Flores v. Medifit Corporate Services, Inc.
Filing
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ORDER DENYING SHEILA MASON'S 55 MOTION TO OPT OUT by Hon. William H. Orrick. (jmdS, COURT STAFF) (Filed on 2/10/2017)
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UNITED STATES DISTRICT COURT
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NORTHERN DISTRICT OF CALIFORNIA
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FRANCISCO FLORES,
Case No. 15-cv-03423-WHO
Plaintiff,
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ORDER DENYING SHEILA MASON’S
MOTION TO OPT OUT
v.
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MEDIFIT CORPORATE SERVICES, INC.,
Dkt. No. 55
Defendant.
United States District Court
Northern District of California
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INTRODUCTION
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When the Court preliminarily approved the MediFit Corporate Services, Inc. “Wage and
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Hour” Class Action Settlement Agreement (“Settlement Agreement”), it ordered Class Members
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to request exclusion from the settlement by September 19, 2016 (the “Opt-Out Deadline”). Dkt.
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No. 46. The Court held a final approval hearing on the Settlement Agreement on November 9,
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2016 and concluded that the Settlement was fair and reasonable to the class. The Settlement was
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approved and final judgment was entered on November 15, 2016. Plaintiff class member Sheila
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Mason now requests permission to belatedly opt-out of the Settlement. Dkt. No. 55. Because
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Mason has not demonstrated excusable neglect to justify her failure to timely opt out, and because
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Medifit is entitled to rely on the finality of the settlement, her motion is DENIED.
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BACKGROUND
Mason was employed by Medifit between July 1, 2013 and March 11, 2016. Motion to
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Opt Out (“Mot.”) at 2 (Dkt. No. 62). On May 11, 2016, Mason retained Michael Adams to
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prosecute her claims against Medifit for discriminatory discharge as well as labor code violations.
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Id. In early August, 2016, Mason received a Notice of Proposed Class Action Settlement and
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Settlement Approval Hearing, which estimated her individual settlement share at $1,155.41, and
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explained that the Opt-Out Deadline was September 19, 2016. Id. Mason consulted with her
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attorney and decided to opt out of the class. Id. On approximately August 13, 2016, Mason
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signed an opt-out request that Adams had prepared and returned it to Adams’ office by regular
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mail. Id. Adams’ secretary, Hosetta Zertuche received the signed opt out request on August 17,
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2016, but mislaid it under other papers and failed to bring it to Adams’ attention. Id. Adams and
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Zertuche did not think about the opt out again until December 19, 2016, when they received notice
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from Mason that she had received a settlement check. Id. Mason contends that her failure to
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timely opt out was the result of excusable neglect on the part of her attorney and his secretary. Id.
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at 3. She requests permission to belatedly opt out and for relief from the judgment. Id.
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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
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legal representative from a final judgment on the basis of mistake inadvertence, surprise, or
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excusable neglect.” Bateman v. U.S. Postal Serv., 231 F.3d 1220, 1223 (9th Cir. 2000). In the
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context of belated settlement opt outs, courts consider:
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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.
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Silber v. Mabon, 18 F.3d 1449, 1455 (9th Cir. 1994). Courts may also consider the likely
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prejudice to the opposing party and whether the movant acted in good faith. Pioneer Investment
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Servs. Co. v. Brunswick Assocs. Ltd. Assocs. Ltd. P’ship, 507 U.S. 380, 395 (1993).
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DISCUSSION
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Mason has not shown that excusable neglect allows her to opt out of the class settlement
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beyond the Opt-Out Deadline and after final judgment has been entered in this case. There is no
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dispute that Mason received actual, timely notice of the Settlement. Mot. at 1. The Settlement
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notice explains that “to opt out, you must submit a signed, written request by first-class U.S. mail
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to the Settlement Administrator at the address below, postmarked no later than September 19,
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2016.” Dkt. No. 46. It explains clearly that the “request to opt out must contain your full name
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and the last four digits of your Social Security Number, and must state in substance the following:
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‘I have read the Class Notice and I wish to opt-out of the class action and do not wish to
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participate in the settlement of the case Flores, et al. v. MediFit Corporate Services, Inc.’ ” Id.
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Mason was not required to obtain counsel to opt-out of the Settlement and could have submitted
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an opt-out request directly to the Settlement Administrator. See In re Volkswagen “Clean Diesel”
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Mktg., Sales Practices, & Prods. Liab. Litig., No. 15-cv-2672-CRB, 2016 U.S. Dist. LEXIS
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149800, *721 (N.D. Cal. Oct. 27, 2016) (“[T]he Settlement does not require Class Members to
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retain counsel to opt out; rather, Friedman could have mailed her request for exclusion herself.
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Accordingly, her failure to timely request exclusion does not constitute good cause or excusable
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neglect.”). By sending her opt-out request to her attorney instead of the Settlement Administrator
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Mason took the risk that her counsel might misplace the opt-out request or fail to forward it to the
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United States District Court
Northern District of California
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correct entity.
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Further, Mason brings this motion after final judgment has been entered and settlement is
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complete. There is no reasonable dispute that the opt-out request is prejudicial to Medifit, which
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is entitled to rely on the finality of its settlement judgment. In re Charles Schwab Corp. Securities
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Litig., No. 08-cv-1510-WHA, 2010 WL 2178937, *1 (N.D. Cal. May 27, 2010) (opt out request
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made “on the eve of preliminary approval of a 200 million dollar class-wide settlement” was likely
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to cause prejudice because defendants negotiated settlement with stable class in mind); Bowman v.
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UBS Financial Servs., Inc., No. 04-cv-3525-MMC, 2007 WL 1456037, *3 (N.D. Cal. May 17,
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2007) (“[D]efendants nonetheless would be prejudiced were the Court to permit Krenzin and Zurn
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to opt out at this late date, because UBS will have to expend resources defending against claims
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that it reasonably understood were foreclosed by the Court’s order of November 22, 2006 granting
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final approval to the settlement.”).
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While there is no evidence that Mason’s request was not brought in good faith, she has
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failed to show excusable neglect. Mason made the choice to rely on her attorney to forward her
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opt-out request instead of sending it herself. If she believes her attorney erred by failing to timely
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forward the request, her remedy is a malpractice suit against her counsel, not to belatedly opt out
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of the settlement. Allowing Mason to opt-out at this late date, after final settlement, would
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prejudice Medifit, which would be required to defend against claims that it reasonably understood
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were foreclosed by the final approval of settlement and judgment in this case.
CONCLUSION
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Mason’s request to belatedly opt-out of the Settlement is DENIED.
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IT IS SO ORDERED.
Dated: February 10, 2016
______________________________________
WILLIAM H. ORRICK
United States District Judge
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United States District Court
Northern District of California
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