McKinney-Drobnis v. Massage Envy Franchising, LLC

Filing 114

ORDER ON CLASS REPRESENTATIVES' MOTION FOR PRELIMINARY APPROVAL AND JOINT MOTION FOR VACATUR. Signed by Judge Maxine M. Chesney on June 7, 2019. (mmclc1, COURT STAFF) (Filed on 6/7/2019)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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Baerbel McKinney-Drobnis, Joseph B. Piccola,
and Camille Berlese, individually and on
behalf of all others similarly situated,

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Plaintiffs,

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[PROPOSED] ORDER ON CLASS
REPRESENTATIVES’ MOTION FOR
PRELIMINARY APPROVAL AND
JOINT MOTION FOR VACATUR

v.

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CASE NO. 3:16-CV-6450-MMC

MASSAGE ENVY FRANCHISING, LLC, a
Delaware Limited Liability Company,

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Defendants.
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ORDER

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ORDER ON CLASS REPRESENTATIVES’ MOTION FOR PRELIMINARY
APPROVAL AND JOINT MOTION FOR VACATUR

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Class Representatives’ Motion for Preliminary Approval of a Class Action Settlement and

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Proposed Settlement Class (the “Motion”) and the Parties’ Joint Motion for Vacatur (“Joint

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Motion”) were heard on May 31, 2019. In connection with the Motion and Joint Motion, the Court

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has considered the proposed class action Settlement Agreement (attached as Exhibit 1 to the

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Declaration of Jeffrey Krinsk), the submissions of counsel, and all other papers filed in this action.

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This Order incorporates by reference the definitions in the Settlement Agreement (the

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“AGREEMENT”). The matter having been submitted, and good cause appearing,

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IT IS HEREBY ORDERED, ADJUDGED, AND DECREED THAT:

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1.

The provisions of the AGREEMENT are hereby preliminarily approved. The

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COURT finds that the SETTLEMENT appears to be fair, adequate, and reasonable to the CLASS

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MEMBERS, free of collusion or indicia of unfairness, and within the range of likely judicial

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approval. The COURT also finds that the SETTLEMENT resulted from arm’s-length negotiations

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and is sufficient to warrant the dissemination of CLASS NOTICE to the CLASS MEMBERS.

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2.

Pursuant to Federal Rules of Civil Procedure 23(a) and 23(b)(3), and for purposes

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of, and solely in connection with, the SETTLEMENT, the COURT finds that each of the

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requirements for certification of the CLASS set forth in the CLASS REPRESENTATIVES’ Motion

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for Preliminary Approval are met and hereby conditionally certifies the CLASS comprised of:

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All Members of an ME LOCATION since November 4, 2006, whose monthly
membership fee has been increased above the amount stated in their Membership
Agreement (“Fee Increase”) prior to date of this PRELIMINARY APPROVAL
ORDER.
3.

The COURT, for SETTLEMENT purposes only, finds that certification of the

CLASS satisfies the requirements under Federal Rules of Civil Procedure 23(a) and 23(b)(3). In
support of this ruling, the COURT conditionally and preliminarily finds that: (a) the CLASS is so
numerous that joinder of all members is impracticable; (b) there are questions of law and fact
common to the CLASS; (c) the named CLASS REPRESENTATIVES’ claims are typical of the
claims of the CLASS; (d) the named CLASS REPRESENTATIVES and CLASS COUNSEL
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ORDER

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identified below are able to adequately represent the CLASS; and (e) class-wide treatment of the
disputes raised in this ACTION is superior to other available methods for adjudicating the
controversy.
4.

If the AGREEMENT is terminated or not consummated pursuant to the

AGREEMENT’s terms, conditional certification of the CLASS shall be void. In that event, the
CLASS REPRESENTATIVES, the CLASS MEMBERS, and MEF shall be returned to their
respective statuses as of the date immediately prior to the execution of the AGREEMENT and
neither the AGREEMENT nor this PRELIMINARY APPROVAL ORDER shall have any bearing
on, and neither shall be admissible in connection with, (a) any issue in this ACTION or any claim
raised under any other state or federal law that was intended to be encompassed within the
ACTION; (b) whether certification or decertification would be appropriate in a non-settlement
context; (c) MEF’s liability for any final judgment or to any CLASS MEMBER; and (d) any
judgment ultimately sought to be entered against MEF or otherwise.
5.

