Allen v. Bedolla, No. 13-56685 (9th Cir. 2015)
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Appellants, objectors to a class action settlement between day laborers and Labor Ready, appealed the district court’s final approval of the settlement, as well as the district court’s denial of their motion to intervene. The court affirmed the district court’s decision to deny Objectors’ untimely motion to intervene because it was filed after four years of ongoing litigation, on the eve of the settlement, and threatened to prejudice settling parties by potentially derailing settlement talks. The court vacated the final approval and remanded to the district court so that it can conduct a “more searching inquiry into the fairness of the
negotiated distribution of funds in light of In re Bluetooth Headset Products Liab. Litig., as well as consider the substantive reasonableness of the attorneys’ fee request in light of the degree of success attained.”
Court Description: Class Action. The panel affirmed the district court’s order denying Objectors’ motion to intervene, and vacated the district court’s order granting final approval to a class action settlement between day laborers and Labor Ready Southwest, a temporary staffing agency, in a putative class action brought by plaintiff Jeffrey Lee Allen against Labor Ready Southwest, alleging violations of the federal Fair Labor Standards Act and California wage and hour and unfair competition laws. Plaintiff alleged that Labor Ready illegally failed to pay employees for their wait and travel times, and had taken unlawful paycheck deductions by providing cash disbursement machines and charging for their use. The Objectors to the settlement are plaintiffs in other uncertified class actions against Labor Ready pending in California state courts raising employment-related claims. 4 ALLEN V. BEDOLLA The panel held that the Objectors’ motion to intervene was untimely because the motion was filed after four years of ongoing litigation, on the eve of settlement, and threatened to prejudice settling parties by potentially derailing settlement talks. The panel held that the district court did not satisfy the procedural standard, outlined in In re Bluetooth Headset Products Liab. Litig., 654 F.3d 935 (9th Cir. 2011), in determining the settlement’s substantive fairness. The panel took no position on the substantive fairness of the agreement, vacated the final settlement approval, and remanded so that the district court could conduct a more searching inquiry. Because the panel vacated and remanded final approval of the settlement, the panel also vacated the attorneys’ fee award to class counsel. Upon remand, the panel directed the district court to provide the entire class – and not just the Objectors – the opportunity to review class counsel’s completed fee motion and to submit objections if they so choose.
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