Frequently Asked Questions

BASIC INFORMATION

1. What is this lawsuit about?

The lawsuit that is being settled is entitled Cesar E. Cortes v. University & State Employees Credit Union, and is currently pending in the United States District Court for the Southern District of California, Case No. 3:22-cv-00444-LAB-DEB. The case is a “class action.” That means that the "Named Plaintiff," Cesar E. Cortes, is an individual who is acting on behalf of a group of individuals. That group includes all University & State Employees Credit Union members who, from March 17, 2021 through August 18, 2023, were assessed an overdraft fee on a one-time debit card or ATM transaction. The persons in this group are collectively called the “Class Members.”

For purposes of this settlement, the Named Plaintiff claims Defendant improperly charged overdraft fees on one-time debit card and ATM transactions without following the necessary opt-in procedures required by Regulation E of the Electronic Fund Transfer Act, 12 C.F.R. § 1005.1, et seq. The Named Plaintiff is seeking a refund of these alleged improper overdraft fees charged to Class Member accounts.

The operative Second Amended Complaint alleges claims for violations of Regulation E and the California Unfair Competition Law (Bus. & Prof. Code §§ 17200, et seq.) (“UCL”). Claims for breach of the account agreement, breach of the implied covenant of good faith and fair dealing, unjust enrichment/restitution, and money had and received were previously dismissed by the Court.

Defendant disputes all of these claims and denies that it did anything wrong. Defendant contends that is has not violated Regulation E or the Unfair Competition Law, that its fee practices, policies and procedures comply with all applicable laws, that it abided by the terms of its member contracts, and that no members were harmed by its conduct. Defendant maintains that its practices were proper and properly disclosed to its members, and therefore denies that its practices give rise to claims for damages by the Named Plaintiff or any Class Member.

2. Why did I receive Notice of this lawsuit?

You received the Notice because Defendant’s records indicate that you are a Class Member because you were charged with one or more fees that are the subject of the claims alleged in this case between March 17, 2021 and August 18, 2023 (the “Class Period”). The Court directed that the Notice be sent to all Class Members because Class Members have a right to know about the proposed settlement and the options available to them before the Court decides whether to approve the settlement.

3. Why did the parties settle?

The Court did not decide in favor of the Named Plaintiff or Defendant. Instead, both sides agreed to a settlement before the case proceeded to a trial. In any lawsuit, there are potential risks and benefits that come with a trial versus settling at an earlier stage. For instance, there is legal uncertainty as to whether a judge or jury will find in favor of either party. Further, proceeding to trial is costly for both sides, and would likely add years to the process with no guarantee of any recovery. Under these circumstances, the parties believe that settlement is in the best interests of all parties and Class Members. And although the court will not decide in favor of either party, it will evaluate the settlement to determine whether it is fair, reasonable, and adequate before it approves the settlement.

It is the Named Plaintiff’s lawyers’ job to identify when a proposed settlement offer is good enough that it justifies recommending settling the case instead of continuing to trial. In a class action, these lawyers, known as Class Counsel, make this recommendation to the Named Plaintiff. The Named Plaintiff has the duty to act in the best interests of the class as a whole and, in this case, it is his belief, as well as Class Counsel’s opinion, that this settlement is in the best interest of all Class Members. By settling, the Named Plaintiff does not in any way concede that the claims lack merit. Likewise, Defendant does not in any way acknowledge, admit to, or concede any of the Named Plaintiff’s allegations and expressly disclaims and denies any and all fault or liability for the charges that have been alleged in this lawsuit and/or settlement.

Who is in the Settlement?

4. How do I know if I am part of the settlement?

If you received the notice, then Defendant’s records indicate that you are a Class Member who is entitled to receive a payment or credit to your account.

Your Options

5. What options do I have with respect to the settlement?

You have three options: (1) do nothing and automatically participate in the settlement; (2) exclude yourself from the settlement (“opt out” of it); or (3) participate in the settlement but object to it. Each of these options is described in a separate section below.

6. What are the critical deadlines?

To participate in the settlement, you need not do anything, so long as you do not opt out or exclude yourself (described in Questions 16 through 18, below), a payment will be made to you, either by crediting your account, if possible, if you are still a member of Defendant or by mailing a check to you at the last address on file with Defendant (or any other address you provide).

The deadline for sending a letter to exclude yourself from or opt out of the settlement is March 25, 2024.

The deadline to file an objection with the Court (described in Questions 19 through 21, below) is also May 24, 2024.

7. How do I decide which option to choose?

If you do not like the settlement and you believe that you could receive more money by pursuing your claims on your own (with or without an attorney that you could hire) and you are comfortable with the risk that you might lose your case or get less than you would in this settlement, then you may want to consider opting out.

