1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 ----oo0oo---- 11 12 TRICILLA GRIFFIN, individually, No. 2:21-cv-0885 WBS KJN and on behalf of other members 13 of the general public similarly situated and on behalf of other 14 aggrieved employees pursuant to ORDER RE: PLAINTIFF’S MOTION the California Private Attorneys FOR PRELIMINARY APPROVAL OF 15 General Act, CLASS ACTION SETTLEMENT 16 Plaintiff, 17 v. 18 CONSOLIDATED COMMUNICATIONS, an unknown business entity; and 19 DOES 1 through 100, inclusive, 20 Defendant. 21 22 ----oo0oo---- 23 Plaintiff Tricilla Griffin, individually and on behalf 24 of all other similarly situated employees, brought this putative 25 class action against defendant Consolidated Communications 26 alleging wage and hour violations under California law. (See 27 First Am. Compl. (“FAC”) (Docket No. 1-1).) Before the court is 28 plaintiff’s unopposed motion for preliminary approval of a class 1 action settlement. (See Mot. for Prelim. Approval (“Mot.”) 2 (Docket No. 27), Def.’s Notice of Non-Opposition (Docket No. 3 31).) 4 I. Background and Proposed Settlement 5 Defendant Consolidated Communications employed 6 plaintiff and other class members as hourly-paid or non-exempt 7 employees. (FAC at ¶ 24.) Plaintiff brought this action 8 alleging: (1) failure to pay minimum and final wages; (2) failure 9 to timely pay wages; (3) failure to pay overtime wages; (4) 10 failure to pay meal and rest period premiums; (4) failure to 11 provide compliant wage statements; (5) failure to keep compliant 12 payroll records; (6) failure to reimburse business expenses; (7) 13 violation of California’s Business and Professions Code, Cal. § 14 17200, et seq.; and (8) violation of California’s Private 15 Attorneys General Act of 2004 (“PAGA”), Cal. Lab. Code § 2698, et 16 seq. (See FAC.) 17 The parties propose a gross settlement amount of 18 $800,000, which includes the following: (1) payments to 19 individual class members based on their number of weeks worked; 20 (2) a $7,500 incentive award to plaintiff; (3) attorneys’ fees of 21 35% of the gross settlement amount, or $280,000, and 22 reimbursement of litigation costs and expenses of no more than 23 $24,000; (4) settlement administration costs of no more than 24 $15,000; and (5) $200,000 for PAGA penalties, of which 75% will 25 be distributed to the Labor and Workforce Development Agency 26 (“LWDA”) and 25% will be distributed to individual class members. 27 (See Ex. 1 to Takvoryan Decl. (“Settlement Agreement”) (Docket 28 No. 27-1 at 24-53).) 1 II. Discussion 2 Federal Rule of Civil Procedure 23(e) provides that 3 “[t]he claims, issues, or defenses of a certified class may be 4 settled . . . only with the court’s approval.” Fed. R. Civ. P. 5 23(e). This Order is the first step in that process and analyzes 6 only whether the proposed class action settlement deserves 7 preliminary approval. See Murillo v. Pac. Gas & Elec. Co., 266 8 F.R.D. 468, 473 (E.D. Cal. 2010) (Shubb, J.). Preliminary 9 approval authorizes the parties to give notice to putative class 10 members of the settlement agreement and lays the groundwork for a 11 future fairness hearing, at which the court will hear objections 12 to (1) the treatment of this litigation as a class action and (2) 13 the terms of the settlement. See id.; Diaz v. Tr. Territory of 14 Pac. Islands, 876 F.2d 1401, 1408 (9th Cir. 1989). The court 15 will reach a final determination as to whether the parties should 16 be allowed to settle the class action on their proposed terms 17 after that hearing. 18 Where the parties reach a settlement agreement prior to 19 class certification, the court must first assess whether a class 20 exists. Staton v. Boeing Co., 327 F.3d 938, 952 (9th Cir. 2003). 21 “Such attention is of vital importance, for a court asked to 22 certify a settlement class will lack the opportunity, present 23 when a case is litigated, to adjust the class, informed by the 24 proceedings as they unfold.” Id. (quoting Amchem Prods. Inc. v. 25 Windsor, 521 U.S. 591, 620 (1997)). The parties cannot “agree to 26 certify a class that clearly leaves any one requirement 27 unfulfilled,” and consequently the court cannot blindly rely on 28 the fact that the parties have stipulated that a class exists for 1 purposes of settlement. See Amchem, 521 U.S. at 621-22. 2 “Second, the district court must carefully consider 3 ‘whether a proposed settlement is fundamentally fair, adequate, 4 and reasonable,’ recognizing that ‘[i]t is the settlement taken 5 as a whole, rather than the individual component parts, that must 6 be examined for overall fairness . . . ’” Staton, 327 F.3d at 7 952 (quoting Hanlon v. Chrysler Corp., 150 F.3d 1011, 1026 (9th 8 Cir. 1998)), overruled on other grounds by Wal-Mart Stores, Inc. 9 v. Dukes, 564 U.S. 338 (2011). District courts “review and 10 approve” settlement of PAGA claims under a similar standard. See 11 Cal. Lab. Code § 2669(k)(2); Jordan v. NCI Grp., Inc., No. cv- 12 161701 JVS SP, 2018 WL 1409590, at *2 (C.D. Cal. Jan. 5, 2018) 13 (collecting cases); Ramirez v. Benito Valley Farms, LLC, No. 16- 14 cv-04708 LHK, 2017 WL 3670794, at *2 (N.D. Cal. Aug. 25, 2017). 