Lemus v. H&R Block Tax and Business Services, Inc. et al

Filing 181

ORDER DENYING MOTION TO PERMIT LATE CLAIM AND RECONSIDER CLASS SETTLEMENT 177 (Illston, Susan) (Filed on 7/23/2013)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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ARABELLA LEMUS, individually and on
behalf of all others similarly situated,

United States District Court
For the Northern District of California

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ORDER DENYING MOTION TO
PERMIT LATE CLAIM AND
RECONSIDER CLASS SETTLEMENT

Plaintiffs,

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No. C 09-03179 SI

v.
H&R BLOCK ENTERPRISES, LLC,
Defendant.

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Currently before the Court is pro se claimant Paul Singh Madar’s motion to permit his late-filed
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claim and to reconsider the final approval of the class action settlement. Pursuant to Civil Local Rule
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7-1(b), the Court finds this matter suitable for disposition without oral argument and therefore
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VACATES the hearing currently scheduled for July 26, 2013. Having carefully considered the papers,
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the Court hereby DENIES claimant Madar’s motion, for the reasons set forth below.
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BACKGROUND
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This case arose from a suit alleging H&R Block committed violations of California wage and
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hour laws. In November 2010, the Court certified a class of “all seasonal, non-exempt Tax Professional
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employees who were or are employed by defendants during the Class Period in California as tax
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preparers.” After the parties filed cross-motions for summary judgment, they attended several mediation
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sessions and eventually reached a settlement. Defendant agreed to pay a maximum settlement amount
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of $35 million, which included a $75,000 payment to the California Labor and Workforce Development
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Agency, settlement administration costs, a $50,000 late claim fund, an award of attorneys’ fees and
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costs, and incentive awards to the named plaintiffs. Class members’ recoveries varied based on the

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number of years worked, but were estimated to average approximately $1,200 per class member. The

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Court granted preliminary approval of the settlement on February 15, 2012, and claim forms and

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notifications were sent to the class. The Court granted final approval of the settlement on October 22,

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2012.

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Simpluris, Inc., is the claims administrator in this class action settlement. On March 1, 2012,

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a class notification and claim form were mailed to Paul Singh Madar at P.O. Box 360507, Milpitas, CA

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95036. Decl. of Michael Bui (“Bui Decl.”) ¶ 4. On April 23, 2012, Simpluris sent a reminder postcard

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to Mr. Madar at that same address. Id. The mailings were not returned undelivered. Id. The deadline

United States District Court
For the Northern District of California

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to submit a claim form was May 21, 2012.

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Mr. Madar does not dispute that he received the claim form and notice. Instead, he claims that

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he mailed the claim form on April 30, 2012 to Simpluris. However, when he called Simpluris on

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January 24, 2013, to inquire about the status of his claim, he was told that Simpluris had never received

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his claim form, and the deadline had passed. Bui Decl. ¶ 5. Mr. Madar called again on February 20,

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2013, and was told the same information by Simpluris. Id. On February 25, 2013, Simpluris received

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Mr. Madar’s claim form, and rejected his claim because it was untimely. Id.

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On November 13, 2012, Simpluris issued the settlement checks to class members who submitted

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timely claim forms. Bui Decl. ¶ 6. Simpluris declares that, “[n]o additional settlement funds remain

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at this time.” Id. ¶ 7.

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DISCUSSION

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Federal policy strongly favors the settlement of class action suits. In re Syncor ERISA Litig., 516

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F.3d 1095, 1101 (9th Cir. 2008) (“there is a strong judicial policy that favors settlements, particularly

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where complex class action litigation is concerned”). Indeed, there is an “overriding public interest”

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in settling class actions. Franklin v. Kaypro Corp., 884 F.2d 1222, 1229 (9th Cir. 1989) (citing Von

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Bronkhorst v. Safeco Corp., 529 F.2d 943, 950 (9th Cir. 1976)).

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In order for a plaintiff class to receive money from a defendant, deadlines must be set for the

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class members to submit their claims. Otherwise, the claim period would never cease and the money
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could never be distributed. Moreover, deadlines are important to defendants because they allow finality

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and ensure the sanctity of a judgment.

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A district court has discretion to allow late claims to a settlement fund. See In re Valdez, 289

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F. App’x 204, 206 (9th Cir. 2008). In this case, the Court does not find that allowance of a late claim

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would be appropriate. Mr. Madar did not contact Simpluris regarding his claim until eight months after

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the deadline, and two months after the settlement checks were issued. Moreover, all of the settlement

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funds have already been disbursed, so no funds remain to pay Mr. Madar’s late claim without disrupting

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the finality of the judgment. Additionally, the Court does not find that Mr. Madar has articulated a

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compelling reason to reconsider the final approval of the class action settlement.

United States District Court
For the Northern District of California

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CONCLUSION
For the foregoing reasons, the Court DENIES claimant Madar’s motion. This resolves Docket
No. 177.

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IT IS SO ORDERED.

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Dated: July 23, 2013
SUSAN ILLSTON
United States District Judge

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