ORDER

THOMAS S. ZILLY, District Judge.

THIS MATTER comes before the Court on plaintiffs' unopposed motion for preliminary approval of class action settlement, which was filed in Case No. C12-2184 as docket no. 221, and in Case No. C14-855 as docket no. 142. The Court will consider the motion as though it had been filed in all five cases captioned above.

The parties propose a settlement pursuant to which defendants will fund an escrow account in the amount of $2.75 million, from which attorney's fees, litigation expenses, notice and claims administration fees, taxes and tax-related expenses, incentive awards to the six class representatives, and payments to class members will be paid.1 The parties request that the Court certify a class of all persons and entities in California, New Jersey, North Carolina, Ohio, and Washington who purchased a CreditBuilder product from August 1, 2010, to the present. They estimate that the number of such persons and entities exceeds 35,000. They propose to require class members to submit a claim form in order to receive a pro rata share of the settlement proceeds. They have not, however, provided any estimate of the amount a typical class member might anticipate receiving. In addition, the parties have offered no basis for the Court to determine whether the total amount of the settlement is reasonable in light of the alleged claims and defenses. Plaintiffs have alleged violations of the Washington Consumer Protection Act (and similar consumer acts of California, New Jersey, North Carolina and Ohio) and have sought to recover statutory, actual, punitive, and/or treble damages, as appropriate, as well as injunctive relief. The parties have failed to provide the Court with any analysis of plaintiffs' chances of success or the likelihood of any relief being afforded to plaintiffs if successful, and have failed to discuss whether more than one class is necessary in light of the various state law claims.

The parties envision that attorney's fees will be equal to or less than twenty-five percent (25%) of the settlement amount, or $687,500. They also contemplate that O&R Construction, LLC will receive an incentive award of $5,000, while the other five class representatives will each receive an incentive award of $2,500, for a total in incentive awards of $17,500. If those amounts are subtracted from the settlement amount, the sum remaining would be $2,045,000, or roughly $58 per class member, assuming all class members shared equally. Litigation expenses, notice and claims administration fees, taxes, and tax-related expenses, however, must also be deducted from the settlement amount in advance of any distribution to class members, and the parties have offered no approximations for these items. Moreover, under the proposed settlement, class members will receive pro rata, rather than equal, shares, and the range of possible recoveries has not been disclosed by the parties. Absent further information, the expected sum or range of sums that class members might receive, assuming every class member, or a predicted percentage of class members, submitted a claim form, cannot be calculated. Without such approximate figures, the Court cannot begin to evaluate whether the proposed settlement is fair, reasonable, adequate, and in the best interests of the class, and class members would not be able to form opinions concerning whether or not to object to the proposed settlement.

The Court is also not persuaded that requiring class members to submit claim forms is in the best interests of class members or is the most efficient and reasonable manner of administering the settlement fund. The parties anticipate that defendants can provide electronically searchable records of all persons in California, New Jersey, North Carolina, Ohio, and Washington who purchased a CreditBuilder product during the class period. The parties have not explained why defendants could not also provide data about when, where, and for how much CreditBuilder products were purchased by such persons, and whether any refunds or credits were issued to them, which data could then be used to compute and distribute the pro rata amount due to each class member.

The parties have proposed a method of dividing the settlement proceeds that might create a conflict between the class and its representatives; by allocating settlement funds among only those who complete and return a claim form, the proposed settlement offers class representatives an incentive to minimize the number of persons or entities who "opt in" so as to maximize their respective pro rata shares.2 The parties are encouraged to consider arranging for fixed amounts to be awarded to class members, depending on the number of CreditBuilder products purchased, and for any remaining (cy pres) funds to be donated to a charitable organization, the identity of which could be disclosed to class members in any notice about any proposed settlement.

For the foregoing reasons, the Court DENIES without prejudice the motions for preliminary approval of class action settlement, docket no. 221 in C12-2184 and docket no. 142 in C14-855. In any renewed motion, the parties shall discuss how class members will be notified about any request for attorney's fees, see In re Mercury Interactive Corp. Sec. Litig., 618 F.3d 988 (9th Cir. 2010), and the parties shall indicate whether, in light of the proposed class definition, these five actions should be consolidated into the lowest cause number before a class is certified for settlement purposes.

IT IS SO ORDERED.