15 A. Class Certification 16 The parties define the proposed class as “[a]ll current 17 and former hourly-paid or non-exempt employees who worked for 18 Defendant within the State of California at any time during the 19 period from February 24, 2017 through March 23, 2022 [“Class 20 Period”].”1 (Mot. at 9; Settlement Agreement at 2.) 21 To be certified, the putative class must satisfy the 22 requirements of Federal Rules of Civil Procedure 23(a) and 23(b). 23 Leyva v. Medline Indus. Inc., 716 F.3d 510, 512 (9th Cir. 2013). 24 1. Rule 23(a) 25 Rule 23(a) restricts class actions to cases where: “(1) 26 the class is so numerous that joinder of all members is 27 1 For purposes of the PAGA claim, the relevant time period 28 is February 19, 2020 to March 23, 2022 (“PAGA Period”). 1 impracticable [numerosity]; (2) there are questions of law or 2 fact common to the class [commonality]; (3) the claims or 3 defenses of the representative parties are typical of the claims 4 or defenses of the class [typicality]; and (4) the representative 5 parties will fairly and adequately protect the interests of the 6 class [adequacy of representation].” See Fed. R. Civ. P. 23(a). 7 a. Numerosity 8 “A proposed class of at least forty members 9 presumptively satisfies the numerosity requirement.” Avilez v. 10 Pinkerton Gov’t Servs., 286 F.R.D. 450, 456 (C.D. Cal. 2012), 11 vacated on other grounds, 596 F. App’x 579 (9th Cir. 2015). See 12 also, e.g., Collins v. Cargill Meat Sols. Corp., 274 F.R.D. 294, 13 300 (E.D. Cal. 2011) (Wanger, J.) (“Courts have routinely found 14 the numerosity requirement satisfied when the class comprises 40 15 or more members.”). Here, plaintiff estimates that the proposed 16 class will contain 274 members. (See Mot. at 9, 12; Decl. of 17 Ovsanna Takvoryan (“Takvoryan Decl.”) (Docket No. 27-1) at ¶ 9.) 18 This more than satisfies the numerosity requirement. 19 b. Commonality 20 Commonality requires that the class members’ claims 21 “depend upon a common contention” that is “capable of classwide 22 resolution--which means that determination of its truth or 23 falsity will resolve an issue that is central to the validity of 24 each one of the claims in one stroke.” Wal-Mart Stores, 564 U.S. 25 at 350. “[A]ll questions of fact and law need not be common to 26 satisfy the rule,” and the “existence of shared legal issues with 27 divergent factual predicates is sufficient, as is a common core 28 of salient facts coupled with disparate legal remedies within the 1 class.” Hanlon, 150 F.3d at 1019. “So long as there is even a 2 single common question, a would-be class can satisfy the 3 commonality requirement of Rule 23(a)(2).” Wang v. Chinese Daily 4 News, Inc., 737 F.3d 538, 544 (9th Cir. 2013) (internal citation 5 and quotation marks omitted). 6 Here, the claims implicate common questions of law and 7 fact because they are premised on policies that applied to all 8 class members equally. All class members were hourly-paid or 9 non-exempt employees of defendant between February 24, 2017, and 10 March 23, 2022. (See FAC at ¶ 26; Mot. at 9.) As a result, the 11 class members share several common factual questions surrounding 12 the existence of alleged wage and hour policies (including 13 failure to pay full wages, failure to provide overtime 14 compensation, and deprivation of meal and rest periods), and 15 several common legal questions concerning whether said policies 16 violated California law. (See FAC at ¶ 16.) 17 Generally, “challeng[ing] a policy common to the class 18 as a whole creates a common question whose answer is apt to drive 19 the resolution of the litigation.” Ontiveros v. Zamora, No. 20 2:08-cv-567 WBS DAD, 2014 WL 3057506, at *5 (E.D. Cal. July 7, 21 2014). Even if individual members of the class will be entitled 22 to different amounts of damages because, for instance, they were 23 denied fewer meal and rest breaks than other employees or had 24 their time rounded down less often than other employees, “the 25 presence of individual damages cannot, by itself, defeat class 26 certification.” Leyva, 716 F.3d at 514 (quoting Wal-Mart Stores, 27 564 U.S. at 362). Accordingly, these common questions of law and 28 fact satisfy the commonality requirement. 1 c. Typicality 2 Typicality requires that named plaintiffs have claims 3 “reasonably coextensive with those of absent class members,” but 4 their claims do not have to be “substantially identical.” 5 Hanlon, 150 F.3d at 1020. The test for typicality “is whether 6 other members have the same or similar injury, whether the action 7 is based on conduct which is not unique to the named plaintiffs, 8 and whether other class members have been injured by the same 9 course of conduct.” Hanon v. Dataproducts Corp., 976 F.2d 497, 10 508 (9th Cir. 1992) (citation omitted). 