Claudine Saldivar, et al. v. Stanford Federal Credit Union, et al.

Consequently, the consumer’s account will always have sufficient available funds to cover these transactions. (Ibid.) However, Stanford still assesses $20 overdraft fees on many of these transactions and misrepresents its practices in its account documents. (Id., ¶ 22.) Because Stanford places a hold on funds when the debit card is used to make a purchase, those funds are not available for any other use by the accountholder, which means when any subsequent, intervening transactions are initiated on a checking account, they are compared against an account balance that has already been reduced to account for any earlier transactions. (Id., ¶ 24.)

Accordingly, many subsequent transactions incur overdraft fees due to the unavailability of the funds sequestered for those debit card transactions. (Id.) Despite keeping these held funds off limits for other transaction, Stanford improperly charges overdraft fees on those APPN transactions, although the APPN transactions always have sufficient available funds to be covered. (Id., ¶ 25.)

While Stanford is contractually permitted to charge overdraft fees for transactions that are authorized into a negative account balance, it is not permitted to do so for APPN transactions, i.e., those transactions that occur when sufficient funds exist to cover them. (FAC, ¶¶ 35-36.) Stanford’s actual practice is to attempt the same debit card transaction twice to determine if the transaction overdraws the account- both at the time a transaction is authorized and later at time of settlement. However, at the moment prior to settlement, Stanford releases the hold placed on funds for the transaction for a split second, putting money

back in the account, and then re-debits the same transaction a second time. (Id., ¶ 41.) This “secret” step allows Stanford is to charge overdraft fees on transactions that should never have been subject to them because they were authorized into sufficient funds and funds were set aside by Stanford to pay for them. (Id., ¶ 42.)

Based on the foregoing allegations, Plaintiff Claudine Saldivar initiated this action in June 2020 and both her and Mr. Montes filed the operative FAC on July 25, 2023, asserting the following causes of action: (1) breach of contract; (2) breach of the implied covenant of good faith and fair dealing; (3) unjust enrichment/restitution; (4) money had and received; and (5) violation of Unfair Competition Law (Bus. & Prof. Code, § 17200, et seq.).

Plaintiffs now seek an order: conditionally certifying the class for settlement purposes; preliminarily approving the class action settlement (the “Settlement”); appointing Plaintiffs as the class representatives; appointing Simpluris, Inc. (“Simpluris”) as the Settlement administrator; and approving the class notice.

II. LEGAL STANDARD FOR SETTLEMENT APPROVAL

B. Class Action

Generally, “questions whether a [class action] settlement was fair and reasonable, whether notice to the class was adequate, whether certification of the class was proper, and whether the attorney fee award was proper are matters addressed to the trial court’s broad discretion.” (Wershba v. Apple Computer, Inc. (2001) 91 Cal.App.4th 224, 234–235 (Wershba), disapproved of on other grounds by Hernandez v. Restoration Hardware, Inc. (2018) 4 Cal.5th 260.)

In determining whether a class settlement is fair, adequate and reasonable, the trial court should consider relevant factors, such as the strength of plaintiffs’ case, the risk, expense, complexity and likely duration of further litigation, the risk of maintaining class action status through trial, the amount offered in settlement, the extent of discovery completed and the stage of the proceedings, the experience and views of counsel, the presence of a governmental participant, and the reaction of the class members to the proposed settlement.

(Wershba, supra, 91 Cal.App.4th at pp. 244–245, internal citations and quotations omitted.)

In general, the most important factor is the strength of the plaintiffs’ case on the merits, balanced against the amount offered in settlement. (See Kullar v. Foot Locker Retail, Inc. (2008) 168 Cal.App.4th 116, 130 (Kullar).) But the trial court is free to engage in a balancing and weighing of relevant factors, depending on the circumstances of each case. (Wershba, supra, 91 Cal.App.4th at p. 245.) The trial court must examine the “proposed settlement agreement to the extent necessary to reach a reasoned judgment that the agreement is not the product of fraud or overreaching by, or collusion between, the negotiating parties, and that the settlement, taken as a whole, is fair, reasonable and adequate to all concerned.” (Ibid., citation and internal quotation marks omitted.)

