Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_12-cv-02484/USCOURTS-casd-3_12-cv-02484-0/pdf.json

Nature of Suit Code: 440
Nature of Suit: Other Civil Rights
Cause of Action: 05:0552pa Right to Privacy Act

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UNITED STATES DISTRICT COURT 

SOUTHERN DISTRICT OF CALIFORNIA 

CARRIE COUSER, individually and on 

behalf of all others similarly situated, 

Plaintiff,

v. 

COMENITY BANK, 

Defendant.

Case No.: 12cv2484-MMA (BGS)

ORDER GRANTING IN PART AND 

DENYING IN PART PLAINTIFF’S 

UNOPPOSED MOTION FOR CY 

PRES DISTRIBUTION 

[Doc. No. 96] 

 

 On October 12, 2012, Plaintiff Carrie Couser filed this putative class action 

alleging violations of the Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 

227 et seq. See Doc. No. 1. Plaintiff now moves the Court for approval of cy pres

distribution of remaining settlement funds to certain beneficiaries. See Doc. No. 96. The 

Court found the matter suitable for determination on the papers and without oral 

argument pursuant to Civil Local Rule 7.1(d)(1). For the reasons set forth below, the 

Court GRANTS IN PART and DENIES IN PART Plaintiff’s motion. 

BACKGROUND

This action is premised on allegations that Defendant contacted Plaintiff on her 

cellular telephone in an attempt to collect an alleged debt owed by Plaintiff’s mother. 

Plaintiff alleges that Defendant used an automatic telephone dialing system to place 

multiple calls to her each day, and that she incurred charges for incoming calls. The 

Parties ultimately entered into a settlement agreement and on May 27, 2015, the Court 

granted final approval of the class action settlement (“the Settlement”). See Doc. No. 91. 

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For the purposes of settlement, the Court certified the following Settlement Class: 

All persons whose cellular telephone numbers were called by 

Defendant, released parties, or a third party dialing company on 

behalf of Defendant or the released parties, using an automatic

telephone dialing system and/or an artificial or prerecorded 

voice, without consent, from August 1, 2010 through May 26, 

2014, excluding those persons whose cellular telephone 

number/s were marked with a “wrong number” code in 

Defendant’s database (which persons are included in the 

putative class in Picchi v. World Financial Network Bank, et 

al., Case No.:11-CV-61797, currently pending in the Southern 

District of Florida). 

Excluded from the Class is Defendant, its parent companies, 

affiliates or subsidiaries, or any employees thereof, and any 

entities in which any of such companies has a controlling 

interest; the judge or magistrate judge to whom the Action is 

assigned; and, any member of those judges’ staffs and 

immediate families, as well as persons who validly request 

exclusion from the Settlement Class. 

See Doc. No. 91. 

Further, as part of the Settlement, Defendant was required to establish a nonreversionary Settlement Fund in the amount of $8,475,000.00. After costs and fees were 

distributed, the Net Settlement Amount was to be distributed pro rata to Class Members 

who had submitted valid and approved claims. Pursuant to the Settlement, the Claims 

Administrator was to mail Settlement Checks to those Class Members, and any funds not 

paid out as a result of un-cashed1

 Settlement Checks would be paid as cy pres awards to 

recipients to be agreed upon by the Parties, and upon Court approval. See Doc. No. 91. 

 Now, Plaintiff moves for Court approval of cy pres distribution of the remaining 

balance of the Settlement Fund, which amounts to approximately $871,549.69.2

 See Doc. 

No. 96. Specifically, Plaintiff requests that the balance be divided equally and distributed 

                                                                

1

 Claimants were required to cash Settlement Checks within 180 days. 

2

 This amount was calculated as of March 8, 2017, and includes earned interest. See Doc. No. 96. 

