Walters v. Target Corp.

• Court: District Court, S.D. California
• Decided: December 2, 2019
• Docket: 3:16-cv-01678
• Status: Unknown

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 JAMES WALTERS, on behalf of himself Case No.: 3:16-cv-1678-L-MDD and all others similarly situated, 12 ORDER GRANTING MOTION FOR Plaintiff, 13 PRELIMINARY APPROVAL OF v. CLASS ACTION SETTLEMENT 14 AND CERTIFICATION OF TARGET CORP., 15 SETTLEMENT CLASS [Doc. 155] Defendant. 16

17 18 Pending before the Court is the Plaintiffs James Walters’ and the proposed class 19 members’ (together “Plaintiffs”) unopposed motion for preliminary approval of class 20 action settlement [ECF No. 155]. In the instant motion, Plaintiffs request the Court 21 pursuant to Federal Rule of Civil Procedure 23 to do the following: (1) grant preliminary 22 approval of the settlement, (2) certify the class for settlement purposes, (3) appoint James 23 Walters as class representative, (4) approve the notice program as contemplated in the 24 settlement agreement (“Agreement”) and approve the form and content of the settlement 25 notices, (5) approve and order the opt-out and objection procedures set forth in the 26 27 28 1 Agreement, (6) stay the California Action pending final approval, (7) appoint Class 2 Counsel as listed in the Agreement2, and (8) schedule a final approval hearing. Upon 3 consideration of the instant motion, the Court hereby GRANTS Plaintiffs’ motion as 4 follows. 5 I. Background 6 On June 29, 2016, Plaintiff Walters filed the California action against Target seeking 7 monetary damages, restitution, and injunctive relief for Target’s alleged breach of the 8 Target Debit Card (“TDC”) Agreement (“TDC” Agreement”) and California law. See Doc. 9 1. On August 15, 2016, Plaintiff Walters filed a First Amended Complaint (“FAC”) 10 asserting the following causes of action: (1) breach of contract, including the implied 11 covenant of good faith and fair dealing; (2) unjust enrichment; (3) unconscionability; (4) 12 conversion; (5) violation of the “unfair” prong of California Unfair Competition Law 13 (“UCL”), Cal. Bus. & Prof. Code §§ 17200 et seq.; (6) violation of the “fraudulent prong 14 of the UCL; (7) violation of the “unlawful” prong of the UCL; and (8) violation of the 15 Consumer Legal Remedies Act “(CLRA”), Cal. Civ. Code §§ 1750 et seq. See Doc. 3. 16 Between September 14, 2016 and March 8, 2018, the parties engaged in motion practice 17 from which Plaintiff’s FAC claims were limited, and Target eventually filed its Amended 18 Answer to the FAC. See Docs. 13, 29, 32, 33, 59. Subsequently, the parties engaged in 19 fact discovery, depositions, and exchanged expert reports. See Doc. 155-3 at 4. After the 20

21 22 1 The California Action encompasses the putative action filed by Plaintiff Walters against Defendant Target Corporation (“Target”), on June 29, 2016, claiming the Target Debit Card (“TDC”) is deceptively 23 marketed. See Doc. 155-2 at 2. On September 12, 2018, Plaintiffs Dixon and Powell (“the Minnesota plaintiffs”) filed a similar action against Target in Minnesota (“the Minnesota Action”). Id. at 3. On 24 January 22, 2019, the Minnesota plaintiffs filed a first amended complaint against Target, alleging similar 25 conduct as alleged in the California action and adding Plaintiff Polcare as another named plaintiff. Id. All parties have agreed that the pending settlement serves as full settlement of both the California and 26 Minnesota actions, subject to final approval. See Doc. 155-2 at 2. 2 In the memorandum in support of the instant motion, Plaintiffs request the Court “appoint as Class 27 Counsel the law firms listed in Section 1.7 of the Agreement[.]” Doc. 155-1 at 32. However, Class Counsel is listed in Section 1.5 of the Settlement Agreement’s (“Settlement”). Doc. 155-2 at 4. The Court 28 1 close of discovery, Target filed a motion for summary judgment, and Plaintiff filed a 2 motion for class certification.3 Docs. 90, 98. 3 On September 12, 2018, Plaintiffs Powell and Dixon commenced the Minnesota 4 Action. 5 In both actions, Plaintiffs allege that Target “omits and misrepresents the risks of 6 using the TDC,” resulting in cardholders suffering significant fee penalties when the 7 checking account linked to their TDC has insufficient funds. Doc. 155-1 at 9. Plaintiffs 8 further allege that the TDC card agreements fail to properly describe how the TDC operates 9 on a slower Automated Clearinghouse Network (“ACH Network”), unlike other debit card 10 networks, causing customers to incur fees for insufficient funds as the TDC does not 11 transmit requests to consumers’ banks for days after a purchase. Id. 12 On March 14, 2019, the Parties mediated both actions in Los Angeles, California. 