Rhom v. Thumbtack, Inc.

Filing 39

ORDER by Judge Haywood S. Gilliam, Jr. GRANTING PLAINTIFFS UNOPPOSED 33 MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT. (ndrS, COURT STAFF) (Filed on 5/12/2017)

1
2
3
4

UNITED STATES DISTRICT COURT

5

NORTHERN DISTRICT OF CALIFORNIA

6
7

MICHAEL RHOM,
Plaintiff,

8
v.

9
10

THUMBTACK, INC.,
Defendant.

United States District Court
Northern District of California

11

Case No. 16-cv-02008-HSG
ORDER GRANTING PLAINTIFF’S
UNOPPOSED MOTION FOR
PRELIMINARY APPROVAL OF CLASS
ACTION SETTLEMENT
Re: Dkt. No. 33

Pending before the Court is Plaintiff Michael Rhom’s unopposed motion for preliminary

12
13

approval of class action settlement, Dkt. No. 33 (“Mot.”), which came before the Court for hearing

14

on February 9, 2017, Dkt. No. 34. The parties filed a joint supplemental submission in support of

15

the motion on February 16, 2017. Dkt. No. 35. The submission attached an amended settlement

16

agreement, claim form, email notice, and website notice. Dkt. No. 35-1 & Exs. A–C. Having

17

carefully considered these filings, as well as the arguments made at hearing, the Court hereby

18

GRANTS the motion.

19

I.

PROVISIONAL CLASS CERTIFICATION

20

If a district court concludes that the moving party has met its burden of proof under

21

Federal Rule of Civil Procedure 23, then the court has broad discretion to certify the class. Zinser

22

v. Accufix Research Inst., Inc., 253 F.3d 1180, 1186, amended by 273 F.3d 1266 (9th Cir. 2001).

23

To meet that burden, the moving party must satisfy each of the four requirements of Rule 23(a)

24

and at least one subsection of Rule 23(b). Id. Rule 23(a) provides that a district court may certify

25

a class only if:

26
27
28

(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.

1

Fed. R. Civ. P. 23(a). That is, the class must satisfy the requirements of numerosity, commonality,

2

typicality, and adequacy of representation to maintain a class action. Mazza v. Am. Honda Motor

3

Co., Inc., 666 F.3d 581, 588 (9th Cir. 2012). Moreover, where the plaintiff seeks to certify a class

4

under Rule 23(b)(3), she must show that “questions of law or fact common to class members

5

predominate over any questions affecting only individual members, and that a class action is

6

superior to other available methods for fairly and efficiently adjudicating the controversy.” Fed.

7

R. Civ. P. 23(b)(3). Here, Plaintiff has shown that Rule 23(a)’s requirements of numerosity,

8

commonality, typicality, and adequacy of representation are satisfied, as are Rule 23(b)(3)’s

9

requirements of predominance and superiority.1 Accordingly, the Court provisionally certifies a
damages class under Rule 23(b)(3). Moreover, the Court appoints Plaintiff as the class

11
United States District Court
Northern District of California

10

representative and CounselOne, P.C. as class counsel, finding that the relevant requirements are

12

satisfied. See Fed. R. Civ. P. 23(a)(4); Hanlon v. Chrysler Corp., 150 F.3d 1011, 1020 (9th Cir.

13

1998) (requirements to satisfy Rule 23(a)(4)); Fed. R. Civ. P. 23(c)(1)(B) (appointment of class

14

counsel); Fed. R. Civ. P. 23(g)(1) (factors to consider re: same).

15

II.

PRELIMINARY SETTLEMENT APPROVAL
Having found provisional certification appropriate, the Court considers whether to grant

16
17

preliminary approval of the proposed class action settlement under Rule 23(e). See Fed. R. Civ. P.

18

23(e) (“The claims, issues, or defenses of a certified class may be settled . . . only with the court’s

19

approval.”) “A district court may approve a proposed settlement in a class action only if the

20

compromise is fundamentally fair, adequate, and reasonable.” In re Heritage Bond Litig., 546

21

F.3d 667, 674–75 (9th Cir. 2008). Specifically, courts scrutinize whether the proposed settlement

22
23
24
25
26
27
28

1

The settlement agreement allows class counsel to request an incentive award of up to $5,000 for
the class representative, Dkt. No. 35-1 ¶ 8.2, which raises potential concerns regarding the
adequacy of representation. If presented with such a request at the final approval hearing, the
Court will consider various factors to determine whether approval is warranted. See Staton v.
Boeing Co., 327 F.3d 938, 977 (9th Cir. 2003) (actions plaintiff took to protect class’s interests,
how much class benefited from such actions, and time and effort expended by plaintiff). In so
doing, the Court will also be guided by the Ninth Circuit’s declaration that “district courts must be
vigilant in scrutinizing all incentive awards to determine whether they destroy the adequacy of the
class representatives.” See Radcliffe v. Experian Info. Sols. Inc., 715 F.3d 1157, 1164 (9th Cir.
2013).
2

