Case 4:18-cv SMR-SBJ Document 73 Filed 02/14/19 Page 1 of 38

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1 Case 4:18-cv SMR-SBJ Document 73 Filed 02/14/19 Page 1 of 38 IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF IOWA CENTRAL DIVISION DAVID M. SWINTON, on behalf of himself ) Case No. 4:18-CV SMR-SBJ and all others similarly situated, ) ) Plaintiff, ) ) ORDER ON MOTION FOR v. ) PRELIMINARY APPROVAL OF CLASS ) ACTION SETTLEMENT SQUARETRADE, INC., ) ) Defendant. ) Before the Court is Plaintiff David Swinton s Motion for Preliminary Approval of Class Action Settlement. [ECF No. 22]. A hearing on Plaintiff s motion was held on February 11, This matter is fully submitted and ready for decision. For the reasons stated herein, Plaintiff s motion is GRANTED. I. BACKGROUND A. Factual and Procedural Background Defendant SquareTrade is a Delaware corporation that maintains its principal place of business in California. [ECF No ]. It markets, sells, and administers extended warranties, accident protection, and service plans for consumer electronics and appliances ( Protection Plans ). Id. at 18. SquareTrade sells its Protection Plans on its own website and through other retailers, such as Amazon.com ( Amazon ). [ECF No at 8]. Amazon customers can purchase Defendant s Protection Plans as a standalone item, or as an add-on item to an existing purchase. [ECF No ]. However, Protection Plans purchased on Amazon are effective only for products purchased on that website. Id. 42.

2 Case 4:18-cv SMR-SBJ Document 73 Filed 02/14/19 Page 2 of 38 Plaintiff alleges Defendant violated state and federal law through the promotion and sale of its Protection Plans. He claims Defendant s description on Amazon of the coverage and benefits of its Protection Plans was at odds with the severe coverage limitations that apply to these plans. Id. 28. As one example, Plaintiff highlights that, although Defendant claims on Amazon that protection begins on the date a consumer purchased a covered item, Defendant typically does not provide any protection for up to 30 days after the purchase of the Protection Plan unless the coverage was bought simultaneously with the product. Id. 29. Such information, Plaintiff claims, could only be found in the formal terms and conditions of the Protection Plans (the Terms and Conditions ). Id. 28. However, Plaintiff alleges that Defendant designed its sales materials to make it difficult to impossible for the consumer to access [the] Terms and Conditions prior to purchasing a Protection Plan Id. 31. He faults Defendant s advertised plan descriptions for stating that the customer s service contract with Defendant will be ed to the customer following purchase. See id. 32. This, Plaintiff claims, implied the Terms and Conditions were generally unavailable prior to purchase. See id. He also alleges that [a] pre-sale link to [the] Terms and Conditions [was] buried in a nondescript section titled Technical Specification, several screens below the purchase section of the product page and below advertisements for unrelated products and all manner of non-essential information. Id. 34. The disclosure consisted of a hyperlink with the words Warranty [pdf], which linked to a document purporting to be the Terms and Conditions (the Pre-Sale Terms and Conditions ). Id. According to Plaintiff, locating the Pre-Sale Terms and Conditions would do little good to a prospective SquareTrade customer because the Pre-Sale Terms and Conditions allegedly differed -2-

3 Case 4:18-cv SMR-SBJ Document 73 Filed 02/14/19 Page 3 of 38 from the final Terms and Conditions sent to the customer after purchase. See id. 37. Some of these changes allegedly added coverage exclusions or limitations, such as an exclusion of claims that were covered by a manufacturer s warranty but were denied by the manufacturer. Some affected a consumer s rights to redress, such as a compelled arbitration scheme in which consumers must pay arbitration costs, even if successful, unless the consumer recovers more than $500. See id The post-sale Terms and Conditions contained a California choice-of-la w provision that is absent from the Pre-Sale Terms and Conditions. Id. 37. Defendant learned of the discrepancy between the final and Pre-Sale Terms and Conditions in late 2016 and corrected the issue by February See [ECF No. 69 3]. 1 Notably, Defendant did (and still does) limit the coverage of its plans sold on Amazon to products that are also purchased on Amazon (the Channel Restriction ). [ECF No ]. Thus, if a consumer purchased a product at a physical retail store, he or she could purchase a Protection Plan from Defendant s own website that would provide warranty coverage for that product. If that same consumer purchased a plan on Amazon, that plan would not cover the product. Plaintiff alleges, however, that notice of this eligibility limitation was inconspicuous[ly]... made approximately six pages down on Defendant s Amazon storefront, below unrelated items and advertisements. Id. Plaintiff is an Iowa resident who purchased a Protection Plan from Defendant on Amazon in 2016 for a television he purchased at Target. See id. 12, 55. On March 3, 2018, Plaintiff attempted to make a warranty claim on the television through his Protection Plan with Defendant. 1 The cited materials state only that the issue was corrected [b]y early [ECF No. 69 3]. At the hearing on Plaintiff s motion, Defendant specified that the issue was resolved in February

4 Case 4:18-cv SMR-SBJ Document 73 Filed 02/14/19 Page 4 of 38 Id. 56. Defendant denied the claim based on the Channel Restriction. Id. 57. Plaintiff has previously purchased several other Protection Plans from Defendant for products not purchased on Amazon. See id. 58. On April 19, 2018, Swinton filed a putative class action against SquareTrade in the Iowa District Court for Polk County, seeking damages and equitable relief under an unjust enrichment theory, Iowa s Private Right of Action for Consumer Frauds Act, 2 and the Magnuson-Moss Warranty Act ( MMWA ), 15 U.S.C et seq. [ECF No ]. In the Complaint, he asserts claims on behalf of himself and individuals who reside in either Iowa or, for some claims, the United States, and purchased a Protection Plan on Amazon. See id. 64. Relevant to the nationwide settlement class, Plaintiff alleges Defendant s practices violated the MMWA by failing to clearly and conspicuously disclose the Terms and Conditions of the Protection Plans. See id. 86. SquareTrade removed to this Court on May 14, [ECF No. 1]. One week later, it filed a Motion to Compel Arbitration and Stay Action. [ECF No. 8]. However, on June 11, 2018, SquareTrade initiated settlement discussions. [ECF No ]. 3 The parties envisioned that the settlement class would include anyone in the United States or its territories who, during the relevant period, purchased a Protection Plan on Amazon. See [ECF Nos at 4; 65 11; 67 at 2; 68 4]. Defendant took the position that a settlement was in the parties best interest because the 2 Iowa Code 714H et seq. 3 In light of those discussions and the proposed settlement that followed, the Court eventually dismissed without prejudice SquareTrade s Motion to Compel Arbitration and Stay Action. [ECF No. 44]. -4-

5 Case 4:18-cv SMR-SBJ Document 73 Filed 02/14/19 Page 5 of 38 number of putative class members who had a claim denied because of the Channel Restriction was low, and the remaining class members suffered no damages. [ECF No. 68 2]. Defendant made what the parties view as a make-whole settlement proposal. [ECF No. 65 4]. Under the proposal, Defendant agreed to: (1) refund the purchase price of the underlying product to any class member who had his or her claim denied because of the Channel Restriction; (2) not enforce the Channel Restriction for any class member going forward; (3) more prominently disclose the Channel Restriction and all other terms and conditions on Defendant s Amazon storefronts; and (4) offer a $5 coupon for all class members off the price of a Protection Plan for a mobile phone. See [ECF No. 68 2]. In exchange, class members would agree to waive their claims against Defendant. See id. Counsel for the parties exchanged s and telephone calls over the next several weeks. See id. 3. Defendant agreed to increase the value of the coupon to $10 per class member. See id. Plaintiff s counsel made various inquiries to ensure Defendant properly identified the group of class members eligible for refund payments and that their claims were correctly valued. See [ECF No. 65 4]. They also sought assurances that class members whose claims did not involve the Channel Restriction retained their right to challenge any future denial of a Protection Plan claim. Id. 10. The parties did not discuss attorney s fees for lead class counsel until they agreed on the other substantive terms of the agreement. [ECF No. 68 5]. As to those fees, Plaintiff s counsel ensured that a proposed base fee award of $25,000 did not detract from funds allocated to class members eligible for refunds. [ECF No. 65 8]. -5-