13 See Doc. 155-3 at 5. Although the Parties did not settle that day, the progress made during 14 mediation laid the foundation to facilitate the Parties reaching settlement after several 15 weeks of negotiation. See id. On April 29, 2019, the parties filed a Notice of Settlement 16 and signed the Settlement on June 18, 2019. See Docs. 155-2 at 22-25; 155-3 at 5. 17 II. Settlement 18 Plaintiff proposes the Settlement class be an opt-out class under Rule 23(b)(2) and 19 (3) of the Federal Rules of Civil Procedure with the following definition: 20 All TDC holders in the United States who, within the Class Period, incurred at least one [Returned Payment Fee (“RPF”)] RPF in connection with their 21 TDC, that was not refunded or waived. 22 Doc. 155-2 at 6. The Settlement defines the Class Period as the period between June 29, 23 2012 and the date this order is filed. Id. at 4. 24 The Settlement has a total cash value of $8,222,330, consisting of the Cash 25 Settlement Amount of $5,000,000 payable by Target to establish the Settlement Fund and 26 27 28 1 the Debt Reduction Cash Amount of $3,222,330. See Docs. 155-1 at 12; 155-2 at 4. The 2 Cash Settlement is earmarked to pay: (1) Settlement Class Member Cash Payments; (2) 3 any Court awarded attorneys’ fees and litigation costs; (c) any Court awarded Class 4 Representative Service Awards; and any Administrative Costs. See Doc. 155-2. 5 Settlement class members will not have to submit claims to receive benefits under the 6 Settlement. Doc. 155-1 at 12. Instead, the Settlement Administrator will automatically 7 distribute Settlement Class Member Cash Payments4 and Debt Reduction Cash Amounts5 8 to the Settlement Class. Ibid. To the extent any funds remain in the Settlement Fund 9 Account after the distributions, those funds will: “(a) be distributed to Settlement Class 10 Members who cashed their checks via a secondary distribution, if economically feasible; 11 or (b) through a residual cy pres program benefitting the National Endowment for Financial 12 Education.” Doc. 155-1 at 13; see doc. 155-2 at 15. Under no circumstance will the funds 13 revert to Target, except where the Settlement is terminated according to its terms. Id. 14 The Settlement Agreement also provides three forms of non-monetary relief. First, 15 “Target agrees not to implement or assess RFP [sic] or any equivalent fee, in connection 16 with TDC transactions that are less than $7.00, for a period of two years[.]” See Doc. 155- 17 2 at 7. Second, “Target agrees that any RFP [sic] charged will be the lesser of the RFP 18 [sic] as disclosed by the TDC Agreement or the amount of the TDC transaction that was 19 returned unpaid, for a period of two years[.]” Ibid. Third, the Parties will collaborate until 20 final approval of the Settlement to inform TDC holders about how use of the TDC could 21 cause RPFs due to non-sufficient funds or overdraft fees from the customer’s banking 22 institution(s). Ibid. 23

24 25 4 “[T]he Net Settlement Fund will be divided by the number of Settlement Class Members who paid at least one RPF that was not refunded or waived.” Doc. 155-1 at 12. 26 5 “The Debt Reduction Cash Amount shall be used by Target to make Debt Reduction Payments toward 27 the outstanding balance on the Settlement Class Member’s TDC account in an amount of 25% of the first RPF that was assessed not paid. Doc. 155-1 at 12. 28 1 III. Legal Standard 2 “[I]n the context of a case in which the parties reach a settlement agreement prior to 3 class certification, courts must peruse the proposed compromise to ratify both the propriety 4 of the certification and the fairness of the settlement.” Staton v. Boeing Co., 327 F.3d 938, 5 952 (9th Cir. 2003). The Court first weighs whether the proposed class meets the 6 certification requirements and next whether the proposed settlement is “fundamentally fair, 7 adequate, and reasonable.” Id. Rule 23(a) provides the four perquisites for class 8 certification: (1) numerosity; (2) commonality; (3) typicality; and (4) adequacy. Fed. R. 9 Civ. P. 23(a). Under Rule 23(b)(3), a class action can exist if “the court finds the questions 10 of and fact common to class members predominate over any questions affecting only 11 individual members, and that a class action is superior to other available methods of fairly 12 and efficiently adjudicating the controversy.” Fed. R. Civ. P. 23(b)(3). A class action can 13 also be maintained under Rule 23(b)(2) if “the party opposing the class has acted or refused 14 to act on grounds that apply generally to the class, so that final injunctive relief or 15 corresponding declaratory relief is appropriate respecting the class as a whole[.]” Fed. R. 16 Civ. P. 23(b)(2). 