Filed 7/30/26 Barcelo v. Papaya Gaming CA2/2
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions
not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion
has not been certified for publication or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION TWO
JANE BARCELO et al., B348956
Plaintiffs and Respondents, (Los Angeles County
Super. Ct. No.
v. 24STCV32626)
PAPAYA GAMING, LTD. et al.,
Defendants and Respondents;
DANIEL GOLDEN et al.,
Movants and Appellants.
APPEAL from an order of the Superior Court of
Los Angeles County. Timothy P. Dillon, Judge. Affirmed.
Whiteford, Taylor & Preston, Spencer Cox, P. Thomas
Distanislao; Wilshire Law Firm, Thiago Coelho; Burns Charest
and Matthew S. Tripolitsiotis for Movants and Appellants.
Skadden, Arps, Slate, Meagher & Flom, Jason D. Russell
and Raza Rasheed, for Defendants and Respondents Papaya
Gaming, Ltd. et al.
William J. Edelman for Plaintiffs and Respondents Barcelo
et al.
____________________
Jane Barcelo and Christina Isernia (plaintiffs) filed a
consumer class action against Papaya Gaming Ltd. and Papaya
Gaming Inc. (Papaya) alleging that Papaya’s gaming website is
fraudulent. Five individuals—namely, Daniel Golden, Barbara
Miller, Jeremy Ghost, Kortni Koutrakos, and Jill Lastarza
(movants)—filed a motion to intervene under Code of Civil
Procedure section 387, subdivisions (d)(1) (mandatory
intervention) and (d)(2) (permissive intervention).1 The trial
court denied the motion, and movants appealed. We affirm.
BACKGROUND
Papaya advertises itself as an online gaming platform
“where users compete in games of skill against other human
users for money.” Plaintiffs and movants allege that Papaya
“controls the outcome of its gaming platforms and uses its own
‘bots’ to play against its human players, effectively ‘rigging’ the
game and withholding the winnings for its own financial gain.”
In March 2024, movants filed a class action in the United
States District Court for the Southern District of New York.
They defined the class as “[a]ll U.S. persons who have lost money
playing any Papaya game from 2016 until [Papaya’s] unlawful
1 All further statutory references are to the Code of Civil
Procedure unless otherwise indicated.
2
conduct and its harmful effects stop.” The parties began
settlement discussions in May 2024, and engaged in a formal
mediation in July 2024. The case did not settle.
In August 2024, Papaya successfully moved to compel
arbitration, which began in February 2025.
Plaintiffs filed the instant class action in December 2024.
Plaintiffs defined the class as “all natural persons in the United
States and United States [t]erritories, who had a Papaya account
and made a deposit in one or more Papaya games during the
[c]lass [p]eriod (between January 1, 2019 and September 5,
2024),” with certain enumerated exceptions. The parties reached
a settlement, subject to court approval, in the amount of $15
million.
In January 2025, plaintiffs filed a motion for preliminary
approval of the class action settlement.
In April 2025, movants filed a motion to intervene. (§ 387,
subds. (d)(1) & (d)(2).) The trial court denied the motion.
Movants timely appealed.
Over movants’ objections, the trial court granted
preliminary approval of the plaintiffs’ settlement in October 2025
and final approval in March 2026.2 The approved settlement
expressly excluded movants from the settlement class.
DISCUSSION
I. Mandatory Intervention
Mandatory intervention is governed by section 387,
subdivision (d)(1). To establish mandatory intervention, a
proposed intervenor must demonstrate: (1) the intervenor has an
interest relating to the property or transaction which is subject to
2 We granted movants’ motion to augment the record with
these postjudgment materials.
