CASE NO. 5:19-cv-162-FB (HJB) IN THE U.S. DISTRICT COURT WESTERN DISTRICT OF TEXASâSAN ANTONIO DIVISION DANIEL GUZMAN, Individually and on Behalf of All Others Similarly Situated Plaintiffs V. CASCADE PROCESS CONTROLS, INC. Defendant DEFENDANT'S FIRST MOTION & REQUEST FOR DECLARATORY JUDGMENT THE MOSTER LAW FIRM, P.C. 4920 S. LOOP 289, STE. 101 LUBBOCK, TX 79414 Attorneys for Defendant CASE NO. 5:19-CV-162-FB (HJB) DANIEL GUZMAN, INDIVIDUALLY AND Â§ ON BEHALF OF ALL OTHERS SIMILARLY Â§ SITUATED Â§ PLAINTIFFS Â§ Â§ UNITED STATES DISTRICT COURT V. Â§ WESTERN DISTRICT OF TEXAS Â§ SAN ANTONIO DIVISION CASCADE PROCESS CONTROLS, INC. Â§ DEFENDANTS. Â§ DEFENDANT'S FIRST MOTION & REQUEST FOR DECLARATORY JUDGMENT COMES NOW, Cascade Process Controls, Inc. (hereinafter "Defendant"), by and through its respective counsel of record and files this First Motion & Request for Declaratory Judgment, and for merit thereunto would show this Honorable Court the following: I. REQUEST FOR DECLARATORY JUDGMENT A. THIS HONORABLE COURT SHOULD UPHOLD 5TH CIRCUIT PRECEDENT THAT INDIVIDUAL SETTLEMENTS BETWEEN DEFENDANT AND PLAINTIFF PARTIES, WITH REGARD TO CERTIFIED CLASS MEMBERS, IS PERMISSIBLE. (1) Declaratory Judgments Generally. While there are no expressly established rules of Texas state or federal civil procedure that deal specifically with declaratory judgments, the Texas Legislature and Federal Congress, along with subsequent Federal and State courts, have given practitioners and jurists at least some general guidance as to the proper use and implementation of such judgments and their requests. See 28 U.S. Code Â§ 2201-22 DECLARATORY JUDGMENT ACT OF 1934 (hereinafter "DJA"); See also, TEX. CIV. PRAC. & REM. CODE, CH. 37, Â§ 37.001 et seq. TEXAS UNIFORM DECLARATORY JUDGMENTS ACT (hereinafter "TUDJA"). Under the TUDJA declaratory judgments are to be "remedial", with a broad purpose to "settle and to afford relief from uncertainty and insecurity with respect to rights. . . and is to be liberally construed." See TUDJA, Â§ 37.002(b). In addition to such judgments being sui generis "[a] court of record within its jurisdiction has power to declare rights, status, and other legal relations whether or not further relief is or could be claimed." See TUDJA, Â§ 37.003(a).1 Not surprisingly the federal DJA is in alignment with the Texas standard, to wit: In a case of actual controversy within its jurisdiction. . . any court of the United States. . . may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought. Any such declaration shall have the force and effect of a final judgment or decree and shall be reviewable as such.2 As to application, a declaratory judgment is appropriate only when there is a justiciable controversy about the rights and status of the parties, and the declaration would resolve the controversy." See TUDJA, Â§ 37.008; See also, Rowan v. Griffin, 876 F.2d at 3. When considering whether or not there exists an actual controversy the Supreme Court of the United States has determined "[a] controversy. . . must be one that is appropriate for judicial determination" and, as such, a controversy "must be 1 See also, City of El Paso v. Heinrich, 284 S.W.3d 366, 370 (Tex.2009); City of Garland v. Dallas Morning News, 22 S.W.3d, 357 (Tex.2000) (plurality op.); Bonham State Bank v. Beadle, 907 S.W.2d 465, 467 (Tex.1995). 2 See Rowan Cos. v. Griffin, 876 F.2d 26, 27 (5th Cir. 1989). definite and concrete, touching the legal relations of parties having adverse legal interests." Rowan v. Griffin, 876 F.2d at 3. 3 Finally, as a result of this well- established guidance of statutory interpretation from the Supreme Court, 5th Circuit courts have long applied the following principal to declaratory judgments in this regardâ"[a] controversy, to be justiciable, must be such that it can presently be litigated and decided and not hypothetical, conjectural, conditional or based upon the possibility of a factual situation that may never develop." Brown & Root, Inc. v. Big Rock Corp., 383 F.2d 662, 665 (5th Cir. 1967). (2) The Case at Bar is of an Actual and Substantial Controversy, and the Issue at Bar is of an Adverse and Immediate Nature Sufficient to Warrant the Issuance of a Declaratory Judgment Granting Individual Class Member Settlement(s). Here, Plaintiffs are a certified class, and were granted such certification status by this Honorable Court, appurtenant to a successful Phase II scheduling conference, on or about October 22, 2019. Defendant's counsel of record was notified by officers and agents of Defendant that they had directly engaged with one of the certified class members, of their own accord, and had discussed a private settlement with such class member. Counsel for Defendant addressed the issue in an email sent to Plaintiffs' counsel the same day, in good faith and candor, understanding that this narrow issue is novel within Texas federal courts. And, while counsel for Defendant has advised that no further such discussions should take place until this Court rules on this issue, Aetna Life Ins. Co. v. Haworth, 300 U.S. 227, 239-41, 57 S. Ct. 461, 463-64, 3 (citing 82 L. Ed. 617 (1937)). Defendant continues to wish to engage in such private settlements with individual Plaintiff class members. As such, Defendant humbly suggests that the issue at bar requires immediate declaratory review and judgment by this Honorable Court. Interestingly, while the narrow issue at hand would appear predictable 5th Circuit common law regarding this issue is largely rooted within Louisiana and Mississippi. In fact, while this particular issue has been addressed