Boyd v. Bank of America, N.A.

• Court: District Court, W.D. Washington
• Decided: July 8, 2020
• Docket: 2:18-cv-01207
• Status: Unknown

Opinion

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3 4 5 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON 6 AT SEATTLE 7 KEVIN G. BOYD, individually and on behalf of others similarly situated, 8 Plaintiff, 9 C18-1207 TSZ v. 10 ORDER BANK OF AMERICA, N.A., 11 Defendant. 12

13 THIS MATTER comes before the Court on plaintiff’s motion for preliminary 14 approval of class action settlement, docket no. 25. Upon initial review of plaintiff’s 15 motion papers, the Court identified a disparity between the Gross Settlement Value 16 ($225,000) set forth in the parties’ Joint Stipulation of Class Action Settlement and 17 Release, Ex. 1 to Haffner Decl. (docket no. 25-1) [hereinafter “Settlement Agreement”], 18 and the amount that the proposed notice to the class indicated defendant had agreed to 19 pay into a settlement fund ($2,250,000), see Ex. 2 to Haffner Decl. (docket no. 25-1 at 20 38). Plaintiff’s counsel has since filed a praecipe, docket no. 26, attached to which is a 21 corrected version of the proposed class notice, which now states that defendant has 22 agreed to pay “up to $225,000” in settlement, see Ex. 1 to Praecipe (docket no. 26 at 6). 1 Having considered the papers filed in support of plaintiff’s motion, including the praecipe 2 and the proposed class notice attached thereto, the Court enters the following order.

3 Discussion 4 In this action, plaintiff Kevin G. Boyd, who was employed as a mortgage broker 5 or lending officer on a commission basis, sued defendant Bank of America, N.A., on 6 behalf of himself and all others similarly situated, for allegedly improper deductions of 7 funds advanced for rest breaks and non-sales work.1 Plaintiff alleged that such 8 deductions constituted both a breach of contract and a willful refusal to pay wages in

9 violation of Washington law. See Compl. at ¶¶ 26-38 (docket no. 1). The parties have 10 engaged in mediation and reached a settlement. Although less than clear, the terms of the 11 parties’ settlement appear to be as follows. The parties propose a settlement fund of 12 $225,000, which will be used to pay (i) attorney’s fees (up to 30% of the fund or 13 $67,500); (ii) roughly $8,000 in litigation costs; (iii) $5,0002 in incentive fees to the

14 named plaintiff; and (iv) approximately $13,500 in settlement administration expenses, 15 leaving a net settlement fund of about $131,000 to be allocated pro rata among 376 class 16 members, who are persons with certain job codes employed in Washington by defendant 17 or a related entity from August 12, 2012, to the present. See Settlement Agreement at 18

19 20 1 Plaintiff acknowledges that a recent Washington Supreme Court decision might preclude the claim for compensation for non-sales work. Pla.’s Mot. at 17 (docket no. 25) (citing Sampson v. Knight Transp., Inc., 193 Wn.2d 878, 893, 448 P.3d 9 (2019)). 21 2 The current proposed notice to the class indicates that the incentive or service payment will be 22 $20,000, see Ex. 1 to Praecipe (docket no. 26), but this figure is inconsistent with Paragraph 38 1 ¶ 11, Ex. 1 to Haffner Decl. (docket no. 25-1 at 11) (defining the “Settling Class” as 2 “[a]ll persons who are or have been employed in job codes SM009, SM171, SM172,

3 SM603, SM604, SM605, SM610, SM611, SM612, and/or SM614 by Bank of America, 4 N.A. and/or Bank of America Corporation in the State of Washington at any time from 5 08/12/2012 to the date of Preliminary Approval of the Settlement”). 6 The parties propose to distribute the net proceeds on the basis of “Compensable 7 Weeks,” meaning weeks that class members were “actively employed” by defendant 8 during the class period, but discounting to one-twentieth (1/20th) any Compensable Week

9 that overlaps with the settlement in Flanagan v. Bank of America, N.A., Suffolk County, 10 N.Y. Supreme Court Case No. 613647/2018. See Settlement Agreement at ¶ 49(a), Ex. 1 11 to Haffner Decl. (docket no. 25-1 at 23). The parties contemplate that a settlement or 12 claims administrator will compute the total number of Compensable Weeks among all 13 class members who have not excluded themselves, and will then divide that figure into