If you believe the settlement is unreasonable, unfair, or inadequate and the Court should reject the settlement, you can object to the settlement terms. The Court will decide if your objection is valid. If the Court agrees, then the settlement will not be approved and no payments will be made to you or any other Class Member. If your objection (and any other objection) is overruled, and the settlement is approved, then you will still get a payment.

8. What has to happen for the settlement to be approved?

The Court has to decide that the settlement is fair, reasonable, and adequate before it will approve it. The Court already has decided to provide preliminary approval of the settlement, which is why you received the Notice. The Court will make a final decision regarding the settlement at a “Fairness Hearing” or “Final Approval Hearing,” which is currently scheduled for July 8, 2024 at 11:30 a.m.

The Settlement Payment

9. How much is the settlement?

Defendant has agreed to create a Settlement Fund of $500,000.00. In addition, Defendant has agreed to change certain overdraft practices and disclosures. Together these constitute the Value of the Settlement.

As discussed separately below, attorneys’ fees, litigation costs, a Service Award to the Named Plaintiff, and the costs paid to a third-party Claims Administrator to administer the settlement (including mailing and emailing the notice) will be paid out of the Settlement Fund. The balance of the Settlement Fund will be divided among all Class Members based on the amount of eligible overdraft fees they paid. The formula for distributing the settlement is described in the Settlement Agreement.

10. How much of the Settlement Fund will be used to pay for attorneys’ fees and costs?

Class Counsel will request attorneys’ fees be awarded by the Court of not more than one-third of the Value of the Settlement. Class Counsel has also requested that it be reimbursed approximately $60,000 in litigation costs incurred in prosecuting the case. The Court will decide the amount of the attorneys’ fees and costs based on a number of factors, including the risk associated with bringing the case on a contingency basis, the amount of time spent on the case, the amount of costs incurred to prosecute the case, the quality of the work, and the outcome of the case.

11. How much of the Settlement Fund will be used to pay the Named Plaintiff a Service Award?

Class Counsel on behalf of the Named Plaintiff will request that the Court award him up to $10,000 for his role in securing this settlement on behalf of the class. The Court will decide if a Service Award is appropriate and if so, the amount of the award.

12. How much of the Settlement Fund will be used to pay the Class Administrator’s expenses?

The Claims Administrator has agreed to cap its expenses at $15,000.00.

13. How much will my payment be?

The balance of the Settlement Fund will be divided among all Class Members on a pro rata basis according to an allocation described in the Settlement Agreement. Class Members who are current members of Defendant will receive a credit to their accounts, if possible, for the amount they are entitled to receive or a check from the Claims Administrator. The remaining Class members will receive a check from the Claims Administrator.

14. Do I have to do anything if I want to participate in the settlement?

No. As long as you do not opt out, a credit will be applied to your account, or a check will be mailed to you at the last known address Defendant has for you. If your address has changed, you should provide your current address to the Claims Administrator at the address set forth in the section “Getting More Information,” below.

15. When will I receive my payment?

The Court will hold a Fairness Hearing (explained below in Questions 22-24) on July 8, 2024 at 11:30 a.m. to consider whether the settlement should be approved. If the Court approves the settlement, then payments should be made or credits should be issued within about 50 to 60 days after the settlement is approved. However, if someone objects to the settlement, and the objection is sustained, then there is no settlement. Even if all objections are overruled and the Court approves the settlement, an objector could appeal, and it might take months or even years to have the appeal resolved, which would delay any payment.

Excluding Yourself from the Settlement

16. How do I exclude myself from the settlement?

If you do not want to receive a payment, or if you want to keep any right you may have to sue Defendant for the claims alleged in this lawsuit or pursuant to this settlement, then you must exclude yourself, or “opt out.” To opt out, you must send a letter to the Claims Administrator that you want to be excluded. Your letter can simply say “I hereby elect to be excluded from the settlement in the Cesar E. Cortes v. University & State Employees Credit Union class action. Be sure to include your name, the last four digits of your member number or former member number, address, telephone number, and email address. Your exclusion or opt out request must be postmarked by March 25, 2024, and sent to:

Cesar E. Cortes v. University & State Employees Credit Union
Attn: EXCLUSIONS
P.O. Box 25226
Santa Ana, CA 92799

17. What happens if I opt out of the settlement?

Class Members who exclude themselves (or “opt out”) are free to file individual lawsuits against Defendant about the issues subject to this settlement. If you file your own lawsuit against Defendant after you exclude yourself, you will have to prove your claims with or without an attorney that you would hire.