The trial court also must independently confirm that “the consideration being received for the release of the class members’ claims is reasonable in light of the strengths and weaknesses of the claims and the risks of the particular litigation.” (Kullar, supra, 168 Cal.App.4th at p. 129.) Of course, before performing its analysis the trial

court must be “provided with basic information about the nature and magnitude of the claims in question and the basis for concluding that the consideration being paid for the release of those claims represents a reasonable compromise.” (Id. at pp. 130, 133.)

III. SETTLEMENT PROCESS

On June 19, 2020, Plaintiff Saldivar initiated this action with the filing of the Complaint. On April 2, 2021, the parties engaged in mediation before Hon. Gail Andler (Ret.) but they were unable to reach an agreement. The parties engaged in extensive written discovery, including multiple sets of requests for production, special interrogatories, form interrogatories, and requests for admission. Defendant produced four months of sample class transaction data which contained sufficient information to identify the class members and their damages—which was then analyzed by Plaintiffs’ expert.

On January 26, 2023, Plaintiff Angelica Carrillo filed her action (Carrillo v. Stanford Federal Credit Union [23CV410517] (Carrillo)) in this Court which asserted an issue already alleged and subsumed by the instant action.1 On July 25, 2023, Plaintiff Saldivar filed the operative FAC, which added Plaintiff Montes to the instant action. On August 21, 2023, Defendant filed a motion to compel arbitration as to Plaintiff Montes’ claims. On October 24, 2023, the Court (Hon. Kulkarni) issued its order, which denied Defendant’s motion to compel arbitration. On September 9, 2024, Defendant filed a motion for summary judgment. On May 8, 2025, Plaintiffs filed their motion to compel attendance at deposition.

The parties continued to negotiate a settlement and agreed upon the Settlement currently before the Court.

IV. SETTLEMENT PROVISIONS

The non-reversionary gross settlement amount is $450,000. Attorneys’ fees of up to one-third ($150,000), litigation costs of up to $40,000 and settlement administration costs. Plaintiffs Saldivar and Montes will seek class representative service awards for up to $10,000 and Plaintiff Carrillo will seek an award for up to $7,500.

The net settlement amount will be allocated to “Class Members,” who are defined as “any Stanford Federal Credit Union Member who has or had an account with Stanford Federal Credit Union who from June 19, 2016 through September 22, 2025 was charged two or more NSF Fee follows by an OD Fee on the same ACH transaction or check.” Funds associated with checks uncashed after 180 days will be transmitted to Public Citizen Foundation.

In exchange for settlement, Class Members who do not opt out will release:

[A]ny and all losses, fees, charges, complaints, claims, debts, liabilities, demands, obligations, costs, expenses, actions, and causes of action of every nature, character, and description, whether known or unknown, asserted or unasserted, suspected or unsuspected, fixed or contingent, which the Saldivar Plaintiffs and Angelica Carrillo and Class Members who do not opt out now have, own or hold against any of the Defendant Releasees arising out of Defendant's assessment of

1 The Carrillo parties are also signatories to the Settlement.

NSF Fees on the second or subsequent time a third party presents an item in an attempt to collect on a check (including an electronic check) or ACH item after the first or prior attempt at collection was rejected and the member's account was assessed an NSF Fee, or Defendant's assessment of an Overdraft Fee on an item that previously resulted in an NSF Fee, during the Class Period.

The foregoing release is appropriately tailored to the allegations at issue. (See Amaro v. Anaheim Arena Management, LLC (2021) 69 Cal.App.5th 521, 537.)

V. FAIRNESS OF SETTLEMENT

Based on available data provided by Defendant, Plaintiff’s expert estimated Defendant’s maximum exposure as $510,040. The gross settlement amount is approximately 88.2% of the maximum exposure, which is well above the range of recoveries typically approved by California courts. (See Cavazos v. Salas Concrete, Inc. (E.D. Cal., Feb 18, 2022, No. 1:19-cv-00062-DAD-EPG) 2022 U.S.Dist. LEXIS 30201, at *41-42 [citing cases approving settlements in the range of 5 to 35 percent of the maximum potential exposure].)

Considering the risk of continued litigation, difficulties related to class certification, and the multiple, dependent contingencies that Plaintiffs would have had to overcome to prevail on the claims, the settlement achieves a good result for the Class. For purposes of preliminary approval, the Court finds that the settlement is fair and reasonable to the Class.

