Opinion
Case No. 2:16-cv-06794-AB (JCx)
2020-06-30
Clifton W. MARSHALL, et al., Plaintiffs, v. NORTHROP GRUMMAN CORPORATION, et al., Defendants.
Kurt C. Struckhoff, Pro Hac Vice, Michael A. Wolff, Pro Hac Vice, Nelson G. Wolff, Pro Hac Vice, Sean E. Soyars, Pro Hac Vice, Jerome J. Schlichter, Schlichter Bogard and Denton LLP, St. Louis, MO, William A. White, Hill Farrer and Burrill LLP, Los Angeles, CA, for Plaintiffs. Alexander Vitruk, Andrew Zachary Edelstein, Grant T. Miller, Mayer Brown LLP, Los Angeles, CA, Abigail M. Bartine, Pro Hac Vice, Nancy G. Ross, Pro Hac Vice, Samuel D. Block, Pro Hac Vice, Samuel P. Myler, Pro Hac Vice, Mayer Brown LLP, Chicago, IL, Brian D. Netter, Pro Hac Vice, Mayer Brown LLP, Washington, DC, Sarah E. Reynolds, Pro Hac Vice, Mayer Brown LLP, Palo Alto, CA, for Defendants Northrop Grumman Corporation, Northrop Grumman Savings Plan Administrative Committee, Northrop Grumman Savings Plan Investment Committee, Denise Peppard, Michael Hardesty, Kenneth L. Bedingfield, Kenneth N. Heintz, Prabu Natarajan, Mark A. Caylor, Mark Rabinowitz. Alexander Vitruk, Grant T. Miller, Mayer Brown LLP, Los Angeles, CA, Nancy G. Ross, Samuel D. Block, Pro Hac Vice, Samuel P. Myler, Pro Hac Vice, Mayer Brown LLP, Chicago, IL, Sarah E. Reynolds, Pro Hac Vice, Mayer Brown LLP, Palo Alto, CA, for Defendant Maria T. Norman. Alexander Vitruk, Grant T. Miller, Mayer Brown LLP, Los Angeles, CA, Nancy G. Ross, Abigail M. Bartine, Pro Hac Vice, Samuel D. Block, Pro Hac Vice, Mayer Brown LLP, Chicago, IL, Sarah E. Reynolds, Pro Hac Vice, Mayer Brown LLP, Palo Alto, CA, for Defendants Richard Boak, Debora Catsavas, Teri Herzog, Tiffany McConnell King, Christopher McGee, Gary McKenzie, Constance Soloway, Rajender Chandhok, Gloria Flach, James M. Myers, Sunil Navale, Eric Scholten, Steven Spiegel.
Kurt C. Struckhoff, Pro Hac Vice, Michael A. Wolff, Pro Hac Vice, Nelson G. Wolff, Pro Hac Vice, Sean E. Soyars, Pro Hac Vice, Jerome J. Schlichter, Schlichter Bogard and Denton LLP, St. Louis, MO, William A. White, Hill Farrer and Burrill LLP, Los Angeles, CA, for Plaintiffs.
Alexander Vitruk, Andrew Zachary Edelstein, Grant T. Miller, Mayer Brown LLP, Los Angeles, CA, Abigail M. Bartine, Pro Hac Vice, Nancy G. Ross, Pro Hac Vice, Samuel D. Block, Pro Hac Vice, Samuel P. Myler, Pro Hac Vice, Mayer Brown LLP, Chicago, IL, Brian D. Netter, Pro Hac Vice, Mayer Brown LLP, Washington, DC, Sarah E. Reynolds, Pro Hac Vice, Mayer Brown LLP, Palo Alto, CA, for Defendants Northrop Grumman Corporation, Northrop Grumman Savings Plan Administrative Committee, Northrop Grumman Savings Plan Investment Committee, Denise Peppard, Michael Hardesty, Kenneth L. Bedingfield, Kenneth N. Heintz, Prabu Natarajan, Mark A. Caylor, Mark Rabinowitz.
