Destini Kanan v. Thinx, Inc.

• Court: District Court, C.D. California
• Decided: August 8, 2022
• Docket: 2:20-cv-10341
• Status: Unknown

Opinion

Case 2:20-cv-10341-SSS-JPR Document 75 Filed 08/08/22 Page 1 of 5 Page ID #:933

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2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 HALEH ALLAHVERDI and HALEY Case No. 2:20-cv-10341-SSS-JPRx BURGESS, individually and on behalf 12 of all others similarly situated, (IN CHAMBERS) ORDER RE 13 JOINT STATEMENT IN Plaintiffs, RESPONSE TO ORDER DENYING 14 STIPULATED DISMISSAL [DKT. v. 15 74] AND GRANTING RENEWED 16 THINX, INC., REQUEST FOR DISMISSAL

17 Defendants. 18 19 Before the Court is Plaintiffs Haleh Allahverdi and Haley Burgess and 20 Defendant Thinx Inc.’s Joint Statement in Response to Order Denying Stipulated 21 Dismissal and the Parties’ renewed joint request to dismiss this case without 22 prejudice. [Dkt. 74]. 23 On June 27, 2022, the Parties filed a stipulation to voluntarily dismiss this 24 case without prejudice pursuant to Federal Rule of Civil Procedure 41(a)(1)(A)(ii). 25 [Dkt. 71]. On July 14, 2022, the Court denied the stipulation and directed the 26 Parties to provide information sufficient to determine whether the stipulated 27 dismissal is collusive or prejudicial to the putative class and whether notice to all 28 members of the putative class is required. [Dkt. 72]. On July 25, 2022, the Parties Case 2:20-cv-10341-SSS-JPR Document 75 Filed 08/08/22 Page 2 of 5 Page ID #:934

1 filed a statement, providing additional information regarding the stipulated 2 dismissal and renewing their request to dismiss. [Dkt. 74]. 3 For the reasons outlined below, the Court GRANTS the Parties’ renewed 4 request for dismissal of this case without prejudice. 5 I. Legal Standard 6 In the Ninth Circuit, when reviewing a class action pre-certification dismissal 7 or compromise, “[t]he district court must ensure that the representative plaintiff 8 fulfills his fiduciary duty toward the absent class members, and therefore must 9 inquire into the terms and circumstances of any dismissal or compromise to ensure 10 that it is not collusive or prejudicial.” Diaz v. Tr. Territory of Pac. Islands, 11 876 F.2d 1401, 1408 (9th Cir. 1989). Specifically, “the district court should inquire 12 into possible prejudice from (1) class members’ possible reliance on the filing of 13 the action if they are likely to know of it either because of publicity or other 14 circumstances, (2) lack of adequate time for class members to file other actions, 15 because of a rapidly approaching statute of limitations, (3) any settlement or 16 concession of class interests made by the class representative or counsel in order to 17 further their own interests.” Id. 18 Under Federal Rule of Civil Procedure 23(e)(1)(A), “[t]he parties must 19 provide the court with information sufficient to enable it to determine whether to 20 give notice of the proposal to the class.” Notice of pre-certification dismissal (1) 21 “protects a defendant by preventing a plaintiff from appending class allegations to 22 her complaint in order to extract a more favorable settlement,” (2) “protects the 23 class from objectionable structural relief, trade-offs between compensatory and 24 structural relief, or depletion of limited funds available to pay the class claims,” and 25 (3) “protects the class from prejudice it would otherwise suffer if class members 26 have refrained from filing suit because of knowledge of the pending class action.” 27 Diaz, 876 F.2d at 1409–10 (emphasis in original). 28 2 Case 2:20-cv-10341-SSS-JPR Document 75 Filed 08/08/22 Page 3 of 5 Page ID #:935

1 II. Discussion 2 The Court has reviewed the additional information the Parties provided and 3 finds the stipulated dismissal is not collusive or prejudicial to the putative class and 4 notice is not required. The Parties stipulated to dismiss this case without prejudice 5 in order to facilitate consolidation of this case with two cases substantially similar 6 to the instant case: Blenis, et al. v. Thinx, Inc., 1:21-cv-11019 (D. Mass), alleging 7 claims on behalf of a putative class of Massachusetts consumers, and Dickens v. 8 Thinx, Inc., 1:22-cv-04286 (S.D.N.Y), alleging claims on behalf of a putative 9 nationwide class and a Florida subclass. [Dkt. 74 at 3]. Blenis was voluntarily 10 dismissed on June 27, 2022, and the case closed. [Id.]. In Dickens, the plaintiff 11 intends to file a consolidated amended class action complaint on or before August 12 8, 2022 and include as named plaintiffs the Plaintiffs in this case and the Blenis 13 plaintiffs. [Id.]. The Parties are working toward settlement and intend to present a 14 global settlement of all three cases to the Dickens court for approval. [Id. at 5]. 15 A. The Stipulated Dismissal Is Not Collusive or Prejudicial 16 Under the Diaz factors, the stipulated dismissal is not collusive or prejudicial 17 to the putative class members. Regarding the first Diaz factor, potential prejudice 18 from putative class members’ possible reliance on the filing of this case, the Court 19 finds there is no such prejudice because the putative class members’ claims will 20 proceed in Dickens, and the start of the class period for the proposed settlement will 21 align with the start of the putative class period in this case, thereby fully covering 22 the claims of the putative class in this case. [Dkt. 74 at 5]. Moreover, the Parties 23 seek to dismiss this case without prejudice. Gonzalez v. Fallanghina, LLC, No. 16- 24 CV-01832, 2017 WL 1374582, at *6 (N.D. Cal. Apr. 17, 2017) (“[T]he rights or 25 claims of the putative [collective] members are not compromised” where plaintiff 26 did not seek to dismiss his claim with prejudice) (citing Luo v. Zynga Inc., 2014 27 WL 457742, at *4 (N.D. Cal. Jan. 31, 2014))). 28 Regarding the second Diaz factor, potential prejudice from lack of adequate 3 Case 2:20-cv-10341-SSS-JPR Document 75 Filed 08/08/22 Page 4 of 5 Page ID #:936