VI. PROPOSED SETTLEMENT CLASS

Plaintiffs request provisional certification of the following class for settlement purposes:

[A]ll Stanford Federal Credit Union Members who have or have had accounts with Stanford Federal Credit Union who, from June 19, 2016 through September 22, 2025, were charged two or more NSF Fees or an NSF Fee followed by an Overdraft Fee on the same ACH transaction or check.

E. Legal Standard for Certifying a Class for Settlement Purposes

Rule 3.769(d) of the California Rules of Court states that “[t]he court may make an order approving or denying certification of a provisional settlement class after [a] preliminary settlement hearing.” California Code of Civil Procedure Section 382 authorizes certification of a class “when the question is one of a common or general interest, of many persons, or when the parties are numerous, and it is impracticable to bring them all before the court ....”

Section 382 requires the plaintiff to demonstrate by a preponderance of the evidence: (1) an ascertainable class and (2) a well-defined community of interest among the class members. (Sav-On Drug Stores, Inc. v. Superior Court (2004) 34 Cal.4th 319, 326, 332 (Sav- On Drug Stores).) “Other relevant considerations include the probability that each class member will come forward ultimately to prove his or her separate claim to a portion of the total recovery and whether the class approach would actually serve to deter and redress alleged wrongdoing.” (Linder v. Thrifty Oil Co. (2000) 23 Cal.4th 429, 435.) The plaintiff has the

burden of establishing that class treatment will yield “substantial benefits” to both “the litigants and to the court.” (Blue Chip Stamps v. Superior Court (1976) 18 Cal.3d 381, 385.)

In the settlement context, “the court’s evaluation of the certification issues is somewhat different from its consideration of certification issues when the class action has not yet settled.” (Luckey v. Superior Court (2014) 228 Cal.App.4th 81, 93.) As no trial is anticipated in the settlement-only context, the case management issues inherent in the ascertainable class determination need not be confronted, and the court’s review is more lenient in this respect. (Id. at pp. 93–94.) But considerations designed to protect absentees by blocking unwarranted or overbroad class definitions require heightened scrutiny in the settlement-only class context, since the court will lack the usual opportunity to adjust the class as proceedings unfold. (Id. at p. 94.)

F. Ascertainable Class

A class is ascertainable “when it is defined in terms of objective characteristics and common transactional facts that make the ultimate identification of class members possible when that identification becomes necessary.” (Noel v. Thrifty Payless, Inc. (2019) 7 Cal.5th 955, 980 (Noel).) A class definition satisfying these requirements

puts members of the class on notice that their rights may be adjudicated in the proceeding, so they must decide whether to intervene, opt out, or do nothing and live with the consequences. This kind of class definition also advances due process by supplying a concrete basis for determining who will and will not be bound by (or benefit from) any judgment.

(Noel, supra, 7 Cal.5th at p. 980, citation omitted.)

“As a rule, a representative plaintiff in a class action need not introduce evidence establishing how notice of the action will be communicated to individual class members in order to show an ascertainable class.” (Noel, supra, 7 Cal.5th at p. 984.) Still, it has long been held that “[c]lass members are ‘ascertainable’ where they may be readily identified ... by reference to official records.” (Rose v. City of Hayward (1981) 126 Cal. App. 3d 926, 932, disapproved of on another ground by Noel, supra, 7 Cal.5th 955; see also Cohen v. DIRECTV, Inc. (2009) 178 Cal.App.4th 966, 975-976 [“The defined class of all HD Package subscribers is precise, with objective characteristics and transactional parameters, and can be determined by DIRECTV’s own account records. No more is needed.”].)

Here, Plaintiffs’ counsel estimates there are thousands of Stanford account holders who are readily identifiable based on Defendant’s records, and the settlement Class is appropriately defined based on objective characteristics. The Court finds that the settlement Class is numerous, ascertainable, and appropriately defined.

G. Community of Interest

The “community-of-interest” requirement encompasses three factors: (1) predominant questions of law or fact, (2) class representatives with claims or defenses typical of the class, and (3) class representatives who can adequately represent the class. (Sav-On Drug Stores, supra, 34 Cal.4th at pp. 326, 332.)

