Court Opinion

ID: 9634822
Source: CourtListenerOpinion
Date Created: 2023-08-22 13:25:29.555688+00
Date Added: 2024-06-11T09:44:02.855811
License: Public Domain

RYMER, Circuit Judge,
concurring in part and dissenting in part:
I would hold that a putative class representative who enters into a settlement with the defendant in a class action after class certification has been denied, and voluntarily dismisses all of his substantive claims, thereby loses a sufficient interest to prosecute an appeal from the adverse certification ruling unless the settlement papers expressly carve out the settling plaintiffs interest in the class claims or retain some other cognizable interest such as shifting the costs of litigation to other members of the class.
As I read the Confidential Settlement Agreement and Release between Narouz and Charter, the parties settled all of Narouz’s substantive claims as an individual and as a putative member of the class if and when the court denied class certification, which, of course it did.1 The Agreement contains a comprehensive release, and does not reserve the right to appeal a class certification claim. Nor does the Agreement discuss the spreading of costs. Pursuant to it, Narouz voluntarily dismissed with prejudice all his individual claims. No one else has stepped up to the plate, that is, no other member of the putative class has sought to intervene for the purpose of appealing the district court’s ruling. In these circumstances, it seems to me, Narouz lacks standing and the appeal is moot for lack of a continuing controversy.
*1269In Geraghty, the Supreme Court considered whether denial of a motion for certification of a class may be reviewed on appeal after the named plaintiffs personal claim had been involuntarily extinguished. U.S. Parole Comm’n v. Geraghty, 445 U.S. 388, 100 S.Ct. 1202, 63 L.Ed.2d 479 (1980). The Court observed that mootness has two aspects: when the issues presented are no longer live, and when the parties lack a legally cognizable interest in the outcome. Id. at 396, 100 S.Ct. 1202. There it was clear the controversy was live because putative members of the class moved to be substituted or to intervene. Id. Here it is not. On the second prong, the Court held that a putative representative retains a personal stake in obtaining class certification when his substantive claim expires. Id. at 404, 100 S.Ct. 1202. See also Deposit Guaranty National Bank v. Roper, 445 U.S. 326, 340, 100 S.Ct. 1166, 63 L.Ed.2d 427 (1980) (permitting appeal of adverse certification ruling after involuntary dismissal of the named plaintiffs substantive claim). But it explicitly declined to express any view as to whether a named plaintiff who settles his individual claim may nevertheless appeal from denial of class certification. Geraghty, 445 U.S. at 404 n. 10, 100 S.Ct. 1202.
I think voluntary settlement is different from involuntary disposition. By definition, voluntary settlement is wholly within the discretion of the parties; they can control what claims are dismissed, which survive, and what rights each party retains in the class certification claim. For this reason it seems to me that Narouz, having voluntarily settled and voluntarily dismissed his individual claims, lacks a sufficient personal stake to appeal a denial of class certification unless he can point to specific language in the settlement papers showing that he retains a cognizable interest.
The Supreme Court identified two such interests in Roper: a plaintiffs interest in his individual substantive claim, and his interest in shifting the costs of litigation to other members of the class. 445 U.S. at 336-39, 100 S.Ct. 1166. As we have indicated, these interests are negotiable and can be settled. See Seidman v. City of Beverly Hills, 785 F.2d 1447, 1448 (9th Cir.1986) (holding that voluntary dismissal with prejudice upon settling individual claims after denial of class certification deprived court of jurisdiction).2 Other courts agree. See, e.g., Toms v. Allied Bond & Collection Agency, 179 F.3d 103, 105 (4th Cir.1999); Dugas v. Trans Union Corp., 99 F.3d 724, 727-29 (5th Cir.1996); Walsh v. Ford Motor Co., 945 F.2d 1188, 1191-92 (D.C.Cir.1991); Shores v. Sklar, 885 F.2d 760, 762-64 (11th Cir.1989).
Other courts facing similar issues also generally start with the principle that a class representative with voluntarily dismissed individual claims has mooted his appeal of a prior denial of class certification, unless the language of both the settlement agreement and the dismissal demonstrate a live controversy and a personal stake in the case. They then evaluate the *1270appellant’s entitlement to the narrow mootness exception based on whether the putative class representative expressly: (1) “carved-out” or preserved class claims, with no dismissal of “any and all” claims or the “action” as a whole; (2) reserved the right to appeal the class certification denial; and/or (3) provided for the shifting of attorneys’ fees, costs and expenses to the class in the event that a class was certified. See, e.g., Toms, 179 F.3d at 105-07 (finding appeal moot where plaintiff expressly agreed to an “unqualified release of claims” — including “any and all” individual and class action claims, any interest in attorneys’ fees and costs and any class representative compensation — even where the settlement agreement preserved the right to appeal class certification ruling, which was held to be “without effect” in light of the plaintiffs lack of interest in the case); Dugas, 99 F.3d at 725-29 (holding plaintiff agreed “without objection” to settlement and stipulated judgment on the entire “action,” and did not distinguish or preserve class claims; under those circumstances, plaintiff needed an “express reservation of a right to appeal” class certification denial);3 Potter v. Norwest Mortgage, Inc., 329 F.3d 608, 611-14 (8th Cir.2003) (holding plaintiff voluntarily released all individual claims after denial of class certification and failed to provide settlement agreement as part of the record that would establish continuing interest in shifting attorneys’ fees and costs to the class under Geraghty and Roper);4 Shores, 885 F.2d at 762-64 (holding release by consent to judgment, without any qualification as to class claims versus individual claims, indicated consent to dismissal of entire “action”); 5 Richards v. Delta Air Lines, Inc., 453 F.3d 525, 528-29 (D.C.Cir.2006) (holding plaintiff who voluntarily settled individual claims could appeal class certification denial because she retained a personal stake in the litigation in shifting fees and costs to the class and in only settling “any and all individual claims she might have,” rather than “any and all” claims or agreeing to dismiss the entire “action”; parties also stipulated that plaintiffs “individual claims” were not “in derogation of any other claim, defense, or right that either party or any putative class member might have in respect of this litigation, including Plaintiffs class claim”).6
*1271Following this approach and applying the rule I would adopt, the question is: what did Narouz and Charter agree to. As I read the Agreement, Narouz fully released all his nonclass, individual claims and his individual claims as part of the class, as well as his right to any other payments, including attorneys’ fees and costs. It was a stair-stepped deal. If the class and class settlement were approved, Narouz would receive $60,000 for settling his individual claims — aside from those related to Narouz’s class allegations and recoverable in accord with the court’s approval of the terms of the Class Action Joint Stipulation of Settlement and Release — and $20,000 as a class settlement payment once the court entered an order approving the class settlement after a fairness hearing. However, if the class and class settlement were not approved, Narouz agreed to treat the $60,000 as consideration for “any and all remaining individual claims against Charter,” and, in accordance with the release provision, to release Charter “for all Narouz’s individual claims alleged in his Complaint, on behalf of himself or as part of the putative or representative class, and agrees he would not be entitled to any further recovery of any kind from Charter.” The release provision fully discharges Charter from all claims arising out of Narouz’s employment.7
The Agreement does not reserve any right to appeal an adverse determination of certification, the terms of the class, or class settlement. Neither does it allow for the contingency of spreading costs among other members of the putative class if the class were not approved. While the Agreement does address attorneys’ fees, what it provides for is fees associated with the settlement of the class action and representative claims as specified in the Joint Stipulation and subject to the court’s approval — which didn’t happen.
In accord with the Agreement, once the court denied certification of the class for settlement, the parties filed a stipulation for dismissal. In it Narouz “voluntarily dismisse[d] with prejudice all his individual claims as alleged in the first, second, third, fourth, fifth, sixth and seventh causes of action in his Complaint.” This included every cause of action in the complaint and made no distinction between his individual, nonclass claims and his class-based claims. Dismissal was ordered by the court on June 5, 2007. Narouz then submitted a proposed judgment to the district court dismissing the “entire action.”8
All of this indicates to me that the parties intended to — and did — end Narouz’s involvement in this case one way or the other. As it happened, the court denied the class certification and settlement. In that event, Narouz agreed that the consideration he received was for releasing any and all of his interests, including class-based claims. All of these claims were voluntarily dismissed with prejudice. No other putative member has picked up the mantle. Therefore, I cannot see how we still have a case or controversy that Narouz has standing to pursue.
Because I conclude that Narouz’s appeal is moot, I do not reach the remaining *1272issues.9

. The Narouz/Charter settlement agreement was executed before the class certification ruling with an effective date after it was rendered.

