may submit a timely Claim 11 Form indicating whether they choose to receive the Cash Award or the Voucher Award. 12 Id. at 5. If an unknown class member fails to elect either the Cash Award or the Voucher 13 Award on an otherwise valid and timely Claim Form, Defendant will issue that class 14 member a Voucher Award. Id. However, unknown class members who fail to submit a 15 valid and timely Claim Form will not be entitled to a Cash Award or Voucher Award. Id. 16 In addition to receipt of a cash or voucher award, “the Settlement provides for 17 entry of a permanent injunction against [defendant], prohibiting text message marketing 18 without obtaining the prior express written consent of the text message recipients.” Pl. 19 Mem. 5:12-15 (citing Settlement Agreement, § III(F)). Also, Defendant will pay each 20 Plaintiff an incentive award of up to $7,500 for pursuing this litigation on behalf of the 21 class, and will pay attorney fees of up to $900,000 to Class Counsel, subject to the 22 Court’s approval. Patterson Decl. Ex. 1, at 7. The parties have selected a Claims 23 Administrator and determined a procedure for notice to class members of their options to 24 receive settlement benefits, opt out of the Settlement, or object to the Settlement. Pl. 25 Mem. 6:22-24. 26 27 28 III. Preliminary Approval of Class Action Settlement Under Federal Rule of Civil Procedure 23(e), a class action settlement must be approved by the court. Review of a class action settlement generally consists of a 4 14cv2521 NLS 1 preliminary approval hearing and a fairness hearing. True v. Am. Honda Motor Co., 749 2 F. Supp. 2d. 1052, 1062 (C.D. Cal. 2010). “At the preliminary approval stage, a court 3 determines whether a proposed settlement is ‘within the range of possible approval.’” Id. 4 (citing In re Corrugated Container Antitrust Litig., 643 F.2d 195, 205 (5th Cir. 1981)). 5 The judge must determine whether the proposed class satisfies the requirements of 6 Federal Rule of Civil Procedure 23(a) and at least one subsection of Rule 23(b). Manual 7 for Complex Litigation, § 21.632 (4th ed. 2004). A settlement can then be accepted if the 8 judge approves the form and manner of notice and makes “a preliminary determination 9 on the fairness, reasonableness, and adequacy of the settlement terms” pursuant to 10 11 Federal Rule of Civil Procedure 23(e)(2). Id. A. 12 Conditional Class Certification To obtain a Conditional Class Certification from the Court, the Class Action must 13 comply with the rigorous standards set forth by Federal Rule of Civil Procedure 23(a) and 14 23(b)(1), (2), or (3). Anchem Products, Inc., v. Windsor, 521 U.S. 591, 614 (1997); Wal- 15 Mart Stores Inc. v. Dukes, 564 U.S. 338, 345 (2011). 16 1. Compliance with Federal Rule of Civil Procedure 23(a) 17 For class certification in a class action lawsuit, a class must meet the prerequisites 18 of numerosity, commonality, typicality, and adequate representation under Rule 23(a) as 19 follows: 20 Rule 23. Class Actions 21 (a) Prerequisites. One or more members of a class may sue or be sued as representative parties on behalf of all members only if: (1) the class is so numerous that joinder of all members is impracticable; (2) there are questions of law or fact common to the class; (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and (4) the representative parties will fairly and adequately protect the interests of the class. 22 23 24 25 26 27 28 /// 5 14cv2521 NLS 1 2 a. Numerosity Rule 23(a)(1) requires that the class be “so numerous that joinder of all members is 3 impracticable” in order to qualify as a class action. Styles for Less records show that it 4 transmitted text messages to approximately 300,000 consumers throughout the country 5 during the Class Period. Pl. Mem. 15:27-28-16:1 (citing Patterson Decl. ¶ 6). The large 6 estimated number of class members, combined with the fact that it is a national class with 7 members dispersed throughout the country, renders joinder of all members impracticable. 8 Pl. Mem. 16:1-3; See Braun v. Safeco Ins. Co. of Am., 2014 U.S. Dist. LEXIS 184123 9 (finding that 149 class members meets the numerosity requirement); Parsons v. Ryan, 10 784 F.3d 571, 574 (9th Cir. 2015) (holding that 33,000 class members satisfied the 11 numerosity requirement). The numerosity requirement is thus satisfied here. 12 13 b. Commonality Under 23(a)(2), there must be “questions of law or fact common to the class” in 14 order to satisfy class action requirements. Courts must apply a “rigorous standard” to this 15 requirement, and must find “a single significant question of law or fact.” Stockwell v. City 16 & County of San Francisco, 749 F.3d 1107, 1116 (9th Cir. 2014). Claims will satisfy the 17 commonality requirement when the claims “depend upon a common contention . . . of 18 such a nature that it is capable of classwide resolution—which means that determination 19 of its truth or falsity will resolve an issue that is central to the validity of each one of the 20 claims in one stroke.” Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 342 (2011). 21 The action at bar involves only those consumers who received unsolicited text 22 messages from Styles for Less “not made for emergency purposes . . . not made by a tax- 23 exempt nonprofit organization, [which] did not deliver a health care message, or was not 24 made with the recipient’s prior express written consent.” Patterson Decl. Ex. A, at 1. This 25 action thus contains questions of law or fact common to the entire class, including “(1) 26 whether Styles for Less obtained prior express written consent to send text messages to 27 its customers; (2) whether the text messages were sent by an automatic telephone dialing 28 system; and (3) whether Styles for Less acted willfully in sending the texts.” Pl. Mem. 6 14cv2521 NLS 1 16:18-23. All asserted claims concern the same underlying conduct by Defendant and 2 will result in the precise resolution that will pertain to the entire class, satisfying 3 commonality under Rule 23(a). 