United States District Court

For the Northern District of California

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

JOHN C. ETTER, individually and on behalf

of all others similarly situated

Plaintiff,

 v.

ALLSTATE INSURANCE COMPANY, et

al.,

Defendant. /

No. C 17-00184 WHA

ORDER GRANTING

PRELIMINARY APPROVAL

OF CLASS SETTLEMENT

INTRODUCTION

In this TCPA class action, plaintiff moves for preliminary approval of a proposed

settlement agreement. The motion is GRANTED. 

STATEMENT

The background of this action is set forth in prior orders (see, e.g., Dkt. No. 73). In

short, this is a class action by plaintiff John Etter against defendants Allstate Insurance

Company, Allstate Indemnity Company, Allstate Property and Casualty Insurance Company,

Allstate Northbrook Indemnity Company, Allstate Insurance Company of California

(collectively, “Allstate”), and Louis Odiase, an Allstate insurance agent. Etter asserted a single

claim for violation of the Telephone Consumer Protection Act of 1991, as amended by the Junk

Fax Prevention Act of 2005, based on allegations that defendants sent a single unsolicited

facsimile advertisement to Etter on October 11, 2016, without his prior invitation or permission

and without the legally-required opt-out notice language. Odiase works as an independent

contractor for Allstate and sent fax advertisements using fax broadcasters. 

Case 3:17-cv-00184-WHA Document 136 Filed 05/30/18 Page 1 of 5
United States District Court

For the Northern District of California

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On December 26, 2017, the Court certified the following class relating to the October

11, 2016 fax (Dkt. No. 73): 

Class B:

All persons or entities successfully sent a facsimile on or about

October 11, 2016, stating, “potentially save 40–60% off your

Commercial auto insurance,” “fill out the form below” and “FAX

YOUR REQUEST TO: 510-234-0518, TEL 510-234-0516, OR

EMAIL: A026315@ALLSTATE.COM,” and “If you wish to be

removed from our Fax list, please call 888-828-3086.”

Plaintiff has now filed an unopposed motion for preliminary approval of a proposed

class settlement (Dkt. Nos. 131, 133–34). 

ANALYSIS

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

Torrisi v. Tuscon 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 proposed settlement agreement satisfies

these requirements. 

1. BENEFIT TO CLASS MEMBERS.

The proposed settlement agreement establishes a gross settlement fund of $6,533,250

(Dkt. No. 134-1 at 2). Lead counsel intend to seek up to 30 percent of the gross settlement fund

($1,959,975) for attorney’s fees plus reasonable out-of-pocket expenses, as well as an incentive

award of $7,500 for the lead plaintiff — all to be paid, to the extent approved, from the gross

settlement fund (Dkt. No. 131 at 6). Additionally, the requested third-party settlement

administrator estimates administrative costs will amount to $52,940, which would also be paid

from the gross settlement fund (Dkt. No. 134-1 at ¶ 7). The net settlement fund remaining after

these deductions (where one-half of the fee award will be paid only at the wrap-up of the fund

administration) will then be distributed on a pro rata basis to class members, who will each

receive a check in the mail (Dkt. No. 131 at 2). 

Case 3:17-cv-00184-WHA Document 136 Filed 05/30/18 Page 2 of 5
United States District Court

For the Northern District of California

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Any balance remaining after the initial distribution will be redistributed to other class

members on a pro rata basis (Dkt. No. 134-1 ¶ 6). If the amount is less than $10 per class

member, however, and thus “not economically feasible to redistribute,” the remainder will be

paid as cy pres award to either the National Consumer Law Center (plaintiff’s preference) or the

Consumer Federation of America (defendants’ preference), whichever non-profit organization

the Court approves of (Dkt. Nos. 131 at 5, 134-1 ¶ 6). 

Under the proposed settlement agreement, plaintiff will recover a settlement fund based

on gross recovery of $375 per fax, with each class member receiving their pro rata share (Dkt.

No. 131 at 8). Since TCPA provides for statutory damages at $500 per fax (or recovery of the

actual monetary loss, whichever is greater), plaintiff’s gross recovery represents 75 percent of

the best possible outcome the class could have obtained through litigation (see id. at 8–9). See

47 U.S.C. 227(b)(3)(B). The difference between the maximum possible recovery and the gross

settlement fund accounts for the risks and costs of litigation, including the risk that defendants’

affirmative defense might prevail, the accrued fees and expenses of counsel, and the risks and

costs of “inevitable appeals” (Dkt. No. 131 at 8). Given that this proposed settlement

agreement comes after over a year of litigation, discovery, and motion practice, both sides have

had ample opportunity to carefully assess and weigh the relative strengths and weaknesses of

their legal positions. The discounted settlement amount seems to reflect those considerations. 

