Judge Carolyn B. Kuhl, Case 21STCV34965 2022-08-02 Tentative Ruling

Judge: Carolyn B. Kuhl, Case: 21STCV34965, Date: 2022-08-02 Tentative Ruling

Case Number: 21STCV34965 Hearing Date: August 2, 2022 Dept: 12

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES

Chang v. TBWA Worldwide, Inc., et al.

20STCV43940

Chang v. Get Real Casting, Inc.

21STCV34965

Dept. 12 SSC

Hon. Carolyn B. Kuhl

Date of Hearing: August 2, 2022

Motion to File Under Seal [Unredacted] Second Amended Request for Dismissal of Plaintiff’s Class Allegations Without Prejudice and of All Causes of Action as to Plaintiff Individually with Prejudice [20STCV43940]

Tentative Ruling: The Motions are denied.

Plaintiff filed case number 20STCV43940 on November 17, 2020, alleging class claims for violations of the Labor Code. Plaintiff filed case number 21STCV34965 on September 22, 2021, alleging class claims for violations of the Labor Code against a different set of Defendants. The cases are not related. Plaintiff has now reached a settlement of his individual claims with the remaining Defendants in both actions and has sought to dismiss the putative class claims.

In both actions, Plaintiff has filed conditionally under seal an identical document: the “[Unredacted] Second Amended Request for Dismissal of Plaintiff’s Class Allegations Without Prejudice and of All Causes of Action as to Plaintiff Individually With Prejudice” (Request for Dismissal). In both actions, Plaintiff has filed an identical Motion to Seal the unredacted version of the Request for Dismissal. The only portion of the sealed Request for Dismissal that is redacted from the public record is the amount for which Plaintiff settled his individual claims.

In a declaration submitted in support of the Motions, Dara Tabesh states that “the settlement agreement includes a confidentially provision whereby public disclosure of the terms of the settlement agreement, with limited exceptions, would constitute a material breach of the agreement.” (Tabesh Decl,. ¶ 5.) Ms. Tabesh further states: “It is my understanding that if the record cannot be sealed, the parties may be forced to litigate, which in turn could lead to bankruptcy filings. For this reason, it is believed that making the proposed terms public would lead to a rejection of the proposed settlement.” (Tabesh Decl., ¶ 7.)

“The court may order that a record be filed under seal only if it expressly finds facts that establish: (1) There exists an overriding interest that overcomes the right of public access to the record; (2) The overriding interest supports sealing the record; (3) A substantial probability exists that the overriding interest will be prejudiced if the record is not sealed; (4) The proposed sealing is narrowly tailored; and (5) No less restrictive means exist to achieve the overriding interest.” (Cal. Rules of Court, rule 2.550, subd. (d).) “A party requesting that a record be filed under seal must file a motion or an application for an order sealing the record. The motion or application must be accompanied by a memorandum and a declaration containing facts sufficient to justify the sealing.” (Cal. Rules of Court, rule 2.551, (b)(1).) “The court must not permit a record to be filed under seal based solely on the agreement or stipulation of the parties.” (Cal. Rules of Court, rule 2.551, subd. (a).)

“[A] contractual obligation not to disclose can constitute an overriding interest within the meaning of [California Rules of Court,] rule [2.550].” (Universal City Studios, Inc. v. Superior Court (2003) 110 Cal.App.4th 1273, 1283 (Universal City).) However, the existence of an overriding interest in preventing public disclosure is only the beginning of the inquiry required by California Rule of Court 2.550 before a record may be sealed. A party seeking to have a record sealed must offer facts to establish that the “overriding interest supports sealing the record,” and that “[a] substantial probability exists that the overriding interest will be prejudiced if the record is not sealed.” (California Rules of Court, rule 2.550(d)(2)-(3).) Or, as the court in Universal City put it, the party moving to seal the documents must make a “specific showing of serious injury” resulting from the public filing of the confidential documents. (Universal City, at p. 1282.)

