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Retiree Support Group of Contra Costa County v. Contra Costa County

United States District Court, N.D. California

July 29, 2016




         Plaintiffs Retiree Support Group of Contra Costa County, et. al. (“RSG”) have filed an Ex Parte Motion for a Temporary Restraining Order (“TRO”), seeking to prevent further communication between AFSCME Retiree Chapter 57 (“Chapter 57”) and the settlement class in this case. ECF No. 183. The motion also requests an order to show cause why a preliminary injunction should not be issued. Id. Defendant Contra Costa County (the “County”) joins in the filing of the motion. Id. Chapter 57 was given an opportunity to oppose the motion, ECF No. 191, and RSG was also allowed to file a reply, ECF No. 195. At oral argument, the parties agreed that no further briefing or evidence was necessary in regards to the preliminary injunction, and so the Court addresses that request as well. The Court will deny the motion for a TRO and grant in part and deny in part the request for a preliminary injunction.

         I. BACKGROUND

         The factual history of this case has been set out in previous orders and will not be repeated here. See, e.g., ECF No. 174.

         On June 14, 2016, the Court conditionally certified a settlement class and preliminarily approved a settlement in this case. ECF No. 137. That order required that the Settlement Administrator mail class notices to the class within twenty-five days after the date of the order, by July 9, 2016, and set a deadline for class members to respond at sixty days after the class notices were sent, by September 7, 2016. Id. at 14. A Fairness Hearing is scheduled for October 25, 2016. ECF No. 179.

         On June 17, 2016, the Court denied a Motion to Intervene filed by AFSCME Local 2700, AFSCME Local 512, AFSCME Retiree Subchapter 142, and Richard Cabral (collectively, “the Objectors”). ECF No. 174. The Objectors sought to intervene in order to oppose the proposed settlement. Id.

         On July 20, RSG, jointly with the County, filed this motion requesting a TRO. ECF No. 183. RSG alleges that during the week of July 4, AFSCME Retiree Chapter 57 (“Chapter 57”), through its officers Nadine Peyrucain, Ruth Roe, and Mr. Cabral, sent to many class members a letter urging them not to participate in the class settlement. Id. at 3. The letter included a form by which recipients could opt out and object to the settlement, and in so doing agree to be represented by Beeson, Tayer & Bodine, the same firm that represented the various objectors who filed the Motion to Intervene. RSG contends that the letter is false and misleading and requests a TRO enjoining Chapter 57 and its officers from communicating any further with the class members, as well as a preliminary injunction that requires Chapter 57 to send a corrective notice, declares ineffective any elections made by class members through Chapter 57’s form, and enjoins Chapter 57 from further communications without prior approval. Id. at 8-9.

         Chapter 57, for its part, notes that RSG circulated a response letter to the class refuting Chapter 57’s letter. ECF No. 191 at 11. Chapter 57 contends that RSG’s own letter is also misleading, but it does not specify how. Id. Chapter 57 also has not requested any relief from the Court.

         In addition, RSG’s motion also requests that the Court order Chapter 57 to show cause why the Court should not issue a preliminary injunction in response to Chapter 57’s communications. ECF No. 183 at 8-9. Specifically, RSG requests (1) that a corrective letter be sent[1] that corrects any false and misleading statements in Chapter 57’s letter; (2) that any elections made by class members using Chapter 57’s form be invalidated; and (3) that a preliminary injunction be entered enjoining Chapter 57 from sending any further communications to class members without prior review by the Court and the parties. Id.

         A declaration submitted by RSG’s attorney, Jeffrey Lewis, indicates that Mr. Lewis sent an e-mail to the three individuals who had signed the challenged communication with this motion and related documents attached. ECF No. 188 ¶ 7. It also indicates that he sent the same documents to an attorney for the firm of Beeson, Tayer & Bodine, and confirmed through subsequent e-mails that this was sufficient to serve Mr. Cabral and Chapter 57. Id. Though Chapter 57 challenges some of the statements made in Mr. Lewis’s declaration, it does not appear to contest that Chapter 57 received effective service. See ECF No. 191 at 20.