6 Case 4:18-cv SMR-SBJ Document 73 Filed 02/14/19 Page 6 of 38 B. Summary of Proposed Settlement On August 9, 2018, Swinton and SquareTrade submitted a proposed class action settlement for the Court s preliminary approval (the Proposed Settlement ). [ECF No. 22-1]. The Proposed Settlement would apply to a class consisting of any person or entity in the United States who, during the Class Period, purchased a SquareTrade Protection Plan on Amazon. [ECF No at 4]. At the February 11, 2019 hearing, the parties clarified that the settlement class also includes persons or entities in U.S. territories. The Class Period spans from April 20, 2012, through October 8, The settlement class excludes the undersigned and her immediate family; Defendant; entities in which Defendant has a controlling interest or which have a controlling interest in Defendant; and Defendant s officers, directors, employees, affiliates and attorneys. Id. Under the terms of the settlement, SquareTrade agrees to: (1) make certain changes to Amazon webpages offering its Protection Plans; (2) provide full product refunds for class members Protection Plan claims that were denied because of the Channel Restriction (the Refund Class Members ); (3) honor class members claims under outstanding Protection Plans that would otherwise be denied because of the Channel Restriction; and (4) provide a $10 coupon to all class members for use on a Protection Plan for a mobile phone. See id. at With respect to changes to Defendant s Amazon webpages, Defendant agreed to move its notice of the Channel Restriction. Id. at 10. That notice will now appear[] to a consumer without scrolling when viewed 4 The parties settlement agreement described the Class Period as the period from April 20, 2012, until Defendant made certain changes to webpages offering its Protection Plans. See [ECF No at 4, 10]. At the February 11, 2019 hearing, Defendant informed the Court that these changes were completed on October 8,

7 Case 4:18-cv SMR-SBJ Document 73 Filed 02/14/19 Page 7 of 38 on a standard computer screen at 100% font size. Id. Defendant also agreed to include language, also accessible without scrolling, that describes where a consumer can access a copy of the Terms and Conditions. Id. While the instant motion was pending, Defendant made these proposed changes. See generally [ECF No. 71]. In addition, Defendant agrees to pay up to $25,000 of lead class counsel s fees, expenses, and costs, plus up to 15% of the purchase price of any product for which Defendant provides a refund under the settlement. Id. at The parties estimate that there are approximately 580 Refund Class Members, and the average price of their covered products is approximately $620. Therefore, lead class counsel stands to recoup approximately $78, The parties have also agreed Plaintiff will receive an incentive award of $2500. Id. at 14. Class members may object to the terms of the settlement or opt out of the settlement class. See [ECF No at 3]. They may make their objections personally, or through an attorney. Id. The Court will consider at a hearing, to be held on June 21, 2019, any timely objections that satisfy requirements set out in the various notices concerning the settlement. See [ECF Nos at 8; 22-3 at 3]. If the Court ultimately approves the Proposed Settlement, any class members who do not timely exclude themselves from the class will be bound by the Court s Judgment in this case. See [ECF No at 7]. In exchange for the various actions Defendant has agreed to take, class members who remain in the class will release any claims against Defendant arising or relating to: (1) the present action, including any challenge to the arbitration provision in the Terms and Conditions; and (2) any marketing, advertising, promotion, representation, and/or sale by the 5 $25,000 + (.15 x (580 x $620)). -7-

8 Case 4:18-cv SMR-SBJ Document 73 Filed 02/14/19 Page 8 of 38 Defendant associated with any SquareTrade Protection Plan on Amazon during the Class Period. Id. at 5. Settlement class members need not take any action to obtain recovery to which they are entitled under the Proposed Settlement. Coupons for mobile-phone plans will automatically be distributed by the third-party claims administrator (the Administrator ) via . See id. at 13. Defendant is responsible under the Proposed Settlement for providing the Administrator with the addresses of settlement class members, which Defendant maintains in its business records. See id. at Refund Class Members will automatically be mailed a check in the appropriate amount, as determined by Defendant based on its business records. See id. at 11. Prior to mailing the refund, Defendant will provide the Administrator with the address it has on file for each Refund Class Member. See id. at The Administrator will send up to three s to each such class member asking them to confirm their mailing address. See id. at 11; [ECF No. 67 at 6]. 6 The parties agree that the Administrator shall use the National Change of Address Database ( NCAD ) to confirm the mailing addresses of any Refund Class Member who does not confirm his or her mailing address via the address confirmation . [ECF No. 67 at 6]. Upon preliminary of the Proposed Settlement, the parties will implement a plan to provide the class with notice of the proposal. The Administrator will establish a website on which it will post the settlement agreement, the Long Form Notice, 7 and an opt-out form. [ECF No at 9]. The Administrator will also arrange for banner ads to run across the Goggle 6 A draft of the address confirmation is appended to this Order as Exhibit A. 7 The Long Form Notice is appended to this Order as Exhibit B. -8-

9 Case 4:18-cv SMR-SBJ Document 73 Filed 02/14/19 Page 9 of 38 Display Network and Facebook. Id. Those ads will contain links to the settlement website. Id. Finally, a short-form notice of the Proposed Settlement (the Notice ) 8 will be ed three times to each class member, whose addresses Defendant will provide to the Administrator based on Defendant s business records. See id. at 8; [ECF No. 67 at 12]. Defendant has agreed to bear the costs of the notice plan. II. STANDARD OF REVIEW In December 2018, Amendments to the Federal Rules of Civil Procedure went into effect. 9 Rule 23(e), governing the Settlement, Voluntary Dismissal or Compromise of class actions, was among the rules amended. It now provides the following with respect to when the parties may notify a class of a proposed settlement: (1) Notice to the Class. (A) Information That Parties Must Provide to the Court. The parties must provide the court with information sufficient to enable it to determine whether to give notice of the proposal to the class. (B) Grounds for a Decision to Give Notice. The court must direct notice in a reasonable manner to all class members who would be bound by the proposal if giving notice is justified by the parties showing that the court will likely be able to: (i) approve the proposal under Rule 23(e)(2); and (ii) certify the class for purposes of judgment on the proposal. 8 The Notice is appended to this Order as Exhibit C. 9 The amended rules shall govern in all proceedings in civil cases thereafter commenced and, insofar as just and practicable, all proceedings then pending. Order Amending Federal Rules of Civil Procedure (Apr. 26, 2018), 324 F.R.D. 904, *905. Because the relevant changes to Rule 23 largely codify existing case law, the Court finds that it is just and practicable to apply amended Rule 23 to this matter now and going forward. -9-

