Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_04-cv-01463/USCOURTS-cand-5_04-cv-01463-5/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 15:1681 Fair Credit Reporting Act

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United States District Court

For the Northern District of California

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1 Some of those non-parties, plaintiffs in a case pending in the Central District of California

titled Millett v. Experian Information Systems, Inc., seek intervention in this matter. Their motion has now been

heard and is under submission.

*E-filed 7/6/06*

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

CHUCK BROWNING,

Plaintiff,

 v.

YAHOO! INC., CONSUMERINFO.COM,

INC., and EXPERIAN NORTH AMERICA,

INC.,

Defendants. /

Case No. C04-01463 HRL

SECOND INTERIM ORDER ON

JOINT MOTION FOR

CERTIFICATION OF

TENTATIVE SETTLEMENT

CLASS AND PRELIMINARY

APPROVAL OF PROPOSED

SETTLEMENT, ETC.

Re Docket No. 103

On May 8, 2006 the court held a preliminary approval hearing on the parties’ Joint

Motion for Certification of Tentative Settlement Class, Preliminary Approval of Proposed

Settlement, Approval and Direction of the Notice Plan, Appointment of Class Counsel, and

Appointment of Settlement Administrator. At the hearing, several nonparties who assert that a

settlement of this case might adversely affect their litigation pending elsewhere also appeared

and were allowed to address the court.1

 The court took the Joint Motion under submission.

Thereafter, the court issued an Interim Order on the Joint Motion which described

several areas of the proposed settlement that were troublesome, particularly the class definition

and the scope of the release. It invited the parties to respond to its questions and concerns.

Case 5:04-cv-01463-HRL Document 126 Filed 07/06/06 Page 1 of 5
United States District Court

For the Northern District of California

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2 The court suggested "a release that covered: liability from a statute or regulation regulating

the service of improving a consumer's credit record, history, or rating, as well as legal or equitable claims based

on the same service, including the service of providing advice or assistance with regard to improving credit

record, history, or rating."

3 The same language is used in the section of the Terms of Release that concerns defendants’

“Marketing Partners or Affiliates.”

2

The parties did respond, filing a Joint Memorandum in Response to Interim Order,

which addressed the court’s questions and, in the key area of the release, proposed new

language. For present purposes, with one exception, the court is satisfied with the response it

received. The exception is the language of the release.

 In pertinent part, the new language releases claims based on: 

(1) any Released Party's violation of the federal Credit Repair Organizations Act; or 

(2) any Released Party's selling, providing or performing (or representing that such

person can or will sell, provide, or perform) the service of improving a consumer's credit

record, history, or rating, as well as any claim based on the same service, including the

service of providing advice or assistance with regard to improving any consumer's credit

record, history, or rating. 

The new language is described as “based on” (but not a wholesale adoption of) language the

court had suggested in its Interim Order, footnote 7.2

 While it might seem incongruous to find

fault with language inspired by its own suggestion, this new language still troubles the court. 

The scope of the release remains problematic.3

The problem is the phrase “as well as any claim based on the same service.” There are

at least two plausible interpretations. First, the release might apply to claims for improving a

consumers’ credit record, history, or rating regardless of the legal basis for the claim (i.e.,

breach of contract, common law fraud, or some other statute or regulation addressing the same

subject). If this were the only interpretation, the court likely would be satisfied. However,

there is a second interpretation if one were to assume that the “service” in question might be (or

be claimed to be) multi-purpose. That is, suppose the service purports to do more than

improving credit history, record, or rating? This is the possibility addressed by the court on

page 5, lines 7 - 13, in its Interim Order. If the service offers something other than credit

Case 5:04-cv-01463-HRL Document 126 Filed 07/06/06 Page 2 of 5
United States District Court

For the Northern District of California

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4 Although protection against fraud and identity theft is the heart of the Millet Third Amended

Complaint, a laundry list of other features of Credit Manager also appears in it. Some of these other features

might by implication relate to improving credit history, record, or rating, e.g., representations that Credit

Manager would provide the purchaser “access [to] the sources of credit information errors,” “quick resolution of

disputes and errors without third party involvement,” and the opportunity to “work with Experian to correct

errors quickly.” However, while the Millett plaintiffs say “all or some of the services identified” were not

provided, the only one they specifically target is protection against fraud and identity theft. Although this court

expects that the Milletts' claims based on fraud and identity theft protection services would not be released by

the Browning settlement, it expresses no opinion about any other Millett allegations.

3

improvement, is that other something also released? In most instances, this court anticipates

that the answer should be no.

This is not merely a hypothetical concern. The proposed class definition in this case

includes purchasers of a credit monitoring product called Credit Manager. According to

Browning’s claim, this product purports to offers credit improvement. Two of the defendants in

this case also sold Credit Manager to the Millet plaintiffs, who allege in their case that Credit

Manager offered a host of “services,” including protection against fraud and identity theft. To

the extent that Credit Manager involves improving credit record, history, or rating, those claims

should, in the court’s mind, be released. To the extent, however, that Credit Manager promised

but did not deliver protection “against fraud and identity theft” in violation of California

consumer protection law and in breach of contract (as the Millet plaintiffs allege), those claims

should not be released.4

With hesitation, the court offers this for consideration:

(1) Any Released Party's violation of the federal Credit Repair Organizations Act; or 

(2) Any Released Party’s selling, providing or performing (or representing that such

person can or will sell, provide, or perform) the service of improving a consumer’s credit

record, history, or rating (including the service of providing advice or assistance with respect to

improving any consumer’s credit record, history, or rating), where the express thrust of the

claim is about improvement of a consumer’s credit record, history, or rating.

///

///

///

///

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United States District Court

For the Northern District of California

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4

The parties are requested to respond by July 21, 2006.

IT IS SO ORDERED.

Dated: 7/6/06 /s/ Howard R. Lloyd 

HOWARD R. LLOYD

UNITED STATES MAGISTRATE JUDGE

Case 5:04-cv-01463-HRL Document 126 Filed 07/06/06 Page 4 of 5
United States District Court

For the Northern District of California

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THIS IS TO CERTIFY THAT A COPY OF THIS NOTICE WILL BE SENT TO:

Marc Kirby Callahan mkcallahan@jonesday.com 

Marc Stephen Carlson mscarlson@jonesday.com, tmmead@jonesday.com 

Hanley Chew hanley.chew@usdoj.gov, hanleychew@hotmail.com 

Bryson Reid Cloon bryson@cloonlaw.com, april@cloonlaw.com;

jeaontheroad@hotmail.com 

Jerome R. Doak jrdoak@jonesday.com, cecox@jonesday.com 

John W. Edwards jwedwards@jonesday.com, 

Gordon John Finwall Gordon@Finwalllaw.com, finwall@sbcglobal.net 

Richard Joseph Grabowski rgrabowski@jonesday.com, 

Peter A. Grammas pgrammas@lowegrammas.com, 

Clay Lowe clowe@lowegrammas.com 

David Clark Zucker zuckerlaw@sbcglobal.net, dkzucker@sbcglobal.net 

Counsel are responsible for distributing copies of this document to co-counsel who have

not registered for e-filing under the court's CM/ECF program.

A courtesy copy will be mailed to:

Michael W. Blanton 

Swanson Midgley LLC

Suite 400

2420 Pershing Rd

Kansas City, MO 64108

Dated: 7/6/06 /s/ JMM 

Chambers of Magistrate Judge Howard R. Lloyd

Case 5:04-cv-01463-HRL Document 126 Filed 07/06/06 Page 5 of 5