1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 SAN JOSE DIVISION 7 PETER ALBERS, 8 Case No. 5:19-cv-05896-EJD Plaintiff, 9 ORDER GRANTING JOINT MOTION v. FOR VOLUNTARY DISMISSAL 10 YARBROUGH WORLD SOLUTIONS, Re: Dkt. No. 51 11 LLC, et al., 12 Defendants.
13 Plaintiff Peter Albers filed this action alleging individual misclassification claims against 14 Defendant Yarbrough World Solutions, LLC (“YWS”), wrongful termination claims against 15 Defendants YWS and Dalley Yarbrough, and putative class claims for employment 16 misclassification against YWS. In turn, YWS filed a counterclaim against Plaintiff for breach of 17 contract. On May 11, 2021, the parties informed the Court that they had reached a settlement and 18 requested an order of dismissal with prejudice as to Plaintiff’s individual claims and YWS’s 19 counterclaim. See Stipulation and Joint Motion for Court Order of Voluntary Dismissal, Dkt. No. 20 51. As to Plaintiff’s putative class claims, the parties have requested an order of dismissal without 21 prejudice. Id. The Court will, for the reasons set forth below, grant the parties’ joint motion for 22 voluntary dismissal. 23 I. BACKGROUND 24 Plaintiff, individually, and on behalf of all similarly situated individuals, brought this 25 putative class action alleging that YWS engaged in unfair business practices in violation of 26 California’s Business and Professions Code § 17200. Dkt No. 36. Plaintiff alleges that YWS 27 forced Plaintiff and similarly situated construction workers to execute a purported list and refer 1 agreement with YWS, whereby workers performed work for YWS as construction workers in 2 California and were classified by YWS as independent contractors. Id. Plaintiff further alleges 3 that although Plaintiff and other similarly situated YWS workers were classified by YWS as 4 independent contractors, Plaintiff and the other YWS workers were in fact employees of YWS. 5 Id. Plaintiff also alleges that YWS classified Plaintiff and similarly situated workers as 6 independent contractors because by doing so, YWS was able to lower its costs by shifting its costs 7 of doing business onto the workers classified as independent contractors. Id. 8 As discussed above, on May 11, 2021, the parties informed the Court that they had reached 9 a settlement and submitted a stipulated request for an order of dismissal. Dkt. No. 51. Pursuant to 10 the settlement, the parties moved jointly to dismiss Plaintiff’s individual claims and YWS’s 11 counterclaim with prejudice pursuant to Federal Rule of Civil Procedure 41(a)(2) and the putative 12 class action claims without prejudice pursuant to Federal Rule of Civil Procedure 23(e). 13 II. LEGAL STANDARD 14 Federal Rule of Civil Procedure Rule 23(e) requires the Court to review and approve a 15 proposed voluntary dismissal, settlement or other compromise of a certified class’s claims. The 16 Ninth Circuit has held that Rule 23(e) also applies before certification, but in a much lighter form 17 that does not entail “the kind of substantive oversight required when reviewing a settlement 18 binding upon the class.” Diaz v. Trust Territory of Pac. Islands, 876 F.2d 1401, 1408 (9th Cir. 19 1989). This holding pre-dates substantial amendments to Rule 23 in 2003, and courts in this 20 district have noted “some uncertainty” about the continued application of Rule 23(e) to 21 precertification settlement proposals in the wake of the 2003 amendments. See, e.g., Lyons v. 22 Bank of America, NA, No. C 11–1232 CW, 2012 W L 5940846, at * 1 n.1 (N.D. Cal. Nov. 27, 23 2012). But our decisions have “generally assumed that it does” apply, id., and this Court will 24 follow Diaz to evaluate the proposed settlement and dismissal here. The Court finds that this 25 approach is consistent with Rule 23(e) as it exists today. It also strikes the right balance between 26 the full-bore fairness review for settlement of certified class claims, and doing nothing at all to 27 ensure that putative class members are protected from collusive deals and not sacrificed for 1 convenience when named representatives decide to settle their claims individually. 2 Accordingly, the “district court must ensure that the representative plaintiff fulfills his 3 fiduciary duty toward the absent class members” and “inquire into the terms and circumstances of 4 any dismissal or compromise to ensure that it is not collusive or prejudicial.” Diaz, 876 F.2d at 5 1408. Although the Court “does not need to perform the kind of substantive oversight required 6 when reviewing a settlement binding upon the class,” it must determine whether class members 7 would be prejudiced by:
8 (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 9 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 10 in order to further their own interests. 11 Id. Regardless, “[i]n no pre-certification dismissal would the court reject the dismissal and require 12 anything more than notice to the class and an opportunity to intervene.” Id. 13 III. DISCUSSION 14 Applying the three Diaz factors here, the Court concludes that dismissal of Plaintiff’s class 15 claims without prejudice will not harm any putative class members. First, there is no evidence 16 that any putative class members are relying on this action. Coverage of the case in the media has 17 been limited to a few mentions on legal news and court docket aggregators such as 18 www.law360.com and www.docketbird.com, and Plaintiff has not identified a single absent class 19 member, nor has any class information been disclosed by YWS to Plaintiff or his counsel. See 20 Declaration of Catherine Coughlin (“Coughlin Decl.”) ¶ 4; see also Tombline v. Wells Fargo 21 Bank, N.A., No. 13-cv-04567 JD, 2014 WL 5140048, at *2 (N.D. Cal. Oct. 10, 2014) (noting that 22 there is unlikely to be reliance when “no one purporting to be a putative class member [has] 23 contacted plaintiffs’ counsel about this case”). 24 Second, the parties represent that no putative class member will face a short deadline on 25 pursuing the claims to be dismissed. Specifically, the parties state that YWS is still an operative 26 entity. Coughlin Decl. ¶ 5. Moreover, to the extent that any current or former YWS worker 27 wishes to file claims against YWS, they would not be time-barred by virtue of the filing and 1 dismissal without prejudice of the class claims. 2 Finally, the settlement between Plaintiff and the two Defendants only resolves □□□□□□□□□□□ 3 individual claims. Because the parties are only requesting dismissal of the class claims without 4 || prejudice, leaving putative class members free to pursue a new class action, no class interests are 5 being conceded. The Court therefore deems the Diaz factors satisfied here. Further, notice to 6 || putative class members is not required as there is no risk of prejudice. See Diaz, 876 F.2d at 1408 7 (“Notice to the class of pre-certification dismissal is not, however, required in all circumstances.”). 8 || Iv. CONCLUSION 9 Accordingly, the parties’ joint motion for voluntary dismissal is GRANTED; 10 1. The putative class claims alleged on behalf of the putative class against YWS as 11 Counts I and II in Plaintiff's operative second amended complaint (Dkt. No. 36) are 12 DISMISSED without prejudice; 13 li.
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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 SAN JOSE DIVISION 7 PETER ALBERS, 8 Case No. 5:19-cv-05896-EJD Plaintiff, 9 ORDER GRANTING JOINT MOTION v. FOR VOLUNTARY DISMISSAL 10 YARBROUGH WORLD SOLUTIONS, Re: Dkt. No. 51 11 LLC, et al., 12 Defendants.
13 Plaintiff Peter Albers filed this action alleging individual misclassification claims against 14 Defendant Yarbrough World Solutions, LLC (“YWS”), wrongful termination claims against 15 Defendants YWS and Dalley Yarbrough, and putative class claims for employment 16 misclassification against YWS. In turn, YWS filed a counterclaim against Plaintiff for breach of 17 contract. On May 11, 2021, the parties informed the Court that they had reached a settlement and 18 requested an order of dismissal with prejudice as to Plaintiff’s individual claims and YWS’s 19 counterclaim. See Stipulation and Joint Motion for Court Order of Voluntary Dismissal, Dkt. No. 20 51. As to Plaintiff’s putative class claims, the parties have requested an order of dismissal without 21 prejudice. Id. The Court will, for the reasons set forth below, grant the parties’ joint motion for 22 voluntary dismissal. 23 I. BACKGROUND 24 Plaintiff, individually, and on behalf of all similarly situated individuals, brought this 25 putative class action alleging that YWS engaged in unfair business practices in violation of 26 California’s Business and Professions Code § 17200. Dkt No. 36. Plaintiff alleges that YWS 27 forced Plaintiff and similarly situated construction workers to execute a purported list and refer 1 agreement with YWS, whereby workers performed work for YWS as construction workers in 2 California and were classified by YWS as independent contractors. Id. Plaintiff further alleges 3 that although Plaintiff and other similarly situated YWS workers were classified by YWS as 4 independent contractors, Plaintiff and the other YWS workers were in fact employees of YWS. 5 Id. Plaintiff also alleges that YWS classified Plaintiff and similarly situated workers as 6 independent contractors because by doing so, YWS was able to lower its costs by shifting its costs 7 of doing business onto the workers classified as independent contractors. Id. 8 As discussed above, on May 11, 2021, the parties informed the Court that they had reached 9 a settlement and submitted a stipulated request for an order of dismissal. Dkt. No. 51. Pursuant to 10 the settlement, the parties moved jointly to dismiss Plaintiff’s individual claims and YWS’s 11 counterclaim with prejudice pursuant to Federal Rule of Civil Procedure 41(a)(2) and the putative 12 class action claims without prejudice pursuant to Federal Rule of Civil Procedure 23(e). 