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to: (1) New Media Rights; (2) Consumer Federation of California; (3) Public Justice 

Foundation; and (4) Bet Tzedek Legal Services. Defendant Comenity Bank does not 

oppose this motion.3

 

LEGAL STANDARD

“[T]he ‘cy pres doctrine allows a court to distribute unclaimed or non-distributable 

portions of a class action settlement fund to the ‘next best’ class of beneficiaries.’” See 

Lane v. Facebook, Inc., 696 F.3d 811, 819 (9th Cir. 2012) (quoting Nachshin v. AOL, 

LLC, 663 F.3d 1034, 1036 (9th Cir. 2011)). “[A] district court should not approve a cy 

pres distribution unless it bears a substantial nexus to the interests of the class members,” 

meaning that the distribution “must account for the nature of the plaintiffs’ lawsuit, the 

objectives of the underlying statutes, and the interests of the silent class members.” Id.

(citing Nachshin, 663 F.3d at 1036); see also Six (6) Mexican Workers v. Arizona Citrus 

Growers, 904 F.2d 1301, 1308 (9th Cir. 1990) (setting aside district court’s cy pres

application where distribution to the chosen recipient organization would have 

“benefit[ed] a group far too remote from the plaintiff class”). 

DISCUSSION

Here, “[t]he purpose of the TCPA is to ‘protect the privacy interests of residential 

telephone subscribers by placing restrictions on unsolicited, automated telephone calls to 

the home and to facilitate interstate commerce by restricting certain uses of facsimile 

machines and automatic dialers.’” Aboudi v. T-Mobile USA, Inc., No. 12CV2169 BTM 

NLS, 2015 WL 4923602, at *5 (S.D. Cal. Aug. 18, 2015) (quoting Satterfield v. Simon & 

Schuster, Inc., 569 F.3d 946, 954 (9th Cir. 2009)). In enacting the TCPA, Congress 

sought to protect people from unsolicited, automated phone calls because they cause a 

nuisance and constitute invasions of privacy. See Cabiness v. Educ. Fin. Sols., LLC, No. 

16-CV-01109-JST, 2016 WL 5791411, at *6 (N.D. Cal. Sept. 1, 2016); Satterfield v. 

                                                                

3

 In fact, Plaintiff’s counsel declares under penalty of perjury that Defendant agreed to the four proffered 

beneficiaries. See Doc. No. 96-2, Decl. of Abbas Kazerounian. 

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Simon & Schuster, Inc., 569 F.3d 946, 954 (9th Cir. 2009). 

Keeping in mind the foregoing, the Court discusses each of the proffered cy pres

beneficiaries and their nexus to class interests and TCPA claims in turn below. 

1. New Media Rights

New Media Rights (“NMR”) is a program of California Western School of Law 

committed to “consumer privacy work.” See Decl. of Art Neill, Doc. No. 96-3. Cy pres 

funds, if approved, would “support pro bono preventative privacy related legal services 

for consumers, nonprofits, technology entrepreneurs, and creators across the United 

States.” See Decl. of Art Neill. The program “provide[s] direct legal education and 

services to consumers,” including “assisting internet users in understanding their rights 

regarding unwanted text messages, emails, and phone calls under the TCPA and related 

privacy laws.” See Decl. of Art Neill. NMR also advises “technology startups, 

nonprofits, creators and other small enterprises on how to comply with privacy laws in a 

consumer friendly way.” See Decl. of Art Neill. NMR also provides this type of 

information on its “heavily trafficked” website. In the past, NMR has “drafted 

recommendations regarding the TCPA and other consumer privacy concerns” to as a 

member of the Federal Communications Committee’s Consumer Advisory Committee. 

Art Neill, the executive director and founder of NMR, provides specific examples of 

recommendations the program has made to the FCC, which directly address the TCPA. 

See Decl. of Art Neill. 

Based on NMR’s previous and current commitment to issues of consumer privacy 

rights and in particular, the statutory scheme at issue in this action, distribution to NMR 

would “account for the nature of [Plaintiff’s] lawsuit, the objectives of the underlying 

statutes, and the interests of the silent class members.” See Lane, 696 F.3d at 819. 

