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Patrick Grannan, On Behalf of Himself and All Others Similarly Situated v. Alliant Law Group

January 24, 2012


The opinion of the court was delivered by: Howard R. Lloyd United States Magistrate Judge

** E-filed January 24, 2012 **


United States District Court Northern District of California


The plaintiff and class representative, Patrick Grannan, moves for Final Approval of the Stipulation of Settlement and Release ("Settlement Agreement") between the parties and for 19 attorney's fees and costs. Defendant Alliant Law Group ("Alliant") filed Statements of Non- Opposition as to both motions. A third party, Cardservice International ("Cardservice") having 21 previously filed a notice of lien against Grannan, objects to the settlement agreement. The matters 22 were heard on November 1, 2011.


Patrick Grannan brought this putative class action in June of 2010 against Alliant Law Group alleging violations of the Telephone Consumer Protection Act ("TCPA"), 47 U.S.C. § 227 et 26 seq. and seeking damages and injunctive relief. He claimed that Alliant, acting as debt collector for 27 its creditor clients, had violated the TCPA by calling cell phones of individuals who had not 28 supplied express prior consent to receive such calls, as required under the Act. Although plaintiffs have not asserted any actual damages, the TCPA permits claimants to recover statutory damages in 2 the amount of $500 per violation of the Act, and up to $1,500 per willful violation. 47 U.S.C. § 3 227(b). In addition, the TCPA permits claimants to seek injunctive relief to prevent future 4 violations. Id. After filing its answer to the complaint, Alliant ceased its debt collection work. The 5 parties conducted some discovery and then reached a tentative settlement. 6

In May of 2011, the parties filed a joint motion for certification of the tentative settlement 8 class and preliminary approval of the proposed settlement (Dkt. No. 21). That motion included the 9 original Stipulation for Settlement and Release ("Settlement Agreement") and proposed notice 10 procedures for notifying the purported class members of the settlement and instructing them how to file a claim or opt-out of the class. After the preliminary approval hearing, the court issued an interim order asking Grannan to submit a letter brief explaining whether the $8,500 incentive 13 payment the parties proposed to give him as class representative was an appropriate amount (Dkt. 14 No. 23). Plaintiff responded with a brief that requested an amended incentive payment to Grannan in 15 the amount of $5,000. 16

Grannan, on behalf of himself and the preliminarily approved Settlement Class. The defendant 18 agreed to certification of the settlement class and offered to pay the maximum limit, $1,000,000, 19 under its insurance policy, and stipulated to an injunction that would prevent it from conducting 20 similar violations should it recommence debt collection activities. 21

On June 22, 2011, this court certified the preliminary Settlement Class, preliminarily 22 approved the Settlement Agreement, approved and directed a plan for giving notice to class 23 members, appointed Class Counsel, and appointed the Claims Administrator ("Prelim. Approval 24 Order") (Dkt. No. 25). The court also set deadlines for objecting to the settlement and for requesting 25 exclusion from the Settlement Class. The court later granted the parties' stipulated request to extend 26 the opt-out, objections, and claims period for those potential class members who could not be served 27 with the requisite notice materials in the first instance (Dkt. No. 31). 28

Preliminary Approval of the Settlement and Certification of the Class

The Settlement Agreement would completely resolve the claims brought against Alliant by 2 that hearing and were heard by the court. The court has also considered the only objection received 3 in accordance with the Court's Prelim. Approval Order. 4

This court finds that it has jurisdiction over the claims the members of the class asserted in 6 this proceeding, personal jurisdiction over the settling parties (including all members of the 7 settlement class), and subject matter jurisdiction to approve the Settlement Agreement filed with this 8 court. 9

A. Final Certification of Settlement Class

1. Class Definition and Notice to the Class

The court held a final fairness hearing on November 1, 2011. The moving parties appeared at



13 as all persons within the United States to whom any telephone calls were made by Alliant or any of 14 the other Released Parties between June 25, 2006 and June 22, 2011, the date of the Preliminary 15

Approval Order, to such person's cellular telephone, paging service, specialized mobile radio 16 service, other radio common carrier service or any service for which the called party is charged for 17 the call, through the use of any automatic telephone dialing system which has the capacity to store 18 or produce numbers (whether or not such capacity was used), including, but not limited to, an 19 automated dialing machine dialer, auto-dialer or predictive dialer, or by the use of an artificial or 20 prerecorded voice, without the called party's express consent. This definition is subject to 21 exclusions based on people with personal or professional relationships to the defendants and all 22 parties' counsel in this case, and people who validly excused themselves. 23

This court preliminarily approved the parties' proposed notice procedure as it was laid out in 25 the court's Order of June 22, 2011. Dkt. No. 25. The court is now satisfied that the notice procedure 26 was carried out according to the applicable standards and that it has satisfied the requirements of the 27 federal Class Action Fairness Act ("CAFA"), 28 U.S.C. § 1715, and Fed. R. Civ. P. 23. 28

