Kang v. Wells Fargo Bank, N.A.

Filing 134

ORDER DENYING #119 MOTION TO INTERVENE. Signed by Judge Beth Labson Freeman on 9/14/2021. (blflc1S, COURT STAFF) (Filed on 9/14/2021) Modified on 9/14/2021 (blflc1S, COURT STAFF).

Case 5:17-cv-06220-BLF Document 134 Filed 09/14/21 Page 1 of 8

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SAN JOSE DIVISION

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JAMES KANG and MICHAEL MOSES,
individually and on behalf of all others
similarly situated,

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Case No. 17-cv-06220-BLF

Plaintiffs,
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v.

United States District Court
Northern District of California

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WELLS FARGO BANK, N.A.,

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Defendant.
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___________________________________
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PATRICIA BARRERAS and JACQUELINE
F. IBARRA, individually and on behalf of all
others similarly situated,

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Plaintiffs,

Case No. 21-cv-00071-BLF
ORDER DENYING MOTION TO
INTERVENE

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v.
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WELLS FARGO BANK, N.A.,

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Defendant.
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In this consolidated class action, Plaintiffs claim that Defendant Wells Fargo Bank, N.A.

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(“Wells Fargo”), has violated California state wage and hour laws with respect to its California-

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based mortgage sales force, referred to as home mortgage consultants (“HMCs”). The Court

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granted Plaintiff’s motion for preliminary approval of a class action settlement on April 1, 2021.

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See Order Granting Plaintiffs’ Motion for Preliminary Approval, ECF 110.1 Plaintiffs’ motion for

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The Kang and Barreras cases have been consolidated, see Stipulation and Order, ECF 103, and
all relevant documents have been filed in the lower-number Kang case. While some filings have
been duplicated in the Barreras case, this order cites only to the ECF numbers in the Kang case.

Case 5:17-cv-06220-BLF Document 134 Filed 09/14/21 Page 2 of 8

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final approval of the class action settlement and Plaintiffs’ motion for attorneys’ fees are set for

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hearing on September 15, 2021. Only one objection to the proposed settlement has been received,

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from class member Kirk E. Fyson (“Fyson”), who also objects to the motion for attorneys’ fees.

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Plaintiffs’ motions for final approval and for attorneys’ fees, and Fyson’s objections thereto, will

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be addressed in a separate order after the hearing on those matters.
In addition to filing an objection, Fyson has filed a motion to intervene in this action. That

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motion is opposed by Plaintiffs and Defendant. The Court previously submitted the motion to

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intervene without oral argument. See Order Re Pending Motions and Requests, ECF 129.
Fyson’s motion to intervene is DENIED for the reasons discussed below.

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United States District Court
Northern District of California

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I.

BACKGROUND
The present action consolidates two class actions that were filed on behalf of HMCs

employed by Wells Fargo in California.

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Ibarra

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Jacqueline F. Ibarra and Patricia Barreras filed the first action in the Los Angeles County

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Superior Court on March 17, 2017, after which it was removed to the United States District Court

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for the Central District of California. In that action, Ibarra v. Wells Fargo Bank, N.A. (“Ibarra”),

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the plaintiffs alleged several violations of California state labor laws on the part of Wells Fargo.

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See Ibarra v. Wells Fargo Bank, N.A., No. CV 17-4344 PA (ASX), 2018 WL 5276295, at *1

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(C.D. Cal. Sept. 28, 2018). The parties stipulated to the dismissal of all claims except a claim

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under California Labor Code § 226.7 for failure to provide or compensate for rest breaks, and a

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related claim for violation of California’s Unfair Competition Law (“UCL”). See id. The parties

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also stipulated to certification of a class under Federal Rule of Civil Procedure 23(b)(3). See id.

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On cross-motions for summary judgment based on stipulated facts, the district court granted

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summary judgment for Plaintiffs, concluding that Wells Fargo had violated § 226.7. See id.

