Anderson-Butler, et al. v. Charming Charlie, Inc., et al.

Filing 15

MEMORANDUM AND ORDER signed by Senior Judge William B. Shubb on 7/29/2015 GRANTING 11 Plaintiffs' Motion for Preliminary Approval of Class Action Settlement. Defendant shall notify class members of the settlement in the manner specified und er section 3.3 of the settlement agreement. All discovery and pretrial proceedings and deadlines, are stayed and suspended until further notice from the court, except for such actions as are necessary to implement the settlement agreement and this O rder. Fairness Hearing is set for 11/2/2015 at 02:00 PM in Courtroom 5 (WBS) before Senior Judge William B. Shubb, to determine whether the settlement agreement should be finally approved as fair, reasonable, and adequate. (See document for further details.) (Kirksey Smith, K)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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HEIDI ANDERSON-BUTLER and
PAULA HAUG on behalf of
themselves and all others
similarly situated,

CIV. NO. 2:14-01921 WBS AC
MEMORANDUM AND ORDER RE: MOTION
FOR PRELIMINARY APPROVAL OF
CLASS ACTION SETTLEMENT

Plaintiffs,

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v.
CHARMING CHARLIE INC., a
Delaware Corporation;
CHARMING CHARLIE LLC, a
Delaware Limited Liability
Company; and DOES 1 through
50, inclusive,

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Defendants.

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Plaintiffs brought this putative class action against
Charming Charlie, LLC,1 alleging defendant illegally required

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Plaintiffs originally named both Charming Charlie,
Inc., and Charming Charlie LLC in error. Charming Charlie, Inc.
no longer exists as a distinct entity because it converted to
Charming Charlie LLC in December 2013. (Def.’s Stmt. at 1
(Docket No. 13).)
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plaintiffs to provide personal information when making a credit

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card purchase in violation of California Civil Code section

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1747.08.

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preliminary approval of the class action settlement.

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I. Factual and Procedural Background

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Presently before the court is plaintiffs’ motion for

Charming Charlie is a retailer selling women’s apparel

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and accessories in stores across the country, including

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California.

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visited Charming Charlie stores located in Chino Hills and

Plaintiffs Heidi Anderson-Butler and Paula Haug

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Folsom, California, respectively.

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items with their credit cards, a clerk told both women they were

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required to provide personal information including their physical

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address, email address, and phone number.

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the information to the clerk.2

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collected information for direct marketing purposes.

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Upon attempting to pay for

Plaintiffs provided

Defendant allegedly used the

Plaintiffs allege defendant violated the Song-Beverly

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Credit Card Act, Cal. Civ. Code § 1747.08, which provides that a

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corporation may not “request, or require as a condition to

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accepting the credit card as payment in full or in part for goods

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or services, the cardholder to provide personal identification

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information, which . . . the corporation . . . causes to be

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written, or otherwise records . . . .”

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lawsuit on behalf of a putative class of consumers in California

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from whom defendant requested personal information during the

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course of credit card transactions.

Plaintiffs brought this

The case settled before the

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Plaintiff Haug refused to provide her physical address
and provided only her telephone number and email address.
(Compl. ¶ 26 (Docket No. 1-2).)
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parties filed any dispositive motions.

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preliminary approval of the parties’ stipulated class-wide

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settlement, pursuant to Federal Rule of Civil Procedure 23(e).

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II. Discussion

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Plaintiffs now seek

Rule 23(e) provides that “[t]he claims, issues, or

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defenses of a certified class may be settled . . . only with the

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court’s approval.”

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involves a two-step process in which the Court first determines

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whether a proposed class action settlement deserves preliminary

Fed. R. Civ. P. 23(e).

“Approval under 23(e)

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approval and then, after notice is given to class members,

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whether final approval is warranted.”

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Coop. v. DIRECTV, Inc., 221 F.R.D. 523, 525 (C.D. Cal. 2004)

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(citing Manual for Complex Litig., Third, § 30.41 (1995)).

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This Order is the first step in that process and

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analyzes only whether the proposed class action settlement

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deserves preliminary approval.

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Co., 266 F.R.D. 468, 473 (E.D. Cal. 2010).

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authorizes the parties to give notice to putative class members

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of the settlement agreement and lays the groundwork for a future

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fairness hearing, at which the court will hear objections to (1)

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the treatment of this litigation as a class action and/or (2) the

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terms of the settlement.

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Pac. Islands, 876 F.2d 1401, 1408 (9th Cir. 1989) (stating that a

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district court’s obligation when considering dismissal or

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compromise of a class action includes holding a hearing to

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“inquire into the terms and circumstances of any dismissal or

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compromise to ensure that it is not collusive or prejudicial”).

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The court will reach a final determination as to whether the

Nat’l Rural Telecomms.

See Murillo v. Pac. Gas & Elec.
Preliminary approval

See id.; Diaz v. Trust Territory of

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parties should be allowed to settle the class action on their

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proposed terms after that hearing.

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The Ninth Circuit has declared a strong judicial policy

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favoring settlement of class actions.

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of Seattle, 955 F.2d 1268, 1276 (9th Cir. 1992).

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where, as here, “the parties reach a settlement agreement prior

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to class certification, courts must peruse the proposed

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compromise to ratify both [1] the propriety of the certification

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and [2] the fairness of the settlement.”