1

(1) appears to be the product of serious, informed, non-collusive negotiations; (2) does not grant

2

improper preferential treatment to class representatives or other segments of the class; (3) falls

3

within the range of possible approval; and (4) has no obvious deficiencies. In re Tableware

4

Antitrust Litig., 484 F. Supp. 2d 1078, 1080 (N.D. Cal. 2007). Finally, where the parties reach a

5

class action settlement prior to class certification, as they did here, the district courts apply “a

6

higher standard of fairness and a more probing inquiry than may normally be required under Rule

7

23(e).” Dennis v. Kellogg Co., 697 F.3d 858, 864 (9th Cir. 2012) (internal quotations marks

8

omitted). Here, having rigorously scrutinized the settlement agreement in light of the higher

9

standard of fairness that applies, the Court preliminarily finds that the proposed settlement is fair,
adequate, and reasonable on its face, and that all four Tableware factors weigh in favor of

11
United States District Court
Northern District of California

10

preliminary approval.2

12

III.

PROPOSED CLASS NOTICE PLAN
Class notice in a Rule 23(b)(3) class action must comport with the requirements of due

13
14

process. Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 173–77 & n.14 (1974). The notice must be

15

“the best practicable, reasonably calculated, under all the circumstances, to apprise interested

16

parties of the pendency of the action and afford them an opportunity to present their

17

objections.” Philips Petroleum Co. v. Shutts, 472 U.S. 797, 812 (1985) (internal quotation marks

18

omitted). “The notice should describe the action and the plaintiffs’ rights in it.” Id. Rule

19

23

23(c)(2)(B) provides, in relevant part:
The notice must clearly and concisely state in plain, easily
understood language: (i) the nature of the action; (ii) the definition
of the class certified; (iii) the class claims, issues, or defenses;
(iv) that a class member may enter an appearance through an
attorney if the member so desires; (v) that the court will exclude
from the class any member who requests exclusion; (vi) the time and
manner for requesting exclusion; and (vii) the binding effect of a
class judgment on members under Rule 23(c)(3).

24

Here, the Court finds that the notice plan described in the amended settlement agreement, see Dkt.

20
21
22

25
2

26
27
28

With regard to the second factor, preferential treatment of class members, an incentive award of
$5,000 for Plaintiff could raise substantial concerns in light of the an estimated settlement
payment of only about $15.00. See Dkt. No. 35 at 2 (assuming a 10% claims rate). At this
juncture, however, the Court need not weigh the impact of a request for an incentive award that
has yet to be filed. At the final approval hearing, the Court will carefully consider any such
request that is filed.
3

1

No. 35-1 ¶ 5.1, will provide the best practical notice to the class, and that the amended notices

2

adequately describe the action and class members’ rights and satisfy the seven requirements of

3

Rule 23(c)(2)(B), see Dkt. No. 35-1 Exs. B–C. In addition, the Court finds that that the CPT

4

Group is qualified to perform the tasks associated with administering the notice outlined in the

5

settlement agreement and therefore approves CPT Group as the settlement administrator. See Dkt.

6

No. 35-1 ¶¶ 1.29, 7.1.

7

IV.

For the foregoing reasons, the Court GRANTS Plaintiff’s motion for preliminary approval

8
9
10

United States District Court
Northern District of California

11
12
13
14
15
16
17

CONCLUSION

of class action settlement. The parties are DIRECTED to implement the proposed class notice
plan.3 The Court SETS the following schedule:
Event
Deadline to Execute Notice Plan
Deadline to File Motion for Fees, Costs, and Incentive
Award
Deadline for Class Members to File Objections / Opt Out
Deadline for Claims Administrator to File List of Timely
Requests for Exclusion
Deadline to File Motion for Final Approval of Class
Action Settlement4
Deadline for Class Members to File Notice of Intent to
Appear at Final Approval Hearing
Final Approval Hearing5

18

July 11, 2017
July 26, 2017
September 7, 2017
September 21, 2017
October 12, 2017, at 2:00
p.m.

IT IS SO ORDERED.

19
20

Date
June 11, 2017
June 27, 2017

Dated: 5/12/2017
______________________________________
HAYWOOD S. GILLIAM, JR.
United States District Judge

21
22
23
3

24
25
26
27
28

Although the cy pres provision has been removed from the settlement agreement, see Dkt. No.
35-1 ¶ 3.1.3, and the email notice, see id. Ex. B at 2, the latter still contains “Cy Pres Recipients”
as one of the links, see id. Ex. B at 3. That error should be corrected. In addition, the website
notice should be revised to reflect that the undersigned judge changed locations after the parties
filed their joint supplemental submission. See Dkt. No. 35-1, Ex. C at 11–12; Dkt. No. 68 (notice
of change of location).
4
Any responses to objections should be incorporated into the motion for final approval of class
action settlement.
5
At the final approval hearing, the Court will hear arguments not only as to the motion for final
approval of class action settlement, but also as to the motion for fees, costs, and incentive award.
4