F OR P UBLICATION



### UNIT E D ST AT E S CO URT O F APPE AL S FO R T H E NINT H CIRCUIT

J E F F R E Y L E E A L L E

N , on behalf of himself, all others similarly situated, the g eneral public and as an “ag g rieved employ ee” under the California L abor Code Private Attorney s General Act,

Plaintiff-Appellee

,

and

L A B O R R E A D Y S O U T H W E S T , I N C ., a W ashing ton corporation doing business in the State of California,

Defendant-Appellee

,

v

.

M A R G I E B E D O L L

A ; A N T H O N Y A. A L L E N ; M I C H A E L A L

V A R E Z ; T Y L E R F A R M E R , M

ovants-Appellants

. N o. 13-55106

D.C. No. 2:09-cv-04266- DDP-AGRA L L E N V

. B E D O L L

A 2

J E F F R E Y L E E A L L E

N , on behalf of himself, all others similarly situated, the g eneral public and as an “ag g rieved employ ee” under the California L abor Code Private Attorney s General Act,

Plaintiff-Appellee

,

and

L A B O R R E A D Y S O U T H W E S T , I N C ., a W ashing ton corporation doing business in the State of California,

Defendant-Appellee

,

v

.

M A R G I E B E D O L L

A ; A N T H O N Y A. A L L E N ; M I C H A E L A L

V A R E Z ; T Y L E R F A R M E R , O bjectors-Appellants

. N o. 13-56685

D.C. No. 2:09-cv-04266- DDP-AGR

OPI NI ON

A ppeal from the United States District Court for the Central District of California Dean D. Preg erson, District J udg e, Presiding

Arg ued and Submitted F ebruary 4
, 2015—Pasadena California

F iled J une 2, 2015A L L E N V

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B efore: Stephen Reinhardt and Ronald M. Gould, Circuit J udg es, and J . F rederick Motz , Senior District J udg e. *

O pinion by

J udg e Gould

SUMMARY * *

Class Action

The pa n el affirmed the district c ourt’s order deny ing Objectors’ motion to intervene, and v acated the district court’s o rder g ranting final app roval to a class action settlement between day laborers and L a bor Ready Southwest,

a temporary staffing ag ency , in a putative class a ction broug ht by plaintiff J effrey L ee A llen ag ainst L abor Ready Southwest, alleg ing violations of the federal F air L abor Standards Act an d California wag e and hour and unfair competition laws.

Plaintiff alleg ed that L a

b or Ready illeg ally failed t o pay employ e es for their wait and travel times, and had taken

u n l a wf u l p a y c h e c k d e d u c t i o n s b y p r o v i d i n g c a s h disbursement machines and charg ing for their use. T he Objectors to the settlement are plaintiffs in other uncertified class actions ag ainst L abor Ready pending in California state courts raising employ

ment-related claims.

* T h e Ho n o rab le J

. Fred erick Mo tz, Sen i o r Un ited States District J u dg e f o r th e District o f

Mary lan d , sittin g b y

d esig n atio n

.

** T h is su m m ary co n stitu

t es n o p ar t o f t h e o p in io n o f th e co u rt. It h as b een p rep ared b y

co u rt staf

f f o r th e co n v en i en ce o f

th e read er.A L L E N V

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The panel held that the O bjec tors’ motion to intervene

was untimely because the motion was filed after f our y ears o f
ong oing litig ation, on the eve of settlement, and threatened to prejudice se t tling p arties by potentially derailing settlement talks.

The panel held that the district court did not sati s fy t he proced ural standard, o utlined in In re Bluetooth Headset Products Liab. Litig.
, 654 F .3d 935 (9th Cir. 2 011), in determining the settlement’s substantive fairness. The panel took no position on the substantive fairness of the ag r eement,

vaca t e d t h e f

inal settlement approval, a nd remanded so that the district court could conduct a more searching inquiry

.

B e cause the panel v a c a ted and remanded final approval of the settlement, the panel also vacated the attorney s’ f ee award to c lass counsel. Upon remand, the panel directed the d i s t r ict court to provide the entire class – and not just the O bjectors

– the opportunity to r eview class counsel’s completed fee motion and to submit objecti o n s if they so choose.