13 II. LEGAL STANDARD 14 Federal Rule of Civil Procedure Rule 23(e) requires the Court to review and approve a 15 proposed voluntary dismissal, settlement or other compromise of a certified class’s claims. The 16 Ninth Circuit has held that Rule 23(e) also applies before certification, but in a much lighter form 17 that does not entail “the kind of substantive oversight required when reviewing a settlement 18 binding upon the class.” Diaz v. Trust Territory of Pac. Islands, 876 F.2d 1401, 1408 (9th Cir. 19 1989). This holding pre-dates substantial amendments to Rule 23 in 2003, and courts in this 20 district have noted “some uncertainty” about the continued application of Rule 23(e) to 21 precertification settlement proposals in the wake of the 2003 amendments. See, e.g., Lyons v. 22 Bank of America, NA, No. C 11–1232 CW, 2012 W L 5940846, at * 1 n.1 (N.D. Cal. Nov. 27, 23 2012). But our decisions have “generally assumed that it does” apply, id., and this Court will 24 follow Diaz to evaluate the proposed settlement and dismissal here. The Court finds that this 25 approach is consistent with Rule 23(e) as it exists today. It also strikes the right balance between 26 the full-bore fairness review for settlement of certified class claims, and doing nothing at all to 27 ensure that putative class members are protected from collusive deals and not sacrificed for 1 convenience when named representatives decide to settle their claims individually. 2 Accordingly, the “district court must ensure that the representative plaintiff fulfills his 3 fiduciary duty toward the absent class members” and “inquire into the terms and circumstances of 4 any dismissal or compromise to ensure that it is not collusive or prejudicial.” Diaz, 876 F.2d at 5 1408. Although the Court “does not need to perform the kind of substantive oversight required 6 when reviewing a settlement binding upon the class,” it must determine whether class members 7 would be prejudiced by:
8 (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 9 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 10 in order to further their own interests. 11 Id. Regardless, “[i]n no pre-certification dismissal would the court reject the dismissal and require 12 anything more than notice to the class and an opportunity to intervene.” Id. 13 III. DISCUSSION 14 Applying the three Diaz factors here, the Court concludes that dismissal of Plaintiff’s class 15 claims without prejudice will not harm any putative class members. First, there is no evidence 16 that any putative class members are relying on this action. Coverage of the case in the media has 17 been limited to a few mentions on legal news and court docket aggregators such as 18 www.law360.com and www.docketbird.com, and Plaintiff has not identified a single absent class 19 member, nor has any class information been disclosed by YWS to Plaintiff or his counsel. See 20 Declaration of Catherine Coughlin (“Coughlin Decl.”) ¶ 4; see also Tombline v. Wells Fargo 21 Bank, N.A., No. 13-cv-04567 JD, 2014 WL 5140048, at *2 (N.D. Cal. Oct. 10, 2014) (noting that 22 there is unlikely to be reliance when “no one purporting to be a putative class member [has] 23 contacted plaintiffs’ counsel about this case”). 24 Second, the parties represent that no putative class member will face a short deadline on 25 pursuing the claims to be dismissed. Specifically, the parties state that YWS is still an operative 26 entity. Coughlin Decl. ¶ 5. Moreover, to the extent that any current or former YWS worker 27 wishes to file claims against YWS, they would not be time-barred by virtue of the filing and 1 dismissal without prejudice of the class claims. 2 Finally, the settlement between Plaintiff and the two Defendants only resolves □□□□□□□□□□□ 3 individual claims. Because the parties are only requesting dismissal of the class claims without 4 || prejudice, leaving putative class members free to pursue a new class action, no class interests are 5 being conceded. The Court therefore deems the Diaz factors satisfied here. Further, notice to 6 || putative class members is not required as there is no risk of prejudice. See Diaz, 876 F.2d at 1408 7 (“Notice to the class of pre-certification dismissal is not, however, required in all circumstances.”). 8 || Iv. CONCLUSION 9 Accordingly, the parties’ joint motion for voluntary dismissal is GRANTED; 10 1. The putative class claims alleged on behalf of the putative class against YWS as 11 Counts I and II in Plaintiff's operative second amended complaint (Dkt. No. 36) are 12 DISMISSED without prejudice; 13 li. The individual claims alleged by Plaintiff against Defendant Yarbrough and YWS 14 as Counts III and IV in Plaintiffs operative second amended complaint (Dkt. No. 3 15 36) are DISMISSED with prejudice; and a 16 lil. The individual counterclaim alleged by YWS against Plaintiff (Dkt. No. 44) is DISMISSED with prejudice. 18 IT IS SO ORDERED. 19 Dated: May 13, 2021 20 EDWARD J. DAVILA 21 United States District Judge 22 23 24 25 26 27 28 || Case No.: 5:19-cv-05896-EJD ORDER GRANTING JOINT MOTION FOR VOLUNTARY DISMISSAL