17 Additionally, the proposed settlement must be fair, consistent with counsel’s 18 fiduciary obligations to the class, and not the product of collusion, even if the proposed 19 terms are not ideal. Hanlon v. Chrysler Corp., 150 F.3d 1011, 1027 (9th Cir. 1998). A 20 court must balance the following factors in evaluating a proposed settlement: 21 [T]he strength of the plaintiffs’ case; the risk, expense, complexity, and likely duration of further litigation; the risk of maintaining class action status 22 throughout the trial; the amount offered in settlement; the extent of discovery 23 completed and the stage of the proceedings; the experience and views of counsel; the presence of a governmental participant; and the reaction of the 24 class members to the proposed settlement. Id. at 1026 (citations omitted). 25 / / / 26 / / / 27 / / / 28 / / / 1 IV. Discussion 2 A. Class Certification 3 When evaluating a class action settlement, courts must pay “undiluted, even 4 heightened attention” to the class certification requirements. Amchem Prods., Inc. v. 5 Windsor, 521 U.S. 591, 620 (1997). 6 1. Numerosity 7 If “the class is so large that joinder of all members is impracticable[,]” the 8 numerosity requirement is satisfied. Fed. R. Civ. P. 23(a)(1). Here, the numerosity 9 requirement is satisfied as the proposed Settlement Class consists of thousands of TDC 10 holders and joinder of all class members is impracticable. 11 2. Commonality 12 “The crux of . . . commonality [is] the rule requiring a plaintiff to show that ‘there 13 are questions of law or fact common to the class.’” Wal-Mart Stores, Inc. v. Dukes, 564 14 U.S. 338, 349 (2011). The common contention “must be of such a nature that it is capable 15 of classwide resolution—which means that determination of its truth or falsity will resolve 16 an issue that is central to the validity of each one of the claims in one stroke.” Id. at 350. 17 Plaintiffs point out the following questions of law and fact common to the class: (1) 18 whether Target’s TDC processing practices violate the TDC Agreement; and (2) whether 19 the TDC Agreement and allegedly deceptive TDC marketing injured all Settlement Class 20 members through imposition of RPFs. Doc. 155-1 at 30. The Court finds that 21 determination of the truth or falsity of Target’s TDC processing or marketing mechanisms 22 would necessarily determine the validity of these questions for each class member. 23 Accordingly, the commonality requirement is satisfied. 24 3. Typicality 25 Typicality requires “the claims or defenses of the representative parties [to be] 26 typical of the claims or defenses of the class[.]” Fed. R. Civ. P. 23(a)(3). The Ninth Circuit 27 has found the typicality requirement satisfied when the named plaintiffs do not set forth 28 different claims or subject a defendant to setting forth unique defenses from those brought 1 by any other class member. See e.g., Kayes v. Pacific Lumber Co., 51 F.3d 1449, 1463 2 (9th Cir. 1995). Plaintiffs contend the typicality requirement is satisfied because “[The 3 named] Plaintiffs’ claims are reasonably coextensive with those of the absent [class] 4 members[.]” Doc. 155-1 at 30. The Court agrees, and, moreover, the named plaintiffs here 5 suffered the same injuries due to the same practices as the absent class members. As such, 6 the typicality requirement is satisfied. 7 4. Adequacy 8 Adequacy evaluates whether “the representative parties will fairly and adequately 9 protect the interests of the class.” Fed. R. Civ. P. 23(a)(4). A named plaintiff adequately 10 represents a class if the plaintiff “does not have conflicts of interest with the proposed 11 class” and is “represented by qualified and competent counsel.” See Wal-Mart Stores, Inc., 12 564 U.S. at 350 n.5. Here, the Court agrees with Plaintiffs’ contention that their interests 13 coexist with the absent class members in that both have the same interest in the Settlement’s 14 relief, relief from TDC fees. The Court also finds that class counsel is competent due to 15 class counsel’s purported experience in litigation, certification, trial and settlement of 16 nationwide class action cases. See Doc. 155-3 at 3. Accordingly, the adequacy 17 requirement is satisfied. 18 Therefore, Plaintiffs satisfied each Rule 23(a) class certification prerequisite. 19 5. Type of Class Action 20 Plaintiff contend that certification is appropriate here because “questions of law or 21 fact common to members of the Settlement Class predominate over any questions affecting 22 only individual members,” and the superior method of fairly and efficiently adjudicating 23 the action is through class action. Doc. 155-1 at 31 (citing Fed. R. Civ. P. 23(b)(3)). 