4 c. Typicality 5 To satisfy Class Action requirements, “the claims or defenses of the representative 6 parties [must be] typical of the claims or defenses of the class.” Fed. R. Civ. P. 23(a)(3). 7 "The test of typicality 'is whether other members have the same or similar injury, whether 8 the action is based on conduct which is not unique to the named plaintiffs, and whether 9 other class members have been injured by the same course of conduct.'" Ellis v. Costco 10 Wholesale Corp., 657 F.3d 970, 984 (9th Cir. 2011) (quoting Hanon v. Dataproducts 11 Corp., 976 F.2d 497, 508 (9th Cir. 1992)). Because Plaintiffs’ injury of receiving 12 unsolicited text messages from the Defendant is the precise injury suffered by all 13 members of the class involved, and arose from the same course of conduct and legal 14 theory, the typicality requirement under Rule 23(a)(3) is satisfied. See Ellis, 657 F.3d at 15 984. 16 17 d. Adequate Representation Rule 23(a)(4) requires that “the representative parties . . . fairly and adequately 18 represent the interests of the class.” Courts make two inquiries in determining whether a 19 party adequately represents a named class of individuals: "(1) do the named plaintiffs and 20 their counsel have any conflicts of interest with other class members and (2) will the 21 named plaintiffs and their counsel prosecute the action vigorously on behalf of the class?" 22 Ellis, 657 F.3d at 985 (quoting Hanlon v. Chrysler Corp., 150 F.3d 1011, 1020 (9th Cir. 23 1998)). “Adequate representation depends on, among other factors, an absence of 24 antagonism between representatives and absentees, and a sharing of interest between 25 representatives and absentees.” Ellis, 657 F.3d at 985. A conflict of interest will often 26 arise between representatives and absentees when class members are “divided into 27 conflicting discrete categories” or there is a “difference in severity of personal injury” to 28 each class member. Hanlon, 150 F.3d at 1021. 7 14cv2521 NLS 1 It does not appear that there is a conflict of interest among the plaintiffs, their 2 counsel, and other class members. The Settlement Agreement places all class members 3 into one category: those who received non-consensual text messages from defendant. 4 Patterson Decl. Ex. A, at 1. Each class member suffered the same injury as the 5 representatives, receiving proper representation for their injuries. Nor is there any 6 indication that the named plaintiffs did not take vigorous action on behalf of the entire 7 class: “Plaintiff Manouchehri has been actively involved in the litigation…participat[ing] 8 in the litigation and discovery and provid[ing] important information regarding [her] 9 receipt of text messages from [defendant].” Patterson Decl. at 1:7-9. In fact, both 10 plaintiffs Manouchehri and Mehrazar-Arzani “placed the Class’s interest before [their] 11 own when [they] rejected Styles for Less’s Rule 68 offer of judgment.” Pl. Mem. 17:26- 12 28. Moreover, proposed Class Counsel are competent and qualified to vigorously address 13 this action, as they have “extensive experience in major complex litigation, and have 14 been appointed class counsel in consumer class action lawsuits involving cellular phone 15 technology and, in particular, the TCPA.” Id. at 18:4-8 (citing Patterson Decl. ¶ 8; 16 Meyers Decl. ¶ ¶ 2-5). Thus, this court finds adequate representation at this stage of the 17 action. 18 19 2. Compliance with Federal Rule of Civil Procedure 23(b)(3) In addition to satisfying all requirements under Rule 23(a), a proposed class action 20 must satisfy one of the provisions of Rule 23(b). Anchem, 521 U.S at 614. Plaintiffs in 21 this case assert that they qualify for class certification for settlement purposes under Rule 22 23(b)(3). Pl. Mem. 14:24-25. Rule 23(b)(3) permits certification of a class action when it 23 is “not clearly called for” but “may nevertheless be convenient and desirable.” Anchem, 24 521 U.S. at 615. 25 26 27 28 (b) Types of Class Actions. A class action may be maintained if Rule 23(a) is satisfied and if: (3) the court finds that the questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods 8 14cv2521 NLS 1 2 3 4 5 6 for fairly and efficiently adjudicating the controversy. The matters pertinent to these findings include: (A) the class members' interests in individually controlling the prosecution or defense of separate actions; (B) the extent and nature of any litigation concerning the controversy already begun by or against class members; (C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; and (D) the likely difficulties in managing a class action. 7 8 a. Predominance of Common Questions of Law or Fact 9 Because plaintiffs assert class action authorization under Rule 23(b)(3), the court 10 must find that “the questions of law or fact common to class members predominate over 11 any question affecting only individual members.” Fed. R. Civ. P. 23(b)(3). The 12 predominance inquiry asks whether “proposed classes are sufficiently cohesive to warrant 13 adjudication by representation.” See Anchem, 521 U.S. at 623. "When common questions 14 present a significant aspect of the case and they can be resolved for all members of the 15 class in a single adjudication, there is clear justification for handling the dispute” on a 16 class action basis. Hanlon, 150 F.3d at 1022 (citing Wright & Miller, § 1778.) Questions 17 of law or fact common to class members will predominate over any question affecting 18 individual members when damages can be calculated on a classwide basis. See Tyson 19 Foods, Inc. v. Bouaphakeo, 136 S. Ct. 1036 (2016); Comcast Corp. v. Behrend, 133 S. 20 Ct. 1426, 1433 (2013). Correspondingly, when damages are likely to vary among class 21 members, the class may be insufficiently cohesive to warrant a class action suit. See 22 Anchem, 521 U.S. at 624. 