For the first community of interest factor, “[i]n order to determine whether common questions of fact predominate the trial court must examine the issues framed by the pleadings and the law applicable to the causes of action alleged.” (Hicks v. Kaufman & Broad Home Corp. (2001) 89 Cal.App.4th 908, 916 (Hicks).) The court must also examine evidence of any conflict of interest among the proposed class members. (See J.P. Morgan & Co., Inc. v. Superior Court (2003) 113 Cal.App.4th 195, 215.) The ultimate question is whether the issues which may be jointly tried, when compared with those requiring separate adjudication, are so numerous or substantial that the maintenance of a class action would be good for the judicial process and to the litigants. (Lockheed Martin Corp. v.

Superior Court (2003) 29 Cal.4th 1096, 1104–1105 (Lockheed Martin).) “As a general rule if the defendant’s liability can be determined by facts common to all members of the class, a class will be certified even if the members must individually prove their damages.” (Hicks, supra, 89 Cal.App.4th at p. 916.)

Here, common legal and factual issues predominate. Plaintiff’s claims arise from Defendant’s conduct regarding uniform NSF fee practices and uniform contractual terms.

As for the second factor,

The typicality requirement is meant to ensure that the class representative is able to adequately represent the class and focus on common issues. It is only when a defense unique to the class representative will be a major focus of the litigation, or when the class representative’s interests are antagonistic to or in conflict with the objectives of those she purports to represent that denial of class certification is appropriate. But even then, the court should determine if it would be feasible to divide the class into subclasses to eliminate the conflict and allow the class action to be maintained.

(Medrazo v. Honda of North Hollywood (2008) 166 Cal. App. 4th 89, 99, internal citations, brackets, and quotation marks omitted.)

Like the other members of the proposed Class, Plaintiffs were members of the credit union during the Class Period, they entered into identical form agreements and were assessed the NSF fees by the same automated software system.

Finally, adequacy of representation “depends on whether the plaintiff’s attorney is qualified to conduct the proposed litigation and the plaintiff’s interests are not antagonistic to the interests of the class.” (McGhee v. Bank of America (1976) 60 Cal.App.3d 442, 450.) The class representative does not necessarily have to incur all of the damages suffered by each different class member in order to provide adequate representation to the class. (Wershba, supra, 91 Cal.App.4th at p. 238.) “Differences in individual class members’ proof of damages [are] not fatal to class certification. Only a conflict that goes to the very subject matter of the litigation will defeat a party’s claim of representative status.” (Ibid., internal citations and quotation marks omitted.)

Plaintiffs have the same interest in maintaining this action as any Class member would have. Further, they have hired experienced counsel. Plaintiffs have sufficiently demonstrated adequacy of representation.

H. Substantial Benefits of Class Certification

“[A] class action should not be certified unless substantial benefits accrue both to litigants and the courts. . . .” (Basurco v. 21st Century Ins. (2003) 108 Cal.App.4th 110, 120, internal quotation marks omitted.) The question is whether a class action would be superior to individual lawsuits. (Ibid.) “Thus, even if questions of law or fact predominate, the lack of superiority provides an alternative ground to deny class certification.” (Ibid.) Generally, “a class action is proper where it provides small claimants with a method of obtaining redress and when numerous parties suffer injury of insufficient size to warrant individual action.” (Id. at pp. 120–121, internal quotation marks omitted.)

Here, there are approximately thousands of Class Members. It would be inefficient for the Court to hear and decide the same issues separately and repeatedly for each class member. Further, it would be cost prohibitive for each Class member to file suit individually, as each member would have the potential for little to no monetary recovery. It is clear that a class action provides substantial benefits to both the litigants and the Court in this case.

VII. NOTICE

The content of a class notice is subject to court approval. (Cal. Rules of Court, rule 3.769(f).) “The notice must contain an explanation of the proposed settlement and procedures for class members to follow in filing written objections to it and in arranging to appear at the settlement hearing and state any objections to the proposed settlement.” (Ibid.) In determining the manner of the notice, the court must consider: “(1) The interests of the class; (2) The type of relief requested; (3) The stake of the individual class members; (4) The cost of notifying class members; (5) The resources of the parties; (6) The possible prejudice to class members who do not receive notice; and (7) The res judicata effect on class members.” (Cal. Rules of Court, rule 3.766(e).)

Here, the notice will be emailed to Class Members who have agreed to receive electronic notifications from Defendant and a postcard will be sent to any Class Members who have not agreed to receive monthly statements by email or for whom Defendant does not have an email address listed. Additionally, a long form of the notice will be hosted and contained on a settlement website with a Spanish translation.

