Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_15-cv-01111/USCOURTS-cand-5_15-cv-01111-1/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 15:1692 Fair Debt Collection Act

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Case No.: 5:15-cv-01111-EJD

ORDER DENYING MOTION FOR PRELIMINARY APPROVAL OF CLASS 

ACTION SETTLEMENT

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

BETTY BROWN, et al.,

Plaintiffs,

v.

HUNT & HENRIQUES, ATTORNEYS AT 

LAW,

Defendant.

Case No. 5:15-cv-01111-EJD 

ORDER DENYING MOTION FOR 

PRELIMINARY APPROVAL OF CLASS 

ACTION SETTLEMENT

Re: Dkt. No. 22

Plaintiffs Betty Brown and Margie Furuya (collectively, “Plaintiffs”) filed the instant class 

action suit against Defendant Hunt & Henriques, Attorneys at Law (“Defendant”) alleging the 

violation of the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692g(a)(4). 

Presently before the court is Plaintiffs’ Motion for Preliminary Approval of the Class Action 

Settlement, which is unopposed. See Mot., Dkt. No. 22. 

Federal jurisdiction arises pursuant to 15 U.S.C. § 1692k(d) and 28 U.S.C. § 1331. A

hearing on the motion was held on October 8, 2015. Having carefully considered the pleadings 

filed by the parties in conjunction with the hearing, the court finds, concludes and orders as 

follows: 

1. A class action may not be settled without court approval. Fed. R. Civ. P. 23(e). “If 

the proposal would bind class members, the court may approve it only after a hearing and on 

finding that it is fair, reasonable, and adequate.” Id. Where “the parties reach a settlement 

agreement prior to class certification, courts must peruse the proposed compromise to ratify both 

the propriety of the certification and the fairness of the settlement.” Staton v. Boeing Co., 327 

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Case No.: 5:15-cv-01111-EJD

ORDER DENYING MOTION FOR PRELIMINARY APPROVAL OF CLASS 

ACTION SETTLEMENT

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F.3d 938, 952 (9th Cir. 2003). In these instances, “courts must be particularly vigilant not only for 

explicit collusion, but also for more subtle signs that class counsel have allowed pursuit of their 

own self-interests and that of certain class members to infect the negotiations.” Dennis v. Kellogg 

Co., 697 F.3d 858, 864 (9th Cir. 2012) (internal quotations omitted). Thus, “settlement approval 

requires a higher standard of fairness and a more probing inquiry than may normally be required 

under Rule 23(e).” Id. (internal quotations omitted). While the law favors the compromise and 

settlement of class action suits, “the decision to approve or reject a settlement is committed to the 

sound discretion of the trial judge because he is exposed to the litigants and their strategies, 

positions, and proof.” Hanlon v. Chrysler Corp., 150 F.3d 1011, 1026 (9th Cir. 1998). 

2. Here, the parties reached a settlement agreement prior to class certification. In 

perusing the proposed agreement, the court found various deficiencies that raise questions about 

the manner in which this action was settled. First, the record shows that a mediator was appointed 

(see Dkt. No. 19), but Plaintiffs do not provide any information in their motion brief concerning 

the mediation process. At the hearing, the parties stated that they spoke with the mediator, but did 

not actually meet with the mediator. Thus, the court has no information as to the extent and 

quality of the parties’ negotiation efforts, nor any indication of what discovery was undertaken 

before the settlement was reached. 

3. Second, various terms of the proposed settlement agreement are either vague or 

unreasonable without a more specific explanation. The proposed agreement provides that any 

remaining funds will be distributed to a cy pres recipient, but the identity of the cy pres recipient is 

unknown. See Dkt. No. 22-1, Settlement Agreement § 2.3. The proposed agreement also 

provides that the settlement administrator is First Class, Inc., but there is no information as to First 

Class, Inc.’s background and experience as settlement administrator, its connection to the parties, 

or the amount of fees. See id. at § 3.5. Moreover, the proposed agreement provides that the 

settlement checks sent to class members will expire and become void 90 days after the checks are 

mailed. See id. at § 4.3. This 90-day period seems to be an unreasonably short timeframe for 

class members to cash their checks without some justification, and this term is absent from the 

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Case No.: 5:15-cv-01111-EJD

ORDER DENYING MOTION FOR PRELIMINARY APPROVAL OF CLASS 

ACTION SETTLEMENT

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United States District Court

Northern District of California

class notice. 

4. Based on the foregoing, the court DENIES Plaintiffs’ Motion for Preliminary 

Approval of Class Action Settlement. The court notes this is not an exhaustive list of the 

deficiencies identified in the proposed agreement, but is meant to serve as guidance for the parties. 

Plaintiffs have leave to submit a new motion for preliminary approval that addresses the 

deficiencies identified herein, and provides a more detailed analysis under Rule 23 and its related 

authority. In addition, any renewed motion must include a “mock-up” of the class notice in the 

form and layout it will be sent to class members. 

5. The court schedules this case for a Case Management Conference for 10:00 a.m. 

on February 4, 2016. The parties shall file a Joint Case Management Conference Statement on or 

before January 28, 2016. 

IT IS SO ORDERED.

Dated: October 15, 2015 

______________________________________

EDWARD J. DAVILA

United States District Judge

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