COUNSEL

Melissa G rant and Glenn A

. Da n a s (arg ued), Capstone L aw APC, L o s Ang eles, California, for Objectors-Appellants.

Mark R. Thierman a

nd J oshua D. B uck, Thierman L aw F irm, P. C

. , Reno, Nevada; J oseph Cho and Ronald H

. B ae, Aequitas L aw G roup, APL C, L os Ang eles California; Chaim Shaun Setareh (arg

ued), L aw O ffice of Shaun Setareh, A PC, B everly Hills, California, for Plaintiff-Appellee.A L L E N V

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David R. Ong aro (arg

u e d), T h ompson & Knig ht L L P, San F rancisco, California, for Defendant-Appellee.

OP INION

GOUL D, Circuit J udg e :

W e review the district court’s appr o v a l o f a class action
set t l ement, b etween day laborers a nd L abor Ready Southwest, that was neg otiated in t h e absence of a c ertified class. App el lants, objectors to the settlement, appeal the district court’s final approval of the settlement, as well as the district court’s denial of their motion to intervene. They raise contentions about whether the approved settlement i s fair, reasonable a

nd adequate. We have jurisdiction under 28 U.S.C. § 1291. W e affirm the denial o f the motion to intervene. Our hig h procedural standard for review of c las s action settlements neg otiated without a certified class leads us to vacate the order g ranting f inal approval to the set tlement and the award of attorney s’ fees, and to remand to the district court for further proceeding s.

I

L abor Ready Southwest ( “L a bor Ready ”) is a t e mporary staffing a g ency , providing day laborers to businesses in need of labor help. The employ ees work fo r the businesses that require labor, but t h ey r emain employ e es of L abor Ready

, which pay s the employ ees, thoug h not for time spent waiting for assig nmen t s a t L abor Ready ’s local offices, and not for time spent traveling from the local office to the b u s inesses that need l a b o r. L abor Ready also allowed employ ees to receive a pay check or alternatively to use a cash disbursementA L L E N V

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machine (“CDM”) in its facility

. T he fee for using the CDM

was one doll a r plus any chang e f rom the pay check amount less than a full dollar.

The Underlying Litigation

Plaintiff-Appellee J effrey L ee Allen (“Allen”) 1 filed this putative class action in California st a t e court in April 2009. Allen claimed violations of the F air L abor Standards Act o f 1938 (“F L SA”), 2 9 U.S.C. § 201 et seq. , as well as California
wag e and hour a n d u n fair competition laws alleg ing that, inter alia

, L abor Ready had illeg ally failed to pay employ ees for their wa i t a n d travel times, and had taken unlawful
pay check ded u c t ions by providing CDMs and c harg ing for their use.

Marg ie B edolla, Anthony A

. Allen, Michael Alvarez a nd T y ler F armer (collectively “Objectors-Appellants” or “Objectors”), are the plaintiffs in other u n certified class actions ag ainst L abor Ready p ending in Californ i a state courts. The first of these was filed i n S e ptember 2 010, a nd the o ther three were filed in November 2011. The O bjectors’ suits raise similar w ag e a n d h o u r claims, and also meal a nd rest break claims that were not raised by Allen.

L abor Ready removed Allen’s suit to the Central District of California. Class c ertification was denied in that case. I n March 2011, the district c ourt g ranted summary judg ment to L ab o r Ready on all claims ex cept for Allen’s claims
reg arding L abor Ready ’s use o f CDMs and related s tate law claims, which were remanded to s tate court after the district

1 P lain tif f J ef f rey A llen is n o relatio n

to Ob j ecto r A n th o n y

A . A llen

.A L L E N V

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court declined to ex ercise its supplemental jurisdiction. Allen appealed that ruling

to the Ninth Circuit. 2

The Settlem ent Agreem ent

The parties previously a ttem p ted two unsuccessful mediations, but while Allen’s state and federal appeals were pending , the parties entered mediation a third time and were successful, leading to a proposed settlement in October 2012. The p a rties t h e n jointly moved to remand the case to the district court for settlement, and we remanded.

