Lusk v. Five Guys Enterprises LLC

• Court: District Court, E.D. California
• Decided: June 1, 2021
• Docket: 1:17-cv-00762
• Status: Unknown

Opinion

1 2 3 UNITED STATES DISTRICT COURT 4 EASTERN DISTRICT OF CALIFORNIA 5 6 JEREMY R. LUSK, CASE NO. 1:17-cv-00762-AWI-EPG

7 Plaintiff, ORDER ON PLAINTIFF’S SECOND- 8 v. AMENDED MOTION FOR PRELIMINARY APPROVAL 9 FIVE GUYS ENTERPRISES LLC; AND ENCORE FGBF, LLC, 10 (Doc. No. 61) Defendants. 11

12 13 In this class action lawsuit, Jeremy Lusk is suing Five Guys Enterprises LLC and Encore 14 FGBF, LLC, on grounds that they violated federal and California consumer reporting laws, 15 California wage-and-hour laws, and California unfair competition law. Although the parties have 16 reached a proposed class settlement, the Court has twice denied Lusk’s motions under Federal 17 Rule of Civil Procedure 23(e) for preliminary approval of the settlement and conditional 18 certification of the putative class. Lusk now moves a third time for such relief. For the reasons 19 discussed below, the Court will also deny this motion. 20 21 BACKGROUND 22 Lusk filed his lawsuit in state court on May 2, 2017. Doc. No. 1. After Defendants 23 removed the action, Lusk filed a first-amended complaint. Doc. No. 13 (“FAC”). Therein, Lusk 24 pleaded the following twelve class claims: (1) failure to make a proper disclosure, in violation of 25 the federal Fair Credit Reporting Act, 15 U.S.C. § 1681b(b)(2)(A); (2) failure to provide a proper 26 summary of rights, in violation of the Fair Credit Reporting Act, 15 U.S.C. §§ 1681d(a)(1) and 27 1681g(c); (3) failure to make a proper disclosure, in violation of California’s Investigative 28 Consumer Reporting Agencies Act, Cal. Civ. Code § 1786.16(a)(2)(B); (4) failure to make a 1 proper disclosure, in violation of California’s Consumer Credit Reporting Agencies Act, Cal. Civ. 2 Code § 1785.20.5(a); (5) failure to provide meal periods or compensation in lieu thereof, in 3 violation of Cal. Labor Code §§ 226.7, 512, and 1198, and California Industrial Welfare 4 Commission Wage Order 5-2001 (“Wage Order 5”); (6) failure to provide rest periods or 5 compensation in lieu thereof, in violation of Cal. Labor Code §§ 226.7 and 1198, and Wage Order 6 5; (7) failure to pay earned wages, including overtimes wages, in violation of Cal. Labor Code 7 §§ 204, 223, 510, 1194, 1197, and 1198, and Wage Order 5; (8) failure to reimburse for necessary 8 gas and mileage expenditures, in violation of Cal. Labor Code § 2802(a); (9) failure to provide 9 accurate itemized wage statements, in violation of Cal. Labor Code § 226; (10) failure to pay 10 separation wages, in violation of Cal. Labor Code §§ 201–203; (11) violations of California’s 11 unfair competition law (“UCL”), Cal. Bus. & Prof. Code § 17200 et seq.; and (12) entitlement to 12 civil penalties under California’s Private Attorney General Act (“PAGA”), Cal. Lab. Code § 2698 13 et seq. 14 After conducting some discovery, the parties participated in mediation and reached a 15 proposed agreement for a class-wide settlement. Doc. No. 29. Lusk next moved for preliminarily 16 approval of the proposed settlement and conditional certification of the putative class for 17 settlement purposes only. Doc. No. 36. The Court denied Lusk’s “first motion,” concluding that 18 he had failed to demonstrate that the proposed settlement was fair and warranted class treatment. 19 Doc. No. 43. Thereafter, Lusk again moved the Court for preliminary approval and conditional 20 certification. Doc. No. 52. The Court denied Lusk’s “second motion,” explaining that his motion 21 described the terms of the proposed settlement and class notice in ways that conflicted with the 22 terms in the proposed settlement and class notice that were attached as its exhibits. Doc. No. 55 at 23 8–9. Lusk has now moved for preliminary approval and conditional certification for a third time. 24 Doc. No. 61 (“Motion”).1 With his “third motion,” Lusk submits a supporting declaration from 25 counsel, which itself comes with attached copies of the recently revised class settlement, class 26 27 28 1 In this order, citations to specific page numbers of Document No. 61 will refer to the pdf pagination of that 1 notice, and class member claim form proposals. Doc. No. 62-1.2 2 3 LEGAL STANDARD 4 Federal Rule of Civil Procedure 23(e) requires judicial review and approval of any class 5 settlement. This process generally involves three stages. In the first, the parties move for 6 “preliminary approval” of the proposed settlement and, if necessary, “conditional certification” of 7 the class. 4 William B. Rubenstein, Newberg on Class Actions § 13:16 (5th ed.). If the court 8 grants this threshold relief, the second and third stages require (1) the provision of notice to the 9 class members, along with an opportunity for them to object to or opt out of the proposed 10 settlement, and (2) a “final approval” determination (and actual class certification, if necessary) 11 following a fairness hearing. Id. 12 To secure preliminary approval and condition certification, the parties must provide 13 sufficient information for the court to determine that it “will likely be able to” grant final approval 14 of the settlement under Rule 23(e)(2) and certify the class for a judgment on the settlement. Fed. 15 R. Civ. P. 23(e)(1)(B). As to the first determination, Rule 23(e)(2) states that a binding class 16 settlement may be approved only on finding that it is “fair, reasonable, and adequate.” Fed. R. 17 Civ. P. 23(e)(2). As to the second determination, a class may be certified if it meets the four 18 prerequisites under Rule 23(a) and at least one of the three categories of class actions under Rule 19 23(b). Fed. R. Civ. P. 23(a)–(b). 20 The court’s role in the class settlement process is an important one, as “the parties that are 21 present and settling the case—class counsel, the class representatives, and the defendants—are 22 proposing to compromise the rights of absent class members.” Newberg on Class Actions 23 § 13:40. To ensure the interests of the absent class members are properly safeguarded, the “judge 24 must adopt the role of a skeptical client and critically examine the class certification elements, the 25 proposed settlement terms, and procedures for implementation.” Id. (quoting Manual for Complex 26