3
the action; (2) the disposition of the action may, as a practical
matter, impair or impede the intervenor’s ability to protect that
interest; and (3) the intervenor’s interest is not adequately
represented by the existing parties.3 (Siena Court Homeowners
Assn. v. Green Valley Corporation (2008) 164 Cal.App.4th 1416,
1423–1424.) It is not settled whether we review a denial of a
motion for mandatory intervention de novo or for abuse of
discretion. (Id. at p. 1425.) We need not resolve this issue
because we find no error under either standard. (See State Water
Bd. Cases (2023) 97 Cal.App.5th 1035, 1043.)
Movants fail to demonstrate they are not adequately
represented by plaintiffs’ counsel. “The most important factor in
determining the adequacy of representation is how the interest
compares with the interests of existing parties. . . .” (Arakaki v.
Cayetano (9th Cir. 2003) 324 F.3d 1078, 1086, citations omitted.)4
“If an applicant for intervention and an existing party share the
same ultimate objective, a presumption of adequacy of
representation arises. . . . To rebut the presumption, an
applicant must make a ‘compelling showing’ of inadequacy of
representation. . . .” (Citizens for Balanced Use v. Montana
Wilderness Assn. (9th Cir. 2011) 647 F.3d 893, 898, citations
omitted.)
Movants do not satisfy this standard. They argue that
plaintiffs inadequately represented movants’ interests because
they colluded with Papaya to reduce the latter’s liability to
3 We consider movants’ interest, not their lawyer’s interest.
4 California “ ‘may take guidance from federal law’ ” on the
issue of mandatory intervention. (Crestwood Behavioral Health,
Inc. v. Lacy (2021) 70 Cal.App.5th 560, 573.)
4
movants and other class members. These arguments focus
primarily on the adequacy of the settlement fund, which, after
fees, awards, and expenses, amounted to approximately $10
million for a class of over four million people. In other words,
movants argue, each class member will receive less than $2.50,
notwithstanding potentially available statutory damages that
could far exceed that amount.
However, the record shows legitimate explanations for the
settlement amount. For example, plaintiffs’ counsel
acknowledged that users of Papaya’s site “are subject to
arbitration agreements that [arguably] subject them to
mandatory arbitration and preclude[s] class claims.”
Accordingly, plaintiffs’ counsel was concerned that “[g]iven the
relatively small value of individual damages, most [c]lass
[m]embers would recover little to nothing absent this
[s]ettlement.” This concern was not unreasonable, given that
movants’ counsel lost a motion to compel arbitration in New
York. For this reason, we also are not persuaded by movants’
argument that plaintiffs’ counsel abandoned billions of dollars in
statutory damages.
Similarly, movants argue that plaintiffs’ service awards are
excessive because they are disproportionate to their losses and
the average recovery.5 In fact, the settlement agreement
provides for service awards of only $1,500 for each named
plaintiff. Service awards are “fairly typical” in class actions.
(Rodriguez v. West Publishing Corp. (9th Cir. 2009) 563 F.3d 948,
5 A service award is a type of discretionary incentive award
“intended to compensate class representatives for work done on
behalf of the class[.]” (Cellphone Termination Fee Cases (2010)
186 Cal.App.4th 1380, 1393–1394.)
5
958.) These amounts are not so high as to evidence collusion.
(See, e.g., In re U.S. Bancorp Litigation (8th Cir. 2002) 291 F.3d
1035, 1038 [approving $2,000 incentive awards to class
representatives who secured a $3 million settlement for a class
that could exceed 4 million].)
Movants also argue that plaintiffs and Papaya colluded by
executing a settlement agreement before plaintiffs’ complaint was
filed, precluding “pre-suit investigation” and “material discovery,
motions practice, or litigation of any sort.” To the contrary, the
record shows that the parties exchanged information during
mediation. Papaya provided information about its user base, fee
structures, insurance coverage and limits, and its general
financial condition. Moreover, it is not uncommon to settle cases
before litigation, as it often results in higher settlement amounts
(especially in cases subject to arbitration agreements). As the
trial court observed, “[i]n a situation with a mass arbitration
agreement, counsel may choose to forgo litigation for a number of
reasons, including keeping costs down (especially in situations
where [the] [d]efendant’s financial state prevents it from paying
out a large settlement).”