The COURT appoints and designates Baerbel McKinney-Drobnis, Camille Berlese,

and Joseph Piccola as CLASS REPRESENTATIVES for the CLASS.
6.

The COURT appoints and designates Finkelstein & Krinsk LLP as CLASS

COUNSEL for the CLASS. CLASS COUNSEL is located at the following address:

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Jeffrey R. Krinsk, Esq.
Trenton R. Kashima, Esq.
Finkelstein & Krinsk LLP
550 West C Street, Suite 1760
San Diego, CA 92101
[phone]

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7.

The COURT approves, as to form and content, the proposed CLASS NOTICE,

attached to the Supplemental Proposed Class Notice, filed June 5, 2019, including the procedure
for the CLASS MEMBERS to object to or request exclusion from the SETTLEMENT, to submit a
VOUCHER REQUEST, and to file a Notice of Intent to Appear at the FINAL APPROVAL
HEARING and, accordingly, directs that CLASS NOTICE be given in the form and manner
consistent therewith and this PRELIMINARY APPROVAL ORDER.

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8.

The COURT finds that the CLASS NOTICE is the best means practicable of

providing notice under the circumstances and when completed shall constitute due and sufficient
notice of the ACTION, the SETTLEMENT, and the FINAL APPROVAL HEARING to all persons
affected by and/or authorized to participate in the SETTLEMENT in full compliance with Federal
Rules of Civil Procedure 23(c) and (e) and the requirements of due process.
9.

The provisions of the AGREEMENT relating to the CLASS NOTICE, exclusion

from the SETTLEMENT, objection to the SETTLEMENT, a VOUCHER REQUEST, Notice of
Intent to Appear at the FINAL APPROVAL HEARING, and the FINAL APPROVAL HEARING
are deemed incorporated as if expressly set forth in this PRELIMINARY APPROVAL ORDER
and have the full force and effect of an Order of this COURT.
10.

As of the date of this PRELIMINARY APPROVAL ORDER, all CLASS

MEMBERS who do not exclude themselves from the SETTLEMENT pursuant to the CLASS
NOTICE and the AGREEMENT shall be bound by the new membership agreement attached as
Exhibit 5 to the AGREEMENT, regardless of whether the SETTLEMENT is finally approved.
This new membership agreement expressly entitles any Massage Envy Spa who uses this or a
similar membership agreement to increase the member’s stated monthly membership fee following
the initial membership term only by providing at least forty-five (45) days’ advance written
notice to the member’s email address on record with the member’s Massage Envy Spa and
that such notice shall be effective on the date sent.
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The COURT appoints and designates Hilsoft Notifications as the SETTLEMENT

ADMINISTRATOR.
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The COURT hereby directs the SETTLEMENT ADMINISTRATOR to provide the

approved CLASS NOTICE to the CLASS in accordance with the schedule below and using the
procedures set forth in the AGREEMENT.
13.

The SETTLEMENT ADMINISTRATOR shall be responsible for
a.

Preparing, drafting, and serving the Notice pursuant to the Class Action
Fairness Act, 28 U.S.C. § 1715 (“CAFA”);

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b.

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COURT;
c.

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d.

undeliverable and who have a physical address in the Millennium Central

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Office Database (or any successor point of sale database);
e.

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f.

including the LONG FORM NOTICE;
g.

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VOUCHER REQUEST form, and/or to obtain any other information

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concerning this SETTLEMENT or the AGREEMENT;
h.

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NOTICE and processing of VOUCHER REQUESTS;
i.