23 The injury of all class members consists of receiving unsolicited text messages 24 from Defendant, rendering common questions among class members and resulting in 25 damages that are unlikely to vary among individuals. Patterson Decl. Ex. A at 1. All 26 members’ claims can be resolved in a single adjudication, and damages can be calculated 27 on a classwide basis using a common methodology of calculation. Common questions 28 will thus predominate over individual questions in the instant case. 9 14cv2521 NLS 1 b. Superiority of Class Action to Other Methods of Adjudication 2 In addressing the superiority requirement of Rule 23(b)(3), courts must determine 3 whether “the objectives of the particular class action procedure will be achieved in the 4 particular case,” and comparatively evaluate “alternative methods of dispute resolution.” 5 Hanlon, 150 F.3d at 1023. Accordingly, class actions are often the only feasible method 6 of relief for individuals when the potential individual monetary recovery is small in size, 7 satisfying the superiority requirement of Rule 23(b)(3). See Leyva v. Medline Indus., 716 8 F.3d 510, 515 (9th Cir. 2013). 9 In the present case, each claim asserted individually, absent a class action, is 10 statutorily limited to $500. Pl. Mem. 19:20-21. Because this monetary relief for each 11 customer who received unwanted text messages is relatively low, individual claims 12 would not be successfully asserted or economically beneficial to class members. See 13 Patterson Decl. Ex. 1, at 5; Hanlon, 150 F.3d at 2013; Levya, 716 F.3d at 511 14 (considering plaintiff’s individual claim of “less than $10,000” as too low for practicable 15 individual adjudication). Class members would likely find individual claims 16 uneconomical to litigate independently, thus rendering a class action superior to other 17 available methods of adjudication for members of the class at hand. See Pl. Mem. 19:20- 18 27; Hanlon, 150 F.3d at 2013. 19 20 B. Fairness of Settlement In approving a class action settlement, a court must find that it was “fair, 21 reasonable, and adequate,” enabling all class members to be bound. Fed. R. Civ. P. 22 23(e)(2). Courts consider a variety of factors when assessing the fairness of a class action 23 settlement, including “(1) the strength of the plaintiffs' case; (2) the risk, expense, 24 complexity, and likely duration of further litigation; (3) the risk of maintaining class 25 action status throughout the trial; (4) the amount offered in settlement; (5) the extent of 26 discovery completed and the stage of the proceedings; (6) the experience and views of 27 counsel; (7) the presence of a governmental participant; and (8) the reaction of the class 28 members to the proposed settlement.” Hanlon, 150 F.3d at 1026; In re Bluetooth Headset 10 14cv2521 NLS 1 Products Liability Litig., 654 F.3d 935, 946 (9th Cir. 2011); Churchill Village, L.L.C. v. 2 General Electric, 361 F.3d 566, 575 (9th Cir. 2004). 3 At the preliminary stage for approval of a settlement agreement the Court need 4 only conduct a brief assessment of the Settlement “for the purpose of resolving any 5 glaring deficiencies before ordering the parties to send the proposal to class members.” 6 Alberto v. GMRI, Inc., 252 F.R.D. 652, 665 (E.D. Cal. 2008) (citing Molski v. Gleich, 318 7 F.3d 937, 953-54 (9th Cir. 2003)). Here, the relevant factors include whether the 8 proposed settlement (1) appears to be the product of arm’s length, noncollusive 9 negotiations; (2) contemplates fair fee and incentive awards; (3) was a result of sufficient 10 discovery or investigation; and (4) integrates the adequacy of the experience and views of 11 counsel to the litigation. See Williams, 2010 WL 761122, at *5; Monterrubio v. Best Buy 12 Stores, L.P., 291 F.R.D. 443, 453-54 (E.D. Cal. 2013). 13 14 1. Product of Noncollusive, Arms-Length Negotiations A mediator’s involvement during the course of settling a class action is evidence of 15 arms-length, non-collusive negotiations. See Hanlon, 150 F.3d at 1029; Gallucci, 603 16 Fed.Appx. at 534. The parties mediated the instant case before Judge Infante of JAMS- 17 San Francisco on September 14, 2015. Patterson Decl. ¶ 4. “At the conclusion of the 18 mediation, Judge Infante made a mediator’s proposal for a class wide settlement, which 19 was ultimately accepted by all parties.” Id. Based on the Judge’s participation and 20 considering the lack of evidence suggesting collusion, it appears at this time that all 21 negotiations between the parties were made at arm’s length. 22 What is not clear by the papers, though, is what will happen to any outstanding 23 money not claimed by the class. In the final approval papers, the parties must 24 explain what will happen to any unclaimed funds. 