Martin v. Lovisa America, LLC. ( 2023 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 RUTH MARTIN, on behalf of herself and Case No. 1:22-cv-01356-ADA-EPG others similarly situated, 12 FINDINGS AND RECOMMENDATIONS Plaintiff, RECOMMENDING THAT PLAINTIFF’S 13 VOLUNTARY DISMISSAL BE GRANTED v. PURSUANT TO FEDERAL RULE OF 14 PROCEDURE 23(e) 15 LOVISA AMERICA, LLC, (ECF Nos. 17 and 18). 16 Defendant. 17 18 Plaintiff Ruth Martin initiated this putative class action on October 23, 2022, alleging 19 violations of the California Invasion of Privacy Act (Cal. Penal Code §§631, 632.7). (ECF No. 1). 20 Plaintiff seeks statutory penalties and injunctive relief on behalf of herself and other class 21 members who “(1) communicated with Defendant via the chat feature on Defendant’s website 22 using a cellular telephone and (2) whose communications were recorded and/or eavesdropped 23 upon without prior consent.” (Id. at p. 6). On April 7, 2023, Plaintiff filed a notice of voluntary 24 dismissal pursuant to Federal Rule of Civil Procedure 41(a)(1)(A)(i). (ECF No. 17).1 Specifically, 25 Plaintiff seeks dismissal of Plaintiff’s individual claims with prejudice and dismissal of the class 26 claims without prejudice. For the reasons that follow, the Court recommends that Plaintiff’s 27 1 Plaintiff subsequently filed a motion to dismiss that is substantively identical to the notice of dismissal. 28 (ECF No. 18). 1 request for voluntary dismissal be granted. 2 II. LEGAL STANDARD 3 Typically, parties may dismiss an action without a court order pursuant to Federal Rule of 4 Procedure 41 by filing “a stipulation of dismissal signed by all parties who have appeared.” Fed. 5 R. Civ. P. 41(a)(1)(A)(ii). Rule 23(e), however, governs the dismissal of class actions, even before class certification has occurred. Diaz, 876 F.2d at 1408. Accordingly, the “district court 6 must ensure that the representative plaintiff fulfills his fiduciary duty toward the absent class 7 members” and must “inquire into the terms and circumstances of any dismissal or compromise to 8 ensure that it is not collusive or prejudicial.” Id. Although the court “does not need to perform 9 the kind of substantive oversight required when reviewing a settlement binding upon the class,” it 10 must determine whether dismissal would prejudice class members due to: 11 (1) class members’ possible reliance on the filing of the action if they are likely to 12 know of it either because of publicity or other circumstances, (2) lack of adequate time for class members to file other actions, because of a rapidly approaching 13 statute of limitations, (3) any settlement or concession of class interests made by the class representative or counsel in order to further their own interests.” 14 Id. Regardless, “[i]n no pre-certification dismissal would the court reject the dismissal and 15 require anything more than notice to the class and an opportunity to intervene.” Id. 16 II. DISCUSSION 17 Plaintiff first argues that the Diaz factors do not apply because that case “was decided 18 prior to amendments to Rule 23(e), which clarified that Rule 23(e) applies to certified classes or 19 settlement classes.” (ECF No. 17, p. 2). However, Plaintiff also argues that “even if the Court 20 were to apply the Diaz factors to these circumstances, dismissal would be proper.” (Id. at p. 3). 21 Applying the Diaz factors here, the Court finds that dismissal of Plaintiff’s class claims 22 without prejudice will not harm any putative class members. Regarding the first factor, “the 23 danger of reliance is generally limited to actions that would be considered of sufficient public 24 interest to warrant news coverage of either the public or trade-oriented variety, and such reliance 25 can occur only on the part of those persons learning of the action who are sophisticated enough in 26 the ways of the law to understand the significance of the class action allegation.” Mahan v. Trex 27 Co., Inc., No. 5:09-cv-00670, 2010 WL 4916417, at *3 (N.D. Cal. Nov. 22, 2010) (citation, 28 alterations, and internal quotations omitted). Here, Plaintiff contends that there are no class 1 members with a reliance interest in the action because “[t]his action has not been publicized in 2 any way[.]” (ECF No. 17, p. 3). Moreover, this case is in its early stages as Defendant has not 3 filed an answer and the Court has not yet held a scheduling conference. Accordingly, the Court 4 finds that this factor does not prejudice putative class members. 5 Second, Plaintiff argues that because the one-year statute of limitations on Plaintiff’s claims does not run until October 2023, “the rights of the putative class are preserved by the 6 solely individual dismissal of Plaintiff’s claims with prejudice.” Accordingly, this factor does not 7 prejudice putative class members because there is adequate time to file other actions. 8 Finally, there is no indication that dismissal represents a concession of class member 9 interests. As Plaintiff states, “the resolution reaches between the Parties does not address, affect, 10 or change the putative class’s rights or claims in any manner.” (ECF No. 17, pp. 3-4). 11 Additionally, putative class members will be free to pursue their claims. 12 The Court finds that dismissal of this action without prejudice does not present a risk of 13 prejudice to the putative class. Therefore, notice to the putative class members is not required. 14 See Diaz, 876 F.2d at 1408 (“Notice to the class of pre-certification dismissal is not, however, 15 required in all circumstances.”). Thus, the Court will recommend that Plaintiff’s individual claims 16 be dismissed with prejudice, and that all claims brought on behalf of the putative class be 17 dismissed without prejudice. 18 III. RECOMMENDATION 19 Based on the foregoing, the Court recommends that Plaintiff’s complaint be dismissed as 20 follows: 21 1. That Plaintiff Ruth Martin’s individual claims for violations of the California Invasion 22 of Privacy Act against Defendant Lovisa America LLC be dismissed with prejudice; 23 2. That all claims brought by Plaintiff Ruth Martin on behalf of the putative class for violations of the California Invasion of Privacy Act against Defendant Lovisa America 24 LLC be dismissed without prejudice; 25 3. The Clerk of the Court be directed to close this case. 26 These findings and recommendations are submitted to the United States district judge 27 assigned to the case, pursuant to the provisions of Title 28 U.S.C. § 636(b)(1). Within twenty-one 28 1 | (21) days after being served with these findings and recommendations, any party may file written 2 || objections with the court. Such a document should be captioned “Objections to Magistrate 3 || Judge’s Findings and Recommendations.” Any response to the objections shall be served and 4 | filed within fourteen (14) days after service of the objections. The parties are advised that failure 5 | to file objections within the specified time may result in the waiver of rights on appeal. Wilkerson |” Wheeler, 772 F.3d 834, 838-39 (9th Cir. 2014) (citing Baxter v. Sullivan, 923 F.2d 1391, 1394 7 (9th Cir. 1991)). 8 IT IS SO ORDERED. 9 19 | Dated: _May 23, 2023 [fe Fo □□□ — UNITED STATES MAGISTRATE JUDGE 1] 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28