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Sallie A. Durham, An Individual On Behalf of Herself and All Others Similarly Situated v. Continental Central Credit

January 3, 2011

SALLIE A. DURHAM, AN INDIVIDUAL ON BEHALF OF HERSELF AND ALL OTHERS SIMILARLY SITUATED,
PLAINTIFF,
v.
CONTINENTAL CENTRAL CREDIT, INC.
DEFENDANTS.



The opinion of the court was delivered by: Hon. William McCurine, Jr. U.S. Magistrate Judge, U.S. District Court

ORDER GRANTING JOINT MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT [DOC. NO. 81] )

I. INTRODUCTION

On November 23, 2010, Plaintiff Sallie A. Durham ("Plaintiff or "class representative") and Defendant Continental Central Credit, Inc. ("Defendant" or "CCC") filed a Joint Motion requesting the Court: (1) grant preliminary approval of the proposed settlement; (2) approve the form and manner of providing notice to the settlement class and (3) schedule a date for the final fairness approval hearing. [Doc. No. 81.] The Court has reviewed all papers filed in support of the Joint Motion and hereby GRANTS the Joint Motion.

II. FACTUAL AND PROCEDURAL BACKGROUND

On September 7, 2007, Plaintiff filed a class action complaint against CCC, asserting claims under the Fair Debt Collection Practices Act, 15 U.S.C. § 1692. Plaintiff alleged CCC's correspondence to consumers contradicted consumer's rights notices required by 15 U.S.C. 1692g(a).

On March 20, 2008, the Court found Plaintiff stated a claim for violation of the Fair Debt Collection Practices Act and the Rosenthal Fair Debt Collection Practices Act, Cal. Civ. Code §§ et seq. [Doc. No. 21.] On May 5, 2009, Plaintiff filed a Motion for Class Certification. {Doc.

No. 43.] On October 20, 2009, the Court denied Plaintiff's Motion for Class Certification without prejudice. [Doc. No. 59.] On February 4, 2010, Plaintiff filed a second Motion for Class Certification. [Doc. No. 64.] On July 14, 2010, the Court granted Plaintiff's Second Motion for Class Certification and in accordance with Rule 23(b)(3) certified the "Overshadowing or Contradicting Class" consisting of: (i) all natural persons with California address to whom (ii) Defendant CCC sent a letter in the form of Exhibit B to the FAC (iii) within 30 days of sending a letter in the form of Exhibit A to the FAC, as shown by the records of CCC (iv) on or after September 7, 2006 (v) in an attempt to collect a debt incurred for personal, family, or household purposes allegedly due for a nonprofit home owners or vacation owners association fees (vi) which was not returned by the U.S. Postal Service. [Doc. No. 74.

On October 13, 2010, the parties filed a notice of settlement. [Doc. No. 79.] On November 23, 2010, the parties filed the instant Joint Motion for Preliminary Approval of Class Action Settlement. [Doc. No. 81.]

III. THE PROPOSED SETTLEMENT

The class settlement fund is Seventeen Thousand Seven Hundred Fifty dollars ($17,750.00). The pro-rata share of the 97 class members will be $182.99. The entire class fund of $17,750.00 will be exhausted in settlement payments to the class without the need for class members to claim in. Plaintiff will receive $1,000 representing statutory damages under the Fair Debt Collection Practices Act and a $3,000 incentive award for a total of $4,000. Funds from any returned or un-cashed settlement checks shall be paid equally to National Consumer Law Center and National Association of Consumer Advocates as a cy pres award for use in consumer representation and education.

IV. PRELIMINARY APPROVAL OF THE SETTLEMENT

Federal Rule of Civil Procedure 23(e)(1) requires the Court to determine whether a settlement is "fair, reasonable, and adequate." To make this determination, the court considers certain factors: (1) the strength of the plaintiff's case and the risk, expense, complexity, and likely duration of further litigation; (2) the risk of maintaining class action status throughout trial; (3) the amount offered in settlement; (4) the extent of discovery completed, and the stage of the proceedings, and (5) the experience and views of counsel. Staton v. Boeing Co., 327 F.3d 938, 959 (9th Cir. 2003) quoting Molski v. Gleich, 318 F.3d 937, 953 (9th Cir. 2003). In addition, the settlement may not be the product of collusion among the negotiating parties. In re Mego Financial Corp. Sec. Litig., 213 F.3d 454, 458 (9th Cir. 2000).

Court approval of a class action settlement involves a two-step process: (1) preliminary approval, and (2) final approval of the settlement after notice to the class. See Manual for Complex Litigation Fourth § 21.632 (2004); Torrisi v. Tucson Elec. Power Co., 8 F.3d 1370, 1377 (9th Cir. 1993) (acknowledging the district court's use of the preliminary approval process.)

After a preliminary fairness evaluation, class members must receive notice and have an opportunity to be heard as to the terms of the proposed settlement. Therefore, the Court need not review the settlement in detail at this time; instead preliminary approval is appropriate so long as the proposed settlement falls "within the range of possible judicial approval." A. Conte & H.B. Newberg, Newberg on Class Actions, §11.25 (4th ed. 2002), quoting Manual for Complex Litigation Third § 30.41 (1997). Accordingly, for this preliminary fairness evaluation, the Court will consider whether the settlement is within the range of possible approval such that there "is any reason to notify the class members of the proposed settlement and to proceed with a fairness hearing." Armstrong v. Board of School Directors, 616 F.2d ...


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