14 the net settlement amount to determine the Per Week Payment. Id. at ¶¶ 49(b)-(c). Each 15 participating class member will receive the product of his or her number of Compensable 16 Weeks multiplied by the Per Week Payment, minus income taxes that must be withheld 17 and remitted to the Internal Revenue Service. See id. at ¶¶ 44 & 50. 18 The parties have not provided any estimates for the sums that individual class

19 members might expect to receive from the settlement. The Court, however, has been able 20 to ascertain as follows. If the anticipated net proceeds of the settlement ($131,000) were 21 distributed equally among the 376 class members, then each individual would receive 22 approximately $348, minus withheld income taxes. On the other hand, under the 1 proposed pro rata scheme, assuming that defendant’s pre-mediation disclosure of a 2 class-wide total of 32,507 Compensable Workweeks, see id. at ¶ 8 (docket no. 25-1 at

3 10), is accurate, then the Per Week Payment would be $4.02 per week, and the range of 4 recoveries would be between $4.02 for a class member who worked only one week 5 during the class period and $1,672.32 for an individual who worked each of the 52 weeks 6 of each of the approximately eight (8) years of the class period.3 The Court does not 7 intend for these values to be binding in any way; they are set forth merely for the purpose 8 of evaluating the reasonableness of the proposed class action settlement.

9 According to plaintiff’s counsel, the total amount of damages suffered by the class 10 was roughly $625,714. Plaintiff’s counsel reached this conclusion by assuming that each 11 class member missed two ten-minute rest breaks each day, on each of the five days of a 12 Compensable Week, and that such missed breaks should be compensated at an overtime 13 rate because they extended the work day. See Pla.’s Mot. at 16-17 (docket no. 25). The

14 uncompensated time was converted to a monetary figure by using the average hourly 15 wage among the various job titles at issue. Id. at 16. If plaintiff’s counsel’s estimate is 16 apportioned equally among the class members, then each individual could be viewed as 17 being owed $1,664 in back wages. This amount is actually less than the top of the range 18 of potential individual recoveries from the settlement. Based on this understanding of

19 how the anticipated distributions of the settlement proceeds compare with the damages 20

21 3 The Court recognizes that defendant’s calculation of the total number of Compensable Weeks covers the period until May 9, 2019, and is not up to date. Thus, the Per Week Payment figures 22 computed by the Court might be slightly too high or too low, depending on how many class 1 that might have been awarded if plaintiff prevailed on the merits in this litigation, the 2 Court ORDERS as follows:

3 (1) Plaintiff’s unopposed motion for preliminary approval of class action 4 settlement, docket no. 25, is GRANTED in part, DEFERRED in part, and RENOTED to 5 August 7, 2020. 6 (2) The Court hereby CERTIFIES for settlement purposes the following Class: 7 All persons who are or have been employed in job codes SM009, SM171, SM172, SM603, SM604, SM605, SM610, SM611, SM612, and/or SM614 8 by Bank of America, N.A. and/or Bank of America Corporation in the State of Washington at any time from August 12, 2012, to the date of this Order 9 (the “Covered Period” or “Class Period”). 10 Any person who timely submits an executed opt-out form is EXCLUDED from the Class. 11 (3) The following individual is APPOINTED as Class Representative: plaintiff 12 Kevin G. Boyd. The following attorneys are APPOINTED as Class Counsel: Joshua H. 13 Haffner and Graham C. Lambert of Haffner Law PC. 14 (4) Rust Consulting, Inc. is APPOINTED as Settlement (or Claims) 15 Administrator. 16 (5) With respect to the Class defined in Paragraph 2, the Court CONCLUDES 17 that the following prerequisites are satisfied: (i) the Class is so numerous that joinder of 18 all members is impracticable; (ii) questions of law and fact common to all members of

19 the Class exist; (iii) the claims of the Class Representative are typical of the claims of the 20 class members; and (iv) the Class Representative and Class Counsel fulfill the criteria for 21 fair and adequate representation. See Fed. R. Civ. P. 23(a). The Court CONCLUDES 22 that the Class defined in Paragraph 2 also meets the following requirements: (i) the 1 questions of law and/or fact common to class members predominate over questions 2 affecting only individual members; (ii) resolution by class action settlement is superior to

3 other available methods of adjudicating the dispute; and (iii) the interests of absent class 4 members who wish to litigate their claims for damages individually are adequately 5 protected by the notice and opt-out provisions described in the Settlement Agreement. 6 See Fed. R. Civ. P. 23(b)(3). 7 (6) The Settlement Agreement executed by the parties, Ex. 1 to Haffner Decl. 8 (docket no. 25-1), is preliminarily APPROVED with two exceptions, as discussed in

