Webb et al v. County of Stanislaus et al

Filing 151

ORDER signed by Chief District Judge Kimberly J. Mueller on 6/3/2024 GRANTING 144 Motion to Approve Settlement and Compromise of Minor Plaintiffs Claims and DIRECTING the Clerk of Court to file, under seal, an unredacted version of plaintiffs 9; corrected proposed order regarding plaintiffs' motion for ex parte approval of minor's compromise. The settlement amount of $20,800.00 shall be made payable to Structured Assignments, SCC, to fund the future periodic payments to A.W. on the dates and in the amounts indicated below: $10,016.06 guaranteed lump sum, payable on A.W.'s 18th birthday; $43,704.49 guaranteed lump sum, payable on A.W.'s 25th birthday. (Clemente Licea, O)

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UNITED STATES DISTRICT COURT

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FOR THE EASTERN DISTRICT OF CALIFORNIA

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Taylor Webb, et al.,

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Plaintiffs,

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No. 1:19-cv-01716-KJM-CSK
ORDER

v.
County of Stanislaus, et al.,

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Defendants.

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Plaintiffs request this court approve the settlement and compromise of minor plaintiff

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A.W.’s claims. The court submitted the motion without oral argument as provided under Local

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Rule 230(g). For the reasons set forth below, the court grants the petition and approves the

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minor’s compromise.

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I.

BACKGROUND

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In October 2019, plaintiff Taylor Webb gave birth to her daughter, plaintiff A.W. Compl.

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¶¶ 90–91, ECF No. 1. A.W.’s father, plaintiff Jeremy Westfall was present at the birth. Id. ¶ 92.

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On October 31, 2019, a few days after A.W. was born, plaintiffs allege Stanislaus County social

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workers unlawfully removed A.W. from Webb. Id. ¶¶ 129–48. Plaintiffs state defendants were

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concerned about Westfall’s proximity to A.W. given that a daughter from a previous relationship

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had recently died in his care. Id. ¶ 117; Mot. at 6, ECF No. 144. The next day, Webb was

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reunited with her daughter only after she agreed to file paperwork for full legal custody of A.W
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and adhere to a “safety plan” whereby she would go to her mother’s home in Utah. Compl. ¶¶

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209, 223–26, 259, 284.

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Webb then began to experience severe shortness of breath and voluntarily returned to the

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hospital where she was readmitted and placed into a medically induced coma. Id. ¶¶ 290–96.

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While Webb was hospitalized, plaintiffs allege defendants conspired with Webb’s mother to

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initiate unlawful guardianship proceedings in state court to allow Webb’s mother to secure

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custody of A.W. Id. ¶¶ 294–303; Mot. at 6.

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After Webb was discharged, she drove with her mother and A.W. to Utah. Compl.
¶¶ 414–16. However, Webb later left her mother’s home with A.W. and returned to California.

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Id. ¶¶ 476–77. Plaintiffs subsequently initiated this action alleging Stanislaus County social

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workers violated their constitutional rights by removing A.W. from Webb’s care and custody.

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See generally id. In October 2023, plaintiffs agreed to settle their case against Stanislaus County.

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Mot. at 7. Under the settlement agreement, Stanislaus County agreed to pay a total of

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$600,000.00, inclusive of attorneys’ fees and costs to plaintiffs. Id. In return, plaintiffs agreed to

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dismiss all claims against each defendant. Id. Petitioner Donnie R. Cox, as A.W.’s Guardian ad

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Litem, now applies for compromise of the minor plaintiff’s settlement proceeds. See id. at 3.

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Subsequently, plaintiffs filed a notice of errata to correct the spelling of minor plaintiff A.W.’s

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name in plaintiffs’ proposed order approving the minor’s compromise. Notice, ECF No. 150.

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II.

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LEGAL STANDARD
District courts have a duty to protect the interests of minor litigants. See Fed. R. Civ. P.

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17(c)(2) (requiring court “appoint a guardian ad litem—or issue another appropriate order—to

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protect a minor or incompetent person who is unrepresented in an action”). This special duty

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requires a district court to “conduct its own inquiry to determine whether the settlement serves the

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best interests of the minor.” Robidoux v. Rosengren, 638 F.3d 1177, 1181 (9th Cir. 2011)

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(quoting Dacanay v. Mendoza, 573 F.2d 1075, 1080 (9th Cir. 1978)); see also E.D. Cal. L. R.