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Class Plaintiffs v. City
Nevertheless,

Staton v. Boeing Co.,

327 F.3d 938, 952 (9th Cir. 2003).
The first part of this inquiry requires the court to

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“pay ‘undiluted, even heightened, attention’ to class

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certification requirements” because, unlike in a fully litigated

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class action suit, the court “will lack the opportunity . . . to

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adjust the class, informed by the proceedings as they unfold.”

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Amchem Prods. Inc. v. Windsor, 521 U.S. 591, 620 (1997); see

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Hanlon v. Chrysler Corp., 150 F.3d 1011, 1019 (9th Cir. 1998).

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The parties cannot “agree to certify a class that clearly leaves

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any one requirement unfulfilled,” and consequently the court

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cannot blindly rely on the fact that the parties have stipulated

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that a class exists for purposes of settlement.

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U.S. at 621-22 (stating that courts cannot fail to apply the

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requirements of Rule 23(a) and (b)).

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See Windsor, 521

The second part of this inquiry obliges the court to

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“carefully consider ‘whether a proposed settlement is

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fundamentally fair, adequate, and reasonable,’ recognizing that

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‘[i]t is the settlement taken as a whole, rather than the

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individual component parts, that must be examined for overall
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fairness . . . .’”

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F.3d at 1026); see also Fed. R. Civ. P. 23(e) (outlining class

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action settlement procedures).

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Staton, 327 F.3d at 952 (quoting Hanlon, 150

A. Class Certification
A class action will be certified only if it meets the

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four prerequisites identified in Rule 23(a) and additionally fits

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within one of the three subdivisions of Rule 23(b).

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Ontiveros v. Zamora, Civ. No. 2:08-567 WBS DAD, 2014 WL 3057506,

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at *4 (E.D. Cal. July 7, 2014); Fed. R. Civ. P. 23(a)-(b).

See

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Although a district court has discretion in determining whether

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the moving party has satisfied each Rule 23 requirement, see

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Califano v. Yamasaki, 442 U.S. 682, 701 (1979); Montgomery v.

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Rumsfeld, 572 F.2d 250, 255 (9th Cir. 1978), the court must

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conduct a rigorous inquiry before certifying a class, see Gen.

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Tel. Co. of Sw. v. Falcon, 457 U.S. 147, 161 (1982); E. Tex.

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Motor Freight Sys. v. Rodriguez, 431 U.S. 395, 403–05 (1977).

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1. Rule 23(a) Requirements

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Rule 23(a) restricts class actions to cases where:

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(1) the class is so numerous that joinder of all
members is impracticable; (2) there are questions of
law or fact common to the class; (3) the claims or
defenses of the representative parties are typical of
the claims or defenses of the class; and (4) the
representative parties will fairly and adequately
protect the interests of the class.

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Fed. R. Civ. P. 23(a).

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a. Numerosity
Under the first requirement, “[a] proposed class of at
least forty members presumptively satisfies the numerosity
requirement.”

Avilez v. Pinkerton Gov’t Servs., 286 F.R.D. 450,

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456 (C.D. Cal. 2012); see also, e.g., Collins v. Cargill Meat

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Solutions Corp., 274 F.R.D. 294, 300 (E.D. Cal. 2011) (Wanger,

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J.) (“Courts have routinely found the numerosity requirement

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satisfied when the class comprises 40 or more members.”).

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proposed class, which the plaintiffs estimate will contain

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approximately 200,000 members, (see Pls.’ Mem. at 1 (Docket No.

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11-1)), easily satisfies this requirement.

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The

b. Commonality
Commonality requires that the class members’ claims

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“depend upon a common contention” that is “capable of classwide

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resolution--which means that determination of its truth or

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falsity will resolve an issue that is central to the validity of

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each one of the claims in one stroke.”

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Dukes, 131 S. Ct. 2541, 2550 (2011).

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and law need not be common to satisfy the rule,” and the

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“existence of shared legal issues with divergent factual

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predicates is sufficient, as is a common core of salient facts

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coupled with disparate legal remedies within the class.”

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150 F.3d at 1019.

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Wal-Mart Stores, Inc. v.
“[A]ll questions of fact

Hanlon,

The proposed class includes “[a]ll persons who, between

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July 9, 2013 and the date of entry of the Preliminary Approval

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Order, engaged in a credit card transaction at a California

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Charming Charlie Store and whose Personal Identification

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Information was requested and recorded by Charming Charlie at the

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Charming Charlie Store for purposes other than shipping, delivery

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or special orders.”

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comprised of individuals alleging facts similar to the named

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plaintiffs, that a Charming Charlie clerk asked for personal

(Pls.’ Mem. at 1-2.)

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The class would be

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information in conjunction with a credit card transaction.

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class members’ claims depend on a common contention that

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requesting and recording this information violated section

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1747.08.

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class-wide basis.

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a civil penalty of no greater than $250 for the first violation

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and $1,000 for subsequent violations).

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therefore meets the commonality requirement.

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c. Typicality

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The

Lastly, the statutory damages could be resolved on a
See Cal. Civ. Code § 1747.08(e) (providing for

The proposed class

Typicality requires that named plaintiffs have claims

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“reasonably coextensive with those of absent class members,” but

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their claims do not have to be “substantially identical.”

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Hanlon, 150 F.3d at 1020.

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other members have the same or similar injury, whether the action

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is based on conduct which is not unique to the named plaintiffs,

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and whether other class members have been injured by the same

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course of conduct.’”

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508 (9th Cir. 1992) (citation omitted).

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The test for typicality “‘is whether

Hanon v. Dataproducts Corp., 976 F.2d 497,

The putative class members allege a simple set of facts

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that are similar to those alleged by the named plaintiffs.