11 The named plaintiff and the other class members were 12 all hourly-paid or non-exempt employees of defendant. (FAC at ¶ 13 26.) Plaintiff and the other class members were all allegedly 14 subject to the same policies and practices in question, including 15 failure to pay full wages, failure to provide overtime 16 compensation, and deprivation of meal and rest periods. (FAC ¶ 17 16.) Although the facts might differ for individual class 18 members, the basis for their injuries and the parties purportedly 19 responsible for those injuries are the same. The proposed class 20 therefore meets the typicality requirement. 21 d. Adequacy of Representation 22 To resolve the question of adequacy, the court must 23 consider two factors: (1) whether the named plaintiff and her 24 counsel have any conflicts of interest with other class members, 25 and (2) whether the named plaintiff and her counsel will 26 vigorously prosecute the action on behalf of the class. In re 27 Hyundai and Kia Fuel Econ. Litig., 926 F.3d 539, 566 (9th Cir. 28 2019). 1 i. Conflicts of Interest 2 There do not appear to be any conflicts of interest for 3 purposes of preliminary approval. The named plaintiff’s 4 interests are generally aligned with those of the putative class 5 members, who suffered injuries similar to those suffered by the 6 named plaintiff. See Amchem, 521 U.S. at 625–26 (“[A] class 7 representative must be part of the class and possess the same 8 interest and suffer the same injury as the class members.”). 9 The settlement would provide an incentive award of 10 $7,500 to the named plaintiff. (Mot. at 21.) While the 11 provision of an incentive award raises the possibility that the 12 named plaintiff’s interest in receiving that award will cause 13 their interests to diverge from the class’s interest in a fair 14 settlement, the Ninth Circuit has specifically approved the award 15 of “reasonable incentive payments.” Staton, 327 F.3d at 977–78. 16 The court, however, must “scrutinize carefully the awards so that 17 they do not undermine the adequacy of the class representatives.” 18 Radcliffe v. Experian Info. Sys., Inc., 715 F.3d 1157, 1163 (9th 19 Cir. 2013). 20 Plaintiff’s counsel estimates that the net settlement 21 amount will be $323,500, to be allocated pro rata to class 22 members based on the number of weeks worked during the Class 23 Period. (Mot. at 13.) While individual awards to class members 24 will vary, the net settlement amount divided evenly between 274 25 class members results in an average of $1,180 per class member. 26 As such, plaintiff’s proposed award of $7,500 represents 27 significantly more than other class members will receive. 28 Further, the payment represents approximately 0.94% of the 1 $800,000 gross settlement amount. The proposed incentive payment 2 therefore gives the court pause, as an incentive payment 3 constituting one percent of the gross settlement amount is 4 “unusually high.” See Ontiveros v. Zamora, 303 F.R.D. 356, 365 5 (E.D. Cal. 2014) (Shubb, J.) (collecting cases). See also Roe v. 6 Frito-Lay, Inc., No. 14-cv-00751, 2017 WL 1315626, at *8 (N.D. 7 Cal. Apr. 7, 2017) (“[A] $5,000 incentive award is ‘presumptively 8 reasonable’ in the Ninth Circuit.”) 9 For purposes of preliminary approval, the incentive 10 award does not appear so disproportionate as to render plaintiff 11 an inadequate class representative. However, the court is not 12 satisfied that the efforts and time commitment described by 13 plaintiff (see Decl. of Tricilla Griffin (Docket No. 27-2) at ¶¶ 14 3-6) justify the incentive amount. In her motion for final 15 approval, if plaintiff does not reduce the amount of her 16 requested reward she should be prepared to present further 17 evidence of her substantial efforts taken as class representative 18 or other relevant personal sacrifices to better justify the high 19 incentive award requested. 20 ii. Vigorous Prosecution 21 The second portion of the adequacy inquiry examines the 22 vigor with which the named plaintiff and her counsel have pursued 23 the class’s claims. “Although there are no fixed standards by 24 which ‘vigor’ can be assayed, considerations include competency 25 of counsel and, in the context of a settlement-only class, an 26 assessment of the rationale for not pursuing further litigation.” 27 Hanlon, 150 F.3d at 1021. 28 Here, class counsel appear to be experienced employment 1 and class action litigators fully qualified to pursue the 2 interests of the class. (See Takvoryan Decl. at ¶¶ 2-7.) This 3 experience, coupled with the work performed thus far (see id. at 4 ¶¶ 11-14), suggest that class counsel are well-equipped to handle 5 this case. Further, plaintiff’s counsel seem to have conducted 6 thorough factual investigation and legal research, and fully 7 considered the strengths and weaknesses of this case in deciding 8 to accept the terms of the proposed settlement agreement. (See 9 id. at ¶¶ 11-14, 19-20.) The court finds no reason to doubt that 10 plaintiff’s counsel is well qualified to conduct the proposed 11 litigation and assess the value of the settlement. Accordingly, 12 the court concludes that Rule 23(a)’s adequacy requirement is 13 satisfied for the purpose of preliminary approval. 