Johnson v. Serenity Transportation, Inc.

District Court, N.D. California·Decided December 10, 2020·No. 3:15-cv-02004·Unknown

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 CURTIS JOHNSON, et al., Case No. 15-cv-02004-JSC

8 Plaintiffs, ORDER RE MOTIONS FOR 9 v. APPROVAL OF SETTLEMENT AND TO WITHDRAW AS COUNSEL 10 SERENITY TRANSPORTATION, INC., et al., Re: Dkt. Nos. 320 & 321 11 Defendants.

12 13 Before the Court is Plaintiffs’ motion to approve a Fair Labor Standards Act (“FLSA”) 14 settlement and release of Plaintiffs’ FLSA and other wage and hour claims against Defendants SCI 15 California Funeral Services, Inc. (“SCI California”) and Service Corporation International (“SCI”) 16 (collectively (“SCI Defendants”), as well as a motion for leave to withdraw as counsel for Plaintiff 17 Anthony Aranda. (Dkt. Nos. 320 & 321.)1 Defendants have not filed an opposition to either 18 motion. After careful consideration, the Court determines that oral argument is unnecessary, see 19 N.D. Cal. Civ. L.R. 7-1(b), VACATES the December 10, 2020 hearing, and GRANTS the 20 motions to approve the settlement and withdraw as counsel. 21 I. Motion for Settlement Approval 22 Gary Johnson and 16 Opt-In Plaintiffs (“SCI California Plaintiffs”) have reached a 23 settlement with the SCI Defendants to resolve their wage and hour claims against the company. 24 (Dkt. Nos. 321 at 3; 321-2 at 2.) Plaintiffs are mortuary drivers who filed suit against their 25 employer, Serenity Transportation, Inc. (“Serenity Transportation”), its owner David Friedel, as 26 well as the SCI Defendants, alleging that they were misclassified as independent contractors and 27 1 denied the benefits of California and federal wage and hour laws. 2 The factual and procedural history of this case is set forth in the Court’s August 1, 2018 3 order granting in part and denying in part Plaintiffs’ motion for class certification. (Dkt. No. 276.) 4 Following this Court’s order, Plaintiffs filed a motion to reconsider portions of the Court’s order 5 that denied class certification of Plaintiffs’ claims against the SCI Defendants for wages owed 6 under California Labor Code § 2810.3, and a motion to stay pending disposition of their Rule 7 23(f) petition for permission to appeal the Court’s order denying class certification as to the SCI 8 Defendants. (Dkt. Nos. 284 & 289.) The Court granted Plaintiffs’ motion to stay but denied 9 Plaintiffs’ motion for reconsideration. (Dkt. No. 300 at 2.) On April 1, 2020, the Ninth Circuit 10 issued a formal mandate regarding its February 10, 2020 decision affirming this Court’s class 11 certification order. (Dkt. No. 310.)2 The parties’ most recent settlement discussions began 12 following the Ninth Circuit’s decision. (Dkt. No. 321-1 at 2 ¶ 3.) 13 The settlement provides that the SCI Defendants will pay $50,000 in resolution of the SCI 14 California Plaintiffs’ claims, inclusive of attorneys’ fees and costs. (Dkt. No. 321-2 at 2.) Each 15 SCI California Plaintiff will receive an amount proportional to the number of relevant shifts they 16 performed for SCI California; payments to the SCI California Plaintiffs totals $21,547.54, and the 17 remaining $28,452.46 is allocated for attorneys’ fees and costs. (Id. at 2, 25.) In exchange for this 18 settlement, the SCI California Plaintiffs will release wage and hour claims they may have against 19 the SCI Defendants and its affiliates, including claims under the FLSA. (Id. at 2.)3 20 The SCI California Plaintiffs now move for approval of the settlement and release of their 21 FLSA claims on the grounds that the settlement reflects a “reasonable compromise” of the 22 disputed FLSA claims. (Dkt. No. 321 at 3.) 23 A. Legal Standard 24 The FLSA requires employers to pay employees time and one-half for work exceeding 40 25 hours per week. See 29 U.S.C. § 207(a)(1). Under the FLSA, an employee may bring a 26