25 2. Attorneys’ Fees and Incentive Awards 26 27 28 a. Attorneys’ Fees If attorneys’ fees are found unreasonably high in a class action, “the likelihood is that the defendant obtained an economically beneficial concession with regard to the 11 14cv2521 NLS 1 merits provisions, in the form of lower monetary payments to class members or less 2 injunctive relief for the class than could otherwise have [been] obtained.” Staton v. 3 Boeing Co., 327 F.3d 938, 964 (9th Cir. 2003). Such a case “has the potential of enabling 4 a defendant to pay class counsel excessive fees and costs in exchange for counsel 5 accepting an unfair settlement on behalf of the class.” Id. (quoting Lobatz v. U.S. West 6 Cellular, 222 F.3d 1142, 1148 (9th Cir. 2000)). Courts often apply the “common fund” 7 doctrine in determining attorneys’ fees in class action suits, in which the court grants the 8 class counsel a certain percentage of the common fund calculated for distribution to the 9 entire class. See Staton, 327 F.3d at 968. The Ninth Circuit “has established 25% of the 10 common fund as the benchmark award for attorney fees.” Id. (citing Hanlon, 150 F.3d at 11 1029); Gallucci v. Gonzalez, 603 Fed.Appx. 533, 534 (9th Cir. 2015). Because $900,000 12 represents 25% of $3,600,000—the common fund for distribution to the class in 13 question—the arranged attorney fees in the case at bar are adequately fair under 14 established precedent. 15 16 b. Class Representatives’ Incentive Awards “Incentive awards are payments to class representatives for their service to the 17 class in bringing the lawsuit.” Radcliffe v. Experian Information Solutions Inc., 715 F.3d 18 1157, 1163 (9th Cir. 2013). The Ninth Circuit has expressed that in some circumstances 19 incentive awards may be proper, but that district courts should be cautious in awarding 20 them. Id. Courts should not routinely apply incentive awards and must “scrutinize 21 carefully the awards so that they do not undermine the adequacy of the class 22 representatives.” Id. Incentive awards produce the risk of rewarding individual members 23 of the class disproportionately to the class as a whole. See id. (citing Staton, 327 F.3d at 24 977). “Concerns over potential conflicts may be especially pressing where . . . the 25 proposed service fees greatly exceed the payments to absent class members.” Radcliffe, 26 715 F.3d at 1165 (quoting White v. Experian Info. Solutions, Inc., 803 F.Supp.2d 1086, 27 1112 (C.D.Cal.2011)). “If class representatives expect routinely to receive special awards 28 in addition to their share of the recovery, they may be tempted to accept suboptimal 12 14cv2521 NLS 1 settlements at the expense of the class members whose interests they are appointed to 2 guard.” Staton, 327 F.3d at 975 (quoting Weseley v. Spear, Leeds & Kellogg, 711 F.Supp. 3 713, 720 (E.D.N.Y.1989)). However, incentive awards that are intended to compensate 4 class representatives for work undertaken on behalf of a class “are fairly typical in class 5 action cases.” In re Online DVD-Rental Antitrust Litigation, 779 F.3d 934, 943 (9th Cir. 6 2015). 7 The Ninth Circuit denied a class action settlement motion when the class 8 representatives’ award was premised on support of the settlement. See Radcliffe, 715 F.3d 9 at 1164. However, when there are “no structural differences in the claims of the class 10 representatives and the other class members,” and when “the amount sought and awarded 11 [is] relatively small . . . within the usual norms of ‘modest compensation’ paid to class 12 representatives for services performed,” class action incentive awards will be permitted. 13 Online DVD-Rental, 779 F.3d at 943. In determining fairness of incentive awards, courts 14 must also weigh relevant factors, such as “the actions the plaintiff has taken to protect the 15 interests of the class, the degree to which the class has benefited from those actions . . . 16 the amount of time and effort the plaintiff expended in pursuing the litigation, and 17 reasonable fears of workplace retaliation.” Staton, 327 F.3d at 977 (quoting Cook v. 18 Niedert, 142 F.3d 1004, 1016 (7th Cir. 1998)). 19 As the present incentive awards are not premised on support of the settlement 20 agreement, and the representatives’ claims are identical to those of unnamed class 21 members, the remaining issue at bar is whether the class representative incentive award 22 of $7,500 is disproportionately unfair based on the effort expended in pursuing this 23 litigation on behalf of the class. Where class representatives received $5,000 in incentive 24 payments and unnamed class members received approximately $12 each from a total 25 settlement fund of $27,250,000, the Ninth Circuit held that the incentive award was fair. 26 Online DVD-Rental, 779 F.3d at 941; cf. In re Mego Fin. Corp. Sec. Litig., 213 F.3d 454, 27 463 (9th Cir. 2000) (approving an incentive award of $5,000 in a settlement of $1.725 28 million involving a class of 5,400 members). This Court held that an incentive award of 13 14cv2521 NLS 1 $30,000 was fair from a settlement agreement of $14,500,000 where plaintiff played an 2 active role in litigation, alleging a total of 120 hours of work and taking a financial risk. 3 Mirkarimi v. Nevada Property 1, LLC, No. 12cv2160, 2016 U.S. Dist. WL 795878 at *6 4 (S.D. Cal. Feb. 29, 2016). California District Courts have emphasized that preliminary 5 approval of incentive awards may be granted so long as the incentive award “does not 6 necessarily render the settlement unfair or unreasonable,” and is “within the range of 7 possible approval.” Villegas v. J.P. Morgan Chase & Co., No. CV 09-0026, 2012 U.S. 8 Dist. LEXIS 166704 at *20 (N.D. Cal. Nov. 20, 2012); Harris v. Vector Mktg. Corp., No. 9 C-08-5198, 2011 U.S. Dist. LEXIS 48878 at *27-29 (N.D. Cal. April 29, 2011). 