Peter Schuman v. Microchip Technology Incorporated

Background

In an earlier order, the court granted the defendants’ motion for summary judgment as to the two named plaintiffs, Peter Schuman and William Coplin. The court found that Schuman and Coplin had knowingly and voluntarily entered into releases. The court otherwise denied the summary-judgment motion and questioned how the class action could proceed without its two named plaintiffs.

The court then ordered the parties to explain why the class should not be decertified because determining whether most class members’ releases were valid would require individualized inquiries. The parties responded. The plaintiffs also moved for permission to amend the operative complaint to add five class members who had not signed releases.

Court’s action

The parties identified a threshold legal dispute about the test governing release enforceability. The plaintiffs argued that if the defendant violated fiduciary duties merely by seeking the releases, that would undermine the basis for summary judgment against the named plaintiffs. The plaintiffs proposed that the court enter judgment against Schuman and Coplin under Federal Rule of Civil Procedure 54(b) so they could appeal, and stay the remaining proceedings until the U.S. Court of Appeals for the Ninth Circuit resolved the appeal.

The court found that proposal sensible because resolving the threshold legal issue would determine substantially different paths for the case. It directed the plaintiffs to submit by April 12, 2024, a short, non-argumentative proposed form of judgment against Schuman and Coplin. The order refers to submission under Rule 54(d), while the plaintiffs’ proposal discussed judgment under Rule 54(b). The court said the proposed judgment must be ministerial and must not repeat or alter the substantive analysis in earlier orders.

The court stayed the remainder of the case until further order, pending resolution of the anticipated appeal concerning summary judgment against the named plaintiffs. If no appeal is filed within 30 days after entry of the Rule 54(d) judgment, the court stated that it would schedule a case-management conference. If an appeal is filed, the parties must submit joint status reports every 180 days, and the court would administratively close and later reopen the case. The court stated that administrative closure would have no substantive effect.

The court terminated the plaintiffs’ motion to amend without prejudice because the plaintiffs agreed that the motion would need to be considered only if the class were decertified. The court also declined to allow the five non-releasing class members to proceed immediately even if the class were not decertified. It stated that plaintiffs’ counsel had chosen to include those individuals in the certified class and that the court would not create a new procedural basis for removing them from that class.

Disposition

The court directed submission of the proposed judgment, stayed the remainder of the case, and terminated the motion to amend without prejudice. It did not decide the anticipated appeal or resolve the release-enforceability dispute in this order.