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Consulting with MEF’s COUNSEL and CLASS COUNSEL concerning any
relevant issue, including (without limitation) distribution of the CLASS

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Creating and maintaining a toll-free number that CLASS MEMBERS can
contact to request a copy of the AGREEMENT, a UNIQUE ID CODE, a

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Creating and maintaining a SETTLEMENT WEBSITE consistent with the
AGREEMENT and this PRELIMINARY APPROVAL ORDER and

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Performing a single skip trace address follow-up on any returned mail or
email SUMMARY NOTICES;

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Sending mailed SUMMARY NOTICE to those CLASS MEMBERS who
were provided SUMMARY NOTICE via email and had it returned

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Performing physical home address and email address updates and
verifications prior to the first distribution of the SUMMARY NOTICE;

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Printing and distributing the SUMMARY NOTICE approved by the

Processing and recording timely and proper requests for exclusion from the
SETTLEMENT;

j.

Processing and recording of timely and proper VOUCHER REQUESTS;

k.

Within five (5) days after the VOUCHER REQUEST DEADLINE,
providing MEF with a written list of all CURRENT MEMBERS who
submitted a timely and valid VOUCHER REQUEST and the following
information, if available, with respect to each CURRENT MEMBER:

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i.

UNIQUE ID CODE; and

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Current email address;

iv.

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Current mailing address;

iii.

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First and last name;

ii.

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The amount of FEE INCREASES paid as of the date of

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PRELIMINARY APPROVAL;

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providing MEF with a written list of all FORMER MEMBERS who

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submitted a timely and valid VOUCHER REQUEST and the following

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information, if available, with respect to each FORMER MEMBER:

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i.

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or not renewed or the FORMER MEMBER’s last EFT payment,

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whichever is later;

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m.

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Emailing VOUCHERS to CLASS MEMBERS who submit a timely and
proper VOUCHER REQUEST and advising CLASS MEMBERS of any

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increased VOUCHER amount as a result of any necessary pro rata

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distribution to comply with the AGREEMENT; and

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n.

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Such other tasks as MEF and the CLASS REPRESENTATIVES mutually
agree or the COURT may order the SETTLEMENT ADMINISTRATOR to

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The amount of FEE INCREASES paid as of the date the FORMER
MEMBER’s MEMBERSHIP was terminated, cancelled, suspended,

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UNIQUE ID CODE; and

v.

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Current email address;

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Current mailing address;

iii.

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First and last name;

ii.

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Within five (5) days after the VOUCHER REQUEST DEADLINE,

perform.
14.

In accordance with the schedule set forth below, the SETTLEMENT

ADMINISTRATOR is directed to establish a website at www.massagefeesettlement.com (the

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“SETTLEMENT WEBSITE”) to provide information regarding the SETTLEMENT including
requesting exclusion from or objecting to the SETTLEMENT, submitting a VOUCHER
REQUEST consistent with the AGREEMENT, the date of the FINAL APPROVAL HEARING,
and other information related to the SETTLEMENT.
15.

MEF shall pay the SETTLEMENT ADMINISTRATOR’s reasonable costs

associated with the administration of the SETTLEMENT, distribution of CLASS NOTICE
pursuant to the AGREEMENT, and any other tasks assigned to the SETTLEMENT
ADMINISTRATOR by the AGREEMENT, by MEF’s and the CLASS REPRESENTATIVES’
mutual written agreement, or as this COURT may order.
16.

Before any VOUCHER may be issued, each CLASS MEMBER must submit a valid

VOUCHER REQUEST in accordance with the instructions set forth in the AGREEMENT and
CLASS NOTICE.
17.

Any CLASS MEMBER may choose to object to the SETTLEMENT by serving on

the SETTLEMENT ADMINISTRATOR an objection to the SETTLEMENT in accordance with
the instructions set forth in the AGREEMENT and CLASS NOTICE. CLASS MEMBERS who
fail to serve timely objections upon the SETTLEMENT ADMINISTRATOR shall be deemed to
have waived any objections and shall forever be foreclosed from making any objection (whether
by appeal or otherwise) to the SETTLEMENT.
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Any CLASS MEMBER may choose to be excluded from the SETTLEMENT as

provided in the AGREEMENT and CLASS NOTICE.
19.

