Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_15-cv-03502/USCOURTS-cand-3_15-cv-03502-25/pdf.json

Nature of Suit Code: 480
Nature of Suit: Consumer Credit
Cause of Action: 28:1441 Petition for Removal - Fair Credit Reporting Act

---

United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

REGMON L. HAWKINS, individually and

on behalf of all others similarly situated,

Plaintiff,

 v.

S2VERIFY, a foreign LLC,

Defendant. /

No. C 15-03502 WHA

ORDER DENYING JOINT

MOTION FOR PRELIMINARY

APPROVAL OF CLASS 

ACTION SETTLEMENT 

INTRODUCTION

In this FCRA class action for statutory damages, the parties move for preliminary

approval of a proposed settlement agreement (Dkt. No. 97). Because the scope of the proposed

release is overbroad, the joint motion for preliminary approval of the proposed settlement

agreement is DENIED.

STATEMENT

The detailed background of this case has already been set forth in prior orders (Dkt. Nos.

22, 60, 82) and does not need to be repeated here. In brief, lead plaintiff Regmon L. Hawkins

applied for employment with IPC Corp., a security services firm. IPC then requested and

obtained a consumer report regarding plaintiff from defendant S2Verify, LLC, a consumer

reporting agency. The report listed plaintiff’s prior convictions, as well as three charges that

did not result in criminal convictions and were older than seven years. IPC allegedly denied

plaintiff’s employment application based on the report. 

Case 3:15-cv-03502-WHA Document 101 Filed 10/17/16 Page 1 of 3
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

2

Plaintiff then brought this action on behalf of a putative class, asserting various claims

against defendant for willful violations of the FCRA. Previous orders denied defendant’s

motions to strike the complaint’s class allegations (Dkt. No. 22), and to dismiss certain claims

(Dkt. No. 60). Another order certified a class of claimants for statutory damages pursuant to the

FCRA (Dkt. No. 82). Defendant also moved for summary judgment (Dkt. No. 76), but

withdrew its motion after the parties stipulated to withdraw one of three counts in the complaint

(Dkt. Nos. 83, 84).

ANALYSIS

“A settlement should be approved if ‘it is fundamentally fair, adequate and reasonable.’” 

Torrisi v. Tucson Elec. Power Co., 8 F.3d 1370, 1375 (9th Cir. 1993) (citation omitted). 

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

Cal. 2007) (Chief Judge Vaughn Walker).

Here, the overbroad proposed release is an obvious deficiency and sufficient reason to

deny preliminary approval. The proposed settlement agreement provides, “Class Members . . .

completely, finally and forever release and discharge S2Verify of, and from, any and all claims

under the FCRA, 15 U.S.C. § 1681, et seq., arising out of their consumer reports prepared by

S2Verify” (Dkt. No. 97-1 § 10.2). In their joint motion, the parties briefly allude to this

provision, acknowledging “the release does not precisely parallel the claims asserted in the First

Amended Complaint (Dkt. 35) in that it purports to release all FCRA claims by all Class

Members arising out of their S2Verify reports” (Dkt. No. 97 at 4). They suggest this is not

problematic because the release “only applies to the consumer reports actually prepared by

S2Verify as to the Class Members, and is therefore tailored to the specific issues litigated in the

case on which Class Counsel took full and extensive discovery (See Dkt. 82 at 4-5.)” (ibid). 

The parties cite to the prior order certifying the class, but nothing on the pages cited — or in the

rest of that order — suggests the class’s two surviving claims under the FCRA should be

Case 3:15-cv-03502-WHA Document 101 Filed 10/17/16 Page 2 of 3
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

3

expanded to include “any and all claims under the FCRA . . . arising out of [the class members’]

consumer reports prepared by S2Verify” (see Dkt. No. 97-1 § 10.2).

As stated in the Notice Regarding Factors to be Evaluated for Any Proposed Class

Settlement, “The release should be limited only to the claims certified for class treatment” and

the specific “claims to be released should be spelled out” (Dkt. No. 11 at 3). A proposed

settlement seeking to “expand the class . . . claim-wise (including claims not even in the

complaint) . . . will be viewed with suspicion. If an expansion is to occur it must come with an

adequate plaintiff and one with standing to represent the add-on scope and with an amended

complaint to include the new claims, not to mention due diligence as to the expanded scope”

(ibid). The parties’ joint motion does not satisfy these requirements. The motion is therefore

DENIED without prejudice to the parties submitting a new proposed settlement agreement with a

more appropriate release of claims.

CONCLUSION

For the foregoing reasons, the joint motion for preliminary approval of the class action

settlement is DENIED. Possibly, there will be other shortfalls in the proposed settlement

agreement, but they can be addressed at the hearing on November 3. 

IT IS SO ORDERED.

Dated: October 17, 2016. 

WILLIAM ALSUP

UNITED STATES DISTRICT JUDGE

Case 3:15-cv-03502-WHA Document 101 Filed 10/17/16 Page 3 of 3