Jesse Robidoux, et al v. Brian Rosengren, et al

Filing

FILED OPINION (JOHN T. NOONAN, RICHARD A. PAEZ and CARLOS T. BEA Authoring ) For the foregoing reasons, we reverse the district court s partial denial of the parties motion to approve the proposed settlement. We remand with instructions for the district court to determine whether the net recovery of the four minor plaintiffs under the proposed settlement is fair and reasonable as to each minor plaintiff. REVERSED AND REMANDED... FILED AND ENTERED JUDGMENT. [7699230]

Case: 09-16674 03/30/2011 Page: 1 of 10

ID: 7699230 DktEntry: 21-1

FOR PUBLICATION

UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
JESSE ROBIDOUX; REGINA ROBIDOUX;
LORENA LINGENFELTER; RANDALL
REICHENBERG, JR., Minor, by and
through the guardian ad litem
Regina Robidoux guardian and
litem Regina Robidoux; SHAUN
JOHNSON; HANNAH BURK, Minor, by
and through the guardian as litem
Lorena Lingenfelter guardian ad
litem Lorena Lingenfelter;
MICHAEL R. BURK, Minor, by and
through the guardian as litem
Lorena Lingenfelter guardian ad
litem Lorena Lingefelter,
Plaintiffs-Appellants,
v.
BRIAN ROSENGREN; WACKER FAMILY
TRUST; CHRISTINE WACKER, Doing
business as Villa Serrano
Apartments; EILEEN WACKER;
WAYNE WACKER; C&D INVESTMENT
PROPERTIES DBA VILLA SERRANO
APARTMENTS,
Defendants-Appellees.





No. 09-16674
D.C. No.
2:06-cv-02334LKK-DAD
OPINION



Appeal from the United States District Court
for the Eastern District of California
Lawrence K. Karlton, Senior District Judge, Presiding
Argued and Submitted
November 5, 2010—San Francisco, California
4287

Case: 09-16674 03/30/2011 Page: 2 of 10

4288

ID: 7699230 DktEntry: 21-1

ROBIDOUX v. ROSENGREN

Filed March 30, 2011
Before: John T. Noonan, Richard A. Paez, and
Carlos T. Bea, Circuit Judges.
Opinion by Judge Bea

Case: 09-16674 03/30/2011 Page: 3 of 10

4290

ID: 7699230 DktEntry: 21-1

ROBIDOUX v. ROSENGREN

COUNSEL
Stuart E. Fagan, Law Offices of Stuart E. Fagan, San Diego,
California, for the plaintiffs-appellants.

OPINION
BEA, Circuit Judge:
This case calls upon us to determine the proper scope of
review for a district court considering whether a proposed settlement of housing discrimination claims involving minor
plaintiffs is fair and reasonable. Plaintiffs-Appellants—
including minors and their guardians ad litem1—appeal the
district court’s denial, in part, of their motion to approve a
proposed settlement of Plaintiffs’ housing discrimination
claims against their former landlords, Wayne and Eileen
Wacker (“Defendants”). The district court, exercising its special duty to protect the interests of litigants who are minors,
rejected the settlement, as proposed, because the district court
found the designation of 56% of the total settlement value to
Plaintiffs’ counsel “excessive” and unreasonable. Robidoux v.
1

Plaintiffs consist of two families and an independent adult plaintiff:
parents Jesse and Regina Robidoux, and their children Randy and Jesse
Jr.; parent Lorena Lingenfelter, and her children Michael and Hannah
Burk; and adult Shaun Johnson.

Case: 09-16674 03/30/2011 Page: 4 of 10

ID: 7699230 DktEntry: 21-1

ROBIDOUX v. ROSENGREN

4291

Wacker Family Trust, 2009 WL 1531785, at *5-6 (E.D. Cal.
May 29, 2009). The district court then reduced Plaintiffs’
counsel’s award from $135,000.00 to $77,166.42 in fees and
$8,500.73 in costs and approved the modified settlement. Id.
at *6.
We reverse. Although the district court has a special duty
to safeguard the interests of minor plaintiffs, that duty
requires only that the district court determine whether the net
amount distributed to each minor plaintiff in the proposed settlement is fair and reasonable, without regard to the proportion of the total settlement value designated for adult coPlaintiffs and contracted by them with Plaintiffs’ counsel. If
the net recovery of each minor plaintiff under the proposed
settlement is fair and reasonable, the district court should
approve the settlement as proposed.2
Background
Plaintiffs were residents of the Villa Serrano Apartments in
Carmichael, CA, which were owned and operated by Defendants. In addition to living in the Villa Serrano Apartments,
Plaintiff Johnson also was a part-time resident property manager for the apartment complex. In 2006, Plaintiffs brought
suit in federal district court against Defendants for alleged
violations of the federal Fair Housing Act, the California Fair
Housing and Employment Act, and state tort law. Specifically, Plaintiffs alleged that, between December 2004 and
September 2005, Defendants engaged in a consistent practice
of discrimination against families with children, including:
arbitrary eviction of families with children; circulation of a
written order telling tenants not to let their children play outside in the common area or ride bicycles, and that allowing
2

Our holding is limited to cases involving the settlement of a minor’s
federal claims. We do not express a view on the proper approach for a federal court to use when sitting in diversity and approving the settlement of
a minor’s state law claims.