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Under § 226.7(c), “[i]f an employer fails to provide an employee a meal or rest or recovery

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period in accordance with a state law . . . the employer shall pay the employee one additional hour

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of pay at the employee’s regular rate of compensation for each workday that the meal or rest or

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recovery period is not provided.” Cal. Lab. Code § 226.7(c). The Ibarra plaintiffs and Wells
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Fargo disagreed on the proper interpretation of the phrase “regular rate of compensation” as used

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in § 226.7. The parties stipulated that under the plaintiffs’ interpretation classwide damages

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would total $97,284,817.91, and under Wells Fargo’s interpretation classwide damages would

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total $24,472,114.36. See Ibarra v. Wells Fargo Bank, N.A., 809 F. App’x 361, 365 (9th Cir.

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2020). The district court adopted the plaintiffs’ interpretation and awarded damages in the amount

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of $97,284,817.91. See id.

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On appeal, the United States Court of Appeals for the Ninth Circuit affirmed on liability
but concluded that a determination of damages should be stayed pending the California Supreme

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Court’s anticipated decision with respect to a then-pending appeal in Ferra v. Loews Hollywood

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Hotel, LLC, Case No. S259172. Ferra was expected to resolve uncertainty regarding the proper

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United States District Court
Northern District of California

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interpretation of § 226.7. See Ibarra, 809 F. App’x at 365-66. The Ninth Circuit remanded Ibarra

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to the district court with instructions to award $24,472,114.36 in damages for Wells Fargo’s

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violation of § 226.7, as the plaintiffs were entitled to at least that amount pursuant to the parties’

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stipulation regarding damages. See id. The Ninth Circuit further instructed the district court “to

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stay the remaining $72,812,703.55 in potential stipulated damages pending a decision in Ferra.”

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Id. at 366. The Ninth Circuit explained, “Although some judicial economy might be lost by

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remanding to the district court, the fact that the parties have stipulated to alternative damages

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amounts – leaving only the question of which legal approach to calculating damages is correct –

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significantly narrows the scope of what remains to be resolved in any further proceedings.” Id.

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Kang and Moses

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After Ibarra was filed, James Kang and Michael Moses filed separate class actions in the

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United States District Court for the Northern District of California, asserting § 226.7 claims on

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behalf of HMCs employed by Wells Fargo in California during a later class period than that

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identified in Ibarra, as well as claims for additional violations of California labor laws. The Kang

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and Moses actions were consolidated by this Court, and the consolidated action thereafter has

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proceeded under the Kang case number. See Order Granting Amended Joint Motion, ECF 63.

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The Court certified a class in Kang prior to consolidation with Moses, and thereafter granted a

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stipulated request to include as a certified claim a rest period claim that had been asserted in
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Moses. See id. The Court thereafter stayed the Kang action pending disposition of the appeal in

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Ibarra. See id.

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Transfer of Ibarra to the Northern District of California and Consolidation with Kang

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Following the Ninth Circuit’s remand of the Ibarra action to the Central District of

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California, the parties stipulated to transfer of Ibarra to the Northern District of California.

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Ibarra, now referred to as Barreras, was assigned to this Court. Pursuant to the parties’

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representation that they had reached a global settlement of Ibarra/Barreras and Kang, this Court

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consolidated the actions and heard a motion for preliminary approval of the class action

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settlement. See Order Approving Stipulation to Consolidate Cases, ECF 103; Minute Entry, ECF
104. That motion was granted and, as noted above, a hearing on Plaintiffs’ motion for final

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United States District Court
Northern District of California

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approval of class action settlement, Plaintiffs’ motion for attorneys’ fees, and Fyson’s objection to

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both motions is set for hearing on September 15, 2021.

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Fyson’s Motion to Intervene

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Fyson is an Ibarra class member who received monies in the distribution ordered by the

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Ninth Circuit and effected by the Central District court prior to the transfer of Ibarra/Barreras to

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this Court. He asserts that pursuant to the Ninth Circuit’s mandate in Ibarra, the

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Central District court was not authorized to transfer the case to this district to facilitate a global

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settlement. According to Fyson, the Ninth Circuit’s mandate required the Central District court to

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do nothing but await the California Supreme Court’s decision in the Ferra appeal and then

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complete the distribution of class action damages in accordance with that decision. He also asserts

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that this Court is without authority to approve the global settlement, because doing so would be

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contrary to the Ninth Circuit’s mandate in Ibarra.