1 time for class members to file other actions because of a rapidly approaching statute 2 of limitations, the Court finds there is no such prejudice because the Dickens 3 plaintiff has already asserted claims on behalf of a putative nationwide class, 4 thereby suspending the applicable statute of limitations. See Am. Pipe & Const. Co. 5 v. Utah, 414 U.S. 538, 554 (1974) (“We are convinced that the rule most consistent 6 with federal class action procedure must be that the commencement of a class 7 action suspends the applicable statute of limitations as to all asserted members of 8 the class who would have been Parties had the suit been permitted to continue as a 9 class action.”). Additionally, any absent class members will be able to opt out of 10 the proposed settlement [Dkt. 74 at 5]. 11 Regarding the third Diaz factor, potential prejudice from any settlement or 12 concession of class interests made by the class representative or counsel, the Court 13 finds no such potential prejudice because there was no settlement reached in this 14 case and there was no consideration provided to Plaintiffs or Plaintiffs’ counsel in 15 exchange for dismissal in this case [Dkt. 74 at 4–5]. Moreover, there is no 16 concession of the putative class’ rights because the stipulated dismissal is without 17 prejudice. See Rodriguez v. Nationwide Mut. Ins. Co., No. 816CV02217, 2017 WL 18 7803796, at *4 (C.D. Cal. Nov. 16, 2017) (“The Court finds that there is no 19 concession of, or prejudice to, rights of potential class members by dismissal, and 20 any absent class member is free to pursue his or her individual or class claims.”). 21 Thus, the stipulated dismissal is not collusive or prejudicial to the putative class. 22 B. Notice to the Putative Class Is Not Required 23 None of the reasons articulated in Diaz for requiring notice to the putative 24 class are present here. See Diaz, 876 F.2d at 1409. First, there is no need to 25 “protect[] [the] defendant by preventing [the] plaintiff from appending class 26 allegations to her complaint in order to extract a more favorable settlement,” id., 27 because the Parties have not reached a settlement or exchanged consideration in 28 connection with this dismissal [Dkt. 74 at 4–5]. See Diaz, 876 F.2d at 1409 4 Case ?:20-cv-10341-SSS-JPR Document 75 Filed 08/08/22 Page5of5 Page ID #:937

1 || (‘Absent any indication that these plaintiffs actually appended class allegations in 2 || an attempt to get favorable individual settlements, there is no reason to require 3 || notice .. . as a deterrent to hypothetical abusive plaintiffs”). 4 Second, there is no need to “protect[] the class from objectionable structural 5 || relief, trade-offs between compensatory and structural relief, or depletion of limited 6 || funds available to pay the class claims,” Diaz, 876 F.2d at 1409, because no 7 || settlement was reached in this case, the putative class members’ claims will be 8 || consolidated in Dickens, and the putative class will receive notice of the proposed 9 || settlement and will have an opportunity to object to the settlement or opt out [Dkt. 10 || 74 at 7]. See City Nominees Ltd. v. Macromedia, Inc., No. C 97-3521, 2000 WL 11 || 970558, at *1 (N.D. Cal. July 7, 2000) (“Because no settlement has been reached, 12 || and the claims are proceeding in state court, class members will not be prejudiced 13 || by not being informed of this action's dismissal.”). 14 Third, there is no need to “protect[] the class from prejudice it would 15 || otherwise suffer if class members have refrained from filing suit because of 16 || knowledge of the pending class action,” Diaz, 876 F.2d at 1409, because the 17 || putative class will be represented in the Dickens case and members may opt out of 18 || any proposed settlement. Moreover, the Parties have stipulated to dismiss this case 19 || without prejudice. Thus, the Court finds the putative class will not be prejudiced 20 || without notice of this dismissal and notice is not required. 21 | WI. Conclusion 22 IT THEREFORE IS ORDERED that the Parties’ renewed joint request to 23 || voluntarily dismiss this case without prejudice is GRANTED. 24 | ( 25 26 || DATED: August 8, 2022 57 SUNSHINE YKES United States District Judge 28