Burzdak v. Universal Screen Arts, Inc.

Background

The court issued an order appointing the Consumer Federation of California (CFC) as the cy pres recipient. A cy pres recipient is an organization that receives unclaimed settlement funds when distributing those funds to class members is not feasible and the organization’s work is sufficiently connected to the class’s interests.

The plaintiff submitted a supplemental accounting after a redistribution of uncashed settlement funds. As of December 13, 2024, 2,519 checks totaling $43,703.18 remained uncashed. The plaintiff stated that redistributing the balance was not administratively feasible. The settlement agreement provided that, if redistribution was not feasible, the funds could be distributed to a court-approved cy pres recipient.

Court’s Analysis

The court applied the Ninth Circuit’s requirement that a cy pres recipient have a substantial connection to the interests of the class members. The court also considered the Northern District of California’s class-action settlement guidelines, which require an explanation of how the recipient relates to the lawsuit and the class members’ claims, as well as disclosure of any relationship between the parties or their lawyers and the proposed recipient.

CFC works to protect California consumers and has focused, among other things, on protections against automatically renewing membership fees. The proposed class was limited to California consumers. The court concluded that giving CFC the funds was likely to advance absent class members’ interests by supporting protections against automatically renewing fees. The court also noted that the parties and their counsel had no relationship with CFC, and that the defendant did not object.

Ruling

The court appointed CFC as the cy pres recipient and ordered distribution of the remaining Settlement Fund balance within 30 days of the order. The order was signed by United States District Judge Edward M. Chen.