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Shen v. Club Med SAS

United States District Court, S.D. California

December 31, 2019

MILA SHEN, by and through her guardian ad litem Peggy Shen Brewster; EDWIN SHEN, an individual; JOYCE SHEN, an individual; ZOE SHEN and VESPER SHEN, by and through their guardian ad litem Peggy Shen Brewster, Plaintiffs,
v.
CLUB MED SAS, a corporation; CLUB MED SALES, INC.; CLUB MED MANAGEMENT SERVICES, INC.; and DOES 1 to 50, Defendants.

          ORDER: (1) ADOPTING MAGISTRATE JUDGE'S REPORT AND RECOMMENDATION; AND (2) GRANTING THE PETITIONS FOR MINORS COMPROMISE [DOC. NOS. 40 AND 41]

          HON. ROGER T. BENITEZ, UNITED STATES DISTRICT JUDGE

         I. INTRODUCTION

         Before the Court are the petitions of guardian ad litem Erik Brewster to approve the compromise of the pending action on behalf of minor Plaintiffs Mila Shen, Zoe Shen, and Vesper Shen (“minor Plaintiffs”). (Doc. No. 40.) United States Magistrate Judge Bernard G. Skomal filed a Report and Recommendation recommending the petitions be granted. (Doc. No. 41.) Based on the Court's review of the moving papers, the law, and for the reasons set forth below, the Court ADOPTS the Magistrate Judge's Report and Recommendation and GRANTS the Petitions.

         II. BACKGROUND

         On August 8, 2018, minor Plaintiffs Mila, Zoe, and Vesper Shen, together with their parents, Plaintiffs Edwin and Joyce Shen, attended a performance at the Club Med Hotel in Tomamu Hokkaido, Japan.[1] (Doc. No. 41 at 2.) At the performance, General manager Merlin Chelliah gathered the children to the front of the stage to have them partake in a sake barrel breaking ceremony. Id. During the ceremony, Ms. Chelliah's wooden mallet slipped out of her hand and hit Mila in the center of her forehead. Id. She suffered a nondisplaced frontal skull fracture and today has a prominent scar across her forehead. Id. She received emergency treatment, imaging, a neurological examination, plastic surgery, and therapy for emotional trauma. Id. Mila was seven years old at the time of the injury. Id. Her parents and sisters Zoe and Vesper witnessed Mila's injury causing them emotional distress. Id.

         This action was initially filed in California Superior Court but was subsequently removed to this Court on February 20, 2019. Id. The Plaintiff's Complaint alleges claims of negligence, negligent infliction of emotional distress, and negligent misrepresentation. Id. The Defendants filed motions to dismiss for lack of personal jurisdiction. Id. Magistrate Judge Skomal held an Early Neutral Evaluation and Case Management Conference on September 4, 2019. Id. The case did not settle, and a scheduling order was issued. Id. On September 30, 2019, Plaintiffs filed their opposition to Defendants' Motion to Dismiss. Id. On October 18, 2019, the parties filed a joint notice of settlement. Id. Thereafter, on November 1, 2019, guardian ad litem Erik Brewster filed petitions for approval of the minor's compromise of claims as to Mila, Zoe, and Vesper Shen.[2] Id. On December 19, 2019, Magistrate Judge Skomal issued a Report and Recommendation recommending the Petitions be granted as to all three minor Plaintiffs. (Doc. No. 41.) Since then, the parties filed a Joint Waiver of the Fourteen Day Objection Period for Approval of Minors' Compromise on December 27, 2019. (Doc. No. 42.)

         III. DISCUSSION

         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 proposed settlements in suits involving minor plaintiffs, this special duty requires a district court to “conduct its own inquiry to determine whether the settlement serves the best interests of the minor.” Dacanay v. Mendoza, 573 F.2d 1075, 1080 (9th Cir. 1978); see also Salmeron v. United States, 724 F.2d 1357, 1363 (9th Cir. 1983) (holding that “a 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”).

         The Ninth Circuit has also made clear that, in cases involving the settlement of federal claims, district courts should “limit the scope of their review to the question 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, ” and should “evaluate the fairness of each minor plaintiff's net recovery without regard to the proportion of the total settlement value designated for the adult co-plaintiffs or plaintiffs' counsel - whose interests the district court has no special duty to safeguard.” Robidoux, 638 F.3d at 1181-82 (citing Dacany, 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. at 1182.

         Considering the Petitions along with the Declarations filed in support of each, the Court agrees with Magistrate Judge Skomal's conclusion that a gross settlement sum of $500, 000 is reasonable in light of the facts of this case, the causes of action brought, and recoveries received by similarly situated plaintiffs.

         Here, the proposed settlement will result in payment (after attorney's fees and costs) of $299, 707.18 to Mila, $45, 091 to Zoe, and $45, 091 to Vesper.[3] (Doc. No. 41 at 5.) Upon receipt of payment, the funds will be deposited into separate settlement annuity accounts set up for each of the minor Plaintiffs.[4] Id. Under this arrangement, when the minor Plaintiff turns eighteen (18) years of age, she will receive one disbursement payment a year, for four years, from her individual annuity account.[5] Id. The Court agrees with Magistrate Judge Skomal's assessment that the proposed methods of disbursement are “fair, reasonable, and within the bounds of applicable law” as to each of the minor Plaintiffs.[6] Id. at 6.

         The Court also finds that the amount deducted from the total recovery for attorney's fees is reasonable. Attorney's fees and costs are typically controlled by statute, local rule, or local custom. Generally, fees in minors' cases historically have been limited to twenty-five percent (25%) of the gross recovery. Napier by & through Quiroz v. San Diego Cty., No. 3:15-cv-00581-CAB-KSC, 2017 WL 5759803, at *3 (S.D. Cal. Nov. 28, 2017. To determine whether the fee is reasonable courts consider a myriad of factors including the amount of the fee in proportion to the value of the services performed; the novelty and difficulty of the questions involved and skills required; the amount involved and the results obtained; and the experience and ability of the attorney. Cal. Rule of Ct. 7.955(b).

         Here, minor Plaintiffs' counsel seeks $100, 000 in attorney's fees, a sum that represents twenty percent (20%) of the $500, 000 gross settlement.[7] (Doc. No. 41 at 7.) Counsel has provided no documentation in support of this request. Nonetheless, the Court finds that in consideration of the duration of this case, the amount of work performed by Plaintiffs' counsel, and the fee request's adherence to an amount which is less than the twenty-five percent (25%) limit historically applied, the amount of attorney's fees sought, in this case, is reasonable and does not suggest that the settlement is unfair.

         Next, the Court finds that an award of $8, 928.38 to cover litigation costs of the Plaintiffs' counsel is also fair and reasonable under the circumstances.[8] These include, amongst other costs, $2, 500 in expert fees, $3, 019.45 for translations, and $1, ...


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