United States District Court

For the Northern District of California

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1 Defendants also filed a Motion to Vacate Pro Hac Vice

Admission of Scott Bursor. Docket No. 36 ("Motion to Vacate"). 

Because the Court grants Defendants' Motion to Dismiss, the Court

DENIES Defendants' Motion to Vacate as moot. 

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

LARRY LEE, LISA WHITLOCK, RANDY

WHITLOCK, and SHAHIN SHOKOOFANDEH,

on behalf of themselves and all

others similarly situated,

Plaintiffs,

v.

SPRINT NEXTEL CORPORATION, SPRINT

SPECTRUM, L.P., NEXTEL

COMMUNICATIONS, INC., and DOES 1

through 100,

Defendants.

 

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No. 08-4959 SC

ORDER GRANTING MOTION

TO DISMISS

I. INTRODUCTION

Defendants Sprint Nextel Corporation, Sprint Spectrum, L.P.,

and Nextel Communications, Inc. (collectively, "Defendants") move

the Court to dismiss this action. Docket No. 34 ("MTD"). 

Plaintiffs Larry Lee, Lisa Whitlock, Randy Whitlock, and Shahin

Shokoofandeh (collectively, "Plaintiffs") filed an Opposition and

Defendants submitted a Reply. Docket Nos. 38, 40. For the

reasons stated herein, the Court GRANTS the Motion to Dismiss.1

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II. BACKGROUND

On October 29, 2008, Plaintiffs filed a Class Action

Complaint against Defendants. Docket No. 1 ("Compl."). 

Plaintiffs are California residents who challenge the early

termination fees ("ETFs") charged by Sprint Nextel Corporation and

related companies. Id. ¶¶ 1, 21-28. Plaintiffs seek relief on

behalf of the following putative class:

All persons in the United States who had a

wireless telephone personal account with Sprint

Nextel (or a Sprint Nextel legacy company) and

were charged an early termination fee within the

relevant limitations period, excluding such

persons who are members of the certified class

in Ayyad v. Sprint Spectrum, L.P., Case No.

RG03-121510 (Superior Court of California,

County of Alameda) and have not opted out of

such certified class.

Id. ¶ 8. 

On January 23, 2009, the Court stayed this action until the

settlement process could be completed in Larson v. Sprint Nextel

Corp., No. 07-5325 (hereinafter, "Larson"), a case that was

pending before Judge Jose L. Linares in the United States District

Court for the District of New Jersey. Docket No. 26. On March 1,

2010, the Court lifted the stay. Docket No. 33. Shortly

thereafter, Defendants filed their Motion to Dismiss. 

III. LEGAL STANDARD

Courts can dismiss a party's claims pursuant to Federal Rule

of Civil Procedure 12(b)(6) where the claims are barred by

principles of res judicata. SLR Partners, LLC v. B. Braun Medical

Inc., No. 09-1145, 2010 WL 330088, at *1 (S.D. Cal. Jan. 20,

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2010). Federal law governs the preclusive effect of a federal

case decided by a federal court. Firemans' Fund Ins. Co. v. Int'l

Market Place, 773 F. 2d 1068, 1069 (9th Cir. 1985); In re Kaplan,

143 F.3d 807, 814-15 (3d Cir. 1998). Res judicata, also known as

claim preclusion, "'applies when there is (1) an identity of

claims; (2) a final judgment on the merits; and (3) identity or

privity between the parties.'" Cell Therapeutics, Inc. v. Lash

Group, Inc., 586 F.3d 1204, 1212 (9th Cir. 2009) (quoting Stewart

v. U.S. Bancorp, 297 F.3d 953, 956 (9th Cir. 2002).

IV. DISCUSSION

Plaintiffs do not dispute that the claims in this case are

the same as in the Larson action, that they were parties to the

Larson settlement, or that there was a Final Judgment in Larson. 

Instead, they contend that this Court must determine the res

judicata effect of the Larson judgment, and they seek to

collaterally attack it. Opp'n at 1-2. Plaintiffs contend that

notice was inadequate in Larson, and that the members of the class

pleaded in this action were not adequately represented in the

Larson action. Opp'n at 5-10. 

1. Limited Collateral Review

"Limited collateral review . . . [is] appropriate . . . to

consider whether the procedures in the prior litigation afforded

the party against whom the earlier judgment is asserted 'a full

and fair opportunity' to litigate the claim or issue." Epstein v.

MCA, Inc., 179 F.3d 641, 648-49 (9th Cir. 1999) (quoting Kremer v.

Chemical Construction Corp., 456 U.S. 461, 480 (1982)). This

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2 Defendants request the Court to take judicial notice of the

Final Judgment and the Settlement Agreement in Larson. The Court

may take judicial notice of documents that bear on whether

plaintiffs are barred from proceeding with this case. See Reyn's

Pasta Bella, LLC v. Visa USA, Inc., 442 F.3d 741, 746 n.6 (9th Cir.