27 2 These separate documents are all found at the same docket number. Doc. No. 62-1 at 1–21 (“Setarah Decl.”); 23–45 28 (“Proposed Settlement”); 47–52 (“Settlement Notice”); and 54–55 (“Claim Form”). Where applicable, this order will 1 Litigation § 21.61 (4th ed.)). 2 3 DISCUSSION 4 The Court will deny Lusk’s latest motion because Lusk has not provided sufficient 5 information showing that the proposed settlement is likely to be approved as “fair, reasonable, and 6 adequate” upon certification of the class under Rule 23. The Court will deny the motion without 7 prejudice, and address its continuing concerns in detail such that Lusk may account for these 8 matters in a subsequent motion for preliminary approval and conditional certification. 9 10 A. Preliminary Approval 11 As noted above, at the preliminary approval stage, the court need only determine that the 12 proposed settlement is “likely” to be finally approved under Rule 23(e)(2). Rule 23(e)(2) itself 13 provides that a court may approve a class-binding settlement only on finding that the settlement is 14 “fair, reasonable, and adequate.” Fed. R. Civ. P. 23(e)(2). Before making such a finding, courts 15 must consider whether: (1) the class representative and counsel have adequately represented the 16 class; (2) the proposal was negotiated at arm’s length; (3) the relief provided for the class is 17 adequate in light of the costs, risks, and delay of trial and appeal; the effectiveness of any 18 proposed method of distributing relief to the class, including the method of processing class- 19 member claims; the terms of any proposed award of attorney’s fees, including timing of payment; 20 and any agreement made in connection with the proposal; and (4) the proposal treats class 21 members equitably relative to each other. Id.; see also In re Bluetooth Headset Prods. Liab. Litig., 22 654 F.3d 935, 946 (9th Cir. 2011) (quoted source omitted) (enumerating additional non-exhaustive 23 factors that are to be considered for purposes of granting final approval of a class settlement). 24 While Rule 23(e) does not mandate that courts consider these same factors for purposes of 25 determining whether preliminary approval is warranted, doing so often proves useful given the 26 role these factors play in final approval determinations. The court may also consider any other 27 topic that it regards as pertinent to determining whether the proposed settlement is fair, reasonable, 28 and adequate. See Fed. R. Civ. P. 23(e)(2) advisory committee’s note to 2018 amendment. 1 Naturally, the showing of fairness of a proposal will vary from case to case. Bluetooth Headset 2 Prods. Liab. Litig., 654 F.3d at 946. Where a settlement has been negotiated before certification, 3 however, there exists “an even greater potential for a breach of fiduciary duty owed the class 4 during settlement,” which means “such agreements must withstand an even higher level of 5 scrutiny for evidence of collusion or other conflicts of interest than is ordinarily required under 6 Rule 23(e) before securing the court’s approval as fair.” Id. 7 8 1. Adequacy of Class Relief 9 The relief obtained by the class is often described as the most important part of a class 10 settlement. Carlin v. DairyAmerica, Inc., 380 F. Supp. 3d 998, 1011 (E.D. Cal. 2019). To 11 determine whether proposed relief is fair and reasonable, the court compares the amount that will 12 be recovered with the estimated value of the class claims if they were to be successfully litigated. 13 Id. (cited source omitted). As part of this comparison, the court must gauge the relative strength 14 of the plaintiff’s case as “[e]ven a fractional recovery of the possible maximum recovery amount 15 may be fair and adequate in light of the uncertainties of trial and difficulties in proving the case.” 16 Millan v. Cascade Water Servs., Inc., 310 F.R.D. 593, 611 (E.D. Cal. 2015) (collecting cases 17 approving settlements that were assumed to be fractions of the maximum potential recovery); see 18 also In re Mego Fin. Corp. Sec. Litig., 213 F.3d 454, 459 (9th Cir. 2000) (“It is well-settled law 19 that a cash settlement amounting to only a fraction of the potential recovery does not per se render 20 the settlement inadequate or unfair.” (quoted source omitted)). 21 Turning to the matter at hand, the proposed class settlement indicates that Defendants will 22 pay $1,200,000 to a settlement class of approximately 2,206 persons who worked as hourly, non- 23 exempt employees of Defendants at any time between August 22, 2013, and the date that 24 preliminary approval is granted. Proposed Settlement, ¶¶ 4, 5, 13, 24. In exchange for their 25 payment of this “gross settlement amount,” Defendants will be fully released from liability for all 26 claims in this lawsuit and any other claims that have been or could have been raised based on the 27 allegations of this action (excluding those claims of class members who properly “opt out”). Id., 28 ¶¶ 18, 19. From the gross settlement amount, Lusk will receive up to $15,000 and his counsel will 1 receive up to $300,000 for fees and $20,000 for costs as compensation for their prosecution of this 2 lawsuit. Id., ¶¶ 14(a)–(c). The gross settlement amount will also provide the third-party claims 3 administrator with up to $30,000 for fees and expenses, and cover a payment of $100,000 in civil 4 penalties under PAGA, of which $75,000 will be awarded to the State of California (with the 5 remaining $25,000 reserved for the class). Id., ¶ 14(d)–(e). With these amounts deducted, the 6 putative class will be entitled to the remainder of the gross settlement amount, also referred to as 7 the “net settlement amount.” Id., ¶¶ 14, 15. As Lusk represents in his motion, simple math using 8 the figures above allocates approximately $760,000 for class member distribution or an average 9 gross recovery of $344.51 per class member. Motion at 10.3 10 As to an estimated value of the class claims, Lusk posits in his motion that, based on a 11 review of payroll and timekeeping data provided by Defendants, the class would recover 12 approximately $15,724,423.74 if he were to prevail on all of the claims. Motion at 19. Lusk 13 separates this figure into the following claim-specific amounts: 14 • $896,979.96 (excluding interest) for the meal period claim 15 • $1,961,913.96 (excluding interest) for the rest period claim 16 • $1,478,619.90 (excluding interest) for the unpaid wages claim 17 • $295,617.12 (excluding interest) for the expenditure reimbursement claim 18 • $1,213,000.00 for the wage statement claim 19 • $3,376,792.80 for the separation wages claim 20 • $6,501,500.00 in civil penalties for the PAGA claim 21 Motion at 18–19. 22 Notwithstanding the maximum potential recovery, Lusk focuses on a sub-total potential 23 recovery that excludes the PAGA amount in full: that is, $9,222,923.74. Lusk contends that the 24 gross settlement amount ($1,200,000) will be an “excellent result” compared to other approved 25 settlements within the Ninth Circuit, as it is “just a little over 13%” of this sub-total. Motion at 19. 26