Alexander Vitruk, Grant T. Miller, Mayer Brown LLP, Los Angeles, CA, Nancy G. Ross, Samuel D. Block, Pro Hac Vice, Samuel P. Myler, Pro Hac Vice, Mayer Brown LLP, Chicago, IL, Sarah E. Reynolds, Pro Hac Vice, Mayer Brown LLP, Palo Alto, CA, for Defendant Maria T. Norman.
Alexander Vitruk, Grant T. Miller, Mayer Brown LLP, Los Angeles, CA, Nancy G. Ross, Abigail M. Bartine, Pro Hac Vice, Samuel D. Block, Pro Hac Vice, Mayer Brown LLP, Chicago, IL, Sarah E. Reynolds, Pro Hac Vice, Mayer Brown LLP, Palo Alto, CA, for Defendants Richard Boak, Debora Catsavas, Teri Herzog, Tiffany McConnell King, Christopher McGee, Gary McKenzie, Constance Soloway, Rajender Chandhok, Gloria Flach, James M. Myers, Sunil Navale, Eric Scholten, Steven Spiegel.
ORDER DENYING WITHOUT PREJUDICE JOINT MOTION FOR FINAL APPROVAL OF SETTLEMENT AND PLAINTIFFS' MOTION FOR ATTORNEYS' FEES [DKT. NOS. 331, 341]
ANDRÉ BIROTTE JR., UNITED STATES DISTRICT COURT JUDGE I. INTRODUCTION
Before the Court is Plaintiffs' and Defendants' joint motion for final approval of class settlement, and Plaintiffs' motion for attorneys' fees. (Dkt. Nos. 331, 341.) The Court has received objections to the proposed settlement from the following class members: Michael Friedlander, John Murray, Alan Carlson, Peter DeLuca, and Robert Stolte. (Dkt. Nos. 333, 335, 338.) The Court held a hearing on the parties' joint motion for final approval of class settlement on June 30, 2020. For the reasons stated below, the Court DENIES without prejudice the parties' joint motion for final approval of class settlement. Because the Court denies final approval of class settlement, the Court DENIES without prejudice Plaintiffs' motion for attorneys' fees, reimbursement of expenses, and incentive awards for class representatives. Based on the parties' representations that renewed motions for final approval of an amended settlement agreement and for attorneys' fees are forthcoming, the Court set a hearing date of August 20, 2020, at 9:00 a.m. for these forthcoming motions. (Dkt. No. 348.)
"Plaintiffs" refers to the following individuals: Clifton Marshall; Thomas Hall; Manuel Gonzalez; Ricky Hendrickson; Phillip Brooks; and Harold Hylton.
"Defendants" refers to the following entities and individuals: Northrop Grumman Corporation; Northrop Grumman Savings Plan Administrative Committee; Northrop Grumman Savings Plan Investment Committee; Denise Peppard; Michael Hardesty; Kenneth Bedingfield; Kenneth Heintz; Prabu Natarajan; Maria Norman; Mark Caylor; Mark Rabinowitz; Richard Boak; Debora Catsavas; Teri Herzog; Tiffany McConnell King; Christopher McGee; Gary McKenzie; Constance Soloway; Rajender Chandhok; Gloria Flach; James Myers; Sunil Navale; Eric Scholten; and Steven Spiegel.
II. BACKGROUND
a. Plaintiffs' allegations
This class action arises out of the decisions and actions of alleged fiduciaries of Defendant Northrop Grumman Corporation's 401(k) retirement plan. Plaintiffs' operative complaint alleged that Defendants breach their fiduciary duties under ERISA in three respects: (1) by distributing assets of the Northrup Grumman Savings Plan ("the Savings Plan") to Defendant Northrop Grumman Corporation as payment for services it provided to the Savings Plan, (2) by paying unreasonable recordkeeping fees to the Saving Plan's recordkeeper, and (3) by using an active-management strategy for the Savings Plan's Emerging Markets Equity Fund and failing to consider whether to convert the Emerging Markets Equity Fund to passive management. (Dkt. Nos. 132, 264.) Plaintiffs further alleged that Defendants engaged in prohibited transactions by hiring and paying third-party service providers, and that Defendants failed to monitor their appointed fiduciaries. (Dkt. No. 132 ¶¶ 135–48.) Plaintiffs additionally sought to recover, as an equitable remedy, payments to Defendant Northrop Grumman Corporation allegedly made in breach of Defendants' fiduciary duties. (Id. ¶¶ 149–53.)
