DAVID J. KOVANEN v. ASSET REALTY LLC, et al.
CASE NO. 3:25-cv-05078-LK
UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT TACOMA
November 7, 2025
ORDER DENYING MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT WITHOUT PREJUDICE
I. BACKGROUND
This case involves allegedly “unsolicited commercial text messages” sent in violation of Washington‘s Consumer Protection Act, Washington‘s Commercial Electronic Mail Act, and the National Telephone Consumer Protection Act. Dkt. No. 1-1 at 2. Plaintiff David J. Kovanen filed suit on behalf of himself and a purported class of similarly situated individuals against numerous
A. The Development and Use of the Lead Generation Platform
According to the complaint, Defendant Storey—the sole member and manager of Defendant Asset Realty, LLC—created a “lead generation platform” in approximately 2005 that, among other things, obtained contact information of certain property owners, “predict[ed] the best time to contact” property owners, and determined the “frequency of contacts a telemarketer should make.” Id. at 11–12. Storey allegedly also “helped to create a coaching and training program” to teach users about the lead generation platform. Id. at 12. In 2015, Storey transferred his lead generation platform to a company that he formed and managed—Pipeline Platform, LLC (“Pipeline“). Id. at 13. Pipeline licensed the lead generation platform to a predecessor of Defendant Anywhere Real Estate Inc.—Realogy Holdings Corp (“Realogy“). Id. Realogy paid Pipeline “up-front fees . . . and a percentage of commission received on any sale” and provided access to “500 different franchise owners that Pipeline could form strategic alliances with to license the [lead generation platform].” Id. Around this time, the Asset Defendants also acquired a Century 21 franchise operating under the trade name Century 21 Northwest. Id. Century 21 is one of the Anywhere Defendants’ brands and subsidiaries. Id. at 21–22. The franchise agreement that Century 21 and Asset Realty signed in 2015 authorizes Asset Realty to operate one or more real estate brokerage offices as Century 21 offices, and permitted the Asset Defendants to use the
In September 2020, text messaging functionality was added to the lead generation platform. Id. The platform “automatically formulates and composes the text messages that are sent to Defendants’ potential customers,” only requiring the user to “hit send.” Id. at 16. Defendants allegedly began sending text messages “to solicit real estate buyers and sellers to use Defendants’ real estate services and generate commissions and other revenue for Defendants and Defendants’ agents.” Id. at 15. Defendants purportedly did not obtain subscribers’ “clear and affirmative consent” to receive those text messages or take steps to ensure that the telephone numbers were not on the National Do Not Call Registry (“DNC Registry“). Id. at 16.
Between February and June 2021, Mr. Kovanen—a Washington resident—received “unsolicited commercial electronic text message[s]” from Defendants, which he says were an “invasion of privacy” and caused him to “waste[] time and attention tending to unsolicited and unwanted junk text messages.” Id. at 27–29. Mr. Kovanen says that Defendants violated both state and federal laws by sending these texts. Id. at 5. According to the complaint, Defendants “initiated or assisted in the transmission of unsolicited commercial electronic text messages to the cellular telephones of hundreds and possibly thousands of Washington residents without first obtaining their clear and affirmative consent to receive such messages.” Id. at 28.
This case had a long procedural history before it was removed to this Court in February 2025. Dkt. No. 1. Mr. Kovanen originally filed a complaint in the Superior Court of Washington on December 10, 2021. Dkt. No. 19-1 at 3–16. He and the Asset Defendants mediated in August 2022 with assistance from a retired judge, but the case did not settle. Dkt. No. 32 at 7. On September 25, 2023, Mr. Kovanen filed an amended complaint. Dkt. No. 19-2 at 347–75. Neither the original nor the first amended complaint contained a federal cause of action. See generally Dkt. No. 19-1 at 3–16; Dkt. No. 19-2 at 347–75.
