Ashok Babu v. Gregory Ahern

• Court: Court of Appeals for the Ninth Circuit
• Decided: October 6, 2023
• Docket: 22-15275
• Status: Unpublished

Opinion

FILED NOT FOR PUBLICATION OCT 6 2023 UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS

FOR THE NINTH CIRCUIT

ASHOK BABU; et al., No. 22-15275

Plaintiffs-Appellees, D.C. No. 5:18-cv-07677-NC

v. MEMORANDUM*

KEENAN G. WILKINS, AKA Nerrah Brown,

Objector-Appellant,

v.

GREGORY J. AHERN, Sheriff; et al.,

Defendants-Appellees,

and

ANDRE GRIFFIN; et al.,

Defendants.

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ASHOK BABU; et al., No. 22-15355

TYLER ABBOTT; et al.,

Objectors-Appellants,

ASHOK BABU; et al., No. 22-15363

AMERICAN FRIENDS SERVICE COMMITTEE; et al.,

2 v.

ASHOK BABU; et al., No. 22-15579

REGINALD ROBERTSON,

3 Appeal from the United States District Court for the Northern District of California Nathanael M. Cousins, Magistrate Judge, Presiding

Argued and Submitted September 15, 2023 San Francisco, California

Before: BOGGS,** S.R. THOMAS, and FORREST, Circuit Judges. Partial Dissent by Judge FORREST.

In these consolidated appeals, objectors appeal the district court’s approval

of a settlement agreement in a federal class action suit seeking injunctive relief on

behalf of individuals incarcerated in Alameda County’s Santa Rita Jail and a

subclass of incarcerated individuals with psychiatric disabilities. We have

jurisdiction pursuant to 28 U.S.C. § 1291. The magistrate judge had jurisdiction

based on the consent of the named parties. 28 U.S.C. § 636(c)(1); Koby v. ARS

Nat’l Servs., Inc., 846 F.3d 1071, 1076 (9th Cir. 2017).

We review de novo the district court’s determination of adequacy of notice.

Roes, 1-2 v. SFBSC Mgmt., LLC, 944 F.3d 1035, 1043 (9th Cir. 2019). We review

for abuse of discretion the district court’s decision to approve a proposed class

action settlement. Briseño v. Henderson, 998 F.3d 1014, 1022 (9th Cir. 2021).

4 We affirm.1 Because the parties are familiar with the factual and procedural

history of the case, we need not recount it here.

1. The named Plaintiffs sufficiently alleged standing in their complaint.

Olean Wholesale Grocery Coop., Inc. v. Bumble Bee Foods LLC, 31 F.4th 651,

682 n.32 (9th Cir. 2022) (en banc), cert. denied sub nom. StarKist Co. v. Olean

Wholesale Grocery Coop., 143 S. Ct. 424 (2022).

The non-party organizations and non-party Wilkins lack standing to appeal.

“A nonparty has standing to appeal a district court’s decision ‘only in exceptional

circumstances’”—that is, “only when ‘(1) the appellant, though not a party,

participated in the district court proceedings, and (2) the equities of the case weigh

in favor of hearing the appeal.’” S. Cal. Edison Co. v. Lynch, 307 F.3d 794, 804

(9th Cir. 2002) (quoting Bank of Am. v. M/V Exec., 797 F.2d 772, 774 (9th Cir.

1984). Although the organizations and Wilkins participated in the district court

proceedings, they are not current class members, have not been brought into the

proceeding, and would not be bound by the judgment. See Hilao v. Estate of

Marcos, 393 F.3d 987, 992 (9th Cir. 2004). Although Wilkins may be incarcerated

1 We grant plaintiffs-appellees’ motion for judicial notice (Dkt. 60) and objector-appellant Wilkins’s motion for judicial notice (Dkt. 78). 5 at Santa Rita Jail in the future, his future class membership is speculative at this

point.2

2. Notice to the class was adequate under Federal Rule of Civil

Procedure 23(e) and due process. In a Rule 23(b)(2) action for injunctive relief,

“there is no requirement for individualized notice beyond that required by due

process.” Frank v. United Airlines, Inc., 216 F.3d 845, 851 (9th Cir. 2000). Due

process requires notice “reasonably calculated, under all of the circumstances, to

apprise interested parties of the pendency of the action and afford them an

opportunity to present their objections.” Mendoza v. Tucson Sch. Dist. No. 1, 623

F.2d 1338, 1351 (9th Cir. 1980) (quoting Mullane v. Cent. Hanover Bank & Tr.

