Why, no, a plaintiff can’t eat his cake and have it, too

It is often the case that plaintiffs who cannot proceed as a class will settle their individual claims. But what if they really want an incentive award, or their attorneys really want a class-size fee award? Can they settle the individual claim and then continue to chase the class allegations?

Nope.

At least that’s what the Ninth Circuit just held in Brady v. AutoZone Stores, Inc., Case No. 19-35122 (9th Cir., June 3, 2020). In the Brady case, the plaintiff brought relatively straightforward claims for alleged missed break periods under the law of the state of Washington. After what the court described as “several years of litigation,” the district court found no basis, and refused, to certify a class.

At that point, the plaintiff settled his individual claims for $5,000 plus unspecified attorneys’ fees, but purported not to have resolved his “Class Claims.” Following the entry of final judgment, the plaintiff appealed the prior denial of certification.

The Ninth Circuit concluded easily that the settlement mooted the class claims, and it dismissed the appeal. It found that the plaintiff could not pursue class claims simply because he had not dismissed them, but needed a genuine financial stake in the outcome of the class claims. It rejected the notion that his desire for an incentive award or fear of liability for costs advanced by his attorneys would constitute such an interest.

Most cases don’t warrant class action treatment. We’ve noted similar tactics used by unsuccessful claimants under the FLSA – but, like defendants, class action plaintiffs may find alternatives to litigating a case to its full conclusion lengthy and expensive.

The bottom line: A putative class action representative cannot gain a right of appeal of a denial of certification by settlement of his or her individual claims.