Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_15-cv-00676/USCOURTS-cand-3_15-cv-00676-0/pdf.json

Nature of Suit Code: 790
Nature of Suit: Other Labor Litigation
Cause of Action: 28:1332 Diversity-Petition for Removal

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United States District Court 

Northern District of Californi

a

UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF CALIFORNIA 

DEANNE ECHEVARRIA, et al.,

Plaintiffs, 

v. 

ACCENTCARE, INC., et al., 

Defendants. 

Case No. 15-cv-00676-EDL 

ORDER REQUIRING FURTHER 

BRIEFING 

Plaintiffs filed this case in superior court on January 7, 2015. Defendants removed the 

case on February 12, 2015, and on February 19, 2015, Defendants filed a motion to compel 

arbitration. On March 5, 2015, Plaintiffs filed a Federal Rule of Civil Procedure 41(a) Notice of 

Voluntary Dismissal, and the Court’s docket clerk closed the case based on the Rule 41(a) notice. 

Plaintiffs also filed a Demand for Arbitration with the American Arbitration Association. 

On March 18, 2015, Defendants filed this administrative motion to clarify the status of the 

case. Defendants believe that this case should remain open and active because it could not have 

been closed without compliance with Federal Rule of Civil Procedure 23(e): 

(e) Settlement, Voluntary Dismissal, or Compromise. The claims, 

issues, or defenses of a certified class may be settled, voluntarily 

dismissed, or compromised only with the court's approval. . . . 

Fed. R. Civ. P. 23(e). A threshold question is whether Rule 23(e) applies to this pre-certification 

case. 

On its face, the current Rule 23(e) applies only to certified classes. However, the prior 

version of the rule was not so limited and applied to “dismissal or compromise of a ‘class action.’” 

The Ninth Circuit applied that previous version of Rule 23(e) to pre-certification classes, such as 

this one. Diaz v. Trust Territory of the Pacific Islands, 876 F.2d 1401 (9th Cir. 1989). Since Diaz 

and the 2003 amendment to Rule 23(e) clarifying that it applies to “certified classes,” courts in this 

Case 3:15-cv-00676-EDL Document 18 Filed 03/26/15 Page 1 of 3
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United States District Court 

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district have expressed uncertainty about whether the Rule still applies to pre-certification 

settlements or dismissals, but have applied the Rule in that context. See Castro v. Zenith 

Acquisition Corp., 2007 WL 81905, at *1 (N.D. Cal. Jan. 9, 2007) (pursuant to a proposed 

settlement and stipulation of dismissal, the court applied the Diaz factors pursuant to Rule 23(e) to 

determine whether dismissal was appropriate); Houston v. Cintas Corp., 2009 WL 921627, at *1 

(N.D. Cal. Apr. 3, 2009) (“Although Rule 23(e) expressly refers to certified classes, before Rule 

23(e) was amended in 2003, the Ninth Circuit had held that the rule applied to pre-certification 

dismissals and compromises,” and “assuming without deciding that Rule 23 applies in this 

instance. . . “); Mahan v. Trex Co., 2010 WL 4916417, at *2 (N.D. Cal. Nov. 22, 2010) (in ruling 

on a motion to amend the complaint after some class claims were settled, the court applied the 

Diaz factors without deciding whether they applied to a pre-certification case); Lyons v. Bank of 

America, 2012 WL 5940846, at *1 (N.D. Cal. Nov. 27, 2012) (stating that the Ninth Circuit 

extended the Rule 23(e)approval requirement to pre-certification cases, but noting the uncertainty 

within the district); Tombline v. Wells Fargo Bank, 2014 WL 5140048, at *2 (N.D. Cal. Oct. 10, 

2014) (noting the uncertainty as to whether Rule 23(e) approval applies to pre-certification cases, 

but concluding that courts have “generally assumed that it does” apply). These cases arose in the 

context of settlements and stipulated dismissals, which may well pose a greater danger of harm to 

absent members of the putative class than under the circumstances here, where Plaintiffs dismissed 

the case with no agreement from Defendants, and continued to pursue the claims on behalf of the 

class through a demand for class arbitration. Therefore, it is even more unlikely that the Court’s 

approval is required to protect absent putative class members here. 

Nonetheless, in light of the uncertainty, it is prudent for the Court to consider whether 

Plaintiffs’ involuntary dismissal was appropriate under Rule 23(e): 

. . . the district court should inquire into possible prejudice from (1) 

class members' possible reliance on the filing of the action if they 

are likely to know of it either because of publicity or other 

circumstances; (2) lack of adequate time for class members to file 

other actions, because of a rapidly approaching statute of 

limitations; (3) any settlement or concession of class interests made 

by the class representative or counsel in order to further their own 

interests. 

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United States District Court 

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Diaz, 876 F.2d at 1408. However, the Court lacks sufficient information to apply these factors. 

Therefore, Defendants shall file a brief, not to exceed five pages, no later than April 3, 2015, 

addressing the Diaz factors. Plaintiff may file a response, not to exceed five pages, no later than 

April 10, 2015. The Court will take this matter under submission and will inform the parties 

whether a hearing is necessary. 

IT IS SO ORDERED. 

Dated: March 26, 2015 

________________________ 

ELIZABETH D. LAPORTE 

United States Magistrate Judge 

Case 3:15-cv-00676-EDL Document 18 Filed 03/26/15 Page 3 of 3