Smith et al v. Leichtman et al

Filing 305

ORDER as to 300 MOTION for Settlement Preliminary Settlement Approval. Motion Hearing set for 8/30/2013 09:00 AM in Courtroom 11, 19th Floor, San Francisco before Hon. Jeffrey S. White.. Signed by Judge Jeffrey S. White on 6/27/13. (jjoS, COURT STAFF) (Filed on 6/27/2013)

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1 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE NORTHERN DISTRICT OF CALIFORNIA 8 9 CHRISTINA SMITH, et al., 11 For the Northern District of California United States District Court 10 12 Plaintiffs, No. C 10-00010 JSW v. LEVINE LEICHTMAN CAPITAL PARTNERS, INC., et al., ORDER REGARDING MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT 13 Defendants. 14 / 15 16 Now before the Court is the motion for final approval of class action settlement filed by 17 Plaintiffs. Although the parties have made some substantial changes to their settlement 18 agreement, the Court still has some concerns. First, although some of the imbalances in the 19 release provisions have been cured, the release provisions are still problematic. While the class 20 members would release claims against all Defendants, only National Corrective Group, Inc. 21 (“NCG”) would release claims against class members. Moreover, it is not clear why the 22 settlement agreement should require class members to release claims relating to the 23 administration of the settlement, which involves events that have not occurred yet, in addition to 24 that arise out of or relate to the Diversion Programs. 25 Second, the Court had concerns with the proposed injunctive relief when it denied final 26 approval of the prior settlement agreement. The Court noted that the proposed injunctive relief 27 did not appear to provide much relief or benefit for the class. Pursuant to the proposed 28 settlement, NCG was only required to alter the letters sent for a period of two years. After that 1 time, NCG was not prohibited from mailing out letters with the same language challenged by 2 this lawsuit. Moreover, the Court noted that proposed altered letters could still mislead 3 recipients that the letters were sent by, or with individual authorization from, the district 4 attorney and that the district attorney is accusing the recipients of violating the law. Instead of 5 strengthening the scope of the injunctive relief, the parties have omitted any injunctive relief 6 from the revised settlement agreement. In the absence of any injunctive relief, and in 7 consideration that each class member will likely receive approximately two or eight dollars, the 8 Court finds that the benefit to class members is quite minimal. Although the Court will not 9 require the parties to provide injunctive relief as a condition of approval, the parties are admonished that the absence of effective injunctive relief may result in the Court limiting the 11 For the Northern District of California United States District Court 10 attorneys’ fees awarded to reflect the lack of substantial benefits to the class. 12 The parties shall submit a supplemental brief to address the Court’s concerns by no later 13 than July 11, 2013. The Court HEREBY CONTINUES the hearing on the motion for 14 preliminary approval of the class action settlement to August 30, 2013 at 9:00 a.m. If the 15 parties need more time to negotiate and amend the terms of the settlement agreement, they shall 16 inform the Court by July 11, 2013 17 IT IS SO ORDERED. 18 19 Dated: June 27, 2013 JEFFREY S. WHITE UNITED STATES DISTRICT JUDGE 20 21 22 23 24 25 26 27 28 2

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