Jose Urena v. Central California Almond Growers Assn.

8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA JOSE URENA, an individual, on behalf of ) Case No.: 1:18-cv-0517 JLT EPG himself and others similarly situated, ) 12 ) ORDER DISCHARGING THE ORDER TO SHOW Plaintiff, ) CAUSE 13 ) (Doc. 72) v. ) 14 ) ORDER DIRECTING THE PARTIES TO FILE A CENTRAL CALIFORNIA ALMOND ) JOINT STATEMENT REGARDING GROWERS ASSN., ) APPOINTMENT OF A CY PRES BENEFICIARY ) 16 Defendant. ) ) 17 ) 18 The Court approved the supplemental distribution of award payments to Settlement Class Members. (Doc. 71.) Recently, the Court ordered Class Counsel to show cause why sanctions should not be imposed for failure to comply with its order directing Class Counsel to file a declaration addressing the supplemental payments. (Doc. 72.) In response, Class Counsel filed a declaration from Nathalie Hernandez, the Operations manager for ILYM Group, Inc. (Doc. 75.)

23 Ms. Hernandez reported the total Settlement Amount to be redistributed was $33,207.75, which included $4,260.00 for settlement administration fees to ILYM Group and $28,947.75 to the 227 Participating Class Members. (Doc. 75 at 7-8, ¶ 13.) “The total net amount sent to the Participating Class Members was $23,770.91, as $3,380.33 was withheld for payment of the employee’s portion of applicable payroll taxes,” to both the Internal Revenue Service and Employment Development Fund.

28 (Id. at 8, ¶ 14.) ILYM Group issued the supplemental payments to the 227 Participating Class Members on January 18, 2023.1 (Id.) Based upon the agreement of the parties, “[t]he deadline for the Participating Class Members to cash their settlement award checks was July 17, 2023; 180 days after the issuance of the settlement award checks.” (Id., ¶ 18.) Ms. Hernandez reports that a total of $1,178.04 remains uncashed. (Id., ¶ 19.)

5 The parties have not yet agreed as to what should be done with the unclaimed funds from the supplemental payments, although the parties previously suggested distribution to a cy pres beneficiary as an alternative to the waterfall payments. (See Doc. 68 at 3.) The Court declined to resolve the parties’ dispute regarding the identity of a cy pres beneficiary when ordering the supplemental distribution to Participating Class Members, as the payments to class members were ordered instead.

10 (Doc. 71 at 2, n. 1.) However, based upon the report of the Settlement Administrator, the issue of unclaimed funds, and possible payment to a cy pre beneficiary, is now ripe. See Rodriguez v. West Publ’g Corp., 563 F.3d 948, 966 (9th Cir. 2009) (finding cy pres distribution “becomes ripe only if entire settlement fund is not distributed to class members”); Dennis v. Kellogg Co., 697 F.3d 858, 865 (9th Cir. 2012) (issues regarding the identification of recipients “will not be ripe until it is determined that available cash remains in th[e] fund after the claims process has concluded”).

16 The parties provided very limited information regarding their respective proposed beneficiaries of California Rural Legal Assistance and the State Bar of California, Legal Services Trust Fund Program. (Doc. 68 at 3.) Given the limited information, the Court is unable to properly evaluate whether either organization is the better beneficiary.

20 The Ninth Circuit determined a proposed cy pres recipient should be “tethered to the nature of the lawsuit and the interest of the silent class members.” Nachshin v. AOL, LLC, 663 F.3d 1034, 1039 (9th Cir. 2011). In other words, the Ninth Circuit “require[s] that there be a driving nexus between the plaintiff class and the cy pres beneficiaries.” Dennis, 697 F.3d at 865 (citing Nachshin, 663 F.3d at 24 1038). The Court explained that without such tethering, the distribution of funds “may create the appearance of impropriety” by catering “to the whims and self interests of the parties, their counsel, or On the same date, ILYM Group issued payments to itself for the settlement administration fees, to the IRS for applicable federal payroll taxes, and to the Employment Development Fund for applicable state payroll taxes. (Doc. 75 at 8, ¶¶ 15-18.)

1 || the court.” Nachshin, 663 F.3d at 1038. Thus, a cy pres award should not benefit a group that is “too ||remote from the plaintiff class.” Six Mexican Workers v. Arizona Citrus Growers, 904 F.2d 1301,130 || (9th Cir. 1990).

4 In identifying a cy pres beneficiary, the Ninth Circuit directs courts to consider whether an || award to the beneficiary “(1) address the objectives of the underlying statutes, (2) target the plaintiff class, or (3) provide reasonable certainty that any member will be benefitted.” See Nachshin, 663 F.3 |} at 1039-1040 (citing Six Mexican Workers, 904 F.2d at 1307). Furthermore, the Court must consider || whether the cy pres distribution is appropriate given the “size and geographic diversity” of the class ||members. Jd. at 1040-1041 (citing, e.g., In re Airline Ticket Comm’n Antitrust Litig., 307 F.3d 679, 6 |} (8th Cir. 2002); Houck on Behalf of U.S. v. Folding Carton Admin. Comm., 881 F.2d 494, 502 (7th C || 1989)). The parties did not address these factors, and the Court declines to speculate as to the || arguments that may be presented if a dispute remains regarding a beneficiary. Accordingly, the Court |] ORDERS: 14 1. The Order to Show Cause dated November 2, 2023 (Doc. 72) is DISCHARGED.

15 2. The parties are DIRECTED to meet and confer regarding the identity of a cy pres 16 beneficiary.

17 3. The parties SHALL file a joint statement regarding the appointment of a cy pres 18 beneficiary, addressing the factors set forth above for any proposed beneficiary, no 19 later than January 26, 2024.

21 IT IS SO ORDERED.

22 Dated: _ December 7, 2023 ( Lint u pA | : | WY) h \ 23 TED STATES DISTRICT JUDGE