10 Case 4:18-cv SMR-SBJ Document 73 Filed 02/14/19 Page 10 of 38 Fed. R. Civ. P. 23(e)(1). Advisory Committee Notes to the 2018 Amendments indicate that this process is meant to codify the preliminary approval process that is customary in class action settlements. As amended, Rule 23(e)(1) provides that the court must direct notice to the class regarding a proposed class-action settlement only after determining that the prospect of class certification and approval of the proposed settlement justifies giving notice. This decision has been called preliminary approval of the proposed class certification in Rule 23(b)(3) actions. Advisory Committee s Notes on 2018 Amendments to Fed. R. Civ. P. 23, 324 F.R.D. 904, 915 (hereinafter Advisory Committee Notes ). The Advisory Committee also stressed, [t]he introductory paragraph of Rule 23(e) is amended to make explicit that its procedural requirements apply in instances in which the court has not certified a class at the time that a proposed settlement is presented to the court. Id. at 917. The Court had not certified a class in this matter before Plaintiff presented the Proposed Settlement for approval. Thus, Rule 23(e)(1) applies to the instant motion. These changes are mostly form over substance, but they do focus the Court s analysis. The Court will consider Plaintiff s Motion for Preliminary Approval of Class Action Settlement to be a Motion for Authorization to Give Notice under Rule 23(e)(1). Consistent with that rule, the Court will consider whether, following notice to the class and a final fairness hearing, the Court will likely be able to: (1) approve the settlement proposal under Rule 23(e)(2); and (2) certify the proposed class. If these two elements are satisfied, the Court will consider whether the parties proposed method of giving notice satisfies the requirements set out in Rule 23(c)(2)(B). -10-

11 Case 4:18-cv SMR-SBJ Document 73 Filed 02/14/19 Page 11 of 38 III. ANALYSIS A. Approval of Settlement under Rule 23(e)(2) Rule 23(e)(2) sets out the circumstances in which a court may authorize a class action settlement that would bind class members. A court may only approve such a settlement after a hearing and only on finding that it is fair, reasonable, and adequate. Fed. R. Civ. P. 23(e)(2). When determining whether a settlement is fair, reasonable, and adequate, a court must consider whether: (A) the class representatives and class counsel have adequately represented the class; (B) the proposal was negotiated at arm s length; (C) the relief provided for the class is adequate, taking into account: (i) the costs, risks, and delay of trial and appeal; (ii) the effectiveness of any proposed method of distribut ing relief to the class, including the method of processing class-member claims; (iii) the terms of any proposed award of attorney s fees, including timing of payment; and (iv) any agreement required to be identified under Rule 23(e)(3); and (D) the proposal treats class members equitably relative to each other. Id. The requirement that a settlement be fair, reasonable, and adequate is nothing new. As the Advisory Committee observed, [c]ourts have generated lists of factors to shed light on this concern. Advisory Committee Notes, 324 F.R.D. at 918. In the Eighth Circuit, courts have focused on four factors: (1) the merits of the plaintiff s case, weighed against the terms of the settlement ; (2) the defendant s financial condition ; (3) the complexity and expense of further -11-

12 Case 4:18-cv SMR-SBJ Document 73 Filed 02/14/19 Page 12 of 38 litigation ; and (4) the amount of opposition to the settlement. Van Horn v. Trickey, 840 F.2d 604, 607 (8th Cir. 1988). The specific considerations in Rule 23(e)(2)(A) (D) were part of the 2018 Amendments. However, they were not intended to displace the various factors that courts have developed in assessing the fairness of a settlement. The goal of this amendment is not to displace any factor [developed by federal courts], but rather to focus the court and the lawyers on the core concerns of procedure and substance that should guide the decision whether to approve the proposal. Advisory Committee Notes, 324 F.R.D. at 918. The Court will therefore consider the Rule 23(e)(2) factors along with the factors developed by courts in the Eighth Circuit. 1. Rule 23(e)(2) factors a. Adequate representation and arm s length negotiation The Court is not aware of any conflict of interest or other deficiency in Plaintiff s proposed representation of the class. As for his counsel, who seek appointment as lead class counsel, they are accomplished litigators with ample experience in class actions and complex litigation. See [ECF Nos ; ]. The Court has reviewed their declarations as to the settlement negotiations in this matter. The initial settlement proposal was substantially similar to what was ultimately agreed. See [ECF Nos at 10 13; 68 2]. However, as discussed in more detail below, that proposal was very favorable to the settlement class. In light of that, Plaintiff s counsel appear to have rightly focused on procedural elements of the settlement, such as ensuring Refund Class Members were properly identified and that their claims were accurately calculated. See [ECF No. 65 4]. Additionally, the parties did not discuss an award of attorney s fees for lead class counsel until after they had agreed on other substantive terms of the agreement. -12-

13 Case 4:18-cv SMR-SBJ Document 73 Filed 02/14/19 Page 13 of 38 See [ECF No. 68 5]. Moreover, the fee proposal is reasonable in light of the estimated cumulative value of the class members claims. Currently, the Court has no concerns about the adequacy of Plaintiff (as a class representative), his counsel, or the parties conduct during settlement negotiations. Amicus Adam Starke is presently litigating against SquareTrade in a similar lawsuit in the United States District Court for the Eastern District of New York. Starke v. SquareTrade, 1:16-CV NGG-SBJ (E.D.N.Y.). He alleges the parties here have engaged in a reverse auction, whereby they have colluded to undermine his action by hastily entering into a settlement that is unfavorable to the class and rewards Plaintiff s counsel with generous attorney s fees. The Court finds there is nothing in the parties conduct to support this allegation. Plaintiff s counsel are established local trial lawyers. Defendant made a settlement offer that in the Court s view was more generous than what Plaintiff s counsel could have reasonably expected to be awarded from an Iowa jury. As discussed below, the settlement proposes to make whole the Refund Class Members, who suffered the greatest and clearest losses. Defendant has agreed to remedy the promotional practices that led to this lawsuit. The settlement offers relief in the form of coupons to class members who have suffered no injury, and who will retain their right to enforce the terms of their Protection Plans. It is not clear what Starke would have had Plaintiff s counsel do. To continue litigating in the face of such a settlement offer would likely be unethical, as it is difficult to imagine it being in the best interest of Plaintiff or the class. Contrary to Starke s allegations, the Court finds the willingness of Plaintiff s counsel to settle this matter under such terms demonstrates their adequacy, rather than any fault. -13-

14 Case 4:18-cv SMR-SBJ Document 73 Filed 02/14/19 Page 14 of 38 b. Adequate relief The Court must consider the adequacy of the proposed relief while taking into account certain enumerated factors listed in Rule 23(e)(2)(C). The Court will first consider the strengths and weaknesses of the proposed relief before considering the impact of the Rule 23(e)(2)(C) factors on the overall adequacy of the settlement. The relief falls into three categories: (1) refunds and the promise of future performance to class members impacted, or potentially impacted, by the Channel Restriction; (2) coupons for class members; and (3) injunctive relief in the form of changes to Defendant s Amazon storefront. In exchange, class members release Defendant from claims arising or relating to: (1) this action, including any challenge to the arbitration provision in the Terms and Conditions; and (2) any marketing, advertising, promotion, representation, and/or sale by the Defendant associated with any SquareTrade Protection Plan on Amazon during the Class Period. [ECF No at 5]. Class members impacted by the Channel Restriction are effectively made whole. If their claims were denied due to the Channel Restriction, they will receive refunds for the price of the underlying product. Defendant will honor any future claims that would have been denied because of the Channel Restriction. There is nothing lacking about the relief for these class members. All class members will receive coupons for a $10 discount off the price a Protection Plan for a mobile phone. The parties have clarified with the Court that the settlement proposals always limited the coupon to a mobile phone Protection Plan. However, this limitation does not appear to be arbitrary. At the hearing on the instant motion, Defendant informed the Court that roughly eighty percent of its Amazon sales are for mobile phone Protection Plans. Plaintiff believes a mobile phone Protection Plan will be of the most benefit to class members. Plaintiff reasons that -14-

