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O&R Construction, LLC v. Dun & Bradstreet Credibility Corp.

United States District Court, W.D. Washington, Seattle

May 5, 2017

O&R CONSTRUCTION, LLC, individually and on behalf of all others similarly situated, Plaintiff,
v.
DUN & BRADSTREET CREDIBILITY CORPORATION, et al., Defendants. DIE-MENSION CORPORATION, individually and on behalf of all others similarly situated, Plaintiff,
v.
DUN & BRADSTREET CREDIBILITY CORPORATION, et al., Defendants. VINOTEMP INTERNATIONAL CORPORATION, et al., individually and on behalf of all others similarly situation, Plaintiff,
v.
DUN & BRADSTREET CREDIBILITY CORPORATION, et al., Defendants. ALTAFLO, LLC, individually and on behalf of all others similarly situated, Plaintiff,
v.
DUN & BRADSTREET CREDIBILITY CORPORATION, et al., Defendants. FLOW SCIENCES INC., individually and on behalf of all others similarly situated, Plaintiff,
v.
DUN & BRADSTREET CREDIBILITY CORPORATION, et al., Defendants.

          ORDER

          Thomas S. Zilly United States District Judge.

         THIS MATTER comes before the Court on plaintiffs' third unopposed motion for preliminary approval of class action settlement, which was filed in Case No. C12-2184 as docket no. 238. The Court will consider the motion as though it had been filed in all five cases captioned above.

         The parties propose a settlement pursuant to which defendants will fund an escrow account in the amount of $2.75 million, from which notice and claims administration fees of $187, 000, taxes and tax-related expenses of $10, 000, attorney's fees of $302, 500, litigation expenses of $425, 000, and incentive awards to named plaintiffs in the aggregate amount of $17, 500 will be deducted before the balance (or Net Settlement Fund) of $1, 808, 000 is distributed to class members on a pro rata basis. Pursuant to the parties' draft agreement, each class member will be entitled to receive an award equal to the percentage of the Net Settlement Fund that such class member's Net Purchase Amount, defined as the total paid for CreditBuilder products minus all refunds and credits, bears to the aggregate of all Net Purchase Amounts. The settlement also requires defendants The Dun & Bradstreet Corporation and/or Dun and Bradstreet, Inc. to add, for a period of at least two years, a full-time employee “whose primary responsibility shall be responding to and enhancing the quality of responses to trade disputes.” See 2d Am. Stip. of Settlement at ¶ 4.1, Ex. 1 to Egler Decl. (docket no. 239-1 at 13).

         The parties seek certification, for settlement purposes, of the following class:

All persons in the states of California, New Jersey, North Carolina, Ohio, and Washington who purchased a CreditBuilder product between August 1, 2010, and January 24, 2017.

         According to the proposed Settlement Administrator, Gilardi & Co. LLC, the proposed class consists of 95, 502 members. Joaquin Decl. at ¶ 4 (docket no. 240). Of this number, 6, 406 class members have a Net Purchase Amount of $0, and such class members would not receive any portion of the Net Settlement Fund. Id. at ¶ 5. The remaining 89, 096 class members would receive an award between $0 and $1, 099.15, based on Net Purchase Amounts between $0.05 and $53, 491.[1] Id. The Settlement Administrator has made certain representations concerning the distribution of anticipated payments, see id. at ¶ 6, but the statistics are flawed because they ignore the 6, 406 class members whose Net Purchase Amounts are $0. When such class members are included in the calculations, the expected distribution is as follows:

Award Amount

Number of Class Members

Percentage of Total

$0 - 2

18027

18.87604%

$2.01 - 5

11922

12.48351%

$5.01 - 10

16360

17.13053%

$10.01 - 20

23890

25.01518%

$20.01 - 30

10225

10.70658%

$30.01 - 40

5730

5.99987%

$40.01 - 50

2841

2.97481%

$50.01 - 60

1918

2.00833%

$60.01 - 70

1150

1.20416%

$70.01 - 80

702

0.73506%

$80.01 - 90

487

0.50994%

$90.01 - 100

385

0.40313%

$100.01 - 200

1142

1.19579%

$200.01 - 300

439

0.45968%

$300.01 - 400

149

0.15602%

$400.01 - 500

68

0.07120%

$500.01 - 600

28

0.02932%

$600.01 - 700

22

0.02304%

$700.01 - 800

11

0.01152%

$800.01 - 900

3

0.00314%

$900.01 - 1000

0

0.00000%

$1000.01 - 1100

3

0.00314%

95502

100%

         As indicated in this table, almost a third of the class (31.4%) would receive $5 or less, roughly half of the class (48.5%) would get $10 or less, and about 98% of the class would be awarded $100 or less, while 3 class members would be paid over $1, 000 each. The average recovery would be $18.93.[2]