Finally, movants argue that the settlement agreement is
coercive because it provides that “if the [s]ettlement is
terminated then [p]laintiffs will dismiss this action without
prejudice and the [p]arties will resume the arbitration
proceedings, not litigate in this [c]ourt.” This is not a compelling
showing of collusion; it merely reflects the reality that, absent
settlement, the parties would be returned to their original
positions, meaning this dispute would be governed by the users’
arbitration agreements. Plaintiffs’ representation is not rendered
6
inaccurate by their counsel’s acknowledgement that, in that
scenario, this dispute would be governed by arbitration.
We have considered movants’ remaining arguments and
find none to be persuasive.6 In sum, we agree with the trial court
that there is no compelling evidence plaintiffs’ counsel provided
inadequate representation to intervenors in negotiating this
settlement. At heart, movants merely disagree with plaintiffs’
counsel’s litigation strategy, which does not justify intervention.
(See League of United Latin American Citizens v. Wilson (9th Cir.
1997) 131 F.3d 1297, 1306.) Therefore, we find that the trial
court correctly denied movants’ motion for mandatory
intervention. (See Oakland Bulk & Oversized Terminal, LLC v.
City of Oakland (9th Cir. 2020) 960 F.3d 603, 620 [affirming
denial of intervention where movant “failed to offer persuasive
evidence” that existing party had taken unfavorable positions in
the litigation].)
6 In their reply brief and at oral argument, movants argued
that their interests were not adequately represented because
they were involuntarily carved out of the settlement class, even
though they wanted to remain in the class to object to this
settlement. Movants forfeited this argument by failing to raise it
in their opening brief. (Doe v. California Dept. of Justice (2009)
173 Cal.App.4th 1095, 1115.) Nor is it clear movants preserved
this issue for appeal before the trial court, as they provide no
record that they objected to their exclusion or failed to receive
notice and opportunity to be heard on this issue. (Jameson v.
Desta (2018) 5 Cal.5th 594, 608–609 [“In the absence of a
contrary showing in the record, all presumptions in favor of the
trial court’s action will be made by the appellate court.”].)
7
II. Permissive Intervention
Permissive intervention is governed by section 387,
subdivision (d)(2). “ ‘ “[T]he trial court has discretion to permit a
nonparty to intervene where the following factors are met: (1) the
proper procedures have been followed; (2) the nonparty has a
direct and immediate interest in the action; (3) the intervention
will not enlarge the issues in the litigation; and (4) the reasons
for the intervention outweigh any opposition by the parties
presently in the action. [Citation.]” ’ ” (Edwards v. Heartland
Payment Systems, Inc. (2018) 29 Cal.App.5th 725, 736.) We
review the denial of permissive intervention for abuse of
discretion. (Ibid.)
The trial court found that “intervention at this stage would
unnecessarily enlarge and complicate the issues in the case” and
“interfere with and delay the court’s role in assessing the fairness
of the settlement.” Specifically, the court found that intervention
would cause “substantial delay.” The court found that the
movants “do not establish a reason to derail the preliminary
approval process or show why their presence is needed as parties
in this action,” because “[p]laintiffs and their counsel are
adequate on this record.” The court also noted that movants “do
not establish collusion or deception.” Finally, the court found
that “[t]he reasons for permitting intervention do not outweigh
the reasons for denying intervention,” recognizing that movants
“only challenge the adequacy of the settlement. Nothing else.”
We find no error in these findings and therefore no abuse of
discretion in the trial court’s decision to deny permissive
intervention. Accordingly, we affirm the court’s order.
8
DISPOSITION
The trial court’s order denying movants’ motion to
intervene is affirmed. Plaintiffs and Papaya are entitled to costs
on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.
_____________________, J.
GOORVITCH
We concur:
________________________, Acting P. J.
CHAVEZ
________________________, J.
RICHARDSON
9