Zayas v. San Francisco Sheriff's Department

Background

The parties filed a renewed joint motion seeking preliminary approval of a class-action settlement. This was their second request. The proposed settlement concerned claims by people housed at San Francisco County Jail 4 who were affected by sewage overflows. The papers stated that the settlement would pay the class $2.1 million.

The case was related to Taylor, No. 18-cv-04857-JCS, and Johnson, No. 18-cv-04890-JCS. The parties represented that the Johnson and Taylor cases would be dismissed and that those plaintiffs would become members of the Zayas settlement class. The court stated that it intended to dismiss those cases without prejudice if it later granted preliminary approval of the Zayas settlement and then entered final approval within an appropriate period. The court did not take that action in this order.

The court had denied the first approval motion because the San Francisco Board of Supervisors had not approved the settlement, making the request premature. The court had also identified other problems, including that the settlement terms were not contained in one complete document.

Legal standard

Federal Rule of Civil Procedure 23(e) requires court approval of a settlement involving a certified class. At the preliminary-approval stage, the court may approve a settlement and direct notice to the class if the settlement appears to result from serious, informed, non-collusive negotiations; has no obvious deficiencies; does not improperly favor class representatives or parts of the class; and falls within the range of possible approval. A settlement must be fundamentally fair, adequate, and reasonable. The court may not rewrite the agreement by deleting, modifying, or replacing provisions; the agreement must stand or fall as a whole.

Reasons for denying preliminary approval

The court found that the parties had engaged in serious, informed, and non-collusive negotiations for more than a year. To the extent the court could determine the terms from the filings, the settlement appeared to fall within the possible range of approval, including because the overall settlement amount appeared reasonable in light of the legal and factual issues and the size of the class. The court nevertheless found numerous deficiencies.

Class definition and membership disputes. The agreement included several inconsistent definitions of the settlement class. They used different end dates for the sewage overflows, differed on whether class members had to be housed in Housing Blocks A, B, or C and in an affected cell, and appeared to exclude plaintiffs in the Taylor and Johnson cases even though counsel had stated that those plaintiffs would be included. The court required one definition that accurately reflected the parties’ agreement and could support class certification under Rule 23.

The agreement also lacked a procedure for determining class membership and allowing people to challenge those determinations. The court noted that, based on information supplied by the City, 135 of 213 named Johnson plaintiffs were identified as having been housed in County Jail 4 and negatively affected by sewage, while 78 apparently believed they had been affected but were not identified in the records. The agreement did not explain how those people would be treated or what recourse they would have. The court required a clear and fair process for resolving membership disputes.

Settlement payments. Paragraph 55 did not clearly explain how each class member’s payment would be calculated. It described flat-rate payments based on exposure, the type of exposure, and whether a person filed grievances, but also said that payments would be distributed pro rata, creating an apparent inconsistency. The agreement did not explain how attorneys’ fees and costs would be allocated among members of Subclasses A and B. It also stated an unclear per-incident amount for Subclass C as “$5.15.12,” which the court said should be expressed in dollars and cents. The meaning of a proposed $15 “check waiver” was also unclear.

The court required a complete explanation of payment calculations, including deductions for attorneys’ fees and costs, the method for any second round of payments, and a procedure for challenging payment calculations.

Attorneys’ fees, claims, and releases. The attorneys’ fee provision referred to a request not exceeding 33 percent and described a division involving the attorneys, but other filings suggested that the parties had agreed to request $660,000, or 31.4 percent of the settlement. The court found it unclear whether the parties agreed to the percentage stated in the settlement agreement.

The agreement defined an “Approved Claim” as one submitted by a deadline even though the parties had agreed that class members would not need to submit claims to participate. The proposed notice likewise incorrectly said that class members needed to submit a timely and valid claim to receive payment.

The agreement contained a release for the class representatives but did not appear to contain a release covering absent class members, despite the parties’ statement that claims by class members would be released. When asked to identify such a provision, the parties could not do so. The court stated that the omission appeared to be an error because the agreement approved by the Board of Supervisors included a release covering class members who did not opt out.

Protections for late notice. The court observed that many class members had been transferred between prisons, were no longer incarcerated, lacked stable addresses, or had addresses different from those in the City’s records. It therefore required special protections for people who received late notice, including consideration of a reserve fund for those who learned of the settlement after the initial payments and consideration of allowing more than six months to cash checks.

Claims administrator. The court continued to have grave concerns about Greenfire Law, the proposed claims administrator. The administrator had not provided information showing that it had administered a class action or had the expertise to administer a settlement as complicated as this one. Although counsel said experienced administrators had not wanted the assignment because of its challenges, the court stated that those challenges made an experienced administrator essential. Counsel agreed to make further efforts to find one.

Class notice. The court required a revised notice that accurately described the amended settlement. Individual notices needed to explain how payments would be calculated, estimate each person’s first-round payment, estimate applicable deductions for attorneys’ fees and administrative costs, explain the possibility of a second payment, and describe how people could challenge class-membership and payment determinations. The notice also needed to explain any release resulting from remaining in the class and not opting out, and to state consistently that class members would not need to file claims.

The court required the notice to be in English and Spanish because many class members primarily spoke Spanish. It also required the telephone hotline to provide access to Spanish-speaking operators. Other required corrections addressed inaccurate references to the Clerk’s Office, an incorrect reference to an order titled “Order Certifying the Class,” and missing explanations of payment calculations.

Disposition

The court denied the renewed motion for preliminary approval without prejudice. It directed the parties to address the identified problems before seeking approval again, including by proposing a schedule with deadlines for membership and payment challenges and for a motion seeking attorneys’ fees and costs. The order did not decide the underlying claims or grant final approval of the settlement.