27 3 According to the proposal, Defendants’ share of any payroll tax attributable to class members’ recovery will be paid 28 from the gross settlement amount. Proposed Settlement, ¶ 17. Thus, presumably (although unnoted in Lusk’s 1 In denying Lusk’s first motion, the Court concluded that Lusk failed to demonstrate that the 2 proposed settlement agreement offered adequate relief to the class. As part of that problem, the Court 3 explained, Lusk had not stated how case-specific facts and evidence gave rise to particular risks 4 affecting recovery on individual class claims. Doc. No. 43 at 10–13. In his third motion, Lusk 5 attempts to cure this deficiency by describing certain risks related to the above-listed claims. 6 While some of these efforts are largely sufficient, the Court still has considerable qualms about 7 Lusk’s analysis regarding the PAGA claim and the absence of analysis regarding other class 8 claims and theories of liability that have been pleaded and are subject to release under the 9 proposed settlement. The Court is also concerned that Lusk’s entire risk assessment is affected by 10 an unaddressed issue regarding the applicable class period. Each of these matters will be 11 discussed in turn. 12 13 a. The Labor Code Claims 14 Lusk bases the meal period, rest period, unpaid wages, separation wages, wage statement, 15 and expenditure reimbursement claims on violations of the California Labor Code and the 16 applicable California Industrial Welfare Commission Wage Order. Lusk asserts that each of these 17 claims is based on Defendants’ unlawful policies and practices that uniformly applied to the entire 18 class. 19 In his motion, Lusk identifies specific risks associated with these separate claims as 20 follows: For the meal period, rest period, unpaid wages, and expenditure reimbursement claims, 21 Lusk states that Defendants have maintained facially compliant written policies on the underlying 22 matters and that further prosecution of these claims will involve the weighty task of proving that, 23 notwithstanding these written policies, Defendants were violating the law by enforcing unwritten 24 policies and practices. Also against these claims, Lusk notes that Defendants produced numerous 25 declarations, wherein putative class members asserted that alleged meal and rest period violations, 26 off-the-clock work, and unreimbursed expenses have not occurred. 27 Specific to the expenditure reimbursement claim, Lusk notes that under California law 28 employees seeking reimbursement under Labor Code § 2802 have a duty to maintain and submit 1 reimbursement requests. See Gattuso v. Harte-Hanks Shoppers, Inc., 42 Cal. 4th 554, 568–69 2 (2007). He contends that this obligation—which Defendants invoked in their defense during 3 mediation—presents even more risk to that claim. 4 As to risks against the wage statement and separation wages claims, Lusk points to the 5 well-established case law split regarding whether plaintiffs are able to recover under California 6 Labor Code §§ 203 and 226 on the basis of meal and rest period violations. See Bates v. Leprino 7 Foods Co., No. 2:20-cv-0700-AWI-BAM, 2020 WL 6392562, at *3–6 (E.D. Cal. Nov. 2, 2020). 8 He also cites Defendants’ possible defense against these claims based on their lack of wrongful 9 intent under the respective statutes. See § 203(a) (violation where “an employer willfully fails to 10 pay” separation wages); § 226(e)(1) (violation with “[a]n employee suffering injury as a result of a 11 knowing and intentional failure by an employer” to provide wage statements). While unstated in 12 his motion, Lusk can seemingly attribute additional risk to the wage statement and separation 13 wages claims in so far as they are derivative of the risks associated with the meal period, rest 14 period, and unpaid wages claims (as addressed above). 15 The Court credits Lusk’s accounting of these specific risks in his latest motion. 16 17 b. The PAGA Claim 18 As pleaded, the PAGA claim is derivative of all the Labor Code claims. Under PAGA, 19 aggrieved employees are able to bring private actions on behalf of themselves and other 20 employees to recover civil penalties for Labor Code violations that were previously recoverable 21 only by the California Labor and Workforce Development Agency (“LWDA”). Cal. Labor Code 22 § 2698 et seq.; Iskanian v. CLS Transp. L.A., LLC, 59 Cal. 4th 348, 379–80 (2014) (citing Arias 23 v. Superior Court, 46 Cal. 4th 969 (2009)). Where civil penalties are recovered under PAGA, 75 24 percent of the recovery goes to the LWDA, and the remaining 25 percent goes to the aggrieved 25 employees. Cal. Labor Code § 2699(i). Civil penalties under PAGA are separate and distinct 26 from statutory penalties provided under other sections of the Labor Code, meaning an employee 27 may recover both PAGA penalties and statutory penalties for Labor Code violations. Iskanian, 59 28 Cal. 4th at 381. 1 The proposed settlement allocates $100,000 of the gross settlement amount to PAGA 2 recovery: $75,000 goes to the LWDA and $25,000 is allocated to the net settlement amount for 3 class recovery.4 These figures stand in stark contrast to the maximum potential PAGA recovery 4 that Lusk estimates in his motion: that is, $6,501,500. The Court questions this figure itself, as 5 well as the substantial difference between the estimate and the $100,000 figure that the proposal 6 actually includes. 7 Turning first to the estimate, Lusk indicates that he calculated a maximum potential 8 recovery of $6,501,500 by adding the potential recovery of $2,600,600 in civil penalties under 9 Labor Code § 2699(f)(2) for both meal period and rest period violations and $1,300,300 in civil 10 penalties under Labor Code § 558(a) for unpaid wages violations. Motion 19. The underlying 11 math is less than crystal clear, but Lusk seems to suggest that these separate figures are each based 12 on 510 first violations and 13,258 subsequent violations. The unpaid wages figure is half of the 13 meal and rest period figures because civil penalties under § 558(a) are punished through $50 and 14 $100 payments for initial and subsequent violations whereas the default civil penalty scheme 15 under § 2699(f)(2) imposes $100 and $200 punishments. Granting these figures, Lusk’s estimate 16 does not incorporate other civil penalties that he sought through the PAGA claim in his first- 17 amended complaint. This includes civil penalties based on violations of Labor Code §§ 201, 202, 18 and 203 (payment of separation wages); § 204 (payment for all hours worked); § 212 (compliance 19 requirements for issuing wages); § 223 (payment of wages based on a designated wage scale); 20 § 226 (provision of wage statements); §§ 1194 and 1197 (payment of minimum wages); § 1198 21 (maximum hours of work); and § 2802 (expenditure reimbursement). FAC, ¶ 192. Not only have 22 all these allegations been made, they are also set to be released according to the terms of the 23 proposed settlement (in addition to any other claims under these provisions that could have been