14 2. Rule 23(b) 15 After fulfilling the threshold requirements of Rule 16 23(a), the proposed class must satisfy the requirements of one of 17 the three subdivisions of Rule 23(b). Leyva, 716 F.3d at 512. 18 Plaintiff seeks certification under Rule 23(b)(3), which provides 19 that a class action may be maintained only if (1) “the court 20 finds that questions of law or fact common to class members 21 predominate over questions affecting only individual members” and 22 (2) “that a class action is superior to other available methods 23 for fairly and efficiently adjudicating the controversy.” Fed. 24 R. Civ. P. 23(b)(3). 25 a. Predominance 26 “The predominance analysis under Rule 23(b)(3) focuses 27 on ‘the relationship between the common and individual issues’ in 28 the case and ‘tests whether proposed classes are sufficiently 1 cohesive to warrant adjudication by representation.’” Wang, 737 2 F.3d at 545 (quoting Hanlon, 150 F.3d at 1022). 3 As discussed above, the claims brought by the proposed 4 settlement class all arise from defendant’s same conduct with 5 respect to wage and hour policies for hourly-paid and non-exempt 6 employees. (See FAC at ¶ 16). The class claims thus demonstrate 7 a “common nucleus of facts and potential legal remedies” that can 8 properly be resolved in a single adjudication. See Hanlon, 150 9 F.3d at 1022. Although there are differences in the facts 10 pertaining to class members and the amount of injury sustained, 11 there is no indication that those variations are “sufficiently 12 substantive to predominate over the shared claims.” See Murillo, 13 266 F.R.D. at 476 (quoting Hanlon, 150 F.3d at 1022). 14 Accordingly, the court finds common questions of law and fact 15 predominate over questions affecting only individual class 16 members. 17 b. Superiority 18 Rule 23(b)(3) sets forth four non-exhaustive factors 19 that courts should consider when examining whether “a class 20 action is superior to other available methods for fairly and 21 efficiently adjudicating the controversy.” Fed. R. Civ. P. 22 23(b)(3). They are: “(A) the class members’ interests in 23 individually controlling the prosecution or defense of separate 24 actions; (B) the extent and nature of any litigation concerning 25 the controversy already begun by or against class members; (C) 26 the desirability or undesirability of concentrating the 27 litigation of the claims in the particular forum; and (D) the 28 likely difficulties in managing a class action.” Id. The 1 parties settled this action prior to certification, making 2 factors (C) and (D) inapplicable. See Murillo, 266 F.R.D. at 477 3 (citing Amchem, 521 U.S. at 620). 4 Rule 23(b)(3) is concerned with the “vindication of the 5 rights of groups of people who individually would be without 6 effective strength to bring their opponents into court at all.” 7 Amchem, 521 U.S. at 617. When, as here, class members’ 8 individual recovery is relatively modest, the class members’ 9 interests generally favors certification. Zinser v. Accufix Res. 10 Inst., Inc., 253 F.3d 1180, 1190 (9th Cir. 2001). Further, the 11 court is unaware of any concurrent litigation regarding the 12 issues in this case. Given that no class member has initiated 13 any competing action in the nearly two years since this case was 14 filed, it is also unlikely that other individual class members 15 have an interest in controlling the prosecution of this action or 16 related actions--although objectors at the fairness hearing may 17 reveal otherwise. See Alberto v. GMRI, Inc., 252 F.R.D. 652, 664 18 (E.D. Cal. 2008) (Shubb, J.). Accordingly, the class action 19 device appears to be the superior method for adjudicating this 20 controversy. 21 3. Rule 23(c)(2) Notice Requirements 22 If the court certifies a class under Rule 23(b)(3), it 23 “must direct to class members the best notice that is practicable 24 under the circumstances, including individual notice to all 25 members who can be identified through reasonable effort.” Fed. 26 R. Civ. P. 23(c)(2)(B). Rule 23(c)(2) governs both the form and 27 content of a proposed notice. See Ravens v. Iftikar, 174 F.R.D. 28 651, 658 (N.D. Cal. 1997) (citing Eisen v. Carlisle & Jacquelin, 1 417 U.S. 156, 172–77 (1974)). Although that notice must be 2 “reasonably certain to inform the absent members of the plaintiff 3 class,” actual notice is not required. Silber v. Mabon, 18 F.3d 4 1449, 1454 (9th Cir. 1994) (citation omitted). 5 The parties have jointly selected ILYM Group (“ILYM”) 6 to serve as the Settlement Administrator. (Settlement Agreement 7 at 13.) Pursuant to the notice plan, defendant will provide ILYM 8 with the class contact information and data within fifteen 9 business days of the court’s order granting preliminary approval. 