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PAGA settlement before
class certification carries a
heightened standard of review
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Peck v. Swift
Transportation (9th Cir 02/11/2022)
http://case.lawmemo.com/9/peck.pdf
Sent to Custom Alerts™
subscribers on 02/14/2022
The 9th Circuit vacated the
district court's approval of a class-action settlement, holding
that the district court erred in applying a presumption
that the settlement was fair and reasonable, and the product of a
non-collusive, arms-length negotiation.
Plaintiffs and
Swift Transportation Company reached a settlement pertaining to
plaintiffs' class claims, alleging violations of California labor
law, and claims brought pursuant to PAGA, which allows private
citizens to recover civil penalties on behalf of themselves and
other current or former employees for violations of the California
Labor Code.
The plaintiffs contended that because the
district court approved the settlement before certifying a class,
the court should have applied a heightened standard of review.
The 9th Circuit agreed, and vacated the district court's
approval of the class-action settlement.
HOLDING:
The district court erred in applying a presumption
that the settlement was fair and reasonable, and the
product of a non-collusive, arms-length negotiation.
The
district court applied the presumption that the 9th Circuit
reversed in Roes 1-2 v. SFBSC Mgmt, 944 F.3d 1035 (9th
Cir 2019), which held that "[w]here . . . the parties negotiate a
settlement agreement before the class has been certified,
settlement approval requires a higher standard of fairness and a
more probing inquiry than may be normally required under Rule
23(e)."
The court rejected attempts to distinguish the
district court's order from the decision in Roes. The
court held further that the district court's error was not
harmless.
Applying the erroneous presumption "cast a shadow on
the entirety of the district court's order."
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