The

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class injury for all class members was being asked to provide

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personal information in connection to a credit card transaction,

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which was then recorded.

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conduct of the store clerk.

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statutory damages, which would presumably be the same award for

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each individual injury.

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conceivably be nuances with respect to a class member’s

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experience at a Charming Charlie store, class members’ claims

Such injury was caused by the same
Plaintiffs seek the remedy of

(See Compl. at 10.)

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While there could

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appear to be reasonably coextensive with those of the named

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plaintiffs.

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requirement.

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The proposed class therefore meets the typicality

d. Adequacy of Representation

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Finally, to resolve the question of adequacy, the court

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must make two inquiries: “(1) do the named plaintiffs and their

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counsel have any conflicts of interest with other class members

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and (2) will the named plaintiffs and their counsel prosecute the

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action vigorously on behalf of the class?”

Hanlon, 150 F.3d at

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1020.

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factors, including “the qualifications of counsel for the

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representatives, an absence of antagonism, a sharing of interests

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between representatives and absentees, and the unlikelihood that

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the suit is collusive.”

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390 (9th Cir. 1992).

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These questions involve consideration of a number of

Brown v. Ticor Title Ins., 982 F.2d 386,

The named plaintiffs’ interests are generally aligned

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with the putative class members.

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suffered a similar injury as the named plaintiffs, and the

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definition of the class is narrowly tailored and aligns with the

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named plaintiffs’ interests.

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(“[A] class representative must be part of the class and possess

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the same interest and suffer the same injury as the class

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members.”); Murillo, 266 F.R.D. at 476 (finding that an

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appropriate class definition ensured that “the potential for

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conflicting interests will remain low while the likelihood of

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shared interests remains high”).

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The putative class members

See Windsor, 521 U.S. at 625–26

The settlement agreement provides for an incentive
award of $5,000 to each of the named plaintiffs, to be paid
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separate from and in addition to the class recovery of $350,000

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in vouchers.

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approved the award of “reasonable incentive payments” to named

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plaintiffs, the use of an incentive award nonetheless raises the

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possibility that plaintiffs’ interest in receiving that award

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will cause their interests to diverge from the class’s interest

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in a fair settlement.

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approve a settlement agreement where size of incentive award

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suggested that named plaintiffs were “more concerned with

Although the Ninth Circuit has specifically

Staton, 327 F.3d at 977–78 (declining to

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maximizing [their own] incentives than with judging the adequacy

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of the settlement as it applies to class members at large”).

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a result, the court must “scrutinize carefully the awards so that

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they do not undermine the adequacy of the class representatives.”

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Radcliffe v. Experian Info. Sys., Inc., 715 F.3d 1157, 1163 (9th

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Cir. 2013).

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As

An incentive award of $5,000 to each of the named

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plaintiffs does not on its face appear to create a conflict of

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interest.

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payments are reasonable.”

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08-0844 EDL, 2009 WL 928133, at *10 (N.D. Cal. Apr. 3, 2009)

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(citing In re Mego Fin. Corp. Sec. Litig., 213 F.3d 454, 463 (9th

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Cir. 2000); In re SmithKline Beckman Corp., 751 F. Supp. 525, 535

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(E.D. Pa. 1990); Alberto v. GMRI, Inc., 252 F.R.D. 652, 669 (E.D.

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Cal. 2008)).

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“In general, courts have found that $5,000 incentive
Hopson v. Hanesbrands Inc., Civ. No.

While the proposed award amount tends to be viewed as

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reasonable in the Ninth Circuit, it is disproportionate to the

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recovery of other class members.

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Buy Stores, L.P., 291 F.R.D. 443, 463 (E.D. Cal. 2013) (England,

See, e.g., Monterrubio v. Best

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J.) (finding $7,500 incentive award unreasonable when average

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class member would receive $65.79 and reducing the award to

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$2,500).

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17,500 or fewer authorized claimants, then each will receive a

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$20 store voucher.

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the value of each voucher shall be reduced pro rata.

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represent that their discovery and investigation have revealed

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that the class is comprised of approximately 200,000 individuals.

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(Pls.’ Mem. at 1.)

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The settlement agreement provides that if there are

If there are greater than 17,500 claimants,
Plaintiffs

If all of the estimated 200,000 class members

participate, then each member will recover a $1.75 voucher.
Plaintiffs’ counsel anticipates that only 5 to 10% of

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class members will actually return the claim form to the Claim

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Administrator.

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average recovery should be based on such a small portion of the

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putative class.

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class certification that the class contains 200,000 members

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eligible to recover, which they state is an informed estimate

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based on discovery and investigation.

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hearing, plaintiffs’ counsel was unable to explain to the court’s

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satisfaction why, given his experience with the method of notice

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used in this case, such a small proportion of class members tend

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to file claims.

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preliminary stage that the expected recovery amount per class

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member is a $1.75 voucher.

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(Pls.’ Mem. at 7.)

The court questions why the

Plaintiffs have represented for the purpose of

(Id. at 1.)

At the

The court will therefore assume at this

In their moving papers, plaintiffs do not provide a

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justification for such a comparatively high incentive award of

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$5,000 to each of the named plaintiffs.

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vaguely notes that the awards are for financial risk and the time
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The settlement agreement

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and effort spent on the litigation, without any further

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explanation.

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provide the court with further guidance.

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award is not dispositive of the named plaintiffs’ adequacy of

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representation, the court will further explore the

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appropriateness of the award at the final fairness hearing.

