Ferrell v. Buckingham Property Management

District Court, E.D. California·Decided July 30, 2020·No. 1:19-cv-00332·Unknown

Opinion

8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10

11 KEVIN FERRELL, et al., No. 1:19-cv-00332-NONE-SAB

12 Plaintiffs, ORDER ADOPTING FINDINGS AND RECOMMENDATIONS AND GRANTING 13 v. PLAINTIFFS’ MOTION FOR CONDITIONAL CLASS CERTIFICATION 14 BUCKINGHAM PROPERTY AND PRELIMINARY APPROVAL OF THE MANAGEMENT, PROPOSED CLASS AND COLLECTIVE 15 ACTION SETTLEMENT Defendant. 16 (Doc. Nos. 19, 24)

17 18 On November 25, 2019, plaintiffs Kevin Ferrell and Cheryl Baker filed a motion for 19 conditional class certification and preliminary approval of the proposed class and collective 20 action settlement in this action. (Doc. No. 19.) On January 21, 2020, the assigned magistrate 21 judge issued findings and recommendations, recommending that plaintiffs’ motion be granted. 22 (Doc. No. 24.) The findings and recommendations were served on the parties and contained 23 notice that any objections to the findings and recommendations were to be filed within fourteen 24 (14) days from the date of service. No objections have been filed. 25 After reviewing the pending findings and recommendations and the parties’ filings, the 26 undersigned identified several issues of concern regarding the proposed settlement and directed 27 the parties to submit responsive supplemental briefing, which plaintiffs filed on June 4, 2020. (Doc. No. 27.) 1 In accordance with the provisions of 28 U.S.C. § 636(b)(1)(C), this court has conducted a 2 de novo review of this case. Having carefully reviewed the entire file, including the plaintiffs’ 3 supplemental briefing (Doc. No. 27), the court concludes that the findings and 4 recommendations are supported by the record and proper analysis. In addition to the reasoning 5 set forth in the magistrate judge’s findings and recommendations (Doc. No. 24), below the court 6 explains the additional considerations taken into account in granting the motion for conditional 7 class certification and preliminary approval of the class and collective action settlement. 8 A. Summary of Proposed Settlement 9 The parties have agreed to a Maximum Settlement Amount of $600,000 on a claims- 10 made basis. (Doc. No. 19-1, Exhibit 1 ¶¶ 34, 62 (Settlement Agreement).) The “Net Settlement 11 Amount” is what remains after deducting the following from the Maximum Settlement Amount: 12 1) attorneys’ fees of up to 35% of the Maximum Settlement Amount, for a total of $210,000, 13 plus reimbursement of litigation costs and expenses up to $35,000, for a combined total of 14 $245,000 to Class/Collective Counsel; 2) Incentive Awards of up to $3,000 each to plaintiffs 15 Ferrell and Baker, for a combined total of $6,000; 3) $3,750 to the Labor Workforce and 16 Development Agency (LDWA) for its share of the Private Attorneys General Act of 2004 17 (PAGA) Settlement Amount; and 4) Settlement Administration Costs estimated to be $16,000. 18 (Doc. No. 19 at 13.) Additionally, a 25% portion of the PAGA Settlement Amount allocated to 19 aggrieved employees ($1,250) will remain part of the Net Settlement Amount. (Id.) 20 The Net Settlement Amount for the two categories of individuals is estimated to be 21 $329,250. (Id.) The Class Members will receive 95% of the Net Settlement Amount, and the 22 FLSA Collective is allocated the remaining 5% of the Net Settlement Amount. (Id. at 14.) The 23 Class Settlement Amount is estimated to be $312,787.50, and will be distributed to claimants 24 based upon their number of workweeks during the Settled Period. (Id. at 13.) If there is a 100% 25 claims rate, the Class Members’ distributions will range between $111.21 (for six months of 26 workweeks) to $1,779.36 (for eight years of workweeks). (Id. at 15.) At least 63% of the Class 27 Settlement Amount will be distributed to Claimants (the Minimum Distribution Floor). (Id. at 1 on a pro rata basis per their number of