. Seidman distinguishes what remains of Jordan v. County of Los Angeles, 669 F.2d 1311, 1316-17 (9th Cir.1982), vacated on other grounds, 459 U.S. 810, 103 S.Ct. 35, 74 L.Ed.2d 48 (1982), rev’d on other grounds on remand, 713 F.2d 503 (9th Cir.1984), amended on remand, 726 F.2d 1366 (9th Cir.1984), on the footing that in Jordan, unlike Seidman, the parties had not stipulated to a voluntary dismissal of the action. 785 F.2d at 1448 n. 2. It notes that in Jordan, we held that a class plaintiff who settled individual claims could appeal where an attempt by other members of the putative class to intervene demonstrated the existence of a live controversy and where the settlement agreement did not resolve the plaintiffs claim for injunctive relief, thereby leaving him with a personal stake in the outcome of the litigation.

. Cf. Zeidman v. J. Ray McDermott & Co., 651 F.2d 1030, 1045, 1050-51 (5th Cir.1981) (holding "a suit brought as a class action must as a general rule be dismissed as moot when the personal claims for the named plaintiffs are satisfied, and no class has properly been certified,” but also that "a suit brought as a class action should not be dismissed for mootness upon tender to the named plaintiffs of their personal claims, at least when, as here, there is pending before the district court a timely filed and diligently pursued motion for class certification”).

. See also Anderson v. CNH U.S. Pension Plan, 515 F.3d 823, 826-27 (8th Cir.2008) (holding after denial of class certification, "the voluntary settlement reached by the named plaintiffs with both defendants leads us to conclude that the entire case is now moot,” although agreement reserved right to appeal, because plaintiff did not establish a “continuing interest ... in shifting costs and attorneys' fees to putative class members”).

. Cf. Love v. Turlington, 733 F.2d 1562, 1564-65 (11th Cir.1984) (holding class representative's appeal of denial of class certification was not moot where she settled individual claims, as "live” controversy existed due to intervenor and plaintiff had "personal stake” in her procedural claim to the right to represent the class under Geraghty).

. Cf. Walsh, 945 F.2d at 1190-92 (holding plaintiff could not appeal class certification denial where he released "any and all claims ... whatsoever” with no mention of class claims; noting that if the settlement was expressly "limited in scope” there would be a basis for plaintiff's appeal of the class certification denial).

. As the Recitals in the Agreement indicate, the parties wished to resolve disputes between them “including but not limited to any matters pertaining to Narouz's employment and termination of employment with Charter and all claims which could have been asserted in the Action.” The class-based claims arise out of Charter's alleged failure to provide meal breaks and overtime wages, and so have to do with Narouz's employment with Charter.

. The court never signed the proposed judgment, perhaps because the stipulation of dismissal had already been entered, and the case had been administratively closed by a “JS-6” entry on the docket.

. This said, I take it that when the majority says that it "tentatively see[s] no reason why preliminary approval should not be granted,” this view is based on the record as it stood at the time the district court made its ruling. On remand, however, other things may well be on the table, including the adequacy of Narouz's class representation. See Geraghty, 445 U.S. at 405-07, 100 S.Ct. 1202 ("Our conclusion that the controversy here is not moot does not automatically establish that the named plaintiff is entitled to continue litigating the interests of the class. '[I]t does shift the focus of examination from the elements of justiciability to the ability of the named representative to "fairly and adequately protect the interests of the class.” Rule 23(a).' Sosna v. Iowa, 419 U.S. [393, 403, 95 S.Ct. 553, 42 L.Ed.2d 532 (1975)]. We hold only that a case or controversy still exists. The question of who is to represent the class is a separate issue.”) (emphasis in original).
I also would not reassign this case to a different judge. As far as I can tell, there has been no demonstration of, and the record does not necessarily show, any “bias or unusual circumstances,” such that reassignment is required under Rhoades v. Avon Prods., Inc., 504 F.3d 1151, 1165-66 (9th Cir.2007).