Case: 09-16674 03/30/2011 Page: 5 of 10

4292

ID: 7699230 DktEntry: 21-1

ROBIDOUX v. ROSENGREN

their children to do so would lead to eviction; constant verbal
harassment and threats to the children and parents; and further
arbitrary action such as falsely reporting Plaintiffs’ cars as
illegally parked so they would be towed and refusing to
accept timely rent payments from families.
At the time of the alleged discriminatory treatment, minor
Randy Robidoux was five years old, and his ability to play
outside in the apartment complex was affected by Defendants’
actions. Minor Jesse Robidoux Jr. was less than one-year old
at the time and was too young to play outside. At the time,
minor Hannah Burk was three years old and was allowed to
play outside on occasion, while minor Michael Burk was less
than one-year old and did not play outside.
In their complaint, Plaintiffs sought declaratory and injunctive relief; compensatory, punitive, and treble damages; and
attorney’s fees. Although none of the Plaintiffs required any
medical or psychiatric treatment for the injuries they sustained, or showed any signs of ongoing stress, they claimed
to have suffered:
[L]oss of important housing opportunities, violation
of their civil rights, deprivation of full use and enjoyment of their tenancy, wrongful eviction, and severe
emotional distress and physical injury, humiliation
and mental anguish, including bodily injury such as
stomach aches; head aches; sleep loss and sleeping
too much; appetite loss; feelings of depression, discouragement, anger, and nervousness; and reliving
the experience; and other special and general damages according to proof.
Complaint at 16. Plaintiffs’ claim for punitive damages was
based on Defendants’ alleged intentional or reckless violation
of Plaintiffs’ civil rights. No specific special damages were
alleged.

Case: 09-16674 03/30/2011 Page: 6 of 10

ID: 7699230 DktEntry: 21-1

ROBIDOUX v. ROSENGREN

4293

In 2008, Plaintiffs filed a motion for summary judgment,
but prior to resolution of the motion, the parties filed a notice
of settlement and moved for the district court’s approval of
the compromise. Under the proposed settlement agreement,
Defendants agreed to pay Plaintiffs a total of $240,000 in
damages, attorney’s fees, and costs, to be allocated as follows:
•

$135,000 to Plaintiffs’ Counsel Stuart Fagan
(56.2%)

•

$35,000 to Robidoux Family (14.6%)
-$2,500 to minor Jesse Robidoux Jr.
-$10,833.33 to minor Randy Robidoux
-$10,833.33 to adult Regina Robidoux
-$10,833.33 to adult Jesse Robidoux

•

$35,000 to Lingenfelter Family (14.6%)
-$2,500 to minor Michael Burk
-$10,833.34 to minor Hannah Burk
-$21,666.66 to adult Lorena Lingenfelter

•

$35,000 to adult Shaun Johnson (14.6%)

Exercising its special duty to determine the fairness of a
settlement of minors’ claims, the district court granted in part
and denied in part Plaintiffs’ motion to approve the settlement. Most importantly for purposes of this appeal, the district court held that “an attorney’s fees award of 56 percent of
the total settlement amount [was] excessive and [did not] represent a fair compromise of the minors’ claims.” Robidoux,
WL 1531785 at *6. Instead, the court found that it was “equitable” to award Plaintiffs’ counsel only one-third of the net
settlement value, after costs. This amounted to an award of
$77,166.42—plus $8,500.73 in costs—instead of the
$135,000.00 provided in the proposed settlement. With this
modification of attorney’s fees, the district court approved the
settlement.

Case: 09-16674 03/30/2011 Page: 7 of 10

4294

ID: 7699230 DktEntry: 21-1

ROBIDOUX v. ROSENGREN

To determine the fairness of the settlement of the minors’
claims, the district court applied state law. Id. at *4. In particular, the district court looked to the local rules of several California courts and concluded that “attorneys are typically
awarded a maximum of 25 percent of the total settlement
award of a minor’s claim, less costs, unless there are extraordinary circumstances warranting a greater award.” Id. at *5.
The district court then found that Plaintiffs’ counsel’s performance was not sufficiently “extraordinary” to merit recovery
of 56% of the total settlement.
Plaintiffs’ timely appealed the partial denial of the settlement on the ground the district court applied the wrong legal
standard in finding the attorney’s fees were excessive.3
Standard of Review and Jurisdiction
This court reviews a district court’s decision to approve or
reject a proposed settlement for abuse of discretion. See In re
Heritage Bond Litigation, 546 F.3d 667, 675 (9th Cir. 2008).
[W]hen we review for abuse of discretion . . . we
first look to whether the trial court identified and
applied the correct legal rule to the relief requested.
Second, we look to whether the trial court’s resolution of the motion resulted from a factual finding
that was illogical, implausible, or without support in
inferences that may be drawn from the facts in the
record.
United States v. Hinkson, 585 F.3d 1247, 1263 (9th Cir. 2009)
(en banc). This court has jurisdiction to review a district
court’s denial of a motion to approve a settlement pursuant to
28 U.S.C. § 1291.
3

Because both Plaintiffs and Defendants approved of the proposed settlement, no appellee brief was filed, nor did an adverse party appear at oral
argument to defend the district court’s ruling.

