Martinez v. Semi-Tropic Cooperative Gin & Almond Huller, Inc.
Opinion
1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10
11 FABIAN CABALLERO MARTINEZ, on ) Case No.: 1:19-cv-01581 JLT CDB behalf of himself and all others similarly ) 12 situated, ) ORDER GRANTING PLAINTIFF’S MOTION ) FOR PRELIMINARY APPROVAL OF CLASS 13 Plaintiff, ) SETTLEMENT ) 14 v. ) (Doc. 47) ) 15 SEMI-TROPIC COOPERATIVE GIN & ) ALMOND HULLER, INC. and DOES 1 ) 16 through 20, inclusive, ) ) 17 Defendants. ) ) 18
19 Fabian Caballero Martinez asserts Semi-Tropic Cooperative Gin & Almond Huller failed to 20 comply with California’s wage and hour laws by failing to pay all wages due and provide proper meal 21 and rest breaks. Plaintiff now seeks preliminary approval of a class settlement reached in this action. 22 Specifically, Plaintiff seeks: (1) conditional certification of the settlement class; (2) preliminary 23 approval of the settlement; (3) appointment of Plaintiff as the class representative; (4) appointment of 24 the firm of Mallison & Martinez as class counsel; (5) approval of the class notice; (6) appointment of 25 Simpluris, Inc., as the settlement administrator; and (7) scheduling for final approval. (Doc. 47-1.) 26 The Court reviewed the proposed settlement between the parties and proposed class notice, as 27 well as the moving papers. For the following reasons, Plaintiff’s motion for preliminary approval of 28 the class settlement is GRANTED. 1 BACKGROUND 2 Plaintiff reports he performed “janitorial work and moving and sorting loads of almonds for 3 shipment” for Defendant, and was classified as a non-exempt employee. (Doc. 16 at 4, ¶ 11.) Plaintiff 4 asserts “Defendant’s business runs twenty-four… hours a day processing almonds,” and the nature of 5 the job required someone always be present to monitor the machines.” (Id. at 7, ¶ 27.) He explains: 6 “If the machines are left unattended while operating, trash and debris can damage the machines that 7 process the almonds.” (Id.) According to Plaintiff, “[f]or that reason, employees were required to 8 show up early for their shifts to ensure that someone is always present to monitor the machines during 9 shift changes.” (Id.) Plaintiff contends his supervisor “also required that Plaintiff be at work early so 10 that he can immediately replace the other employee.” (Id.) 11 Plaintiff reports he “typically worked from Monday through Saturday,” and was scheduled to 12 work a twelve-hour shift from 6PM to 6AM. (Doc. 16 at 7, ¶ 28.) However, Plaintiff alleges he “had 13 to clock in early and clock out late.” (Id.) As a result, Plaintiff reports he arrived at work five to ten 14 minutes before he was scheduled, and “[t]his time was never compensated.” (Id.) In addition, he 15 asserts he “had to occasionally remain at work up to 20 minutes after his shift had ended to allow his 16 replacement to relieve him,” and without compensation. (Id.) In addition, Plaintiff contends he “is 17 aware that other employees were required to do the same. (Id.) According to Plaintiff, his “wage 18 statements reveal that he was paid for seventy-two … hours of work nearly every pay period, which 19 suggests that Defendant was improperly rounding Plaintiff’s time worked.” (Id. at 7-8, ¶ 28.) He 20 asserts that “[o]n at least one occasion,” Defendant required Plaintiff to work seven days in a row, and 21 Plaintiff “was not compensated at double his wage after the eighth hour of work.” (Id. at 8, ¶ 28.) 22 Plaintiff alleges Defendant failed to provide uninterrupted meal periods and rest periods, “or 23 pay a premium wage in lieu thereof.” (Doc. 16 at 8, ¶¶ 29-30.) He contends he “did not receive his 24 first meal period until 1 AM, more than seven … hours into his shift.” (Id., ¶ 29.) Plaintiff assert also 25 that he “never received a second lunch period or signed a meal period waiver.” (Id.) Plaintiff alleges 26 “he was often interrupted and asked to perform work duties” during his rest and meal periods. (Id., ¶¶ 27 29-30.) For example, Plaintiff asserts: “Supervisors and other employees would come into the break 28 room and tell Plaintiff to work on a task that needed attention.” (Id., ¶ 30.) Plaintiff contends these rest 1 and meal period practices “occurred every shift,” and he “was never compensated with premium 2 wages.” (Id., ¶¶ 29-30.) 