Wednesday, August 6, 2014

This Settlement Is Really Just a Sale . . .

Luckey v. Superior Court, No. B253892 (July 22, 2014)

Plaintiff brings a class action against a retailer for violating FACTA, which prohibits the printing of certain credit card information on a customer receipt. After an early mediation before a retired judge, a class action settles. The class had not yet been certified. 

The terms of the settlement lookahem—a little shady. The plaintiff attorneys get $300,000 and the members of the class get $5 off any $25 purchase from the defendant during a particular week. Apparently, every other customer of the defendant who shops during that week also gets the same deal. In exchange, the class releases its FACTA claims, which carry statutory damages of $100-1,000 per count. 

The parties stipulate that a temporary judge can hear the motion to approve the settlement. Coincidentally, the temporary judge they agree to is the same judge that conducted the mediation. Because, surely the retired judge who brokered the settlement is in a perfectly objective position to opine upon whether he got the parties to a fair deal! The trial court, however, refuses to approve the stip, reasoning that the class representative has no authority to consent to a temporary judge on behalf of the absent members of an as-yet-uncertified class. Both parties seek writ relief.

Interestingly, because both sides agree that the trial court should be reversed, there is effectively no real party in opposition to the writ. The court of appeal, however, requested a response from the superior court itself. Although the superior court is generally only a nominal party on a writ, in certain limited circumstances—those addressing the court’s procedures or uses of its resources—it can provide a response. This was one of those circumstances.

The court goes on to agree with the superior court. The state constitution, the rules of court, and concerns of public policy require all “parties litigant” to consent to the appointment of a temporary judge.  If a class has not been certified, the putative class rep does not have the authority to bind absent members of the class to such an agreement.

Writ denied.

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