Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_08-cv-03174/USCOURTS-cand-3_08-cv-03174-39/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 15:1601 Truth in Lending

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

EDUARDO DE LA TORRE, et al.,

Plaintiffs,

v.

CASHCALL, INC.,

Defendant.

Case No. 08-cv-03174-MEJ 

ORDER RE: CLARIFICATION 

OF THE RECORD

The Court recently held a bench trial to determine the relief available to “class members”

for Defendant CashCall, Inc.’s (“CashCall”) violation of the Electronic Funds Transfer Act 

(“EFTA”), 15 U.S.C. § 1693k(1), when it conditioned its extension of credit on borrowers’ 

repayment by means of preauthorized electronic funds transfers (“EFTs”) (the “Conditioning 

Claim”).

1

 Dkt. Nos. 295, 297 (trial minutes). In considering the available relief, a number of 

significant issues have come to the Court’s attention.

A. Issues to Be Addressed

1. Evidence of Notice as Required Under Rule 23(c)(3) 

Federal Rule of Civil Procedure 23(c)(3) requires that “[w]hether or not favorable to the 

class, the judgment in a class action must: . . . (B) for any class certified under Rule 23(b)(3), 

include and specify or describe those to whom the Rule 23(c)(2) notice was directed, who have not 

requested exclusion, and whom the court finds to be class members.” The parties’ March 3, 2013 

Joint Status Report indicated that “by August 3, 2012, email notice was delivered to 120,870 class 

 

1

See Order re: Mots. for Summ. J. (“MSJ Order”) at 16-17, Dkt. No. 220. In violating the EFTA, 

CashCall also violated California’s Unfair Competition Law (“UCL”), Business and Professions 

Code section 17200, by engaging in an unlawful business practice. Id. at 17. 

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members and by October 3, 2012 postcard notice was mailed to 49,481 class member [sic]. Of the 

170,351 class members, 26 opted-out.” Dkt. No. 136 at 1. To the Court’s knowledge, the parties 

provided this information only in their Joint Status Report; they have not provided any 

declarations or other evidence attesting to whom they sent notice or who among those individuals 

did not request to be excluded from this action or a particular class. Additionally, on July 10, 

2013, the Court ordered supplemental notice be sent to an additional 13,541 Conditioning Class 

members who were improperly excluded from the original class list. Dkt. No. 144. Again, to the 

Court’s knowledge, neither Plaintiffs nor CashCall has provided evidence that those 13,541 

Conditioning Class members received notice of this action. 

2. Class Certification of the “Conditioning Class”

As noted above, Federal Rule of Civil Procedure 23(c)(3)(B) requires that “the judgment in 

a class action . . . include and specify . . . whom the court finds to be class members.” In doing so, 

the Court discovered an error in the class definition related to the Conditioning Claim. 

Initially, in ruling on Plaintiffs’ Motion for Class Certification, the Court issued an Order 

certifying under Rule 23(a) and 23(b)(3) the following classes:

National Class

All individuals who borrowed money from CashCall, Inc., between 

June 30, 2004 and February 2007, who signed CashCall’s 

promissory note containing an electronic funds authorization 

indicating that cancellations of such authorization must be received 

at least seven days prior to the applicable payment due date.

California Class

All individuals who, while residing in California, borrowed from 

$2,500 to $2,600 at an interest rate of 90% or higher from CashCall, 

Inc., for personal, family, or household use at any time from June 

30, 2004, to the present.

Dkt. No. 100 at 37-38. 

Subsequently, the parties met and conferred in an attempt to devise a proposed notice plan 

and to address CashCall’s objections to the class definitions above. Dkt. No. 127 at 1 (describing 

post-class certification discussions and disputes); see also Dkt. No. 104 at 1-2 (case management 

statement explaining Plaintiffs’ proposal of a conditioning class consisting of “[a]ll individuals 

who, while residing in California, borrowed money from CashCall, Inc. for personal, family, or 

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United States District Court

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household use at any time from June 30, 2004 to the present” and disagreement over class

definition); Dkt. No. 113 at 1 (CashCall’s Motion for the Court to define two putative classes: (1) 

a Conditioning Claim class and (2) an Unconscionability Class). In the process, Plaintiffs 

proposed new class definitions to the Court, which in relevant part stated:

The “Conditioning Class”: “All individuals who, while residing in 

California, borrowed money from CashCall, Inc. for personal, 

family, or household use at any time from June 30, 2004 to the 

present.”

Mot. for Approval of Class Notice Plan at 2, Dkt. No. 111 (also copied in the Court’s Class 

Definition Order, Dkt. No. 127 at 1). 

