In Carter v. City of Los Angeles, ___ Cal.App.4th ___ (Feb. 26, 2014; pub. ord. Mar. 13, 2014), the Court of Appeal (First Appellate District, Division One) held, on a 2-1 vote, that the trial court had improperly approved a class action settlement that released statutory damages claims, but did not provide unnamed class members with an opportunity to opt out.
The majority's analysis relies heavily on the discussion of Rule 23(b)(2) class certification in Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011), although the opinion acknowledges that Dukes is not binding.
The dissenting justice believed the majority's analysis misconstrued Dukes:
I am not persuaded. First, the relevant sentence of Wal-Mart is not only dictum but also expressly acknowledges that the Court has “never held” that lack of notice and opt-out rights in a class action with nonpredominating claims for monetary damages always violates due process. (Wal-Mart, supra, 131 S.Ct. at p. 2559.) Second, that passage in Wal-Mart is inapplicable here in any event, because it refers to “absence of notice and opt-out” (ibid.), but here class members were given notice and the opportunity to object. Wal-Mart says nothing, even in dictum, about whether the absence of opt-out rights in these circumstances would violate due process. Third, the settlement in this case secures highly valuable benefits for all class members, and those benefits overwhelmingly predominate over the objectors’ individual claims for monetary damages, which are probably worthless. Under the circumstances of this case, there is no “serious possibility” (ibid.) that certification of the class and approval of the settlement violates due process.
Rothschild, Acting P.J., dissenting (slip op. at 1).