10 (Id. at 14.) Within ten days of receiving the class information 11 from defendant, ILYM shall mail the class notice to all class 12 members using the most current mailing addresses available. 13 (Id.) 14 Plaintiff’s counsel has provided the court with a 15 proposed notice to class members. (See Ex. A to Settlement 16 Agreement (Docket No 27-1 at 54-60) at 1-4.) It explains the 17 proceedings, defines the scope of the class, and explains what 18 the settlement provides and how much each class member can expect 19 to receive in compensation. (See id. at 55-57.) The notice 20 further explains the opt-out procedure, the procedure for 21 objecting to the settlement, and the date and location of the 22 final approval hearing. (See id. at 58-59.) The content of the 23 notice therefore satisfies Rule 23(c)(2)(B). See Fed. R. Civ. P. 24 23(c)(2)(B); Churchill Vill., L.L.C. v. Gen. Elec., 361 F.3d 566, 25 575 (9th Cir. 2004) (“Notice is satisfactory if it ‘generally 26 describes the terms of the settlement in sufficient detail to 27 alert those with adverse viewpoints to investigate and to come 28 forward and be heard.’”) (quoting Mendoza v. Tucson Sch. Dist. 1 No. 1, 623 F.2d 1338, 1352 (9th Cir. 1980)). 2 While the court is satisfied by the content of the 3 proposed notice, the court notes that a single mailed notice is 4 unlikely to provide sufficient notice. See Roes, 1-2 v. SFBSC 5 Mgmt., LLC, 944 F.3d 1035, 1045–46 (9th Cir. 2019). It is 6 advisable that the Settlement Administrator undertake additional 7 measures “reasonably calculated, under all the circumstances,” to 8 apprise all class members of the proposed settlement. See id. at 9 1047 (quoting Mullane v. Cent. Hanover Bank & Tr. Co., 339 U.S. 10 306, 315 (1950)). 11 12 B. Preliminary Settlement Approval 13 After determining that the proposed class satisfies the 14 requirements of Rule 23(a) and (b), the court must determine 15 whether the terms of the parties’ settlement appear fair, 16 adequate, and reasonable. See Fed. R. Civ. P. 23(e)(2); Hanlon, 17 150 F.3d at 1026. This process requires the court to “balance a 18 number of factors,” including “the strength of the plaintiff’s 19 case; the risk, expense, complexity, and likely duration of 20 further litigation; the risk of maintaining class action status 21 throughout the trial; the amount offered in settlement; the 22 extent of discovery completed and the stage of the proceedings; 23 the experience and views of counsel; the presence of a 24 governmental participant; and the reaction of the class members 25 to the proposed settlement.” Hanlon, 150 F.3d at 1026. 26 Because some of these factors cannot be considered 27 until the final fairness hearing, at the preliminary approval 28 stage “the court need only determine whether the proposed 1 settlement is within the range of possible approval,” Murillo, 2 266 F.R.D. at 479 (quoting Gautreaux v. Pierce, 690 F.2d 616, 621 3 n.3 (7th Cir. 1982)), and resolve any “glaring deficiencies” in 4 the settlement agreement before authorizing notice to class 5 members, Ontiveros, 2014 WL 3057506, at *12 (citing Murillo, 6 266 F.R.D. at 478). This generally requires consideration of 7 “whether the proposed settlement discloses grounds to doubt its 8 fairness or other obvious deficiencies, such as unduly 9 preferential treatment of class representatives or segments of 10 the class, or excessive compensation of attorneys.” Murillo, 266 11 F.R.D. at 479 (quoting West v. Circle K Stores, Inc., 04-cv-438 12 WBS GGH, 2006 WL 1652598, at *11-12 (E.D. Cal. June 13, 2006)). 13 Courts often begin by examining the process that led to 14 the settlement’s terms to ensure that those terms are “the result 15 of vigorous, arms-length bargaining” and then turn to the 16 substantive terms of the agreement. See, e.g., Murillo, 266 17 F.R.D. at 479-80; West, 2006 WL 1652598, at *11-12; In re 18 Tableware Antitrust Litig., 484 F. Supp. 2d 1078, 1080 (N.D. Cal. 19 2007) (“[P]reliminary approval of a settlement has both a 20 procedural and a substantive component.”). 21 1. Negotiation of the Settlement Agreement 22 Following ten months of investigations and informal 23 discovery, the parties engaged in a full-day mediation on 24 December 21, 2021. (See Takvoryan Decl. at ¶ 11-12.) The 25 mediation was conducted by an experienced civil mediator. (See 26 id. at ¶ 12.) Plaintiff’s counsel represents that the parties 27 exchanged “extensive information” and “engaged in discussions 28 regarding their evaluations of the case and various aspects of 1 the case, including but not limited to, the risks and delays of 2 further litigation, the risks to the Parties of proceeding with 3 class certification and/or representative adjudication, the law . 