I'm posting today to share some excellent news. Yesterday, the Ninth Circuit reversed final approval of a proposed class action settlement in an Unruh Act age discrimination case, holding that the district court "materially underrated the strength of the plaintiff's claims, substantially overstated the settlement's worth, and failed to take the required hard look at indicia of collusion, including a request for attorneys' fees that dwarfed the anticipated monetary payout to the class." Allison v. Tinder, Inc., ___ F.3d ___ (9th Cir. Aug. 17, 2021) (slip op. at 5-6). I represented the objectors in this case, along with my co-counsel, Al Rava of the Rava Law Firm and Danielle Leonard and Michael Rubin of Altshuler Berzon. Congratulations and thanks to all involved in achieving this excellent result.
I am particularly pleased with this outcome because the challenged settlement was formed in a federal district court case filed soon after my victory in the California Court of Appeal in Candelore v. Tinder, Inc., 19 Cal.App.5th 1138 (2018). On behalf of two proposed class members, my co-counsel and I took immediate steps to object to what we considered to be an inadequate settlement, one that in our opinion did not reflect the strength of the claims given the binding holdings in Candelore. The settlement had been negotiated without our knowledge or involvement.
The Ninth Circuit agreed that the settlement should not have been approved. Allison, slip op. at 5. The Ninth Circuit had this to say about Candelore:
In Candelore, as here, the class action plaintiff alleged that Tinder violated the Unruh Act by charging customers over 29 more than it charged younger customers for the same service. Id. at 339. While Tinder initially moved successfully to dismiss the complaint for failure to state a claim, id. at 340, on appeal, Candelore secured a ruling that his allegations did state a claim for age discrimination under the Unruh Act—and that, if his allegations were true, Tinder’s age-based distinction would not be justified by public policy as a matter of law. See id. at 350. In the course of its decision, the Candelore court “recognize[d] ... that past cases,” like Javorsky v. Western Athletic Clubs, Inc., 195 Cal. Rptr. 3d 706 (2015), “have embraced the notion that age may serve as a reasonable proxy for income in upholding age-based discounts against Unruh Act claims.” 228 Cal. Rptr. 3d at 344. But those cases, the court reasoned, are “inconsistent with the ‘individual nature’ of the right secured by the [Unruh] Act, which protects individuals from unequal treatment based on generalizations about ‘a group’ to which they belong.” Id. at 347.
Id. at 9-10. In approving the challenged settlement, the district court stated that it believed Javorsky was "'more in line with the weight of authority'" than Candelore--ignoring the fact that Candelore was, and is, binding "law of the case" in the state court action, as well as the fact that the Court of Appeal in Candelore was considering the very same age-based price differential challenged in the later-filed federal action. Id. at 11, 14-15. In the Ninth Circuit's words:
[T]he district court so underrated the strength of the plaintiff’s case, so overstated the settlement value, and so overlooked the suggestions of collusion present as to collectively constitute an abuse of discretion. [¶] First, the district court discounted the strength and value of the class members’ claims because the court “f[ound] the holding of Javorsky to be more compelling and more in line with the weight of authority than the holding in Candelore.” In so doing, the district court ignored the fact that the settlement class members are also putative members of the class in Candelore—and the settlement agreement therefore releases claims where Candelore is the law of the case, regardless of whether the district court finds the opinion persuasive.
Id. at 14-15. In other words, while the district court may not have agreed with the analysis in Candelore, that analysis is nonetheless binding, which means the Unruh Act claims are significantly more valuable than reflected by the challenged settlement. See id. This was just one of numerous problems that the Ninth Circuit identified with the challenged settlement. See id. at 15-17.
Bloomberg News reports that "Tinder's $24 Million Deal to End Age Discrimination Suit Undone."