10 At this point in this action there is insufficient information to determine that the 11 proposed incentive award of $7,500 for both Plaintiffs is fair. Plaintiffs have offered no 12 information as to whether they were deposed and do not describe the efforts each Plaintiff 13 made or the hours of work each spent in helping to respond to discovery. Further, 14 counsel provides no information as to plaintiff Mehrazar-Arzani’s part in the litigation. 15 Both Plaintiffs seek an equal award, yet there is evidence of more extensive discovery on 16 the part of Plaintiff Manouchehri, who was “actively involved in the 17 ligitation…participated in the litigation and discovery and provided important 18 information regarding [her] receipt of text messages from Styles for Less.” Patterson 19 Decl. ¶ 2. While this Court needs more detailed evidence as to the number of hours and 20 effort expended by both Plaintiffs, there is sufficient information to preliminarily approve 21 this Settlement Agreement, with the expectation that the requested information will be 22 subsequently provided by the parties. See Young v. Polo Retail, LLC, No. C-02-4546, 23 2006 U.S. Dist. LEXIS 81077, at *15-16 (N.D. Cal. Oct. 25, 2006) (preliminarily 24 approving settlement agreement where a $25,000 incentive award compared to a 25 maximum award of $3,000 for unnamed class members raised questions of fairness); 26 Monterrubio, 291 F.R.D. at 447-48 (preliminarily approving settlement agreement 27 entitling plaintiff to an incentive award of “up to $7,500” where the average unnamed 28 class member would receive $65.79 in damages when the extent of plaintiff’s 14 14cv2521 NLS 1 participation was not fully detailed). 2 The parties are advised that this Court will not approve the incentive award 3 amounts without detailed evidence specific to each Plaintiff, indicating the extent of each 4 representative’s role in discovery and litigation. See Van Vranken v. Atlantic Richfield 5 Co., 901 F. Supp. 294, 300 (N.D. Cal. 1995) (decreasing the plaintiff’s incentive award 6 from $100,000 to $50,000 where plaintiff did not list the number of hours spent toward 7 litigation, but “participated in 49 telephone conferences and five meetings with Class 8 Counsel, attended three pre-trial hearings, had his deposition taken twice, and testified at 9 trial”). 10 11 3. Extent of Discovery Completed Plaintiffs’ counsel propounded formal discovery requests after investigating 12 potential claims, “including Interrogatories, Requests for Production, and Requests for 13 Admission,” and deposed Defendant under Rule 30(b)(6). Patterson Decl. at 1:10-14. 14 Defendant “responded to the discovery requests and produced responsive documents.” Id. 15 at 1:12-13. The parties engaged in discovery over the course of eleven months, after 16 which both parties mediated the case before a retired judge, briefing their positions prior 17 to the mediation. Id. at 1:16-18; Ex. 1, at 4. 18 It appears that the parties exercised considerable discovery before mediation; 19 however, this Court requires more detailed information concerning the full extent of 20 discovery by both plaintiffs to this action. The Court would like to see the precise number 21 and type of discovery requests, including depositions, so it can determine whether all 22 possible claims were investigated, deliberated, and discussed between the parties, and 23 that agreements were not made in haste or in the absence of relevant information 24 pertaining to the issue at hand. See Hanlon, 150 F.3d at 1027. These issues must be 25 addressed by the parties prior to the final fairness hearing in order to finalize this 26 Settlement Agreement. However, this present lack of information does not prevent a 27 preliminary approval of the Settlement. See Monterrubio, 291 F.R.D. at 454 (where “the 28 parties did not fully complete discovery prior to settlement negotiations, but rather 15 14cv2521 NLS 1 engaged in a process of informal discovery, approval of a class action settlement [was] 2 proper as long as discovery allowed the parties to form a clear view of the strengths and 3 weaknesses of their cases”). 4 4. Experience and Views of Counsel 5 Patterson Law Group, class counsel to plaintiff Manouchehri, focuses on class 6 action litigation, is “recognized as a leader on both the state and national levels,” and its 7 attorneys “have successfully served as class counsel, or co-class counsel…recovering 8 hundreds of millions of dollars in benefits for individuals across the country.” Patterson 9 Decl. 2:12-18; Ex. 3, at 2. In Patterson’s view, the proposed settlement is the best option 10 for the parties, considering “summary judgment, the difficulties of complex litigation, the 11 risk of reversal on appeal, and the potential for delay.” Patterson Decl. 1:27-2:1-2. 12 Evan M. Meyers, attorney with McGuire Law, P.C., represents both Plaintiffs. 13 Meyers Decl. 1:5-7. Meyers has “extensive experience in class action lawsuits similar in 14 size and complexity to the instant case…ha[s] served as Class Counsel in multiple class 15 action lawsuits, including TCPA actions…[and] ha[s] intimate knowledge of the law in 16 the field of telecommunications and cellular telephone technology.” Id. at 1:11-25. In his 17 experienced opinion, based upon “knowledge of the facts and relevant law, including 18 Defendant’s potential defenses in this matter…this proposed settlement is fair, reasonable 19 and adequate.” Id. at 2:20-22. 20 Plaintiffs’ Counsel asserts that “[i]f this case does not settle, there are risks that the 21 class may not be certified and that Plaintiffs will face lengthy and expensive litigation, 22 delaying any relief for Class Members, or that Plaintiffs and the Class Members will 23 receive no relief whatsoever.” Pl. Mem. 11:10-13. Continued litigation may likely be 24 unproductive and economically detrimental to Plaintiffs and all class members, 25 suggesting the benefit of the present Settlement Agreement. 