24 Predominance weighs “whether proposed classes are sufficiently cohesive to 25 warrant adjudication by representation.” Hanlon v. Chrysler Corp., 150 F.3d 1011, 1022 26 (9th Cir. 1998). “Rule 23(b)(3) requires a showing that questions common to the class 27 predominate.” Amgen, Inc. v. Connecticut Retirement Plans and Trust Funds, 568 U.S. 28 455, 459 (2013). The predominance requirement is satisfied as questions of fact and law 1 common to the Settlement Class, such as class members’ contractual relationship with 2 Target via the TDC Agreement or Target’s liability for the RPF fees, outweigh any 3 individual issues that may arise. Despite Plaintiffs’ failure to assert any viable contention 4 that class action is superior to other available methods, it plainly evident to the Court that 5 class action is the superior method for fair and efficient adjudication here. See Doc. 155- 6 1 at 31-32; Fed. R. Civ. P. 23(b)(3)(A)-(D). As such, the Court could certify the Settlement 7 Class under Rule 23(b)(3). 8 Notwithstanding, Plaintiffs also pursued conditional certification under Rule 9 23(b)(2). A class action can be maintained under Rule 23(b)(2) if “the party opposing the 10 class has acted or refused to act on grounds that apply generally to the class, so that final 11 injunctive relief or corresponding declaratory relief is appropriate respecting the class as a 12 whole[.]” Fed. R. Civ. P. 23(b)(2). Rule 23(b)(2)’s requirements “are unquestionably 13 satisfied when members of a putative class seek uniform injunctive or declaratory relief 14 from policies or practices that are generally applicable to the class as a whole. Parsons v. 15 Ryan, 754 F.3d 657, 688 (9th Cir. 2014) (citation omitted). The Court finds that the 16 imposition of and relief from Target’s RPF fees related to its TDC is ground that applies 17 generally to the class. Here, the Parties have agreed that Target will change its business 18 practices as it pertains to RPFs associated with its TDC in a manner which applies 19 uniformly to the Settlement Class. As such, Rule 23(b)(2) is satisfied and the Court 20 certifies the class under this rule. 21 For the above-mentioned reasons, the Settlement Class defined as “All TDC holders 22 in the United States who, within the Class Period, incurred at least one RPF in connection 23 with their TDC, that was not refunded or waived[]” is certified for settlement purposes. 24 B. Settlement Terms 25 The Ninth Circuit maintains a “strong judicial policy” that favors the settlement of 26 class actions. Class Plaintiffs v. City of Seattle, 955 F.2d 1268, 1276 (9th Cir. 1992). The 27 court’s responsibility at the preliminary approval stage is to determine whether the 28 settlement falls “within the range of possible approval.” See Manual for Complex 1 Litigation, Fourth § 21.632 (FJC 2004). If “the proposed settlement appears to be the 2 product of serious, informed, non-collusive negotiations, has no obvious deficiencies, does 3 not improperly grant preferential treatment to class representatives or segments of the class, 4 and falls within the range of possible approval[,]” then preliminary approval the settlements 5 should granted. In re Tableware Antitrust Litig., 484 F.Supp.2d 1078, 1079 (N.D. Cal. 6 2007) (quoting Manual for Complex Litigation, Second § 30.44 (FJC 1985)). 7 1. Product of Non-collusive Negotiations 8 “Settlements reached with the help of a mediator are likely non-collusive.” Barbosa 9 v. MediCredit, Inc., at *6 (C.D. Cal. May 1, 2015) (citing Satchell v. Fed. Express Corp., 10 2007 WL 1114010, at *4 (N.D. Cal. Apr. 13, 2007) (“The assistance of an experienced 11 mediator in the settlement process confirms that the settlement is non-collusive.”)). The 12 Parties here engaged in formal mediation before an experienced mediator for a full day, 13 after completing discovery. The Parties thereafter continued their settlement discussions 14 for several weeks, following mediation, with the mediator’s assistance. As such, the Court 15 finds that this settlement was the product of arm’s-length negotiation. Accordingly, the 16 Court finds this factor weighs in favor of approval. 17 2. No Obvious Deficiencies 18 “[S]ettlement avoids the risks of extreme results on either end, i.e., complete or no 19 recovery. Thus, it is plainly reasonable for the parties at this stage to agree that the actual 20 recovery realized, and risks avoided here outweigh the opportunity to pursue potentially 21 more favorable results through full adjudication.” Dennis v. Kellogg Co., 2013 WL 22 6055326, at *3 (Nov. 14, 2013). The Court concludes that no obvious deficiencies to the 23 settlement exists here. The Settlement includes monetary relief of a $5,000,000 cash fund 24 and $3,222,230 in debt reduction funds and non-monetary relief consisting of modification 25 of TDC disclosures, an increase in minimum transaction amount before assessing an RPF, 26 and a commitment that RPFs will not exceed the transaction mount that incurred the fee. 27 See Doc. 155-2 at 7. Depending on the damages model referenced, Plaintiffs contend the 28 $5,000,000 cash settlement alone provides the Settlement Class approximately 20%-40% 1 of their probable damages, without the attendant risk of further litigation. Doc. 155-1 at 2 23. The Parties agree that settlement prevails over the risk of continued litigation. See 3 Doc. 155-3 at 7-8. Continued litigation could prove to be difficult, expensive, time 4 consuming, and possibly fruitless as motions for class certification and summary judgment 5 were contested and pending prior to settlement. Thus, this factor tilts in favor of approval. 