15 Case 4:18-cv SMR-SBJ Document 73 Filed 02/14/19 Page 15 of 38 mobile phones are more likely to be damaged in the ordinary course of their use, thus necessitating an extended warranty, as opposed to more stationary items, like a TV. The Court makes no comment on this reasoning, except to highlight that the parties appear to have carefully considered the mobile phone element of the coupon. As a form of relief, the coupon proposal is gratuitous for Refund Class Members. The Court also finds that it is reasonable for the remaining class members because there is no evidence they have sustained damages due to Defendant s failure to properly disclose the terms of its Protection Plans. 10 Legally cognizable damages would seem most likely for class members who relied on provisions that differed between the final and Pre-Sale Terms and Conditions. However, Defendant s business records indicate that no claims have been denied based on provisions that were materially different in the Pre-Sale Terms and Conditions. See [ECF No ] Plaintiff alleges that all class members were injured by reason of Defendant s subject disclosure violations, in that their Protection Plans were worth ascertainably less as enforced than as disclosed before and at the time of sale. [ECF No ]. However, that injury, on its own, is generally not actionable under the MMWA; plaintiffs typically must show damage in the form of a breach of the warranty in question. See Temple v. Fleetwood Enters., Inc., 133 F. App x 254, 268 (6th Cir. 2005) ( Ultimately, the applicability of the [MMWA] is directly dependent upon a sustainable claim for breach of warranty. ). Thus, in Moroz v. Alexico Corp., the court observed that most courts have interpreted the MMWA s civil action provision as allowing a claim under the MMWA only to redress a breach of warranty that causes the Plaintiff to sustain actual damages. No , 2008 WL , at *5 (E.D. Pa. Jan. 8, 2008). The court found the plaintiff failed to show he suffered damages caused by the defendant s failure to adequately disclose the disputed warranty terms, where the only damage plaintiff suffered was that he paid more for the underlying product than he would have if the warranty had been properly disclosed. See id. at *6. 11 This conclusion is derived from the February 4, 2019 declaration of Michael Gallagher, SquareTrade s Senior Director of Customer Experience Optimization. [ECF No. 69 2]. Gallagher reviewed SquareTrade s claims data for the relevant period against the differences between the final and Pre-Sale Terms and Conditions set out in paragraph thirty-seven of Plaintiff s Complaint. Of those provisions, claims have only been denied due to language that excludes coverage for products fraudulently described to SquareTrade. See id The Court -15-

16 Case 4:18-cv SMR-SBJ Document 73 Filed 02/14/19 Page 16 of 38 Against this potentially insignificant amount of damages are significant hurdles to recovery should this case not settle. Those hurdles are detailed below, but they include the Terms and Conditions arbitration clause, whether the class can be certified for trial, and substantive issues as broad as whether class members can state a claim for relief under the MMWA. Although the coupon is not as appealing as a cash recovery, the Court finds that this element is adequate. The Court is also satisfied at this time with the changes Defendant has proposed, and implemented, to its Amazon storefront. See [ECF No. 71]. The Channel Restriction is clearly described, prominently placed, and can generally be viewed on a computer without scrolling. Within the same paragraph as the Channel Restriction, customers are informed that, by purchasing a Protection Plan, they agree to the plan s Terms and Conditions. A web address to the Terms and Condition is provided, and customers are informed that the Terms and Conditions will be ed to them after purchase. Additionally, Defendant now includes the entirety of the Terms and Conditions in the body of the post-sale it sends to its customers, rather than providing only a link to the Terms and Conditions in that . See [ECF No. 69 3]. As to the claims release, it is generally unremarkable. It is at first striking that the release specifies that class members may not challenge the arbitration provision in the Terms and Conditions. But that is ultimately part of the claim at issue here that provision, along with other terms and conditions, was illegally obscured from SquareTrade customers. There is nothing unusual about a settlement release covering the alleged misconduct in a lawsuit. Amicus Adam Starke points out that a New York federal court found that the arbitration provision was agrees with Gallagher that the relevant language change is not material, an observation that supports his conclusion that the claims would have been denied under either version of the Terms and Conditions. See id

17 Case 4:18-cv SMR-SBJ Document 73 Filed 02/14/19 Page 17 of 38 unenforceable under New York law as applied to a New York resident. See Starke v. SquareTrade, Inc., 16-CV-7036 (NGG), 2017 WL , at *5, *9 (E.D.N.Y. Aug. 3, 2017). However, given the narrow scope of that holding, the Court does not view the waiver s express reference to the arbitration provision as some bald attempt to undermine judicial authority. Starke also argues the waiver s reference to claims that relate to the sale by the Defendant associated with any Protection Plan could be construed as barring claims to enforce the terms of the plans. The parties agree that the language in question does not bar such claims. See [ECF Nos ; 68 3]. For the avoidance of doubt, the Court finds that such claims are not barred under the terms of the Proposed Settlement, and if the settlement is ultimately approved, class members shall not be enjoined from asserting such claims against SquareTrade. Further, the parties must clarify that point in the settlement notice materials. Against these terms, the Court will analyze the enumerated factors in Rule 23(e)(2)(C). i. The costs, risks, and delay of trial and appeal A comparison of the settlement against the costs, risks, and delay of trial and appeal strongly favors approving the settlement. If the settlement fails and this matter proceeds, it will likely take years to resolve, assuming it makes it to trial. Although all of this is subject to the parties litigation strategies, the matter is likely to include a motion to compel arbitration, a pre-answer motion to dismiss, protracted discovery, class certification, and summary judgment. There would likely be interlocutory appeals on some of those issues. The case would then proceed to trial and possibly appeal. All of this would incur substantial legal costs, both in the form of attorney s fees and the general expenses that accompany litigation. -17-

18 Case 4:18-cv SMR-SBJ Document 73 Filed 02/14/19 Page 18 of 38 In addition to these delays and expenses, the risks of proceeding to trial are substantial. Notably, the Court is skeptical the proposed class could be certified for trial. There are numerous individual issues that would appear to cause intractable management problems, ranging from the state-by-state analysis of the enforceability of the arbitration clause, to whether causation can be established on a class-wide basis. 12 There are also genuine questions as to whether the MMWA applies to Defendant s Protection Plans or if class members can recover damages when they never file a claim under the warranty in question. See [ECF No. 67 at 7 8]. All of these factors point to the settlement s adequacy. ii. Method of distributing relief At this stage, the Court is satisfied with the parties proposed method of distributing relief. SquareTrade s business is completely electronic; it is reasonable for them to focus notice and the distribution of relief via their customers addresses. The Court inquired as to how many times both the Notice and the address confirmation for Refund Class Members would be distributed. The parties have stated each will be sent three times. Given the banner ads and other methods of advertising the settlement, this eases the Court s concerns about spam filtering or class members ignoring these s. Additionally, the parties have agreed that the Administrator will use the NCAD to confirm the physical mailing address of Refund Class Members who do not reply to the address confirmation . The Court finds this is a reasonable step to ensure those class members receive their refunds. 12 As discussed in Section III.B.2.a, infra, such manageability issues need not be considered when certifying a class solely for the purpose of settlement because the proposal is that there be no trial. See Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 620 (1997). -18-

19 Case 4:18-cv SMR-SBJ Document 73 Filed 02/14/19 Page 19 of 38 iii. Attorney s fees The Court is also presently satisfied with the proposal for attorney s fees vis-à-vis the settlement offer. The $25,000 lump sum to lead class counsel will not be deducted from a finite settlement fund; consequently, it does not detract from any award to the settlement class. The Court is also not concerned with the 15% portion of the refund payments that will go to counsel. According to the parties estimates, those payments will total approximately $359,600. Lead class counsel s share of that will be approximately $53,940. Even if the Court adds the $25,000 lump sum to that figure, lead class counsel only stands to receive an amount equaling approximately 22% of the refund payments. That is well within the acceptable range of such percentages. Cf. Yarrington v. Solvay Pharms., Inc., 697 F. Supp. 2d 1057, 1064 (D. Minn. 2010) (observing that courts in the Eighth Circuit have frequently awarded attorney fees between twenty-five and thirty-six percent of a common fund in class actions ). The Court also finds nothing problematic in the timing of the payment of attorney s fees. At the hearing on the instant motion, the parties informed the Court that all payments including refund payments, coupons, the incentive award, and attorney s fees will be made on the Effective Date as defined in the settlement agreement Therefore, there appears to be no risk that the payment of attorney s fees will delay or otherwise detract from payments to the settlement class. These findings do not replace the analysis the Court will have to undertake to approve a motion for an award of attorney s fees. The Court has merely found that the proposed fees do not have an adverse impact on the adequacy of the settlement proposal. -19-