3 According to Plaintiff, “Defendant also failed to provide Class members, including Plaintiff, 4 with accurate itemized wage statements.” (Doc. 16 at 8, ¶ 31.) He asserts the wage statement did not 5 “reflect[] all hours worked by Plaintiff” because he “was required to work before and after his shift had 6 ended,” and this time was not reflected on the wage statements. (Id.) Plaintiff contends Defendant 7 “fail[ed] to itemize in wage statements all wages earned and accounting for the applicable rate of pay 8 for Plaintiff and the members of the proposed class.” (Id. at 9, ¶ 34.) 9 Finally, Plaintiff asserts that upon his termination, Defendant “failed to compensate Plaintiff for 10 all hours worked.” (Doc. 16 at 8, ¶ 32.) He contends Defendant did not pay statutory penalties to class 11 members, including Plaintiff. (Id.) Plaintiff alleges Defendant “made it difficult to account with 12 precision for the unlawfully withheld wages due to Plaintiff and the Class … because Defendant did not 13 fully implement and preserve a record keeping method to accurately record all hours worked and wages 14 earned by its employees as required for non-exempt employees.” (Id. at 9, ¶ 35.) 15 On November 5, 2019, Plaintiff initiated this action by filing a complaint. (Doc. 1.) He filed a 16 First Amended Complaint on January 30, 2020. (Doc. 16.) Plaintiff identified the following causes of 17 action: (1) failure to pay overtime wages in violation of the Fair Labor Standards Act; (2) failure to pay 18 minimum wages; (3) failure to pay overtime wages under California law; (4) failure to furnish itemized 19 wage statements; (5) meal period violations; (6) rest period violations; (7) failure to pay wages due 20 upon termination or resignation; (8) violation of Cal. Bus. & Prof. Code § 17200, et seq.; and (9) civil 21 penalties pursuant to California’s Private Attorney General Act. (Doc. 16 at 12-26.) He asserted the 22 claims were brought on behalf of himself and a class including: “All persons employed by Defendant 23 … in the State of California at any time within four [] years of the filing of the Initial Complaint in this 24 action.” (Id. at 9, ¶ 39.) Defendant filed its First Amended Answer on March 5, 2020. (Doc. 21.) 25 The Court issued its Scheduling Order governing the action on April 14, 2020. (Doc. 24.) 26 The parties engaged in discovery, including the production of “payroll and timekeeping records for the 27 Class.” (Doc. 47-1 at 8.) Plaintiff’s counsel also hired an expert “to perform an extensive review and 28 analysis of these records and assembled a comprehensive damages model.” (Doc. 42-2 at 10.) 1 The parties participated in a mediation with Steven M. Vartabedian on June 1, 2021. (Doc. 47-1 2 at 8.) Plaintiff reports that “[a]s a result of mediation, the parties reached an agreement in principal to 3 settle this matter, which they memorialized in a Memorandum of Understanding.” (Id.) The parties 4 then entered into the “Settlement Agreement and Release,” which the parties and counsel executed 5 between January and March 2022. (Doc. 42-3 at 2-26.) Because the initial agreement referred to 6 certification of the Settlement Class under state law, the parties executed the “Amended Settlement 7 Agreement and Release” in June 2022, “to conform with the applicable federal class certification 8 requirements laid out in Rule 23.” (See Doc. 45 at 2; see also Doc. 47-3.) Plaintiff now seeks approval 9 of the settlement. (Doc.