Co., 339 U.S. 306, 314 (1950)). Here, notice was disseminated in all intake and

housing units of the jails, in the jails’ hospitals and mental health facilities, on class

counsel’s website, on tablets used by class members, and on the television-

notification system inside the jail. That is sufficient under Mullane. Moreover,

members of the community who may join the class in the future were not entitled

to notice at the time of the settlement. See A. B. v. Haw. State Dept. of Educ., 30

2 Because the organizations and Wilkins lack standing, we need not and do not address any arguments on appeal that only they raise. 6 F.4th 828, 838 (9th Cir. 2022) (noting that “[w]hen future persons referenced

become members of the class, their claims will necessarily be ripe”).

3. In order to survive appellate review of a class action settlement, the

district court must show that it has explored comprehensively all [Rule 23(e)(2)]

factors, and must give a reasoned response to all non-frivolous objections.” In re

Apple Inc. Device Performance Litig., 50 F.4th 769, 782 (9th Cir. 2022). Here, the

district court did not specifically list and analyze the agreement under the enhanced

requirements of In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935 (9th Cir.

2011). However, we “will rarely overturn an approval of a compromised

settlement unless the terms of the agreement contain convincing indications

that . . . self-interest rather than the class’s interest in fact influenced the outcome

of the negotiations.” Briseño, 998 F.3d at 1022 (citation and internal quotation

marks omitted). In this case, the district court made the finding, after examination

of the record, that “the Consent Decree was reached after intensive and prolonged

arm’s length negotiations by capable counsel, with input from the United States

Department of Justice and under the supervision of Magistrate Judge Laurel

Beeler, and was not a product of fraud, overreaching, or collusion among the

parties.” Although it would have been preferable if the district court had

conducted its analysis by specifically referencing the Bluetooth factors, it

7 sufficiently complied with the Bluetooth requirements for us to conclude the court

did not commit reversible error. We note that, aside from the clear sailing

agreement, there is no evidence of collusion in the extensive record of this case.

Thus, there were no “convincing indications that . . . self-interest rather than the

class’s interest in fact influenced the outcome of the negotiations.” Briseño, 998

F.3d at 1022.

In this case, “the evidence is insufficient to prove that the class would have

gotten meaningfully more injunctive or declaratory relief if [the County] had

merely been permitted to oppose class counsel’s fee application, which [the

County] already knew would be requesting substantially less than what class

counsel represented would fully compensate them.” Campbell v. Facebook, Inc.,

951 F.3d 1106, 1127 (9th Cir. 2020); see In re Volkswagon “Clean Diesel” Mktg.,

Sales Practice, & Prods. Liab. Litig., 895 F.3d 597, 613 (9th Cir. 2018) (noting

that this Court “would be reluctant in the extreme, on the procedural ground raised,

8 to upset a settlement—especially one of such overall benefit to the class—that

otherwise evinced no signs of collusion, unfairness, or irregularity”).3

4. The district court did not otherwise err in finding that the proposed

settlement was “fair, reasonable, and adequate” under Fed. R. Civ. P. 23(e)(2).

a. The district court determined adequacy of the class

representatives when it certified the class, and the record indicates no

reversible error in that determination at the time of the final approval. The

district court properly determined that class counsel provided adequate

representation on the basis of extensive discovery and settlement

negotiations.

