Mitzie Perez v. Wells Fargo & Co.

Background

The plaintiffs alleged that Wells Fargo Bank, N.A. engaged in lending discrimination based on alienage or immigration status by excluding recipients of Deferred Action for Childhood Arrivals (DACA) from various types of consumer credit, in violation of federal and California law. Wells Fargo disputed and denied the claims and contended that it had complied with the applicable laws.

The parties negotiated a proposed settlement to avoid the expense and uncertainty of continued litigation. They asked the court to conditionally certify settlement classes, preliminarily approve the settlement, appoint class representatives and class counsel, approve notice materials, establish deadlines for claims, exclusions, and objections, and schedule a final-approval hearing.

Preliminary Approval

The court explained that preliminary approval required it to decide whether the proposed settlement fell within the range of reasonableness. At this stage, the court did not decide the merits of the claims or resolve unsettled legal questions. After reviewing the settlement agreement, its allocation plan and release, the case record, and supporting declarations, the court found on a preliminary basis that the settlement was fair, reasonable, and adequate. It also found that the settlement resulted from informed, good-faith, arm’s-length negotiations and that the participation of an experienced mediator supported a finding that the settlement was not collusive.

The court therefore preliminarily approved the settlement, subject to further consideration at the final-approval hearing. The order stated that preliminary approval was not a finding that Wells Fargo was liable or that either the claims or defenses were valid.

Settlement Classes and Representatives

For settlement purposes only, the court conditionally certified a National Class and a California Class. In general, the classes covered people who applied for specified Wells Fargo credit products during stated periods, had valid and unexpired DACA status when they applied, were denied credit as reflected in Wells Fargo’s class data, and met the applicable residency requirements. The covered products included credit cards, student lending, personal lines and loans, small-business lending, and home mortgages, with different periods and residency requirements for different products.

The court found, for settlement purposes only, that the requirements for class certification under Federal Rule of Civil Procedure 23(a) and (b)(3) were satisfied, including numerosity, common questions predominating over individual ones, typical claims, adequate representation, and the superiority of a class action. The court appointed Victoria Rodas, Samuel Tabares Villafuerte, Teresa Diaz Vedoy, and Andres Acosta as representatives for the National Class, and appointed Victoria Rodas, Samuel Tabares Villafuerte, and Teresa Diaz Vedoy as representatives for the California Class. It appointed Outten & Golden LLP and the Mexican American Legal Defense and Educational Fund as class counsel.

Notice and Class-Member Procedures

The court approved the proposed notice and found that the notice plan satisfied Rule 23 and due process. JND Legal Administration was appointed as settlement administrator. The administrator was directed to mail and, when available, email notice; establish a settlement website; send reminder notices; and perform other duties under the settlement agreement.

The order set November 24, 2020, as the general deadline for claim forms, opt-out requests, and objections unless the court ordered otherwise. A class member who submitted a timely and valid verified claim could receive a settlement payment, while a class member who failed to submit a valid claim would be barred from receiving payment unless otherwise ordered but would still be bound by any final judgment. A class member who properly opted out would not have rights under the agreement and would not be bound by the agreement or any final judgment. Class members who did not opt out could object to the settlement, fee requests, or service awards if they complied with the order’s requirements.

Further Proceedings and Disposition

The court scheduled a final-approval hearing for January 8, 2021. That hearing was to address whether the settlement should receive final approval, whether a judgment should be entered, whether class members should be bound by the release, and whether attorneys’ fees, expenses, or awards to class representatives and individual plaintiffs should be granted. The court separately reserved those fee and award decisions for the final-approval process.

The court stayed the action except as necessary to implement the settlement or comply with the agreement. After the opt-out deadline and pending final determination, non-excluded class members and those acting on their behalf were preliminarily enjoined from pursuing covered released claims. The court retained exclusive jurisdiction over matters arising from or connected with the settlement. If the settlement were terminated or a specified material term were not satisfied, the order provided that it could be treated as vacated and the parties restored to their prior positions, except for the provision stating that the settlement was not an admission of liability.

Judge Maxine M. Chesney’s order was a preliminary settlement-approval order, not a final merits decision or final approval of the settlement.