20 Case 4:18-cv SMR-SBJ Document 73 Filed 02/14/19 Page 20 of 38 iv. Rule 23(e)(3) agreements The Court must also consider the settlement against the terms of any side agreements the parties have made in connection with the settlement proposal. The parties have confirmed there are no such agreements. In conclusion, the Court finds the settlement proposal is likely to satisfy the adequacy requirement of Rule 23(e)(2)(C). c. Equitable treatment Rule 23(e)(2)(D) requires the Court to consider whether the proposal treats class members equitably relative to each other. The Court is satisfied that it does. There is no requirement that all class members in a settlement be treated equally. See Marshall v. Nat l Football League, 787 F.3d 502, 510 (8th Cir. 2015). And, indeed, class members are not treated equally here. Some are entitled to cash refunds and others only benefit from a coupon and injunctive relief. However, the Court finds that these different approaches are fair. The settlement provides relief commensurate to the value of their respective MMWA claims. In particular, class members whose claims were denied due to the Channel Restriction suffered greater, clearly ascertainable losses. It is not clear that any other class members suffered losses due to Defendant s alleged MMWA violations. The United States Court of Appeals for the Eighth Circuit has advised that in evaluating the strength of the plaintiffs case and the potential value, the district court must take into account the interest of the entire class. Id. at 519. Thus, it must balance the claims of those with potentially substantial damages to those with potentially minimal or insignificant damages. Id. at The Court finds that the Proposed Settlement achieves this balance. -20-

21 Case 4:18-cv SMR-SBJ Document 73 Filed 02/14/19 Page 21 of Eighth Circuit factors As noted previously, Eighth Circuit courts have traditionally focused on four factors when assessing the fairness and adequacy of a proposed settlement: (1) the merits of the plaintiff s case, weighed against the terms of the settlement ; (2) the defendant s financial condition ; (3) the complexity and expense of further litigation ; and (4) the amount of opposition to the settlement. Van Horn, 840 F.2d at 607. The Court has already addressed the first and third of these factors above. The fourth factor (opposition to the settlement) is irrelevant at this time, as notice has not been distributed. The remaining factor, the financial condition of Defendant, is neutral here. There is no dispute that Defendant is financially capable of either paying the settlement or continuing this litigation. See Marshall, 787 F.3d at 512 (finding the defendant s financial condition to be a neutral factor when the defendant was in good financial standing, which would permit it to adequately pay for its settlement obligations or continue with a spirited defense in the litigation ). Having considered the proposed settlement against the factors listed in Rule 23(e)(2) and, where different, set out in Eighth Circuit case law, the Court finds that it will likely be able to approve the proposed settlement following notice to the class and the final fairness hearing. B. Class Certification When asked to authorize distribution of a settlement notice to a proposed class that has not yet been certified, a court must determine whether it is likely to certify the class for purposes of judgment on the [settlement] proposal. Fed. R. Civ. P. 23(e)(1)(B)(ii). If a court determines certification is likely (and that it will likely approve the settlement proposal under Rule 23(e)(2)), it may authorize the distribution of notice. However, this does not amount to a preliminary or conditional certification of the class. The ultimate decision to certify the class for purposes of -21-

22 Case 4:18-cv SMR-SBJ Document 73 Filed 02/14/19 Page 22 of 38 settlement cannot be made until the hearing on final approval of the proposed settlement. Advisory Committee Notes, 324 F.R.D. at 917. Plaintiff asks the Court to certify a class consisting of any person or entity in the United States [or its territories] who, from April 20, 2012, through October 8, 2018, purchased a SquareTrade Protection Plan on Amazon, but excluding the judge approving the Settlement and his or her immediate family; Defendant; any entities in which Defendant has a controlling interest or which have a controlling interest in Defendant; and the officers, directors, employees, affiliates, and attorneys for Defendant. [ECF No at 4]. The certification of this class is premised on Defendant s alleged violations of the MMWA, namely that Defendant failed to fully and conspicuously disclose in simple and readily understood language the terms and conditions of the warranties it provides for consumer products. 15 U.S.C. 2302(a). Due to the uniformity of the layout of Defendant s Amazon storefronts and its method for distributing notice of the Terms and Conditions before and after the sale of a Protection Plan, all class members were generally exposed to the same alleged violations of the MMWA. The parties acknowledge, however, that the injuries and damages vary among the class members. All class members were allegedly injured because the value of the Protection Plans as enforced were worth less than their value as disclosed before and at the time of sale. However, some class members had their Protection Plan claims denied specifically due to the Channel Restriction. There are roughly 580 such class members, and the average amount of their damages the amount of the underlying product is $620. Under Rule 23, a motion for class certification involves a two-part analysis. First, under Rule 23(a), the proposed class must satisfy the requirements of numerosity, commonality, -22-

23 Case 4:18-cv SMR-SBJ Document 73 Filed 02/14/19 Page 23 of 38 typicality, and fair and adequate representation. Luiken v. Domino s Pizza, LLC, 705 F.3d 370, 372 (8th Cir. 2013). Second, the proposed class must meet at least one of the three requirements of Rule 23(b). Comcast Corp. v. Behrend, 569 U.S. 27, 33 (2013). Parties seeking class certification must affirmatively demonstrate [their] compliance with Rule 23 and be prepared to prove that the rule s requirements are in fact satisfied. Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350 (2011). When determining whether to certify a class, courts may need to probe behind the pleadings, as the analysis will [f]requently... entail some overlap with the merits of the plaintiff s underlying claim. Id. at (citation omitted). Courts have broad discretion in deciding whether to certify a class. Rattray v. Woodbury Cty., 614 F.3d 831, 835 (8th Cir. 2010). But certification is proper only if the trial court is satisfied, after a rigorous analysis, that the prerequisites of Rule 23(a) have been satisfied. Dukes, 564 U.S. at Rule 23(a) factors a. Numerosity Rule 23(a)(1) requires that a class be so numerous that joinder of all members is impracticable. Fed. R. Civ. P. 23(a)(1). When determining whether numerosity is satisfied, courts consider the number of persons involved in the class, the nature of the action, the size of individual claims, the inconvenience of trying individual suits, and any other factor relevant to the practicability of joining all the putative class members. Paxton v. Union Nat l Bank, 688 F.2d 552, (8th Cir. 1982). No arbitrary rules regarding the necessary size of classes have been established. Id. at 559. Indeed, the Eighth Circuit has affirmed the certification of -23-