Three key provisions of the sett l e ment are at issue h ere. (1) There was a g ross settlement fund of $4.5 million. F rom that f und, L abor Ready ag reed to pay each class member w ho submits a claims form within 45 day s of the class notice $10 for non-CDM claims and $25 for class members who used the CDMs during the class period. There is no minimum pay out and all of the money in the settlement fun d not paid toward attorney s’ fees, administration costs, or to class members w ho

s u b mit c laims reverts to L abor Ready

. (2) There w a s injunctive relief, whereby L a b or Ready wi l l s h ut down the CDMs throug hout Californ i a and replace them with an electronic pay c ard throug h w hich w o r k e r s receive their pay daily without cha r ge; further, L abor Ready will provide training to staff reg a

rding c ompliance with m e a l a n d r e st

2 Su bseq u en t ly

, th e state co u rt o n rem an d g ran ted L ab o r R ead y ’ s m o tio n to co m p el arb itratio n o f n early all o f Al l e n ’ s claim s, an d b oth p arties

a p p e aled th e decisio n to th e Calif o rn ia Co u rt o f A

p p eal. A t th e tim e o f settlem en t, t h e p a rties’ ap p eals in state an d f ed eral co u rt w ere still
p en d in g

. O f Ob

j ecto rs’ cases, o n e w as sen t to in d iv id u al arb itratio n , on e is p ro ceed i n g to classw id e arb itratio n , o n e is p ro ceed in g in arb itratio n on

an o p t- in c l a s sw i d e basis, an d o n e i s set to b e arb itrated o n a rep resen tativ e b asis.A L L E N V

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break and overtime laws a n d committed to an audit to ensure complia n c e with those laws, and L abor Ready will post notices in its branch offices telling workers they need not w ait in the office for work and p r o v i d e business cards informing them of their rig hts under state labor laws. (3) There was an ag reement o n attorney s ’ fees for A llen’s counsel (the class counsel), under w h i ch L abor Ready would not contest an award of 2 5% of the $4.5 million common fund (i.e., $1.125 million).

The settlement releases or forecloses all of the claims that Allen asserted, or could have asserted, ag ainst L abor Ready

, including meal and rest b reak claims that he d i d n o t make,

ex c e pt that class members who do not make a claim w ill not release any claims under F L SA, and class members who opt
out will not b e held to release any c laims made in the lawsuit for individual relief.

A fter preliminary approval was g ranted in April 2013, notice was mailed to 210,224 potential class members. Under the ter m s o f the class notice and the district court’s preliminary approval order, all objection s , opt outs, a nd claims were required to be mai l e d by J uly 15, 4 5 day s a fter the class notice was sent. I n r e s p onse, 14,947 people

s u b mitted timely a

nd valid claim f

o rms. Thus, the L abor Ready ’s max imum possible pay o ut to the class i s $373,675, assuming that every p erson w ho submitted a cla i m u s e d the CDMs and is entitled to the hig her relief amount of $25.

Upon learning d e t ails of the prospective settlement throug h communications with L a b or Ready in their separate

s u i t s , O bjectors soug ht to intervene as of rig ht and t o i n tervene permissively in Allen’s c ase. The district courtA L L E N V

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denied their motion, but g r anted Objectors leave to object at the preliminary

approval stag e.

After a final fairness hearing

, the district court issued an order approving the settlement on Aug ust 27, 2013. The district court d etermin ed that the notice procedure satisfied federal law a

nd due process. The order noted that the four Objectors had raised concerns, but overrul ed them. The district court found that th e s e t t lement terms were fair, reasonable a n d a dequate to the class, and awarded $1.125 million i n attorney ’s fees, f inding that fig ure (25% of the common fund) fair and reasonable.

Objectors’ a p p e a ls of the denial o f their intervention motion and of final settlement approval timely followed.

II

The settlement of a c lass action must be fair, adequate,

a n d r e asonable. F ed. R. Civ. P. 23(e)(2). W e r e v i e w a district court’s approval of a class- a c t i o n settlement for a clear abuse of discretion. See Rodriguez v. W e st P u blishing Corp.
, 563 F .3d 948, 963 (9th Cir. 2009). “A court abuses its discretion when it fails to apply the correct leg al standard or ba s e s its decision on unreasonable finding s of fact.” Nachshin v. A OL, LLC
, 663 F .3d 1034, 1038 (9th Cir. 2011).