26 27 28 C. Proposed Notice In order to approve a class action settlement agreement, notice must be given “in a reasonable manner to all class members who would be bound by the proposal.” Fed. R. 16 14cv2521 NLS 1 Civ. P. 23(e)(1). Notice provided pursuant to Rule 23(e) must "generally describe the 2 terms of the settlement in sufficient detail to alert those with adverse viewpoints to 3 investigate and to come forward and be heard." Lane v. Facebook, Inc., 696 F.3d 811, 4 826 (9th Cir. 2012) (quoting Rodriguez v. West Publ'g Corp., 563 F.3d 948, 962 (9th Cir. 5 2009)). Further, “[f]or any class certified under Rule 23(b)(3), the court must direct to 6 class members the best notice that is practicable under the circumstances, including 7 individual notice to all members who can be identified through reasonable effort.” Fed. 8 R. Civ. P. 23(c)(2)(B). 9 The Settlement Agreement outlines a detailed method of notice for absent class 10 members that satisfies Rule 23(e) and Rule 23(c)(2) requirements. Within seven days 11 after preliminary approval of the settlement, the Defendant will provide class members’ 12 contact information available from its records, including names, mailing addresses, 13 telephone numbers, and e-mail addresses. Patterson Decl. Ex. 1, at 7. Within fourteen 14 days after “preliminary approval of the Settlement, the Claims Administrator will mail [a] 15 Summary Class Notice and Claim Form . . . and $15 Voucher Award” to those members 16 whose mailing addresses were on file, and email such forms to those members with only 17 an email address on file. Decl. Ex. 1, at 7; Ex. B; Ex. D. If a form is returned due to 18 incorrect address, “the Claims Administrator will promptly search for a more current 19 address . . . and re-mail” the forms, “taking reasonable steps to trace the mailing 20 address[es].” Patterson Decl. Ex. 1, at 7. Furthermore, “the Claims Administrator will 21 commence a 30-day social media campaign . . . on websites geared to reach the target 22 audience” and will “create and maintain a settlement website containing” the Summary 23 Class Notice and Claim Form available for submittal. Patterson Decl. Ex. 1, at 8. The 24 Class Notice form contains a detailed description of what the lawsuit entailed, reasons for 25 the settlement, and what the class members’ options are. See Patterson Decl. Ex. A. The 26 Court finds that this plan for providing notice is adequate. 27 28 D. Proposed Class Counsel and Representatives Federal Rule of Civil Procedure 23(g)(2) states that “When one applicant seeks 17 14cv2521 NLS 1 appointment as class counsel, the court may appoint that applicant only if the applicant is 2 adequate under Rule 23(g)(1) and (4).” “If more than one adequate applicant seeks 3 appointment, the court must appoint the applicant best able to represent the interests of 4 the class.” Radcliffe v. Hernandez, No. 14-56101, 2016 U.S. App. LEXIS 5691 at *25 5 (9th Cir. Mar. 28, 2016). Under Rule 23(g)(1), the court must consider: 6 7 8 9 (i) the work counsel has done in identifying or investigating potential claims in the action; (ii) counsel's experience in handling class actions, other complex litigation, and the types of claims asserted in the action; (iii) counsel's knowledge of the applicable law; and (iv) the resources that counsel will commit to representing the class. 10 11 Class counsel has a duty to “fairly and adequately represent the interest of the class,” and 12 in addition to the Rule 23(g)(1)(a) factors, the Court may “consider any other matter 13 pertinent to counsel's ability to fairly and adequately represent the interests of the class.” 14 Fed. R. Civ. P. 23(g)(4), (g)(1)(B). 15 The proposed class counsel adequately satisfies Rule 23(g) requirements. Evan M. 16 Meyers, attorney with McGuire Law, P.C., has been involved in this lawsuit “since 17 before its commencement,” has “diligently investigated the facts and claims in this matter 18 and ha[s] also dedicated substantial resources to this matter and will continue to do so.” 19 Meyers Decl. ¶ 7. Attorneys at McGuire Law, P.C. “have extensive experience in class 20 action lawsuits similar in size and complexity to the instant case” and “have intimate 21 knowledge of the law in the field of telecommunications and cellular telephone 22 technology.” Id. ¶ 2-4. Meyers has previously been involved in “consumer class actions 23 involving unauthorized telephone calls under the TCPA” and has “been appointed as 24 class counsel in numerous complex consumer class actions,” along with other attorneys at 25 McGuire Law, P.C. Id. ¶ 4. 26 Before filing this lawsuit, Patterson Law Group investigated Plaintiff’s potential 27 claims. Patterson Decl. ¶ 3. After filing, Patterson Law Group “propounded formal 28 discovery requests, including Interrogatories, Requests for Production, and Requests for 18 14cv2521 NLS 1 Admission” and “also deposed [Defendant] pursuant to Federal Rule of Civil Procedure 2 30(b)(6).” Id. Patterson Law Group “substantially concentrates its practice in the 3 prosecution of class actions” and is “recognized as a leader on both the state and national 4 levels.” Id. at ¶ 8; Ex. 3. Attorneys at Patterson Law group “have successfully served as 5 class counsel, or co-class counsel . . . recovering hundreds of millions of dollars in 6 benefits for individuals across the country.” Patterson Decl. ¶ 8; Ex. 3. “The parties agree 7 that the proposed Class meets the requirements of Federal Rules of Civil Procedure 23 for 8 settlement purposes.” Patterson Decl. ¶ 5. 