“A dismissal of an entire class action, or of any party or cause of action in a class action, requires court approval. … Requests for dismissal must be accompanied by a declaration setting forth the facts on which the party relies. The declaration must clearly state whether consideration, direct or indirect, is being given for the dismissal and must describe the consideration in detail.” (Cal. Rules of Court, rule 3.770, subd. (a), emphasis added.) “This rule applies even before a class is certified, and assures that plaintiff is not deriving some personal benefit from dismissal that belongs to the class.” (Cal. Prac. Guide Civ. Pro. Before Trial (The Rutter Group) Ch. 11-A ¶ 11:14.) Because these actions are putative actions, the decision by this court of whether to grant dismissal thus depends in large part on the nature of any consideration received by Plaintiff in the settlement. In other words, a plaintiff’s compensation received in order to dismiss a putative class action is not the strictly personal affair of that plaintiff.

Even though parties ordinarily have an interest in enforcing a contractual obligation not to disclose settlement terms, when an individual settlement is made by a plaintiff who originally brought a class action, the public has an interest in ensuring that the plaintiff is not taking monies that fairly belong to the class. The court’s decision on that issue should be subject to public scrutiny. An important judicial function would be hidden from the public should the amount of an individual settlement be concealed when the plaintiff seeks permission to dismiss class claims. Therefore, the ordinary interest of parties in settling a matter confidentially is overcome by the public interest when the settlement is a pre-requisite to dismissal of class claims.

It is certainly true that “a private settlement agreement is entitled to at least as much privacy protection as a bank account or tax information … .” (Hinshaw, Winkler, Draa, Marsh & Still (1996) 51 Cal.App.4th 233, 241 disapproved of on other grounds by Williams v. Superior Court (2017) 3 Cal.5th 531 (Hinshaw).) But here the parties have failed to show that Plaintiff, who has sought to represent a class of similarly situated employees, has a strong enough privacy interest in her individual recovery amount that would overcome the public right of access to information that is critical to whether this court (1) dismisses a putative consumer class action and (2) orders that notice of such dismissal be provided to putative class members. (See Cal. Rules of Court, rule 3.770.)

There is insufficient evidence presented by Plaintiff to demonstrate that Plaintiff will suffer any prejudice if the public record reflects the amount she has received under the settlement. Plaintiff’s claims and the settlement thereof do not concern private matters such as, for example, Plaintiff’s personal income, private wealth, or health information. The facts here thus differ from those in Hinshaw, where the “settlement and its allocation reflect the income lost by” third parties. (Hinshaw, supra, 51 Cal.App.4th at p. 237.)

Similarly, unlike in Hinshaw, where the plaintiffs sought settlements containing the private information of third parties, here the privacy interest is held by Plaintiff, who voluntarily filed this action on behalf of putative class members. Given the nature of class actions and the procedural rules governing them, it should have been clear to Plaintiff and his counsel that recovery paid pursuant to any eventual settlement would be less private than a settlement reached in a case brought by Plaintiff strictly in his individual capacity. Put another way, a plaintiff’s privacy interest in a settlement payment is attenuated when the payment is made in exchange for the dismissal of putative class claims.

The only evidence touching on prejudice here is the claim by Plaintiff’s counsel that it is her “understanding” that, if the settlement amount is not sealed from the public record, “it is believed that” there would be a “rejection of the proposed settlement.” (Tabesh Decl., ¶ 7.) These statements from Plaintiff’s counsel are too vague to support a finding that either Plaintiff or Defendants will suffer serious injury by the revelation of confidential information. Given the important interest in transparency when a plaintiff dismisses the claims of putative class members, the opinion—unsupported with clear evidence—that a settlement might be abandoned is insufficient support for an order sealing of the settlement amount. Were it otherwise, settlement amounts in putative class actions would always be shielded from the public view whenever a defendant suggested that such confidentiality was a condition of the settlement.