Denial of a motion to intervene as of rig ht is reviewed de

novo , ex cept for the timeliness p rong which is reviewed for an abuse of discretion. Chamness v. Bowen , 722 F .3d 1110, 1121 (9th Cir. 2 013 )

. Denial of a motion for permissive intervention is reviewed f o r an abuse of discretion. Blum v

. Merrill Lynch Pierce Fenn e r & Smith Inc.
, 712 F .3d 1349, 1352 (9th Cir. 2013).A L L E N V

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III

W e affirm the district court’s decision to d eny O bjectors’ untimely motion to intervene. W hile the district court did not

ex p lain its decision to d eny the motion, we may affirm on any basis supported by the record, whether or not relied upon by the district cou r t

. H

all v. N. A m. Van Lines, Inc.
, 476 F .3d 683, 686 (9th Cir. 2007). Here, the Objectors kne w o f the Allen litig ation, which had been ong o i n g f o r four y ears, for
at least a y ear before they moved to i ntervene and h ad
reg ularly asked L abor Ready about the status of s e t t l ement talk s in Allen’s case. A timely motion is required for the
g ranting of intervention, whethe r a s a matter of rig ht o r permissively

. See Arakaki v. Cayetano
, 324 F .3d 1 078, 1083 (9th Ci r

. 2 0 03) (intervention as of rig ht); Nw. Forrest Res. Council v

. Glickman

, 82 F .3 d 8 2 5
, 839 (9th Cir. 1 996) (permissive intervention).

Objectors a

rg ue that under United States v. Carpenter
, a motion to intervene a s of rig ht can be timely even thoug h an action has been p ending for some t i me—in Carptenter
, ei gh teen months—when the intervenors act promptly a fter receiving n otice of a proposed settlement that woul d not adequately represent their interests. 298 F .3d 1122, 1124 (9th Cir. 2 002). B ut Carpenter involved a g overnment entity not representing intervenors’ interests. Id. a t 1125. I ts r easoning

was g rounded in the need to encourag e the assu m p t i o n that when the g overnment is a party , the interests of o thers will be protected. Id. Here, the g overnment is not a party

.

W e are n ot persuaded that Objectors’ motion was timely

, because the motion was f i l e d after four y ears of ong oing li t ig ation, on the eve of settlement, and threatened to prejudice settling parties by potentially derailing s ettlementA L L E N V

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talks, and especially where Objectors’ concerns could larg ely b e a ddressed throug h the normal objection process. 3 S e e Orange Cnty. v. Air Cal.

, 799 F .2d 535, 537–38 (9th Cir. 1986).

IV

W e nex t address Objectors’ contentions reg a rdi n g the settlement itself. W e have set a hig h procedural standard for settlements that, like the one a t issue here, occur without a certified class. Apply ing tha t standard, we vacate final approval and reman d to the district court so that it can conduct a “more searching inquiry into the fa i r n e s s of the
neg otiated distribution of f u nds, a s well as consider the substantive reasonableness of the attorney s’ fee reque s t i n lig ht of the deg ree of success attained.” I n r e Bluetooth Headset Products Liab. Litig.
, 654 F .3d 9 3 5
, 9 38 ( 9th Cir. 2011) (“ Bluetooth ”).

A

A difficult b a l a n cing a ct almost alway s confronts a district court tasked with approving a class action settlement. On the one hand, we have repeatedl y n o t e d t h at “there is a strong judicial p o l icy that favors settlements, p a rticularly where complex class a c t i o n litig ation is concerned.” In re Syncor ERISA Litig.
, 516 F

. 3d 1095, 1101 (9th Cir. 2 008) (citing Class Plaintiffs v. City of Seattle

, 955 F .2d 1 268, 1276

3 A t o ral arg u m en t o n t

h e in terv en t io n m o tio n , Ob j ecto rs in d icated th at th ey w ish ed to raise o b

j ectio n s at t h e p relim in ary settlem en t ap p ro v al h earin g , rath er th an

w ait f o r th e class n o tice an d f

ile th eir o b

j ectio n af ter p relim i n ary ap p ro v a l a n d b ef o re th e f in al ap p ro v al h earin g , w h ich th e d istrict co u rt allo w ed