         Chapter 57 was given leave to respond, and did so, on July 25, 2016. ECF No. 191. RSG was similarly given leave to reply, and did so, on July 27, 2016. ECF No. 195. The Court held a hearing on the motion on July 29, 2016.


         The Court applies a familiar four-factor test on both a motion for a temporary restraining order and a motion for a preliminary injunction. See Stuhlbarg Int'l Sales Co. v. John D. Brush & Co., 240 F.3d 832, 839 n. 7 (9th Cir. 2001). A plaintiff seeking either remedy “must establish that he is likely to succeed on the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in his favor, and that an injunction is in the public interest.” Am. Trucking Associations, Inc. v. City of Los Angeles, 559 F.3d 1046, 1052 (9th Cir. 2009) (quoting Winter v. Nat. Resources Defense Council, 555 U.S. 7, 20 (2008)). Injunctive relief is “an extraordinary remedy that may only be awarded upon a clear showing that the plaintiff is entitled to such relief.” Winter, 555 U.S. at 22.

         To grant preliminary injunctive relief, a court must find that “a certain threshold showing [has been] made on each factor.” Leiva-Perez v. Holder, 640 F.3d 962, 966 (9th Cir. 2011). Assuming that this threshold has been met, “‘serious questions going to the merits’ and a balance of hardships that tips sharply towards the plaintiff can support issuance of a preliminary injunction, so long as the plaintiff also shows that there is a likelihood of irreparable injury and that the injunction is in the public interest." Alliance for the Wild Rockies v. Cottrell, 632 F.3d 1127, 1135 (9th Cir. 2011).

         In addition, a movant seeking the issuance of an ex parte TRO must satisfy Federal Rule of Civil Procedure 65(b), which requires a showing “that immediate and irreparable injury, loss, or damage will result to the movant before the adverse party can be heard in opposition” and certification of “efforts made to give notice and the reasons why it should not be required.” Fed.R.Civ.P. 65(b)(1).


         In its opposition, Chapter 57 begins by disputing that the Court has the authority to issue an order regulating its communications with the class. It offers two arguments as to why this Court lacks that authority. First, it contends that the Court lacks authority over Chapter 57 because it is not a party to this action, and because Rule 23 is not a jurisdictional statute. ECF No. 191 at 11. Second, it argues that the requested relief would violate the Norris-LaGuardia Act by interfering with a labor dispute. Id. at 14. As set forth below, both of these arguments are unpersuasive, and the Court concludes it has the authority to address the dispute now before it.

         A. Authority over Nonparties

         There is little dispute that the Court possesses the authority, under Rule 23, to regulate the parties’ communications to class members when those communications are false and misleading and interfere with the class’s due process rights. See Gulf Oil Co. v. Bernard, 452 U.S. 89, 100 (1981). The question raised by Chapter 57 is whether the Court possesses the same authority over a nonparty when that party sends false and misleading communications to a class.

         Chapter 57 argues only that “Rule 23 is not a jurisdictional statute and does not confer on this Court the authority to regulate the speech of non-parties.” ECF No. 191 at 11. However, the cases it cites for this proposition, Blyden v. Navient Corp., No. EDCV 14-02456-JGB, 2015 WL 4508069, at *9 (C.D. Cal. July 23, 2015); Pioche Mines Consol., Inc. v. Dolman, 333 F.2d 257, 264-65 (9th Cir. 1964); and Simon v. E. Kentucky Welfare Rights Org., 426 U.S. 26, 40 (1976), are inapposite. Blyden and Simon both discuss the issue of whether a plaintiff who otherwise lacks Article III standing may obtain it through Rule 23 by seeking class certification. Pioche addresses the question of whether a court’s valid jurisdiction over the individual parties is lost if the parties’ putative class action did not comply with the requirements of Rule 23. Neither of those issues is relevant here.