2. SCOPE OF THE RELEASE.

The proposed settlement agreement defines the class using the same definition set forth

in the class certification order (compare Dkt. No. 73 at 12 with Dkt. No. 134-1 ¶ 3). Moreover,

counsel confirmed during oral argument that the proposed settlement agreement releases only

the certified class claim, despite including the language “any and all claims that were asserted

or could have been asserted in the Litigation” relating to the October 11, 2016 facsimile (see

Dkt. No. 134-1 ¶ 15). The proposed settlement agreement does not release any claims based on

faxes sent on other dates (ibid.). The scope of class definition and release in the proposed

settlement agreement is appropriately tailored and thus falls within the range of possible

approval.

Case 3:17-cv-00184-WHA Document 136 Filed 05/30/18 Page 3 of 5
United States District Court

For the Northern District of California

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3. ATTORNEY’S FEES AND INCENTIVE AWARD.

Plaintiff’s motion indicates that “Class Counsel will request that the Court approve

Plaintiff’s request for attorneys’ fees equal to 30% of the Settlement Fund, or $1,959,975.00,

plus reasonable expenses” (Dkt. No. 131 at 10). In addition, “Class Counsel will also request”

an incentive award “to Plaintiff in the amount of $7,500.00 from the Settlement Fund for

serving as the class representative” (id. at 15). While the prospect of these forthcoming

requests does not prevent preliminary approval at this stage, the parties are advised that the

requested amounts are subject to close scrutiny and potential reduction at the final approval

stage. 

In particular, and as cautioned in the Court’s Notice Regarding Facts to be Evaluated for

Any Proposed Class Settlement, the request for an incentive award to the lead plaintiff is a “red

flag” (Dkt. No. 25). Plaintiff’s requested $7,500 incentive award “amounts to less than $0.50

from each of the 15,276 class members” (Dkt. No. 131 at 16). The proposed settlement

agreement, however, states that the requested amount “will be set by the Court” and that “[t]he

parties have not agreed on any such amounts” (Dkt. No. 134-1 ¶ 11). While helpful that the

settlement agreement is not conditioned on a specific incentive award amount, it does not

automatically eliminate the risk that the proposed award might make a flawed or inadequate

settlement more “palatable” to the lead plaintiff (Dkt. No. 25). Nonetheless, because the

proposed settlement agreement does not provide for an automatic incentive award, no request

for such an award has been made yet, and the settlement agreement is not contingent on the

outcome of any such request, preliminary approval remains appropriate.

4. OTHER CONSIDERATIONS.

Another factor weighing in favor of preliminary approval is that the proposed settlement

agreement came about as a result of extensive mediation efforts supervised by Magistrate Judge

Jacqueline Corley, including two in-person settlement conferences and subsequent deliberations

(Dkt. No. 131 at 3). This background is not dispositive of but nevertheless relevant to the

question of whether this proposed settlement agreement appears to be “the product of serious,

informed, non-collusive negotiations.” See In re Tableware, 484 F. Supp. 2d at 1079. 

Case 3:17-cv-00184-WHA Document 136 Filed 05/30/18 Page 4 of 5
United States District Court

For the Northern District of California

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CONCLUSION

Subject to the foregoing, plaintiff’s unopposed motion for preliminary approval of the

class action settlement is GRANTED. Class-settlement.com is hereby APPOINTED as settlement

administrator. The Court will retain jurisdiction over the litigation and the parties until

DECEMBER 31, 2019. 

By JUNE 6 AT NOON, counsel shall resubmit the proposed notice for Court approval with

the following modifications. First, the proposed notice must include, plainly and

conspicuously, the estimated amount of attorney’s fees, expenses, and incentive award class

counsel expect to request. The estimated amount must be expressed as both a percentage and

dollar amount. Second, in addition to making clear how the requested attorney’s fees, expenses,

incentive award, and administration costs will impact the settlement fund, the notice must

provide clear estimates (also expressed in dollar amounts) of the net amounts that will be

ultimately distributed to class members. All of the foregoing must be explained in plain English

in the notice. The notice should also state in Spanish that a Spanish-language version of the

notice is available at class counsel’s website. Both sides shall agree on the form of translation. 

If counsel submits a revised version of the proposed notice with the foregoing revisions

by May 31 at 5:00 p.m., then the undersigned judge will try to respond by the following day. In

all events, counsel shall submit, along with the proposed notice, a revised proposed timeline for

administering the settlement that takes into account the delay in obtaining Court approval for

said notice. 

The final pretrial conference and trial dates, as well as other pending deadlines in this

action, are hereby VACATED and will be reset if final approval is not granted. 

IT IS SO ORDERED.

Dated: May 30, 2018. WILLIAM ALSUP

UNITED STATES DISTRICT JUDGE

Case 3:17-cv-00184-WHA Document 136 Filed 05/30/18 Page 5 of 5