Class Definition: The parties agreed to certification of a Settlement Class generally defined

Notice to the Class:

2 a cellular phone number that appeared in Alliant's electronic database of collection calls made. Dkt. 3

No. 46 ¶ 3 ("Vasquez Declaration"). The database also included the names, addresses, and business 4 information that Alliant had for each individual. 108,246 of the cellular phone numbers were 5 accompanied by names and addresses; these individuals were sent postcard-type notices with a 6 summary of the Settlement Agreement and information about filing a claim. Of those 108,246, 7

There were 137,891 potential class members in this action. Each individual was identified by 33,017 postcards were returned as undeliverable, and of those 33,017, the Claims Administrator 8 located updated addresses and sent new postcards to 12,604 individuals. Vasquez Dec. ¶¶ 9-10. The 9 court granted an extension of time to file a claim or opt-out solely for those individuals whose 10 postcards were originally returned as undeliverable. Dkt. No. 31. The Claims Administrator published a press release about the settlement through PR Newswire and in USA Today. Vasquez Dec. ¶¶ 7-8. In addition, it established a website dedicated to the case, where class members could 13 access court filings and information about the case, look up deadlines for filing claims, and file a 14 claim. Vasquez Dec. ¶ 11. Finally, the Claims Administrator set up a toll-free telephone number 15 where class members could inquire about the Settlement and make a claim. Vasquez Dec. ¶ 12. The 16

In total, the claims administrator received 1,986 claim forms. Of those, 979 were filed 18 online, 994 through telephone support, and 8 through postal mail. Opt-outs had to be postmarked by 19

According to plaintiff's counsel at hearing, all six of the class members who opted out will be 21 excluded from the class. 22

The Class Action Fairness Act ("CAFA") requires defendants to send to the appropriate state 24 and federal officials a copy of the complaint, notice of scheduled judicial hearings, proposed or final 25 notifications to class members, proposed or final class settlements, any other contemporaneous 26 agreements between the parties, any final judgments or notice of dismissal, and the names of class 27 members if feasible. See 28 U.S.C. § 1715(b)(1-8). The court is satisfied that the notices were sent 28 (See Dkt. No. 46 at 2).

Claims Administrator received 2,965 phone calls, resulting in 994 claims filed. Id. 17

October 15, 2011. One class member timely opted out, and five untimely opt-outs were received. 20

a. Notice Under the Class Action Fairness Act

3 provide "the best notice that is practicable under the circumstances") and 23(e)(1) (requiring court to 4

In class action settlements, it is common practice to provide a single notice program that satisfies 6 both of these notice standards. See David F. Herr, Annotated Manual for Complex Litigation § 7

b. Notice Under Fed. R. Civ. P. 23

The notice program satisfied both Fed. R. Civ. P. Rule 23(c)(2)(B) (requiring that the court "direct notice in a reasonable manner to all class members who would be bound by [settlement]"). 5

21.31 (4th ed. 2005). In this case, postal mail was well suited for locating and notifying class 8 members, since the violations by defendant arose out of auto-dialed telephone calls made to cellular 9 telephones, which typically have a name and physical mailing address associated with them. The 10 court reviewed and approved these notices before they were disseminated and found that they were written in plain language. The notice clearly stated the nature of the action; the class definition; the class claims, issues, and defenses; that class members could appear through counsel; when and 13 how class members could elect to be excluded; and the binding effect of a class judgment on class 14 members. See Fed. R. Civ. P. 23(c)(2)(B). It also informed class members of the amount of 15 attorneys' fees requested by Class Counsel. Fed. R. Civ. P. 23(h)(1). 16

17 apprise the Settlement Class of the pendency of this action, all material elements of the Settlement, 18 the opportunity for Settlement Class Members to exclude themselves from, object to, or comment 19 on the settlement and to appear at the Final Fairness Hearing. The notice was the best notice 20 practicable under the circumstances, satisfying the requirements of Rule 23(c)(2)(B); provided 21 notice in a reasonable manner to all class members, satisfying Rule 23(e)(1)(B); was adequate and 22 sufficient notice to all Class Members; and, complied fully with the laws of the United States and of 23 the Federal Rules of Civil Procedure, due process and any other applicable rules of court. 24

The parties have agreed that upon entry of final approval of the Settlement Agreement, the Class Representative, Class Members, and their successors and assigns will have permanently 27 released any and all of the Released Claims against any of the Released Parties, as set forth in the 28 Settlement Agreement. See Settlement Agreement, pp. 8-9, 15-16. Pursuant to the release contained

The Court concludes that the notice was reasonably calculated under the circumstances to

2. Scope of Release

in the Agreement, the Released Claims are compromised, settled, released, discharged, and 2 dismissed with prejudice by virtue of these proceedings and this order. The Released Claims include 3 any and all claims related to or arising out of the allegations of Alliant's TCPA violations stated in 4 the complaint, and any other claims for TCPA violations that may be or become known to class 5 members. In addition, class members agree to release ...

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