6 3. No Preferential Treatment 7 “Although [the Ninth Circuit] ha[s] approved incentive awards for class 8 representatives in some cases, [it has instructed] district courts to scrutinize carefully the 9 awards so that they do not undermine the adequacy of the class representatives.” Radcliffe 10 v. Experian Solutions Inc., 715 F.3d 1157, 1163 (9th Cir. 2013) (reversing the district 11 court’s class action settlement approval). In Radcliffe, the court questioned, but did not 12 determine, “whether class representatives could be expected to fairly evaluate awards 13 ranging from $26 to $750 is a fair settlement value when they would receive $5,000 14 incentive awards.” Id. at 1165. The Ninth Circuit in In re Online DVD-Rental Antitrust 15 Litigation, 779 F.3d 934 (9th Cir. 2015) revealed that it examines the following factors 16 when evaluating incentive awards: “the number of named plaintiffs receiving incentive 17 payments, the proportion of the payments relative to the settlement amount, and the size of 18 each payment.” Id. at 947 (citing Staton v. Boeing Co., 327 F.3d 938, 977 (9th Cir. 2003)). 19 Here, the class representative service awards amounts are reasonable in light of the 20 time, effort, and risk each class representative assumed. Plaintiff Walters will apply for an 21 award not exceeding $10,0006, and Plaintiffs Dixon, Powell, and Polcare will apply for an 22 award not exceeding $3,000. Doc. 155-1 at 15. Using the Staton factors, each named 23 plaintiff is receiving an incentive award under the Settlement Agreement, the maximum 24 amount of incentive awards, collectively, would equate to less than one percent of the total 25

26 6 In the Long Form Notice, the Parties represent that Class Counsel will request Class Representative 27 Service award not to exceed $7,500 for Plaintiff Walters. Doc. 155-2 at 37. The Court will evaluate the amount and reasoning supporting the request for Plaintiff Walters’ Class Representative Service Award 28 1 settlement amount, and each payment is capped at a modest amount. These awards merely 2 compensate the class representatives for the risk they assumed and the successful assistance 3 they provided in this case. For example, the class representatives submitted to interviews 4 with Class Counsel, located and forwarded responsive documents and information, and 5 participated in conferences with Class Counsel. Doc. 155-3 at 6-7. Specifically, Plaintiff 6 Walters provided discovery documents and sat for deposition. Id. The Court finds the 7 class representatives adequately represent the class in light of their levels of participation 8 in a complicated case in which the absent class members will receive favorable monetary 9 and non-monetary relief without any effort. Accordingly, this factor favors approval. 10 4. Effectiveness of Distribution of Class Relief 11 The Court finds the method of processing and distributing class-member claims is 12 adequate. Here, the Settlement Class members do not have to submit claims to receive 13 relief benefits because the settlement administrator will automatically distribute the 14 Settlement Class Member Cash Payments and the Debt Relief Payments. Doc. 155-3 at 6. 15 In fact, the Settlement Administrator will distribute the Net Settlement Fund to the 16 Settlement Class within 30 days following the Effective Date, as contemplated in the 17 Settlement Agreement. Id.; Doc. 155-2 at 4. The Settlement Administrator will mail check 18 payments to the Settlement Class from the Net Settlement Fund. Doc. 155-2 at 13. Within 19 15 business days of this order, Target will provide the Settlement Administrator with the 20 following Settlement Class members’ information: 21 “(i) name; (ii) last known e-mail address if available; (iii) last known mailing address; (iv) TDC Account Number or some sort of unique identifier that can 22 be used to identify each separate Settlement Class member; (v) the date and 23 amount of the first RPF incurred by each Settlement Class member during the Class Period that has not been refunded or waived; and (vii) [sic] for each RPF 24 in item number (v), an identifier that distinguishes whether the RPF was paid 25 by the customer or remains due and owing. The Settlement Administrator shall use the data provided by Target to make the calculations required by the 26 Settlement, and the Settlement Administrator shall share the calculations with 27 Class Counsel.” 