workweeks. (Id.) Any unclaimed amount over the 2 Minimum Distribution Floor will be used to pay defendant’s share of payroll taxes and 3 contributions in connection with the wages portion of the Estimated Class Settlement Shares 4 and Estimated FLSA Settlement Shares. (Id.) Any further remaining amount will be retained 5 by defendant. (Id.) 6 For the FLSA Settlement Amount, approximately $16,462.50 will be distributed to FLSA 7 Collective Members based on their number of workweeks. (Id.) If there is a 100% claims rate, 8 the FLSA Collective Members’ distributions will range between $5.85 (for six months of 9 workweeks) to $93.65 (for eight years of workweeks). (Id. at 15.) The entire FLSA Settlement 10 Amount will be paid out to the FLSA Collective. (Id. at 13.) 11 B. Conflicts of Interests 12 On May 5, 2020, the undersigned directed the parties to submit supplemental 13 documentation addressing whether plaintiffs’ firm has any conflicts of interest in this case with 14 plaintiffs Kevin Ferrell and Cheryl Baker, Class Members, defendant Buckingham Property 15 Management, defendant’s counsel, or the cy pres recipient Legal Aid at Work. (Doc. No. 26 ¶ 16 8.) Plaintiffs’ counsel avers that there are no conflicts of interest in this case. (Suppl. Aiwazian 17 Decl. ¶ 69; Suppl. Davis Decl. ¶ 3.) Accordingly, the court adopts the pending findings and 18 recommendations as to the finding that plaintiffs and their counsel satisfy the adequacy of 19 representation requirement of Federal Rule of Civil Procedure 23(a)(4). 20 C. Valuation of Plaintiffs’ Claims 21 The maximum potential damages for plaintiffs’ claims are approximately 22 $11,353,147.53.1 (See Doc. No. 24 at 31; Aiwazian Decl. ¶ 26(a)–(l).) Thus, the Maximum 23 1 As requested, plaintiffs’ counsel has provided supplemental documentation showing that the 24 valuation of plaintiffs’ FLSA overtime and minimum wage claims included the liquidated damages provided by law. (Suppl. Aiwazian Decl. ¶ 17.) The court calculates the maximum 25 potential damages as follows: $1,026,334.45 + $901,945.24 + $684,103.09 + $601,189.72 + $1,368,206.17 + $1,368,206.17 + $1,634,505.60 + $2,207,800.00 + $401,500 + $146,254.00 + 26 $684,103.09 + $329,000.00 = $11,353,147.53. Plaintiffs’ updated calculations slightly differ from this court’s and the magistrate judge’s calculations, particularly because plaintiffs used a 27 different figure for the FLSA minimum wages claim in their supplemental briefing. (Compare Suppl. Aiwazian Decl. ¶ 69, with Aiwazian Decl. ¶ 26(d).) Plaintiffs are directed to address this 1 Settlement Fund of $600,000 is approximately 5.3% of recovery for plaintiffs’ maximum 2 potential claims. After deducting attorneys’ fees proposed at 35% of the Maximum Settlement 3 Amount, costs, and other amounts described above, the Class Settlement Amount is estimated to 4 be $312,787.50. (Doc. No. 24 at 31; Doc. No. 27 at 17; Settlement Agreement ¶ 44.) The 5 FLSA Settlement Amount is $16,462.50, which is only 1% of the original $1,503,134.96 6 valuation for the FLSA claims.2 (Doc. No. 24 at 31.) Therefore, the total maximum estimated 7 payout to the Class Members and the FLSA Collective is approximately $329,250. (Doc. No. 8 24 at 31.) This amounts to less than 3% of the original valuation. (See id.) 9 According to plaintiffs, “at least 63% of the Class Settlement Amount (‘Minimum 10 Distribution Floor’) will be distributed to Class Members who submit timely and valid Claim 11 Forms (‘Claimants’) and the entire FLSA Settlement Amount will be distributed to Proposed 12 FLSA Collective Members who submit valid and timely FLSA Opt-in Forms (‘FLSA Collective 13 Members’).” (Doc. No. 27 at 17–18.) 14 “[I]t is estimated that the average Estimated Class Settlement Share to Class Members is 15 approximately $389.24 and the average Estimated FLSA Settlement Share to a Proposed FLSA 16 Member is approximately $20.49.” (Id.

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