Bautista v. Juul Labs, Inc.

District Court, N.D. California·Decided February 2, 2022·No. 4:20-cv-01613·Unknown

Opinion

MARIA DE LA LUZ BAUTISTA-PEREZ, Case No. 20-cv-01613-HSG et al., ORDER GRANTING PRELIMINARY Plaintiffs, SETTLEMENT APPROVAL v. Re: Dkt. No. 131 JUUL LABS, INC., et al., Defendants. Pending before the Court is the unopposed motion for preliminary approval of class action settlement filed by Plaintiffs. Dkt. No. 131 (“Mot.”). The parties have reached a settlement regarding Plaintiffs’ claims and now seek the required court approval. For the reasons set forth below, the Court GRANTS Plaintiffs’ motion. A. Factual Allegations Defendant Juul Labs, Inc. (“Juul”) is a foreign stock corporation that produces electronic cigarettes. See Dkt. No. 100 (“Second Amended Complaint” or “SAC”) ¶ 16. In the run-up to San Francisco’s November 5, 2019 municipal election, Juul oversaw the Yes on C Campaign to pass Proposition C (the “Campaign”), which would have overturned a San Francisco ordinance suspending the sale of electronic cigarettes. Id. ¶ 3. Juul hired Defendant Long Ying International, Inc. (“Long Ying”), a campaign operator based in San Francisco, and Defendant David Ho, the CEO for Long Ying, to help manage the Campaign’s operations. Id. ¶ 5. Long Ying and its owner David Ho hired Plaintiffs and roughly 365 other workers to provide canvassing, phone banking, and related administrative services for the Campaign. SAC ¶¶ 3, 116. These campaign workers were hired as independent contractors and were required to sign a form independent contractor agreement with Long Ying. Id. ¶¶ 8, 89. Plaintiffs allege that Defendant Juul and Coalition were also legal employers of the campaign workers because, among other reasons, a Juul employee had the ability to control the campaign workers’ wage, hours, and working conditions, and the campaign workers were supervised in part by Coalition employees. Id. ¶¶ 125-132. Plaintiffs also allege that Defendants failed to comply with several state and federal laws by violating requirements to provide compliant pay statements and to pay workers for all hours worked and immediately upon discharge. Id. ¶¶ 153-201. B. Procedural Background In March 2020, Named Plaintiffs brought this lawsuit, asserting claims under the California Labor Code and the federal Fair Labor Standards Act (“FLSA”). Dkt. No. 1. The Court denied Defendants’ motions to compel arbitration in August 2020. Dkt. No. 66. Plaintiffs then filed their First Amended Complaint (“FAC”), which added claims for penalties under the Private Attorneys General Act (“PAGA”). Dkt. No. 78. Defendant Juul moved to dismiss the FAC, and Defendant Coalition joined that motion. Dkt. Nos. 82-83. In December 2020, the Court granted Juul’s Motion to Dismiss but gave Plaintiffs leave to amend their complaint. Dkt. No. 98. Plaintiffs filed their Second Amended Complaint in January 2021. Dkt. No. 100. Plaintiffs then moved to conditionally certify the class, while Juul and Coalition moved to dismiss the SAC. Dkt. Nos. 79, 104, 105. The Court denied the motions to dismiss and granted conditional class certification. Dkt. No. 117. In June 2021, the Court stayed the case to allow the parties to pursue mediation. Dkt. No. 128. The parties attended a mediation session and ultimately accepted a mediator’s proposal to settle the case in August 2021. Mot. at 6. The parties finalized a settlement agreement in December 2021, which they now present to the Court for approval. Id. // // C. Settlement Agreement Following discovery and with the assistance of a private mediator, the parties entered into a settlement agreement. See Dkt. No. 131-1, Declaration of George Warner ISO Plaintiffs’ Unopposed Motion for Preliminary Approval of Class Action and Collective Action Settlement and Conditional Class Certification (“Warner Decl.”); Exhibit 1 (“Settlement Agreement” or “SA”). The terms of the Settlement Agreement are summarized below: Class Definition: The Settlement Class is defined as all individuals who were hired directly by Long Ying to perform phone banking, canvassing and/or administrative tasks for the Campaign and performed such work at any time during the Class Period. SA § IV.B. The parties have represented that there are approximately 369 individuals who fall within the class definition. Warner Decl. ¶ 13. Monetary Terms: Defendants have agreed to pay a gross Settlement Fund of $1,750,000. SA § VI.A. $400,000 of the gross Settlement Fund will be allocated to resolve claims raised under PAGA, of which $300,000 will be disbursed to the State of California and $100,000 will be disbursed to the class members. Id. § VI.E. $1,500 of the gross Settlement Fund will be allocated to resolve the collective action members’ FLSA claims. Id. § VI.F. At least $563,000 of the gross Settlement Fund will be allocated to class members to resolve claims under the Labor Code and San Francisco law. Id. §§ VI.B–VI.D; Warner Decl. ¶ 17. The Settlement Agreement permits payment of attorneys’ fees of up to $750,000 for Plaintiffs’ attorneys, fees of $18,500 to the settlement administrator, and $17,000 in class representative service awards. SA §§ VI.B–VI.D; Warner Decl. ¶ 17. Class Notice: Upon preliminary approval, the Settlement Administrator will send a notice to members of the class, using first-class mail and, when available, e-mail. SA § VII.C, Ex. A. Members of the class who also have claims under the FLSA will receive a slightly modified notice that will allow them to join the collective action portion of this case and participate in the settlement of the FLSA portion of the settlement. Id. § VII.C, Ex. B. In addition, the Settlement Administrator will establish a website for Class Members’ inquiries. Id. § VII.H. Opt-Out Procedure: Any putative class member who does not wish to participate in the class action portion of the settlement must sign and postmark a written request for exclusion to the settlement administrator within 45 days from the mailing of the class notice. SA § VII.F. Opt-In Procedure for FLSA Claims: The campaign workers who also have a claim under the FLSA will receive a separate version of the class action notice that provides information about the FLSA portion of the settlement. SA § VII.E, Ex. B. This version invites campaign workers to opt into the settlement of the FLSA overtime claim by filling out the form attached to the notice and sending it to Plaintiffs’ counsel by email or mail, or by filling out the consent to join form online. Id. Distribution Plan and Possible Cy Pres Allocation: Class members will receive their individual settlement payments within 10 days of the final approval of the Settlement Agreement, after which class members will have 90 days to deposit their checks. SA § VIII.C. Class members do not need to file a claim to receive payment. Id. After 90 days, the Settlement Administrator will provide notice of the total amount of funds left undeposited and will provide notice by email to class members who did not cash the initial check so that those class members can inform the Settlement Administrator of any change of address. Id. § VIII.E. The Settlement Administrator will also use updated forwarding addresses to obtain the most recent address available. Id. The Settlement Administrator will then provide those class members who did not deposit their initial checks the option to get paid via check or electronic payment, such as Venmo or Paypal. SA § VIII.E. If, after this second distribution, at least $20,000 remains, the Settlement Administrator will issue an additional distribution to the Class Members who deposited their initial checks. SA § VIII.F. If less than $20,000 remains, Open Door Legal will receive the remainder as a cy pres beneficiary. Id. Open Door Legal is a nonprofit legal services provider that serves low-wage residents of San Francisco in employment matters and other legal matters. Warner Decl. ¶ 16(g). Release: The class will release all claims against Defendants that were alleged or could have been alleged in this case based on the same facts and cir

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Bautista v. Juul Labs, Inc., (N.D. Cal. 2022).

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