Any CLASS MEMBER who timely and properly requests to be excluded from the

SETTLEMENT will not be bound by the AGREEMENT, will not have any right to object to, appeal
from, or comment on the SETTLEMENT, and will not receive any benefits under the
SETTLEMENT or be bound by the new MEMBERSHIP AGREEMENT attached as Exhibit 5 to
the AGREEMENT.
20.

Any request for exclusion must be signed by the requesting CLASS MEMBER and

must comply with the requirements set forth in the AGREEMENT and the CLASS NOTICE.

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CLASS MEMBERS who have not requested exclusion by submitting a valid and

timely written request shall be bound by all determinations of the COURT, the AGREEMENT, and
any FINAL APPROVAL ORDER and JUDGMENT entered.
22.

The COURT orders the following schedule as set forth in the AGREEMENT:
a.

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launch the SETTLEMENT WEBSITE.
b.

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c.

following information with respect to each FORMER MEMBER from the

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Millennium Central Office Database (or any successor point of sale

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database) as of the date of this PRELIMINARY APPROVAL ORDER:

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(i) first and last name; (ii) last known mailing address; (iii) email address, if

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available; (iv) phone number, if available; (v) a UNIQUE ID CODE; (vi) a

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UNIQUE ID CODE for each membership held by the Former Member; (vii)

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the date the FORMER MEMBER’s MEMBERSHIP was terminated,

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cancelled, suspended, or not renewed; (viii) each date on which the

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FORMER MEMBER paid a monthly MEMBERSHIP fee that was higher

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than the prior month; and (ix) the total amount of FEE INCREASES the

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FORMER MEMBER paid through the date the FORMER MEMBER’S

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MEMBERSHIP was terminated, cancelled, suspended, or not renewed or the

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No later than July 8, 2019, MEF shall provide the SETTLEMENT
ADMINISTRATOR with an electronic list or database that includes the

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No later than April 25, 2019, the SETTLEMENT ADMINISTRATOR shall
serve the notices required to be served pursuant to CAFA.

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No later than June 14, 2019, the SETTLEMENT ADMINISTRATOR shall

FORMER MEMBER’s last EFT payment, whichever is later.
d.

No later than July 8, 2019, MEF shall provide the SETTLEMENT
ADMINISTRATOR with an electronic list or database that includes the
following information with respect to each CURRENT MEMBER from the
Millennium Central Office Database (or any successor point of sale

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database) as of the date of this PRELIMINARY APPROVAL ORDER:

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(i) first and last name; (ii) last known mailing address; (iii) email address, if

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available; (iv) phone number, if available; (v) UNIQUE ID CODE;

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(vi) UNIQUE ID CODE for each MEMBERSHIP held by the CURRENT

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MEMBER; (vii) each date on which the CURRENT MEMBER paid a

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monthly MEMBERSHIP fee that was higher than the prior month; and (viii)

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the total amount of FEE INCREASES the CURRENT MEMBER paid

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through the date of this PRELIMINARY APPROVAL ORDER .
e.

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and cause to be posted on the SETTLEMENT WEBSITE a motion

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requesting

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f.

the

CLASS

No later than July 22, 2019, the SETTLEMENT ADMINISTRATOR shall

Mail to all other CLASS MEMBERS.
g.

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All VOUCHER REQUESTS must be submitted online on the
SETTLEMENT WEBSITE or emailed, faxed, or mailed to the

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SETTLEMENT ADMINISTRATOR postmarked on or before September

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20, 2019.
h.

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for

MEMBERS for whom an email address is available and via First Class U.S.

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AWARD

database) to be CLASS MEMBERS, via email for those CLASS

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FEE

the Millennium Central Office Database (or any successor point of sale

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INCENTIVE

complete the initial CLASS NOTICE to all persons shown by the data from

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an

REPRESENTATIVES and a FEE AND EXPENSE AWARD.

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No later than August 16, 2019, CLASS COUNSEL shall file with the Clerk

All objections must be mailed to the SETTLEMENT ADMINISTRATOR
on or before September 20, 2019.

i.

All requests for exclusion must be emailed or mailed by First Class U.S.
Mail to the SETTLEMENT ADMINISTRATOR postmarked on or before
September 20, 2019.

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j.

