Murphy v. SFBSC Management, No. 17-17079 (9th Cir. 2019)Annotate this Case
The Ninth Circuit reversed the district court's approval of a settlement notice process and a class action settlement, negotiated without a certified class, in a case arising out of a dispute under federal and California labor law regarding whether exotic dancers working at various nightclubs in San Francisco were misclassified as independent contractors rather than being treated as employees.
The panel held that the settlement notice did not meet Federal Rule of Civil Procedure 23's "best notice that is practicable under the circumstances" standard. The panel also held that the district court abused its discretion in approving the settlement, because the district court applied an incorrect legal standard and failed to employ the heightened scrutiny required to meet the strict procedural burden the panel imposed for assessing class settlements negotiated prior to class certification. The panel also reversed the district court's award of attorneys' fees, and remanded for further proceedings.