Kevin Burkhammer v. Allied Interstate, LLC, 15CV-0567

Hearing: Motion for Cy Pres Distribution

Date: April 4, 2018

Kevin Burkhammer (“Plaintiff”) brought this action against Allied Interstate, LLC (“Defendant”) as a representative for consumers that were victims of alleged violations of the Rosenthal Fair Debt Consumer Protection Act (“RFDCPA”). Defendant allegedly sent consumers written communication that incorrectly identified “American General” as the original creditor. Plaintiff sought statutory penalties on behalf of the putative class members and the action was settled. This Court granted final approval of the class action settlement on November 8, 2017.

Following distribution of the settlement checks, the Claims Administrator Dahl Administration, LLC (“Dahl”) notified Plaintiff that 1,203 checks remained uncashed after the deadlines for cashing had passed, valued at $22,686.86. Plaintiff moves here for those remaining funds by provided to the San Luis Obispo College of Law (“SLO Law”) in a cy pres distribution. Plaintiff’s motion is supported by a declaration from Dahl. Defendant does not oppose the motion.

Unpaid cash residue or unclaimed or abandoned class member funds are distributed pursuant to Code of Civil Procedure section 384. A proper cy pres distribution is directed to “nonprofit organizations or foundations, to support projects that will benefit the class or similarly situated persons, further the objectives and purposes of the underlying class action or cause of action, or promote the law consistent with the objectives and purposes of the underlying class action or cause of action; child advocacy programs; or nonprofit organizations providing civil legal services to the indigent.” (Code Civ. Proc., § 384(b)(1)(C).) Plaintiff argues that SLO Law is a proper cy pres recipient because it is a designated 501c(3) organization that manages and supports a number of programs designed to protect California consumers, including the SLO LawLine, which is a confidential legal hotline and referral program where SLO Law students provide legal advisory services for community members in need, and the Lawyer Referral and Information Service, amongst others. Plaintiff represents that the Dean of SLO Law confirmed that funds received from this action will be used to benefit the programs discuss above as well as similar programs that are developed in the future.

Pursuant to Code of Civil Procedure section 384(b), unless the Court makes a specific finding for good cause shown that an alternative distribution would better serve the public interest or the interest of the class, any unpaid residue of a class action settlement shall be transmitted 25% to the State Treasury for deposit in the Trial Court Improvement and Modernization Fund, 25% of the State Treasury for deposit into the Equal Access fund of the Judicial Branch, and 50% to a qualified non-profit organization (the cy pres
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recipient). The Court finds that SLO Law is an appropriate cy pres recipient under Code of Civil Procedure section 384(b)(3)(C). However, Plaintiff does not address whether payments will be made as required under subsections (A) and (B). The parties should come prepared to address whether they intend to make the payments to the State Treasury as set forth in the statute, or whether there is good cause for an alternative distribution.