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Fyson has raised these and other points in a twenty-three page memorandum in support of

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his objection. See Fyson Obj., ECF 116 & 117. Plaintiffs have filed a nineteen page

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memorandum in response, and with permission of the Court both Fyson and Plaintiffs filed five-

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page supplemental briefs. See Fyson Obj., ECF 116 & 117; Pls.’ Response, ECF 118; Fyson

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Suppl. Br., ECF 130. The Court will take up the objection at the hearing on Plaintiffs’ motion for

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final approval and motion for attorneys’ fees.
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Although he has been given the opportunity to raise his concerns regarding the proposed

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settlement and attorneys’ fees in his objection and the briefing thereon, Fyson nonetheless asserts

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that he is entitled to intervene in this action to protect his interests. He has filed a motion to

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intervene as of right under Federal Rule of Civil Procedure 24(a) or, alternatively, for permissive

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intervention under Federal Rule of Civil Procedure 24(b) or Federal Rule of Civil Procedure

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23(d)(1).

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II.

LEGAL STANDARD
An applicant seeking to intervene as of right under Rule 24(a) must “make four showings

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to qualify under this Rule: (1) it has a significant protectable interest relating to the property or

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transaction that is the subject of the action; (2) the disposition of the action may, as a practical

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United States District Court
Northern District of California

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matter, impair or impede the applicant’s ability to protect its interest; (3) the application is timely;

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and (4) the existing parties may not adequately represent the applicant’s interest.” Perry v.

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Schwarzenegger, 630 F.3d 898, 903 (9th Cir. 2011) (quotation marks and citation omitted).
Even where intervention as of right is unavailable, courts may still permit intervention

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when the proposed intervenor “has a claim or defense that shares with the main action a common

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question of law or fact.” Fed. R. Civ. P. 24(b)(1)(B).
“A motion to intervene must be served on the parties,” it “must state the grounds for

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intervention,” and it must “be accompanied by a pleading that sets out the claim or defense for

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which intervention is sought.” Fed. R. Civ. P. 24(c).
Rule 23(d)(1) provides in relevant part that in a Rule 23 class action, a court may require

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“giving appropriate notice to some or all class members” regarding “the members’ opportunity to

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signify whether they consider the representation fair and adequate, to intervene and present claims

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or defenses, or to otherwise come into the action.” Fed. R. Civ. P. 23(d)(1).

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III.

DISCUSSION
Applying these standards, the Court has no difficulty concluding that Fyson has failed to

establish entitlement to intervene as of right, and that permissive intervention is not warranted.

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With respect to intervention as of right, Fyson does have a significant protectable interest

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in the subject of the action (factor 1), as he is a class member who has received funds pursuant to
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the distribution in Ibarra and (it appears) will be entitled to additional funds if the proposed global

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settlement is approved. Disposition of the matter may impair or impede Fyson’s ability to protect

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his interests (factor 2), as he objects to both the motion for final approval of the proposed

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settlement and the motion for attorneys’ fees and contends that he would be entitled to a greater

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distribution if the Court were to deny those motions.

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However, Fyson’s motion is untimely (factor 3). “A timely motion is required for the
granting of intervention, whether as a matter of right or permissively.” Allen v. Bedolla, 787 F.3d

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1218, 1222 (9th Cir. 2015). Kang was filed in 2017, and Fyson received notice that he is a Kang

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class member in April 2019. See Fyson Decl. ¶ 8, ECF 117-1. “While the length of time that has

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passed since a suit was filed is not, in and of itself, determinative of timeliness, [a] party seeking

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United States District Court
Northern District of California

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to intervene must act as soon as he knows or has reason to know that his interests might be

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adversely affected by the outcome of the litigation.” California Dep’t of Toxic Substances Control

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v. Com. Realty Projects, Inc., 309 F.3d 1113, 1120 (9th Cir. 2002) (quotation marks and citation

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omitted). Once Fyson was notified of his status as a class member in Kang, he was on notice that

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his rights might be impacted by the case.

