McKinney-Drobnis v. Massage Envy Franchising, LLC

Background

The court had previously approved the parties’ class-action settlement under Rule 23 of the Federal Rules of Civil Procedure. Class members received vouchers and injunctive relief. In its earlier order, the court awarded Class Counsel $938,026.22 for work attributable to non-voucher relief, but deferred ruling on fees attributable to the vouchers under 28 U.S.C. § 1712. That statute bases the voucher-related portion of a fee award on the value of vouchers redeemed by class members.

The Settlement Agreement provided that, within ten days after the voucher-redemption period ended, Massage Envy Franchising, LLC would provide Class Counsel with the aggregate value of redeemed vouchers. Class Counsel then had ten days after receiving that value to file any additional fee and expense request. The parties agreed that the redemption period ended on December 24, 2023. On December 27, 2023, counsel for Massage Envy provided Class Counsel with the aggregate redemption value of $2,880,377.83. Plaintiffs filed their additional fee motion on February 8, 2024.

Parties’ arguments

Massage Envy argued that the motion should be denied because it was not filed within the ten-day period stated in the Settlement Agreement. Plaintiffs argued that the deadline had not begun because the redemption value was provided by Massage Envy’s counsel rather than by Massage Envy itself. Plaintiffs also argued that the Settlement Agreement required the value to be provided in a declaration. In a reply footnote, plaintiffs argued that any late filing should be excused under Federal Rule of Civil Procedure 6(b)(1)(B), which permits extensions for excusable neglect in certain circumstances.

Court’s reasoning

Applying California contract-interpretation principles, the court held that the Settlement Agreement did not require Massage Envy to provide the redemption value through an agent other than its counsel of record. Because a limited liability company acts through agents, and because the Agreement used “MEF” to refer to acts that could be performed only by counsel, the court interpreted the reference to Massage Envy as allowing communication through its counsel.

The court also relied on the parties’ conduct before the timeliness dispute arose. Class Counsel had asked Massage Envy’s counsel to send the final redemption information, and counsel confirmed that she would do so. The court further held that the Agreement did not require the aggregate value to be supplied in a declaration. It noted that the Agreement expressly required declarations in other circumstances but contained no such requirement for the redemption value.

The court did not accept plaintiffs’ Rule 6(b)(1)(B) argument. It explained that the rule applies to deadlines set by the federal rules or by a court order, and plaintiffs cited no case extending it to a deadline set by contract. The court also stated that courts may not rewrite class-action settlement terms.

Disposition

The court denied plaintiffs’ Motion for Post-Judgment Award of Attorney’s Fees. The opinion’s order did not award the requested additional fees.