Further, despite that the program is headquartered in San Diego, the program clearly has 

nationwide impact. Cf. Nachshin, 663 F.3d 1034, 1040 (disapproving of cy pres

distribution in part because the settlement class was nationwide yet “two-thirds of the 

donations [would] be made to local charities in Los Angeles”). Accordingly, distribution 

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to NMR is appropriate. 

2. Consumer Federation of California

According to the executive director of CFC, Richard Holober, the Consumer 

Federation of California (“CFC”) is “a non-profit consumer advocacy organization” 

which “work[s] to improve state and federal consumer protection laws.” See Decl. of 

Richard Holober, Doc. No. 96-4. The organization has advocated for enactment of a 

financial privacy law, and legislation protecting against identify theft. CFC has also 

advocated for the protection of cellular phone users’ Customer Proprietary Network 

Information, and “led the fight that stopped a 2015 attack on California’s two party 

consent law for recording or monitoring cellular phone conversation.” See Decl. of 

Richard Holober. Further, CFC has testified in regulatory proceedings in support of 

“restricting insurer access to a motorist’s confidential automobile’s transponder data,” 

and sponsored a law preventing “rent to own companies from secretly placing spyware 

on rental computers.” See Decl. of Richard Holober. CFC has also had a hand in 

enacting legislation regarding the privacy of information concerning the online activities 

of public school students, limitations on the usage of toll collection data, limitations on 

the usage of sensitive passenger information by transportation companies, and legislation 

regarding California’s Confidentiality of Medical Information Act. 

While CFC may advocate for worthy causes, the Court is bound by Ninth Circuit 

precedent requiring that those causes be aligned with class members’ interests and the 

litigation’s underlying claims. The TCPA guards against the nuisance and costs of 

unwanted telephone calls—regardless of the purpose of the call, or any information 

potentially gathered during that call. CFC’s focus appears to be primarily on privacy of 

information and how certain information is used, rather than on the privacy of individuals 

from unwelcome contact.4

 Further, Mr. Holober does not state for what purpose the cy 

                                                                

4

 The Court is also unpersuaded that the sole fact that CFC has previously “joined in a letter to the FCC . 

. . seeking to maintain the strong protections of the TCPA” sufficiently establishes the requisite nexus. 

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pres funds would be used. Accordingly, based on the declaration provided, the Court 

cannot be reasonably certain that distribution to CFC would “(1) address the underlying 

statute[], (2) target the plaintiff class, or (3) provide reasonable certainty that any member 

will be benefited.” See Nachshin, 663 F.3d at 1040. The Court declines to approve cy 

pres distribution to CFC. 

3. Public Justice Foundation

“Public Justice PC pursues high impact lawsuits to combat social and economic 

injustice, protect the Earth’s sustainability, and challenge predatory corporate conduct 

and government abuses.” See Decl. of F. Paul Bland, Doc. No. 96-5, ¶ 3. The Public 

Justice Foundation, a non-profit “charitable membership organization,” “supports Public 

Justice PC’s cutting-edge litigation and educates the public about critical public interest 

issues.” See Decl. of F. Paul Bland, ¶ 4. Both organizations have their headquarters in 

Washington, D.C. Public Justice has litigated “issues that are central to the enforcement 

of the [TCPA],” such as whether “an unaccepted offer of judgment to the named class 

representative [rendered moot] a class action.” See Decl. of F. Paul Bland, ¶ 6. Also, 

Public Justice “filed an amicus brief in Spokeo, Inc. v. Robins, No. 13-1339, 2016 U.S. 

LEXIS 3046 (May 16, 2016),” regarding “Article III challenges to standing in privacy 

injury cases.” See Decl. of F. Paul Bland, ¶ 6. Further, Public Justice “provides 

assistance and information on a pro bono basis to individuals and attorneys who represent 

individuals and classes who have been harassed by violators of the TCPA,” and holds 

educational events regarding “issues involving challenges to abuses of mandatory 

arbitration clauses (a major defense in many privacy injury cases).” See Decl. of F. Paul 

Bland, ¶ 7. The executive director of both organizations, F. Paul Bland, declares under 

penalty of perjury that cy pres funds will be used “to further [the organizations’] 

consumer protection advocacy and education efforts nationwide.” See Decl. of F. Paul 

Bland, ¶ 9. 

