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Mendez v. C-Two Group, Inc.

United States District Court, N.D. California

March 27, 2017

JAMIE MADRIGAL MENDEZ, Plaintiff,
v.
C-TWO GROUP, INC., et al., Defendants.

          ORDER GRANTING PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT RE: DKT. NO. 104.

          HAYWOOD S. GILLIAM, JR. United States District Judge.

         Pending before the Court is the unopposed motion for preliminary approval of class action settlement filed by Plaintiff Jamie Mendez (“Plaintiff”), individually and on behalf of the settlement class as defined herein. Dkt. No. 104 (“Mot.”). Plaintiff filed suit against Defendants C-Two Group, Inc. and C&L Associates, Inc. (collectively, “Defendants”) for violating the Telephone Consumer Protection Act, 47 U.S.C. § 227, et seq. (“TCPA”) by allegedly sending marketing text messages to Plaintiff and the putative class using an automatic telephone dialing system (“ATDS”). The parties have reached a settlement regarding Plaintiff's claim and now seek required court approval of the proposed class settlement.

         The Court has carefully considered the arguments of the parties. For the reasons set forth below, the Court GRANTS Plaintiff's motion for preliminary approval of class action settlement.

         I. BACKGROUND

         A. Factual Allegations and Procedural History

         Plaintiff filed her initial complaint, on behalf of herself and others similarly situated, in San Francisco Superior Court on November 5, 2013. Dkt. No. 1 at 2. The defendants named in that complaint jointly removed the action to this Court shortly thereafter. Id. Plaintiff then filed a first amended class action complaint, which, on motion, the Court dismissed for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). Dkt. Nos. 9, 23 & 36. With leave of the Court, Dkt. No. 40, Plaintiff filed the operative second amended class action complaint against Defendants, alleging that they sent her unsolicited and nonconsensual text messages that sought her patronage at a nightclub in San Francisco called Infusion Lounge (“Infusion Lounge”) for over two years. Dkt. No. 41 ¶¶ 13-14. Plaintiff argues that this conduct violated Section 227 of the TCPA, which proscribes, in relevant part, using an ATDS to contact someone in the United States on their telephone without prior express consent. Id. ¶¶ 27-28. On that basis, Plaintiff sought compensatory and punitive damages, injunctive relief, and attorneys' fees and costs. Id. at 7-8. Defendants answered the complaint on August 5, 2014. Dkt. No. 48.

         On March 13, 2015, Plaintiff moved for class certification. Dkt. No. 64. Defendants jointly opposed, Dkt. No. 68, and Plaintiff replied, Dkt. No. 72. On June 2, 2015, the Court certified the following litigation class pursuant to FRCP 23(b)(3), Dkt. No. 75: “All individuals who entered their contact information online through Infusion Lounge's website and were sent a text message from SMS Short Code 99158 that referenced the Infusion Lounge from November 5, 2009 through October 15, 2013.” Dkt. No. 75. On December 10, 2015, the Court issued an accompanying Order Certifying Class stating the Court's reasoning for certifying the class in further detail. Dkt. No. 92.

         Plaintiff filed the present motion on August 26, 2016, see Mot., and the Court held a hearing on October 27, 2016, see Dkt. No. 107.

         B. Overview of the Proposed Settlement

         The parties executed a class action settlement agreement detailing the provisions of the proposed settlement. Dkt. No. 104, Ex. A. Following the October 27, 2016 hearing, Plaintiff filed an updated settlement agreement, which altered the definition of the term “settlement certificates.” See Dkt. No. 108-1, Ex. 3. On March 21, 2017, the Court advised the parties of additional deficiencies in the settlement agreement, Dkt. No. 110, and Plaintiff filed a second revised settlement agreement on March 24, 2017, Dkt. No. 111-2, Ex. A (“SA”). The key terms are as follows:

         Settlement Class: All individuals who entered their contact information online through Infusion Lounge's website and were sent a text message from SMS Short Code 99158 that referenced the Infusion Lounge from November 5, 2009 through October 15, 2013. SA ¶ 1.26. The parties have represented that an estimated total of 4, 879 persons fall within this class definition, not including individuals who may submit a valid request for exclusion. See Dkt. No. 104, Lambert Decl. at ¶ 9.

         Relief: Each class member will be directly issued a settlement certificate valued at $10 that can be redeemed for one-time free entry into the Infusion Lounge on any Wednesday, Thursday, Friday, or Saturday on which the Infusion Lounge is open to the public. SA ¶ 1.12. The certificates will be freely transferrable, may not be redeemed for cash, may not be used for anything other than entry into the club, are not gift cards, may only be used once, may be declared void if a valid code is not included on the certificate, and shall expire 365 days after issuance. Id. Codes will be directly disseminated to class members following final approval. Mot. at 5. Class members will not need to submit a claim form. Id.

         Class Certification, Representative, and Counsel: The Court previously certified the class identified here and granted Plaintiffs request for appointment as class representative and Plaintiffs attorneys as class counsel. See Dkt. No. 92.

         Attorneys' Fees and Costs: The agreement authorizes class counsel to apply to the Court for an award of costs incurred in litigating this case not to exceed $6, 500. SA 8.1. Class counsel shall not seek an award of attorneys' fees. Id. Defendants agree not to oppose a request for costs less than or equal to $6, 500. Id.

         Settlement Administration Costs: Defendants will pay the settlement administrator for all costs associated with the settlement, including providing notice, maintaining the settlement website and arranging for the issuance of the settlement certificates. Id. ¶ 2.2, 4.2. The parties estimate that the cost of administering the settlement will be $7, 000. Id. ¶ 2.2.

         Incentive Award: The agreement authorizes the named Plaintiff to seek a $500 incentive award for her participation in this lawsuit, which Defendants do not oppose. SA ¶ 8.3-8.4.

         Unclaimed Settlement Funds: The agreement provides that unclaimed settlement certificates shall expire 365 days after issuance. Id. ¶ 1.12.

         Class Notice: A third-party settlement administrator will establish a settlement website within 21 days and send class notice via direct email within 30 days of the Court's entry of an order granting the motion for preliminary approval. Id. ΒΆ 4.2. The parties attached a revised copy of their ...


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