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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10
11 FABIAN CABALLERO MARTINEZ, on ) Case No.: 1:19-cv-01581 JLT CDB behalf of himself and all others similarly ) 12 situated, ) ORDER GRANTING PLAINTIFF’S MOTION ) FOR PRELIMINARY APPROVAL OF CLASS 13 Plaintiff, ) SETTLEMENT ) 14 v. ) (Doc. 47) ) 15 SEMI-TROPIC COOPERATIVE GIN & ) ALMOND HULLER, INC. and DOES 1 ) 16 through 20, inclusive, ) ) 17 Defendants. ) ) 18
19 Fabian Caballero Martinez asserts Semi-Tropic Cooperative Gin & Almond Huller failed to 20 comply with California’s wage and hour laws by failing to pay all wages due and provide proper meal 21 and rest breaks. Plaintiff now seeks preliminary approval of a class settlement reached in this action. 22 Specifically, Plaintiff seeks: (1) conditional certification of the settlement class; (2) preliminary 23 approval of the settlement; (3) appointment of Plaintiff as the class representative; (4) appointment of 24 the firm of Mallison & Martinez as class counsel; (5) approval of the class notice; (6) appointment of 25 Simpluris, Inc., as the settlement administrator; and (7) scheduling for final approval. (Doc. 47-1.) 26 The Court reviewed the proposed settlement between the parties and proposed class notice, as 27 well as the moving papers. For the following reasons, Plaintiff’s motion for preliminary approval of 28 the class settlement is GRANTED. 1 BACKGROUND 2 Plaintiff reports he performed “janitorial work and moving and sorting loads of almonds for 3 shipment” for Defendant, and was classified as a non-exempt employee. (Doc. 16 at 4, ¶ 11.) Plaintiff 4 asserts “Defendant’s business runs twenty-four… hours a day processing almonds,” and the nature of 5 the job required someone always be present to monitor the machines.” (Id. at 7, ¶ 27.) He explains: 6 “If the machines are left unattended while operating, trash and debris can damage the machines that 7 process the almonds.” (Id.) According to Plaintiff, “[f]or that reason, employees were required to 8 show up early for their shifts to ensure that someone is always present to monitor the machines during 9 shift changes.” (Id.) Plaintiff contends his supervisor “also required that Plaintiff be at work early so 10 that he can immediately replace the other employee.” (Id.) 11 Plaintiff reports he “typically worked from Monday through Saturday,” and was scheduled to 12 work a twelve-hour shift from 6PM to 6AM. (Doc. 16 at 7, ¶ 28.) However, Plaintiff alleges he “had 13 to clock in early and clock out late.” (Id.) As a result, Plaintiff reports he arrived at work five to ten 14 minutes before he was scheduled, and “[t]his time was never compensated.” (Id.) In addition, he 15 asserts he “had to occasionally remain at work up to 20 minutes after his shift had ended to allow his 16 replacement to relieve him,” and without compensation. (Id.) In addition, Plaintiff contends he “is 17 aware that other employees were required to do the same. (Id.) According to Plaintiff, his “wage 18 statements reveal that he was paid for seventy-two … hours of work nearly every pay period, which 19 suggests that Defendant was improperly rounding Plaintiff’s time worked.” (Id. at 7-8, ¶ 28.) He 20 asserts that “[o]n at least one occasion,” Defendant required Plaintiff to work seven days in a row, and 21 Plaintiff “was not compensated at double his wage after the eighth hour of work.” (Id. at 8, ¶ 28.) 