Logitech, Inc. v. Usdc-Casf

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS SEP 12 2019
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
In re: LOGITECH, INC., No. 19-70248
______________________________
D.C. No. 3:18-cv-03091-WHA
LOGITECH, INC.,
Petitioner, MEMORANDUM*
v.
UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF
CALIFORNIA, SAN FRANCISCO,
Respondent,
JAMES PORATH, individually and on
behalf of all similarly situated individuals,
Real Party in Interest.
Appeal from the United States District Court
for the Northern District of California
William Alsup, District Judge, Presiding
Argued and Submitted July 18, 2019
San Francisco, California
Before: PAEZ and RAWLINSON, Circuit Judges, and ANELLO,** District Judge.
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The Honorable Michael M. Anello, United States District Judge for
Petitioner Logitech, Inc. seeks a writ of mandamus directing the district
court to withdraw its case management order prohibiting the parties from
negotiating settlement as to class claims prior to class certification (the “Order”).1
The parties are familiar with the contours of the Order, so we do not recite them
here. We have jurisdiction pursuant to 28 U.S.C. § 1651 and deny the petition.
“The writ of mandamus is a drastic and extraordinary remedy reserved for
really extraordinary causes.” In re Van Dusen, 654 F.3d 838, 840 (9th Cir. 2011)
(internal quotations omitted). Whether to grant a writ of mandamus requires a
case-by-case analysis of five factors. Id. (citing Bauman v. U.S. Dist. Court, 557
F.2d 650, 654–55 (9th Cir. 1977)). The third factor, which asks whether the
district court’s order is clearly erroneous as a matter of law, is necessary. Id. at
841. Mandamus review is discretionary and neither depends on—nor necessarily
follows from—satisfaction of all the factors. Cole v. U.S. Dist. Court For Dist. of
Idaho, 366 F.3d 813, 817 (9th Cir. 2004).
Our analysis begins and ends with the third factor: clear error. Logitech
argues that the Order clearly violates Federal Rule of Civil Procedure 23, which
governs class actions, and the parties’ First Amendment petition and speech rights.
the Southern District of California, sitting by designation.
1
The Order includes an exception to the settlement-discussion prohibition where
the court has granted a motion for appointment of interim class counsel. Such a
motion was denied in this case, but Logitech does not challenge that denial in this
mandamus petition.
2
1. We begin with the “nonconstitutional ground[] for decision”: whether the
Order is clearly erroneous under Rule 23. See Gulf Oil Co. v. Bernard, 452 U.S.
89, 99–100 (1981). First, Rule 23 explicitly contemplates the simultaneous
certification of a class and settlement, albeit with permissive and not mandatory
language: “The claims, issues or defenses of a certified class—or a class proposed
to be certified for purposes of settlement—may be settled . . . only with the court’s
approval.” Fed. R. Civ. P. 23(e) (emphasis added); see also Hanlon v. Chrysler
Corp., 150 F.3d 1011, 1019 (9th Cir. 1998) (“[T]here is nothing inherently wrong
with this practice[.]”). Indeed, there are many instances where classes have been
certified for settlement, and their settlements have been approved, by scrutinizing
courts. See, e.g., In re Hyundai & Kia Fuel Economy Litig., 926 F.3d 539, 552–53
(9th Cir. 2019) (en banc); Lane v. Facebook, Inc., 696 F.3d 811, 818–19, 826 (9th
Cir. 2012); Hanlon, 150 F.3d at 1025–27.
Second, sections of Rule 23 provide district courts with wide discretion,
including the factors to be considered in the appointment of class counsel, which is
required before a class can be certified and settled. See Fed. R. Civ. P.
23(g)(1)(A)–(B). Further, where class certification and class settlement are sought
at the same time, courts “must pay ‘undiluted, even heightened, attention’ to class
certification requirements.” Hanlon, 150 F.3d at 1019 (quoting Amchem Prods.,
Inc. v. Windsor, 521 U.S. 591 (1997)); see also In re Bluetooth Headset Prods.
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Liability Litig., 654 F.3d 935, 947 (9th Cir. 2011) (noting that courts “must be
particularly vigilant not only for explicit collusion, but also for more subtle signs
that class counsel have allowed pursuit of their own self-interests and that of
certain class members to infect the negotiations”). Given the discretion afforded
district courts by Rule 23 and its lack of mandatory class settlement language, we
cannot say the Order’s prohibition on class negotiations before certification is clear
error.
In Gulf Oil, the Supreme Court considered an order limiting communications
between parties and potential class members and recognized that, because class
actions present “opportunities for abuse,” district courts have “both the duty and
the broad authority to exercise control over” such cases—so long as the district
courts do not exceed the bounds of the Federal Rules. 452 U.S. at 100. Thus, any
restriction on communications that would frustrate the policies of Rule 23 must
follow “a specific record showing . . . the particular abuses . . . threatened” and the
district court must “giv[e] explicit consideration to the narrowest possible relief
which would protect the respective parties.” Id. at 102 (quotation omitted). Here,
the district court did not make specific findings of the abuses or explicitly consider
narrower means of protecting the parties from any abuses threatened by pre-
certification class negotiations. See, e.g., Hyundai, where a class was certified for
settlement, the district court “appointed liaison counsel to act on behalf of [the]
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plaintiffs not participating in [the settlement discussions] and to participate in
confirmatory discovery,” in addition to ordering “multiple rounds of briefing” and
holding numerous hearings “concerning the fairness of the settlement, sufficiency
of the class notice, . . . and other issues.” 926 F.3d 553–54. Courts can reject class
settlements after they have been negotiated, and it is unclear why that approach
was not taken here. See Bluetooth, 654 F.3d at 945-46 (vacating a class settlement
because a problem with the fee award tainted the whole settlement). That the
Order appears to be neither drawn as narrowly as possible, nor based on a specific
record showing the abuses particular to this case, however, does not amount to
clear error.
2. We next turn to the First Amendment. Even if the Order “involved
serious restraints on expression,” Gulf Oil, 452 U.S. at 103–04, it is unclear
whether the expression is protected by the First Amendment. Discussing and
agreeing to class settlement—or petitioning for such a settlement—may not be
protected speech because Logitech does not have a right to negotiate with absent,
unrepresented, potential class members before there is a class or interim class
counsel. Gentile v. State Bar of Nevada, 501 U.S. 1030, 1071 (1991). The Order
is not clearly erroneous under the First Amendment, and we decline to issue a
mandamus order.
PETITION DENIED.
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