b. Procedural history
Plaintiffs filed their complaint on September 9, 2016. (Dkt. No. 1.) On February 13, 2017, Plaintiffs filed their First Amended Complaint. (Dkt. No. 70.) Following a joint stipulation of the parties, Plaintiffs filed their Second Amended Complaint, the operative complaint at this juncture, on November 3, 2017. (Dkt. No. 132.)
Plaintiffs filed their First Amended Complaint after the Court granted in part and denied in part Defendants' motion to dismiss Plaintiffs' complaint. (See Dkt. No. 68.)
On February 15, 2018, the Court granted in part and denied in part Defendants' partial motion to dismiss Plaintiffs' Second Amended Complaint. (Dkt. No. 146.) In particular, the Court dismissed with prejudice Plaintiffs' first through sixth causes of action against Defendant Northrup Grumman Corporation, and struck Plaintiffs' jury trial demand. (Id. ) The Court denied Defendants' motion to dismiss Plaintiffs' seventh and eighth causes of action against Defendant Northrop Grumman Corporation, and denied Defendants' motion to dismiss Plaintiffs' first through eighth causes of action against Individual Defendants. (Id. )
"Individual Defendants" refers to the following individuals: Denise Peppard; Michael Hardesty; Kenneth Bedingfield; Kenneth Heintz; Prabu Natarajan; Maria Norman; Mark Caylor; Mark Rabinowitz; Richard Boak; Debora Catsavas; Teri Herzog; Tiffany McConnell King; Christopher McGee; Gary McKenzie; Constance Soloway; Rajender Chandhok; Gloria Flach; James Myers; Sunil Navale; Eric Scholten; and Steven Spiegel. (See Dkt. No. 146 at 1 n.1.)
On February 1, 2019, Defendants moved for partial summary judgment as to Plaintiffs' second, third, sixth, and seventh causes of action. (Dkt. No. 168.) The Court granted Defendants' motion for summary judgment with respect to Plaintiffs' second, sixth, and seventh causes of action. (Dkt. No. 264.) The Court denied Defendants' motion for summary judgment with respect to Plaintiffs' third cause of action. (Id. ) Accordingly, only Plaintiffs' eighth cause of action against Defendant Northrup Grumman Corporation and Plaintiffs' first, third, fourth, fifth, and eighth causes of action against Individual Defendants remain.
On the morning of October 15, 2019, the day this case was scheduled for a bench trial, the parties informed the Court that a settlement had been reached. (Dkt. No. 312.) The parties filed their proposed settlement with the Court on January 13, 2020, and jointly moved for preliminary approval of the proposed class settlement. (Dkt. No. 321.) The Court held a hearing on the parties' joint motion for preliminary approval of class settlement on January 31, 2020, and issued an order granting preliminary approval of the settlement on February 3, 2020. (Dkt. Nos. 325, 326.)
After granting preliminary approval of the settlement, the Court set a Fairness Hearing for June 5, 2020. (Dkt. No. 326.) The parties filed their joint motion for final approval of the settlement on May 22, 2020. (Dkt. No. 341.) On June 1, 2020, in light of an intervening public health emergency, the Court issued an order converting the Fairness Hearing to a telephonic status conference. (Dkt. No. 345.)
