Saliba v. KS Statebank Corporation

• Court: District Court, D. Arizona
• Decided: September 20, 2024
• Docket: 2:20-cv-00503
• Status: Unknown

Opinion

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA

9 Ricci Saliba, No. CV-20-00503-PHX-JAT

10 Plaintiff, ORDER

11 v.

12 KS Statebank Corporation,

13 Defendant. 14 15 Pending before the Court is the Joint Motion to Approve Cy Pres Recipient (“Joint 16 Motion”). (Doc. 66). 17 I. BACKGROUND 18 The Court approved a Final Class Action Settlement on October 6, 2021. (Doc. 63). 19 The settlement agreement, in part, provided the following: If any amounts remain 180 days from issuance of this second distribution, the 20 Parties shall seek Court approval of a cy pres award to a nonprofit charitable 21 organization. The Parties shall jointly select a cy pres recipient prior to moving for the Court’s approval. 22 (Doc. 55-1 p. 22-23; Doc. 66-1 p. 22-23). The parties followed the distribution procedures 23 and $5,577.38 remains. (Doc. 66 p. 2). The parties then filed the pending Joint Motion, 24 proposing People Acting Now Discover Answers (“PANDA”) as the cy pres recipient. 25 (Doc. 66 p. 2). PANDA’s mission “is to support discovery processes that lead to improved 26 treatments and cures for devastating childhood diseases.” Our Impact, PANDA 27 [https://perma.cc/JM34-YMN8]. PANDA “accomplishes its mission by raising awareness 28 and private funding for the Steele Children’s Research Center at the University of 1 Arizona.” Id. 2 II. DISCUSSION 3 a. Legal Standard 4 “Cy pres distributions must account for the nature of the plaintiffs’ lawsuit, the 5 objectives of the underlying statutes, and the interests of the silent class members, including 6 their geographic diversity.” Nachshin v. AOL, LLC, 663 F.3d 1034, 1036 (9th Cir. 2011) 7 (citing Six (6) Mexican Workers v. Ariz. Citrus Growers, 904 F.2d 1301, 1307-08 (9th Cir. 8 1990)). A beneficiary based in a single location may still be appropriate if the beneficiary 9 has a nationwide reach. See In re Easysaver Rewards Litig., 906 F.3d 747, 761-62 (9th Cir. 10 2018) (finding appropriate university recipients of single location because research topics 11 had national scope, research was “directly responsive” to underlying issues, and impact of 12 research was not confined to single location.) 13 There must also be “a driving nexus between the plaintiff class and the cy pres 14 beneficiaries.” Id. at 1038. There are many cases where courts have rejected a proposed cy 15 pres recipient because it failed the nexus requirement. In Six Mexican Workers, the court 16 rejected a cy pres award to the “Inter-American Fund (IAF) for indirect humanitarian 17 assistance in Mexico” in part because benefitted group was “too remote from the plaintiff 18 class” and there was “no reasonable certainty that any member [would] be benefited.” 904 19 F.2d at 1304-09. In Nachshin, the court rejected donations to the Legal Aid Foundation of 20 Los Angeles, the Boys and Girls Club of Santa Monica and Los Angeles, and the Federal 21 Judicial Center Foundation in part because the recipients had nothing to do with the 22 plaintiff’s claims, which related to AOL’s provision of commercial email services. 663 23 F.3d at 1040. The Ninth Circuit concluded that “[t]he parties should not have trouble 24 selecting beneficiaries from any number of non-profit organizations that work to protect 25 internet users from fraud, predation, and other forms of online malfeasance.” Id. at 1041. 26 In Dennis v. Kellogg, the settlement specified that “any charity to receive a portion of the 27 cy pres distributions [would] be one that feeds the indigent.” 697 F.3d 858, 866 (9th Cir. 28 2012). The court found that while a noble goal, and while cereal was part of the case subject 1 || matter, such recipients were “divorced from the concerns embodied in [the] consumer 2|| protection laws” at issue in the case. Jd. On the other hand, a cy pres recipient set up to “promote the interests of online privacy and security” had “a direct and substantial nexus to the interests of absent class members” where the litigation concerned “various state and 5|| federal privacy statues.” Lane v. Facebook, Inc., 696 F.3d 811, 816-17, 821 (9th Cir. 2012). 6 b. Analysis 7 The Court appreciates why the parties proposed PANDA as a worthy cy pres 8 || recipient. However, “[n]ot just any worthy recipient can qualify as an appropriate cy pres 9|| beneficiary.” Dennis, 697 F.3d at 865. The Joint Motion does not explain how PANDA 10 || qualifies as an appropriate cy pres beneficiary based on well-established Ninth Circuit law. |} On cursory examination of such requirements, the Court does not see how PANDA can 12 || meet such requirements because there is no nexus between the objectives of the Telephone 13 |} Consumer Protection Act and PANDA’s research on childhood diseases. 14 HI. CONCLUSION 15 Plaintiff should identify the legal authority that supports the Court approving the 16 || selection of PANDA as the cy pres recipient. If there is no such legal authority, Plaintiff || should select a different recipient and submit another motion. 18 Accordingly, 19 IT IS ORDERED that the Joint Motion to Approve Cy Pres Recipient (Doc. 66) is 20 || denied without prejudice. 21 Dated this 20th day of September, 2024. 22 23 A 24 95 James A. Teil Org Senior United States District Judge 26 27 28

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