Ninth Circuit Reverses Order Denying Settlement Approval

In Narouz v. Charter Communications, LLC 591 F.3d 1261 (C.A.9 (Cal.), 2010) a former employee brought a putative class action in state court against former employer alleging wrongful termination, and violations of the California Labor Code and Unfair Competition Law ("UCL"). Following removal and fairly extensive litigation, the parties entered into separate agreements resolving the employee's individual claims and the class claims. District Court Judge Real denied certification of the class for settlement purposes and refused to approve the settlement. The Court stated only that it could not ascertain the class and offered no further analysis.

The employee appealed, and the Ninth Circuit reversed. The Court held:

(1) As a matter of first impression, the appeal from denial of class certification was not rendered moot by the class representative's settlement of his individual claims, since the class representative retained a personal stake in the class litigation. "In order to retain such a 'personal stake,' a class representative cannot release any and all interests he or she may have had in class representation through a private settlement agreement.... Conversely, a settlement agreement that specifically provides that the class representative is solely releasing individual claims may permit the class representative to retain a 'personal stake' in the class claim." 591 F.3d at 1264.

(2) The employer's appeal of the District Court's earlier decisions denying the employer's motions to strike and ex parte application to extend the dates in the scheduling order were not ripe for review. 591 F.3d at 1265-1266.

(3) The District Court's decision denying certification of settlement class was not entitled to the traditional deference given to class certification decisions because the Court "fail[ed] to make sufficient findings to support its application of the Rule 23 criteria." 591 F.3d at 1266.

The Ninth Circuit remanded the case for further proceedings and ordered that it be reassigned to a different judge. 591 F.3d at 1267.