Amaro v. Anaheim Arena Management, LLC

Amaro v. Anaheim Arena Management, LLC

Opinion

MOORE, Acting P. J.—Considering how often trial courts review and approve class action settlements, especially in the wage and hour context, there are few published California cases providing guidance on this process. Parties seeking approval must generally rely on federal authority. Due to this paucity in state law, we publish this opinion to provide guidelines for courts in evaluating class action settlements.

Plaintiff Irean Amaro filed this wage and hour [**2]  class action and Labor Code Private Attorneys General Act of 2004 (Lab. Code, § 2698 et seq.) (PAGA) lawsuit against defendant Anaheim Arena Management, LLC (AAM), in 2017. At the time, there were already two existing class actions asserting the same claims. One had been filed in 2014 and the other in 2016. About a month after filing her lawsuit, Amaro and AAM reached a global settlement [*528]  that covered the claims asserted in the two prior class actions. The plaintiffs from the prior actions, which included intervener Rhiannon Aller, were not involved in those settlement discussions. Aller intervened in this lawsuit and objected to the settlement. Initially, the trial court denied preliminary approval of the settlement on grounds Amaro had not given the court enough information to determine the adequacy of the settlement. Amaro then engaged in extensive informal discovery and entered into an amended settlement with AAM. The court approved the amended settlement over Aller's objections and entered judgment per the settlement's terms.

CA(1)(1) Aller appeals, claiming the court's approval of the settlement was erroneous for two reasons. First, she argues the class members' release in the settlement is improper because it extends to claims outside the scope of Amaro's complaint, waives [**3]  class members' (from all class actions) claims under the Fair Labor Standards Act of 1938 (29 U.S.C. § 201 et seq.) (FLSA) without obtaining their written consent, and releases PAGA claims beyond the limitations period of Amaro's own PAGA claim. We agree the release is overbroad. It covers “potential claims … in any way relating to the” facts pled in the complaint. The “in any way relating” language causes the release to unreasonably extend to claims that may only be tangentially related to the allegations in Amaro's complaint, rendering it overbroad. However, we reject Aller's other contentions. ] The FLSA's written consent requirement does not apply to a release in a class settlement of state wage and hour claims. Further, nothing in the PAGA statute prevents Amaro from releasing claims outside the limitations period of her own claim.

CA(2)(2) Next, Aller contends the court abused its discretion in finding the settlement was not the product of a collusive reverse auction. ] Such an event occurs when a defendant sued in multiple class actions picks the most ineffectual class counsel to negotiate a weak settlement that precludes all the other class action claims. Aller primarily relies on the fact that AAM attempted to separately negotiate settlements with [**4]  the plaintiffs in the two prior lawsuits. After those settlement discussions failed, AAM bypassed those plaintiffs and undercut their claims by negotiating a settlement with Amaro that extinguished the other class actions. We find there is nothing inherently wrong with this process. When such a settlement occurs, the objecting party must also show, at the very least, some evidence of unfairness to the class or misconduct to support a collusive reverse auction finding. Aller has not done so. Nor has she presented sufficient evidence to warrant discovery into whether the settlement was collusive.

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