28 Doc. 155-2 at 10 ¶ 2.5 (b). 1 The Settlement Agreement provides the Settlement Administrator fair and clear 2 instructions on how to process each Settlement Class members’ claim. For each class 3 member who has paid all or part of their first RPF incurred during the Class Period, a Cash 4 Payment will be distributed equal to that class member’s pro rata share of the Net 5 Settlement Fund7 based on the dollar amount of the first RPF that class member paid. See 6 id. at 8 ¶ 2.2(b)(5). Alternatively, for each class member who has not paid their first RPF 7 incurred during the Class Period at the time Cash Payments are to be distributed, “the Debt 8 Reduction Cash Amount will be used by Target to reduce such outstanding RPF by twenty- 9 five percent [(25%)].” Id. at ¶ 2.2(b)(6). 10 The Court finds the effectiveness of the proposed method for processing and 11 distributing the class relief adequate because of its clear processing guidelines and 12 automatic distribution to absent class members. Therefore, this consideration also favors 13 approval. 14 5. Attorneys’ Fee Award and Timing of Payment 15 In order to determine the fairness and adequacy of a settlement, “a district court must 16 carefully assess the reasonableness of a fee amount spelled out in a class action settlement 17 agreement.” Staton, 327 F.3d at 963. “In a certified class action, the court may award 18 reasonable attorney’s fees and nontaxable costs that are authorized by law or by the parties’ 19 agreement.” Fed. R. Civ. P. 23(h). “[C]ourts have an independent obligation to ensure 20 that the award, like the settlement itself, is reasonable, even if the parties have already 21 agreed to an amount.” In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935, 941 (9th 22 Cir. 2011) (citations omitted). 23 In a common fund case, district courts may use either the percentage-of-the-fund 24 method or the lodestar method to calculate an appropriate attorneys’ fee award. Viciano v. 25 26 27 7 The Net Settlement Fund will be divided by the number of Settlement Class members who paid at least one RPF that was not refunded or waived to determine the specific Cash Payment amount. Doc. 155-1 at 28 1 Microsoft Corp., 290 F.3d 1043, 1047 (9th Cir. 2002); In re Wash. Pub. Power Supply Sys. 2 Sec. Litig., 19 F.3d 1291, 1295 (9th Cir. 1994). “The typical range of acceptable attorneys’ 3 fees in the Ninth Circuit is 20% to 33 1/3% of the total settlement value[.]” Vasquez v. 4 Coast Valley Roofing, Inc., 266 F.R.D. 482, 491 (E.D. Cal. 2010). When applying the 5 percentage-of-the-fund method, an attorneys’ fee award of “twenty-five percent is the 6 ‘benchmark’ that district courts should award.” In re Pac. Enters. Sec. litig., 47 F.3d 373, 7 379 (9th Cir. 1995) (citing Six (6) Mexican Workers v. Ariz. Citrus Growers, 904 F.2d 8 1301, 1311 (9th Cir. 1990)). Court “may adjust the benchmark when special circumstances 9 indicate a higher or lower percentage would be appropriate.” In re Pac. Enters. Sec. Litig., 10 47 F.3d at 379 (citing Six (6) Mexican Workers, 904 F.2d at 1311). The following factors 11 have been used as grounds to adjust the percentage upward or downward: (1) the results 12 achieved; (2) the risks of litigation; (3) the skill required and the quality of the work; (4) 13 the contingent nature of the fee; (5) the burdens carried by the class counsel; and (6) the 14 awards in similar cases. Monterrubio v. Best Buy Stores, LP, 291 F.R.D. 443, 455 (E.D. 15 Cal. 2013) (citation omitted); Craft v. San Bernardino, 624 F.Supp.2d 1113, 1116-17 (C.D. 16 Cal. 2008). Any class member must be allowed an opportunity to object to the fee motion 17 itself, aside from any objection the class member may have to the preliminary notice that 18 such a motion will be filed. See In re Mercury Interactive Corp. Sec. Litig. 618 F.3d 988, 19 993-95 (9th Cir. 2010). 20 Under the Settlement Agreement, the Parties have agreed that Class Counsel can 21 apply for an award from the Settlement not to exceed 30% ($2,466,699) of the Settlement 22 Value. Doc. 155-2 at 14. Class Counsel is also entitled to “apply for reimbursement for 23 costs and expenses incurred in the Actions.” Ibid. The Settlement Administrator is 24 required to pay Class Counsel from the Settlement Fund within 10 days of the Effective 25 under the Settlement Agreement. Id. at 15. The Court will scrutinize Class Counsel’s 26 request for an award of Class Counsel’s attorneys’ fees, costs, and expenses upon filing of 27 the motion for final approval of class action settlement. At this point, the Court finds the 28 1 Class Counsel’s award provision reasonable because of its language that Class Counsel 2 may apply for an award not to exceed 30% of the Settlement value. 