Lother v. City of Mountain View

Background

Danielle and Douglas Lother, their minor children M.L. and A.L., and the defendants jointly sought court approval of a settlement. The defendants were the City of Mountain View and individually named police officers; Santa Clara County and social worker Joseph Phan; and American Medical Response and its employee, Laura Yamada.

The plaintiffs alleged that defendants subjected M.L. to an unlawful and unfounded “sexual assault examination.” They also alleged that A.L., M.L.’s sister, was questioned by some defendants and knew about the alleged conduct involving M.L. The complaint asserted claims under 42 U.S.C. § 1983 for alleged violations of the Fourth and Fourteenth Amendments, along with claims under California Civil Code § 52.1 and claims for battery, false imprisonment, negligence, and intentional infliction of emotional distress.

The plaintiffs represented that they had agreed to settle all claims, including appeal rights and attorneys’ fees, for $600,000. The settlement included no admission of liability by any defendant, and each side would bear its own fees and costs except as specified in the settlement arrangements. The court did not receive the underlying settlement agreement but reviewed the parties’ representations and supporting materials. All defendants stated that they did not oppose the motion.

Settlement Terms

The proposed $600,000 settlement was divided as follows:

- $106,666.67 for M.L. - $53,333.33 for A.L. - $440,000 for Danielle and Douglas Lother

Plaintiffs’ counsel would receive $40,000, representing 25 percent of the minors’ combined shares. Counsel’s $1,415 in costs would be deducted from Danielle and Douglas Lother’s portion. After the deductions, M.L. would receive $80,000 and A.L. would receive $40,000 through structured settlement annuities. The annuities would make incremental payments when each child reached ages 18, 22, and 25. Danielle and Douglas Lother would receive $438,585 after the specified deduction.

Court’s Analysis

Federal Rule of Civil Procedure 17(c) requires a district court to protect minors involved in litigation. For a proposed settlement involving a minor, the court must independently determine whether the settlement serves the minor’s best interests. The court focused on each minor’s net recovery, considering the facts, the minor’s claims, and recoveries in similar cases, rather than comparing the minors’ shares with the amounts allocated to adult plaintiffs or attorneys’ fees.

Because the attorneys’ fees would be deducted from the minors’ shares, the court examined whether those deductions left M.L. and A.L. with unfair or unreasonable recoveries. It found that the proposed net amounts were comparable to or greater than recoveries in similar cases. The court also noted that structured payments after the minors reached age 18 were viewed favorably in other cases, and it had no reason to question the parties’ choice of structured annuities.

The court further considered the plaintiffs’ statement that, because M.L. and A.L. were young, they would continue to depend on their parents and could benefit from their parents’ settlement share, including for future therapy or treatment related to the alleged conduct.

Ruling and Next Step

Judge Virginia Demarchi granted the plaintiffs’ unopposed motion to approve the minors’ compromise, finding the settlement fair and reasonable. The order did not itself dismiss the case. Instead, it required the parties to file a joint status report by February 18, 2020, stating when they anticipated filing a stipulation for dismissal.