Ninth Circuit Upholds Order Prohibiting Settlement Negotiations Before Class Certification

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On September 12, the Ninth Circuit denied a class action defendant’s request for a writ of mandamus directing a district court judge to withdraw his order prohibiting class settlement negotiations prior to certification.

  • Plaintiff James Porath filed a putative class action in May 2018, alleging that Logitech falsely and deceptively advertised its Z200 speakers. Consistent with his longstanding practice, Northern District of California Judge William Alsup issued an order prohibiting the parties from discussing class settlement prior to class certification.
  • Logitech moved for Judge Alsup to reconsider his decision, which Judge Alsup denied, explaining that, because parties may discuss settlement as to the named plaintiff’s individual claim, “[n]o permanent or overly broad ban on speech exists.” Judge Alsup also cited the court’s interest in “effectuating orderly case management and the interests of the absent class members whose rights are also at risk.”
  • Logitech then petitioned the Ninth Circuit for a writ of mandamus. The Ninth Circuit denied Logitech’s petition based on lack of clear error, noting the wide discretion provided to district courts under Rule 23 and further explaining that the First Amendment does not give private litigants “a right to negotiate with absent, unrepresented, potential class members before there is a class or interim class counsel.”
    • The Ninth Circuit noted, however, that under the U.S. Supreme Court’s decision in Gulf Oil Co. v. Bernard, 452 U.S. 89 (1981), any restriction on communications that would frustrate the policies of Rule 23 must be narrowly tailored and include a “specific record” showing the particular abuses threatened.
    • While noting that Judge Alsup’s order “appears to be neither drawn as narrowly as possible, nor based on a specific record showing the abuses particular to this case,” the Ninth Circuit concluded that these infirmities did not amount to clear error.
  • Logitech filed a petition for writ of certiorari with the U.S. Supreme Court on October 2.
  • The case is Logitech, Inc. v. United States District Court for the Northern District of California, San Francisco. Read more here.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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