27 2 The Ninth Circuit additionally denied Plaintiffs’ petition for a rehearing en banc. (Dkt. No. 309.) 1 “collective action” on behalf of other “similarly situated” employees. 29 U.S.C. § 216(b). An 2 employee’s rights under the FLSA are non-waivable; thus, they may only be settled and released 3 under the supervision of the Secretary of Labor or a district court. See Lynn's Food Stores, Inc. v. 4 U.S. By & Through U.S. Dep't of Labor, Employment Standards Admin., Wage & Hour Div., 679 5 F.2d 1350, 1353 (11th Cir. 1982); Camilo v. Ozuna, No. 18-CV-02842-VKD, 2019 WL 2141970, 6 at *6 (N.D. Cal. May 16, 2019) (citing Lynn’s Food Stores, 679 F.2d at 1353). See also 7 Seminiano v. Xyris Enter., Inc., 602 F. App'x 682, 683 (9th Cir. 2015) (“FLSA claims may not be 8 settled without approval of either the Secretary of Labor or a district court.”) (citations omitted). 9 Before approving an FLSA settlement, a district court must determine if the settlement is a “fair 10 and reasonable resolution of a bona fide dispute.” Lynn’s Foods Stores, 679 F.2d at 1355. “If a 11 settlement in an employee FLSA suit does reflect a reasonable compromise over issues . . . . that 12 are actually in dispute[,] [courts may] approve the settlement in order to promote the policy of 13 encouraging settlement of litigation.” Id. at 1354. 14 B. Discussion 15 1. Bona Fide Dispute 16 “A bona fide dispute exists when there are legitimate questions about the existence and 17 extent of the defendant's FLSA liability.” Jennings v. Open Door Mktg., LLC, No. 15-CV-4080- 18 KAW, 2018 WL 4773057, at *4 (N.D. Cal. Oct. 3, 2018) (internal quotation marks and citation 19 omitted). “That is, there must be some doubt whether the plaintiffs will be able to succeed on the 20 merits of their FLSA claims.” Heath v. Google LLC, No. 15-CV-01824-BLF, 2019 WL 3842075, 21 at *4 (N.D. Cal. Aug. 15, 2019) (citations omitted). The requirement that an FLSA settlement 22 resolve a “bona fide dispute” is to ensure that “an employee does not waive claims for wages, 23 overtime compensation, or liquidated damages when no actual dispute exists between the parties.” 24 Saleh v. Valbin Corp., No. 17-CV-00593-LHK, 2018 WL 6002320, at *2 (N.D. Cal. Nov. 15, 25 2018) (citing Lynn’s Food Stores, 679 F.2d at 1353 n.8). 26 Here, there is a bona fide dispute. The parties have litigated for years with substantive 27 motion practice, including an appeal to the Ninth Circuit. They began their most recent settlement 1 certification order. (Dkt. No. 321-1 at 2 ¶ 3.) At bottom, the parties have disputed the SCI 2 California Plaintiffs’ classification status and Defendants’ liability under California and federal 3 wage and hour laws throughout this case, illustrating that a bona fide dispute exists. See Heath, 4 2019 WL 3842075, at *4 (determining bona fide dispute existed “as evidenced by years of 5 litigation” where the parties disputed legal issues and the defendant’s liability across motions to 6 dismiss, to certify and decertify a collective action, as well as to “reconsider the order declining to 7 recertify the collective”). As in Heath, since it was filed the parties have disputed the case’s legal 8 and factual issues across motions to dismiss, motions for conditional certification, various 9 summary judgment motions, motions for reconsideration, and filed an appeal to the Ninth Circuit. 10 (See, e.g., Dkt. Nos. 34, 51, 59, 124, 173, 225, 284, 289, 310.) For these reasons, the Court 11 concludes that the purpose of the bona fide dispute requirement has been satisfied. See Saleh, 12 2018 WL 6002320, at *3; Lynn's Food Stores, 679 F.2d at 1353 n.8 (“The purpose of this analysis 13 is to ensure that an employee does not waive claims for wages, overtime compensation, or 14 liquidated damages when no actual dispute exists between the parties.”) 15 2.

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