At the June 5, 2020 telephonic status conference, the Court asked the parties how it could ensure that objecting class members could meaningfully participate in the Fairness Hearing. The Court additionally requested that Plaintiffs' attorneys provide (1) notice of a rescheduled Fairness Hearing on the settlement notice website, and (2) direct notice to the two objectors who were not represented by counsel. After this hearing, the Court continued the Fairness Hearing to Tuesday, June 30, 2020, at 9:00 a.m. (Dkt. No. 346.) In its order, the Court stated that any objectors that wished to participate at the hearing could contact Plaintiffs' counsel and/or this Court's Courtroom Deputy. (Id. ) On June 16, 2020, Plaintiffs' counsel filed a declaration stating (1) that the settlement notice website was updated on June 8, 2020 to notify class members that the Fairness Hearing had been postponed to June 30, 2020, and (2) that Plaintiffs' counsel delivered via FedEx letters informing the unrepresented objectors that the Fairness Hearing had been continued to June 30, 2020. (Dkt. No. 347.)
As of the date of the Fairness Hearing, June 30, 2020, five objectors have raised objections to the parties' proposed settlement. Two of those objectors, Michael Friedlander and John Murray, submitted letters to the Court. (Dkt. Nos. 335, 338.) Three of those objectors, Alan Carlson, Peter DeLuca, and Robert Stolte, filed their objections with the Court through their attorneys. (Dkt. No. 333.) No other individuals have thus far raised an objection to the parties' proposed settlement agreement.
c. Overview of the settlement agreement
The key provisions of the parties' proposed settlement agreement are as follows:
i. Class definition
The parties' proposed settlement agreement includes, by reference, the class that this Court certified, which is as follows:
All persons, excluding defendants and/or other individuals who are liable for the conduct described in the complaint, who are or were participants or beneficiaries of the Northrop Grumman Savings Plan at any time between September 9, 2010 and the date of judgment, and were affected by the conduct set forth in this Complaint.
(See Dkt. No. 321-1 "Proposed Settlement" § 1.2; see also Dkt. No. 130 at 22.)
ii. Payment to class members
Under the parties' proposed settlement agreement, Defendants agree to pay a sum of $12,375,000 into a Qualified Settlement Fund. (Proposed Settlement § 2.27.) From this $12,375,000 figure, class counsel seeks to recover $4,125,000 in attorneys' fees, as well as litigation expenses in an amount not to exceed $450,000. (Id. § 7.1.) Class counsel also seeks to recover an incentive award for each of the class representatives in an amount not to exceed $25,000 per class representative, which would also be paid from the gross settlement amount. (Id. ) Accordingly, the net settlement amount for all class members would equal $12,375,000 less the fees, costs, and expenses identified in the proposed settlement agreement. (Id. § 2.29.)
iii. Plan of allocation
To distribute the net settlement amount to class members, the proposed settlement agreement establishes a Plan of Allocation. (Id. § 2.33.) Under the Plan of Allocation, the net settlement amount would be divided into two portions: (1) the Administrative Fee Portion (equal to 80% of the net settlement amount), and (2) the Emerging Markets Equity Fund Portion (equal to 20% of the net settlement amount). (Id. § 6.4.3.)
With respect to the Administrative Fee Portion, class members would receive a percentage of this portion that is the product of the sum of the participant's quarter-ending total account balances for each quarter from September 30, 2010 through December 31, 2013 divided by the sum of the quarter-ending net asset value of the Savings Plan for each quarter during that period. (Id. § 6.4.4.)
With respect to the Emerging Markets Equity Fund Portion, class members would receive a percentage of this portion that is the product of the sum of the participant's quarter-ending account balances invested in the Emerging Markets Equity Fund for each quarter from December 31, 2010 through December 31, 2014 divided by the sum of the quarter ending net asset value of the Emerging Markets Equity Fund for each quarter during that period. (Id. § 6.4.5.)