24 4 While the LWDA is not a party to this action, the Labor Code directs that a “proposed settlement shall be submitted 25 to the [LWDA] at the same time that it is submitted to the court.” Cal. Labor Code § 2699(l)(2). Lusk represents that the proposed settlement was submitted to the LWDA on May 15, 2020. Setareh Decl., ¶ 35, Ex. 2. He does not 26 confirm whether LWDA has responded in any fashion. See Haralson v. U.S. Aviation Servs. Corp., 383 F. Supp. 3d 959, 971 (N.D. Cal. 2019) (suggesting that the notice provision exists to allow for comment from the LWDA). The 27 Court also notices that the submission to the LWDA seems to have been completed before the proposed settlement was revised, although the parties’ joint revisions do not appear to have directly implicated the PAGA claim. But see 28 Maciel v. Bar 20 Dairy, LLC, No. 1:17-cv-00902-DAD-SKO, 2020 WL 5095885, at *21 (E.D. Cal. Aug. 28, 2020) 1 raised based on the allegations of this action). Proposed Settlement, ¶ 18. The Court suspects that 2 the unaddressed allegations have some value and should have been included in Lusk’s risk 3 assessment. And if that is not the case and these allegations have no value whatsoever, Lusk must 4 explain to the Court why these specifically pleaded allegations are entirely valueless and why it is 5 fair and reasonable for the class members to release all claims of this kind for nothing in return. 6 The Court’s concerns with Lusk’s PAGA analysis do not end there. Even assuming that 7 $6,501,500 represents the maximum potential recovery on the PAGA claim, Lusk has not 8 sufficiently shown how this number was reduced to a mere fraction of that amount ($100,000 or 9 1.5% of the estimate) based on the facts and circumstances of this case. Lusk seems convinced 10 that the PAGA claim “is not likely to bear fruit in this case” because trial courts have discretion to 11 decrease unjust and oppressive PAGA awards under Labor Code § 2699(e)(2). For support, he 12 points the Court to the decision in Cotter v. Lyft, Inc., 176 F. Supp. 3d 930 (N.D. Cal. 2016). 13 Cotter, to put it simply, does not offer him help. In fact, in Cotter, the Northern District denied 14 preliminary approval in part because the plaintiffs’ PAGA analysis was full of arbitrary 15 assumptions and calculations, including an unexplained shrinking of a maximum PAGA estimate 16 of $5,430,000 million to $122,250 in the proposed settlement. Id. at 939–41. While the court 17 acknowledged its discretionary authority under § 2699(e)(2), it rejected the plaintiffs’ theory that 18 this statute compelled a certain reduction of PAGA penalties on the basis of an unrelated state 19 court decision and instead emphasized that any application of that discretion would necessarily 20 depend on the facts and circumstances of the specific case at hand. Id.; see also Haralson v. U.S. 21 Aviation Servs. Corp., 383 F. Supp. 3d 959, 971–74 (N.D. Cal. 2019) (examining ways in which 22 courts have evaluated whether fractional recovery on a PAGA claim is reasonable). 23 Like in Cotter, and as noted above, this Court has concerns about Lusk’s calculation of the 24 PAGA claim’s potential value. The Court also has concerns regarding how only a tiny fraction of 25 that potentially undervalued estimate (1.5%) and the gross settlement amount (8.33%) ended up in 26 the proposed settlement. The Court has discretionary authority to reduce PAGA awards under 27 § 2699(e)(2). If that authority is going to be so dramatically relied upon, however, Lusk must 28 make at least a preliminary showing that such a reduction would be warranted in light of the facts 1 and circumstances of this particular case. With nothing more than generic references to 2 Defendants’ line of business being one of low margins, Lusk has not done that here. 3 4 c. The Credit Reporting Claims 5 Lusk has raised four credit reporting claims under federal and California law. Broadly, 6 these claims are based on allegations that Defendants obtained credit reports as part of employee 7 background checks and then failed to disclose to employees that the credit reports were obtained. 8 In denying Lusk’s first motion, the Court explained that Lusk had failed to address these 9 claims within his risk assessment, despite the fact that Lusk was asking the Court to certify the 10 claims and that the proposed settlement, if it was finally approved, would release Defendants from 11 further liability on the claims. Doc. No. 43 at 13. In his latest motion, Lusk states that Defendants 12 provided verified discovery responses indicating that they did not perform background checks on 13 any applicants or employees, which in turn threatens to negate the entire theory of liability for 14 these claims as class members would not be able to prove the alleged injury. While he describes 15 this particular risk, Lusk once again entirely omits these claims from his risk assessment. Lusk 16 does not clearly explain their absence. One interpretation is that this is a mistake, in which case 17 the Court’s previous concerns regarding Lusk’s full examination and explanation of these claims 18 remains. Another interpretation is that Lusk believes these claims are worthless and that their 19 absence from the assessment is intentional. The Court finds problems with this reading as well. 20 Under the proposed settlement, class members will release any claims based on the federal 21 Fair Credit Reporting Act, the California Investigative Consumer Reporting Agencies Act, and the 22 California Consumer Credit Reporting Agencies Act that could have been raised under the 23 allegations of this action. Proposed Settlement, ¶ 18.5 In other words, if the credit reporting 24 claims are indeed unequivocally meritless such that their non-inclusion in the potential recovery 25 estimate is appropriate and class members’ settlement shares are not considered in any way 26 27 5 The proposed Settlement Notice and Claim Form do not reference the Fair Credit Reporting Act, Investigative Consumer Reporting Agencies Act, or Consumer Credit Reporting Agencies Act amongst the extended list of released 28 claims. See Doc. No. 62-1 at 49 and 55. These provisions should be expressly cited in these documents, just as they 1 attributable to these claims, the proposed settlement creates a one-sided bargain. That is, for 2 nothing of value in return, the class members are asked to grant a release that stretches far beyond 3 the four credit reporting claims that have actually been raised in this action. Without any 4 explanation from Lusk, this outcome seems unfair, unreasonable, and inadequate. 5 6 d. The UCL Claim 7 As with the credit reporting claims, the Court explained in denying Lusk’s first motion that 8 Lusk had not addressed the exposure and recovery risks related to the UCL claim. Doc. No. 43 at 9 13. Lusk does not cure this deficiency in his latest motion. He has not provided an estimate for 10 the maximum potential recovery on this claim, nor has he provided an explanation regarding the 11 possible risks that run against that claim. As things stand, Lusk’s risk assessment treats the UCL 12 claim as having no value. That may be the case. But if it is, Lusk needs to inform the Court as to 13 why this claim is entirely without merit. And once again, the proposed settlement states that all 14 claims that could have been raised under the UCL based on the allegations of this action will be 15 released. Proposed Settlement, ¶ 18. Lusk must explain how such a broad release for nothing in 16 return warrants the Court’s approval. 17 18 e. The Meal and Rest Period Claims 19 As discussed above, Lusk provides both potential recovery estimates and possible risks 20 regarding the meal and rest period claims. While crediting these efforts, the Court still finds 21 deficiencies with how Lusk has accounted for these claims in his latest motion compared to how 22 the claims were pleaded in his first-amended complaint. 