If you opt out, then you cannot object to the settlement and you will not be entitled to receive a payment from this settlement.

18. If I exclude myself, can I obtain a payment?

No. If you exclude yourself, you will not be entitled to a payment.

Objecting to the Settlement

19. How do I notify the Court that I do not like the settlement?

You can object to the settlement or any part of it that you do not like IF you do not exclude yourself, or opt out, from the settlement. (Class Members who exclude themselves from the settlement have no right to object to how other Class Members are treated.) To object, you must mail a written document to the Claims Administrator at the address below. Your objection should say that you are a Class Member, that you object to the settlement, and the factual and legal reasons why you object, whether you intend to appear at the Final Approval/Fairness Hearing, and if you are represented, the name of your attorney and contact information. In your objection, you must include your name, address, telephone number, email address (if applicable) and your signature.

All objections must be post-marked no later than May 24, 2024, and must be mailed to the Claims Administrator as follows:

20. What is the difference between objecting and requesting exclusion from the settlement?

Objecting is telling the Court that you do not believe the settlement is fair, reasonable, and adequate for the class, and asking the Court to reject it. You can object only if you do not opt out of the settlement. If you object to the settlement and do not opt out, then you are entitled to a payment if the settlement is approved and you qualify for such a payment, but you will release claims you might have against Defendant. Excluding yourself or opting out is telling the Court that you do not want to be part of the settlement, and do not want to receive a payment or release claims you might have against Defendant for the claims alleged in this lawsuit and covered by this settlement. You cannot object if you opt out.

21. What happens if I object to the settlement?

If the Court sustains your objection, or the objection of any other Class Member, then there is no settlement. If you object, but the Court overrules your objection and any other objection(s), then you will be part of the settlement and you will receive the payment you are entitled to under the terms of the settlement.

The Court’s Fairness Hearing

22. When and where will the Court decide whether to approve the settlement?

The Court will hold a Final Approval or Fairness Hearing on July 8, 2024 at 11:30 a.m. At this hearing, the Court will consider whether the settlement is fair, reasonable, and adequate. If there are objections, the Court will consider them. The Court may also decide how much to award Class Counsel for attorneys’ fees and expenses and how much the Named Plaintiff should get as a “Service Award” for acting as the class representative.

23. Do I have to come to the hearing?

No. Class Counsel will answer any questions the Court may have. You may attend if you desire to do so. If you have submitted an objection, then you may want to attend.

24. May I speak at the hearing?

If you have objected, you may ask the Court for permission to speak at the Final Approval Hearing. To do so, you must include with your objection, described in Question 19, above, the statement, “I hereby give notice that I intend to appear at the Final Approval Hearing.”

If You Do Nothing

25. What happens if I do nothing at all?

If you do nothing at all, and if the settlement is approved, then you may receive a payment if you are entitled to one that represents your share of the Settlement Fund net of attorneys’ fees and costs, Claims Administrator expenses, and the Named Plaintiff’s Service Award. You will be considered a part of the Settlement Class, and you will give up all claims against Defendant concerning the claims and legal issues covered and resolved by the settlement.

The Lawyers Representing You

26. Do I have a lawyer in this case?

The Court decided that Richard D. McCune and Emily J. Kirk of McCune Law Group, APC (“Class Counsel”) are qualified to represent you and all other Class Members. Contact information for Class Counsel is:

27. Do I have to pay the lawyer for accomplishing this result?

No. Class Counsel will be paid directly from the Settlement Fund.

28. Who determines what the attorneys’ fees will be?

The Court will be asked to approve the amount of attorneys’ fees at the Fairness Hearing. Class Counsel will file an application for fees and costs and will specify the amount being sought as discussed above. You may review the fee application in the Documents section of this website or view a physical copy of the fee application at the Court Clerk’s Office, located at 333 West Broadway, San Diego, CA 92101.

Getting More Information

The Notice only summarizes the proposed settlement. More details are contained in the Settlement Agreement, which can be viewed/obtained in the Documents section of this website or at the Court Clerk’s Office, located at 333 West Broadway, San Diego, CA 92101, by asking for the Court file containing the Motion for Preliminary Approval of Class Settlement (the Settlement Agreement is attached to the motion).

For additional information about the settlement and/or to obtain copies of the Settlement Agreement, or to change your address for purposes of receiving a payment, you should contact the Claims Administrator as follows:

University & State Employees Credit Union Overdraft Settlement
c/o Settlement Administrator
P.O. Box 25226
Santa Ana, CA 92799

PLEASE DO NOT CONTACT THE COURT OR ANY REPRESENTATIVE OF DEFENDANT CONCERNING THE NOTICE OR THE SETTLEMENT.