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Alberto, 252 F.R.D. at 662-63, 669 (certifying plaintiff as an

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adequate class representative “pending the introduction at the

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final fairness hearing of evidence in support of counsel’s

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At the hearing plaintiffs’ counsel failed to
While the incentive

See

findings”).

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Accordingly, the court preliminarily finds that the

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proposed incentive award does not render plaintiffs inadequate

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representatives of the class.

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fairness hearing, however, the parties shall present or be

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prepared to present evidence of the named plaintiffs’ asserted

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“financial risk” and of named plaintiffs’ efforts taken as class

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representatives, such as their hours of service or an itemized

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list of their activities, to justify the discrepancy between

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their award and those of the absent class members.3

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On or before the date of the

The second prong of the adequacy inquiry examines the

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vigor with which the named plaintiff and her counsel have pursued

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the common claims.

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which ‘vigor’ can be assayed, considerations include competency

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of counsel and, in the context of a settlement-only class, an

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“Although there are no fixed standards by

Relevant factors for the evaluation of the amount of
incentive payments made to the named plaintiff include “the
actions the plaintiff has taken to protect the interests of the
class, the degree to which the class has benefitted from those
actions, . . . and reasonabl[e] fear[s of] workplace
retaliation.” Staton, 327 F.3d at 977 (citation omitted).
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assessment of the rationale for not pursuing further litigation.”

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Hanlon, 150 F.3d at 1021.

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Plaintiffs’ counsel states he has represented millions

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of consumers in numerous class actions asserting violations of

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California’s consumer protection statutes.

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In the last decade, counsel has brought twenty class actions

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under the Song-Beverly Act to judgment.

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no reason to doubt that plaintiffs’ attorney is well qualified to

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conduct the proposed litigation and assess the value of the

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(Pls.’ Mem. at 7.)

(Id.)

The court finds

settlement.

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Plaintiffs’ counsel asserts that to arrive at his

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decision to settle the action, he seriously considered the risks

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of further litigation.

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exceptions to section 1747.08 that could preclude recovery of the

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full permissible civil penalty, and class certification would be

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challenged.

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along with the strength of the case to arrive at the decision to

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settle.

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these factors weighed in favor of settlement.

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plaintiffs and their counsel appear to be prepared to prosecute

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the action vigorously on behalf of the class.

Counsel recognized that there are

(Pls.’ Mem. at 5.)

(Id. at 4-5.)

Counsel weighed these risks

At this stage, the court agrees that
The named

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2. Rule 23(b)

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An action that meets all the prerequisites of Rule

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23(a) may only be certified as a class action if it also

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satisfies the requirements of one of the three subdivisions of

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Rule 23(b).

Leyva v. Medline Indus. Inc., 716 F.3d 510, 512 (9th

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Cir. 2013).

Plaintiffs presumably seek certification under Rule

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23(b)(3), which provides that a class action may be maintained
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only if (1) “the court finds that questions of law or fact common

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to class members predominate over questions affecting only

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individual members” and (2) “that a class action is superior to

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other available methods for fairly and efficiently adjudicating

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the controversy.”

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Fed. R. Civ. P. 23(b)(3).

a. Predominance

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“Because Rule 23(a)(3) already considers commonality,

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the focus of the Rule 23(b)(3) predominance inquiry is on the

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balance between individual and common issues.”

Murillo, 266

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F.R.D. at 476 (citing Hanlon, 150 F.3d at 1022); see also

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Windsor, 521 U.S. at 623 (“The Rule 23(b)(3) predominance inquiry

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tests whether proposed classes are sufficiently cohesive to

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warrant adjudication by representation.”).

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The class members’ contentions appear to be similar, if

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not identical.

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members’ allegations could exist, there is no indication that

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those variations are “sufficiently substantive to predominate

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over the shared claims.”

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plaintiffs refused to give the clerk her home address but still

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provided other information.

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that personal information be requested and then recorded for a

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violation to occur.

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number and another a home address is not material to the shared

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claims.

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law and fact predominate over the class members’ claims.

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Again, although some nuances among the class

See id.

For instance, one of the named

The statute, however, requires only

Whether one plaintiff provided a telephone

Accordingly, the court finds that common questions of

b. Superiority
Rule 23(b)(3) also requires a showing that “a class
action is superior to other available methods for fairly and
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efficiently adjudicating the controversy.”

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(3).

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making this determination:

It sets forth four non-exhaustive factors to consider in

(A) the class members’ interests in individually
controlling the prosecution or defense of separate
actions; (B) the extent and nature of any litigation
concerning the controversy already begun by or against
class members; (C) the desirability or undesirability
of concentrating the litigation of the claims in the
particular forum; and (D) the likely difficulties in
managing a class action.

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5
6
7
8
9

Fed. R. Civ. P. 23(b)

Id.

The parties settled this action prior to certification,

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making factors (C) and (D) inapplicable.

See Murillo, 266 F.R.D.

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at 477 (citing Windsor, 521 U.S. at 620).

Section 1747.08 limits

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an individual’s recovery of statutory civil penalties to $250 for

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the first violation, see Cal. Civ. Code § 1747.08(e), so most

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class members’ recovery would be relatively small, and they might

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have little interest in controlling the prosecution of separate

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actions.

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already begun by class members regarding 1747.08 violations at

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Charming Charlie stores.

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reveal otherwise.

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stage, the class action device appears to be the superior method

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for adjudicating this controversy.