9 Paragraphs 7 and 8. The proposed class action settlement is not obviously deficient and 10 no evidence exists at this stage of the proceedings of any fraud, collusion, overreaching, 11 or disregard of the rights of absent class members on the part of any party. Sufficient 12 discovery was conducted in this case, and Class Counsel has sufficient experience in 13 similar proceedings to propose this settlement. The Court’s preliminary approval is

14 subject to change pending further submissions of the parties and the outcome of a hearing 15 on final approval of the proposed class action settlement. 16 (7) The Settlement Agreement refers to an Adjustment Form that each class 17 member will receive in addition to the notice of the proposed settlement. See Settlement 18 Agreement at ¶ 45, Ex. 1 to Haffner Decl. (docket no. 25-1 at 21-22). The Adjustment

19 Form will provide individualized information concerning a class member’s Compensable 20 Weeks and estimated pro rata share of the settlement proceeds. See id. The Settlement 21 Agreement requires that the class notice tell class members how to request corrections to 22 the Adjustment Form. See id. The proposed form of class notice, however, makes no 1 mention of the Adjustment Form. See Ex. 1 to Praecipe (docket no. 26). The Settlement 2 Agreement further indicates that “Settling Class Members will be instructed that they

3 must return the completed Adjustment Form with a postmark reflecting a date within 4 sixty (60) calendar days from the date of first mailing of the Settlement Class Notice,” 5 and that, if a class member provides both an Adjustment Form and an opt-out form, the 6 one submitted later in time will control. See Settlement Agreement at ¶¶ 24 & 45, Ex. 1 7 to Haffner Decl. (docket no. 25-1 at 15 & 22). The Court DECLINES to approve any 8 provision of the Settlement Agreement that requires class members to “opt in” to the

9 settlement by mailing an Adjustment Form to the Settlement or Claims Administrator. 10 The Adjustment Forms may be provided to class members for informational purposes, to 11 help them understand what they might expect from the settlement, and to permit them to 12 challenge the accuracy of the data set forth, but the Adjustment Forms may not be used as 13 a prerequisite for obtaining a share of the settlement proceeds.

14 (8) The Settlement Agreement states that, if any settlement checks are not 15 cashed or any portion of the settlement funds are not distributed, any residual amount 16 shall be paid to the Legal Foundation of Washington. Id. at ¶ 42(e). The Court defers 17 ruling with regard to this provision of the Settlement Agreement. A cy pres beneficiary 18 must be “tethered to the nature of the lawsuit and the interests of the silent class

19 members.” Dennis v. Kellogg Co., 697 F.3d 858, 867 (9th Cir. 2012); Nachshin v. AOL, 20 LLC, 663 F.3d 1034, 1036 (9th Cir. 2011) (“Cy pres distributions must account for the 21 nature of the plaintiffs’ lawsuit, the objectives of the underlying statutes, and the interests 22 of the silent class members, including their geographic diversity.”). The parties bear the 1 burden of demonstrating the appropriateness of their selection of any cy pres recipient, 2 and they have not done so.

3 (9) The Court DEFERS the scheduling of a hearing on final approval of the 4 proposed class action settlement until after the parties file (i) appropriate amendments to 5 their Settlement Agreement, addressing the issues identified in Paragraphs 7 and 8, and 6 (ii) a revised proposed notice to class members, incorporating the following changes: 7 (a) Adjustment Form: As indicated in Paragraph 7, notwithstanding the Settlement Agreement’s requirement that the notice inform class members about 8 the accompanying Adjustment Form, the current form of notice does not mention the Adjustment Form. The parties shall include in their revised proposed class 9 notice language about the Adjustment Form that is consistent with Paragraph 7 of this Order and any amendments to the Settlement Agreement that are adopted by 10 the parties. 11 (b) Calculating Pro Rata Shares: The current proposed notice does not provide sufficient information for class members to understand how the amounts 12 they will be entitled to receive from this settlement will be calculated. Reference to the Settlement Agreement as containing “the exact allocation formula,” see 13 Proposed Notice at ¶ 4, Ex. 1 to Praecipe (docket no. 26), is inadequate. The notice should instead outline the method for computing pro rata shares, including 14 the specific amounts that are anticipated to be deducted from the gross settlement fund,4 state the range of recoveries, and provide at least one concrete example. 15 (c) Implying Imprimatur: The current class notice contains statements that might unduly dissuade class members from objecting or otherwise exercising 16 their rights, for example, a “federal court authorized this notice” and the “Court ordered that you be sent this notice,” as well as phrases giving the misimpression 17 that the Court has already approved certain elements of the proposed settlement, for example, “Court-approved attorneys’ fees,” “Court-approved Service 18 Payments,” and “the [allocation] formula that has been approved by the Court.” The parties are encouraged to instead use passive voice, for example, “this notice 19 is being sent to you because you have a right to know about a proposed settlement of a class action lawsuit and about your options before the Court decides whether 20

