Guzman v. National Packaging Services Corporation

District Court, E.D. Wisconsin·Decided July 8, 2022·No. 2:19-cv-01722·Unknown

Opinion

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WISCONSIN

LIBNA GUZMAN, on behalf of herself and all others similarly situated,

Plaintiffs, Case No. 19-cv-1722-pp v.

NATIONAL PACKAGING SERVICES CORPORATION,

Defendant.

ORDER GRANTING JOINT MOTION FOR FINAL SETTLEMENT APPROVAL (DKT. NO. 48), GRANTING PETITION FOR ATTORNEYS’ FEES AND CLASS REPRESENTATIVE INCENTIVE AWARDS (DKT. NO. 51), DENYING MOTION TO SEAL (DKT. NO. 54), ORDERING SPREADSHEET RESTRICTED, ORDERING PLAINTIFFS TO FILE A REDACTED VERSION OF THE SPREADSHEET AND DISMISSING CASE

Plaintiff Libna Guzman filed a collective and class action on behalf of herself and similarly situated hourly production employees who worked at the National Packaging Services (NPS) production facilities in Wisconsin. Dkt. No. 1. Magistrate Judge William Duffin facilitated resolution of the case, dkt. no. 38, and once the parties had filed their joint motion for a collective and class settlement and supporting brief, dkt. nos. 40 and 41, the court granted the motion for preliminary approval of the settlement, dkt. no. 44. The court scheduled a fairness hearing for June 2, 2022 at 9:30 a.m., id., but the plaintiffs asked the court to reschedule it to give them additional time to complete their calculations allocating the settlement fund to the class members, dkt. no. 45. The court granted the motion and rescheduled the hearing to July 6, 2022. Dkt. No. 46. The plaintiffs since have filed a joint motion for settlement approval, dkt. no. 48, a motion for attorney fees and class representative incentive awards,

dkt. no. 51, and a motion to seal the allocation of the individual awards, dkt. no. 54. The court has conducted the fairness hearing. Dkt. No. 55. The court will approve the settlement and award the fees. It will not grant the plaintiffs’ request to seal the individual allocation chart, but will allow them to file a redacted version for public viewing and will restrict the unredacted version to viewing by the court and the parties. I. Joint Motion for Settlement Approval (Dkt. No. 48) Both the FLSA collective action and the Rule 23 class action settlement

require judicial approval. The Rule 23 class action settlement also requires a hearing—the court may approve it only after a hearing and on a finding that the settlement is fair, reasonable and adequate. Federal Rule of Civil Procedure 23(e)(2). The rule requires consideration of the following factors: (A) the class representatives and class counsel have adequately represented the class; (B) the proposal was negotiated at arm's length; (C) the relief provided for the class is adequate, taking into account:

(i) the costs, risks, and delay of trial and appeal; (ii) the effectiveness of any proposed method of distributing relief to the class, including the method of processing class- member claims; (iii) the terms of any proposed award of attorney's fees, including timing of payment; and (iv) any agreement required to be identified under Rule 23(e)(3); and (D) the proposal treats class members equitably relative to each other.

Fed. R. Civ. P. 23(e)(2). The considerations in the rule overlap with the factors articulated by the Seventh Circuit: “(1) the strength of the case for plaintiffs on the merits, balanced against the extent of settlement offer; (2) the complexity, length, and expense of further litigation; (3) the amount of opposition to the settlement; (4) the reaction of members of the class to the settlement; (5) the opinion of competent counsel; and (6) stage of the proceedings and the amount of discovery completed.” Wong v. Accretive Health, Inc., 773 F.3d 859, 863 (7th Cir. 2014) (citations omitted); Fed. R. Civ. P. 23(e)(2). A. Adequacy of Representation—Rule 23(e)(2)(A) The court previously appointed Libna Guzman as representative of the collective and Rule 23 classes. Dkt. No. 31 at 2. The court certified the following FLSA collective class and the Rule 23 class: All hourly production employees who worked at NPS’s Wisconsin production facilities and were paid a shift differential, were paid a year-end bonus, or worked on a designated holiday during the time period of November 22, 2017 to the date of preliminary approval of this Settlement Agreement [March 3, 2022].

Dkt. No. 44. The court appointed Guzman to serve as the representative for the certified collective class and it is not aware of any conflicting interests between Guzman and the other class members. Class counsel, Yingtao Ho and the Previant Law Firm, have adequately represented the class throughout the litigation. With respect to the first factor, the court is satisfied that class is adequately represented. B. Arm's Length Negotiations and Non-Collusiveness of Settlement Process—Rule 23(e)(2)(B) and the Seventh Circuit's First Facto

The Seventh Circuit has emphasized that the “most important factor relevant to the fairness of a class action settlement is the strength of plaintiff’s case on the merits balanced against the amount offered in the settlement.” Wong, 773 F.3d at 863. The plaintiffs asserted three claims: (1) that NPS should have included shift differentials in computing its hourly production employees’ regular rate for overtime pay; (2) that NPS should have included year-end bonuses paid to some hourly production employees when computing their regular rate for overtime pay; and (3) that by failing to include shift differentials and year-end bonuses in computing the rate for its employees’ worked holiday pay, NPS paid to its employees worked holiday pay less than time and a half their regular rate. Only the shift differential claim was largely undisputed. Dkt. No. 52 at 1. The parties asserted in their moving papers, and at the hearing, that there were “vigorous” disputes over whether the year-end bonuses must be included in the

regular rate, whether worked holiday pay must equal time and a half the regular rate to qualify for exemption under §207(e)(6) of FLSA, and whether worked holiday pay that equals less than time and a half the regular rate may be offset from weekly overtime pay that NPS owes its employees. Dkt. No. 42 at 3, 4. The plaintiffs admit there is evidence that the bonuses were not promised—or announced—in advance and that NPS does not use defined criteria in deciding whether to award bonuses. Dkt. No. 42 at 8. Nevertheless, the parties negotiated a settlement worth ten times the value of the shift differential claim (and only ten percent of the Class Fund is allocated to the shift differential claim). Dkt. No. 52 at 1. Excluding attorney’s fees of $32,000, the proposed settlement equals $55,500. The plaintiffs represent that the recovery amounts to more than 62%1

of NPS’ realistic maximum exposure of $89,000. Dkt. No. 42 at 3, 8. The court is satisfied that the parties negotiated at arm’s length and in good faith, particularly when balancing the merits of the claim against the settlement. C. Adequacy of the Relief Provided by the Settlement—Rule 23(e)(2)(C) and the Seventh Circuit's Second and Sixth Factors

When considering the adequacy of relief, Rule 23(e)(2) instructs the court to take into consideration the costs, risks and delay of trial and appeal, the effectiveness of the proposed method of distribution, the terms of any proposed award and the agreements made in connection with the settlement. Fed. R. Civ. P. 23(e)(2).

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