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( 9 t h C i r. 1992)). And it is the nature of a settlement, a s a hig hly n e g o tiated compromise—here the parties submitted to mediation three times b efore reaching an a cceptable proposal—that “[ i] t may be unavoidable that some c l a ss members w ill alway s be happ i er with a g iven result than others.” Officers for J

u stice v. Civil Serv. Comm’n of City & Cnty. of San Francisco
, 68 8 F. 2 d 615, 624 (9th Cir. 1 982) (quoting Mendoza v. United States
, 623 F .2d 1338, 1344 (9th Cir. 1 980)). B ut on the o ther hand, “settlement class actions present unique d u e process concerns for absent class

me m b ers,” Hanlon v. Chrysler Corp.
, 150 F .3d 1011, 1026 (9th Cir. 1 998), and the d i s t r ict c ourt has a fiduciary duty to look after the interests of those a b s e n t c lass members. See,

e

. g

. Sullivan v. DB I

nvs., Inc.
, 667 F .3d 273, 3 19 (3d Ci r. 2011) (stating that “ t rial judg es bear the important responsibility of protecting absent class members, a n d must be assur[ ed] that the settlement r epresents adequate compensation for the r elease of the class cla ims” (internal quotation marks o mitted)); Reynolds v. Beneficial Nat’ l B ank

, 288 F .3d 277, 280 (7th Cir. 2002) (at t h e s e t t lement phase, the district judg e is “a fiduciary of the class,” subject “to the hig h duty of care that the law requires o f f iduciaries”); Maywalt v. Parker & Parsley Petroleum Co.
, 67 F .3d 1 0 72, 1078 (2d Cir. 1995) (noting that “ t h e d i strict court has a fiduciary r esponsibility to ensure that the settlement is fair and not a product of c o l l usion, and that the class members’ interests were represented adeq uately ” (internal quotation marks omitted)). See a lso Staton v. Boeing Co.
, 3 2 7 F. 3d 938, 972 n.22 (9th Cir. 2003) (it is the district court’s duty to police “the inherent tensions among class represe n t a tion, defendant’s interests in minimiz ing the cost of th e t otal settlement packag e, and class counsel’s interest in fees.”).A L L E N V

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R ecog niz ing these potentially conflicting demands, w e have imposed different standards upo n a d istrict court depending on the nature o f our review. When we review the settlement’s substantive fairness, “ [ w] e will rarely overturn

an approval of a compromised settlement unless the terms o f the ag reement contain c o n v i n cing indications that

. . . selfinterest rather than the class’s interests in fact influenced the
outcome of the neg otiations.” Id. at 960. However, we hold district c ourts to a hig her procedural standard when making that determination of substantive fairness: “To surv i v e appellate review, the district court must show it has ex plored comprehensively all factors, a nd must g ive a r easoned
response to all non-frivolous objections.” Dennis v. Kellogg Co.
, 6 97 F

. 3d 858, 864 (9th Cir. 2 012) (citations and internal quotation marks omitted). T hat procedural burden is more strict when a settlement is neg otia t e d absent class certification. Then “such ag r eements must w ithstand an even hig her level of scrutiny for evidence of collusion or other conflicts of interest than is ordinarily requir e d u nder Rule 23(e) before securing the court’s approval as fair.” Bluetooth

, 654 F .3d at 946.

H e re, the district court did not satisfy this proce d u ra l standard. W e take n o p osition on the substantive fairness of the ag reement, because the record b efore us does not allow us to u ndertake even our deferential substantive review. B ut we vacate f i nal settlement a

p proval and “ remand so that the district court may conduct a m o r e searching inquiry

. ” Bluetooth , 654 F .3d at 938.

As we said in Bluetooth

, w e r equire district courts to look for “subtle sig ns that class counsel have a l lowed pursuit o f their own self-interests

. . . to infect the neg otiations.” Id. at 947. W e went o n to identify t h ree such subtle sig ns:A L L E N V