The proposed settlement agreement clarifies that "[n]o amount shall be distributed to a Class Member that is five dollars ($5.00) or less because such an amount is de minimis and would cost more in processing than its value." (Id. ) The proposed settlement further clarifies that "[i]n the event that the Settlement Administrator determines that the Plan of Allocation would otherwise require payments exceeding the Net Settlement Amount, the Settlement Administrator is authorized to make such changes as are necessary to the Plan of Allocation such that said totals do not exceed the Net Settlement Amount." (Id. § 6.4.8.) The Settlement Administrator is defined in the proposed settlement agreement as "an independent contractor to be retained by Class Counsel." (Id. § 2.41.) The Settlement Administrator is authorized to calculate payments pursuant to the Plan of Allocation outlined above. (Id. §§ 6.4, 6.8.)
Class counsel has retained Analytics Consulting LLC to serve as the Settlement Administrator. (See Dkt. No. 342-1 ¶ 2.)
iv. Attorneys' fees and costs
As noted above, class counsel seeks to recover their attorneys' fees in an amount not to exceed $4,125,000, in addition to litigation costs and expenses in an amount not to exceed $450,000. (Id. § 7.1.) Class counsel also seeks to recover $25,000 per class representative as an incentive award. (Id. ) Each of these expenses would be paid from the gross settlement amount identified above ($12,375,000). (Id. §§ 2.27, 2.29.)
v. Release of claims
The parties' proposed settlement agreement also contains provisions addressing class members' release of claims and covenant not to sue. (Id. §§ 8.1, 8.2, 8.3.) In particular, the proposed settlement agreement states that "[a]s of the Settlement Effective Date, the [Savings Plan] and the Class Members ... on behalf of themselves and the [Savings Plan] ... shall be deemed to have fully ... settled, released, relinquished, waived, and discharged the Released Parties from the Released Claims[.]" (Id. § 8.1.) The proposed settlement agreement further provides that "[a]s of the Settlement Effective Date, the Class Members on behalf of themselves and the [Savings Plan] ... expressly agree that they ... shall not sue or seek to institute ... in any action or proceeding ... any cause of action, demand, or claim on the basis of, connected with, or arising out of any of the Released Claims." (Id. § 8.2.) With respect to unknown claims, the proposed settlement agreement provides that "[e]ach Class Member and the Plan ... stipulate and agree with respect to any and all Released Claims that, upon entry of the Final Order, the Class Members are conclusively deemed to ... settle, release, relinquish, waive, and discharge any and all rights or benefits that they may now have, or in the future may have, under any law relating to the releases of unknown claims, including without limitation, Section 1542 of the California Civil Code[.]" (Id. § 8.3.)
The parties' proposed settlement agreement extensively defines "Released Claims." In particular, the proposed settlement agreement states that Released Claims means, in part, "any and all actual or potential claims, actions, demands, rights, obligations, liabilities, damages, attorneys' fees, expenses, costs, and causes of action ... whether brought in an individual, representative, or any other capacity ... whether known or unknown .... for actions or omissions that occurred during the Class Period only, that:" (1) were asserted in the class action or might have been asserted in the Class Action, or (2) would be barred by the principles of res judicata or collateral estoppel had the claims been fully litigated and resulted in a final judgment. (See Id. § 2.39.) The proposed settlement agreement clarifies, however, that its definition of Released Claims "specifically excludes claims of individual denial of benefits under ERISA § 502(a)(1)(B) other than claims for benefits under the [Savings Plan] during the Class Period, wages, labor or employment claims of any type, including but not limited to employment discrimination or wrongful termination, or any workers' compensation claim." (Id. § 2.39.8.)
