United States District Court, N.D. California
SHAWN ESPARZA, on behalf of herself, and all others similarly situated, Plaintiff,
SMARTPAY LEASING, INC., Defendant.
ORDER RE PRELIMINARY APPROVAL OF CLASS ACTION
WILLIAM ALSUP UNITED STATES DISTRICT JUDGE
class action for alleged violations of the Telephone Consumer
Protection Act, plaintiff moves for preliminary approval of a
proposed class settlement. For the reasons explained below,
the motion is Granted.
early 2016, plaintiff Shawn Esparza allegedly terminated her
lease of a mobile phone from defendant Smartpay Leasing, Inc.
She nonetheless continued to receive promotional text
messages from defendant on a different phone. The messages
continued even after plaintiff requested defendant stop
sending them. Defendant later learned that a coding error in
its platform prevented individuals from opting out of
receiving the texts. Based on these allegations, plaintiff
filed her initial complaint in June 2017 asserting two claims
for negligent and willful violations of the TCPA (Compl.
¶¶ 19, 22-29, 53-63). A June 2019 order certified
the following class:
“STOP” Text Message Class: All persons
within the United States (i) to whose cellular telephone
number (ii) SmartPay Leasing, Inc. sent a text message (iii)
using its vendor Twilio, Inc.'s platform (iv) from
September 29, 2015 to June 13, 2017, (v) after texting the
2019, following mediation with the Honorable Leo S. Papas,
Ret. of Judicate West in San Diego, the parties reached a
settlement. Plaintiff now moves for preliminary approval of
the class action settlement agreement (Dkt. Nos. 89, 99,
103). Defendant does not oppose. This order follows full
briefing and oral argument.
Rule of Civil Procedure 23(e) provides that “[t]he
claims, issues, or defenses of a certified class . . . may be
settled . . . only with the court's approval.”
Preliminary approval is appropriate if “the proposed
settlement appears to be the product of serious, informed,
non-collusive negotiations, has no obvious deficiencies, does
not improperly grant preferential treatment to class
representatives or segments of the class, and falls within
the range of possible approval.” In re Tableware
Antitrust Litig., 484 F.Supp.2d 1078, 1079 (N.D. Cal.
2007) (Chief Judge Vaughn Walker). Here, the proposed
settlement agreement satisfies these requirements.
Benefit to Class Members.
proposed class settlement establishes a gross $8, 679, 000
non-reversionary settlement fund to be distributed evenly
among 23, 144 class members. Each class member would
accordingly receive a gross payment of $375. Because the TCPA
provides for statutory damages of $500 per violation, this
settlement amounts to 75% of the monetary damages plaintiff
contends is owed to the class. This is before any deductions
from the settlement fund, which deductions will include any
future awards for plaintiffs' attorney's fees and
litigation expenses, any incentive award, and payments to the
the settlement fund reflects a discount on plaintiff's
claims, there exists a risk that defendant would go bankrupt
and the class would be left with much less (if anything) even
if plaintiffs did succeed at trial. This motion follows the
parties' exchange of key written and documentary
discovery and motion practice, with defendant consistently
denying plaintiff's allegations. The difference between
the possible recovery and the gross settlement fund accounts
for the avoided risks and costs of continued litigation and
thus appears reasonable. The reasonableness of the benefit to
class members will ultimately hinge, however, on the amount
allocated towards the settlement administrator,
attorney's fees, litigation expenses, and any incentive
award. As of now, the settlement amount falls within the
range of approval.
Scope of Release.
proposed settlement agreement defines the class using the
same definitions set forth in the class certification order.
The agreement also only releases all claims that relate to
automated text message pursuant to the TCPA, U.S.C § 227
and parallel state law claims related to such text messages
sent by SmartPay to class members during the defined class
period. The scope of the class definition and release in the