4 . ., the evidence produced and analyzed, and the possibility of 5 appeals.” (Id.) Plaintiff’s counsel further represents that the 6 settlement was the result of arms-length bargaining. (See id.) 7 Given the parties’ representation that the settlement 8 reached was the product of arms-length bargaining following 9 extensive informal discovery, the court at this stage does not 10 question that the proposed settlement is the result of informed 11 and non-collusive negotiations between the parties. See La Fleur 12 v. Med. Mgmt. Int’l, Inc., Civ. No. 5:13-00398, 2014 WL 2967475, 13 at *4 (N.D. Cal. June 25, 2014) (“Settlements reached with the 14 help of a mediator are likely non-collusive.”). 15 2. Amount Recovered and Distribution 16 In determining whether a settlement agreement is 17 substantively fair to the class, the court must balance the value 18 of expected recovery against the value of the settlement offer. 19 See Tableware, 484 F. Supp. 2d at 1080. This inquiry may involve 20 consideration of the uncertainty class members would face if the 21 case were litigated to trial. See Ontiveros, 2014 WL 3057506, at 22 *14. 23 The amount of recovery, an average of $1,180 per class 24 member, is certainly within the range of approval for actions of 25 this type. See, e.g., Vasquez v. Coast Valley Roofing, Inc., 670 26 F. Supp. 2d 1114, 1125 (E.D. Cal. 2009) (Wanger, J.) (approving 27 wage-and-hour settlement providing for an average recovery of 28 $1,000); Barbosa v. Cargill Meat Solutions Corp., 297 F.R.D. 431, 1 440 (E.D. Cal. 2013) (Oberto, J.) (approving wage-and-hour 2 settlement providing for an average recovery of $601.91). 3 Additionally, because the amount class members receive is based 4 on the number of workweeks each class member worked during the 5 Class Period, the court finds that the method of distributing 6 relief to the class is appropriate. 7 However, the amount reserved for PAGA penalties gives 8 the court pause. Under PAGA, 75% of the civil PAGA penalties are 9 paid to the LWDA. Cal. Lab. Code § 2699(i). Though there is no 10 binding authority concerning review of PAGA penalties, the LWDA 11 has stated: 12 the relief provided for under the PAGA [must] be genuine and meaningful, consistent with the underlying purpose of the 13 statute to benefit the public and, in the context of a class 14 action, the court [must] evaluate whether the settlement meets the standards of being “fundamentally fair, 15 reasonable, and adequate” with reference to the public policies underlying the PAGA. 16 17 California Labor and Workforce Development Agency's Comments on 18 Proposed PAGA Settlement (“LWDA Letter”); Castro v. Paragon 19 Indus., Inc., No. 1:19-cv-00755 DAD SKO, 2020 WL 1984240, at *5 20 (E.D. Cal. Apr. 27, 2020) (citing LWDA Letter); O'Connor v. Uber 21 Techs., Inc., 201 F. Supp. 3d 1110, 1133 (N.D. Cal. 2016) (same). 22 Here, the $150,000 reserved for PAGA penalties paid to 23 the LWDA seems significantly higher than is typical. See, e.g., 24 Mondrian v. Trius Trucking, Inc., No. 1:19-cv-00884 DAD SKO, 2022 25 WL 2306963, at *3 (E.D. Cal. June 27, 2022) ($7,500 to LWDA out 26 of $995,000 gross settlement); Almanzar v. Home Depot U.S.A., 27 Inc., No. 2:20-cv-0699 KJN, 2022 WL 2817435, at *2 (E.D. Cal. 28 July 19, 2022) ($28,125 to LWDA out of $750,000 gross 1 settlement); Castro v. Paragon Indus., Inc., No. 1:19-cv-00755 2 DAD SKO, 2020 WL 1984240, at *3 (E.D. Cal. Apr. 27, 2020) 3 ($56,250 to LWDA out of $3,750,000 gross settlement); Syed v. M- 4 I, L.L.C., No. 1:12-cv-01718 DAD MJS, 2017 WL 714367, at *13 5 (E.D. Cal. Feb. 22, 2017) ($75,000 to LWDA out of $3,950,000 6 gross settlement); Ontiveros v. Zamora, 303 F.R.D. at 371 7 ($40,000 to LWDA out of $2,000,000 gross settlement); Garcia v. 8 Gordon Trucking, Inc., No. 1:10-cv-0324 AWI SKO, 2012 WL 5364575 9 (E.D. Cal. Oct. 31, 2012) ($7,500 to LWDA out of $3,700,000 gross 10 settlement). While the proposed amount is presumably linked to 11 the prescribed statutory penalties, counsel did not provide any 12 calculation or explanation that would allow the court to evaluate 13 the appropriateness of the penalty amount. 14 Though the settlement amount is adequate for purposes 15 of approval at this stage, the court emphasizes that this is only 16 a preliminary determination. At the final fairness hearing, 17 counsel should be prepared to present additional information 18 demonstrating the settlement’s adequacy, including the full 19 potential value of the class claims, how the settlement amount 20 compares to that value, what the range of expected recovery is 21 for individual class members, the reasoning behind counsel’s 22 determination that the settlement is a fair and adequate result 23 for the class members, and a justification for the amount 24 reserved for PAGA penalties, as well as other information 25 pertinent to the eight Hanlon factors identified above. 26 Counsel are cautioned that because this settlement was 27 reached prior to class certification, it will be subject to 28 heightened scrutiny for purposes of final approval. See In re 1 Apple Inc. Device Performance Litig., 50 F.4th 769, 2022 WL 2 4492078, at *8 (9th Cir. 2022). The recommendations of 3 plaintiff’s counsel will not be given a presumption of 4 reasonableness, but rather will be subject to close review. See 5 id. at *9. The court will particularly scrutinize “any subtle 6 signs that class counsel have allowed pursuit of their own self- 7 interests to infect the negotiations.” See id. (quoting Roes, 8 944 F.3d at 1043). 