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Perez v. CRST International, Inc.

United States District Court, N.D. Iowa, Cedar Rapids Division

May 31, 2019

JESUS PEREZ, as an individual, on behalf of himself, all others similarly situated, and the general public, Plaintiffs,
v.
CRST INTERNATIONAL, INC.; CRST EXPEDITED, INC.; and DOES 1-100, inclusive, Defendants.

          ORDER

          C.J. Williams, United States District Judge

         This 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).

         Plaintiff's 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 certified.

         For the 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.

         I. APPLICABLE LAW

         “The 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).

         The 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 omitted).

         Additionally, 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).

         II. ANALYSIS

         A. Class Claims

         Consistent 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 of factors.

         1. Marshall Factors

         The 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.

         The 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 ...


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