3 Class Counsel offers no contentions about the fees it will seek at this point. 4 Notwithstanding, the Court advises that circumstances necessitating an attorneys’ fee 5 award that exceeds the 25% benchmark are not obvious here. See Six (6) Mexican Workers, 6 904 F.2d at 1311(affirming a twenty-five percent award where “the litigation lasted more 7 than 13 years, obtained substantial success, and involved complicated legal and factual 8 issues”). For that reason, the Court suggests Class Counsel file a thorough fee award 9 motion prior to the Final Approval Hearing that details the hours reasonably spent 10 representing Plaintiffs in this action. Class Counsel must also address each of the 25% 11 benchmark adjustment factors identified above. 12 C. Notice Program 13 For a Rule 23(b)(2) class, the court may direct appropriate notice. Fed. R. Civ. P. 14 23(c)(2)(A). In the class action settlement context, “[t]he parties must provide the court 15 with information sufficient to enable it to determine whether to give notice of the proposal 16 to the class.” Fed. R. Civ. P. 23(e)(1)(A). “[T]he mechanics of the notice process are left 17 to the discretion of the court subject only to the broad ‘reasonableness’ standards imposed 18 by due process.” Grunin v. Int’l House of Pancakes, 513 F.3d 114, 120 (8th Cir. 1975) 19 (see citing 7A C. Wright and A. Miller, Federal Practice and Procedure, Civil s 1797 at 237 20 (1972)). 21 The Court approves the Notice Program pursuant to the modifications discussed 22 below. Here, the notice consists of three layers: (1) email notice to Settlement Class 23 members for whom Target maintains their email addresses (Email Notice”); (2) direct mail 24 postcard notice to all Settlement Class members for whom Target does not have an email 25 address (“Postcard Notice”); and (3) Long Form Notice (“Long Form”) containing further 26 settlement details, available via the settlement website and via U.S. mail upon request. See 27 Doc. 155-2 at 27-39. The Long Form informs each class member that they can “object to 28 any part of the Settlement, the Settlement as a whole, Class Counsel’s requests for fees and 1 expenses and/or Class Counsel’s request for Service Awards for the Class 2 Representatives.” See Doc. 155-2 at 37. The Long Form and the Settlement agreement, 3 as currently drafted, demand that any objection by a class member be made, by letter, 4 including the following to be valid: (1) the case name and number; (2) the objector’s name, 5 address, telephone number, and signature; (3) an explanation of the nature of the objection; 6 (4) citation to any legal authority supporting the proposed objection; (5) the number of 7 times the objector has objected to a class action settlement in the past five years and the 8 caption of the caption for any such case(s); (6) the name of any counsel representing the 9 objector; and (7) a statement indicating whether the objector will appear at the Final 10 Approval hearing. See Doc. 155-2 at 12, 37. However, the Court finds these objection 11 requirements to be too onerous on a potential objector in light of the requirements set forth 12 in Rule 23(e)(5)(A). See Fed. R. Civ. P. 23(e)(5)(A) (“[O]bjection must state whether it 13 applies only to the objector, to a specific subset of the class, or to the entire class, and also 14 state with specificity the grounds for the objection.”). As such, the Court instructs the 15 Parties to eliminate objection requirements (5) and (7) from the above-mentioned list. 16 Additionally, the Court instructs the Parties to strike, from section 15 of the Long 17 Form, the sentence reading, “The Parties have the right to take discovery, including 18 subpoenas and depositions, from any objector.” Doc. 155-2 at 37. Upon the Court’s 19 reading, the sentence’s tone and placement generates sentiments of intimidation. The 20 Court also seeks to put the Parties and any potential objector on equal footing at this point 21 in the litigation. As such, the Parties will not be granted an absolute right to discovery 22 through this Notice language as it is understood that “[c]lass members who object . . . do 23 not have an absolute right to discovery[.]” Hemphill v. San Diego Ass’n of Realtors, Inc., 24 225 F.R.D. 616, 619 (S.D. Cal. 2005) (compiling cases). With that in mind, if a party seeks 25 to engage in discovery related to an objection, the Parties or any objector shall file a motion 26 for leave to engage in discovery setting forth: (1) the nature and amount of previous 27 discovery; (2) whether there is a reasonable basis for the discovery requests; and (3) the 28 interests of the discovery-seeking party. Id. at 620. 