228 Cal. App. 4th 81
Cal. Ct. App.2014Background
- Plaintiff Roman Luckey sued Cotton On on behalf of a nationwide putative class under FACTA, alleging receipts printed expiration dates and more than the last five card digits; no class had been certified.
- Parties mediated and reached a pre-certification class settlement: $1,000,000 fund allocated to a one-week $5-off-$25 store credit promotion, $302,000 attorney fees (requested), $5,000 class representative payment, and a stipulated injunction; relief viewed by court as minimal per-class recovery.
- The settlement agreement included a stipulation that a private retired judge (the mediator) be appointed as a temporary judge to decide preliminary and final approval; parties proposed private compensation for that temporary judge.
- Los Angeles Superior Court refused to approve the stipulation, reasoning counsel for the named plaintiff could not bind absent putative class members who had not received notice and had not become parties litigant.
- Luckey sought writ relief; the Court of Appeal denied the petition, holding the stipulation was ineffective because absent class members in a pre-certification settlement are not parties litigant and cannot be bound by counsel’s stipulation to a temporary judge.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether counsel for a named plaintiff in a pre-certification class action can stipulate to a temporary judge on behalf of absent putative class members | Luckey: counsel may stipulate and parties should be able to choose a privately compensated temporary judge to expedite resolution | Superior Court/Cotton On: absent class members are not parties litigant pre-notice and cannot be bound; stipulation therefore ineffective | Held: No — in a pre-certification settlement counsel cannot bind absent putative class members to a temporary judge; stipulation ineffective |
| Whether the Constitutional "parties litigant" requirement permits binding absent class members by such a stipulation | Luckey: Constitution permits stipulation by parties; named plaintiff and defendant are parties and may so stipulate | Superior Court: "parties litigant" means those taking part in litigation; absent members not yet parties litigant and thus cannot consent | Held: "Parties litigant" limits stipulation to those who have appeared; absent putative class members are not covered pre-notice |
| Whether court rules/local rules allow or disallow the stipulation in this context | Luckey: local/rules do not bar stipulation; parties can agree to temporary judges | Superior Court: rules on temporary judges and local rule requiring representation that no new parties will be added show stipulation cannot bind unknown future parties | Held: Rules (Cal. Rules of Court and local rule) support trial court’s discretion to deny such a stipulation in pre-certification class cases |
| Public policy and due process concerns about delegating fiduciary fairness review to a privately selected temporary judge | Luckey: procedural protections remain before a temporary judge; parties’ choice should be respected | Superior Court: heightened fiduciary duty to absent class members and appearance-of-impartiality concerns (mediator as judge) counsel against allowing a party-selected temporary judge before notice/certification | Held: Public policy favors protecting absent class members and trial court discretion to refuse delegation in this setting; due process and appearance concerns weigh against allowing the stipulation |
Key Cases Cited
- Amchem Products, Inc. v. Windsor, 521 U.S. 591 (U.S. 1997) (heightened scrutiny required for settlement-only class certification to protect absent class members)
- Dunk v. Ford Motor Co., 48 Cal.App.4th 1794 (Cal. Ct. App. 1996) (court must ensure settlement is fair, adequate, and reasonable; factors and presumption of fairness described)
- Estate of Kent, 6 Cal.2d 154 (Cal. 1936) ("parties litigant" means those who have appeared; only those who take part may bind others by stipulation)
- Wershba v. Apple Computer, Inc., 91 Cal.App.4th 224 (Cal. Ct. App. 2001) (objecting class members treated as functionally equivalent to intervenors in settlement context)
- Del Real v. City of Riverside, 95 Cal.App.4th 761 (Cal. Ct. App. 2002) (a temporary judge lacks jurisdiction without a valid stipulation)
- Munoz v. BCI Coca-Cola Bottling Co. of Los Angeles, 186 Cal.App.4th 399 (Cal. Ct. App. 2010) (trial court must have basic information to independently assess settlement adequacy)