In February 2023, Defendant Asset Realty LLC filed for bankruptcy, after which Mr. Kovanen and the Asset Defendants participated in a settlement conference with a bankruptcy judge, but it too was unsuccessful. Dkt. No. 32 at 6–7; see also Dkt. No. 19-2 at 154 (reflecting Debtor Asset Realty, LLC as the Bankruptcy Debtor). On January 10, 2025, Mr. Kovanen filed a second amended complaint, which added claims under the Telephone Consumer Protection Act,
II. DISCUSSION
Under
Courts look for “collusive negotiations,” “obvious deficiencies,” and “preferential treatment to class representatives or segments of the class,” In re Tableware Antitrust Litig., 484 F. Supp. 2d 1078, 1079 (N.D. Cal. 2007), and ensure that the proposed settlement “treats class members equitably relative to each other,”
Below, the Court discusses deficiencies with various provisions of the Settlement Agreement, related documents, and the motion for preliminary approval.
A. The Settlement Agreement
1. Class Definition and Notice
Under the Settlement Agreement, the “Settlement Class” includes:
All persons, as that term is defined in
RCW 19.190.010(11) [i.e., an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, government, governmental subdivision, agency or instrumentality, public corporation, or any other legal or commercial entity] andRCW 19.86.010(1) [i.e., natural persons, corporations, trusts, unincorporated associations and partnerships]; (1) to whose telephone numbers Defendants initiated or assisted in the transmission of one or more commercial electronic text messages for the purpose of promoting Asset Realty LLC d/b/a Century 21 Northwest‘s real estate services; (2) where such message was sent while such person was a Washington resident; (3) and while the number to which the message was sent was assigned to a cellular telephone or pager service that is equipped withshort message capability or any similar capability allowing the transmission of text messages; (4) without obtaining the recipients’ clear and affirmative consent to receive messages in advance of sending the text message; (5) between December 10, 2017 through June 17, 2022. The Settlement Class does not include Defendants, any entity that has a controlling interest in Defendants, and Defendants’ current or former directors, officers, counsel, and their immediate families. The Settlement Class also does not include any persons who validly request exclusion from it.
Dkt. No. 37 at 6–7. “Settlement Class Member” means “individuals or entities who are within the Settlement Class.” Id. at 7. And “Class List” means “the list of telephone numbers that received text messages from Asset [Realty] that was identified by Plaintiff‘s expert in Exhibit 8 to Plaintiff‘s expert‘s report.” Id. at 5. There are several issues with these definitions.
First, it is unnecessary and potentially confusing to class members to cross-reference two sections of the Revised Code of Washington with overlapping definitions in the Settlement Class definition rather than having a self-contained description of “persons.”
Second, it is unclear at best whether the parties can capably identify Washington residents “to whose telephone numbers Defendants initiated or assisted in the transmission of one or more commercial electronic text messages for the purpose of promoting Asset Realty LLC d/b/a Century 21 Northwest‘s real estate services.” Although the Agreement contemplates providing notice of the proposed settlement to “all Settlement Class Members” by compiling “a list of persons that will receive individual notice” from “the Paragraph 2.4 data,” the Paragraph 2.4 data does not seem particularly reliable for this purpose. Id. at 10. Paragraph 2.4 requires Mr. Kovanen to provide to the Settlement Administrator a “Class List” comprised of “(1) the telephone numbers listed on Exhibit 8 to Plaintiff‘s expert‘s report, and (2) the names and contact information of the subscriber or ordinary user of the telephone numbers at the time the text messages at issue in this case were sent, to the extent Plaintiff has access to that information.” Id. at 8. But the version of Exhibit 8 to Mr. Kovanen‘s expert‘s report that was provided to the Court contains no list of numbers; it is
Mr. Kovanen does not explain (1) why it is reasonable to apparently assume that individuals with area codes associated with states outside Washington could not have been Washington residents at the time the text messages were sent;1 or (2) why Mr. Kovanen and not Defendants are tasked with supplying “the names and contact information of the subscriber or ordinary user of the telephone numbers at the time the text messages at issue in this case were sent,” given that it appears Mr. Kovanen may not have access to it, see Dkt. No. 37 at 8 (only requiring this information “to the extent Plaintiff has access to [it]“).2 Based on the current definitions, it appears that there may be individuals in the Settlement Class—which includes persons who received a relevant text message “while such person was a Washington resident,” Dkt. No. 37 at 6—who are not on the Class List—which encompasses only telephone numbers “contain[ing] Area Codes within the State of Washington,” Dkt. No. 19-2 at 1124. In other words, Washington residents with out-of-state area codes could be Settlement Class Members but would not appear on the Class List. If there is no reliable method to identify whether a given text was
Based on these apparent shortcomings, the Court cannot conclude that the parties’ settlement notice plan constitutes “a reasonable manner” of providing notice “to all class members who would be bound by the proposal.”