and its remedy established within the 5th Circuit since at least 1989, it appears to be a novel issue of first impression for this Honorable Court, if not Texas as a whole with regard to federal civil practice. That said, the seminal case with regard to appropriateness and allowance of individual certified class-member settlements with a named adverse party comes from the U.S. District Court for the Eastern District of Louisiana. The court in In re Shell Oil Refinery, 152 F.R.D. 526, 527 (E.D. La. 1989) faced this exact same issue which Defendant now brings before this Honorable Court. In Shell Oil, counsel for Plaintiffs, a certified class, argued that since the opt-out period had expired no individual settlements could be made without irreparable harm to the class action. Id. at 26-27. Plaintiffs' counsel further argued that once each member of the class was certified he or she gave up any and all rights they might have had to negotiate and conclude their own settlement(s). Id. at 27. Finally, Plaintiffs argued that barring individual class members from settling individually was necessary in order to ensure the integrity of the class action and that all members would be treated fairly. Id. Ultimately, however, the court disagreed entirely, going so far as to state "it appears that plaintiffs' position is unsupported by any legal authority. Indeed, several courts have recognized that individual settlements are permissible in a class action." Id. at 28.4 Additionally, while the Fed. R. Civ. P. broadly speak to the entire class settlement, the court, citing to In Re General Motors, 594 F.2d at 1139 stated that "[a] proposed offer to settle with individual class members requires a lesser degree of judicial scrutiny than a proposed settlement of a class action." Id. at 31 (emphasis added). The court thus ultimately held that certified class members are free to accept or reject individual settlement offers, and that plaintiffs' argument that individual settlements were impermissible because they might destroy the class action was without merit. Id.5 Here, and comparable to Shell Oil, Defendant is seeking to engage individual Plaintiffs, whom are certified class members, for the sole purpose of negotiating individual settlement agreements with such members. It must also be noted that counsel for Defendant has not attempted, and is not attempting, to circumvent longstanding TEXAS DISCIPLINARY RULES OF PROFESSIONAL CONDUCT, to wit, usurping the lawyer-client relationship of Plaintiffs and their counsel by utilizing Defendant as an end-around to the Rule. On the contrary, the previous negotiations between Defendant and individual Plaintiffs' class members were devised and entered into 4 (citing In Re General Motors Corporation Engine Interchange Litigation, 594 F.2d 1106, 1137-1140 (7th Cir. 1979); Vernon J. Rockler & Co., Inc. v. Minneapolis Shareholders Company, 425 F. Supp. 145, 149-50 (D. Minn. 1977); Chrapliwy v. Uniroyal, Inc., 71 F.R.D. 461, 464 (N.D. Ind. 1976); Rodgers v. United States Steel Corporation, 70 F.R.D. 639, 642-43 (W.D. Pa. 1976). 5 (citing Vernon J. Rockler & Co., 425 F. Supp. At 150). solely by Defendant without counsel's input until after the fact, which additionally complies with the spirit of Shell Oil. Therefore, while the court in Shell Oil continued to maintain oversight and supervision of the settlement process, per the FED. R. CIV. P., the court also allowed the defendant and certified Plaintiffs' class members to negotiate and enter into their own individual settlements. Additionally, the court in Shell Oil required counsel for defendant to make any offers of settlement to plaintiffs' counsel per the very narrow and specific Louisiana professional conduct rule of the same nature, though no such per se class-action rule is found within the State of Texas. (3) Conclusion. As a result of the foregoing, it becomes clear through prior decisions directly related to this issue that a party defendant may appropriately engage and settle suit(s) with party plaintiffs, even if those plaintiffs are members of a certified class action. Yet, as this appears to be a novel issue within this Federal District Court, Defendant prays that this Honorable Court institute and uphold 5th Circuit principles of stare decisis in this regard, by issuing a declaratory judgment that Defendant may negotiate and enter into settlement agreements with individual Plaintiffs' certified class members. II. PRAYER Defendant, incorporating by reference all of the foregoing, humbly and respectfully prays that this Honorable Court uphold 5th Circuit principles of stare decisis, and declare it proper and appropriate for party defendants to engage party plaintiffs in order to individually settle suit(s), notwithstanding such party plaintiffs may be members of a certified class; and, that such individual settlements with and by party plaintiff class members is likewise proper and appropriate. Respectfully submitted, /s/ B. Blaze Taylor, Esq. B. Blaze Taylor, Esq. State Bar No. 24106495 THE MOSTER LAW FIRM, P.C. 4920 South Loop 289, Suite 101 Lubbock, TX 79414 email@example.com Phone: (806) 778-6486 Facsimile: (866) 302-7046 Counsel for Defendant CERTIFICATE OF SERVICE & COMPLIANCE This is to certify that on JANUARY 6, 2019, Plaintiff(s) were properly noticed and served with a true and correct copy of the foregoing document via the PACER CM/EMF document filing system. Below signed counsel further represents that this Motion complies with WDTX Local Rules 5, 7, and 10. Respectfully submitted by, /s/ B. Blaze Taylor, Esq. B. Blaze Taylor, Esq.