         RSG, for its part, cites several district court cases in which the court took curative action in response to a nonparty’s interfering communications with absent class members. See ECF No. 195 at 12-13 (citing Williams v. Quinn, No. 05 C 4673, 2010 WL 3021576, at *3 (N.D. Ill. July 27, 2010); Georgine v. Amchem Products, Inc., 160 F.R.D. 478, 497-98 (E.D. Pa. 1995); In re Synthroid Mktg. Litig., 197 F.R.D. 607, 610 (N.D. Ill. 2000); In re Lutheran Bhd. Variable Ins. Products Co., No. 99-MD-1309PAMJGL, 2002 WL 1205695, at *2 (D. Minn. May 31, 2002); In re Payment Card Interchange Fee & Merch. Disc. Antitrust Litig., No. 05-MD-1720 JG, 2014 WL 4966072, at *31 (E.D.N.Y. Oct. 3, 2014), appeal withdrawn (Feb. 17, 2015)).

         Generally, it appears that courts that have exercised authority over nonparties in this context have done so on the basis of either Federal Rule of Civil Procedure 23, or under the All Writs Act, 28 U.S.C. § 1651. See In re Payment Card, 2014 WL 4966072, at *31 (“The proper exercise of judicial authority in this context may have either a procedural basis, under Federal Rule of Civil Procedure 23(d), or an equitable basis, under the All Writs Act.”). Those courts that have invoked Rule 23 as the basis for authority have relied on the Court’s duty, under Rule 23(d), to protect the due process rights of absent class members through accurate notice procedures. See, e.g., Williams, 2010 WL 3021576, at *3 (“This court, however, must ensure that proper and adequate notice is provided to the Class. This power extends to non-parties that interfere with this duty of the court.”); Georgine, 160 F.R.D. at 497-98 (“Included in my responsibility to direct to the class the best notice practicable is the duty to ensure that the class receives accurate information”); In re Lutheran, 2002 WL 1205695, at *2 (“Courts possess the inherent power to protect the orderly administration of justice and to preserve the dignity of the tribunal.” (quoting Kleiner v. First Nat’l Bank of Atlanta, 751 F.2d 1193, 1209 (11th Cir. 1985)). Citing to Gulf Oil, which is discussed further below, and Rule 23(d), a court in this district enjoined further communications from two law firms whose bids to serve as lead counsel for an accounting fraud class action were rejected, and who subsequently sent solicitations to class members seeking to recruit them. In re McKesson HBOC, Inc. Sec. Litig., 126 F.Supp.2d 1239, 1241 (N.D. Cal. 2000). The court referred to Rule 23(d)’s granting of “broad powers to make ‘appropriate orders’ to ensure efficient and fair proceedings in a class action, ” which “include the authority to enjoin communications with class members to protect them from undue interference.” Id. at 1242 (citations omitted).

         Courts have also referred to the All Writs Act when addressing the actions of nonparties. The act states that “[t]he Supreme Court and all courts established by Act of Congress may issue all writs necessary or appropriate in aid of their respective jurisdictions and agreeable to the usages and principles of law.” 28 U.S.C. § 1651(a). In In re Synthroid, 197 F.R.D. at 610, the district court issued a corrective notice in response to a nonparty trade association’s communications with a settlement class, and while it declined to also enjoin them from further communications, it concluded that it “is authorized” to do so “under the All Writs Act, ” and “[t]hat power extends to non-parties.” The court cited to United States v. New York Tel. Co., 434 U.S. 159, 174 (1977), which dealt with a court order to a nonparty telephone company ordering cooperation with federal law enforcement, and held that “[t]he power conferred by the [All Writs] Act extends, under appropriate circumstances, to persons who, though not parties to the original action or engaged in wrongdoing, are in a position to frustrate the implementation of a court order or the proper administration of justice[.]” See also In re Payment Card, 2014 WL 4966072, at *31 (“In sum, where, as here, a district court retains exclusive jurisdiction over settlement agreements and distribution of settlement funds pursuant to those agreements, it may issue orders necessary to protect the settlement from threats by both parties and non-parties.” (citation omitted)).

         Having reviewed this case law, the Court concludes it possesses authority to grant the requested relief against Chapter 57. RSG has argued that Chapter 57’s communications interferes with the class’s due process rights under Gulf Oil and Rule 23, and accordingly, those communications would also “frustrate the implementation” of this court’s efforts to properly provide class notice to the settlement class.

         B. The ...

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