Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_11-cv-02022/USCOURTS-cand-4_11-cv-02022-17/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 28:1331 Fed. Question

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United States District Court 

Northern District of California 

UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF CALIFORNIA 

BRANDON BANKS, et al.,

Plaintiffs, 

v. 

NISSAN NORTH AMERICA, INC., 

Defendant. 

Case No. 11-cv-2022-PJH 

ORDER RE NOTICE OF AMENDED 

PROPOSED SETTLEMENT 

At a case management conference held on February 18, 2016, the parties 

proposed a procedure by which notice of the amended proposed settlement would be 

sent only to class members who opted out of the original proposed settlement. The 

parties argued that the proposed procedure was similar to that approved in Klee v. 

Nissan North America, Inc., 2015 WL 4538426 (C.D. Cal. July 7, 2015). However, 

because the parties did not cite to Klee in their case management statement, the court 

did not have an opportunity to review the case prior to the case management conference. 

Following the case management conference, the court reviewed Klee and noted 

that, unlike Klee, this is a “claims made” case, so only class members who submit a valid 

claim will receive any benefit. The court further observed that, “[a]s a result, if the court 

were to send notice only to class members who opted out of the original proposed 

settlement, all of the class members who neither opted out nor submitted a claim would 

receive nothing. Contrast that with the situation in Klee, where those silent class 

members would still receive the benefit of the modified settlement.” Dkt. 211 at 2. 

The court then expressed its inclination to “require that notice be sent to (1) class 

Case 4:11-cv-02022-PJH Document 215 Filed 03/17/16 Page 1 of 5
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United States District Court 

Northern District of California 

members who opted out of the original settlement, (2) class members who objected to 

the original settlement, and (3) class members who did not respond to the original 

settlement notice.” Dkt. 211 at 2. Because the issue had not been fully briefed, the court 

allowed the parties an opportunity to file a supplemental brief “explain[ing] why the court 

should follow the approach taken in Klee,” despite the key differences between the two 

cases. 

Defendant Nissan North America, Inc. (“Nissan”) has now filed a supplemental 

brief, arguing that notice should not be sent to the class members who did not respond to 

the first notice.1 Nissan makes two primary arguments: (1) supplemental notice is not 

required when a settlement is amended to increase the benefits to the class, and (2) 

supplemental notice would incur an “extraordinary expense.” 

 As to (1), Nissan provides a string citation of cases in support of its argument, but 

only two of those cases address the specific question posed by the court’s previous order 

– whether courts in claims-made cases have approved amended settlements without 

providing notice to the entire class. And in fact, a closer look at one of those two cases 

shows that Nissan was not entirely accurate in stating that “class members had to submit 

a claim in order to ensure their participation in the settlement.” See In re Toyota Motor 

Corp. Unintended Acceleration Marketing, Sales Practices, & Products Liability Litigation, 

2013 WL 3224585 (C.D. Cal. June 17, 2013). 

The proposed settlement in Toyota actually had four parts, only some of which 

required claims to be submitted by class members. The four parts were: (1) cash 

payments to cover the decrease in value due to the alleged defects, (2) installation by 

Toyota dealers of a “brake override system” (and cash payments to owners of vehicles 

that were ineligible for this installation), (3) establishment by Toyota of a “customer 

support program,” and (4) establishment by Toyota of a “safety and education fund.” 

2013 WL 3224585 at *2. Based on the Toyota opinion, it appears that (2) and (3) were 

 

1

 Plaintiff did not join the supplemental brief, instead filing a separate document that did 

not take a position on the notice issue. See Dkt. 212. 

Case 4:11-cv-02022-PJH Document 215 Filed 03/17/16 Page 2 of 5
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United States District Court 

Northern District of California 

provided to all class members – regardless of whether they submitted claims – which, 

standing alone, is enough to distinguish Toyota from the present case. However, in even 

starker contrast to the present case, the Toyota settlement provided for cash payments to 

be made even to non-claimants. See id. at *3 (“After the claimants are paid out” of the 

settlement funds, and after settlement administration costs were paid, “the residual will be 

directly distributed to class members who did not file claims”). So, under the proposed 

settlement in Toyota, non-claimants received: (1) installation of a brake override system 

(if eligible), (2) access to Toyota’s customer support program, and (3) residual cash 

payments. In the present case, non-claimants will receive nothing absent additional 

notice. 

 The second case cited by Nissan, Union Asset Management Holding A.G. v. Dell, 

Inc., is a closer fit, because it was purely a “claims-made” settlement, and because nonclaimants received nothing under the proposed settlement. 669 F.3d 632 (5th Cir. 2012). 

Dell involved a securities class action settlement where stock owners could submit a 

claim for a payment from the settlement fund. When the settlement was first approved, it 

contained a “de minimis” provision whereby any claimant whose allocation was less than 

$10 would not receive any payment. Id. at 641. The settlement was modified to remove 

that provision, and to allow those “de minimis” claimants to receive the amount due, but 

no additional notice was sent to non-claimants. 

While the overall posture of Dell is analogous to the present case, the payment 

amounts are not. In Dell, any class member who chose not to submit a “de minimis” 

claim as part of the original settlement, but who would have submitted a claim as part of 

the amended settlement (which removed the “de minimis” provision), lost out on a 

maximum of $10. The amounts at issue in this case are vastly different. Many of the 

class members would have received just $20 under the original proposed settlement, but 

would receive a minimum of $400 under the amended settlement. The court finds it likely 

that a significant number of class members could have seen that they were due $20 (or 

even $60) under the original proposed settlement and chosen not to submit a claim, but 

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would have chosen differently if they were to receive $400. The court further notes that 

submission of a claim in this case is not a perfunctory task – the claim form instructed 

each claimant as follows: 

You must include the following required documentation for your claim to be 

considered: 

(1) documentation reflecting the C1179 diagnostic code (which 

documentation was made at the time of inspection by a licensed mechanic 

(or a mechanic employed by a licensed or professional auto repair 

business), and occurred at or before the time of repair or replacement); 

(2) proof that the out-of-pocket costs were incurred and actually paid by me; 

and 

(3) proof that I owned the vehicle at the time the repair/replacement was 

done. 

Dkt. 160, Ex. C. 

Nissan maintains that “the proposed settlement class members who decided not to 

opt out of the original settlement had more than adequate incentive to file a claim,” but 

the court finds that unlikely for the many class members who stood to gain at most $20 

(or even $60) from the original settlement. As shown above, to receive that $20 (or $60), 

class members had to submit multiple pieces of documentation, some of which 

(especially the repair documentation bearing the specific “C1179” diagnostic code) may 

not have been easy to find. The court finds it likely that a significant number of class 

members may not have been adequately incentivized to expend that effort for $20, but 

would be for $400. 

The court further notes that more than one-fifth of the claimants would have 

received just $20 under the original proposed settlement, and more than one-third would 

have received $60 or less. Nissan emphasizes that, in Toyota, no supplemental notice 

was required even though the amended settlement terms “increased the benefit to class 

members by 30 percent or more,” but fails to recognize that, in this settlement, many 

class members would see their benefit increase by 2000% (from $20 to $400). It would 

Case 4:11-cv-02022-PJH Document 215 Filed 03/17/16 Page 4 of 5
United States District Court 

Northern District of California 

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Case 4:11-cv-02022-PJH Document 215 Filed 03/17/16 Page 5 of 5