Distribution to the Public Justice Foundation bears a sufficiently “substantial nexus 

to the interests of the class members,” particularly based on the organizations’ focus on 

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issues related to enforcement of the TCPA, such as current Article III standing issues, and 

assistance to those whose rights under the TCPA may have been violated. See Lane, 696 

F.3d at 819. Accordingly, the Public Justice Foundation is sufficiently “tethered to the 

nature of the lawsuit and the interests of the silent class members,” such as their interest 

in redressing violations of the TCPA in federal courts. See Nachshin, 663 F.3d at 1039. 

Further, Public Justice’s work benefits consumers nationwide. Thus, the Court approves 

distribution of cy pres funds to the Public Justice Foundation. 

4. Bet Tzedek Legal Services

Lastly, Plaintiff requests the Court approve cy pres distribution to Bet Tzedek 

Legal Services in Los Angeles. Bet Tzedek “is a non-profit legal services program that 

provides free legal services primarily to low-income residents of Southern California.” 

See Doc. No. 96-6, Decl. of Gus T. May, ¶ 4. Gus T. May, the legal director at Bet 

Tzedek, states that the organization represents clients “in numerous legal areas,” such as 

elder law, (specifically, elder financial abuse), real estate fraud, consumer fraud, debtor’s 

rights, debt counseling, housing and government benefits, employment law, (specifically, 

wage theft), human trafficking, and “tax problems resulting from fraud against our 

clients.” See Decl. of Gus T. May, ¶ 7. 

Based on this information, the Court declines to approve cy pres distribution to Bet 

Tzedek. Again, while the organization may support noble causes, cy pres beneficiaries 

must have more than a tenuous connection to the Class and litigation. See Lane, 969 F.3d 

at 821 (stating that in Nachshin and Six (6) Mexican Workers, “the connection between 

the cy pres recipients and the absent class members” was “too tenuous”). Here, based on 

Mr. May’s declaration, Bet Tzedek’s work appears to be insufficiently related to the 

absent Class Members’ interests and the purpose of the TCPA. The organization 

provides legal services in a wide variety of areas, the majority of which are unrelated to 

the invasion of privacy interests contemplated by the TCPA. Also, Bet Tzedek 

admittedly predominately serves residents of Los Angeles, further diminishing the 

likelihood that any Class Member in the nationwide Class would indirectly benefit from 

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the cy pres distribution. See Six (6) Mexican Workers, 904 F.2d at 1308 (stating that cy 

pres “distribution of unclaimed funds” is meant to “indirectly benefit the entire class”); 

see Nachshin, 663 F.3d at 1040 (“The cy pres distribution also fails to target the plaintiff 

class, because it does not account for the broad geographic distribution of the class.”). 

Lastly, Mr. May does not describe for what specific purpose the funds would be used for. 

See Decl. of Gus T. May, ¶ 9 (stating only that the funds, if approved, “will directly 

support these vital legal services”). Unfortunately, for the reasons stated above, the Court 

declines to approve cy pres distribution to Bet Tzedek. 

CONCLUSION

 In sum, the Court GRANTS IN PART and DENIES IN PART Plaintiff’s motion 

for approval of cy pres distribution as set forth above, and further ORDERS that: 

1. New Media Rights and Public Justice Foundation are designated the cy pres

beneficiaries of the remaining balance of the settlement fund and must share 

equally in the cy pres award; and 

2. Kurtzman Carson Consultants, LLC, the claims administrator, must 

promptly distribute the cy pres award to New Media Rights and Public 

Justice Foundation in equal amounts. 

IT IS SO ORDERED.

Dated: May 26, 2017

 _____________________________ 

 Hon. Michael M. Anello 

United States District Judge 

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