23 As to the meal period claim, in his motion, Lusk calculates a potential recovery 24 ($896,979.96) by multiplying the number of shifts greater than six hours (81,028) by the average 25 hourly rate ($11.07). Motion at 19. In line with this calculation, Lusk has sought recovery for 26 meal period violations based on Defendants’ failure to provide meal periods for each five-hour 27 work period, as required under Labor Code § 512(a) and Wage Order 5, § 11(A). FAC, ¶¶ 102– 28 103. Yet, in his first-amended complaint, Lusk also alleges that Defendants are liable for failing 1 to provide class members who worked shifts of ten or more hours with a second meal period (or 2 compensation in lieu thereof), as required under the same laws. FAC, ¶¶ 105–106. These 3 allegations are not clearly addressed (if they are addressed at all) in Lusk’s potential recovery 4 estimate and risk assessment. 5 Lusk’s treatment of the rest period claim contains a similar problem. In his motion, Lusk 6 calculates a potential recovery for this claim ($1,961,913.96) by multiplying the number of shifts 7 greater than three-and-a-half hours (177,228) by the average hourly rate ($11.07). Motion at 19. 8 In his first-amended complaint, however, Lusk alleges that Defendants failed to provide class 9 members with rest periods for each work period of four hours or major fraction thereof, as 10 required under Wage Order 5, § 12(A). FAC, ¶ 116. It is unclear from Lusk’s description of the 11 potential recovery estimate whether shifts where employees were entitled to more than one rest 12 period—i.e., shifts longer than six hours—were counted as multiple violations, such that the 13 estimate is consistent with the allegations underlying this claim. 14 Given that these theories of liability have been raised, they are covered by a proposed 15 settlement that seeks to resolve all of Lusk’s outstanding claims. Proposed Settlement, ¶ 18. This 16 in turn means that these claims should have been addressed in Lusk’s motion. The Court is unable 17 to determine whether the proposed settlement is fair, reasonable, and adequate without information 18 on the value of the theories and their associated risks. 19 20 f. The Unpaid Wages Claim 21 Lusk’s assessment of the unpaid wages claim suffers from the same deficiency as his 22 assessment of the meal and rest period claims. As set forth in the first-amended complaint, the 23 unpaid wages claim is based in part on Defendants’ alleged failure to pay class members overtime 24 wages under Labor Code § 510(a) and Wage Order 5, § 3(A). See FAC, ¶¶ 132–133, 135–137. 25 These statutory provisions require employers to pay overtime wages at a rate of one and one-half 26 times an employee’s regular rate of pay. See Cal. Labor Code § 510(a); Cal. Code Regs. tit. 8, 27 § 11050(3)(A). Lusk acknowledges this theory of liability in his motion. He refers to his unpaid 28 wages claim as based on “alleged unpaid straight time and overtime wages,” and asserts that 1 “whether Defendants failed to pay all overtime wages due and payable to former employees within 2 the times specified under the California Labor Code” is amongst the common issues that 3 predominate over individual issues in this action. Motion at 20, 30. Moreover, the proposed 4 settlement mentions overtime wages in significant ways: it states that Defendants’ failure to pay 5 overtime wages at the correct overtime rates is both a claim in this action and a claim that will be 6 released if the settlement is granted final approval by the Court. Proposed Settlement, ¶¶ A, 18. 7 The proposed class notice and claim form similarly state that “all claims for unpaid wages, 8 including without limitation overtime wages” held by class members will be fully and completely 9 released upon entry of a final approval order. Doc. 61-2 at 49, 55. Despite all of these references, 10 Lusk does not address the potential recovery or risks attendant to an overtime wages claim in his 11 motion. Rather, he calculates a potential recovery on the unpaid wages claim ($1,478,619.90) by 12 multiplying the total number of unpaid wages violations (267,140) by the time spent working off 13 the clock (.5 hours) by the average hourly rate ($11.07). Motion at 18. 14 Like with the other insufficiently addressed claims and theories of liability discussed 15 above, Lusk’s failure to assess the value of the overtime wages allegations leaves the Court to 16 assume that those allegations are without value. If that is indeed the case, Lusk needs to inform 17 the Court why that is so. He also needs to explain how class members’ gratuitous release of any 18 and all overtime wages claims that have arisen during the class period constitutes a fair, 19 reasonable, and adequate deal. 20 21 g. The Class Period 22 In addition to the claim-specific problems addressed above, the Court is concerned that an 23 unaddressed issue with the applicable class period affects Lusk’s entire claims valuation and risk 24 assessment analysis. The proposed settlement defines the class period as “the period of time from 25 August 22, 2013 through the date of Preliminary Approval of the Settlement.” Proposed 26 Settlement, ¶ 4. In other words, the class period has remained open since the parties reached their 27 agreement on October 12, 2018. Since that date, Lusk has moved for preliminary approval on 28 three occasions. In his latest motion, Lusk provides potential recovery estimates that are very 1 close, if not identical, to the estimates he provided in his first motion, which was filed on April 1, 2 2019. Compare Motion at 18–19 with Doc. No. 36 at 20. For example, in his first motion, Lusk 3 estimated that the potential recovery on the meal period claim was $872,470.21; in his third 4 motion, Lusk estimates that this claim is worth $896,979.96. Both motions estimate the potential 5 recovery on the wage statement claim is $1,213,000. 6 Lusk has not explained whether the most recent estimates account for the nearly two years 7 that have elapsed since estimates were first provided. Comparing the two motions suggests 8 otherwise, which portends a significant undervaluing of the class claims. For instance, if the wage 9 statement estimate is calculated by multiplying the total number of pay periods during the entire 10 class period by $50 and $100 for first and subsequent violations, as Lusk purports in his latest 11 motion, it seems obvious that the value of that claim should have greatly increased between April 12 2019 and March 2021 as pay periods continued to occur. The same can be said for the rest of the 13 estimates that Lusk has (or should have) provided. See Cotter, 176 F. Supp. 3d at 940 (explaining 14 that counsel had drastically undervalued a claim because outdated information with an open class 15 period was used). 