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202(b) (“No claim by or against a minor or incompetent person may be settled or compromised

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absent an order by the Court approving the settlement or compromise.”).

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The Ninth Circuit instructs district courts to “limit the scope of their review to the

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question of whether the net amount distributed to each minor plaintiff in the settlement is fair and

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reasonable, in light of the facts of the case, the minor’s specific claim, and recovery in similar

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cases.” Robidoux, 638 F.3d at 1181–82. This requires the court to “evaluate the fairness of each

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minor plaintiff’s net recovery without regard to the proportion of the total settlement value

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designated for adult co-plaintiffs or plaintiffs’ counsel—whose interests the district court has no

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special duty to safeguard.” Id. at 1182.

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III.

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ANALYSIS
Under the settlement agreement, Stanislaus County will issue a check for $579,200.00 to

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Powell & Associates Client Trust Account. Mot. at 7. This accounts for the entire settlement

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amount minus $20,800.00, which Stanislaus County will make payable to Structure Assignments

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SCC to fund future periodic payments to A.W. on her 18th and 25th birthdays. Id. Specifically,

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A.W. will receive a guaranteed lump sum of $10,016.06 in 2037 and a guaranteed lump sum of

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$43,704.49 in 2044. Id. The payment to Structure Assignments SCC shall be made through a

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qualified assignment under Section 130 of the Internal Revenue Code. Id. at 7–8. The Structure

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Assignments SCC shall make payments through the purchase of an annuity from Independent

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Life Insurance Company, which will make the future periodic payments. Id. at 8.

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A.W.’s mother, plaintiff Taylor Webb, will receive $239,200.00, which is the total amount

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after applying a 50 percent contingency fee to $600,000.00 and subtracting $40,000.00 for costs.

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Robert R. Powell Decl. ¶ 6, ECF No. 144-1. Plaintiff Jeremy Westfall wishes to recover nothing

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from this action. Id. Westfall, unlike Webb, also is a plaintiff in a similar lawsuit regarding the

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removal of his son whereby he will receive $239,200.00 in settlement proceeds. Id.; see also

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First Am. Compl., Westfall v. County of Stanislaus, No. 21-00283 (E.D. Cal. May 17, 2021), ECF

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No. 7. Plaintiffs’ counsel declares the contingency fee request and the ultimate distribution of the

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gross settlement award are fair and reasonable. Powell Decl. ¶ 4.

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To show the requested recovery amount for A.W. is reasonable, plaintiffs’ counsel

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provides a series of case citations involving unlawful removal, as well as cases involving

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wrongful death and sex abuse. See Mot. at 8–9. As noted in Minors P.H. v. County of Riverside,
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removal cases appear less frequently than other minors’ compromise cases. No. 15-00890, 2020

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WL 10893001, at *3 (C.D. Cal. Mar. 30, 2020). Based on the court’s independent review of

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these cases, as well as others, the court approves the total $20,800.00 award for A.W. See, e.g.,

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Carefoot v. County of Kern, No. 17-00456, 2019 WL 3026989, at *3 (E.D. Cal. July 11, 2019),

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report and recommendation adopted, No. 17-00456, 2019 WL 3943970 (E.D. Cal. Aug. 21,

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2019) (approving $11,500 award for a minor who was removed for nearly two months at three

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months old); McNelis v. County of El Dorado, No. 22-00369, 2023 WL 5758540, at *5 (E.D. Cal.

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Sept. 6, 2023) (collecting cases and noting in unlawful removal cases, recovery ranges “from

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$7,000 to $28,000 with an outlier of $130,000”). Here, A.W. was four days old when she was

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removed from her mother for one day. Mot. at 9. There are no allegations A.W. was subjected to

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medical examinations or other invasive investigative procedures and there is no indication A.W.

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suffered or needs treatment for physical or emotional injuries. Mot. at 12. Given these factual

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circumstances, A.W.’s specific claim and recovery in similar cases, the court determines the net

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amount distributed to A.W. is fair and reasonable. See Robidoux, 638 F.3d at 1182.