9 Because the class representatives satisfy the Rule 23(a) requirements of typicality, 10 commonality, and adequate representation, this Court finds that plaintiffs are adequate 11 representatives for this class action. See Nursing Home Pension Fund v. Oracle Corp., 12 No. C01-00988, 2006 U.S. Dist. LEXIS 94470 at *44 (N.D. Cal. Dec. 20, 2006); In re DJ 13 Orthopedics, Inc., No. 01-CV-2238-K, 2003 U.S. Dist. LEXIS 21534 at *29 (S.D. Cal. 14 Nov. 16, 2003); Civil Rights Educ. & Enforcement Ctr. v. Ashford Hospitality Trust, Inc., 15 No. 15-cv-00216, 2015 U.S. Dist. LEXIS 170416 at *21 (N.D. Cal. 2015) 16 17 IV. Conclusion Because the present class action Settlement Agreement satisfies the requirements 18 set forth by Rule 23(a) and 23(b), and provides an adequate means of notice to absent 19 class members, this Court preliminarily approves this Settlement Agreement. In 20 addition, this Court approves the appointment of representatives and class counsel to this 21 action. This court, however, requires more detailed evidence as to the extent of discovery 22 completed and both Plaintiffs’ roles in the litigation prior to the final fairness hearing. 23 Accordingly, the Court ADOPTS the following proposed order submitted by Plaintiffs, 24 as amended by this Court: 25 This Action is pending before this Court as a putative class action. The named 26 Plaintiffs, Class Counsel, and Defendant Styles for Less, Inc. have applied to this Court 27 for an order preliminarily approving the settlement of this action in accordance with a 28 Class Action Settlement Agreement, which sets forth the terms and conditions for a 19 14cv2521 NLS 1 proposed settlement and dismissal of the Action with prejudice. The Court has read and 2 considered the unopposed motion for preliminary approval and supporting documents 3 and now, ORDERS: 4 1. This Order incorporates by reference the definitions in the Settlement Agreement, 5 and all terms defined therein shall have the same meaning in this Order as set forth 6 in the Settlement Agreement. 7 2. It appears to the Court on a preliminary basis that the Settlement Agreement is fair, 8 adequate, and reasonable. It appears to the Court at this time that adequate 9 investigation and research has been conducted, such that counsel for the parties at 10 this time are able to reasonably evaluate their respective positions. But the parties 11 must provide further detailed information regarding discovery and the 12 participation of each specific named Plaintiff in the final approval papers, as 13 well as an explanation as to what will happen to any unclaimed funds. It 14 further appears to the Court that settlement, at this time, will avoid substantial 15 additional costs by all parties, as well as avoid the delay and risks that would be 16 presented by the further prosecution of the Action. It further appears that the 17 Settlement Agreement has been reached as the result of intensive, serious, and 18 arms-length negotiations with the help of a highly respected mediator, the 19 Honorable Edward A. Infante (Ret.). 20 3. The Court preliminarily finds that the Settlement Agreement appears to be within 21 the range of reasonableness of a settlement that could ultimately be given final 22 approval by this Court. Indeed, the Court has reviewed the monetary recovery that 23 is being granted as part of the settlement and preliminarily finds that the monetary 24 settlement awards made available to all putative class members are fair, adequate, 25 and reasonable when balanced against the potential outcomes of further litigation. 26 4. For settlement purposes only, the Court finds that the prerequisites for class action 27 treatment under Federal Rules of Civil Procedure 23(a) and 23(b)(3) have been 28 preliminarily satisfied. The Court finds that the Class is so numerous that joinder 20 14cv2521 NLS 1 of all Class Members is impracticable; Plaintiffs’ claims are typical of the Class’s 2 claims; there are questions of law and fact common to the Class, which 3 predominate over any questions affecting only individual Class Members; and 4 class certification is superior to other available methods for the fair and efficient 5 adjudication of the controversy. The Court hereby conditionally certifies the 6 following Class for settlement purposes only: 7 8 9 10 All consumers who received a text message from Defendant from October 16, 2013 to December 15, 2015, which text message was not made for emergency purposes, was not made by a tax-exempt nonprofit organization, did not deliver a health care message, or was not made with the recipient’s prior express written consent. 11 12 5. Asal Sally Manouchehri and Pooneh Mehrazar-Arzani are hereby preliminarily 13 appointed and designated, for all purposes, as the representatives for the Class, and 14 the law firms of Patterson Law Group, APC and McGuire Law, P.C., are hereby 15 preliminarily appointed and designated as Class Counsel to act on behalf of 16 Plaintiffs and the Class. 17 6. Class Counsel is authorized to act on behalf of Class Members with respect to all 18 acts or consents required by, or which may be given pursuant to, the Settlement 19 Agreement, and such other acts reasonably necessary to consummate the 20 Settlement Agreement. Any Class Member may enter an appearance through 21 counsel of his or her own choosing and at his or her own expense. Any Class 22 Member who does not enter an appearance or appear on his or her own will be 23 represented by Class Counsel. 