The court is also unaware of any concurrent litigation

Objectors at the fairness hearing may

See Alberto, 252 F.R.D. at 664.

At this

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3. Rule 23(c)(2) Notice Requirements

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If the court certifies a class under Rule 23(b)(3), it

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“must direct to class members the best notice that is practicable

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under the circumstances, including individual notice to all

26

members who can be identified through reasonable effort.”

27

R. Civ. P. 23(c)(2)(B).

Fed.

Rule 23(c)(2) governs both the form and

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14

1

content of a proposed notice.

2

651, 658 (N.D. Cal. 1997) (citing Eisen v. Carlisle & Jacquelin,

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417 U.S. 156, 172–77 (1974)).

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“reasonably certain to inform the absent members of the plaintiff

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class,” actual notice is not required.

6

1449, 1454 (9th Cir. 1994) (citation omitted).

7

See Ravens v. Iftikar, 174 F.R.D.

Although that notice must be

Silber v. Mabon, 18 F.3d

The settlement agreement provides that the Claims

8

Administrator will provide notice to the class using several

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methods: (1) via a website displaying full notice of the

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settlement, the claim form, the settlement agreement, and other

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court filings; (2) by email, to class members for whom defendant

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collected a valid email address; (3) by U.S. mail, to class

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members for whom defendant collected a valid mailing address; and

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(4) by displaying a sign in all of California Charming Charlie

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stores in a location visible to customers.

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Ex. 1 (“Settlement Agreement”) at 9 (Docket No. 11-3).)

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eligible to receive a voucher, class members must accurately

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complete and submit a claim form to the Claims Administrator by

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mail or e-mail within forty-five calendar days after the notice

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period has closed.

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providing notice is reasonably calculated to provide notice to

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class members and is the best form of notice available under the

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circumstances.

24

(See Lindsay Decl.
To be

The court is satisfied that this system of

The parties supplied the full “Notice of Class Action

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and Proposed Settlement,” (Lindsay Decl. Ex. B), which will be

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available on the settlement website.

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the proceedings; defines the scope of the class; informs the

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class member of the claim form requirement and the binding effect
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The full notice explains

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of the class action; describes the procedure for opting out and

2

objecting; and provides the time and date of the fairness

3

hearing.

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23(c)(2)(B).

5

Vill., L.L.C. v. Gen. Elec., 361 F.3d 566, 575 (9th Cir. 2004)

6

(“Notice is satisfactory if it ‘generally describes the terms of

7

the settlement in sufficient detail to alert those with adverse

8

viewpoints to investigate and to come forward and be heard.’”

9

(quoting Mendoza v. Tucson Sch. Dist. No. 1, 623 F.2d 1338, 1352

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11

The content of the full notice therefore satisfies Rule
See Fed. R. Civ. P. 23(c)(2)(B); see also Churchill

(9th Cir. 1980)).
B. Preliminary Settlement Approval

12

After determining that the proposed class satisfies the

13

requirements of Rule 23, the court must determine whether the

14

terms of the parties’ settlement appear fair, adequate, and

15

reasonable.

16

1026.

17

factors,” including:

18
19
20
21
22

See Fed. R. Civ. P. 23(e)(2); Hanlon, 150 F.3d at

This process requires the court to “balance a number of

the strength of the plaintiff’s case; the risk,
expense, complexity, and likely duration of further
litigation; the risk of maintaining class action
status throughout the trial; the amount offered in
settlement; the extent of discovery completed and the
stage of the proceedings; the experience and views of
counsel; the presence of a governmental participant;
and the reaction of the class members to the proposed
settlement.

23
24
25
26
27
28

Hanlon, 150 F.3d at 1026.

Many of these factors cannot be

considered until the final fairness hearing, so the court need
only conduct a preliminary review at this time to resolve any
“glaring deficiencies” in the settlement agreement before
authorizing notice to class members.
16

Ontiveros, 2014 WL 3057506,

1

at *12 (citing Murillo, 266 F.R.D. at 478).

2
3

1. Terms of the Settlement Agreement
(1)

Settlement Class:

All persons who, between July 9, 2013

4

and the date of entry of the Preliminary Approval Order,

5

engaged in a credit card transaction at a California

6

Charming Charlie Store and whose personal identification

7

information was requested and recorded by Charming

8

Charlie and the Charming Charlie Store for purposes other

9

than shipping, delivery, or special orders.

10
11

(Pls.’ Mem.

at 2.)
(2)

Notice:

Within thirty days of the court’s granting

12

preliminary approval, the Claims Administrator will

13

provide notice to class members using the methods

14

detailed above, all of which will direct class members to

15

the class settlement website for further information.

16

The class settlement website will be active for a minimum

17

of forty-five days.

18

(3)

Opt-out Procedure:

(Settlement Agreement ¶ 3.3.)
To opt out of the settlement, a class

19

member must, within forty-five after the last day for

20

notice to be provided, submit by U.S. mail a letter or

21

postcard addressed to the Claims Administrator indicating

22

(a) the name and case number of the action; (b) the full

23

name, address, and telephone number of the person

24

requesting exclusion; and (c) a statement that he/she

25

does not wish to participate in the Settlement.

26

than 200 class members request exclusion, then Charming

27

Charlie may elect to terminate the settlement agreement.

28

(Id. ¶ 3.10.)
17

If more

1

(4)

Objections to Settlement:

Any class member who has not

2

submitted a timely written exclusion request and who

3

wishes to object to the fairness, reasonableness, or

4

adequacy of the settlement must deliver written

5

objections to class counsel and defendant’s counsel, and

6

must file such objection with the court, no later than

7

forty-five calendar days after the last day for notice to

8

be provided.