24 Case 4:18-cv SMR-SBJ Document 73 Filed 02/14/19 Page 24 of 38 classes with as few as twenty members. See, e.g., Ark. Educ. Ass n v. Bd. of Educ., 446 F.2d 763, (8th Cir. 1971) (upholding class of members). Here, Plaintiff asserts the class is comprised of over fourteen million SquareTrade customers. See [ECF No ]. Of the broader class, approximately 580 are eligible for refunds. The proposed class satisfies the numerosity requirement. b. Commonality Rule 23(a)(2) requires that there are questions of law or fact common to the class. Fed. R. Civ. P. 23(a)(2). Commonality requires the plaintiff to demonstrate that the class members have suffered the same injury. Dukes, 564 U.S. at (2011) (quoting Gen. Tel. Co. of the Sw. v. Falcon, 457 U.S. 147, 157 (1982)). Plaintiff cannot accomplish this by merely showing that they have all suffered a violation of the same provision of law. Id. at 350. Instead, [t]heir claims must depend upon a common contention... [that] must be of such a nature that it is capable of classwide resolution which means that determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke. Id. For this purpose, [e]ven a single [common] question will do. Id. at 359 (alterations in original) (citation omitted). The parties offer various questions that would satisfy the commonality requirement for the proposed class. Notably, Defendant contends the MMWA does not require pre-sale disclosure of terms and conditions of service contracts at all. Rather, it imposes that requirement as to warranties. See 15 U.S.C. 2302(b) (providing for pre-sale disclosure only with respect to the terms of any written warranty ). Defendant argues that both the MMWA and its implementing regulations differentiate between warranties and service contracts, with the former being different -24-

25 Case 4:18-cv SMR-SBJ Document 73 Filed 02/14/19 Page 25 of 38 in that they are purchased in connection with, and are part of the basis of the bargain for, the underlying product. See 15 U.S.C. 2301(4); 16 C.F.R (b) (c) (distinguishing between warranties and service contracts). Plaintiff disputes these arguments and contends the pre-sale disclosure requirements of the MMWA apply to the sale of service contracts. The resolution of these questions whether the Protection Plans are service contracts, and, if so, does the MMWA apply to them would potentially resolve issues central to Plaintiff s claims in one stroke. Dukes, 564 U.S at 350. Rule 23(a) s commonality requirement thus appears to be satisfied. c. Typicality Rule 23(a)(3) requires a showing that the claims or defenses of the representative parties are typical of the claims or defenses of the class. Fed. R. Civ. P. 23(a)(3). When establishing typicality, [f]actual variations in the individual claims will not normally preclude class certification if the claim arises from the same event or course of conduct as the class claims, and gives rise to the same legal or remedial theory. Alpern v. UtiliCorp United, Inc., 84 F.3d 1525, 1540 (8th Cir. 1996). The burden is fairly easily met so long as other class members have claims similar to the named plaintiff. Id. (citation omitted). Here, Plaintiff s claims are typical of the rest of the class because they arise from uniform promotional practices; there are no differences amongst the class members in the layout of the Amazon storefront and, thus, the way relevant information was conveyed to them. Additiona lly, Plaintiff suffered both injuries to which the class was allegedly subject he was denied a claim based on the Channel Restriction, and he otherwise purchased a Protection Plan that was worth less than advertised. Therefore, typicality is likely satisfied here. -25-

26 Case 4:18-cv SMR-SBJ Document 73 Filed 02/14/19 Page 26 of 38 d. Adequate representation Finally, the Court must consider whether Plaintiff will fairly and adequately protect the interests of the class. Fed. R. Civ. P. 23(a)(4). This inquiry serves to uncover conflicts of interest between named parties and the class they seek to represent. Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 625 (1997). The focus of Rule 23(a)(4) is whether: (1) the class representatives have common interests with the members of the class, and (2) whether the class representatives will vigorously prosecute the interests of the class through qualified counsel. Paxton, 688 F.2d at (8th Cir. 1982). Here, Plaintiff alleges he suffered the same injuries as the rest of the class, and there is no indication that his interests somehow conflict with those of other class members. Notably, Plaintiff and other class members share the same objectives, and their claims arise from the same general factual position. The Court finds there is no conflict between Plaintiff, who is eligible to receive a refund, and class members who are not eligible to receive refunds. The settlement is not structured so that refund payments somehow detract from the relief available to other class members. As to Plaintiff s counsel, they are accomplished litigators with ample experience in class actions and complex litigation. See [ECF Nos ; ]. The Court has reviewed their declarations as to the settlement negotiations in this matter. Given the adequacy of the proposed settlement they were able to negotiate, the Court is satisfied that Plaintiff s counsel have vigorously prosecuted the interests of the class, and will continue to do so. -26-

27 Case 4:18-cv SMR-SBJ Document 73 Filed 02/14/19 Page 27 of Rule 23(b) Having found that the proposed settlement class satisfies the requirements of Rule 23(a), the Court must now determine if the class satisfies any one of the requirements of Rule 23(b). Plaintiff assert the class satisfies Rule 23(b)(3), which allows a court to maintain a class action if the court finds that the questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and effectively adjudicating the controversy. Fed. R. Civ. P. 23(b)(3). The Court will address each of these elements in turn. a. Common issues predominate over individualized issues The predominance inquiry tests whether proposed classes are sufficiently cohesive to warrant adjudication by representation and calls upon courts to give careful scrutiny to the relation between common and individual questions in a case. Tyson Foods, Inc. v. Bouaphakeo, 136 S. Ct. 1036, 1045 (2016) (citation omitted). For these purposes: If, to make a prima facie showing on a given question, the members of a proposed class will need to present evidence that varies from member to member, then it is an individual question. If the same evidence will suffice for each member to make a prima facie showing, then it becomes a common question. Blades v. Monsanto Co., 400 F.3d 562, 566 (8th Cir. 2005). When assessing predominance under Rule 23(b)(3), courts must determine whether the common issues in the case are more prevalent or important than the individual issues. Tyson Foods, Inc., 136 S. Ct. at (citation omitted). When one or more of the central issues in the action are common to the class and can be said to predominate, the action may be considered proper under Rule 23(b)(3) even though other important matters will have to be tried separately.... Id. (citation omitted). -27-

28 Case 4:18-cv SMR-SBJ Document 73 Filed 02/14/19 Page 28 of 38 Although Rule 23(b)(3) does not prescribe separate considerations for classes that are to be certified for settlement purposes only, [s]ettlement is relevant to a class certification. Amchem, 521 U.S. at 619; see also Advisory Committee Notes, 324 F.R.D. at 931 (observing that the standards for certification differ for settlement and litigation purposes ). Notably, a district court need not inquire whether the case, if tried, would present intractable management problems... for the proposal is that there be no trial. Amchem, 521 U.S. at 620. Thus, any manageability issues that might or might not arise at trial from proving liability, injury and damages on behalf of the class members are not relevant to the certification of a settlement class. Dorado v. Bank of Am., N.A., No. 1:15-cv UU, 2017 WL , at *6 (S.D. Fla. Mar. 24, 2017); see also In re Diet Drugs, Nos. 1203, , 2000 WL , at *43 (E.D. Pa. Aug. 28, 2000) ( [I]ndividual issues relating to causation, injury and damage also disappear because the settlement s objective criteria provide for an objective scheme of compensation. ) However, a certifying court must still determine whether the legal or factual questions that qualify each class member s case as a genuine controversy are sufficiently simila r to yield a cohesive class. In re Am. Intern. Grp., Inc. Secs. Litig., 689 F.3d 229, 240 (2d Cir. 2012) (quoting Amchem, 521 U.S. at 623). Here, as discussed above, there are common questions as to the nature of the Protection Plans and whether the proposed class could assert its claims under the MMWA. If the class overcame this hurdle, all class members were exposed to substantially the same user interface and terms and conditions. Based on this, the issue of whether Defendant s disclosure of the terms and conditions of the Protection Plans complied with the requirements of the MMWA is an issue of law that is equally applicable to all class members. -28-