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shall provide to CLASS COUNSEL and MEF’s COUNSEL a list of CLASS

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MEMBERS who submitted valid and timely exclusion requests.

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k.

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by the SETTLEMENT ADMINISTRATOR from CLASS MEMBERS.

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l.

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of Compliance to be filed with the COURT in connection with the FINAL

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APPROVAL motion.

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m.

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No later than October 7, 2019, the SETTLEMENT ADMINISTRATOR
shall provide CLASS COUNSEL and MEF’s COUNSEL with a Declaration

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No later than October 7, 2019, CLASS COUNSEL shall file with the
COURT and serve upon MEF’s COUNSEL any written objections received

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No later than October 7, 2019, the SETTLEMENT ADMINISTRATOR

No later than October 18, 2019, CLASS COUNSEL shall file the CLASS
REPRESENTATIVES’ Motion for FINAL APPROVAL.

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A FINAL APPROVAL Hearing shall be held before this COURT on November 1,

2019, at 9:00 a.m., at the United States District Court for the Northern District of California, San
Francisco Courthouse, Courtroom 7 – 19th Floor, 450 Golden Gate Avenue, San Francisco, CA
94102, to determine all necessary matters concerning the AGREEMENT, including whether the
proposed SETTLEMENT is fair, adequate, and reasonable, whether this COURT should grant
FINAL APPROVAL, whether there should be any FEE AND EXPENSE AWARD and/or
INCENTIVE AWARD, and the amounts of any such awards.
24.

Any objecting CLASS MEMBER may appear, in person or by counsel, at the

FINAL APPROVAL HEARING to show cause why the SETTLEMENT and the AGREEMENT
should not be approved as fair, adequate, and reasonable, or to object to any request for a FEE AND
EXPENSE AWARD and/or INCENTIVE AWARD. To appear in person or by counsel, the
objecting CLASS MEMBER must file with the COURT and serve upon all counsel designated in
the CLASS NOTICE, a Notice of Intention to Appear on or before October 18, 2019. The Notice
of Intention to Appear must include the required information in accordance with the
AGREEMENT, the CLASS NOTICE, and the SETTLEMENT WEBSITE.

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25.

Any CLASS MEMBER who fails to timely submit a proper Notice of Intention to

Appear will not be heard during the FINAL APPROVAL HEARING.
26.

Pursuant to Federal Rule of Civil Procedure 54(b), the COURT may vacate or revise

non-final orders when it is consonant with equity to do so. In re Cathode Ray Tube (CRT) Antitrust
Litig., No. 14-CV-2058 JST, 2017 WL 2481782, at *5 (N.D. Cal. June 8, 2017) (“Courts in this
circuit have frequently vacated non-final orders in furtherance of settlements.”). The COURT finds
that vacatur of the Order Denying Defendant’s Motion for Judgment on the Pleadings or,
Alternatively to Strike Class Allegations; Granting in Part and Denying in Part Plaintiffs’ Motion
to Strike Affirmative Defenses entered on April 5, 2017 [Doc. 49] and the Order Denying
Defendant’s Motion for Certification of Order for Interlocutory Appeal and Motion to Stay;
Vacating Hearing entered on May 17, 2017 [Doc. 68] (collectively, the “MJOP Order”) in the
ACTION, solely for purposes of approval of this SETTLEMENT, is consonant with equity as
vacatur will better serve the CLASS MEMBERS, the CLASS REPRESENTATIVES, the public,
and allow the SETTLEMENT to proceed. Accordingly, the MJOP Order is hereby vacated in its
entirety subject to the terms of the AGREEMENT.
27.

Nothing in this PRELIMINARY APPROVAL ORDER is, or may be construed as,

an admission or concession on any point of fact or law by or against the CLASS
REPRESENTATIVES or MEF.
28.

CLASS COUNSEL, MEF, and the SETTLEMENT ADMINISTRATOR are

directed to carry out their obligations under the AGREEMENT.
IT IS SO ORDERED

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DATED: June 7, 2019
Hon. Maxine M. Chesney
Hon. Maxine
n M
UNITED STATES DISTRICT JUDG
UNITED
I
JUDGE