9

information, a statement of each objection, and a written

Written objections must include identifying

10

brief detailing legal and factual support the objector

11

wishes to bring to the court’s attention.

12

who has objected in writing has the option of appearing

13

at the fairness hearing in person or through counsel.

14

However, a class member intending to object at the

15

hearing must file with the court a “Notice of Intention

16

to Appear” no later than forty-five calendar days after

17

the last day for notice to be provided.

18

(5)

Settlement Amount:

A class member

(Id. ¶ 3.9.)

Defendant agrees to comply with

19

section 1747.08 in its California stores, although the

20

agreement does not require defendant to notify plaintiffs

21

of changes to its policies, practices, and procedures.

22

In addition, defendant will pay up to $350,000 in the

23

form of store vouchers to class members valid for six

24

months after issuance and redeemable for in-store

25

purchases of merchandise at Charming Charlie stores.

26

amount of each voucher will depend on the number of class

27

members who return the claim form.

28

claimants, each will receive a $20 voucher.
18

The

If there are 17,500
The

1

remainder will be redistributed as “remainder vouchers.”

2

If there are greater than 17,500 claimants, the value of

3

each voucher shall be reduced pro rata.

4

there are 20,000 claimants, each will receive a $17.50

5

voucher.

6

(6)

For example, if

(Id. ¶¶ 2.1-2.2.)

Attorney’s Fees, Costs, and Plaintiffs’ Incentive Award:

7

Plaintiffs will apply to the court for an award of

8

attorney’s fees and costs of $140,000 total to be paid

9

separate and apart from the award to the class.

10

Defendant agrees not to oppose class counsel’s

11

application.

12

not oppose, an incentive award of $5,000 to each of the

13

named plaintiffs to be paid separate and apart from the

14

award to the class.

15

(7)

Release:

Plaintiffs also request, and defendant does

(Id. ¶ 2.4.)

Class members who participate in the settlement

16

who have not timely opted out agree to release from

17

claims arising out of acts, omissions, or other conduct

18

that could have been alleged or otherwise referred to in

19

the action, including but not limited to any and all

20

violations of California Civil Code Section 1747.8.

21

2. Preliminary Determination of Adequacy

22

At the preliminary stage, “the court need only

23

‘determine whether the proposed settlement is within the range of

24

possible approval.’”

25

Gautreaux v. Pierce, 690 F.2d 616, 621 n.3 (7th Cir. 1982)).

26

This generally requires consideration of “whether the proposed

27

settlement discloses grounds to doubt its fairness or other

28

obvious deficiencies, such as unduly preferential treatment of

Murillo, 266 F.R.D. at 479 (quoting

19

1

class representatives or segments of the class, or excessive

2

compensation of attorneys.”

3

Inc., Civ. No. 04-0438 WBS GGH, 2006 WL 1652598, at *11-12 (E.D.

4

Cal. June 13, 2006)).

5

process that led to the settlement’s terms to ensure that those

6

terms are “the result of vigorous, arms-length bargaining” and

7

then turn to the substantive terms of the agreement.

8

West, 2006 WL 1652598, at *11-12; In re Tableware Antitrust

9

Litig., 484 F. Supp. 2d 1078, 1080 (N.D. Cal. 2007)

Id. (quoting W. v. Circle K Stores,

Courts often begin by examining the

See, e.g.,

10

(“[P]reliminary approval of a settlement has both a procedural

11

and a substantive component.”).

12

a. Negotiation of the Settlement Agreement

13

Prior to settling, the parties engaged in some formal

14

discovery, (Lindsay Decl. ¶ 3), which presumably informed the

15

parties’ decision to settle.

16

settlement is the result of arms-length settlement negotiations,

17

including a full day of mediation before a former San Diego

18

superior court judge with significant experience in consumer

19

class actions.

20

Fleur v. Med. Mgmt. Int’l, Inc., Civ. No. 5:13-00398, 2014 WL

21

2967475, at *4 (N.D. Cal. June 25, 2014) (“Settlements reached

22

with the help of a mediator are likely non-collusive.”).

23

Plaintiffs’ counsel state that the settlement was reached after

24

“strenuous advocacy of the litigation and extensive

25

negotiations.”

26

plaintiffs and he took into account the uncertain outcome and

27

risks of litigation, particularly the delay often inherent in

28

class actions.

The parties represent that the

(Id.; Def.’s Stmt. at 3 (Docket No. 13)); see La

(Lindsay Decl. ¶ 5.)

(Id. ¶ 4.)

He declares that both

In light of these considerations, the
20

1

court finds no reason to doubt the parties’ representations that

2

the settlement was the result of vigorous, arms-length

3

bargaining.

4

b. Amount Recovered and Distribution

5

In determining whether a settlement agreement is

6

substantively fair to the class, the court must balance the value

7

of expected recovery against the value of the settlement offer.

8

See Tableware, 484 F. Supp. 2d at 1080.

9

consideration of the uncertainty class members would face if the

10

case were litigated to trial.

11

This inquiry may involve

*14.

12

See Ontiveros, 2014 WL 3057506, at

Section 1747.08 provides that “[a]ny person who

13

violates this section shall be subject to a civil penalty not to

14

exceed two hundred fifty dollars ($250) for the first violation

15

and one thousand dollars ($1,000) for each subsequent violation .

16

. . .”

