Court Opinion

ID: 4437830
Source: CourtListenerOpinion
Date Created: 2019-09-12 20:00:30.794715+00
Date Added: 2024-06-11T14:46:15.234297
License: Public Domain

NOT FOR PUBLICATION                       FILED
                     UNITED STATES COURT OF APPEALS                       SEP 12 2019
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                               FOR THE NINTH CIRCUIT

In re: LOGITECH, INC.,                          No.    19-70248
______________________________
                                                D.C. No. 3:18-cv-03091-WHA
LOGITECH, INC.,

                 Petitioner,                    MEMORANDUM*

 v.

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF
CALIFORNIA, SAN FRANCISCO,

                 Respondent,

JAMES PORATH, individually and on
behalf of all similarly situated individuals,

                 Real Party in Interest.

                    Appeal from the United States District Court
                      for the Northern District of California
                     William Alsup, District Judge, Presiding

                        Argued and Submitted July 18, 2019
                            San Francisco, California

Before: PAEZ and RAWLINSON, Circuit Judges, and ANELLO,** District Judge.

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      **
             The Honorable Michael M. Anello, United States District Judge for
      Petitioner Logitech, Inc. seeks a writ of mandamus directing the district

court to withdraw its case management order prohibiting the parties from

negotiating settlement as to class claims prior to class certification (the “Order”).1

The parties are familiar with the contours of the Order, so we do not recite them

here. We have jurisdiction pursuant to 28 U.S.C. § 1651 and deny the petition.

      “The writ of mandamus is a drastic and extraordinary remedy reserved for

really extraordinary causes.” In re Van Dusen, 654 F.3d 838, 840 (9th Cir. 2011)

(internal quotations omitted). Whether to grant a writ of mandamus requires a

case-by-case analysis of five factors. Id. (citing Bauman v. U.S. Dist. Court, 557

F.2d 650, 654–55 (9th Cir. 1977)). The third factor, which asks whether the

district court’s order is clearly erroneous as a matter of law, is necessary. Id. at

841. Mandamus review is discretionary and neither depends on—nor necessarily

follows from—satisfaction of all the factors. Cole v. U.S. Dist. Court For Dist. of

Idaho, 366 F.3d 813, 817 (9th Cir. 2004).

      Our analysis begins and ends with the third factor: clear error. Logitech

argues that the Order clearly violates Federal Rule of Civil Procedure 23, which

governs class actions, and the parties’ First Amendment petition and speech rights.

the Southern District of California, sitting by designation.
1
  The Order includes an exception to the settlement-discussion prohibition where
the court has granted a motion for appointment of interim class counsel. Such a
motion was denied in this case, but Logitech does not challenge that denial in this
mandamus petition.

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      1. We begin with the “nonconstitutional ground[] for decision”: whether the

Order is clearly erroneous under Rule 23. See Gulf Oil Co. v. Bernard, 452 U.S.

89, 99–100 (1981). First, Rule 23 explicitly contemplates the simultaneous

certification of a class and settlement, albeit with permissive and not mandatory

language: “The claims, issues or defenses of a certified class—or a class proposed

to be certified for purposes of settlement—may be settled . . . only with the court’s

approval.” Fed. R. Civ. P. 23(e) (emphasis added); see also Hanlon v. Chrysler

Corp., 150 F.3d 1011, 1019 (9th Cir. 1998) (“[T]here is nothing inherently wrong

with this practice[.]”). Indeed, there are many instances where classes have been

certified for settlement, and their settlements have been approved, by scrutinizing

courts. See, e.g., In re Hyundai & Kia Fuel Economy Litig., 926 F.3d 539, 552–53

(9th Cir. 2019) (en banc); Lane v. Facebook, Inc., 696 F.3d 811, 818–19, 826 (9th

Cir. 2012); Hanlon, 150 F.3d at 1025–27.

      Second, sections of Rule 23 provide district courts with wide discretion,

including the factors to be considered in the appointment of class counsel, which is

required before a class can be certified and settled. See Fed. R. Civ. P.

23(g)(1)(A)–(B). Further, where class certification and class settlement are sought

at the same time, courts “must pay ‘undiluted, even heightened, attention’ to class

certification requirements.” Hanlon, 150 F.3d at 1019 (quoting Amchem Prods.,

Inc. v. Windsor, 521 U.S. 591 (1997)); see also In re Bluetooth Headset Prods.

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Liability Litig., 654 F.3d 935, 947 (9th Cir. 2011) (noting that courts “must be

particularly vigilant not only for explicit collusion, but also for more subtle signs

that class counsel have allowed pursuit of their own self-interests and that of

certain class members to infect the negotiations”). Given the discretion afforded

district courts by Rule 23 and its lack of mandatory class settlement language, we

cannot say the Order’s prohibition on class negotiations before certification is clear

error.

         In Gulf Oil, the Supreme Court considered an order limiting communications

between parties and potential class members and recognized that, because class

actions present “opportunities for abuse,” district courts have “both the duty and

the broad authority to exercise control over” such cases—so long as the district

courts do not exceed the bounds of the Federal Rules. 452 U.S. at 100. Thus, any

restriction on communications that would frustrate the policies of Rule 23 must

follow “a specific record showing . . . the particular abuses . . . threatened” and the

district court must “giv[e] explicit consideration to the narrowest possible relief

which would protect the respective parties.” Id. at 102 (quotation omitted). Here,

the district court did not make specific findings of the abuses or explicitly consider

narrower means of protecting the parties from any abuses threatened by pre-

certification class negotiations. See, e.g., Hyundai, where a class was certified for

settlement, the district court “appointed liaison counsel to act on behalf of [the]

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plaintiffs not participating in [the settlement discussions] and to participate in

confirmatory discovery,” in addition to ordering “multiple rounds of briefing” and

holding numerous hearings “concerning the fairness of the settlement, sufficiency

of the class notice, . . . and other issues.” 926 F.3d 553–54. Courts can reject class

settlements after they have been negotiated, and it is unclear why that approach

was not taken here. See Bluetooth, 654 F.3d at 945-46 (vacating a class settlement

because a problem with the fee award tainted the whole settlement). That the

Order appears to be neither drawn as narrowly as possible, nor based on a specific

record showing the abuses particular to this case, however, does not amount to

clear error.

       2. We next turn to the First Amendment. Even if the Order “involved

serious restraints on expression,” Gulf Oil, 452 U.S. at 103–04, it is unclear

whether the expression is protected by the First Amendment. Discussing and

agreeing to class settlement—or petitioning for such a settlement—may not be

protected speech because Logitech does not have a right to negotiate with absent,

unrepresented, potential class members before there is a class or interim class

counsel. Gentile v. State Bar of Nevada, 501 U.S. 1030, 1071 (1991). The Order

is not clearly erroneous under the First Amendment, and we decline to issue a

mandamus order.

       PETITION DENIED.

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