Kyle Hansen v. Tinder, Inc. 15-CVP-01522

Hearing: Motion for Preliminary Approval of Class Action Settlement

Date: April 10, 2018

Kyle Hansen (“Plaintiff”) as the representative plaintiff filed this class action against Tinder, Inc. (“Defendant”), a dating application service. Plaintiff alleges Defendant’s membership agreement fails to include certain required clauses about cancellation of the membership. Plaintiff’s first amended complaint includes causes of action for violation of Civil Code section1694 and Business and Professions Code section 17200.

Plaintiff brings this unopposed motion for preliminary approval of class action settlement. Plaintiff moves the Court for an order: (1) granting preliminary approval of the settlement; (2) approving the proposed form of notice to the class; (3) establishing a schedule for disseminating the notice to the class members, as well as deadlines for class members to object to or opt out of the settlement; (4) scheduling a hearing for final approval of the settlement during which class members may be heard; and (5) scheduling a hearing for Plaintiff’s counsel’s application for an award of fees and litigation costs.

There are three stages to the court’s settlement approval process: (1) preliminary approval of the proposed settlement at an informal hearing; (2) notice of the settlement to all affected class members; and (3) final approval after a formal hearing. As noted above, the instant motion seeks preliminary approval of the settlement.

The court may approve settlements reached before or after a class has been certified. (Weil & Brown, Cal. Prac. Guide: Civ. Proc. Before Trial (The Rutter Group 2017), Ch. 14-C, § 14:138.20, citing Wershba v. Apple Computer, Inc. (2001) 91Cal.App.4th 224, 240.) Here, the class was not certified prior to the settlement. The settlement agreement and proposed notice to class members must be filed with the motion, and the proposed order must be lodged with the motion. (Cal. Rules of Court, rule 3.769(c); Weil & Brown, supra, at § 14:138.30.) The Parties have satisfied these requirements.

The purpose of preliminarily evaluating class action settlements is to determine whether the proposed settlement is within the “range of reasonableness” for possible approval, and whether it is worthwhile to issue notice to the class and schedule a formal hearing. (Cabraser, Cal. Class Actions and Coordinated Proceedings (2d ed. 2017) § 14.02.) A presumption of fairness applies if there has been arm’s length bargaining, investigation and discovery have been sufficient to allow counsel and the court to act intelligently, class counsel is experienced in similar litigation, and the percentage of class members who object to the settlement is small. (In re Microsoft I–V Cases (2006) 135 Cal.App.4th 706, 723; 7-Eleven Owners for Fair Franchising v. Southland Corp. (2000) 85 Cal.App.4th 1135, 1146.)

Here, the Parties reached the proposed settlement through mediation with the Honorable Robert T. Altman (Ret.) (Loker Decl., ¶ 8.) Class counsel is experienced with this type of litigation and

has sufficient discovery and data to make an informed decision. The Parties conclude that the settlement is fair, reasonable, adequate and in the best interest of the class.

The preliminary approval hearing is also appropriate for the certification of a settlement class if the class has not yet been certified. Under California law, the basic requirements to sustain a class action are an ascertainable class, a well-defined community of interest in the questions of law and fact involved, and substantial benefits from certification that render proceeding as a class superior to the alternatives. (Code Civ. Proc., § 382; Weil & Brown, supra, Ch. 14-C, § 14:11, Brinker Restaurant Corp. v. Sup. Ct. (2012) 53 Cal.4th 1004, 1021.)

The proposed class herein consists of 34,000 class members, defined as “all persons within California who purchased a Tinder Plus subscription at any time between March 2, 2015 and June 11, 2015.” (Mtn., p. 3, ll. 7-9.) The class members’ settlement is nonmonetary.1 Depending on their subscription status, a class member will receive either: one free month of Tinder Plus, valued between $9.99 and $19.99; or, a one-time allotment of Super Likes, also valued between $9.99 and $19.99. (Loker Decl., ¶ 10.b.; Settlement Agreement, § 3.1.) Nonmonetary settlements, sometimes referred to as “coupon” settlements, are routinely held to be fair and reasonable, particularly where, as here, the settlement occurred after an arm’s length negotiation with experienced counsel. (Chavez v. Netflix, Inc. (2008) 162 Cal.App.4th 43, 48, 54 [upholding nonmonetary settlement of one month free membership upgrade or one month free membership]; Nordstrom Comm’n Cases (2010) 186 Cal.App.4th 576, 580, 590 [settlement including Nordstrom merchandise vouchers upheld]; In re Microsoft I–V Cases, supra, 135 Cal.App.4th at pp. 710, 711-713 [affirming approval of settlement where 100 percent of settlement was paid in vouchers]; Wershba v. Apple Computer, Inc., supra, 91 Cal.App.4th at p. 247 [coupons were fair portion of settlement also involving cash refunds, reimbursements, and reinstatement of free service] [disapproved of on another ground in Hernandez v. Restoration Hardware, Inc. (2018) 4 Cal.5th 260, 269]; Dunk v. Ford Motor Co. (1996) 48 Cal.App.4th 1794, 1802, 1804 [$400 coupon which could be applied against purchase price of new car, with no cash payable to the class members, was fair as settlement of claims that vehicles were defective].) If the court has certified the action as a class action, notice must be given to the class members containing an explanation of the proposed settlement, procedures for class members to follow in filing written objections to the settlement, and procedures for arranging to appear at the settlement hearing to state any objections to the proposed settlement. (Cal. Rules of Court, rule 3.769(f); Weil & Brown, supra, Ch. 14-C, § 14:139.11.)

Here, the proposed notice will be provided to the class members via email, will contain a detailed summary of the settlement, and will provide Plaintiff’s counsel’s contact information. (Settlement Agreement, § 5.4.) Inasmuch as the class members needed an email address to subscribe to Defendant’s service, the Court finds the members’ receipt of the notice via email reasonable. (Chavez v. Netflix, Inc., supra, 162 Cal.App.4th 43 at p. 57 [where class members conduct business with defendant over the internet, an email “summary notice” of the essential terms of a proposed settlement, coupled with a link to a website with more information, was “a
1 As part of the settlement, Tinder shall also establish a settlement fund in the amount of $65,000 within 30 days of the final judgment in this action, representing the maximum amount to be paid to Plaintiff’s counsel as attorneys’ fees and litigation costs. (Loker Decl., ¶ 10.f.)

sensible and efficient way of providing notice”].) Plaintiff’s counsel will maintain the settlement documents on its website through the date of Final Approval. (Settlement Agreement, § 5.5.)

The motion for preliminary approval of class action settlement is granted. The Parties have satisfied the procedural requirements for preliminary approval of a class action settlement and the settlement amount appears fair and reasonable. The date for the final settlement approval shall be set at the hearing.