Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_10-cv-01290/USCOURTS-casd-3_10-cv-01290-1/pdf.json

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

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17AUG~I PH 3:z[ 

CLrnK. U.S. DISTRICT ~CURT SfVTiltRN OIGTRIGT OF CMlFORNll 

1JS 

UNITED STATES DISTRICT COURT 

SOUTHERN DISTRICT OF CALIFORNIA 

ALBERTO MALTA, individually and on 

behalf of all other similarly situated, et al., 

Plaintiffs, 

v. 

THE FEDERAL HOME LOAN 

MORTGAGE CORPORATION, also 

known as Freddie Mac, et al., 

Defendants. 

Case No.: 3:10-cv-01290-BEN-NLS 

ORDER GRANTING SECOND 

DISTRIBUTION OF SETTLEMENT 

FUND 

19 Before this Court is Lead Plaintiff Alberto Malta's Motion for Second Distribution 

20 or, Alternatively, Cy Pres Distribution from the Residual Settlement Fund. (Docket No. 

21 132.) The motion is unopposed. (Docket No. 134.) The Court finds the motion suitable 

22 for determination on the papers without oral argument, pursuant to Civil Local Rule 

23 7.1.d.l. For the reasons set forth below, Lead Plaintiffs Motion is GRANTED in part. 

24 BACKGROUND 

25 This action was filed on June 16, 2010 for violations of the Telephone Consumer 

26 Protection Act ("TCPA"). (Docket No. 1.) On May 21, 2013, Co-Lead Plaintiffs Alberto 

27 Malta and Danny Allen, Jr. filed a First Amended Complaint on behalf of themselves and 

28 a putative class alleging Defendants sent automated text messages to non-customer's 

3: 10-cv-01290-BEN-NLS 

Case 3:10-cv-01290-BEN-NLS Document 140 Filed 08/01/17 PageID.<pageID> Page 1 of 5
1 cellular telephones using an automated dialing system without first obtaining the non2 customer's express consent in violation of the TCP A. (Docket No. 59.) 

3 On February 5, 2013, the Court granted preliminary approval of the Class Action 

4 Settlement Agreement ("Agreement"). 1 (Docket No. 48.) On June 21, 2013, the Court 

5 entered an Order and Final Judgment of Dismissal with Prejudice ("Final Judgment 

6 Order"), which, inter alia, approved the Agreement, directed the parties to consummate 

7 the Settlement in accordance with the terms of the Agreement, and retained jurisdiction 

8 over the litigation for all matters relating to the consummation of the Agreement. 

9 (Docket No. 91.) On June 28, 2013, the Court granted Class Counsel's Ex Parte Request 

10 to Modify the Final Judgment Order ("Modification Order"). (Docket No. 96.) The 

11 Modification Order modified the numbers of approved late claims, requests for exclusion, 

12 and amount paid per claim. 

13 On January 4, 2017, Lead Plaintiff Alberto Malta filed an unopposed Motion for 

14 Second Distribution or, Alternatively, Cy Pres Distribution from the Residual Settlement 

15 Fund ("Pl.'s Redistrib. Mot."). (Docket Nos. 132, 134.) Plaintiffs motion indicates that, 

16 pursuant to the Court's Final Judgment and Modification Orders, the Claims 

17 Administrator has issued each of the 120,700 claimants a settlement check. However, 

18 5,556 claimants did not cash their checks, leaving a balance of$438,832.55 including 

19 accrued interest in the Settlement Fund as of March 7, 2016. 

20 Plaintiffs motion requests a second distribution of the remaining balance in the 

21 Settlement Fund. IL YM Group, Inc., the Claims Administrator, estimates that it will cost 

22 approximately $85,000 to complete a second distribution of the Settlement Fund, which 

23 leaves approximately $353,823.55 for redistribution to claiming Class Members. (Pl.'s 

24 Redistrib. Mot at 2; Declaration of Lisa Mullins ("Mulins Deel.")~~ 5-6.) If the Claims 

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27 1 Capitalized terms not otherwise defined herein have the meanings assigned to them in 

the Agreement (Docket No. 38-3) or the Court's Final Judgment Order dated June 21, 28 2013. (Docket No. 91.) 

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1 Administrator issues redistribution checks to only those Class Members who cashed the 

2 initial settlement checks, each individual will receive a check for approximately $3.07. 

3 (Pl.'s Redistrib. Mot at 2.) If the Claims Administrator issues redistribution checks to all 

4 Class Members who submitted a valid claim regardless of whether they cashed the initial 

5 settlement check, each individual will receive a check for approximately $2.93. (Id.; 

6 Mulins Deel.~ 6.) 

7 Although Defendants filed a Statement of Non-Opposition, they noted that "the 

8 parties' settlement agreement does not provide for a second distribution to settlement 

9 class members." (Docket No. 134 at 2.) Section 11.02 of the Agreement provides: 

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Mailing of Settlement Check: Settlement checks shall be sent to 

Qualified Class Members by the Claims Administrator via U.S. 

mail no later than thirty (30) days after the Effective Date. If 

any settlement checks are returned, the Claims Administrator 

shall attempt to obtain a new mailing address for that 

Settlement Class Member by taking the steps described in 

Sections 9.01. If, after a second mailing, the settlement check 

is again returned, no further efforts need be taken by the Claims 

Administrator to resend the check. The Claims Administrator 

shall advise Class Counsel and counsel for Defendants of the 

names of the claimants whose checks are returned by the postal 

service as soon as practicable. Each settlement check will be 

negotiable for one hundred eighty (180) days after it is issued. 