2. Key Deadlines
The Settlement Agreement provides the following key dates and deadlines:
- Five days after Preliminary Approval: Plaintiff provides the “Class List” to the Settlement Administrator. Dkt. No 37 at 8.
- 30 days after Preliminary Approval: “Settlement Notice Date“; the date by which the Settlement Administrator shall provide notice of the provisional class certification and proposed settlement to all Settlement Class Members. Id. at 7, 10.
- 60 days after Preliminary Approval: Class Counsel will apply to the Court for an award of attorneys’ fees, costs and expenses. Id. at 8.
- 90 days after Preliminary Approval: Deadline for class members to submit a claim, opt out, or object. Id. at 11–13.
- 5 days after the deadline for claim submission, opt out, or objection: The Settlement Administrator will provide the “parties” (lowercase) with “a declaration of due diligence and proof of mailing, including information as to any inability to deliver notice because of invalid addresses, the number of claims, the number of requests for exclusion, and the number of objections, and report on completion of the notice plan.” Id. at 12.
- 28 days after the deadline for claim submission, opt out, or objection: The Settlement Administrator “shall use all reasonable efforts to complete its review of all Claim Forms” by this date. Id. at 14.
Up to 14 days after completion of Settlement Administrator‘s review of all Claim Forms (up to 42 days after deadline for claim submission): deadline for claimants whose claims were disallowed to cure any deficiency. Id. - 120 days after Preliminary Approval (30 days after deadline for claim submission, opt out, or objection): Plaintiff will file a motion for final approval. Id. at 12.
If there are any issues with delivering notice to class members or other problems with the notification or claims administration process, it does not appear that this proposed schedule would permit the Court or parties to identify them prior to the deadline for claim submission, opt out, or objection, nor would Class Counsel or the Court have a meaningful opportunity to address such problems prior to Class Counsel‘s motion for fees and costs. For these reasons, the Settlement Administrator should be required to inform the parties, and Plaintiff should be required to inform the Court, of any such issues or problems after the Settlement Notice Date but before Class Counsel‘s application for fees.
Because issues with the notification or claims administration process may require the Court to extend any of the above deadlines, each deadline should be tied to the preceding one rather than to, for example, the preliminary approval date.
And finally, the motion for final approval should occur after all data regarding claim submissions is collected. Because it appears that such data will be collected up to 42 days after the deadline for claim submission, id. at 14, the deadline to file a motion for final approval should be scheduled sufficiently after the deficiency cure deadline to accurately account for the claims rate (and any issues encountered during the cure period).
In sum, a revised schedule should look something like the following:
- Five days after Preliminary Approval: Plaintiff provides the “Class List” to the Settlement Administrator.