The email and long form notice inform the Class Members of the nature of the lawsuit and their rights under the terms of the Settlement and applicable law. It includes: a detailed explanation of the case, including the basic contentions or denials of the Parties and the basic terms of the Settlement; a statement that the court will exclude the member from the class if they request so by a specified date; a procedure for the member to follow in requesting exclusions from the class; an explanation that members of the Class can participate in the Settlement by doing nothing; a statement that the judgment, whether favorable or not, will bind all members who do not request exclusion; and a statement that any member who does not request exclusion may, if the member so desires, enter an appearance through counsel.

Class Members are given 30 days to exclude themselves or object. The form of notice is adequate.

Regarding appearances at the final fairness hearing, the notice shall be modified to instruct class members as follows:

Although class members may appear in person, the judge overseeing this case encourages remote appearances. Class members who wish to appear remotely should contact class counsel at least three days before the hearing if possible. Remote appearances must be made through UDC, unless otherwise arranged with the Court. Please go to https://santaclara.courts.ca.gov/online-services/remote- hearings to find the appropriate link. Also, please note that that you must register in advance to appear remotely..

Turning to the notice procedure, as articulated above, the parties have selected Simpluris. No later than 10 days after preliminary approval, Defendant will deliver the Class data (i.e., Class list and related qualifying workweeks and contact information) to Simpluris. Simpluris, in turn, will send the notice and take the website live within 15 days of receiving the Class data. Simpluris shall take efforts to locate a forwarding address for any notices returned as undeliverable. It will provide a summary report of the notice 5 business days before the deadline to file the final approval motion. These notice procedures are appropriate and are approved.

VIII. SERVICE AWARD, FEES, AND COSTS

Plaintiffs Saldivar and Montes request service awards of $10,000 and Plaintiff Carrillo requests $7,500. The rationale for making enhancement or incentive awards to named plaintiffs is that they should be compensated for the expense or risk they have incurred in conferring a benefit on other members of the class. An incentive award is appropriate if it is necessary to induce an individual to participate in the suit. Criteria courts may consider in determining whether to make an incentive award include: 1) the risk to the class representative in commencing suit, both financial and otherwise; 2) the notoriety and personal difficulties encountered by the class representative; 3) the amount of time and effort spent by the class representative; 4) the duration of the litigation and; 5) the personal benefit (or lack thereof) enjoyed by the class representative as a result of the litigation.

These “incentive awards” to class representatives must not be disproportionate to the amount of time and energy expended in pursuit of the lawsuit. (Cellphone Termination Fee Cases (2010) 186 Cal.App.4th 1380, 1394-1395, internal punctuation and citations omitted; see also Covillo v. Specialty’s Café (N.D. Cal. 2014) 2014 U.S.Dist.LEXIS 29837, at *29 [incentive awards are particularly appropriate where a plaintiff undertakes a significant “reputational risk” in bringing an action against an employer].)

Plaintiffs Saldivar and Montes submitted declarations in support of the request, however, neither details the amount of time spent on this action. Plaintiff Carrillo did not submit a declaration. Prior to final approval Plaintiffs shall submit declarations stating the amount of time spent on this action and addressing any other factors they would like the Court to consider.

The court also has an independent right and responsibility to review the requested attorney fees and only award so much as it determines reasonable. (See Garabedian v. Los Angeles Cellular Telephone Co. (2004) 118 Cal.App.4th 123, 127-128.) Plaintiffs’ counsel will seek attorneys’ fees of up to one-third of the gross settlement amount (currently estimated to be $150,000), and litigation costs for up to $40,000. Prior to any final approval hearing,

Plaintiffs’ counsel shall submit lodestar information (including hourly rate and hours worked) as well as evidence of actual litigation costs incurred.

IX. CONCLUSION

Plaintiffs’ motion for preliminary approval is GRANTED.

The final approval hearing shall take place on December 10, 2026 at 1:30 in Department 22. The following Class is preliminarily certified for settlement purposes:

[A]ll Stanford Federal Credit Union Members who have or have had accounts with Stanford Federal Credit Union who, from June 19, 2016 through September 22, 2025, were charged two or more NSF Fees or an NSF Fee followed by an Overdraft Fee on the same ACH transaction or check.

The Court will prepare the order.

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