16 Beyond simply undervaluing the claims, the open class period also subjects to release all 17 claims that could have been raised based on the underlying allegations that have accrued since 18 April 1, 2019. Problems exist if these claims are not given any value. As an example, pretend a 19 putative class member had wage statement claims accrue in February and March 2021. If the class 20 member does not opt out and recovers under the proposed settlement, she will be unable to pursue 21 those wage statement claims, as they presumably constitute claims that “have been, or that could 22 have been, asserted against [Defendants], whether or not presented, based on the primary rights or 23 the facts alleged at any point in time in this Action.” Proposed Settlement, ¶ 18. Yet, according to 24 Lusk’s motions, no part of the class member’s recovery under the proposed settlement will be 25 attributable to those specific wage statement claims as the value of wage statement class claim has 26 not changed since April 1, 2019. Like with the faults discussed above, the Court remains 27 unconvinced that the proposed settlement offers a fair and reasonable result to the extent it both 28 fails to compensate for certain recovery and releases claims that could have been raised to secure 1 that recovery. 2 3 h. Class Relief Conclusion 4 As noted above, in his motion, Lusk asserts that the gross settlement amount represents an 5 “excellent result” because it equals approximately 13% of the maximum potential recovery. In 6 light of the foregoing issues, the Court currently finds this assertion incorrect, if not wholly 7 misleading. The claim of 13% is based on the gross settlement amount ($1,200,000) and a sub- 8 total potential recovery ($9,222,923.74) that excludes potential recovery on the PAGA, credit 9 reporting, and UCL claims, as well as the meal period, rest period, and unpaid wages theories of 10 liability that were pleaded but not addressed in Lusk’s motion. It also does not incorporate the 11 fact that the class period has remained open since the parties reached an agreement in October 12 2018, which seemingly should increase potential recovery figures across the board. But even if all 13 these omissions are excused, adding only Lusk’s (potentially undervalued) PAGA estimate to the 14 sub-total potential recovery ($15,724,423.74), drops the recovery percentage to 7.6%. This 15 percentage drops even further to 4.8% if the amount actually expected to be distributed to the class 16 ($760,000) is used instead of the gross settlement amount. Again, this figure does not include any 17 of the claims that Lusk has not addressed. Although a return of this kind is not per se 18 unreasonable, the exclusions, oversights, and rather arbitrary calculations that populate Lusk’s risk 19 assessment pose a significant problem for securing preliminary approval at this time. 20 21 2. Equitable Treatment of Class Members 22 Rule 23(e) requires examination of whether a proposed settlement “treats class members 23 equitably relative to each other.” Fed. R. Civ. P. 23(e)(2)(D). To consider this factor, the court 24 assesses whether the proposed settlement “improperly grant[s] preferential treatment to class 25 representatives or segments of the class.” Taafua v. Quantum Glob. Techs., LLC, No. 18-cv- 26 06602-VKD, 2021 WL 579862, at *7 (N.D. Cal. Feb. 16, 2021) (quoted source omitted). “Matters 27 of concern could include whether the apportionment of relief among class members takes 28 appropriate account of differences among their claims, and whether the scope of the release may 1 affect class members in different ways that bear on the apportionment of relief.” Fed. R. Civ. P. 2 23(e)(2)(D) advisory committee’s note to 2018 amendment. 3 Under the proposed settlement, class members’ actual recovery will be based on the 4 number of weeks they worked for Defendants during the class period. A given class member’s 5 settlement share is calculated by dividing this number by the total of all class members’ work 6 weeks, and then multiplying that quotient by the net settlement amount. Proposed Settlement, 7 ¶ 15(b). Thus, the proposed distribution scheme treats class members equally in one primary 8 sense. What may be equal might not be equitable, however, as the scheme seemingly does not 9 account for apparent distinctions amongst the class members based on the class claims. 10 Take, for instance, the separation wages claim that Lusk estimates is worth $3,376,792.80, 11 an amount greater than any other addressed claim aside from the (potentially underestimated and 12 severely discounted) PAGA claim. According to his motion, Lusk bases this estimate on a 13 “termination count” of 1,271. In other words, more than 40% of the approximately 2,206 putative 14 class members did not have a termination event during the class period that would entitle them to 15 recovery under Labor Code § 203. Lusk recognized as much in his first-amended complaint, 16 wherein he alleged that a subclass would be needed for class members who are entitled to 17 separation wages. FAC, ¶¶ 20, 159, 167. Similar questions can be raised regarding the meal 18 period, rest period, and expenditure reimbursement claims, for which class members who worked 19 longer shifts or used their personal vehicles for work-related activities could have 20 disproportionately endured the statutory violations for which the settlement purportedly 21 compensates. Again, Lusk recognized these claims (among others) were deserving of subclasses 22 in the first-amended complaint. FAC, ¶¶ 20, 95, 108, 111, 119, 140, 143. 23 Acknowledging all of these class member distinctions would obviously require a 24 distribution scheme more complicated than the one included in the proposed settlement. This 25 drawback notwithstanding, such complication may be necessary to ensure class members are 26 treated equitably. If that is not the case, then Lusk must at least explain to the Court how it is that 27 equitable treatment will still be provided despite the clear distinctions. 28 1 3. Adequate Representation 2 a. Class Counsel 3 In denying Lusk’s first motion, the Court was not persuaded by Lusk’s efforts to 4 demonstrate that a proposed attorney’s fee award of $400,000, or 33.3% of the gross settlement 5 amount, was warranted. Doc. No. 43 at 14–17. This, the Court explained, was a significant 6 upward adjustment from the 25% benchmark that the Ninth Circuit has established for cases where 7 attorney’s fees are to be determined based on a percentage of a large fund created by a settlement 8 or award for class distribution. See In re Online DVD-Rental Antitrust Litig., 779 F.3d 934, 949 9 (9th Cir. 2015); Hanlon v. Chrysler Corp., 105 F.3d 1011, 1029 (9th Cir. 1998). Factors courts 10 may consider when assessing a requested percentage include: 11 the extent to which class counsel achieved exceptional results for the class, whether the case was risky for class counsel, whether counsel’s performance generated 12 benefits beyond the cash settlement fund, the market rate for the particular field of law (in some circumstances), the burdens class counsel experienced while litigating 13 the case (e.g., cost, duration, foregoing other work), and whether the case was handled on a contingency basis. 