21 4 The revised proposed form of notice should correct the existing mistake about the incentive or 22 service payment to the Class Representative. See supra note 2. In addition, the third sentence of 1 to approve the settlement,” or conditional language, for example “anticipated attorneys’ fees,” “requested service payments,” or “proposed formula for 2 apportioning the net settlement funds.” 3 (d) Correspondence: The proposed form of notice tells class members that they should “write to the Court,” which might cause confusion about where 4 correspondence should be directed. All correspondence, including opt-out forms, objections, and Adjustment Form corrections, should be sent to the Settlement 5 Administrator, and class members should not submit any settlement-related documents directly to the Court. The parties are urged to omit “the Court” from 6 their instructions to class members, for example, “you may state any objections to the proposed settlement by sending a letter to the Settlement Administrator.” 7 (e) Class Counsel: The current class notice indicates that the Court has “decided” certain lawyers “are qualified” to represent class members. Only one of 8 the half-dozen law firms listed, however, is Class Counsel, and the Court has made no such ruling. In addition, the proposed form of notice states that class members 9 “will not be charged” for the services of Class Counsel. This statement is not accurate. Class Counsel’s fees are being deducted from the gross awards due to 10 class members under the settlement. Moreover, although the proposed form of notice describes Class Counsel’s intent to request attorney’s fees of “up to 30%” 11 of the settlement fund, the dollar figure associated with the anticipated motion is nowhere stated. The revised proposed notice must set forth the amounts of 12 attorney’s fees and costs that Class Counsel will request and advise class members that a copy of the motion may be viewed on Class Counsel’s website and at the 13 website maintained by the Settlement Administrator for this litigation. The motion for attorney’s fees and costs must be filed with the Court and uploaded to the 14 websites by the date that notices to class members are mailed. See In re Mercury Interactive Corp. Sec. Litig., 618 F.3d 988 (9th Cir. 2010). The appropriate noting 15 date for such motion will be addressed when the final settlement approval hearing is scheduled. 16 (f) Cy Pres Recipient: The current proposed notice has no provision 17 concerning the disposition of uncashed or unclaimed checks. The revised form of notice must describe the timing on which checks will be deemed uncashed or 18 unclaimed, identify the proposed cy pres recipient, and advise class members that they may object to the cy pres recipient even if they have no other objection to the 19 settlement. 20 (g) Websites: The current form of notice has no placeholder for either Class Counsel’s website or the Settlement Administrator’s website. The revised 21 proposed class notice shall prominently set forth both website addresses, and shall advise class members that they may obtain a copy of the Settlement Agreement 22 and other materials relating to this litigation, including a copy of the pleadings and 1 (h) Hearing Logistics: The Court will not require class members to indicate in advance that they wish to be heard at the hearing concerning final 2 approval of the proposed settlement, and the parties shall revise the class notice accordingly. Moreover, if the final settlement approval hearing needs to be 3 rescheduled or if it must be conducted remotely via telephone or videoconference, counsel will be advised and notice will be posted in advance on the Court’s 4 website. A specific webpage address for inclusion in the class notice will be provided at a later date. 5 (i) Opt-Out Forms: The current form of notice instructs class members 6 to send a letter to the Settlement Administrator if they wish to be excluded from the Class. The parties are directed to craft a suitable opt-out form, which shall be 7 appended to the revised proposed class notice. The notice shall indicate that class members may exclude themselves by sending a completed and signed opt-out 8 form to the Settlement Administrator. They may also opt out via letter with the components outlined in Paragraph 9 of the current proposed notice to the class. 9 (10) On or before the new noting date for the pending motion (August 7, 2020), 10 the parties shall file supplemental materials that are consistent with this Order, including 11 any amendments to the settlement documents, a revised proposed notice to the class with 12 appended opt-out form, and a sample Adjustment Form. 13 IT IS SO ORDERED. 14 The Clerk is directed to send a copy of this Order to all counsel of record. 15 Dated this 7th day of July, 2020. 16 A 17

18 Thomas S. Zilly United States District Judge 19

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