In Ronald Munday v. Navy Federal Credit Union, No. 8:15-cv-01629 (C.D. Cal. May 26, 2016), the Central District of California recently rejected a proposed class action settlement between Navy Federal Credit Union and individuals it allegedly called in violation of the TCPA. The plaintiff alleged that Navy Federal Credit Union violated the TCPA by autodialing him on his cellphone without consent. However, the district judge did not approve the settlement because it had a “notable deficiency as to the scope of the proposed release,” which rendered the settlement unreasonable. Munday, slip op. at 8. Specifically, the proposed release was not limited to claims “based on the identical factual predicate as the underlying claims in the class action.” Id. (quoting Reyn’s Pasta Bella, LLC v. Visa USA, Inc., 442 F.3d 741, 748 (9th Cir. 2006)). Beyond claims of autodialing cellphones, it released defendants from unrelated claims with an “all-encompassing ‘including without limitation’ provision.” Id.
Additionally, the court deemed the Armed Services YMCA as an inappropriate cy pres recipient, with insufficient relation to the settlement class. Id., at 9. Parties who endeavor to arrive at a potential class-wide settlement must closely consider the acceptable scope of a settlement release and cy pres considerations, to avoid the time and expense of revising the proposed settlement agreement to alleviate potential deficiencies.