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(1) “ when counsel r e ce ive a disproportionate d istribution o f the settlement;” (2) “ w h en the parties neg otiate a ‘clear sailing ’ arrang ement” (i.e., an arrang ement where defendant will not o bject to a certain fee request by class counsel); a

nd (3) when the parties c reate a r e v erter that returns unclaimed fees to the defendant. Id. All three sig ns appear here: (1) all of the money that does not g o toward claims actuall y m ade, the attorney s’ fees and costs and the administrati o n c o sts reverts to L abor R e ady ; (2) L abor Ready ag reed n ot to dispute th e award of fees to class counsel, as long a s that award did not ex ceed 25% of the common fund; and (3) when the attorney s’ fee award is ex amined in terms o f “economic reality ,” the award ex ceeds the max imum possible amount o f class monetary relief b y a factor of three. 4 S e e id. at 943

4 T h e aw ard o f

$ 1 .1 2 5 m i llio n in atto rn ey s’ f ees rep resen ts 2 5 % o f

th e f u n d created b y th e settlem en t, w h ich w e g en erally co n s i d er th e

“ ben ch m ark ” p ercen tag e f o r f ee aw ard s f

ro m a co m

m o n f u n d

. S ee S ix ( 6) Mexica n W

o rkers v. Ariz. Citru s Gro w ers , 9 0 4 F.2 d 13 0 1
, 1 3 1 1 (9 th Cir.1 9 9 0 ). Ho w ev er, w e h av e cau tio n ed t h at t h e d istrict co u

rt s h o u ld n o t calcu late f

ees u sin g “ a m ech an ical o r f o rm u laic ap p ro ach th at resu lts in an

u n reaso n ab le rew ard .” Blu eto o th , 6 54 F.3 d at 9 4 4

. On ly 1 4,9 4 7 t i m ely claim s w ere su b m itted , m ean i n g th at at m o s t $ 3 7 3 ,6 7 5 w ill b e d isb u rsed
t o t h e class in m o n etary relief

. Su ch a lo w p ay ou t to th e cl a s s w a s

an ticip ated b y th e p a r t i e s : A t a h earin g h eld b ef o re th e p relim in ary ap p ro v al, class co u n sel said th at h e w o u ld co n s id er it a su ccess if ev en 1 0 % o r 1 5 % of th e class m a d e claim s (in f act, th e claim s rate w as less th an 8 %). A lso

, Ob

j ecto rs arg u e d th at L ab o r Read y ’ s estim ate of ad m i n istrativ e co sts w as prem ised o n o n l y 1 0 % o f t h e class m ak in g claim s, an d th e d istrict c o u rt ex p ressed co n cern ab o u t th e l ow lik ely
p articip atio n rate y ield in g b en ef its f o r L ab o r Re a d y (in th e f o rm of

rev ersio n o f th e f

u n d s) an d class co u n sel. Ho w ev er, th e reco rd g iv es n o

assu ran ce th at, in th e f

ace o f th ese ad m issio n s f ro m class co u n sel an d

co n cern s f

ro m O b j ecto rs, th e d istrict co u

rt “ i n q u ire[d ] f

u rth er i n to w

h y th e p arties h ad n eg o tia t ed su ch a d isp ro p o rtio n ate d istrib u t io n b etw een f ees

an d relief .” Blu eto oth , 6 5 4 F.3 d at 9 3 5

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(quoting In re Gen. Motors
, 5 5 F .3d 768, 821 (9th Cir. 1995)).

W h ile the e x istence o f these three sig ns does not mean the
set tlement c annot still be f air, reasonable, or adequate, they required the district court to e x amine them, and adequately to develop the record to support its final approval d e cision. “Confronted with these multiple indicia of possible implicit collusion, the district court had a s p e cial ‘oblig at[ ion] to assure itself that the fees awarded in the ag reement were not unreasonably hig h.’” Bluetooth

, 654 F 3.d a t 947 (quoting Staton , 327 F .3d at 965).

As a whol e , the settlement appears to afford valuable relief, muc h b y injunction, that will b enefit the class. 5 The district court n oted the ex istence o f this injunctive relief, but did not make ex press finding s about the v a l u e of the injunctive r elief, cf. Bluetooth

, 654 F .3d at 944, finding s that mig ht have g iven more justification for the reasonableness o f class counsel’s fee award. Similarly