b. The district court did not abuse its discretion in determining

that the settlement provided adequate relief for the class. Regarding the

overall adequacy of the relief to the class, objectors have not challenged the

district court’s finding that the benefits were substantial, including a new

classification system to determine custody levels, reconfiguration of the

outdoor spaces to maximize out-of-cell time, a requirement that individuals

3 The district court also did not commit reversible error when it failed to expressly discuss the four factors enumerated in Fed. R. Civ. P. 23(e)(2). See Kim v. Allison, 8 F.4th 1170, 1179 (9th Cir. 2021) (describing the requirements as “consideration of the[] eight [circuit] factors” plus “applying the heightened scrutiny set forth in Bluetooth”). 9 receive adequate mental healthcare, and an increased requirement for

minimum out-of-cell time. Moreover, the preclusive effects of the

settlement do not outweigh its benefits because the decree does not preclude

any suits for money damages or future litigation based on future conduct or

for injunctive relief not covered by the consent decree. Hiser v. Franklin,

94 F.3d 1287, 1291 (9th Cir. 1996). Nor did the district court err in

weighing the involvement of the United States Department of Justice in

favor of settlement. See Hanlon v. Chrysler Corp., 150 F.3d 1011, 1026 (9th

Cir. 1998).

c. The district court did not abuse its discretion when it

determined that the relief was equitable between class members. Many of

the consent decree’s provisions address jail policies regarding mental health

and mental illness because those subjects form the basis of the lawsuit, and it

is entirely reasonable that some members of the disability subclass may

stand to benefit the most from those policy changes. See Fed. R. Civ. P. 23

advisory committee’s note to 2018 amendment (“Matters of concern could

include whether the apportionment of relief among class members takes

appropriate account of differences among their claims.”). And objectors

have not demonstrated reversible error in the district court’s determination

that the consent decree also provides substantial benefits to all class

10 members, including increased minimum out-of-cell times that greatly exceed

applicable regulations and aspects of the comprehensive overhaul of mental

healthcare in the jail. Cal. Code Regs. tit. 15, § 1065.

5. The district court did not abuse its discretion in responding to the

objections. “To survive appellate review, the district court must . . . give a

reasoned response to all non-frivolous objections.” In re Apple Inc. Device

Performance Litig., 50 F.4th at 782 (citation omitted). Here, the district court

provided reasoned responses to the non-frivolous objections by grouping the

numerous objections into categories and responding to each category. Although

the responses were occasionally brief, and at a high level of generality, the district

court provided its reasoning and did not dismiss the objections out-of-hand. Any

failure on the part of the district court to respond to a specific point raised by an

objection does not constitute reversible error based on the district court’s generally

adequate and reasoned responses to the objections. See Volkswagon, 894 F.3d at

613 (“[A] reviewing court is concerned with the overall adequacy of the district

court’s fairness determination, not with parliamentary points of order about its

process.”).

AFFIRMED.

11 FILED OCT 6 2023 Babu; et al. v. Ahern; et al., No. 22-15275 MOLLY C. DWYER, CLERK Forrest, J., dissenting in part: U.S. COURT OF APPEALS

I agree with the majority except on one point: the district court erred by not

conducting the analysis set out in In re Bluetooth Headset Products Liability

Litigation, 654 F.3d 935 (9th Cir. 2011), in assessing the substantive fairness of the

parties’ class settlement agreement.

Federal Rule of Civil Procedure 23(e)(2) requires district courts to analyze

whether a class action settlement agreement is “fair, reasonable, and adequate”

before approving such settlement. Originally, Rule 23 did not flesh out how this

analysis should be done, see Briseño v. Henderson, 998 F.3d 1014, 1023 (9th Cir.

2021), and we identified several factors that district courts must consider in Hanlon

v. Chrysler Corp., including, among other things, “the strength of the plaintiffs’

case,” the risks of proceeding with litigation, the stage of the proceedings, and the

amount of and plaintiffs’ reaction to the settlement offer, 150 F.3d 1011, 1026 (9th

Cir. 1998). We did not identify consideration of attorney’s fees as a factor in Hanlon.

See Briseño, 998 F.3d at 1023.