24 7. A Final Approval Hearing shall be held before this Court on October 6, 2016 at 25 2:30 p.m., in Courtroom 1A, Edward J. Schwartz Federal Courthouse, 221 26 West Broadway, San Diego, California 92101, to determine all necessary matters 27 concerning the Settlement Agreement, including: whether the proposed settlement 28 of the Action on the terms and conditions provided for in the Settlement 21 14cv2521 NLS 1 Agreement is fair, adequate, and reasonable and should be finally approved by the 2 Court; whether a Judgment, as provided in the Settlement Agreement, should be 3 entered herein; whether the plan of allocation contained in the Settlement 4 Agreement should be approved as fair, adequate, and reasonable to the Class 5 Members; and to award attorneys’ fees and costs, the class representative 6 enhancement award, and settlement administration costs. 7 8. The Court hereby approves, as to form and content, the Notices to be distributed to 8 Class Members attached as Exhibits A through E to the Settlement Agreement. The 9 Court finds that the distribution of the Notices, in the manner and form set forth in 10 the Settlement Agreement, meets the requirements of Due Process, is the best 11 notice practicable under the circumstances, and shall constitute due and sufficient 12 notice to all persons entitled thereto. 13 9. The Court hereby appoints CPT Group as Settlement Administrator and hereby 14 directs the Settlement Administrator within 30 days after entry of this Order to 15 mail or cause to be mailed to Class Members the Notice by first class mail, provide 16 email and published notice to Class Members, and create and maintain a settlement 17 website in accordance with the Settlement Agreement. 18 10. Any Class Member may choose to be excluded from the Class by following the 19 instructions for requesting exclusion, which are set forth in the Notice. Any such 20 request must be postmarked or submitted via the Settlement Website within 75 21 days of entry of this Order. Any person who opts to be excluded from the class 22 will not be entitled to any recovery under the Settlement Agreement and will not 23 be bound by the Settlement or have any right to object, appeal, or comment 24 thereon. Class Members who have not requested exclusion shall be bound by all 25 determinations of this Court, by the Settlement Agreement, and by the Judgment. 26 11. Any Class Member may appear at the Final Approval Hearing and may object to or 27 express his or her views regarding the Settlement Agreement, present evidence, or 28 file papers that may be proper and relevant to the issues to be heard and determined 22 14cv2521 NLS 1 by the Court as provided in the Notice, provided that the Class Member has served 2 by hand or by first class mail, within 75 days of the date of this Order, written 3 objections to the Settlement Agreement as provided in the Notice. Any Class 4 Member who does not make his or her objection in the manner provided in the 5 Notice shall be deemed to have waived any objections and shall be foreclosed from 6 making any objection to the Settlement Agreement. 7 12. All papers supporting Plaintiffs’ request for an award of attorneys’ fees and costs 8 and class representative enhancement award, which must be supported by 9 further facts as described in this order, shall be filed no later than 14 calendar 10 11 days before the Claim Deadline. 13. All papers in support of final approval of the Settlement Agreement shall be filed 12 with the Court and served no later than 14 calendar days before the Final Approval 13 Hearing. 14 14. The Settlement Agreement is not a concession or admission, and shall not be used 15 against any of the parties as an admission or indication with respect to any claims. 16 Whether or not the Settlement Agreement is fully approved, neither the Settlement 17 Agreement, nor any document, statement, proceeding, or conduct related to the 18 Settlement Agreement, nor any reports or accounts thereof, shall in any event be: 19 a. Construed as, offered or admitted in evidence as, received as or deemed to 20 be evidence for any purpose as to the claims or defenses in the Action, 21 including, but not limited to, evidence of a presumption, concession, 22 indication or admission by any party of any liability, fault, wrongdoing, 23 omission, concession or damage; or 24 b. Disclosed, referred to, or offered or received in evidence against any of the 25 parties in any further proceeding in the Action, or in any other civil, 26 criminal, or administrative action or proceeding, except for purposes of 27 enforcing the Settlement Agreement. 28 15. As of the date this Order is signed, all dates and deadlines associated with this 23 14cv2521 NLS 1 Action shall be stayed, other than those pertaining to the administration of the 2 Settlement of the Action. 3 16. In the event the Settlement Agreement is not finally approved, or is terminated, 4 cancelled, or fails to become effective for any reason, this Order shall be rendered 5 null and void and shall be vacated, and the parties shall revert to their respective 6 positions as or before entering into the Settlement Agreement. 7 The Court reserves the right to adjourn or continue the date of the Final Approval 8 Hearing and all dates provided for in the Settlement Agreement without further notice to 9 Class Members, and retains jurisdiction to consider all further applications arising out of 10 11 12 or connected with the Settlement Agreement. IT IS SO ORDERED. Dated: June 20, 2016 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 24 14cv2521 NLS
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