Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_17-cv-05351/USCOURTS-cand-3_17-cv-05351-15/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Other Contract

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United States District Court

For the Northern District of California

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

EMILY FISHMAN and SUSAN FARIA,

individually and on behalf of others similarly

situated,

Plaintiffs,

 v.

TIGER NATURAL GAS INC., an Oklahoma

corporation; COMMUNITY GAS CENTER

INC., a Colorado corporation; JOHN DYET,

an individual; and DOES 3-100

Defendants. /

No. C 17-05351 WHA

ORDER RE MOTION FOR

PRELIMINARY APPROVAL

OF CLASS SETTLEMENT

INTRODUCTION

In this class action for violations of California’s Recording Law, plaintiffs move for

preliminary approval of a proposed class settlement. For the reasons below, the motion is

GRANTED.

STATEMENT

Defendant John Dyet owned several telemarketing companies, including defendant

Community Gas Center, Inc. Beginning in 2014, CGC called PG&E customers to promote

defendant Tiger Natural Gas, Inc.’s capped-rate program, pursuant to which program Tiger’s

supply rate for natural gas would be capped at $0.69 per therm. This case stems from alleged

misrepresentations made during these phone solicitations to PG&E’s customers. Plaintiffs

further alleged that defendants recorded these sales calls without customers’ consent.

Case 3:17-cv-05351-WHA Document 379 Filed 02/22/19 Page 1 of 5
United States District Court

For the Northern District of California

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Based on these allegations, plaintiff Emily Fishman filed her initial complaint in August

2017. Plaintiffs’ most recent iteration of the complaint contained thirteen claims for relief,

including for violations of California’s Recording Law, California’s Unfair Competition Law,

and California’s Consumers Legal Remedies Act. A November 2018 order certified the

following class only with respect to plaintiffs’ Recording Law claim, denying without prejudice

certification as to the Section 17200 and CLRA claims (Dkt. Nos. 1, 101, 250):

Tiger/PG&E Customer Class: All California consumers and

businesses that were customers of PG&E at the time they enrolled

in Tiger’s capped-rate price protection program after receiving a

telemarketing call advertising the program between August 18,

2013, and the present.

With respect to the Section 17200 and CLRA claims, the class certification order

explained that although plaintiffs had claimed they could show the existence of damages on an

aggregate, classwide basis using PG&E’s data, they had failed to show that such information

existed or was available and, as a result, plaintiffs had failed to meet their burden of showing that

FRCP 23(b)(3)’s requirements had been met as to their CLRA and Section 17200 claims. The

order further provided that if plaintiffs obtained the necessary proof from PG&E, the Court

would consider a supplemental motion for class certification (Dkt. No. 250).

Following a settlement conference with Magistrate Judge Elizabeth Laporte, the parties

reached a settlement of plaintiffs’ Recording Law claim. The parties also reached a class-wide

settlement of plaintiffs’ not-yet-certified Section 17200 and CLRA claims. Plaintiffs now move

for preliminary approval of the class settlement (Dkt. No. 373). This order follows full briefing

and oral argument. 

ANALYSIS

Federal Rule of Civil Procedure 23(e) provides that “[t]he claims, issues, or defenses of a

certified class . . . may be settled . . . only with the court’s approval.” Preliminary approval is

appropriate if “the proposed settlement appears to be the product of serious, informed,

non-collusive negotiations, has no obvious deficiencies, does not improperly grant preferential

treatment to class representatives or segments of the class, and falls within the range of possible

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United States District Court

For the Northern District of California

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approval.” In re Tableware Antitrust Litig., 484 F. Supp. 2d 1078, 1079 (N.D. Cal. 2007) (Chief

Judge Vaughn Walker). Here, the proposed settlement agreement satisfies these requirements.

1. BENEFIT TO CLASS MEMBERS.

With respect to plaintiffs’ Recording Law claim, the proposed settlement establishes a

gross settlement fund of $3.7 million, to be distributed evenly amongst the 26,637 class

members. Because California’s Recording Law provides for $5,000 in statutory damages per

violation, this settlement amounts to 2.78% of the $133 million in statutory damages that

plaintiffs contend are owed to the class. This is before any deductions from the settlement fund,

which deductions will include any future awards for plaintiffs’ attorney’s fees and litigation

expenses, any incentive award, and payments to the claims administrator. With respect to

plaintiffs’ Section 17200 and CLRA claims, the proposed settlement provides for injunctive

relief prohibiting Tiger from engaging in the misleading business practices alleged in this case

but does not provide for additional monetary compensation. Plaintiffs do not provide an

estimated amount of class-wide damages stemming from these statutory claims. 