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The parties reached a global settlement and stipulated to transfer of the Ibarra/Barreras

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action to the Northern District of California in December 2020. Ibarra/Barreras was consolidated

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with Kang March 2021 in order to facilitate the global settlement, and Plaintiffs’ motion for

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preliminary approval was granted on April 1, 2021. Fyson received notice of the settlement in the

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consolidated action in early May, 2021. Fyson nonetheless waited until July 2, 2021 to file his

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motion to intervene.

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The Court finds unpersuasive Fyson’s explanation that he did not realize intervention

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would be necessary until he reviewed Plaintiffs’ response to his objections. Given Fyson’s

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demonstrated knowledge regarding Ibarra and the Ninth Circuit’s decision on that appeal, as well

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as the sophistication of the arguments raised in these proceedings, it appears that Fyson knew all

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facts necessary to put him on notice that the present action could impact his rights months ago.

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More likely, Fyson has monitored the case for years. Under similar circumstances in Allen, the

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Ninth Circuit opined, “We are not persuaded that Objectors’ motion was timely, because the
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motion was filed after four years of ongoing litigation, on the eve of settlement, and threatened to

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prejudice settling parties by potentially derailing settlement talks, and especially where Objectors’

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concerns could largely be addressed through the normal objection process.” Allen, 787 F.3d at

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1218.

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Even if Fyson were able to demonstrate that his motion was timely filed, he has not

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adequately explained why his interests cannot be represented absent intervention (factor 4). As

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the Ninth Circuit noted in Allen, objections to a settlement can be addressed through the normal

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objection process. See Allen, 787 F.3d at 1218. Indeed, the issues that give rise to Fyson’s motion

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to intervene – his contention that approving the proposed settlement would violate the Ninth
Circuit’s mandate in Ibarra, and related issues – are thoroughly addressed in the briefing on his

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United States District Court
Northern District of California

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objection. The Court has indicated that it will address those issues in the context of Fyson’s

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objection when it rules on the pending motions for final approval and attorneys’ fees. Fyson

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contends that he needs additional discovery to adequately protect his interests in this case. But he

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has not identified the proposed discovery with specificity, nor explained why discovery is

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necessary to evaluation of Plaintiffs’ motions for final approval and attorneys’ fees. If the Court

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finds that it needs additional information, which is unlikely given the robust briefing provided by

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the parties and Fyson, the Court can request that such information be provided.

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In his supplemental briefing, Fyson contends that intervention is required to permit him to

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raise and explore the impact of a supposedly secret side deal, the Hallman settlement. Fyson does

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not adequately explain why he could not have raised the Hallman issue earlier, nor does he explain

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why the Hallman issue cannot be addressed through “the normal objection process.” Allen, 787

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F.3d at 1218.

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The Court notes that Fyson’s motion to intervene was not accompanied by a pleading that

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sets out the claim or defense for which intervention is sought, as required under Rule 24(c). The

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Court does not deny the motion to intervene on this basis.

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Because Fyson’s motion to intervene is untimely, and because his concerns adequately are

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raised in his objection and the briefing thereon, his motion to intervene pursuant to Rule 24(a) is

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DENIED. For the same reasons, his motion for permissive intervention under Rule 24(b) also is
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DENIED. Fyson’s motion references Rule 23(d)(1), which grants the Court authority to require

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that some or all class members be given an opportunity to indicate whether they consider the class

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representation to be fair and adequate, or to intervene. Fed. R. Civ. P. 23(d)(1). Beyond citing

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this provision, Fyson offers no argument on its applicability here. To the extent it has discretion to

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allow Fyson to intervene under Rule 23(d)(1), the Court declines to exercise such discretion in this

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case. Accordingly, Fyson’s motion for permissive intervention under Rule 23(d)(1) is DENIED.
The Court emphasizes that in denying Fyson’s motion to intervene, the Court has not made

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any determinations as to the merits of the concerns Fyson raises. Those concerns, which are

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explained in detail in Fyson’s objection and the briefing thereon, are taken seriously by the Court

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and will be addressed when the Court rules on Plaintiffs’ motions for final approval and attorneys’

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United States District Court
Northern District of California

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fees.

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IV.

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ORDER
Fyson’s motion to intervene is DENIED.

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Dated: September 14, 2021

______________________________________
BETH LABSON FREEMAN
United States District Judge

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