2006); SLR Partners, 2010 WL 330088 at *3. The Court GRANTS

Defendants' Request for Judicial Notice. The Court also takes

judicial notice of other entries on the Larson docket. 

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review does not include reconsideration of the merits of the claim

or issue. Epstein, 179 F.3d at 649. Where there are no explicit

findings as to adequacy of representation by the certifying court,

a second court can review the judgment to determine whether it

satisfies due process as to the claims at issue in the second

case. Hesse v. Sprint Corp., 598 F.3d 581, 588-89 (9th Cir.

2010).

2. The Larson Action

On February 16, 2010, Judge Linares entered a Final Judgment

in the Larson action. Docket No. 34-1 ("Request for Judicial

Notice") Ex. 1 ("Final Judgment").2 The Larson court certified

the following nationwide class for settlement purposes:

All persons in the United States who are or

were parties to a personal fixed-term

subscriber agreement for a Sprint Nextel

Wireless Service Account for personal or mixed

business/personal use, whether on the Sprint

CDMA network or Nextel iDen network, or both,

. . . entered into between July 1, 1999 and

December 31, 2008 and whose claims relate in

any way to an Early Termination Fee or use of

an Early Termination Fee in a fixed-term

subscriber agreement . . . , excluding only

the Ayyad Class Claims and Persons whose right

to sue Sprint Nextel as a Settlement Class

Member is otherwise barred by a prior

settlement agreement and/or prior final

adjudication on the merits. . . .

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3

 Alan R. Plutzik, attorney for Plaintiffs, filed a

Declaration in Support of Plaintiff's Opposition. Docket No. 39.

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Final Judgment ¶ 6. The Final Judgment expressly incorporated a

Settlement Agreement, id. ¶ 4, and the Settlement Agreement

identifies this case as a "Related Claim." See Request for

Judicial Notice Ex. 2 ("Settlement Agreement") at 17-18. It

provides that "[t]his Settlement Agreement may be pleaded by

Sprint Nextel as a bar to all, or any relevant portion, of any

action or Related Claim pending or filed by a Settlement Class

Member concerning, relating to or arising out of the Class

Released Claims, including any ETF-Related Claims." Id. at 50. 

3. Adequate Notice

Plaintiffs contend that the notice in Larson was inadequate

because it conflicted with prior notices issued by a California

state court, because Judge Linares refused to consider evidence

that 4.1 million class members could have been identified and

provided individual notice at a relatively modest cost, and

because the Larson notice contained false information. Opp'n at

6-9.

Judge Linares made explicit findings as to adequacy of

notice. Indeed, the order granting final approval to the

settlement agreement devotes fourteen pages to notice-related

issues. See Plutzik Decl. Ex. H ("Jan. 15, 2010 Order") at 9-23.3

Judge Linares held four days of hearings from March 12, 2009 to

March 17, 2009 to address objections to the settlement. See

Plutzik Decl. Ex. L ("Apr. 30, 2009 Order") at 2.

Scott Bursor, one of the attorneys for Plaintiffs in this

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4 This case was part of the California Judicial Council

Coordinated Proceeding ("JCCP') denominated Alameda County

"Cellphone Termination Fee Cases," JCCP No. 4332. 

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case, represented some objectors in the Larson action. In

response to objections, the court in Larson revised the notice

plan to ensure that individual notice was sent to members of the

payer class in Robertson v. Nextel Communications, Inc.4 Id. at

8-10. The Court required Sprint to identify subclasses of

individuals who could receive individual notice. Id. at 10-16. 

The Court also found the bill insert deficient, and required

Sprint and Class counsel to design a more robust individual notice

program. Id. at 16-20.

A proposed Amended Notice Plan was submitted on May 21, 2009,

and the court approved it on June 2, 2009. See Larson Docket Nos.

340, 344. Under the Amended Plan, individual notice was to be

provided to 194,461 members of the Robertson class. See Jan. 15,

2010 Order at 16. The Amended Plan provided for individual notice

to thousands of other class members, see id at 16-17, a new twosided bill insert into current Sprint customer bills, see id. at

21, and notice by publication, see id. at 11-15. 

In response, class members objected that the individual

notice component of the Amended Notice Plan remained deficient. 

See id. at 16. The Court considered and rejected the argument

that Sprint failed to provide individual notice to millions of

class members who could be easily identified. Id. at 17-18. In a

January 4, 2010 letter, Mr. Bursor argued that Sprint could have

identified four million class members at a maximum cost of

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$100,000, or 2.4 cents per class member. See Larson Docket No.

433. The Court considered this letter, see Jan. 15, 2010 Order at

18 n.17, but did not revisit its finding that the notice provided

to individual class members was sufficient under the federal

rules, id. at 18. 

 The Larson court also considered and rejected objections

that the notice provided false information, or that it was

inaccurate in light of a California court's finding of illegality. 