III. LEGAL STANDARD
Under Federal Rule of Civil Procedure 23(e)(2), the Court may approve a class action settlement "only after a hearing and only on finding that it is fair, reasonable, and adequate[.]" In reviewing proposed class action settlements, the Court must "ensure[ ] that unnamed class members are protected from unjust or unfair settlements affecting their rights, while also accounting for the strong judicial policy that favors settlements, particularly where complex class action litigation is concerned." See Campbell v. Facebook, Inc. , 951 F.3d 1106, 1121 (9th Cir. 2020) (citing In re Hyundai & Kia Fuel Econ. Litig. , 926 F.3d 539, 556, 568 (9th Cir. 2019) (en banc)). In evaluating the fairness of a proposed class action settlement, the Court may consider some or all of the following factors: (1) the strength of the plaintiffs' case, (2) the risk, expense, complexity, and likely duration of further litigation, (3) the risk of maintaining class action status throughout the trial, (4) the amount offered in settlement, (5) the extent of discovery completed and the stage of the proceedings, (6) the experience and views of counsel, (7) the presence of a governmental participant, and (8) the reaction of the class members to the proposed settlement. See Id. (quoting Hanlon v. Chrysler Corp. , 150 F.3d 1011, 1026 (9th Cir. 1998) ).
With respect to the proper scope of a settlement agreement's release of liability, "[a] settlement agreement may preclude a party from bringing a related claim in the future ‘even though the claim was not presented and might not have been presentable in the class action,’ but only where the released claim is ‘based on the identical factual predicate as that underlying the claims in the settled class action.’ " See Hesse v. Sprint Corp. , 598 F.3d 581, 590 (9th Cir. 2010) (quoting Williams v. Boeing Co. , 517 F.3d 1120, 1133 (9th Cir. 2008) ). "Put another way, a release of claims that ‘go beyond the scope of the allegations in the operative complaint’ is impermissible." Lovig v. Sears, Roebuck & Co. , No. EDCV 11-00756-CJC, 2014 WL 8252583, at *2 (C.D. Cal. Dec. 9, 2014) (quoting Willner v. Manpower, Inc. , No. 11-CV-02846-JST, 2014 WL 4370694, at *7 (N.D. Cal. Sept. 3, 2014) ).
IV. DISCUSSION
a. The parties' proposed settlement agreement releases claims that go beyond the scope of the allegations in the operative complaint
The Court concludes that the parties' proposed settlement agreement contains an overly broad release of liability. As class objectors Alan Carlson, Peter DeLuca, and Robert Stolte state in their objections, the factual allegations underlying Plaintiffs' claims concern Defendants' management and administration of the Savings Plan. (See Dkt. No. 333 at 4–5.) In particular, Plaintiffs allege in their operative complaint that Defendants (1) distributed the Saving Plan's assets to Defendant Northrop Grumman Corporation as payment for services it provided to the Savings Plan, (2) paid unreasonable recordkeeping fees to the Saving Plan's recordkeeper, and (3) used an active-management strategy for the Savings Plan's Emerging Markets Equity Fund and failed to consider whether to convert the Emerging Markets Equity Fund to passive management. (See Dkt. Nos. 132.)
Despite the limited factual predicate upon which Plaintiffs bring suit, the parties' proposed settlement agreement purports to preclude "any cause of action, demand, or claim on the basis of, connected with, or arising out of any of the Released Claims." (Proposed Settlement § 8.2.) As noted above, Released Claims is defined extensively in the proposed settlement agreement to include, among other things, "any and all actual or potential claims, actions, demands, rights, obligations, liabilities, damages, attorneys' fees, costs, and causes of action ... whether known or unknown ... for actions or omissions that occurred during the Class Period only," that (1) were asserted in the class action or could have been asserted in the Class Action, or (2) would be barred by the principles of res judicata or collateral estoppel had the claims been fully litigated and resulted in a final judgment. (See Id. § 2.39.)
By releasing "any cause of action, demand, or claim on the basis of, connected with, or arising out of any of the Released Claims," the parties' proposed settlement agreement "could capture claims that go beyond the scope of the allegations in the operative complaint, which the Ninth Circuit has held is inappropriate." See Willner v. Manpower, Inc. , 2014 WL 4370694, at *7 (N.D. Cal. Sept. 3, 2014) (citing Hesse , 598 F.3d at 590 ). The overly broad scope of this release is underscored by the expansive interpretations that courts give to phrases such as "connected with" or "arising out of." Cf. Yei A. Sun v. Advanced China Healthcare, Inc. , 901 F.3d 1081, 1086 (9th Cir. 2018) (interpreting the phrase "relating to" a particular agreement to cover "any disputes that reference the agreement or have some ‘logical or causal connection’ to the agreement," and explaining that the phrase "relating to" is synonymous with "in connection with."). Because the scope of the proposed settlement agreement's release of liability could extend to any cause of action that has a logical or causal connection to the Released Claims, and is not limited to claims based on an identical factual predicate, the proposed release of liability is impermissible.