A few years later, in Bluetooth, we addressed the “inherent risk . . . that class

counsel may collude with the defendants,” and we held that when a settlement is

reached before class certification, it must “withstand an even higher level of

scrutiny.” 654 F.3d at 946. In addition to the Hanlon factors, we required district

courts assessing pre-certification settlements to analyze whether the following 1 warning signs of collusion were present: (1) class counsel receiving disproportionate

benefit from the settlement relative to the class, (2) a clear sailing agreement that

“provid[es] for the payment of attorneys’ fees separate and apart from class funds,”

and (3) agreements that unawarded fees “revert to [the] defendants rather than be

added to the class fund.” Id. at 947; see also Campbell v. Facebook, Inc., 951 F.3d

1106, 1125 (9th Cir. 2020) (recognizing that the Bluetooth warning signs “were a

necessary addition to the Hanlon factors”).

In 2018, Rule 23(e) was amended, and it now lists four factors that district

courts must consider in assessing the substantive fairness of class settlements.

Briseño, 998 F.3d at 1023. The Rule 23(e) factors supplement, rather than displace,

the Hanlon factors. See Fed. R. Civ. P. 23(e)(2) advisory committee’s note to 2018

amendment. Of particular relevance here, Rule 23(e)(2)(C)(iii) requires district

courts to consider “the terms of any proposed award of attorney’s fees, including

timing of payment.” Given the amendment to Rule 23(e), we recently expanded

Bluetooth and now require district courts to consider the warning signs of collusion

between class counsel and defendants when reviewing all class settlements. See

Briseño, 998 F.3d at 1023. We instructed: “courts must apply Bluetooth’s heightened

scrutiny to post-class certification settlements in assessing whether the division of

funds between the class members and their counsel is fair and ‘adequate.’” Id. at

1025.

2 Moreover, we have explained that “we hold district courts to a higher

procedural standard” when they are assessing the substantive fairness of a class

settlement. In re Apple Inc. Device Performance Litig., 50 F.4th 769, 782 (9th Cir.

2022) (quoting McKinney-Drobnis v. Oreshack, 16 F.4th 594, 606 (9th Cir. 2021)).

District courts must show they have “explored comprehensively all Rule 23(e)(2)

factors.” Id. (emphasis added). We review a district court’s approval of a class action

settlement for an abuse of discretion. Briseño, 998 F.3d at 1022. Applying the

“incorrect legal standard alone constitutes an abuse of discretion.” In re Apple, 50

F.4th at 783 (quoting Saucillo v. Peck, 25 F.4th 1118, 1131 n.9 (9th Cir. 2022)).

Here, the district court analyzed the substantive fairness of the proposed class

settlement under the Hanlon factors; it did not, however, conduct a Bluetooth

analysis. Indeed, it is unclear that the district court was even aware of Bluetooth and

its relevance to this case. The district court did not cite Bluetooth. And it did not

discuss or reference Bluetooth’s warning signs. This is particularly telling because

the parties here had a clear sailing agreement that the district court did not reference,

even though that is one of the Bluetooth warning signs that we require district courts

to consider. See Briseño, 998 F.3d at 1026.

As the majority points out, the district court did mention collusion when it

found that the settlement “was not a product of fraud, overreaching, or collusion

among the parties.” But this statement is not an indication that the district court was

3 aware of or applied Bluetooth because it is a near perfect quote from Hanlon. See

Hanlon, 150 F.3d at 1027 (explaining courts only intrude upon p arties’ private

settlement agreements as necessary to “reach a reasoned judgment that the

agreement is not the product of fraud or overreaching by, or collusion between, the

negotiating parties”).

Where we have held that the Bluetooth analysis is a necessary part of assessing

the adequacy of a class settlement under Federal Rule of Civil Procedure 23(e)(2)(C)

and that the district court “must show it has explored comprehensively all Rule

23(e)(2) factors,” I conclude that the district court erred by failing to apply Bluetooth.

And because failure to apply the correct legal standard is itself an abuse of discretion

that “is not subject to review for harmlessness,” In re Apple, 50 F.4th at 783, I would

vacate and remand with instructions for the district court to properly analyze the

parties’ settlement agreement in light of all the relevant factors, including those

identified in Bluetooth. For this reason, I respectfully dissent in part.