17

estimate is correct and the class is comprised of 200,000 members

18

who can prove one-time-only violations, then prevailing at trial

19

would lead to a recovery of $250 per class member, or $50

20

million.

21

Cal. Civ. Code § 1747.08(e).

Assuming that plaintiffs’

The expected recovery as a result of the settlement is

22

a voucher with the maximum value of $20, redeemable at a Charming

23

Charlie retail establishment in California.

24

will be reduced pro rata if greater than 17,500 class members

25

submit claims.

26

the numbers of class members is approximately 200,000.

27

Mem. at 1.)

28

then individual recovery will be $1.75.

Individual recovery

Again, plaintiffs state that discovery revealed
(Pls.’

If all 200,000 proposed class members submit claims,

21

The contrast between the

1

value of expected recovery and the value of the settlement offer

2

is stark.

3

Even if fewer than 200,000 class members submit claim

4

forms, and individual recovery is higher than $1.75, there are

5

concerns regarding the adequacy of the settlement.

6

settlement is technically opt out, in that a class member must

7

affirmatively opt out of the class or else they will be bound by

8

judgment.

9

who fails to timely opt out automatically releases defendant from

This

The settlement agreement provides that a class member

10

their claims under section 1747.08 or any claims arising from

11

conduct that could have been alleged or referred to in the

12

Complaint.

13

also, however, take the affirmative step of submitting a claim

14

form to recover a voucher.

15

only 5 to 10% of class members return claim forms, 90% of class

16

members, upon taking no action, will opt in by default and

17

release defendant but get no recovery simply because they fail to

18

timely return the claim form.

19

(settlement agreement ¶ 4.4.)

A class member must

If, as plaintiff’s counsel projects,

There are some uncertainties in this litigation.

20

Firstly, it appears that under section 1747.08, no civil penalty

21

shall be assessed if the defendant can show by a preponderance of

22

the evidence that the violation was not intentional and resulted

23

from a bona fide error.

24

have also held that section 1747.08 is violated “only if the

25

request [for personal information] is made under circumstances in

26

which the customer could reasonably understand that the email

27

address was required to process the credit card transaction . . .

28

.”

Cal. Civ. Code § 1747.08(e).

Courts

Harold v. Levi Strauss & Co., 236 Cal. App. 4th 1259, 1268
22

1

(1st Dist. 2015).

2

they reasonably believed that payment by credit card was

3

conditioned on providing personal information.

4

plaintiffs’ counsel notes broadly that “certifying a class is

5

risky,” that “trial would likely consume several weeks with

6

uncertain results,” and that the actual penalty awarded “could be

7

very small under certain circumstances,” without much further

8

elaboration. (See Pls.’ Mem. at 5.)

9

Under this view, plaintiffs prevail only if

Moreover,

In light of these albeit unelaborated uncertainties,

10

the court will grant preliminary approval to the settlement

11

because it is within the range of possible approval.

12

266 F.R.D. at 479 (quoting Gautreaux v. Pierce, 690 F.2d 616, 621

13

n.3 (7th Cir. 1982)).

14

prepared to explain to the court, either before or at the

15

fairness hearing, why the settlement is adequate given the stark

16

disparity between the settlement amount and the apparent value of

17

the case.

18

to the court all risks and uncertainties with specificity, as

19

well as an explanation for why the civil penalty awarded at trial

20

would likely be “very small” under these circumstances, as

21

plaintiffs vaguely suggested.

22

Murillo,

However, plaintiffs’ counsel should be

In particular, counsel should be prepared to explain

c. Attorney’s Fees

23

If a negotiated class action settlement includes an

24

award of attorneys’ fees, that fee award must be evaluated in the

25

overall context of the settlement.

26

312 F.3d 1123, 1126 (9th Cir. 2002); Monterrubio, 291 F.R.D. at

27

455.

28

the award, like the settlement itself, is reasonable, even if the

Knisley v. Network Assocs.,

The court “ha[s] an independent obligation to ensure that

23

1

parties have already agreed to an amount.”

2

Headset Prods. Liab. Litig., 654 F.3d 935, 941 (9th Cir. 2011).

3

In re Bluetooth

The settlement agreement provides that plaintiffs’

4

counsel will apply to the court for a fee award of up to

5

$140,000, to be paid by defendant separate and apart from the

6

recovery of the class.

7

award.

8

Defendant has agreed not to oppose this

In deciding the attorney’s fees motion, the court will

9

have the opportunity to assess whether the requested fee award is

10

reasonable, by multiplying a reasonable hourly rate by the number

11

of hours counsel reasonably expended.

12

Mut. Life. Co., 214 F.3d 1041, 1045 (9th Cir. 2000).

13

this lodestar calculation, the court may take into account

14

factors such as the “degree of success” or “results obtained” by

15

plaintiff’s counsel.

16

879 F.2d 481, 488 (9th Cir. 1988).

17

the fees motion, finds that the amount of the settlement warrants

18

a fee award at a rate lower than what plaintiffs’ counsel

19

requested, then it will reduce the award accordingly.

20

will therefore not evaluate the fee award at length here in

21

considering whether the settlement is adequate.

22

See Van Gerwen v. Gurantee
As part of

See Cunningham v. County of Los Angeles,
If the court, in ruling on

The court

IT IS THEREFORE ORDERED that plaintiffs’ motion for

23

preliminary certification of a conditional settlement class and

24

preliminary approval of the class action settlement be, and the

25

same hereby is, GRANTED.

