Hochstetler et al v. Pacific Gateway Concessions LLC

Filing 60

ORDER Re: Cy Pres Recipient Letter. Signed by Judge Thelton E. Henderson on 4/5/17. (tehlc2, COURT STAFF) (Filed on 4/5/2017)

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1 UNITED STATES DISTRICT COURT 2 NORTHERN DISTRICT OF CALIFORNIA 3 4 RACHEL HOCHSTETLER, et al., Plaintiffs, 5 v. 6 7 PACIFIC GATEWAY CONCESSIONS LLC, 8 Case No. 14-cv-04748-TEH ORDER RE: CY PRES RECIPIENT LETTER Defendant. 9 On June 7, 2016, the Court granted the Parties’ Motions for Final Approval of Class 10 United States District Court Northern District of California 11 Action Settlement, for Award of Attorney’s Fees and Costs, and for Incentive Payments. 12 ECF No. 57. In granting the motions, the Court ordered: “[i]f any residual funds from the 13 Settlement Fund remain after payments are made to the settlement Class members through 14 the distribution of [Pacific Gateway Concession (“PGC”)] Gift Cards, any and all such 15 residual funds will be distributed to Consumers Union of the United States.” Id. ¶ 18. The 16 parties’ Joint Settlement Agreement clarifies that all residual funds are to be paid “in the 17 form of PGC Gift Cards.” ECF No. 37-1 at 3. Additionally, the Court “retain[ed] 18 continuing jurisdiction to interpret, implement, and enforce the Settlement, and all orders 19 and judgment entered in connection therewith.” Id. ¶ 20. 20 The Court is now in receipt of a letter directed to the Court from Elisa Obdabashian 21 of Consumers Union. See ECF No. 58. Pursuant to the Settlement Agreement, Consumers 22 Union received a cy pres distribution of $793,000 in the form of 7,993 gift cards worth 23 $100 each. Consumers Union “accepted the award with the hope of being able to use 24 proceeds from the sale of the cards to advocate on behalf of consumer protections in the 25 financial marketplace.” However, the organization has found most PGC stores have said 26 they would not accept the gift cards1, thus leaving Consumer Union “unable to responsibly 27 1 28 In support of these statements, Ms. Obdabashian submitted a spreadsheet noting the organization’s efforts in clarifying which PGC stores accepted the gift cards that 1 sell the cards in order to use the proceeds for [its] consumer advocacy work.” In short, 2 Consumers Union claims Defendant PGC “has ended up paying very little, if anything, 3 toward remedying the abuses outlined in this settlement.” Id. 4 These findings are particularly worrisome and troubling to the Court. Indeed, the 5 entire settlement agreement would be greatly undermined should Consumers Union not be 6 able to purposefully use the gift cards for promoting consumer advocacy work. See 7 Nachshin v. AOL, LLC, 663 F.3d 1034, 1036 (9th Cir. 2011) (“Cy pres distributions must 8 account for the nature of the plaintiffs’ lawsuit, the objectives of the underlying statutes, 9 and the interests of the silent class members”). Fortunately, counsel for Defendant, upon receiving a copy of Ms. Odabashian’s 11 United States District Court Northern District of California 10 letter, submitted its own letter seeking “to assure the Court that PGC will honor all gift 12 cards and is taking immediate steps to address the issues raised in Ms. Odabashian’s letter 13 and the enclosed spreadsheet.” ECF No. 59. The Court accepts Defendant’s invitation to 14 “file a declaration attesting to the efforts described [in its letter] to ensure that the gift cards 15 are honored.” Id. at 2. 16 Defendant shall submit the declaration by April 12, 2017 and shall include in its 17 declaration a date by which the problem shall be fully and completely resolved. The Court 18 advises Defendant to make the resolution of this problem a matter of the highest priority. 19 20 IT IS SO ORDERED. 21 22 23 Dated: 4/5/17 _____________________________________ THELTON E. HENDERSON United States District Judge 24 25 26 27 28 Consumers Union was awarded. See ECF No. 58-1. The spreadsheet lists several PGC stores which stated they do not accept PGC gift cards. 2

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