9 3. Attorney’s Fees 10 If a negotiated class action settlement includes an 11 award of attorney’s fees, that fee award must be evaluated in the 12 overall context of the settlement. Knisley v. Network Assocs., 13 312 F.3d 1123, 1126 (9th Cir. 2002); Monterrubio v. Best Buy 14 Stores, L.P., 291 F.R.D. 443, 455 (E.D. Cal. 2013) (England, J.). 15 The court “ha[s] an independent obligation to ensure that the 16 award, like the settlement itself, is reasonable, even if the 17 parties have already agreed to an amount.” In re Bluetooth 18 Headset Prods. Liab. Litig., 654 F.3d 935, 941 (9th Cir. 2011). 19 The settlement agreement provides that plaintiff’s 20 counsel will seek a fee award of up to 35% of the gross 21 settlement, or $280,000 based on the gross settlement amount of 22 $800,000. (Settlement Agreement at 23.) If the court does not 23 approve the fee award in whole or in part, that will not prevent 24 the settlement agreement from becoming effective or be grounds 25 for termination. (Id. at 24.) 26 In deciding the attorney’s fees motion, the court will 27 have the opportunity to assess whether the requested fee award is 28 reasonable by multiplying a reasonable hourly rate by the number 1 of hours counsel reasonably expended. See Van Gerwen v. Gurantee 2 Mut. Life. Co., 214 F.3d 1041, 1045 (9th Cir. 2000). As part of 3 this lodestar calculation, the court may consider factors such as 4 the “degree of success” or “results obtained” by plaintiff’s 5 counsel. See Cunningham v. County of Los Angeles, 879 F.2d 481, 6 488 (9th Cir. 1988). If the court, in ruling on the fees motion, 7 finds that the amount of the settlement warrants a fee award at a 8 rate lower than what plaintiff’s counsel requests, then it will 9 reduce the award accordingly. The court will therefore not 10 evaluate the fee award at length here in considering whether the 11 settlement is adequate. 12 IT IS THEREFORE ORDERED that plaintiff’s motion for 13 preliminary certification of a conditional settlement class and 14 preliminary approval of the class action settlement (Docket No. 15 27) be, and the same hereby is, GRANTED. 16 IT IS FURTHER ORDERED THAT: 17 (1) the following class be provisionally certified for the 18 purpose of settlement: 19 (a) All current and former hourly-paid or non-exempt 20 employees who worked for defendant within the State of California 21 at any time during the period from February 24, 2017 through 22 March 23, 2022; 23 (2) the proposed settlement is preliminarily approved as 24 fair, just, reasonable, and adequate to the members of the 25 settlement class, subject to further consideration at the final 26 fairness hearing after distribution of notice to members of the 27 settlement class; 28 (3) for purposes of carrying out the terms of the settlement 1 only: 2 (a) Tricilla Griffin is appointed as the representative 3 of the settlement class and is provisionally found to be an 4 adequate representative within the meaning of Federal Rule of 5 Civil Procedure 23; 6 (b) the law firm of Lawyers for Justice, PC is 7 provisionally found to be a fair and adequate representative of 8 the settlement class and is appointed as class counsel for the 9 purposes of representing the settlement class conditionally 10 certified in this Order; 11 (4) ILYM Group is appointed as the Settlement Administrator; 12 (5) the form and content of the proposed Notice of Class 13 Action Settlement (Ex. A to Settlement Agreement (Docket No. 27-1 14 at 54-60)) is approved, except to the extent that it must be 15 updated to reflect dates and deadlines specified in this Order; 16 (6) no later than fifteen (15) calendar days from the date 17 this Order is signed, defendant’s counsel shall provide the 18 Settlement Administrator with the following information about 19 each class member: full name; last known address; last known 20 telephone number; dates of employment with defendant as an 21 hourly-paid or non-exempt employee; the number of workweeks 22 worked during the Class Period; the number of workweeks worked 23 during the PAGA Period; Social Security number; and the last 24 known email address; 25 (7) no later than ten (10) calendar days from the date 26 defendant submits the contact information to the Settlement 27 Administrator, it shall mail a Notice of Class Action Settlement 28 to all members of the settlement class via first class mail. If 1 a Notice is returned to the Settlement Administrator with a 2 forwarding address, the Settlement Administrator will re-send the 3 Notice to the forwarding address. If no forwarding address is 4 provided, the Settlement Administrator will attempt to locate a 5 more current address within three (3) business days of receipt of 6 the returned mail; 7 (8) no