A federal appeals court has ordered  Judge William Alsup to explain why he refused to allow lawyers to engage in settlements talks in a class action against Logitech Inc.

The U.S. Court of Appeals for the Ninth Circuit on Wednesday granted Logitech's emergency motion for a stay of the case pending its petition for a writ of mandamus challenging two of Alsup's orders. Those orders, on June 13 and Aug. 23, barred lawyers on both sides from settlement talks prior to certification of a nationwide class of Logitech consumers, who alleged false advertising over the sale of computer speakers.

Alsup, of the U.S. District Court for the Northern District of California, known for his unique standing orders, has long had a requirement that lawyers get class actions certified prior to settlement discussions. In a Jan. 18 order in the Logitech case, he acknowledged that this could be the first time someone had challenged that standing order. “No one has ever complained about it—until now,” he wrote.

“What the Ninth Circuit is saying right now is, 'Hey, judge, we're giving you a chance to explain yourself better or to do something differently,” said Howard Erichson of Fordham University School of Law, whose publications Alsup cited in the Logitech case. “We actually see some merit in this in the mandamus petition.”

Mayer Brown partner Donald Falk in Palo Alto, California, who represents Logitech, and plaintiffs attorney Rafey Balabanian of Edelson PC in San Francisco declined to comment.

Edelson filed the case less than a year ago, alleging Logitech mislead consumers into believing that its Z200 stereo sound system came with speakers that had had four functional drivers, not two. Alsup's initial standing order on June 13 emphasized, among other things, that lawyers should not discuss settlement of the case prior to class certification—although he carved out some exceptions in which doing so would be “acceptable to conserve resources.”

Claiming to fit within that exception, lawyers asked Alsup to halt the litigation for settlement negotiations. He denied that and, in an Aug. 23 case management order, set deadlines for class certification to move forward.

Most judges do not impose such a requirement, but many are reviewing class action settlements with increasing scrutiny, particularly in the Northern District of California, which announced new guidelines on Nov. 1. U.S. District Judge Lucy Koh cited the new rules on Jan. 28 when she rejected an $85 million data breach settlement with Yahoo, as did U.S. District Judge Charles Breyer in his Feb. 11 preliminary approval of an $800 million emissions agreement over Fiat Chrysler's EcoDiesel vehicles.

But, unlike the new guidelines, which focus on the details of an actual agreement, Alsup's standing order addresses the timing of settlement discussions. His order in the Logitech case cited a concern that lawyers would low-ball the claims of absent class members in settlement discussions due to perceived risks that a judge would reject certification.

Alsup also is concerned about sacrificing the class for a quick settlement, Erichson said.

“The danger is the plaintiffs' lawyer will want to cut the deal, the defendant will cut the deal, and some judges are too quick to approve it, even if it screws over the class members,” he said. “Judge Alsup is more aware of that than most judges and more willing to say so explicitly, saying if you want to negotiate a class settlement, then, get your class action certified.”

On Oct. 8, Logitech first petitioned the Ninth Circuit to intervene so that both sides could settle the case. Its petition cited excerpts of an Aug. 23 hearing in which Alsup outlined his concerns: “It's called collusive settlements,” he said. “Well, a lot of judges would rubber-stamp that because they'd love to get rid of the case. Well, I don't do that. My job is to protect the absent class members.”

Logitech called Alsup's orders “legally untenable.”

“Both parties to this false-advertising class action agree that it should be settled, and settled now,” wrote Falk and Dale Giali, another partner at Mayer Brown, in Los Angeles, in the original petition. “Continuing the litigation will only serve to waste the money, time, and resources of all concerned—including the district court.”

The petition cited constitutional violations, such as the First Amendment's free speech clause, in prohibiting settlement discussions. Logitech also argued that Alsup had plenty of opportunities under Rule 23 of the Federal Rules of Civil Procedure, which govern class actions, to address his concerns about a potential settlement.

Logitech emphasized that its petition could have repercussions beyond its own case.

“The district court appears to issue standing orders very similar to the order at issue here in every putative class action that is assigned to it,” the Mayer Brown lawyers wrote. “Absent intervention by this court, therefore, the district court may impede many other parties in many other class actions from engaging in reasonable, pre-certification settlement efforts.”

A panel of the Ninth Circuit refused on Dec. 24 to grant the petition but allowed Logitech to refile its petition after raising its concerns to Alsup. Logitech did so in a motion for reconsideration, but Alsup denied the motion on Jan. 18. The judge insisted that his standing order allowed for class action settlements prior to certification in certain circumstances and was not a broad First Amendment ban on settlement discussions. He also refused to stay the case, ordering plaintiffs' lawyers to file their motion for class certification by Feb. 21.

In its second petition, filed on Jan. 25, Logitech renewed its arguments, adding that new amendments to Rule 23 that became effective on Dec. 1 envisioned that there would be settlements of class actions prior to certification.

“This petition for a writ of mandamus raises issues that may warrant an answer,” wrote a different motions panel of the Ninth Circuit in this week's order. The Ninth Circuit ordered Alsup to respond within 14 days.