Flores v. Medifit Corporate Services, Inc.

Filing 69

ORDER DENYING SHEILA MASON'S 55 MOTION TO OPT OUT by Hon. William H. Orrick. (jmdS, COURT STAFF) (Filed on 2/10/2017)

Download PDF
1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 FRANCISCO FLORES, Case No. 15-cv-03423-WHO Plaintiff, 8 ORDER DENYING SHEILA MASON’S MOTION TO OPT OUT v. 9 10 MEDIFIT CORPORATE SERVICES, INC., Dkt. No. 55 Defendant. United States District Court Northern District of California 11 12 INTRODUCTION 13 When the Court preliminarily approved the MediFit Corporate Services, Inc. “Wage and 14 Hour” Class Action Settlement Agreement (“Settlement Agreement”), it ordered Class Members 15 to request exclusion from the settlement by September 19, 2016 (the “Opt-Out Deadline”). Dkt. 16 No. 46. The Court held a final approval hearing on the Settlement Agreement on November 9, 17 2016 and concluded that the Settlement was fair and reasonable to the class. The Settlement was 18 approved and final judgment was entered on November 15, 2016. Plaintiff class member Sheila 19 Mason now requests permission to belatedly opt-out of the Settlement. Dkt. No. 55. Because 20 Mason has not demonstrated excusable neglect to justify her failure to timely opt out, and because 21 Medifit is entitled to rely on the finality of the settlement, her motion is DENIED. 22 23 BACKGROUND Mason was employed by Medifit between July 1, 2013 and March 11, 2016. Motion to 24 Opt Out (“Mot.”) at 2 (Dkt. No. 62). On May 11, 2016, Mason retained Michael Adams to 25 prosecute her claims against Medifit for discriminatory discharge as well as labor code violations. 26 Id. In early August, 2016, Mason received a Notice of Proposed Class Action Settlement and 27 Settlement Approval Hearing, which estimated her individual settlement share at $1,155.41, and 28 explained that the Opt-Out Deadline was September 19, 2016. Id. Mason consulted with her 1 attorney and decided to opt out of the class. Id. On approximately August 13, 2016, Mason 2 signed an opt-out request that Adams had prepared and returned it to Adams’ office by regular 3 mail. Id. Adams’ secretary, Hosetta Zertuche received the signed opt out request on August 17, 4 2016, but mislaid it under other papers and failed to bring it to Adams’ attention. Id. Adams and 5 Zertuche did not think about the opt out again until December 19, 2016, when they received notice 6 from Mason that she had received a settlement check. Id. Mason contends that her failure to 7 timely opt out was the result of excusable neglect on the part of her attorney and his secretary. Id. 8 at 3. She requests permission to belatedly opt out and for relief from the judgment. Id. 9 10 LEGAL STANDARD “Rule 60(b)(1) of Civil Procedure provides that a court may relieve a party or a party’s United States District Court Northern District of California 11 legal representative from a final judgment on the basis of mistake inadvertence, surprise, or 12 excusable neglect.” Bateman v. U.S. Postal Serv., 231 F.3d 1220, 1223 (9th Cir. 2000). In the 13 context of belated settlement opt outs, courts consider: 14 17 the degree of compliance with the best practicable notice procedures; when notice was actually received and if not timely received, why not; what caused the delay, and whose responsibility was it; how quickly the belated opt out request was made once notice was received; how many class members want to opt out; and whether allowing a belated opt out would affect either the settlement or finality of the judgment. 18 Silber v. Mabon, 18 F.3d 1449, 1455 (9th Cir. 1994). Courts may also consider the likely 19 prejudice to the opposing party and whether the movant acted in good faith. Pioneer Investment 20 Servs. Co. v. Brunswick Assocs. Ltd. Assocs. Ltd. P’ship, 507 U.S. 380, 395 (1993). 15 16 21 DISCUSSION 22 Mason has not shown that excusable neglect allows her to opt out of the class settlement 23 beyond the Opt-Out Deadline and after final judgment has been entered in this case. There is no 24 dispute that Mason received actual, timely notice of the Settlement. Mot. at 1. The Settlement 25 notice explains that “to opt out, you must submit a signed, written request by first-class U.S. mail 26 to the Settlement Administrator at the address below, postmarked no later than September 19, 27 2016.” Dkt. No. 46. It explains clearly that the “request to opt out must contain your full name 28 and the last four digits of your Social Security Number, and must state in substance the following: 2 ‘I have read the Class Notice and I wish to opt-out of the class action and do not wish to 2 participate in the settlement of the case Flores, et al. v. MediFit Corporate Services, Inc.’ ” Id. 3 Mason was not required to obtain counsel to opt-out of the Settlement and could have submitted 4 an opt-out request directly to the Settlement Administrator. See In re Volkswagen “Clean Diesel” 5 Mktg., Sales Practices, & Prods. Liab. Litig., No. 15-cv-2672-CRB, 2016 U.S. Dist. LEXIS 6 149800, *721 (N.D. Cal. Oct. 27, 2016) (“[T]he Settlement does not require Class Members to 7 retain counsel to opt out; rather, Friedman could have mailed her request for exclusion herself. 8 Accordingly, her failure to timely request exclusion does not constitute good cause or excusable 9 neglect.”). By sending her opt-out request to her attorney instead of the Settlement Administrator 10 Mason took the risk that her counsel might misplace the opt-out request or fail to forward it to the 11 United States District Court Northern District of California 1 correct entity. 12 Further, Mason brings this motion after final judgment has been entered and settlement is 13 complete. There is no reasonable dispute that the opt-out request is prejudicial to Medifit, which 14 is entitled to rely on the finality of its settlement judgment. In re Charles Schwab Corp. Securities 15 Litig., No. 08-cv-1510-WHA, 2010 WL 2178937, *1 (N.D. Cal. May 27, 2010) (opt out request 16 made “on the eve of preliminary approval of a 200 million dollar class-wide settlement” was likely 17 to cause prejudice because defendants negotiated settlement with stable class in mind); Bowman v. 18 UBS Financial Servs., Inc., No. 04-cv-3525-MMC, 2007 WL 1456037, *3 (N.D. Cal. May 17, 19 2007) (“[D]efendants nonetheless would be prejudiced were the Court to permit Krenzin and Zurn 20 to opt out at this late date, because UBS will have to expend resources defending against claims 21 that it reasonably understood were foreclosed by the Court’s order of November 22, 2006 granting 22 final approval to the settlement.”). 23 While there is no evidence that Mason’s request was not brought in good faith, she has 24 failed to show excusable neglect. Mason made the choice to rely on her attorney to forward her 25 opt-out request instead of sending it herself. If she believes her attorney erred by failing to timely 26 forward the request, her remedy is a malpractice suit against her counsel, not to belatedly opt out 27 of the settlement. Allowing Mason to opt-out at this late date, after final settlement, would 28 prejudice Medifit, which would be required to defend against claims that it reasonably understood 3 1 were foreclosed by the final approval of settlement and judgment in this case. CONCLUSION 2 3 Mason’s request to belatedly opt-out of the Settlement is DENIED. 4 5 6 7 8 IT IS SO ORDERED. Dated: February 10, 2016 ______________________________________ WILLIAM H. ORRICK United States District Judge 9 10 United States District Court Northern District of California 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4

Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.

Why Is My Information Online?