- 25 days after Class List submission date: “Settlement Notice Date“; the date by which the Settlement Administrator shall provide notice of the provisional class certification and proposed settlement to all Settlement Class Members. [30 days after Prelim Approval]
15 days after Settlement Notice Date: The Settlement Administrator will provide to the parties (who will then file with the Court) a declaration of due diligence and proof of mailing and a description of any issues or problems that have arisen with notifying the class or any other aspect of the claims administration process, and any extensions that may be required to correct or mitigate such issues or problems. If any issues or problems arise subsequent to this date that may require an extension of the claims/opt out/objection period or other deadlines, the Settlement Administrator will notify the parties as soon as possible, and the parties must then file a notice and proposed resolution with the Court as soon as possible. [45 days after Prelim Approval] - 30 days after Settlement Notice Date: Class Counsel will apply to the Court for an award of attorneys’ fees, costs and expenses. [60 days after Prelim Approval]
- 60 days after Settlement Notice Date: Deadline for class members to submit a claim, opt out, or object. [90 days after Prelim Approval]
- 28 days after the deadline for claim submission, opt out, or objection: The Settlement Administrator shall use all reasonable efforts to complete its review of all Claim Forms by this date. [118 days after Prelim Approval]
- Up to 14 days after completion of Settlement Administrator‘s review of all Claim Forms: Deadline for claimants whose claims were disallowed to cure any deficiency. [132 days after Prelim Approval]
- 25 days after completion of Settlement Administrator‘s review of all Claim Forms: The Settlement Administrator will provide the parties with a report on its claim administration, including how many class members received notice, the number of claims, the number of requests for exclusion, the number of objections, and any other information the parties and/or Court should be aware of regarding the notification and claims administration process. [143 days after Prelim Approval]
- 21 days after Settlement Administrator‘s report on claim administration: Plaintiff will file a motion for final approval. [164 days after Prelim Approval]
3. Settlement Awards
Under the Settlement Agreement, Defendants will pay a total of $700,000 “for any and all payments” under the Agreement, including “but not limited to” sums associated with the “Settlement Notice, Settlement Administration, attorneys’ fees, costs, and expenses, and Claimant Awards.” Dkt. No. 37 at 7.4 “Claimant Award” means “the cash payment available to Eligible
Furthermore, while the Agreement states that “Claimant Awards” will be paid “pro rata,” Dkt. No. 37 at 14, the Agreement does not describe exactly how that will work. This leaves various unanswered questions. Will Settlement Class Members with more than one device that received texts be entitled to multiple payments? Assuming that claimants who received disproportionately more text messages than others are not entitled to a greater payment, see id. at 46, is that a fair result? Is it equitable to pay the holders of the 27,436 “unique numbers” that had been listed on the DNC Registry for more than 30 days at the time they received the texts (thus providing them with a TCPA claim), Dkt. No. 19-2 at 1309; Dkt. No. 1-1 at 29–30, 35–36, the same as other Settlement Class Members? Mr. Kovanen does not explain how the chosen approach “treats class members equitably.”
4. Changes to Defendants’ Practices
In the Settlement Agreement, Defendant Storey agrees to permanently cease operation of Asset‘s lead management program, allow the website www.pipelineplatform.com and underlying files to be deleted,6 and delete related videos from the YouTube channel @AssetChad “Conversion Coaching AI.” Dkt. No. 37 at 8–10. He also agrees that he and any company he controls will not text any Settlement Class Member without first obtaining clear and affirmative consent. Id. at 10.
As the parties acknowledge, Dkt. No. 37 at 41–42, some potential class members may ask to be excluded from the settlement and file their own lawsuits against some or all Defendants. As soon as a potential claim is identified, a litigant in federal court is under a duty to preserve evidence it knows or reasonably should know is relevant to the action. In re Napster, Inc. Copyright Litig., 462 F. Supp. 2d 1060, 1067 (N.D. Cal. 2006). Once the duty attaches, a party must “suspend any existing policies related to deleting or destroying files and preserve all relevant documents related to the litigation.” Id. at 1070. Given the potential for independent lawsuits from potential class members, the Court will not approve any provision sanctioning the destruction of potentially relevant evidence.
