Y.M. v. St. Joseph Health System

          ORDER GRANTING PETITION FOR MINOR'S COMPROMISE AND PETITION FOR ESTABLISHMENT AND APPROVAL OF SPECIAL NEEDS TRUST RE: ECF NO. 43

          JON S. TIGAR United States District Judge.

         Before the Court is a Petition for Minor's Compromise, ECF No. 43, and a separately filed Petition for Establishment and Approval of Special Needs Trust, ECF No. 50. The Court will grant the petitions.

         I. BACKGROUND

         At issue are two consolidated cases, Case No. 3:14-cv-04654-JST and Case No. 3:15-cv-00049-JST, filed by Plaintiff Y.M., a minor, by and through his guardian ad litem, Rocio Mendez. As summarized by Plaintiff in his petition, the case concerns "severe and permanent neurologic injuries" to Y.M. "as a result of severe birth asphyxia suffered during his birth." ECF No. 43 at 3. Y.M. "will require 24 hour attendant care for all activities of daily living for the rest of his life" and "[h]is life expectancy has been significantly reduced." Id. The initial complaint, filed in Sonoma County Superior Court, alleges a negligence claim against Defendants in their selection of physicians and health care providers, and in the treatment and diagnosis of Y.M. ECF No. 1-1 ¶ 14.

         The two cases, which were brought against different Defendants, were consolidated on February 25, 2015. ECF No. 22. By joint stipulation, all events in the case were vacated and continued on February 29, 2016, in light of completed settlement discussions, ECF No. 42, and the instant Petition for Minor's Compromise was filed on May 10, 2016, ECF No. 43. A Petition for Establishment and Approval of Special Needs Trust was later filed on June 2, 2016.

         II. LEGAL STANDARD

         "District courts have a special duty, derived from Federal Rule of Civil Procedure 17(c), to safeguard the interests of litigants who are minors." Robidoux v. Rosengren, 638 F.3d 1177, 1181 (9th Cir. 2011). In the context of a proposed settlement in suits involving minors, the Court must "independently investigate and evaluate any compromise or settlement of a minor's claims to assure itself that the minor's interests are protected . . . even if the settlement has been recommended or negotiated by the minor's parent or guardian ad litem." Salmeron v. U.S., 724 F.2d 1357, 1363 (9th Cir. 1983). Courts should consider "whether the net amount distributed to each minor plaintiff in the settlement is fair and reasonable, in light of the facts of the case, the minor's specific claim, and recovery in similar cases." Robidoux, 638 F.3d at 1182.

         In evaluating a settlement, the district court "should evaluate the fairness of each minor plaintiffs net recovery without regard to the proportion of the total settlement value designated for adult co-plaintiffs or plaintiffs' counsel - whose interests the district court has no special duty to safeguard." Id at 1182 (citing Dacanay, 573 F.2d at 1078). "So long as the net recovery to each minor plaintiff is fair and reasonable in light of their claims and average recovery in similar cases, the district court should approve the settlement as proposed by the parties." Id

         III. DISCUSSION

         The minor's compromise proposed by the parties is for a total amount of $8.5 million, with $4.5 million paid by Petaluma Hospital and $4 million paid by the U.S.A., subject to approval by the Justice Department. ECF No. 43 at 4. The parties have divided this amount as follows:

• $250, 000 held for attorney's costs. Any net balance will be returned to Y.M.'s Special Needs Trust.

• $300, 000 held for payment of Medi-Cal lien. Any net balance will be returned to Y.M.'s Special Needs Trust.

• $950, 000 paid to Y.M.'s parents, Alejandro and Rocio Mendez, and their son D.M., in exchange for waivers of any future ...