Any funds not paid out as the result of uncashed settlement 

checks shall be paid out as a cy pres award, to a recipient 

agreed to by the Parties and approved by the Court, as set forth 

in Section 8.05(f). 2 

2 Section 8.05(f) provides: 

[F]inally, on the Final Distribution Date, which is the earlier of 

(i) the date as of which all the checks for Settlement Awards 

have been cashed or (ii) 210 days after the date on which the 

last check for a Settlement A ward was issued, the Claims 

Administrator shall pay any amount remaining in the 

Settlement Fund Account from uncashed settlement checks to 

one or more cy pres recipients which are agreed upon by the 

Parties and approved by the Court. (Docket No. 38.3 at 14.) 

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3: 10-cv-01290-BEN-NLS 

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1 (Docket No. 38-3 at 18.) Nevertheless, as will be explained below, the Court concludes 

2 granting Plaintiffs request for a second distribution of the Settlement Fund is the most 

3 appropriate disposition of the remaining funds at this time. 

4 DISCUSSION 

5 "It is not uncommon in consumer class actions to have funds remaining after 

6 payment of all identifiable claims." Diamond Chem. Co. v. Akzo Nobel Chemicals B. V, 

7 517 F. Supp. 2d 212, 217 (D.D.C. 2007) (quoting In re Motorsports Merch. Antitrust 

8 Litig., 160 F. Supp. 2d 1392, 1393 (N.D. Ga. 2001); see also Six (6) Mexican Workers v. 

9 Arizona Citrus Growers, 904 F.2d 1301, 1307 (9th Cir. 1990). Various courts who have 

10 considered the question of how to appropriately distribute such funds have determined 

11 that "neither the class members nor the settling defendants have any legal right to 

12 unclaimed or excess funds." Id. (quoting Powell v. Georgia-Pacific Corp., 843 F. Supp. 

13 491, 495 (W.D. Ark. 1994), aff'd, 119 F.3d 703 (8th Cir. 1997)); see also Motorsports 

14 Merch., 160 F. Supp. 2d at 1393; Wilson v. Southwest Airlines, Inc., 880 F.2d 807, 811-

15 12 (5th Cir. 1989); In re Folding Carton Antitrust Litig., 744 F.2d 1252, 1254 (7th Cir. 

16 1984), cert. dismissed, 471U.S.1113, 106 S.Ct. 11 (1985). 

17 Neither Lead Plaintiff nor Defendants contend they retain any legal claim to the 

18 remaining Settlement Fund. Nor are they entitled to it pursuant to the terms of the 

19 Agreement. Therefore, the Court "must apply equitable principles in considering the 

20 appropriate distribution of the [ r ]emaining Settlement Fund." Id. (citing Motorsports 

21 Merch., 160 F. Supp.2 d at 1393); see also Powell, 843 F. Supp. at 495 (until settlement 

22 funds are completely distributed, the court retains its traditional equity powers) (citing 

23 Beecher v. Able, 575 F.2d 1010, 1016 (2d Cir. 1978)). 

24 The Court has reviewed Plaintiffs Motion and corresponding memorandum of 

25 points and authorities, the Declarations of Lisa Mullins and Jennifer M. Urban in support 

26 of Plaintiffs Motion, all other exhibits and papers submitted in support thereof, and 

27 Defendant's Statement of Non-Opposition, and determines that good cause exists for a 

28 second distribution of the Settlement Fund to the Class Members who cashed the initial 

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1 settlement checks. First, although the Agreement provides for cy pres distribution of 

2 unclaimed funds from the first distribution of the Settlement Fund, it is not clear from the 

3 Agreement that a cy pres distribution of this size was contemplated. 3 In contrast, it is 

4 clear to the Court that the Settlement Fund was intended to compensate Class Members 

5 whose claims were timely filed and approved by this Court. Second, although each 

6 payment to individual Class Members in a second distribution will be small, it is not non7 distributable, insignificant, or de minimis. See In re Google Referrer Header Privacy 

8 Litig., 87 F. Supp. 3d 1122, 1132 (N.D. Cal. 2015) (quoting Nachshin v. AOL, LLC, 663 

9 F.3d 1034, 1038 (9th Cir. 2011) (Cy pres payments may be approved when actual funds 

10 are "non-distributable," or "where the proof of individual claims would be burdensome or 

11 distribution of damages costly.") (internal citation and quotation marks omitted). Third, 

12 the Court agrees with Plaintiffs assertion that it is unlikely that Class Members who did 

13 not cash the initial check for $84.78 will cash a check for less than $4.00. 

14 Therefore, the Court directs the Claims Administrator to pay each of the Class 

15 Members who cashed the initial settlement checks an equal share of the remaining 

16 Settlement Fund, after its own fees of no more than $85,000.00 are paid. If unclaimed 

17 funds remain in the Settlement Fund after the second distribution, either party may move 

18 the Court for a cy pres distribution in accordance with the Agreement. 

19 This Court retains jurisdiction to consider any further applications concerning the 

20 administration of the Agreement, and such other and further relief as this Court deems 

21 appropriate. 

22 IT IS SO ORDERED. 

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24 DATED: July-?L_, 2017 

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EZ 

nited States District Court Judge 

3 Indeed, Lead Plaintiffs request for a second distribution of the remaining funds and 

28 Defendants non-opposition to a second distribution supports the Court's determination. 

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