         Although the Court does not have confidence in the Settlement Administrator's computations, the Court is satisfied that a pro rata distribution of the Net Settlement Fund is practicable and potentially fair, reasonable, and adequate. The Court will therefore consolidate these matters and certify a class for settlement purposes, as set forth in the conclusion; however, the scheduling of a final settlement approval hearing is deferred until the parties address the following issues:

         (1) The parties have identified as a potential cy pres recipient the Washington State Bar Foundation. They have not, however, indicated how such cy pres recipient “account[s] for the nature of the plaintiffs' lawsuit, the objectives of the underlying statutes, and the interests of the silent class members, including their geographic diversity.” Nachshin v. AOL, LLC, 663 F.3d 1034, 1036 (9th Cir. 2011); see also Dennis v. Kellogg Co., 697 F.3d 858 (9th Cir. 2012). The class in this matter is comprised of persons in five different states, and claims were brought under the laws of those five states, but the proposed cy pres recipient provides financial support only for programs of the Washington State Bar Association. The parties must comply with the Ninth Circuit's standards concerning cy pres distributions, and the proposed notices must be revised to inform class members that they may object to the choice of cy pres recipient even if they have no other objection to the settlement.

         (2) According to the Settlement Administrator, approximately 2% of the class would receive awards exceeding $100, and 67 of those members would be paid over $500. Neither the Settlement Administrator nor the parties, however, disclose how much each named class representative would receive in addition to the proposed incentive award. Such information must be provided to the Court and could affect its view about whether the proposed pro rata distribution of the Net Settlement Fund is fair, reasonable, adequate, and in the best interests of the class.

         (3) The Court cannot approve the forms of notices submitted by the parties. The parties propose to provide class members with unique identifiers that will enable them to ascertain their pro rata shares of the Net Settlement Fund.[3] Neither of the notices proposed by the parties, however, set forth the range or frequency of possible awards, and thus, the figures that class members might glean by using their respective unique identifiers would be essentially meaningless. Moreover, the notices proposed by the parties do not inform class members about the number of persons who will receive no monetary benefit from the settlement and why. To constitute adequate notice, the postcard and e-mail to be distributed to class members must provide them with a way of comparing their anticipated recoveries with those of other class members and of forming opinions about whether the proposed settlement is fair, reasonable, and adequate.

         (4) The parties also propose to have class members file, in hardcopy rather than electronic form, written objections directly with the Court, and to send copies to three different law offices. They would further require that any objection include copies of all papers, briefs, or other documents upon which the objection is based. See Ex. A-1 to Proposed Order (docket no. 238-1 at 26). This plan is unworkable. It would require any class member wishing to object to incur unnecessary duplication charges and postage, and might unreasonably burden court staff. Any notice to class members and any direction on the website associated with this matter shall instruct class members to send opt-out forms, [4] objections, notices of intent to appear at the final approval hearing, and any other correspondence to the Settlement Administrator, which shall distribute such materials as appropriate to all counsel, shall prepare a suitable affidavit or declaration summarizing such submissions (or lack thereof), and shall electronically file such affidavit or declaration at least seven (7) days before any final approval hearing, along with copies of all executed opt-out forms and objections. Objections need contain only a short, plain statement of the grounds for opposing the proposed settlement, and need not include any additional papers, briefs, or other documents. In addition, the Court will not require that class members submit “valid objections” as a prerequisite to appearing at any final approval hearing.

         (5) The proposed notice for distribution via e-mail suggests that pleadings and other papers related to this litigation may be inspected in the office of the Clerk of the Court. This approach is infeasible for both the Court and class members, who might not reside near the courthouse or even in the State of Washington. The parties are directed to instead post on the website for this matter all materials relating to this action that class members might wish to review, including all pleadings and orders or rulings of the Court. In connection with any motion for final ...


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