See id. at 14 nn. 11-13. The Larson court concluded that the

Amended Notice Plan complied with the stringent requirements of

Federal Rules of Civil Procedure 23(c)(2)(B) and 23(e). Id. at

22-23. Having reviewed the procedures followed in Larson, this

Court finds they afforded Plaintiffs a full and fair opportunity

to litigate the issue of adequacy of notice. 

In their Opposition, Plaintiffs also argue that the Larson

notice conflicted with prior notices issued by California state

courts. Opp'n at 6. However, based on Judge Linares' thorough

responses to objections, it is clear that Plaintiffs had a full

and fair opportunity to raise this argument in the Larson action. 

This Court will not disturb or revisit Judge Linares' findings

regarding adequacy of notice.

4. Adequate Representation

Plaintiffs contend that there was inadequate representation

in the Larson action because the action was not vigorously

prosecuted and it settled in record time. Opp'n at 5. Judge

Linares considered objections related to adequacy of

representation before explicitly finding that "the named

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Plaintiffs are capable of fairly and adequately representing the

interests of the Class in connection with the proposed

settlement." Jan. 15, 2010 Order at 8-9. The Court cannot, and

will not, revisit this finding.

Plaintiffs also contend they were not adequately represented

in the Larson action because the Larson class representatives

consisted of Sprint subscribers, and did not include subscribers

charged an ETF by Nextel. Opp'n at 5-6. According to Plaintiffs'

Complaint, Sprint and Nextel merged in August 2005 to form Sprint

Nextel. Compl. ¶ 42.

The Larson court made no explicit finding that the class

representatives in Larson were adequate representatives of

subscribers subject to an ETF by Nextel. However, implicit in his

determination that "the named Plaintiffs are capable of fairly and

adequately representing the interests of the Class" is a finding

that the named Plaintiffs were adequate representatives of Nextel

subscribers. This is because the Larson settlement class includes

all members of the putative class in this case, including Nextel

subscribers. 

The putative class here consists of persons with accounts

with "Sprint Nextel (or a Sprint Nextel legacy company) . . .

[who] were charged an early termination fee within the relevant

limitations period. . . ." Compl. ¶ 8. The settlement class in

Larson consists of parties to a subscriber agreement for a Sprint

Nextel Wireless Service Account "whether on the Sprint CDMA

network or Nextel iDen network, or both, . . . entered into

between July 1, 1999 and December 31, 2008." Final Judgment ¶ 6. 

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The class period in Larson, which predates the merger of Sprint

and Nextel in 2005, indicates that the class includes Nextel

subscribers. Defendants contend it is undisputed that the class

in this case is included in the Larson settlement class. Reply at

5. Having carefully reviewed Plaintiffs' Opposition, and the

class definitions, the Court finds nothing that suggests

otherwise. 

A number of other considerations support this Court's

determination that Judge Linares implicitly found the Larson

Plaintiffs to be adequate representatives of Nextel subscribers. 

First, in response to objections raised in the Larson proceedings,

the notice plan was revised to provide individual notice to

194,461 members of the class in Robertson v. Nextel

Commmunications, Inc. See Jan. 15, 2010 Order at 15-16. This

revision shows the interests of Nextel subscribers were raised and

addressed in the Larson action. 

Second, counsel for the California Nextel class in Robertson,

and counsel for Plaintiffs in this case, sought attorneys' fees in

Larson based on their contention that their work in Robertson and

in this case conferred a benefit on the Larson class. Id. at 60-

65. Although Judge Linares denied their fee request, the mere

fact that they sought an award indicates that members of the class

in this case, including Nextel subscribers, were adequately

represented in the Larson proceedings.

It is also worth noting that the class representatives in

this case were not subscribers charged an ETF by Nextel. See

Compl. ¶¶ 21-24. Instead, Larry Lee, Lisa Whitlock, Randy

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Whitlock, and Shahin Shokoofandeh were charged an ETF by Sprint

Nextel. See id. The Complaint states they will fairly and

adequately represent and protect the interests of the class. Id.

¶ 14. Since the Complaint in this case does not name any Nextel

subscribers as class representatives, counsel for Plaintiffs would

appear to be operating under a double standard when they attack

Larson on the same basis. 

The Court will not disturb or revisit Judge Linares' finding

that the named Plaintiffs in Larson were capable of fairly and

adequately representing the interests of the class; a class which

included the putative class members of this case. Having reviewed

the procedures followed in Larson, this Court finds they afforded

Plaintiffs a full and fair opportunity to litigate the issue of

adequate representation. 

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V. CONCLUSION

The Court is satisfied that putative class members in this

case received the requisite notice, opportunity to be heard, and

adequate representation in the Larson action. As noted by Judge

Linares, this case is listed in the Larson Settlement as a Related

Claim, and is therefore "settled and released by way of the

Settlement Agreement." Jan. 15, 2010 Order at 62-63. The Larson

settlement precludes this case from going forward. The Court

GRANTS Defendants' Motion to Dismiss. This case is DISMISSED WITH

PREJUDICE.

IT IS SO ORDERED.

Dated: May 6, 2010

 

UNITED STATES DISTRICT JUDGE

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