Cortes v. National Credit Adjusters, L.L.C.

Filing 75

ORDER signed by Senior Judge Morrison C. England, Jr on 10/06/22 GRANTING 72 Motion Cy Pres Distribution of Residual Settlement Funds. The Court approves Consumer Reports as the Cy Pres recipient of the $48,689.42 in residual settlement funds.(Licea Chavez, V)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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MIKE CORTES, on behalf of himself
and all others similarly situated,
Plaintiff,

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No. 2:16-cv-00823-MCE-EFB

ORDER
v.
NATIONAL CREDIT ADJUSTERS,
L.L.C.,
Defendant.

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Plaintiff Mike Cortes (“Plaintiff”) brought a class action lawsuit against Defendant

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National Credit Adjusters, L.L.C. (“Defendant”) for violations of the Telephone Consumer

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Protection Act (“TCPA”), the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692 et

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seq. (“FDCPA”), and California’s Rosenthal Fair Debt Collection Practices Act, California

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Civil Code §§ 1788 et seq. (“Rosenthal Act”). On December 7, 2020, this Court granted

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final approval of the parties’ class action settlement, which established a $1,800,000

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non-reversionary settlement fund for the payment of individual class member awards,

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attorneys’ fees and costs, administration costs, and a service award to the class

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representative. See ECF No. 69. Those funds have since been distributed but there

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remains $48,689.41 in unclaimed funds. See Boub Decl., ECF No. 72-1 ¶¶ 4–9.

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Presently before the Court is Plaintiff’s Motion for Cy Pres Distribution of Residual
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Settlement Funds, which seeks approval for the distribution of $48,689.41 in residual

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settlement funds to the parties’ proposed cy pres recipient, Consumer Reports. ECF

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No. 72 (“Pl.’s Mot.”). In response, Defendant filed a Statement of Non-Opposition. ECF

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No. 74. For the reasons set forth below, Plaintiff’s Motion is GRANTED.1

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“The cy pres doctrine allows a court to distribute unclaimed or non-distributable

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

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Nachshin v. AOL, LLC, 663 F.3d 1034, 1036 (9th Cir. 2011) (citing Six (6) Mexican

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Workers v. Ariz. Citrus Growers, 904 F.2d 1301, 1307–08 (9th Cir. 1990)). “Cy pres

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distributions must account for the nature of the plaintiffs’ lawsuit, the objectives of the

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underlying statutes, and the interests of the silent class members, including their

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geographic diversity.” Id. “Where, as here, the original settlement did not provide for the

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cy pres designee, nothing appears to prevent the plaintiff[] moving for such a designee in

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a separate motion.” Four in One Co., Inc. v. SK Foods, L.P., No. 2:08-cv-3017 KJM JDP

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(consolidated cases), 2021 WL 4480737, at *2 (E.D. Cal. Sept. 30, 2021).

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The Court finds Consumer Reports to be an appropriate cy pres beneficiary.

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Regarding the nature of the lawsuit, Plaintiff alleges that Defendant made numerous

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calls to his cell phone using an autodialer and/or artificial or prerecorded voice and that

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these calls were attempts to collect a consumer debt that Plaintiff purportedly owed.

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First Am. Compl., ECF No. 48 ¶¶ 1, 15. Plaintiff claims that he had no contact with

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Defendant prior to these phone calls, he did not consent to receive such phone calls,

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and that he never provided his phone number to Defendant. Id. ¶ 13. In selecting

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Consumer Reports as the cy pres beneficiary, Plaintiff cites its work “to protect

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consumers against invasions of their privacy and peace by phone and other

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telecommunications,” and asserts that “Consumer Reports has worked to ensure

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compliance with the [TCPA] since its enactment in 1991.” See Taylor Decl., ECF

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No. 72-2 ¶¶ 7–9 (declaration from Consumer Reports’ Vice President and Chief Social

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1 Because oral argument would not have been of material assistance, the Court ordered this
matter submitted on the briefs. E.D. Local Rule 230(g).

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Impact Officer) (“[Consumer Reports] seeks to preserve consent and protect consumers

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from harassment, manipulation, and fraud on phones . . .”). For example, Consumer

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Reports’ “campaign to End Robocalls—including advocacy, analysis, and a million

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signatures across multiple petitions—prompted the FCC [Federal Communications

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Commission] to rule that phone companies should provide free tools to stop robocalls

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before they reach consumers.” Id. ¶ 8 (stating that Consumer Reports also “submitted

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comments to the FCC on robocall-mitigation technologies and consent requirements,

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testified before Congress, and challenged the TCPA loophole allowing robocalls by debt

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collectors.”). Not only is Consumer Reports’ advocacy related to Plaintiff’s lawsuit, but it

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demonstrates “a clear connection between the aims of the statutes at issue in this

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litigation, including the TCPA, FDCPA, and the Rosenthal Act” and shows that

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Consumer Reports, a nationwide organization, represents the interests of the silent class

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members. Pl.’s Mot., at 5–6.

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Accordingly, Plaintiff’s Motion for Cy Pres Distribution of Residual Settlement

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Funds, ECF No. 72, is GRANTED. The Court approves Consumer Reports as the cy

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pres recipient of the $48,689.42 in residual settlement funds.

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IT IS SO ORDERED.

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Dated: October 6, 2022

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