Lawrence Peck v. Swift Transportation Company, 25 F.4th 1118

Background

Plaintiffs (Saucillo and Rudsell) settled long-running litigation against Swift that included uncertified class claims and a representative PAGA claim; total settlement allocated $7,250,000 to class claims and $500,000 to PAGA (75% to LWDA, 25% to aggrieved employees).
Two objectors appealed: Lawrence Peck (objecting to the PAGA portion) and Sadashiv Mares (objecting to the fairness of the class monetary award and the legal standard used).
The district court approved the overall settlement and applied a presumption that an arms‑length, mediated negotiation is presumptively fair and reasonable, then evaluated Hanlon factors and reduced attorneys’ fees.
On appeal, the Ninth Circuit held Peck lacked the right to appeal the PAGA settlement because he was not a party to the PAGA action here (he had a separate PAGA suit and was a class member only in the class action).
The court held the district court abused its discretion by applying an improper presumption of fairness for a settlement reached before class certification and vacated the class‑action settlement approval; remanded for reconsideration under the heightened standard.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether a non‑party objector (Peck) may appeal approval of a PAGA settlement	Peck: as a class member and potential recipient of PAGA proceeds and because he filed a parallel PAGA suit, he may object and appeal	Swift: Peck is not a party to the PAGA action here and thus has no appellate right	Dismissed Peck’s appeal; non‑party objectors to a PAGA settlement generally cannot appeal because PAGA actions are representative and nonparty aggrieved employees are not parties in the class‑action sense
Whether the district court may apply a presumption of fairness where settlement was negotiated before class certification	Mares: pre‑certification settlement required heightened scrutiny per Roes; presumption was improper	Swift/Plaintiffs: presumption appropriate (or harmless) given arm’s‑length mediation and extensive litigation	Court held the presumption was erroneous; heightened, more probing review required for pre‑certification settlements and the district court erred
Whether Mares waived the objection to the legal standard by not raising it earlier	Mares: could not reasonably object before the court’s final order that first applied the presumption	Swift: objection not preserved below, so waived on appeal	Court held issue was not waived because the legal‑standard error appeared in the final order and appellate courts may correct such legal errors
Appropriate remedy for applying the wrong legal standard	Plaintiffs: error was harmless and approval should be affirmed	Objector: vacate and remand for application of correct standard	Court vacated class‑settlement approval and remanded for the district court to apply heightened scrutiny; did not address merits of the PAGA settlement

Key Cases Cited

Roes 1-2 v. SFBSC Mgmt., LLC, 944 F.3d 1035 (9th Cir. 2019) (pre‑certification settlements require heightened fairness review)
Magadia v. Wal‑Mart Assocs., Inc., 999 F.3d 668 (9th Cir. 2021) (Article III standing limits for certain PAGA claims)
Devlin v. Scardelletti, 536 U.S. 1 (2002) (nonnamed class members have interests allowing appeal of settlement approval)
Canela v. Costco Wholesale Corp., 971 F.3d 845 (9th Cir. 2020) (PAGA judgments differ from Rule 23 res judicata effects; PAGA is representative enforcement)
Kim v. Reins Int’l Cal., Inc., 459 P.3d 1123 (Cal. 2020) (PAGA is a representative action on the state’s behalf; no individual component)
Hanlon v. Chrysler Corp., 150 F.3d 1011 (9th Cir. 1998) (factors for evaluating class‑action settlement fairness)
In re Bluetooth Headset Prod. Liab. Litig., 654 F.3d 935 (9th Cir. 2011) (standards for approval of pre‑certification settlements)