26

IT IS FURTHER ORDERED that:

27

(1) Defendant shall notify class members of the

28

settlement in the manner specified under section 3.3 of the
24

1

settlement agreement;

2

(2) Class members who want to receive a voucher under

3

the settlement agreement must accurately complete and deliver a

4

Claim Form to the Claims Administrator no later than forty-five

5

(45) calendar days after the last day for notice to be provided

6

under section 3.3(b) and (c) of the settlement agreement;

7

(3) Class members who have not submitted a timely

8

written exclusion request and who want to object to the

9

settlement agreement must deliver written objections to class

10

counsel and Charming Charlie’s counsel, and must file such

11

objection with the Court, no later than forty-five (45) calendar

12

days after the last day for notice to be provided under Section

13

3.3(b) and (c) of the settlement agreement.

14

deemed to be the date the objection is deposited in the U.S. Mail

15

as evidenced by the postmark.

16

the name and case number of the Action “Anderson-Butler v.

17

Charming Charlie, Inc., Case No. 14-cv-01921-WBS-AC”; (b) the

18

full name, address, and telephone number of the person objecting;

19

(c) the words “Notice of Objection” or “Formal Objection”; and

20

(d) in clear and concise terms, the legal and factual arguments

21

supporting the objection, including an attestation under the

22

penalty of perjury of facts demonstrating that the person

23

objecting is a class member.

24

serves a written objection, as described in this paragraph, may

25

appear at the fairness hearing, either in person or through

26

personal counsel hired at the class member’s expense, to object

27

to the settlement agreement.

28

intending to make an appearance at the fairness hearing, however,

The delivery date is

The objection must include: (a)

Any class member who files and

Class members, or their attorneys,

25

1

must also deliver to class counsel and Charming Charlie’s

2

counsel, and file with the court, no later than forty-five (45)

3

calendar days after the last day for notice to be provided under

4

Section 3.3(b) and (c) of the settlement agreement, a Notice of

5

Intention to Appear.

6

timely Notices of Intention to Appear may speak at the fairness

7

hearing.

8

the lawsuit’s appropriateness or merits.

9

Only class members who file and serve

The objection will not be valid if it only objects to

(4) Class members who fail to object to the settlement

10

agreement in the manner specified above will: (1) be deemed to

11

have waived their right to object to the settlement agreement;

12

(2) be foreclosed from objecting (whether by a subsequent

13

objection, intervention, appeal, or any other process) to the

14

settlement agreement; and (3) not be entitled to speak at the

15

fairness hearing.

16

(5) Class members who want to be excluded from the

17

settlement must send a letter or postcard to the Claims

18

Administrator stating: (a) the name and case number of the Action

19

“Anderson-Butler v. Charming Charlie, Inc., Case No. 14-cv-01921-

20

WBS-AC”; (b) the full name, address, email address, and telephone

21

number of the person requesting exclusion; and (c) a statement

22

that the person does not wish to participate in the Settlement,

23

postmarked no later than forty-five (45) calendar days after the

24

last day for notice to be provided under Section 3.3(b) and (c)

25

of the settlement agreement.

26

(6) The class is provisionally certified as a class of

27

all persons who, between July 9, 2013 and the date of entry of

28

this Order, engaged in a credit card transaction at a California
26

1

Charming Charlie Store and whose personal identification

2

information was requested and recorded by Charming Charlie at the

3

Charming Charlie store for purposes other than shipping, delivery

4

or special orders.

5

counsel, defendant’s officers and directors, and the judge

6

presiding over the Action.

Also excluded from the class are defendant’s

7

(7) Plaintiffs Heidi Anderson-Butler and Paula Haug are

8

conditionally certified as the class representatives to implement

9

the Parties’ settlement in accordance with the settlement

10

agreement.

11

James M. Lindsay, Esq., is conditionally appointed as class

12

counsel.

13

adequately protect the Class’s interests.

14

The law firm of Lindsay Law Corporation, through

Plaintiffs and Lindsay Law Corporation must fairly and

(8) If the settlement agreement terminates for any

15

reason, the following will occur: (a) Class certification will be

16

automatically vacated; (b) Plaintiffs will stop functioning as

17

class representatives; and (c) this action will revert to its

18

previous status in all respects as it existed immediately before

19

the parties executed the settlement agreement.

20

(9) All discovery and pretrial proceedings and

21

deadlines, are stayed and suspended until further notice from the

22

court, except for such actions as are necessary to implement the

23

settlement agreement and this Order.

24

(10) The fairness hearing is set for November 2, 2015,

25

at 2:00 p.m., in courtroom 5, to determine whether the settlement

26

agreement should be finally approved as fair, reasonable, and

27

adequate.

28
27

1

(11) Based on the date this Order is signed and the

2

date of the fairness hearing, the following are the certain

3

associated dates in this settlement:

4
5

(a) Defendant shall send email and U.S. mail
notice is 30 days after entry of this Order;

6

(b) Pursuant to Local Rule 293, plaintiffs shall

7

file a motion for attorney’s fees no later than 28 days prior to

8

the final fairness hearing;

9

(c) The last day for class members to file a

10

claim, request exclusion, or object to the settlement is 75 days

11

after entry of this Order;

12

(d) The parties shall file briefs in support of

13

the final approval of the settlement no later than 14 days before

14

the fairness hearing.

15

(12) In the case that the fairness hearing be

16

postponed, adjourned, or continued, the updated hearing date

17

shall be posted on the settlement website.

18

Dated:

July 29, 2015

19
20
21
22
23
24
25
26
27
28
28