29 Case 4:18-cv SMR-SBJ Document 73 Filed 02/14/19 Page 29 of 38 In contrast, the most prominent individual issues involve damages, causation, and injury. For example, the injuries and damages of the Refund Class Members differ from the remaining class members. Broader differences such as whether Defendant s failure to adequately disclose the terms of its Protection Plans actually caused harm go to the issue of causation. However, these are typically viewed as manageability issues that are not relevant in a settlement context. See Dorado, 2017 WL , at *6. In these circumstances, the Court finds that the common issues predominate over individua l issues. b. Superiority of a class resolution The superiority requirement asks whether the class action is the best available method for resolving the controversy. Cullan & Cullan LLC v. M-Qube, Inc., No. 8:13CV172, 2016 WL , at *6 (D. Neb. Sept. 27, 2016). The Court must compare the possible alternatives to determine whether Rule 23 is sufficiently effective to justify the expenditure of the judicial time and energy that is necessary to adjudicate a class action and to assume the risk of prejudice to the rights of those who are not directly before the court. 7AA Charles Alan Wright et al., Federal Practice and Procedure 1779, (3d ed. 2005). Here, the Court finds that class resolution is superior to other methods of adjudicating this matter. The values of class members individua l claims, to the extent they have value at all, are generally not high enough to justify litigating in federal court. Even for those class members who might stand to recover more than the filing fee to commence a civil action, there is no indication that their claims are large enough to cover the expenses of litigating against a defendant as resourceful as SquareTrade. In short, there is minimal, if any, incentive for class members to -29-

30 Case 4:18-cv SMR-SBJ Document 73 Filed 02/14/19 Page 30 of 38 pursue their claims individually. Additionally, the Court is not aware of any other means by which class members might seek redress, such as an administrative or regulatory claims procedure. In conclusion, the Court finds it will likely be able to certify the proposed class following the notice period and final fairness hearing. C. Notice Plan The parties have proposed that notice of the settlement will be handled primarily by electronic means. The Administrator will establish a website on which it will post the settlement agreement, the Long Form Notice, and an opt-out form. [ECF No at 9]. The Administrator will also arrange for banner ads to run across the Goggle Display Network and Facebook. Id. Those ads will contain links to the settlement website. Id. Finally, the Notice will be ed three times to each class member, whose addresses Defendant will provide to the Administrator based on Defendant s business records. See id. at 8; [ECF No. 67 at 12]. Notice for classes certified under Rule 23(b)(3) must be the best notice that is practicable under the circumstances, including individual notice to all members who can be identified through reasonable effort. Fed. R. Civ. P. 23(c)(2)(B). Such notice may be transmitted by electronic means. Id. In addition to these general requirements, the notice must contain the following: The notice must clearly and concisely state in plain, easily understood language: (i) (ii) (iii) (iv) the nature of the action; the definition of the class certified; the class claims, issues, or defenses; that a class member may enter an appearance through an attorney if the member so desires; -30-

31 Case 4:18-cv SMR-SBJ Document 73 Filed 02/14/19 Page 31 of 38 (v) (vi) (vii) that the court will exclude from the class any member who requests exclusion; the time and manner for requesting exclusion; and the binding effect of a class judgment on members under Rule 23(c)(3). Id. The Court has reviewed the parties proposed Notice and Long Form Notice. The Long Form Notice contains all of the information listed in Rule 23(c)(2)(B). The Notice contains all of this information except for a clear definition of the settlement class. It must be amended to include that definition. Also, during the hearing on the instant motion, the Court asked the parties to edit the relevant text in the notices to make clear that the proposed class includes individuals residing in U.S. territories. The Court finds the notice is the best practicable under the circumstances. Defendant conducts its business electronically. It has all of its customers addresses. The Court had concerns about spam filtering and the possibility that the Notice would be ignored by class members. The Court finds that running ads for the settlement and sending the Notice three times to class members reasonably addresses these concerns. The Court informed the parties that it had concerns about stale addresses and inquired as to how much it would cost to mail notice to class members from whom the Administrator receives an undeliverable notification. The parties estimate that will cost $333,950. The Court finds that is not reasonable in light of the amounts at issue in the settlement. However, the parties must keep track of how many undeliverable notifications the Administrator receives in response to the Notice and provide that information when they file their motion for final approval of the settlement. Additiona lly, because Rule 23(c)(2)(B) closely tracks the requirements of procedural due process under the -31-

32 Case 4:18-cv SMR-SBJ Document 73 Filed 02/14/19 Page 32 of 38 United States Constitution, the Court finds that the notice is constitutionally valid. See Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306, 314 (1950) ( An elementary and fundamental requirement of due process in any proceeding which is to be accorded finality is notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections. ). For the sake of accuracy, the Court will also order two other changes to the notices. As already discussed, both the Long Form Notice and the notice must be revised to specify that class members retain their right to challenge the denial of a protection plan claim. Additiona lly, the parties must delete the sentence No court has decided that SquareTrade did anything wrong from the Notice. See [ECF No at 1]. That statement is debatable in light of the Starke ruling on the arbitration provision, referenced above. Although parties can argue as to what the word wrong means in a legal context, it is best to avoid the dispute altogether. IV. CONCLUSION For the foregoing reasons: 1. The Court finds that it will likely be able to approve the Settlement Agreement on behalf of all persons or entities in the United States or its territories who, during the period from April 20, 2012 through October 8, 2018, (the Class Period ), purchased a SquareTrade Protection Plan on Amazon, but excluding the undersigned and her immediate family, any entities in which Defendant has a controlling interest or which have a controlling interest in Defendant, and the officers, directors, employees, affiliates, and attorneys for Defendant (the Settlement Class ). -32-

33 Case 4:18-cv SMR-SBJ Document 73 Filed 02/14/19 Page 33 of The Court finds that it will likely be able to certify the Settlement Class for the purposes of judgment on the proposed Settlement Agreement 13 only. 3. A hearing (the Final Approval Hearing ) shall be held before this Court on June 21, 2019, at 9:00 a.m. Central Time, at the United States District Court for the Southern District of Iowa, 123 East Walnut Street, Des Moines, Iowa to determine (i) whether the proposed Settlement Agreement is fair, reasonable, adequate, and in the best interests of the Settlement Class, and should be finally approved by the Court; (ii) whether the Settlement Class should be certified under Rule 23 of the Federal Rules of Civil Procedure; (iii) whether a Judgment as provided in Section II(B)(4) of and Exhibit C to the Settlement Agreement should be entered in this matter; (iv) whether to award attorneys for Plaintiff ( Lead Class Counsel ) their requested attorney s fees and reimbursement of expenses; and (v) whether to award the Named Plaintiff his requested incentive award. The Court may continue or adjourn the Final Approval Hearing without further notice to Settlement Class Members. 4. The Court may decide to approve the Settlement with or without modification and with or without further notice of any kind. The Court may also enter its Judgment approving the Settlement Agreement and dismissing the claims in the Complaint, on the merits and with prejudice, regardless of whether it has approved the relief to the Settlement Class or awarded attorneys fees, reimbursement of expenses, or an award to the Named Plaintiff. 5. Subject to the parties implementing the changes described above, the Court approves, as to form and content, the Notice of Pendency and Settlement of Class Action (the Long Form 13 A copy of the Settlement Agreement is docketed at [ECF No. 22-1]. -33-

34 Case 4:18-cv SMR-SBJ Document 73 Filed 02/14/19 Page 34 of 38 Notice ) annexed as Exhibit B to this Order, and finds that the distribution of the Notice in the form annexed as Exhibit C to this Order, along with the digital media campaign set out in Section II(C) of the Settlement Agreement, meets the requirements of the Federal Rules of Civil Procedure and due process, and is the best notice practicable under the circumstances and shall constitute due and sufficient notice to all persons entitled thereto. 6. Defendant shall coordinate with the Third-Party Settlement Administrator to ensure that notice to the Settlement Class, as discussed in this Order and set forth in Section II(C) of the Settlement Agreement, is given. 7. Within sixty (60) calendar days of the entry of this Order (the Notice Date ), Defendant shall: (i) ensure that the Third-Party Administrator disseminates a copy of the Notice, substantially in the form annexed as Exhibit C to this Order and bearing the changes discussed herein, by electronic mail to all Class Members who can be identified by a reasonable effort by Defendant utilizing its computer database as described in Section II(C) of the Settlement Agreement; (ii) ensure that the Third-Party Administrator commences the digital media campaign set out in Section II(C) of the Settlement Agreement; and (iii) ensure that the Third-Party Administrator has set up the Settlement Website on which it shall post this Order and the Settlement Agreement, as well as the Long Form Notice (revised as discussed in this Order and substantially in the form annexed as Exhibit B hereto) and Opt-Out Form substantially in the form annexed as Exhibit E to the Settlement Agreement. -34-