14 15 Online DVD-Rental Antitrust Litig., 779 F.3d at 954–55 (internal quotation marks omitted). 16 When considering preliminary approval of a proposed settlement, the court should assess the 17 reasonableness of the attorney’s fee award because “an inordinate fee may be the sign that counsel 18 sold out the class’s claims at a low value in return for the high fee.” Newberg on Class Actions 19 § 13:54. “A defendant’s willingness to pay high fees may also indicate that the relief in the 20 settlement undervalues the class’s claims, because otherwise it would not be in the defendant’s 21 interest to pay that much.” Id. 22 Lusk explains that the parties have since revised the proposed settlement such that counsel 23 is set to receive an award of $300,000, which represents 25% of the gross settlement amount. 24 Motion at 8. As this matches the benchmark that the Ninth Circuit recognizes, the Court’s 25 previously raised concern has been alleviated. Even so, the Court takes note that an amount of 26 attorney’s fees may still be adjusted upwards or downwards from the 25% benchmark if the record 27 shows “‘special circumstances’ justifying a departure.” Bluetooth Headset Prods. Liab. Litig., 654 28 F.3d at 942 (quoted source omitted); see also Powers v. Eichen, 229 F.3d 1249, 1256–57 (9th Cir. 1 2000) (stating that an explanation in the record is necessary for departure from the benchmark). 2 3 b. Class Representative 4 Discretionary incentive awards to class representatives are fairly typical in class actions. 5 Rodriguez v. W. Publ’g Corp., 563 F.3d 948, 958 (9th Cir. 2009). These awards are meant to 6 “compensate class representatives for work done on behalf of the class, to make up for financial or 7 reputational risk undertaking in bringing the action, and, sometimes, to recognize their willingness 8 to act as a private attorney general.” Id. at 958–59. To justify any proposed incentive award, the 9 class representative shall present evidence demonstrating the quality of his or her representation 10 and be prepared to rationalize any discrepancy between an incentive award and the settlement 11 shares of the unnamed class members. Alberto v. GMRI, Inc., 252 F.R.D. 652, 669 (E.D. Cal. 12 2008). The court, in turn, must assess whether an incentive payment is excessive by balancing the 13 size of any award compared to the settlement amount and the size of each payment; the court may 14 also consider “the actions the plaintiff has taken to protect the interests of the class, the degree to 15 which the class has benefitted from those actions, . . . the amount of time and effort the plaintiff 16 expended in pursuing the litigation . . . and reasonable fear[s of] workplace retaliation.” Staton v. 17 Boeing Co., 327 F.3d 938, 977 (9th Cir. 2003). While they may be commonly granted, district 18 courts must vigilantly scrutinize all incentive awards, as unreasonable incentive awards undermine 19 a “critical check on the fairness of the settlement for the class as a whole” because class 20 representatives could become “more concerned with maximizing those incentives than with 21 judging the adequacy of the settlement as it applies to class members at large.” Id.; see also 22 Radcliffe v. Experian Info. Sols., Inc., 715 F.3d 1157, 1165 (9th Cir. 2013). 23 The proposed settlement provides for a maximum class representative payment of $15,000. 24 Proposed Settlement, ¶ 14(c). The payment represents 1.25% of the gross settlement amount and 25 almost 2% of the net settlement amount. Through counsel’s declaration, Lusk emphasizes his 26 willingness to serve as a class representative as shown by his participation in this lawsuit. Setareh 27 Decl., ¶ 32. He also has sat for a deposition. Id., ¶ 7. 28 The Court finds this incentive award suffices for preliminary approval purposes. While it 1 cannot fully evaluate whether the claimed amount is excessive as it does not yet know exactly how 2 much work Lusk has had to do, the Court will always be able to review the evidence Lusk presents 3 before granting final approval. The Court impresses upon Lusk that if this matter should reach 4 that stage, presentation of that evidence remains his burden. 5 6 B. Conditional Certification 7 Rule 23 of the Federal Rules of Civil Procedure imposes a two-step test for deciding 8 whether a class may be certified. Under the first step, the court determines whether the moving 9 party has established four perquisites: 10 (1) the class is so numerous that joinder of all members is impracticable; (2) there are questions of law or fact common to the class; (3) the claims or defenses of the 11 representative parties are typical of the claims or defenses of the class; and (4) the representative parties will fairly and adequately protect the interests of the class. 12 13 Fed. R. Civ. P. 23(a)(1)–(4). If the prerequisites of Rule 23(a) are met, the court considers 14 whether the proposed class action meets at least one of the three provisions of Rule 23(b). Fed. R. 15 Civ. P. 23(b). Lusk seeks certification under Rule 23(b)(3), which states that a class action may be 16 maintained if “the court finds that the questions of law or fact common to class members 17 predominate over any questions affecting only individual members, and that a class action is 18 superior to other available methods for fairly and efficiently adjudicating the controversy.” Fed. 19 R. Civ. P. 23(b)(3). 20 While the same standards under Rule 23(a) and (b) are used for both litigation and 21 settlement classes, courts apply the certification criteria slightly differently in each situation. In re 22 Hyundai & Kia Fuel Econ. Litig., 926 F.3d 539, 556 (9th Cir. 2019). Certification of a litigation 23 class requires consideration of trial manageability, a concern that is not present for certification of 24 a settlement class. Id. Meanwhile, settlement classes demand “heightened attention to the 25 definition of the class or subclasses,” as “a court asked to certify a settlement class will lack the 26 opportunity, present when a case is litigated, to adjust the class, informed by the proceedings as 27 they unfold.” Id. at 557 (quoting Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 620 (1997)). 28 “[T]he aspects of Rule 23(a) and (b) that are important to certifying a settlement class are ‘those 1 designed to protect absentees by blocking unwarranted or overbroad class definitions. The focus 2 is on whether a proposed class has sufficient unity so that absent members can fairly be bound by 3 decisions of class representatives.’” Id. at 558 (quoting Amchem Prods., 521 U.S. at 621). 