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Despite counsel’s arguments, the court is concerned by the request for a 50 percent

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contingency fee. Mot. at 13–14; McNelis v. County of El Dorado, No. 22-00369, 2023 WL

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5758540, at *4 (E.D. Cal. Sept. 6, 2023) (articulating similar concern with a request for a 40

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percent contingency fee by the same attorney). Absent a showing of good cause, courts in the

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Eastern District of California generally consider 25 percent of the recovery as the benchmark for

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attorney’s fees in contingency cases for minors. See L.T. v. United States, No. 22-00142, 2023

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WL 5434423, at *3 (E.D. Cal. Aug. 23, 2023); Mitchell v. Riverstone Residential Grp., No. 11-

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2202, 2013 WL 1680641, at *2 (E.D. Cal. Apr. 17, 2013) (collecting cases). Plaintiffs’ counsel

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states he typically applies a contingency fee of at least 35 percent and contingency fees of 50

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percent are not uncommon in these types of cases. Powell Decl. ¶ 14. However, plaintiffs’

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counsel does not explain why he applied 50 percent in this case instead of his normal 35 percent

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fee. Further, while the court acknowledges counsel’s experience, id. ¶ 16, and the hundreds of

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hours counsel and his staff spent litigating this matter, given the overlap between this case and

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Westfall, counsel’s proposed combined fee award of $600,000 between the two cases could be
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considered excessive. Compare Mot. (seeking 50% contingency fee totaling $300,000.00) with

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Mot., Westfall, No. 21-00283 (E.D. Cal. Dec. 18, 2023), ECF No. 73 (seeking 50% contingency

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fee totaling $300,000.00).

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Yet, in cases involving the settlement of a minor’s federal claims, such as the instant

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action, the Ninth Circuit directs courts to focus their inquiry on “whether the net recovery of each

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minor plaintiff is fair and reasonable, without regard to the amount received by adult co-plaintiffs

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and what they have agreed to pay plaintiffs’ counsel.” Robidoux, 638 F.3d at 1179 n.2, 1182

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(finding an abuse of discretion where the district court rejected a minor’s settlement because it

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found a 56% contingency fee was excessive and unreasonable). Given this controlling

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precedent, because the court finds A.W.’s net award is fair and reasonable, the court grants the

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motion for approval of minor’s compromise for A.W.

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IV.

CONCLUSION

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For the reasons set forth above:

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1) The settlement of the minor plaintiff’s claims, as compromised given the terms of the

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settlement reached among the parties, and as further described in the Ex-Parte

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Petition for Approval of Minor’s Compromise filed December 7, 2023, is approved;

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2) The settlement amount of $20,800.00 shall be made payable to Structured

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Assignments, SCC, to fund the future periodic payments to A.W. on the dates and in

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the amounts indicated below:

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a. $10,016.06 guaranteed lump sum, payable on A.W.’s 18th birthday.

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b. $43,704.49 guaranteed lump sum, payable on A.W.’s 25th birthday.

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3) The parties’ projected purchase date of the annuity policy was January 10, 2024.

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The delay in funding the annuity may result in a delay of the payment dates by an

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equal number of days, or a change in the payment amounts that shall be accurately

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recorded in the qualified assignment and release document and annuity contract

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without the need of obtaining an amended Petition or Court Order. A comparably

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rated life insurance company may be substituted to obtain the best interest rates

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available at the time of funding;
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4) Defendant Stanislaus County and/or Insurer shall make a qualified assignment under

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Section 130 of the Internal Revenue Code to Structured Assignments SCC, to fund

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the obligation to make payments through the purchase of an Annuity from

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Independent Life Insurance Company, who shall make the future periodic payments;

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5) The court approves the distribution of attorneys’ fees to plaintiffs’ counsel as set
forth in the Ex-Parte Petition for Approval of Minor’s Compromise;
6) The Clerk of Court is directed to file, under seal, an unredacted version of plaintiffs’

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corrected proposed order regarding plaintiffs’ motion for ex parte approval of

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minor’s compromise. Only the parties to this case and their respective counsel shall

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be permitted access to the sealed document.

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This order resolves ECF No. 144.

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IT IS SO ORDERED.

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DATED: June 3, 2024.

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