35 Case 4:18-cv SMR-SBJ Document 73 Filed 02/14/19 Page 35 of At least fourteen (14) calendar days prior to the deadline for filing papers in support of the Final Approval of the Settlement, Defendant shall provide to Lead Class Counsel proof, by affidavit or declaration, that the notices described in the preceding paragraph have been provided in the prescribed manner and Lead Class Counsel will include such declaration with the Final Approval of Settlement papers to be filed with the Court. 9. Lead Class Counsel has the authority to enter into the Settlement Agreement on behalf of the Settlement Class and is authorized to act on behalf of the Settlement Class Members with respect to all acts or consents that may be required by or that may be given pursuant to the Settlement Agreement or such other acts that are reasonably necessary to consummate the Settlement. 10. Any Settlement Class Member may enter an appearance in the Action, at his or her own expense, individually or through counsel of his or her own choice. If Settlement Class Members do not enter an appearance, they will be represented by Lead Class Counsel. 11. Unless and until the Settlement Agreement is canceled and/or terminated pursuant to Sections II(N) or II(S) of the Settlement Agreement, neither Plaintiff nor any Settlement Class Member, either directly, through any representative, or in any other capacity, shall commence or prosecute against any of the Released Parties any action or proceeding in any court or tribunal asserting any of the Released Claims. 12. Any Settlement Class Member who wishes to make a written objection must serve by mail or such objection so that it is received not later than June 7, 2019, by Harley C. Erbe, ERBE LAW FIRM, 2501 Grand Avenue, Des Moines, Iowa, 50312, Tel: (515) , erbelawfirm@aol.com, or Steven P. Wandro, WANDRO & ASSOCIATES, 2501 Grand -35-

36 Case 4:18-cv SMR-SBJ Document 73 Filed 02/14/19 Page 36 of 38 Avenue, Des Moines, Iowa, 50312, Tel: (515) , An objection should indicate the case name and also include the following information: (i) name, address, and telephone number of the Settlement Class Member; (ii) all grounds for the objection, including any legal support the Settlement Class Member or his or her counsel wish to assert; (iii) if represented by counsel, the name, address, and telephone number of all counsel who represent the Settlement Class Member; (iv) a statement confirming whether the Settlement Class Member or his or her counsel plan to appear at the Final Approval Hearing; (v) the name, address, and telephone number of any counsel that will appear at the Final Approval Hearing; and (vi) the number of times the Settlement Class Member and his or her counsel filed an objection to any other class action settlement in the previous five years and the identity of that case, and the nature and resolution of each objection. Any Settlement Class Member who does not make his or her objection in the manner provided herein shall be deemed to have waived such objection and shall forever be foreclosed from making any objection to the Settlement Agreement, to Lead Class Counsel s application for fees and expenses, and/or to the Named Plaintiff s request for an incentive award, unless otherwise ordered by the Court. Any Settlement Class Member who submits a timely objection may, but is not required to, appear and address the Court at the Final Approval Hearing. 13. Upon receipt, Lead Class Counsel shall promptly file with the Court any written objections that satisfy the criteria set out in the preceding paragraph. 14. The motion in support of final approval of the Settlement Agreement shall be filed and served no later than twenty-one (21) calendar days prior to the Final Approval Hearing; -36-

37 Case 4:18-cv SMR-SBJ Document 73 Filed 02/14/19 Page 37 of 38 any responsive papers shall be filed and served no later than fourteen (14) days prior to the Final Approval Hearing; any reply papers shall be filed and served no later than seven (7) days prior to the Final Approval Hearing. Lead Class Counsel s application for attorney s fees and expenses, and Plaintiff s application for an incentive award, must be filed and served no later than thirty (30) days prior to the deadline for Settlement Class Members to file objections. 15. Settlement Class Members shall be bound by all determinations and judgments in the Action, whether favorable or unfavorable, unless such persons request exclusion from the Settlement Class in a timely and proper manner, as follows. A Settlement Class Member wishing to request exclusion from the Settlement Class shall notify the Lead Class Counsel in writing at the address set forth in the Notice either by electronically submitting the webbased Opt-Out Form via the Settlement Website no later than thirty (30) calendar days prior to the Final Approval Hearing, by no later than thirty (30) calendar days prior to the Final Approval Hearing, or by submitting a printed copy of the Opt-Out Form via first class mail, postage prepaid, and postmarked no later than thirty (30) calendar days prior to the Final Approval Hearing. Such request for exclusion shall clearly indicate the case name, the name, address, and telephone number of the person seeking exclusion, and that the sender specifically requests to be excluded from the Settlement Class (as defined in the Settlement Agreement). The request for exclusion shall not be effective unless the request for exclusion provides the required information and is made within the time stated above, or the request for exclusion is otherwise accepted by the Court. Settlement Class Members -37-

38 Case 4:18-cv SMR-SBJ Document 73 Filed 02/14/19 Page 38 of 38 who timely and properly exclude themselves from the Settlement Class shall not be entitled to receive any relief as described in the Settlement Agreement. 16. Neither the Settlement Agreement, nor any of its terms or provisions, nor any of the negotiations or proceedings connected with it, shall be construed as an admission or concession by Defendant of the truth of any of the allegations in the Action, or of any liability, fault, or wrongdoing of any kind. 17. The Court retains jurisdiction to consider all further applications arising out of or connected with the proposed Settlement Agreement. 18. In the event that the Settlement Agreement shall not be consummated pursuant to its terms, the Settlement Agreement, except as otherwise provided herein, including any amendment(s) thereto, and this Order, shall be null and void, of no further force or effect, and without prejudice to any party, and may not be introduced as evidence or referred to in any action or proceeding by any person or entity, and each party shall be restored to his, her, or its respective position as it existed before the execution of the Settlement Agreement. IT IS SO ORDERED. Dated this 14th day of February, STEPHANIE M. ROSE, JUDGE UNITED STATES DISTRICT COURT -38-

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40 Case 4:18-cv SMR-SBJ Document 73-1 Filed 02/14/19 Page 2 of 2 Subject Line: Import Information Refund Payment from SquareTrade Address Confirmation Dear [Refund Class Member], You have been identified as a member of the Refund Settlement Class in the case of Swinton v. SquareTrade, Inc., No. 4:18-cv-00144, a case now pending in the United States District Court for the Southern District of Iowa. This means that you are eligible to receive a payment, as described below. SquareTrade s records indicate that, between the period [date] and [date], you submitted a claim for coverage under a SquareTrade Plan that you had purchased on Amazon.com, and that your claim was denied on the basis that the product covered by the Protection Plan had not been purchased on Amazon.com. Pursuant to the terms of a classwide settlement reached in the case, you are eligible to receive a payment from SquareTrade in the amount of the purchase price of the covered product, exclusive of taxes and fees, less %. In order for you to receive this payment, we need to confirm your mailing address. Please call us at [phone number], or send an stating your current mailing address to [ ], or sent us a letter stating your current mailing address, to: SquareTrade v. Swinton Class Action Settlement Administrator c/o [address] [address] [address] You may also visit the Settlement website at [insert web address] to obtain further information about the case and the Settlement. Thank you. US: v2

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