Although this broad language prohibiting Plaintiffs from bringing suit is styled as a covenant not to sue, as opposed to a release from liability, this distinction alone does not render it permissible. See Skilstaf, Inc. v. CVS Caremark Corp. , 669 F.3d 1005, 1017 n.10 (9th Cir. 2012) ("[U]nder the modern view a covenant not to sue, like a release, operates as a complete bar to the underlying litigation.").
The parties' response to these objections is unavailing. In particular, the parties contend that any ambiguity regarding the scope of released claims can be resolved by stipulating that "Released Claims" as defined in Section 2.39 are limited to the facts of the operative complaint. (See Dkt. No. 340 at 3.) However, it is well established that a court "may not delete, modify, or substitute provisions of [a proposed settlement agreement,]" but rather "must consider the proposal as a whole and as submitted." See Officers for Justice v. Civil Serv. Com'n of City and Cty. of San Francisco , 688 F.2d 615, 630 (9th Cir. 1982) ; see also In re Bluetooth Headset Products Liability Litig. , 654 F.3d 935, 948 (9th Cir. 2011) (holding that an interpretation of a settlement agreement that "effectively ‘delete[d]’ [a provision] from the settlement ... is beyond the scope of the court's discretion."). Additionally, although the parties propose stipulating to a definition of "Released Claims" in Section 2.39, the overly broad release of liability appears in Section 8.2 of the proposed settlement agreement, wherein class members would be barred from bringing "any cause of action, demand, or claim on the basis of, connected with, or arising out of any of the Released Claims." (Proposed Settlement § 8.2.) Because the parties' proposed stipulation does not address the overly broad language of Section 8.2, and would compel the Court to adopt an interpretation that effectively deletes Section 8.2 from the proposed settlement agreement, such an approach is beyond the Court's discretion to adopt.
The parties' reliance on Campbell v. Facebook, Inc. 951 F.3d 1106 (9th Cir. 2020) does not demonstrate otherwise. In Campbell , the court relied on Facebook's counsel's assurances at oral argument that the phrase claims for declaratory and injunctive relief was intended to apply only to those claims that shared an identical factual predicate. See 951 F.3d at 1124. In relying on these assurances from counsel, the court was not compelled to adopt an interpretation of a settlement agreement that effectively deleted certain provisions of the agreement. Moreover, any interpretation of Campbell that is inconsistent with prior Ninth Circuit precedent is impermissible. See Hart v. Massanari , 266 F.3d 1155, 1171 (9th Cir. 2001) ("[A] later three-judge panel considering a case that is controlled by the rule announced in an earlier panel's opinion has no choice but to apply the earlier-adopted rule; it may not any more disregard the earlier panel's opinion than it may disregard a ruling of the Supreme Court.").
In sum, because the parties' proposed settlement agreement includes a release of liability that extends beyond claims based on an identical factual predicate as the claims at issue in the operative complaint, the Court must deny approval of the proposed settlement.
V. CONCLUSION
For the reasons stated above, the parties' joint motion for final approval of settlement is DENIED . Plaintiffs' motion for attorneys' fees is similarly DENIED . These denials are without prejudice , as the parties may move again for final approval of settlement and attorneys' fees should the parties reach an agreement that cures the deficiency identified in this order. Based on the parties' representations that renewed motions for final approval of an amended settlement agreement and for attorneys' fees are forthcoming, the Court set a hearing date of August 20, 2020, at 9:00 a.m. for these forthcoming motions. (Dkt. No. 348.)