Case: 09-16674 03/30/2011 Page: 8 of 10

ID: 7699230 DktEntry: 21-1

ROBIDOUX v. ROSENGREN

4295

Analysis
[1] District courts have a special duty, derived from Federal Rule of Civil Procedure 17(c), to safeguard the interests
of litigants who are minors. Rule 17(c) provides, in relevant
part, that a district court “must appoint a guardian ad litem—
or issue another appropriate order—to protect a minor or
incompetent person who is unrepresented in an action.” Fed.
R. Civ. P. 17(c). In the context of proposed settlements in
suits involving minor plaintiffs, this special duty requires a
district court to “conduct its own inquiry to determine
whether the settlement serves the best interests of the minor.”
Dacanay v. Mendoza, 573 F.2d 1075, 1080 (9th Cir. 1978);
see also Salmeron v. United States, 724 F.2d 1357, 1363 (9th
Cir. 1983) (holding that “a court must independently investigate and evaluate any compromise or settlement of a minor’s
claims to assure itself that the minor’s interests are protected,
even if the settlement has been recommended or negotiated by
the minor’s parent or guardian ad litem”).
[2] But this court has not provided district courts with specific guidance on how to conduct this independent inquiry,
nor dictated whether district courts should consult state law in
making such determinations. In the district courts in this Circuit, the typical practice has been to apply state law and local
rules governing the award of attorney’s fees, as the district
court did here. See, e.g., Alvarado v. United States, 2010 WL
5418863 (E.D. Cal. Dec. 23, 2010); Hernandez v. Sutter Med.
Ctr. of Santa Rosa, 2009 WL 1138713 (N.D. Cal. Apr. 27,
2009); Deja Marie J. v. San Francisco Unified Sch. Dist.,
2006 WL 2348884 (N.D. Cal. Aug. 11, 2006).
[3] However, this approach places undue emphasis on the
amount of attorney’s fees provided for in a settlement, instead
of focusing on the net recovery of the minor plaintiffs under
the proposed agreement. Inconsistency can be avoided if district courts limit the scope of their review to the question
whether the net amount distributed to each minor plaintiff in

Case: 09-16674 03/30/2011 Page: 9 of 10

4296

ID: 7699230 DktEntry: 21-1

ROBIDOUX v. ROSENGREN

the settlement is fair and reasonable, in light of the facts of the
case, the minor’s specific claim, and recovery in similar cases.
Most importantly, the district court should evaluate the fairness of each minor plaintiff ’s net recovery without regard to
the proportion of the total settlement value designated for
adult co-plaintiffs or plaintiffs’ counsel—whose interests the
district court has no special duty to safeguard. See Dacanay,
573 F.3d at 1078 (holding that it is “well settled in the usual
litigation context that courts have inherent power summarily
to enforce a settlement agreement” where the parties are not
a protected class of litigants such as minors or class-action
plaintiffs). So long as the net recovery to each minor plaintiff
is fair and reasonable in light of their claims and average
recovery in similar cases, the district court should approve the
settlement as proposed by the parties.
[4] Here, the district court abused its discretion by performing an overly broad review of the proposed settlement
and considering factors and state court rules outside the narrow scope of the district court’s review. Most importantly, the
district court erred in rejecting the settlement on the basis that
the provision of 56% of the total settlement value for attorney’s fees was “excessive,” and thus the settlement was not
“fair and reasonable” to the minor plaintiffs. However, as
explained above, the district court’s special duty to protect
minor plaintiffs requires only that the district court consider
whether the net recovery of each minor plaintiff is fair and
reasonable, without regard to the amount received by adult
co-plaintiffs and what they have agreed to pay plaintiffs’
counsel.
[5] In other words, in this context, the fairness determination is an independent, not a comparative, inquiry. Thus, the
district court erred when it focused on the admittedly large
proportion of the total settlement value going to Plaintiffs’
counsel, instead of reviewing the fairness of each minor’s net
recovery in isolation. We therefore reverse and remand for the
district court to consider, in the first instance, whether the pro-

Case: 09-16674 03/30/2011 Page: 10 of 10

ID: 7699230 DktEntry: 21-1

ROBIDOUX v. ROSENGREN

4297

posed net recovery of each of the four minor plaintiffs (as
shown supra) is fair and reasonable in light of the facts of the
case, each minor’s claims, and typical recovery by minor
plaintiffs in similar cases. If the net recovery of each minor
plaintiff under the proposed settlement is fair and reasonable,
the district court should approve the settlement as presented,
regardless of the amount the parties agree to designate for
adult co-plaintiffs and attorney’s fees.
Conclusion
[6] For the foregoing reasons, we reverse the district
court’s partial denial of the parties’ motion to approve the
proposed settlement. We remand with instructions for the district court to determine whether the net recovery of the four
minor plaintiffs under the proposed settlement is fair and reasonable as to each minor plaintiff.
REVERSED AND REMANDED.