Gilbert Saucillo v. Swift Transportation Company of Arizona, LLC

• Court: Court of Appeals for the Ninth Circuit
• Decided: May 12, 2023
• Docket: 22-55560
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS MAY 12 2023 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

GILBERT SAUCILLO; JAMES R. No. 22-55560 RUDSELL, on behalf of themselves and all others similarly situated, D.C. No. 5:10-cv-00809-VAP-OP Plaintiffs-Appellees,

v. MEMORANDUM*

SADASHIV MARES,

Objector-Appellant,

and

JOHN BURNELL; JACK POLLOCK,

Plaintiffs,

v.

SWIFT TRANSPORTATION COMPANY OF ARIZONA, LLC, an Arizona corporation,

Defendant-Appellee,

SWIFT TRANSPORTATION COMPANY

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. INCORPORATED; DOES,

Defendants.

Appeal from the United States District Court for the Central District of California Virginia A. Phillips, Chief District Judge, Presiding

Submitted May 10, 2023** San Francisco, California

Before: FRIEDLAND and BENNETT, Circuit Judges, and BENNETT,*** District Judge.

Objector-Appellant Sadashiv Mares appeals the district court’s approval of a

class action settlement between Defendant-Appellee Swift Transportation and

Plaintiff-Appellees Gilbert Saucillo and James Rudsell.1 The district court

approved a $7.25 million settlement, of which class counsel would receive

approximately $1.8 million in attorneys’ fees. We have jurisdiction under 28

** The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). *** The Honorable Richard D. Bennett, United States District Judge for the District of Maryland, sitting by designation. 1 Mares has requested that we take judicial notice of several records from other related litigation, including from the Rudsell action prior to consolidation. “We may take judicial notice of court filings and other matters of public record.” Reyn’s Pasta Bella, LLC v. Visa USA, Inc., 442 F.3d 741, 746 n.6 (9th Cir. 2006); see Fed. R. Evid. 201(d). Accordingly, Mares’s request for judicial notice is granted.

2 U.S.C. § 1291. Reviewing for abuse of discretion, Roes, 1-2 v. SFBSC Mgmt.,

LLC, 944 F.3d 1035, 1043 (9th Cir. 2019), we affirm.

We previously vacated an order by the district court approving the same

settlement agreement because the court applied the wrong legal standard, failing to

engage the heightened fairness inquiry that is required when a settlement

agreement is reached prior to class certification. Saucillo v. Peck, 25 F.4th 1118,

1122, 1131 (9th Cir. 2022). On remand, the district court conducted the requisite

“probing inquiry,” scrutinizing the settlement agreement for “any ‘subtle signs that

class counsel . . . allowed pursuit of their own self interests . . . to infect the

negotiations.’” Roes, 944 F.3d at 1043, 1048 (first quoting Dennis v. Kellogg Co.,

697 F.3d 858, 864 (9th Cir. 2012), and then quoting Allen v. Bedolla, 787 F.3d

1218, 1224 (9th Cir. 2015)).

The district court did not abuse its discretion in approving the settlement

agreement. In scrutinizing the agreement for subtle signs of collusion, the court

appropriately considered the interaction between the agreement’s clear sailing

provision and the size of the attorneys’ fees and determined that there was no cause

for concern, given that the attorneys’ fees were proportionate and no portion of the

settlement fund could revert to Swift. See Allen, 787 F.3d at 1224 & n.4. The

remaining “red flags” that Mares raises do not otherwise indicate collusion.

First, the fact that Plaintiffs settled this case after the denial of class

3 certification was not inherently suspect: The district court was familiar with the

case’s lengthy procedural history and noted that the parties had “tenaciously

litigated this case” for years, including a lengthy motion for class certification, a

petition to our court to appeal the denial of class certification, and significant

discovery. Even if plaintiffs in other similar ongoing class actions might have

initially seen more success than Plaintiffs here, continued success was uncertain

following our opinion in International Brotherhood of Teamsters, Local 2785 v.

Federal Motor Carrier Safety Administration, 986 F.3d 841 (9th Cir. 2021), which

upheld the Federal Motor Carrier Safety Administration’s determination that

federal law preempts California’s meal- and rest-period laws. See generally, e.g.,

Valiente v. Swift Transp. Co. of Ariz., LLC, 54 F.4th 581 (9th Cir. 2022).

Next, the fact that the settlement states that it settles claims in the

Consolidated Complaint for violations of certain state statutes that were not named

in previously operative complaints does not evince collusion or result in

unfairness, given that our court’s precedent necessarily limits the preclusive effect

of a release agreement to claims that share an “identical factual predicate” with

those advanced in this case. Hesse v. Sprint Corp., 598 F.3d 581, 590-92 (9th Cir.

2010).

Nor did the district court err in addressing Mares’s concerns regarding

Swift’s exposure estimate or in approving that estimate. Rather, in noting the

4 significant risks that Plaintiffs faced in continued litigation―including the district

court’s denial of class certification in similar cases and the aforementioned

preemption determination―the district court appropriately “assess[ed] the

plaintiffs’ claims in determining the strength of their case relative to the risks of

continued litigation” and “acted properly in evaluating the strength of the

plaintiffs’ case in its entirety rather than on a claim-by-claim basis.” Lane v.

Facebook, Inc., 696 F.3d 811, 823 (9th Cir. 2012) (emphasis omitted).

Finally, any uncertainty in the number of class members was minor and not

indicative of collusion between the parties. Mares suggests that there are 20,900

class members rather than 19,544 and expresses concern that the omitted 1,356

drivers “risk . . . having their rights released with no recovery.” But even assuming

that this discrepancy indeed exists and that 1,356 class members did not receive

notice of the settlement agreement, those class members would not be bound by its

terms―so Mares’s concerns are misplaced. See Phillips Petroleum Co. v. Shutts,

472 U.S. 797, 812 (1985).

After nearly a decade of litigation and several intervening legal

developments that were not favorable to Plaintiffs, the parties reached a settlement

agreement resulting in nearly $4.3 million for the class as a whole and an average

award of more than $200 per driver. “[T]he question whether a settlement is

fundamentally fair within the meaning of [Federal Rule of Civil Procedure] 23(e)

5 is different from the question whether the settlement is perfect in the estimation of

the reviewing court.” Lane, 696 F.3d at 819. Here, given the district court’s

“expos[ure] to the litigants, and their strategies, positions and proof,” we cannot

say that the court abused its discretion in approving the settlement agreement. Id.

at 818 (quotation marks omitted). Rather, the court scrutinized the settlement

agreement for subtle signs of collusion and appropriately concluded that the

settlement agreement was the product of non-collusive negotiations.

AFFIRMED.