Lyons et al v. Bank of America, NA et al

Filing 72

ORDER GRANTING 70 MOTION FOR SETTLEMENT APPROVAL. Signed by Judge Claudia Wilken on 11/27/2012. (ndr, COURT STAFF) (Filed on 11/27/2012)

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1 IN THE UNITED STATES DISTRICT COURT 2 FOR THE NORTHERN DISTRICT OF CALIFORNIA 3 4 5 GINA LYONS and JERRY LYONS, on behalf of themselves and all others similarly situated, 6 Plaintiffs, 7 8 9 United States District Court For the Northern District of California 10 No. C 11-1232 CW ORDER GRANTING MOTION FOR SETTLEMENT APPROVAL (Docket No. 70) v. BANK OF AMERICA, NA, and BAC HOME LOANS SERVICING, LP, Defendants. ________________________________/ 11 12 13 14 15 16 17 18 Plaintiffs, Gina and Jerry Lyons, brought this putative class action in March 2011 for breach of contract and various other claims against Defendants, Bank of America, NA and BAC Home Loans Servicing, LP. The parties reached a settlement agreement in September 2012 and now move for preliminary approval. took the matter under submission on the papers and now grants the motion. BACKGROUND 19 20 21 22 23 24 25 26 27 28 The Court On September 18, 2012, the parties met with mediator Gilda R. Turitz and reached an initial settlement agreement. They informed the Court two days later but declined to provide any details about the proposed agreement. Docket No. 65. The parties also failed to notify the Court whether they would be seeking preliminary approval of the settlement under Rule 23. Accordingly, on September 26, 2012, the Court ordered the parties to submit a joint status report addressing that question. Docket No. 66. 1 One week later, the parties submitted a status report stating 2 that they did “not believe Court approval is required in order to 3 dismiss these post-2003, uncertified, putative class member claims 4 without prejudice.” 5 that they were “prepared to file a motion for approval . . . if 6 this Court requires it.” 7 the joint status report, the Court ordered the parties to file a 8 motion for preliminary approval. 9 filed the motion on November 16, 2012. United States District Court For the Northern District of California 10 11 Docket No. 67, at 2. Id. They noted, however, On October 9, 2012, after reviewing Docket No. 68. The parties LEGAL STANDARD Federal Rule of Civil Procedure 23(e) states that the 12 “claims, issues, or defenses of a certified class may be settled, 13 voluntarily dismissed, or compromised only with the court’s 14 approval.” 15 requirement to settlements made before a class has been certified. 16 Diaz v. Trust Territory of Pac. Islands, 876 F.2d 1401, 1408 (9th 17 Cir. 1989).1 18 inquire into a settlement or dismissal differs before and after The Ninth Circuit has extended this court approval It has stressed, however, that a “court’s duty to 19 20 21 22 23 24 25 26 27 28 1 Courts in this district have expressed some uncertainty about whether Rule 23(e) still applies to pre-certification settlement proposals in the wake of the 2003 amendments to the rule but have generally assumed that it does. See, e.g., Mahan v. Trex Co., Inc., 2010 WL 4916417, at *3 (N.D. Cal.) (noting that “even where the procedures of Rule 23(e) do not apply automatically,” court approval of class settlements and dismissals is still required (citations omitted)); Houston v. Cintas Corp., 2009 WL 921627, at *1-*2 (N.D. Cal.) (discussing the 2003 amendments to Rule 23(e) and “[a]ssuming without deciding that Rule 23 [still] applies” to pre-certification settlements); Castro v. Zenith Acquisition Corp., 2007 WL 81905, at *1 (N.D. Cal.) (assuming that Rule 23(e) applies to pre-certification dismissals without discussing the 2003 amendments). 2 1 certification” because, before certification, the risk of 2 prejudice to absent class members is significantly lower. 3 (noting that pre-certification dismissals do not require “the kind 4 of substantive oversight required when reviewing a settlement 5 binding upon the class”). 6 7 8 9 United States District Court For the Northern District of California 10 11 12 Id. To determine whether pre-certification settlement or dismissal is appropriate, the court must inquire into possible prejudice from (1) class members’ possible reliance on the filing of the action if they are likely to know of it either because of publicity or other circumstances, (2) lack of adequate time for class members to file other actions, because of a rapidly approaching statute of limitations, (3) any settlement or concession of class interests made by the class representative or counsel in order to further their own interests. 13 Diaz, 876 F.2d at 1408; see also Houston, 2010 WL 4916417, at *1 14 (applying the Diaz factors). 15 is to “determine whether the proposed settlement and dismissal are 16 tainted by collusion or will prejudice absent putative members.” 17 Mahan, 2010 WL 4916417, at *3. 18 19 The central purpose of this inquiry DISCUSSION The parties have not provided the Court with a copy of their 20 proposed settlement agreement. 21 proposed agreement in broad terms and argue that it satisfies the 22 three Diaz factors. 23 agreement, Plaintiffs would voluntarily dismiss all claims against 24 Defendants with prejudice. 25 but without prejudice to allow putative class members to bring 26 these claims against Defendants in the future. 27 not disclosed any of their other obligations under the settlement; Instead, they describe their Under the parties’ description of their Class claims would also be dismissed, 28 3 The parties have 1 nonetheless, they have demonstrated that approval is appropriate 2 here. 3 Under the first Diaz factor, the Court must assess whether 4 dismissal will prejudice absent class members who knew of and 5 relied on Plaintiffs’ lawsuit. 6 class members are not aware of this lawsuit and have not relied on 7 it because the suit has garnered little media attention. 8 Court agrees that this apparent lack of media coverage makes it 9 unlikely that similarly situated homeowners knew of Plaintiffs’ The parties argue that putative The United States District Court For the Northern District of California 10 lawsuit and relied on it for vindication of their own rights. 11 Mahan, 2010 WL 4916417, at *3 (finding that detrimental reliance 12 by absent class members was unlikely because there was “no 13 evidence that the instant case has garnered significant news 14 coverage”). See 15 Furthermore, even if some putative class members had relied 16 on Plaintiffs’ lawsuit, application of the second and third Diaz 17 factors makes clear that they would not be prejudiced by dismissal 18 here. 19 parties’ settlement jeopardizes absent class members’ opportunity 20 to bring suit against Defendants or otherwise undermines their 21 ability to prosecute class claims. 22 parties intend to dismiss the class claims without prejudice, 23 absent class members would still be able to bring suit against 24 Defendants. 25 because of the class action tolling doctrine. 26 Los Angeles, 754 F.2d 1485, 1488 (9th Cir. 1985); Hanni v. Am. 27 Airlines, Inc., 2010 WL 1576435, at *3 (N.D. Cal.). Under those factors, the Court must determine whether the In this case, because the What’s more, these claims would not be time-barred 28 4 Tosti v. City of 1 Accordingly, the basic terms of the parties’ pre- 2 certification settlement agreement satisfy the Diaz factors and 3 merit approval under Rule 23(e). 4 CONCLUSION 5 For the reasons set forth above, the Court GRANTS the 6 parties’ motion for settlement approval and voluntary dismissal 7 (Docket No. 70). 8 are dismissed with prejudice. 9 without prejudice. United States District Court For the Northern District of California 10 11 Plaintiffs’ individual claims against Defendants All class claims are dismissed The parties are not required to provide notice of the settlement to absent class members. IT IS SO ORDERED. 12 13 14 Dated: 11/27/2012 CLAUDIA WILKEN United States District Judge 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5

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