5. Releases
As discussed above, the Settlement Agreement purports to release claims of all “Settlement
B. Forms: Long Form Notice, Claim Form, Email Notice, Postcard Notice
There are several issues with the proposed forms as well. First, although Mr. Kovanen repeatedly states in his motion that he expects the pro rata payment to class members to be $28 to $55, Dkt. No. 32 at 4, 9, 14, the Long Form Notice initially states that “Class counsel estimates that payments could be between $31 and $62,” Dkt. No. 37 at 40, and later states that “Class Counsel estimate that payments could be between $28 and $55,” id. at 45. The Court expects representations to the class to be consistent and accurate.
Second, the Long Form Notice states that “[a] state court authorized this notice.” Id. at 40. This error must be corrected in any renewed motion for preliminary approval.
Third, the table summarizing class members’ “legal rights and options in this lawsuit” in the Long Form Notice describes the releases alternately as “giv[ing] up your right to bring your own lawsuit about the issues in this Lawsuit” and “giv[ing] up any rights to sue Defendants separately about the same legal claims in this lawsuit [(lowercase)].” Dkt. No. 37 at 41–42 (emphasis added); see also id. at 46 (“you give up any rights to sue the Defendants separately about the same issues in this Lawsuit“) (emphasis added); id. at 56 (you “give up your right to bring your own lawsuit about the texts“). This language should be internally consistent and consistent with the release language in the Settlement Agreement. See also Hesse v. Sprint Corp., 598 F.3d 581, 590 (9th Cir. 2010) (“A settlement agreement may preclude a party from bringing a related claim in the future even though the claim was not presented and might not have been presentable in the class action, but only where the released claim is based on the identical factual predicate as that underlying the claims in the settled class action.” (citation modified)).
Fifth, the section on “When and where will the Court decide whether to approve the settlement?” indicates the hearing will be held in “Suite 15134,” id. at 49, but the undersigned judge‘s courtroom is Courtroom 15106. See https://www.wawd.uscourts.gov/judges/king-chambers. This correction must be made elsewhere as well. See, e.g., id. at 56, 60.
Sixth, on the claim form, if the claimant enters a number that is not in the Class List, the site returns the following error message: “Your phone number could not be verified.” Dkt. No. 37 at 27. To facilitate the resolution of deficient claims during the short cure period, this error message should provide instructions to the claimant on what to do if the claimant believes the number should be included.
Seventh, the claim form that can be submitted online or by mail allows claimants to submit up to three mobile numbers, id. at 27, while the postcard claim form only includes one, id. at 57. If payments will be made based on unique numbers, claimants should all be permitted to submit the same quantity of numbers regardless of which option they choose to submit their claim.
C. Motion for Preliminary Approval
Mr. Kovanen‘s motion does not explain why the Court should appoint him as class representative or his attorneys as class counsel.
For the foregoing reasons, the Court DENIES without prejudice Mr. Kovanen‘s Motion for Preliminary Approval of Class Action Settlement. Dkt. No. 32. The parties are cautioned that the deficiencies identified in this Order may not include all deficiencies in the Settlement Agreement. Before submitting a revised agreement for approval, the parties should take care to ensure there are no mistakes. See N.D. v. Reykdal, No. 2:22-CV-01621-LK, 2024 WL 4751368, at *2 (W.D. Wash. Oct. 15, 2024) (“Plaintiffs . . . may not seek attorney‘s fees for their work correcting counsel‘s mistakes in any forthcoming third motion for preliminary approval.“); Leblanc v. USG7, LLC, No. 6:12-CV-1235-ORL-41TBS, 2016 WL 1358529, at *2 (M.D. Fla. Apr. 6, 2016) (“fees aris[ing] only out of Plaintiffs’ counsels’ need to correct their mistakes” are “both excessive and redundant“).
Within 90 days, if another Motion for Preliminary Approval of Class Action Settlement has not yet been filed, the parties must file a Joint Status Report for the Court‘s use in setting a schedule for the prompt resolution of this case.
Dated this 7th day of November, 2025.
Lauren King
United States District Judge