Sabrina Laguna v. Coverall North America, Inc.

This case asks us to decide whether a settlement agreement reached before class certification between Plaintiffs and Defen *921 dants is fair, reasonable, and adequate. We agree with the district court that the settlement merits approval, and we affirm.

I

Coverall North America, Inc. (“Coverall”) is a janitorial franchising company operating in California. Plaintiffs brought a class action suit against Coverall in 2009 alleging that (1) Coverall misclassified its California franchisees as independent contractors, thereby avoiding the protections afforded by California’s labor laws to franchisees; and (2) Coverall breached its franchise agreements, and committed fraudulent and unfair practices, by removing customer accounts from franchisees without cause so that it could resell those accounts to other franchisees. In August 2011, after about two years of significant litigation, the parties agreed on a settlement. The sole objector, Amrit Singh, filed an objection to the proposed settlement on November 14, 2011, and although the objection was not timely, the district court accepted the filing “in the interest of determining the issues on the merits.” After a fairness…

dissenting:

With reluctance, I dissent from the majority decision affirming the district court’s approval of the proposed class action settlement. The record below is bereft of crucial information — information without which the district court could not fully review either the adequacy of the settlement or the reasonableness of the fee award. In particular, the record is silent as to two essential matters: (1) the portion of the class eligible to receive the chief non-monetary benefit of the settlement (ie., the assignment of customer accounts to current franchisees) and (2) the value of the monetary relief to the class (and whether there is a justification for imposing a claims process with a reverter of unclaimed funds back to the defendant). The case should be remanded for fuller development of the record. I also believe this case affords this Court an opportunity to provide additional guidance to the district courts in their assessment of proposed class action settlements.

I am well aware that there are good reasons for a district judge to afford deference to a settlement reached by agreement between the parties. See Lane v. Facebook, Inc., 696 F.3d 811, 819 (9th Cir.2012)…

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

SABRINA LAGUNA, an individual; No. 12-55479 CARLOS ACEVEDO, an individual; TERESA SALAS, an individual; ROES D.C. No. 3–50, on behalf of themselves and in 3:09-cv-02131- a representative capacity for all JM-BGS others similarly situated, Plaintiffs-Appellees,

OPINION

AMRIT SINGH,

Objector-Appellant,

v.

COVERALL NORTH AMERICA, INC., a Delaware corporation; ALLIED CAPITAL CORPORATION, a Maryland corporation; ARES CAPITAL CORPORATION, a Maryland corporation; CNA HOLDING CORPORATION, a Delaware corporation; TED ELLIOTT, an individual; DOES 5–50, inclusive, Defendants-Appellees.

Appeal from the United States District Court for the Southern District of California Jeffrey T. Miller, Senior District Judge, Presiding

Argued and Submitted November 8, 2013—Pasadena, California Filed June 3, 2014

Before: Ronald M. Gould and Jay S. Bybee, Circuit Judges, and Edward M. Chen, District Judge.*

Opinion by Judge Gould; Dissent by Judge Chen

SUMMARY**

Settlement Agreement

The panel affirmed the district court’s approval of a proposed class action…