Seeking Court’s Approval of Class Settlement? Try Again!

After an initial failure to obtain court’s preliminary approval of class settlement in a total sum of six million dollars, the parties filed another motion seeking approval of settlement in the same amount in an attempt to address the concerns previously raised by the court. See Pine v. A Place for Mom, Inc., 2019 U.S. Dist. LEXIS 210778 (W.D. Wash., Dec. 5, 2019). 

In the parties’ initial attempt, the court rejected their proposed class definition because it used a highly disputed term to characterize the dialing system. That’s right. They used ATDS. (First lesson learned today for me. Avoid using any disputed terms in a class definition!) The court also refused to approve any settlement in which class members must “opt in” or fill out a claim form in order to obtain their share of the settlement proceeds because it created an incentive to minimize the number of persons who could have been receiving settlement funds. See Pine, 2019 U.S. Dist. LEXIS 164560 (Sep. 25, 2019).

In the renewed motion, the parties excluded the disputed term from the class definition and revised the “opt in” mechanism. (Problems solved? Not exactly.) The court, however, still found the proposed class definition problematic because it was inconsistent with the proposed settlement terms based on the parties’ negotiation. The settlement terms provided that the funds would only be distributed to class members who did not consent to the calls at issue, or upon their option, be donated to an Alzheimer’s research foundation. Nevertheless, this lack of consent was not included as a prerequisite in the proposed class definition. (Not so persuasive when they were trying to convince the court that they had reached a smooth settlement plan, right?) For this reason, the court stated that the proposed class definition was over-broad and must be revised to include the phrase “without their consent.”

The court also could not agree with the new “opt in” mechanism, namely certification of two proposed sub-classes: “Locate,” consisting of those whose lack of consent was not in dispute; and “Non-Locate,” consisting of those with disputed consent, which would require an “opt-in.” The court found the parties’ proffered estimation of pro rata share questionable and contradictory due to insufficient information concerning the number of members in the “Non-Locate” group who did not consent. (I remember at my law school graduation ceremony, the department dean said to us, when someone wanted to convince you with something, you would always want to ask: show me the evidence!)

In addition, the court raised another concern regarding the parties’ designation of the cy pres recipient – the Fisher Center for Alzheimer’s Research Foundation. The court specifically stated, “The parties bear the burden of demonstrating the appropriateness of their selection of a cy pres recipient, and the Court will not relieve them of this responsibility.” Pine, 2019 U.S. Dist. LEXIS 210778, p.9.

The court renoted the motion to January 31, 2020, and the parties were to file supplemental materials, including any revised settlement documents, consistent with the order on or before the new noting date. I will follow up on this and keep y’all updated.

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