United States District Court, N.D. Iowa, Cedar Rapids Division
JESUS PEREZ, as an individual, on behalf of himself, all others similarly situated, and the general public, Plaintiffs,
CRST INTERNATIONAL, INC.; CRST EXPEDITED, INC.; and DOES 1-100, inclusive, Defendants.
Williams, United States District Judge
matter is before the Court on the parties' Joint Motion
for Approval of Settlement. (Doc. 83). The parties ask the
Court to approve the terms of the settlement agreement,
dismiss plaintiff's individual claims with prejudice, and
dismiss plaintiff's class claims without prejudice.
(Docs. 83, at 1; see also Doc. 83-2, at 7
(settlement agreement contemplating judicial dismissal of the
subject claims)). The Court held a telephonic hearing on May
28, 2019, and no potential class members appeared.
(See Doc. 85).
complaint alleges ten California state law claims. (Doc. 75).
The complaint does not allege any other state law claims or
federal claims. (See id.). The parties filed cross
motions for a determination of the applicable body of law
(Docs. 69, 70), and on December 20, 2018, the Court
determined that Iowa law, not California law, applies to
plaintiff's claims (Doc. 77, at 20). Perez v. CRST
Int'l, Inc., 355 F.Supp.3d 765 (N.D. Iowa 2018).
Roughly six weeks later, the parties informed the Court that
this case had settled (see Doc. 78), and the parties
subsequently brought the current motion. No. party has moved
for class certification, and the class has not been
following reasons, the Court grants the
parties' motion to dismiss plaintiff's individual
claims with prejudice, to dismiss the class claims without
prejudice, and the Court approves the settlement as to the
class claims. The parties' motion for an order approving
the terms of the settlement of plaintiff's theoretical
FLSA claims is denied.
claims . . . of a certified class . . . may be settled [or]
voluntarily dismissed . . . only with the court's
approval.” Fed.R.Civ.P. 23(e). “If the proposal
would bind class members, the court may approve it only after
a hearing and only on finding that it is fair, reasonable and
adequate . . ..” Fed.R.Civ.P. 23(e)(2). The Eighth
Circuit Court of Appeals requires court approval under Rule
23 even when a class has yet to be certified. Crawford v.
F. Hoffman-La Roche Ltd., 267 F.3d 760, 764 (8th Cir.
2001) (citations omitted). Although Rule 23(e) generally
requires a court to provide notice to class members before
approving a settlement, “notice is not necessarily
required if a class has not been certified.”
Crawford, 267 F.3d at 764-65 (citations omitted).
Court “acts as a fiduciary [that] must serve as a
guardian of the rights of absent class members, ” and
the Court cannot accept a settlement that is not fair,
reasonable, and adequate. Grunin v. Int'l House of
Pancakes, Inc., 513 F.2d 114, 123 (8th Cir. 1975)
(citations omitted). To determine whether a settlement is
fair, reasonable, and adequate under Rule 23(e), the Eighth
Circuit directs district courts to consider four factors:
“1) the merits of the plaintiff's case weighed
against the terms of the settlement, 2) the defendant's
financial condition, 3) the complexity and expense of further
litigation, and 4) the amount of opposition to the
settlement.” Marshall v. Nat'l Football
League, 787 F.3d 502, 508 (8th Cir. 2015) (citation and
internal quotation marks omitted). The balance of the merits
of the plaintiff's case against the settlement terms is
the most important consideration. Id. (citation
this Court has previously measured whether a dismissal is
appropriate under Rule 23 by considering the following
factors: “1) the circumstances leading to the decision
to voluntarily dismiss the class action; 2) any settlement or
concession of class interests made by the class
representative(s) or counsel; 3) class members' possible
reliance on the filing of the action if they are likely to
know of it either because of publicity or other
circumstances; 4) amount of time for class members to file
other actions in view of applicable statute(s) of
limitations; and 5) any other factors bearing on possible
prejudice or loss of benefit to the absent class members
created by the dismissal.” Schultzen v. Woodbury
Cent. Cmty. Sch. Dist., 217 F.R.D. 469, 471 (N.D. Iowa
2003) (citation omitted).
with Eighth Circuit precedent, the Court will consider each
factor set forth under Marshall. The parties'
motion, however, contemplates the five enumerated
Schultzen considerations, and the Court will review
each Schultzen factor in addition to the
Marshall factors. The Court finds that the
settlement is fair, reasonable and adequate under both sets
first factor under Marshall considers “the
merits of the plaintiff's case weighed against the terms
of the settlement.” 787 F.3d at 508. As currently pled,
plaintiff's claims address only California law, and based
on plaintiff's request that the Court apply California
law, this case appears to have been litigated strictly
considering California law thus far. (See Docs. 69;
75). In addressing the parties' cross motions for a
determination of whether Iowa law, as opposed to California
law, governs, the Court found that Iowa law and California
law are truly in conflict with respect to each of
plaintiff's ten claims. Perez, 355 F.Supp.3d at
770-72. Specifically, the Court found that Iowa law is in
conflict with California law on plaintiff's claim under
California's Private Attorneys General Act because
“Iowa has no law that is analogous” to the
California law. Id. at 770-71. The Court went on to
address the remaining nine claims, all of which are based on
the distinction between an employee and an independent
contractor. Id. at 771-72. The Court found that
“[a]lthough there is a significant degree of overlap
between the tests employed by Iowa and California, the tests
are not identical.” Id. at 772. The Court
ultimately concluded that Iowa law governs this case.
Id. at 779.
Court's determination that Iowa law governs this case
effectively defeated each of plaintiff's claims because
each claim was pled under California law, which is
inapplicable here. The California claims, then, failed as a
matter of law. To pursue this case plaintiff would either
have to reform his complaint to allege claims under Iowa ...