later than sixty (60) days from the date Settlement 8 Administrator mails the Notice of Class Action Settlement, though 9 in the case of a re-mailed notice the deadline will be extended 10 by fifteen (15) days, any member of the settlement class who 11 intends to dispute the number of workweeks credited to him or 12 object to, comment upon, or opt out of the settlement shall mail 13 written notice of that intent to the Settlement Administrator 14 pursuant to the instructions in the Notice of Class Action 15 Settlement; 16 (9) A final fairness hearing shall be set to occur before 17 this Court on May 30, 2023, at 1:30 p.m. in Courtroom 5 of the 18 Robert T. Matsui United States Courthouse, 501 I Street, 19 Sacramento, California, to determine whether the proposed 20 settlement is fair, reasonable, and adequate and should be 21 approved by this court; whether the settlement class’s claims 22 should be dismissed with prejudice and judgment entered upon 23 final approval of the settlement; whether final class 24 certification is appropriate; and to consider class counsel’s 25 applications for attorney’s fees, costs, and an incentive award 26 for the class representative. The court may continue the final 27 fairness hearing without further notice to the members of the 28 class; 1 (10) no later than twenty-eight (28) days before the final 2 fairness hearing, class counsel shall file with this court a 3 petition for an award of attorney’s fees and costs. Any 4 objections or responses to the petition shall be filed no later 5 than fourteen (14) days before the final fairness hearing. Class 6 counsel may file a reply to any objections no later than seven 7 (7) days before the final fairness hearing; 8 (11) no later than twenty-eight (28) days before the final 9 fairness hearing, class counsel shall file and serve upon the 10 court and defendant’s counsel all papers in support of the 11 settlement, the incentive award for the class representative, and 12 any award for attorney’s fees and costs; 13 (12) no later than twenty-eight (28) days before the final 14 fairness hearing, the Settlement Administrator shall prepare, and 15 class counsel shall file and serve upon the court and defendant’s 16 counsel, a declaration setting forth the services rendered, proof 17 of mailing, a list of all class members who have opted out of the 18 settlement, a list of all class members who have commented upon 19 or objected to the settlement; 20 (13) any person who has standing to object to the terms of 21 the proposed settlement may appear at the final fairness hearing 22 (themselves or through counsel) and be heard to the extent 23 allowed by the court in support of, or in opposition to, (a) the 24 fairness, reasonableness, and adequacy of the proposed 25 settlement, (b) the requested award of attorney’s fees, 26 reimbursement of costs, and incentive award to the class 27 representative, and/or (c) the propriety of class certification. 28 To be heard in opposition at the final fairness hearing, a person 1 must, no later than sixty (60) days from the date the Settlement 2 Administrator mails the Notice of Class Action Settlement, (a) 3 serve by hand or through the mails written notice of his or her 4 intention to appear, stating the name and case number of this 5 action and each objection and the basis therefore, together with 6 copies of any papers and briefs, upon class counsel and counsel 7 for defendant, and (b) file said appearance, objections, papers, 8 and briefs with the court, together with proof of service of all 9 such documents upon counsel for the parties. 10 Responses to any such objections shall be served by 11 hand or through the mails on the objectors, or on the objector’s 12 counsel if there is any, and filed with the court no later than 13 fourteen (14) calendar days before the final fairness hearing. 14 Objectors may file optional replies no later than seven (7) 15 calendar days before the final fairness hearing in the same 16 manner described above. Any settlement class member who does not 17 make his or her objection in the manner provided herein shall be 18 deemed to have waived such objection and shall forever be 19 foreclosed from objecting to the fairness or adequacy of the 20 proposed settlement, the judgment entered, and the award of 21 attorney’s fees, costs, and an incentive award to the class 22 representative unless otherwise ordered by the court; 23 (14) pending final determination of whether the settlement 24 should be ultimately approved, the court preliminarily enjoins 25 all class members (unless and until the class member has 26 submitted a timely and valid request for exclusion) from filing 27 or prosecuting any claims, suits, or administrative proceedings 28 regarding claims to be released by the settlement. enn enn nen ene een ne no nn nnn EN I OI I
1 Dated: November 8, 2022 . ak. ah hla, (hi. 2 □□□□□□□□□□□□□□□□□□□□□□□□ 3 UNITED STATES DISTRICT JUDGE 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 25