CashCall objected to the class period defined in Plaintiffs’ proposed classes (Dkt. No. 

113), and the Court, finding merit in those objections, found the definition for the Conditioning 

Class should be limited to those borrowers (1) who did not sign CashCall’s post-July 11, 2011

promissory note and (2) “who obtained loans after March 13, 2006.” Dkt. No. 127 at 2-4 

(discussing effect of July 11, 2011 addition of arbitration clause to promissory note); id. at 6 

(discussing EFTA’s one year statute of limitations). The Court thus ordered the parties “to meet 

and confer and submit, by July 18, 2012, an updated version of Plaintiffs’ motion for approval of 

class notice plan (Dkt. No. 110), including a proposed order, reflecting the Court’s decisions in

this opinion.” Dkt. No. 127 at 7. 

Plaintiffs submitted a brief entitled “Plaintiffs’ Revised Memorandum in Support of

Motion for Approval of Class Notice Plan in Compliance with the Court’s Order of July 2, 

2012[,]” in which Plaintiffs offered a revised proposed class notice plan, with the following class 

definition:

The “Conditioning Class”: “All individuals who, while residing in 

California, borrowed money from CashCall, Inc. for personal, 

family, or household use on or after March 13, 2006 through July 

10, 2011 and were charged an NSF Fee.” 

Dkt. No. 128 at 1 (emphasis added). This was the first time Plaintiffs included the NSF Fee2

 

2 An NSF Fee stands for a “nonsufficient fund” fee, which a CashCall borrower can incur for 

payments returned for insufficient funds. Undisputed Fact No. 4, Dkt. No. 281.

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limitation to their Conditioning Class definition. Plaintiffs did not call attention to this change in 

their memorandum or otherwise. CashCall did not object and even signed an “Approval as to 

Form” noting it “approves this Notice Plan as to form as being in compliance with this Court’s 

Order of July 2, 2012.” Id. at 4. The Court approved Plaintiffs’ proposed notice plan on July 20, 

2012. Dkt. No. 130.

The parties and the Court have conducted the rest of this case up through trial with the 

limitation that the Conditioning Class only included those borrowers who incurred NSF Fees.

Neither Plaintiffs nor CashCall challenged this limitation. But there is a problem: the Court’s 

Class Certification ruling did not certify the class as defined in Plaintiffs’ proposed notice plan 

with the NSF Fee limitation. In other words, the Court has not conducted the required Rule 23(a) 

and 23(b)(3) analyses for the Conditioning Class with an NSF Fee limitation. Plaintiffs never 

raised this issue with the Court, and CashCall never objected to the class definition with the NSF 

Fee limitation—it even approved it as being in compliance with the Court’s Order, as noted above. 

CashCall only identified this issue in its pretrial brief, noting that Plaintiffs’ “counsel [] narrowed 

the class [] without Court approval, by excluding from the Class definition all borrowers who were 

not charged an NSF fee—a unilateral concession that eliminated almost 60,000 borrowers from 

the Class, even though they signed the same EFT authorization, which [the class representative]

claims violated the EFTA.” Dkt. No. 282 at 3. Plaintiffs never responded to this issue in any of 

their subsequent briefings or at trial. 

B. Status and Required Response from Parties

The abovementioned issues only truly manifested themselves after the Court conducted the 

bench trial on the issue of what relief “class members” were entitled to as a result of CashCall’s 

EFTA and UCL violations and when the Court recognized the discrepancies between the certified 

class definitions, its related findings as to the class, and the later modified Conditioning Class 

definition. Additionally, the Court cannot issue a judgment without complying with Rule 

23(c)(3), and the Court lacks sufficient information regarding the notice issued to class members 

to do so. Although it seems to the Court that both parties were likely aware of the issues 

addressed here, neither of them came forward with any objections or recommendations of how to 

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rectify these problems. Without clarification of the record on foregoing issues, the Court cannot 

enter a judgment. See Bd. of Sch. Comm’rs of City of Indianapolis v. Jacobs, 420 U.S. 128, 130 

(1975) (“Because the class action was never properly certified nor the class properly identified by 

the District Court, . . . the case is remanded to that court with instructions to order the District 

Court to vacate its judgment . . . .”). 

Given the foregoing, the Court ORDERS the parties to meet and confer in person about all 

of the issues above and submit a joint statement addressing these issues and proposing potential 

recommendations to the Court by December 9, 2015. The joint statement should also include 

attestations concerning what notice was already sent to which class members and whether any of 

those class members sought to be excluded from this action.

IT IS SO ORDERED.

Dated: November 20, 2015

______________________________________

MARIA-ELENA JAMES

United States Magistrate Judge

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