Although the settlement fund reflects a huge discount on plaintiffs’ claims, there exists a

serious risk that defendants would go bankrupt and the class would be left with much less (if

anything) even if plaintiffs did succeed at trial. In connection with this motion, defendants have

demonstrated their limited financial resources and inability to pay a more reasonable settlement. 

Tiger is a family-owned business with one shareholder. The company contracts with an

aggregator which sells Tiger natural gas and extends to Tiger a line of credit for the purchase of

the gas. In return, Tiger’s aggregator exercises control over Tiger’s retained earnings and has a

first-position lien against all of Tiger’s assets. This relationship prohibits Tiger from obtaining a

loan to finance a larger settlement in this action. Moreover, Tiger’s annual net profits are modest

and more than half of Tiger’s retained earnings will be directed to the proposed $3.7 million

settlement. Dyet, in turn, is an individual with limited savings. His telemarketing company

CGC is now defunct. Accordingly, continuing to litigate risks further limiting the class’s

ultimate recovery. 

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United States District Court

For the Northern District of California

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2. SCOPE OF THE RELEASE.

The proposed settlement agreement defines the class using the same definition set forth in

the class certification order. A subclass of only consumers (rather than consumers and

businesses) would be used for the CLRA claim. The proposed settlement agreement releases

only the Recording Law, Section 17200, and CLRA claims asserted in this action. The ten other

claims alleged in the operative complaint would be dismissed without prejudice. The scope of

the class definition and release in the proposed settlement agreement is therefore appropriately

tailored and thus falls within the range of possible approval.

3. OTHER CONSIDERATIONS.

Additional factors weigh in favor of granting preliminary approval. Relevant to the

question of whether the agreement appears to be “the product of serious, informed, noncollusive

negotiations,” the parties reached the proposed settlement after attending a settlement conference

with Magistrate Judge Laporte. Moreover, the proposed settlement agreement does not require

class members to participate in a claims process in order to claim their share of the settlement

fund. 

In the event that any class member does not cash their settlement check, leftover funds

will go to a cy pres recipient. Plaintiffs propose that leftover funds be distributed to The Utility

Reform Network, a nonprofit “engaged in protecting consumers from overreach by utilities in

California” (Dkt. No. 373 at 48). Tiger disagrees that The Utility Reform Network should be a

cy pres recipient, but does not propose a specific alternative. This order overrules Tiger’s

objection and finds that TURN is an appropriate choice for a cy pres recipient.

4. NOTICE.

Under the proposed settlement, the claims administrator will use contact information

obtained from Tiger to send the settlement notice via first-class mail. The proposed class notice

satisfies the requirements of FRCP 23(c)(2)(B) and 23(e)(1), as it clearly describes of the nature

of the action, the estimate for each class member’s expected recovery, the implications of

objecting to the settlement, and the process for opting out of the settlement.

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United States District Court

For the Northern District of California

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CONCLUSION

The terms of the parties’ settlement agreement are hereby PRELIMINARILY APPROVED as

being fair, reasonable and adequate to the members of the class, subject to further consideration

at the final approval hearing. Plaintiffs’ unopposed motion for preliminary approval of the

settlement is GRANTED. 

The Angeion Group is hereby APPOINTED as claims administrator. Provided that all

missing information in the proposed notices is filled out, the proposed form of notice for the

class is APPROVED. Tiger shall provide the claims administrator with the information necessary

to conduct the mailing of the notices. Class notice should be distributed by MARCH 11, 2019.

The deadline to opt out of the settlement or to file objections to the settlement is MAY 9,

2019. The parties shall respond to any objections to the settlement by MAY 16, 2019. Class

counsel shall file a motion for an award of attorneys’ fees, costs and enhancement award on or

before APRIL 11, 2019. By MAY 16, 2019, plaintiffs shall file a motion for final approval of the

class settlement. A hearing to consider whether the class settlement should be given final

approval, and on plaintiffs’ motion for attorneys’ fees, costs and enhancement awards, is SET for

JUNE 20 AT 11:00 A.M.

The final pretrial conference and trial dates are hereby VACATED and will be reset if final

approval is not granted.

Plaintiffs’ administrative motion to file under seal in support of their motion for

preliminary approval (Dkt. No. 371) is GRANTED on the grounds that the information sought to

be sealed is either duplicative or relates to confidential settlement negotiations. Tiger and Dyet’s

administrative motions (Dkt. Nos. 370, 372) are DENIED. Tiger and Dyet shall re-file their

declarations and related exhibits on the public docket by FEBRUARY 29 AT NOON.

IT IS SO ORDERED

Dated: February 22, 2019. WILLIAM ALSUP

UNITED STATES DISTRICT JUDGE

Case 3:17-cv-05351-WHA Document 379 Filed 02/22/19 Page 5 of 5