1 Other than these modifications, the Court finds the Notice Program to be 2 satisfactory. Upon the filing of this order, the Settlement Administrator, Epiq Systems, 3 shall: (1) obtain from Target and Class Counsel the names, physical addresses, or email 4 addresses of the Settlement Class members (to the extent reasonably available); (2) verify 5 and update the addresses (to the extent necessary); (3) establish and maintain an automated 6 toll-free telephone line for Settlement Class Members to call with settlement-related 7 inquiries, to answer the class member’s inquiries, and to accept requests for Long Forms 8 to be sent in the mail; (4) establish and maintain a website as contemplated in the Settlement 9 Agreement. See Doc. 155-2 at 10-11. As represented in the Settlement Agreement, the 10 Notice Program shall be completed no later than 70 days after the entry of this order. Doc. 11 155-2 at 16. Moreover, the Settlement Administrator shall serve CAFA notice on the 12 appropriate state and federal officials, with a compact disc containing all the documents 13 required by 28 U.S.C. § 1715(b)(1)-(8). See id. at 19. Thus, this consideration weighs in 14 favor of approval. 15 D. Release of Claims 16 “[A] federal court may release not only those claims alleged in the complaint, but 17 also a claim ‘based on the identical factual predicate as that underlying the claims in the 18 settled class action.’” Reyn’s Pasta Bella, LLC v. Visa USA, Inc., 442 F.3d 741, 748 (9th 19 Cir. 2006) (citing Class Plaintiffs, 955 F.2d at 1287)). “[W]hile a release need not slavishly 20 echo the claims in the complaint, it must appropriately track and not exceed them.” Myles 21 v. AlliedBarton Sec. Servs., LLC, 2014 WL 6065602, at *3 (N.D. Cal. Nov. 12, 2014) 22 (citation omitted). The proposed releases are written in a manner such that it appears to be 23 appropriately limited to claims arising out of the marketing of the TDC, the TDC 24 Agreement, its fees, Target’s actions alleged in the Actions, and the administration of this 25 Settlement. This consideration weighs in favor of approval. 26 V. Conclusion 27 For the reasons stated above, the Court hereby orders as follows: 28 1 1. The Court finds the settlement is preliminarily fair, reasonable, and adequate to 2 the proposed class; 3 2. The following settlement class is preliminarily certified for settlement purposes 4 under Rule 23(a) and Rule 23(b)(2): 5 All TDC holders in the United States who, between June 29, 2012 and the date below, incurred at least one RPF [Returned Payment Fee] in connection 6 with their TDC, that was not refunded or waived. 7 8 3. Plaintiff James Walters is appointed as Class Representative in the California 9 Action, and Plaintiffs Michelle Dixon, Charles Powell, and Deana Polcare are 10 appointed as Class Representatives in the Minnesota Action; 11 4. The Notice Program is as set forth in the Settlement Agreement and modified by 12 this order is approved, the form and content of such notices should be modified 13 accordingly. The Court cautions the Parties to review both the Settlement 14 Agreement and the three notices for typographical, grammatical, and punctuation 15 errors before the Notice Program commences as the Court identified errors in 16 review of this motion. Notwithstanding, the following schedule shall govern the 17 filing deadlines for this settlement: 18 a. Notice shall be completed no later than February 14, 2020; 19 b. The Motion for Class Representative Service Awards and Fee and Expense 20 Application shall be filed no later than February 14, 2020; 21 c. Absent Settlement Class Members shall opt out or object to any part of the 22 Settlement, the Settlement as a whole, Class Counsel’s requests for fees 23 and expenses, and/or Class Counsel’s Request for Service Awards for the 24 Class Representatives, as instructed in the Settlement and Class Notices, 25 no later than April 17, 2020; 26 d. The Parties’ deadline to file a Motion for Final Approval of Class Action 27 Settlement and to file a response to Absent Settlement Class Members’ 28 objections is May 22, 2020; 1 e. Absent Class Members shall file any objection to Class Counsel’s fee 2 motion no later than June 8, 2020; and 3 f. The Court shall hold a Final Approval of Class Action Settlement hearing 4 on June 22, 2020 at 10:30 a.m. 5 5. The opt-out and objection procedures as set forth in the Settlement Agreement 6 and modified by this order are approved; 7 6. The California Action is stayed pending final approval of the settlement; and 8 7. Kopelowitz Ostrow Ferguson Weiselberg Gilbert, Kaliel PLLC, and Tycko & 9 Zavareei LLP are appointed as Class Counsel. 10 IT IS SO ORDERED. 11 ||Dated: December 2, 2019

B Wg James Ln 14 United States District Judge

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