, t h o u g h c lass counsel represented that the f

ee award was l ess than his “lodestar” fig ure, there were no ex

press finding s from the district court

on what it considered to be a reasonable lodestar amount. Cf. B l u etooth

, 654 F .3d at 945 (citing Vizcaino v. Microso f t Corp.
, 290 F .3d 1043, 1050–51 (9th Cir. 2002)) (noting that district courts are encourag ed t o c r oss-check the two fee5 A lleg ed v io latio n s o f Calif orn ia’ s Un f

air Co m p etit i o n La w are th e b asis of so m e o f th e class claim s ; u n d er state law

, th e “ th e p rim ary f o rm

o f relief av ailab le u n d er th e [Un f air Co m p etitio n La w ] t o p ro t ect

co n su m ers f ro m u n f air b u sin ess p ractices is an in j u n ctio n ,” w

h ile o th er relief

, su ch as m o n e t a ry relief

, is p u rely “ an cillary .” In re To b a cco II Ca ses , 2 0 7 P .3 d 2 0 , 3 4 (2 0 09 ).A L L E N V

. B E D O L L

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calculating methods ag ainst o ne another, to ensure a fair a nd reasonable fee).

W e stress that “we ex pres s n o o p inion on the ultimate f a i r n ess of what the p arties h ave neg otiated, for we have n o b usiness substituting our notions o f fairness for those o f t h e district judg e.” Bluetooth

, 654 F

. 3d at 950 (internal quotation marks and alterations omitted). On remand, the district court, after appropriately supplementing the r e c ord, may ex ercise its discretion to reapprove the settlement and class counsel’s fee,
reappro v e the settlement but modify class counsel’s fee, to disapprove the settlem e n t, or take other appropriate actions depending on its inquiry

, finding s, and e valuation of whether the settlement is fair, reasonable, and adequate.

B

B e cause we vacate and remand final a pproval of the settlement, we also vacate the attorney s’ fee award to class counsel. A s we noted above, on remand, the district court has broad discretion to reapprove, disap p r o ve or modify the f ee award after making appropriate finding s as to its substantive reasonableness. However, u pon remand, the d i s t rict court must comply with our procedures permitting class membe rs to object to class counsel’s fee award befor e i t i s made. Obje ctors contend that the orig inal proceeding s did not, because the d eadline for filing class member objections was before counsel submitted its f inal fee request with supporting papers. They

are correct.

I n In re Mercury In t er active Corp. Securities Litigation (“ Mercury ” ) we held th a t F ederal Rule of Civil Procedure 23(h) requires a district c o u r t “to set the deadline for objections to counsel’s fee request on a date after the motionA L L E N V

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and documents supporting it have b een filed.” 618 F .3d 988, 993 (9th Cir. 2 010) ( emphasis in o r i gi n al). B e cause of the diverg ence of interests between the class and class c ounsel at the f ee-setting stag e, “[ w] hen the district court sets a schedule that denies the class an a d e q uate o pportunity to r eview a nd
prepare o bjections to class counsel’s completed fee motion, it fails to f

ulfill its fiduciary responsibilities to the class.” Id. at 994–95.

The district court h ere did not follow our precedent in Mercury

. U nder the terms of the class notice and the district court’s order g ranting preliminary a p proval to the settlement, all objections, opt o uts, a

nd claims were due J uly 1 5, 45 day s after class n otic e w a s sent. The motion to g rant final approval to the settlement and the completed attorney s’ fees motion was d

u e 70 day s after the class notice was s e nt, a nd the completed fees motion was not filed until J uly 29, 2013. U p o n remand, the district c o urt must g ive the entire class—and not just the Objectors-Appellants here—the opportunity to review c lass counsel’s c o m p l eted fee motion and to submit objections if they so choose.

V

Objectors make other substa n t i v e challeng es to the settlement. B ecause we do not reach a substantive review o f whether the settlement is fair, reasonable and adequate, w e do
not address these arg uments. Objectors may raise them ag ain
to the ex tent pertinent in any subsequent appeal, if the district
court o n remand ex e rcises its discretion to r eapprove this settlement.A L L E N V

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VI

W e affirm the dis t r i ct court’s order deny ing O bjectors’ motion to intervene. W e vacate the district c ourt’s order
g ra n t ing final approval to the settlement and g ranting attorney s’ fees. W e re mand to the district court for f urther proceeding s consist e n t w ith this opinion. E ach party shall bear its own costs upon appeal.

AF F IRMED in part, VACATED and REMANDED in part.