4 According to the proposed settlement, Defendants stipulate that the certification 5 requirements have been met for the purpose of settling this case. Proposed Settlement, ¶ 21. The 6 proposed settlement also provides that Defendants reserve the right to contest certification if the 7 Court does not approve the proposal for any reason. Id. The conditionally certified class is to be 8 defined as follows: 9 All persons who have been employed in California by Defendants as hourly-paid or “nonexempt” employees, whether directly or through an employment agency or a 10 professional services organization, at any time during the period from August 22, 2013 through the date that the Court grants Preliminary Approval of the Settlement. 11 12 Id. 13 Based on the collective representations in Lusk’s motion, the Court finds that conditional 14 certification will likely be appropriate assuming a proposed settlement can secure preliminary 15 approval. As discussed above, the Court remains concerned with the lack of subclass treatment 16 for certain class claims. This concern applies in the certification context as well. But otherwise, 17 Lusk has generally made a prima facie case that the class should be certified for settlement 18 purposes. Despite this, a question remains regarding the Court’s ability to actually certify the 19 class following a final fairness hearing based on the record. 20 In denying Lusk’s first motion, the Court explained that Lusk had not shown whether a 21 sufficient amount of discovery had been conducted before an agreement was reached. Doc. No. 22 43 at 13–14. The Court wondered whether a lack of discovery translated to Lusk’s insufficient 23 evaluation of each claim, noting as well that his failure to even address certain claims could imply 24 that those claims were not subject to any discovery. Id. at 14. In his latest motion, Lusk attempts 25 to ease this concern with the following description of the discovery efforts: 26 The Parties conducted significant and extensive investigation of the facts and law during the prosecution of this action. This included formal written discovery by 27 both Parties and the production of the class list and almost 1,000 pages of documents (which included Defendants’ meal period and rest break policies, along 28 with the relevant employee handbook, time punch records and wage statements), as 1 2 Motion at 10–11, 17; Serateh Decl., ¶ 7. The Court finds this explanatory effort little better than 3 the last go-around, and its previous apprehension that insufficient discovery on the class claims 4 has led to insufficient evaluation of those claims lingers. 5 Moreover, aside from the representation above, Lusk only discusses discovery in his 6 motion for purposes of describing risks attendant to the class claims. For instance, Lusk states that 7 during discovery Defendants produced sixty-nine declarations, wherein putative class members 8 averred that their time and pay records were accurate, meal and rest period violations did not 9 occur, and expenditure reimbursements were either provided or not required because personal 10 vehicles were not used for work-related activities. Motion at 21–23. Against these declarations, 11 Lusk offers no evidence in favor of the class claims. Aside from his own deposition, which he 12 does not cite to, Lusk does not indicate whether any other depositions have been taken or any 13 supporting declarations have been procured.6 Instead, whenever evidence is needed for purposes 14 of arguing that certification is warranted, Lusk relies solely on Defendants’ stipulation that the 15 requirements of Rule 23(a) and (b) are met or bald statements in counsel’s declaration that assert 16 the same to be true. But this alone does not provide a basis in the record for the Court to adopt 17 such a conclusion for itself. 18 Up to this point, Lusk has made a case that all of the class claims are based on Defendants’ 19 unlawful policies and practices that uniformly applied to the entire class. Yet, according to his 20 motion, the only evidence regarding those policies and practices (namely, Defendants’ 21 declarations) appears to unanimously indicate that they do not in fact exist. While Lusk is not 22 required to conclusively prove his case to obtain certification, he must offer some proof that the 23 allegedly unlawful policies and practices upon which he bases the class claims do in fact exist. 24 See Perez v. Leprino Foods Co., No. 1:17-cv-00686-AWI-BAM, 2021 WL 53068, at *8 (E.D. Cal. 25 Jan. 6, 2021). And although even less is required at this early stage, Lusk must make at least some 26 showing that certification will be possible. See Fed. R. Civ. P. 23(e)(1) advisory committee’s note 27 28 6 Lusk also has not explained how the payroll and timekeeping records that he appears to have used for his potential 1 to 2018 amendment (“[T]he court cannot make the decision regarding the prospects for 2 certification without a suitable basis in the record.”). This bar, as low as it may be, is in place for 3 a reason. If this matter proceeds to a final approval hearing at which time Lusk cannot show that 4 his claims are typical of the class claims and common questions predominate over individualized 5 inquiries, the Court will have no basis on which to certify the class. This in turn would collapse 6 the settlement proceedings and require all involved to return to their current position, leaving 7 everyone with nothing more than a massive waste of time, expenses, and judicial resources. While 8 Lusk has provided a foundation for conditional certification through argument, Defendants’ 9 stipulation, counsel’s representations, and the presence of a neutral mediator during the 10 negotiation of the proposed settlement, he must establish that foundation has a suitable basis in the 11 record to assure the Court the matter should proceed. 12 13 C. Conclusion 14 The Court does not take lightly the fact that in once again denying a motion for 15 preliminary approval and condition certification, it is further forestalling potential recovery for the 16 putative class. Nonetheless, the Court is obligated under Rule 23 to review and scrutinize the 17 information the parties provide before it may grant its judicial stamp of approval. Where that 18 stamp proves difficult to obtain because the information that must be reviewed is not sufficient, it 19 is not the Court’s prerogative to ignore this obligation or otherwise ease the burden of those 20 bearing responsibility under the rule. 21 Though the Court will deny Lusk’s third motion, it will do so without prejudice and grant 22 him an opportunity to file a new motion. This too is a measure not taken lightly, as the Court 23 recognizes that some of its concerns in denying Lusk’s first motion have remained through its 24 resolution of Lusk’s second and third motions. If Lusk chooses to file a new motion, he shall 25 appropriately account for each and every one of the concerns raised in this order. 26 /// 27 /// 28 /// 1 ORDER 2 Accordingly, IT IS HEREBY ORDERED that: 3 1. Lusk’s third motion for preliminary approval and conditional certification (Doc. 4 No. 61) is DENIED without prejudice; 5 2. This case is referred back to the magistrate judge for further scheduling and 6 management. 7 g IT IS SO ORDERED. g Dated: _May 31, 2021 7 ZS □ Z Cb Led — SENIOR DISTRICT JUDGE 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28