22 Plaintiff alleges Defendant failed to provide uninterrupted meal periods and rest periods, “or 23 pay a premium wage in lieu thereof.” (Doc. 16 at 8, ¶¶ 29-30.) He contends he “did not receive his 24 first meal period until 1 AM, more than seven … hours into his shift.” (Id., ¶ 29.) Plaintiff assert also 25 that he “never received a second lunch period or signed a meal period waiver.” (Id.) Plaintiff alleges 26 “he was often interrupted and asked to perform work duties” during his rest and meal periods. (Id., ¶¶ 27 29-30.) For example, Plaintiff asserts: “Supervisors and other employees would come into the break 28 room and tell Plaintiff to work on a task that needed attention.” (Id., ¶ 30.) Plaintiff contends these rest 1 and meal period practices “occurred every shift,” and he “was never compensated with premium 2 wages.” (Id., ¶¶ 29-30.) 3 According to Plaintiff, “Defendant also failed to provide Class members, including Plaintiff, 4 with accurate itemized wage statements.” (Doc. 16 at 8, ¶ 31.) He asserts the wage statement did not 5 “reflect[] all hours worked by Plaintiff” because he “was required to work before and after his shift had 6 ended,” and this time was not reflected on the wage statements. (Id.) Plaintiff contends Defendant 7 “fail[ed] to itemize in wage statements all wages earned and accounting for the applicable rate of pay 8 for Plaintiff and the members of the proposed class.” (Id. at 9, ¶ 34.) 9 Finally, Plaintiff asserts that upon his termination, Defendant “failed to compensate Plaintiff for 10 all hours worked.” (Doc. 16 at 8, ¶ 32.) He contends Defendant did not pay statutory penalties to class 11 members, including Plaintiff. (Id.) Plaintiff alleges Defendant “made it difficult to account with 12 precision for the unlawfully withheld wages due to Plaintiff and the Class … because Defendant did not 13 fully implement and preserve a record keeping method to accurately record all hours worked and wages 14 earned by its employees as required for non-exempt employees.” (Id. at 9, ¶ 35.) 15 On November 5, 2019, Plaintiff initiated this action by filing a complaint. (Doc. 1.) He filed a 16 First Amended Complaint on January 30, 2020. (Doc. 16.) Plaintiff identified the following causes of 17 action: (1) failure to pay overtime wages in violation of the Fair Labor Standards Act; (2) failure to pay 18 minimum wages; (3) failure to pay overtime wages under California law; (4) failure to furnish itemized 19 wage statements; (5) meal period violations; (6) rest period violations; (7) failure to pay wages due 20 upon termination or resignation; (8) violation of Cal. Bus. & Prof. Code § 17200, et seq.; and (9) civil 21 penalties pursuant to California’s Private Attorney General Act. (Doc. 16 at 12-26.) He asserted the 22 claims were brought on behalf of himself and a class including: “All persons employed by Defendant 23 … in the State of California at any time within four [] years of the filing of the Initial Complaint in this 24 action.” (Id. at 9, ¶ 39.) Defendant filed its First Amended Answer on March 5, 2020. (Doc. 21.) 25 The Court issued its Scheduling Order governing the action on April 14, 2020. (Doc. 24.) 26 The parties engaged in discovery, including the production of “payroll and timekeeping records for the 27 Class.” (Doc. 47-1 at 8.) Plaintiff’s counsel also hired an expert “to perform an extensive review and 28 analysis of these records and assembled a comprehensive damages model.” (Doc. 42-2 at 10.) 1 The parties participated in a mediation with Steven M. Vartabedian on June 1, 2021. (Doc. 47-1 2 at 8.) Plaintiff reports that “[a]s a result of mediation, the parties reached an agreement in principal to 3 settle this matter, which they memorialized in a Memorandum of Understanding.” (Id.) The parties 4 then entered into the “Settlement Agreement and Release,” which the parties and counsel executed 5 between January and March 2022. (Doc. 42-3 at 2-26.) Because the initial agreement referred to 6 certification of the Settlement Class under state law, the parties executed the “Amended Settlement 7 Agreement and Release” in June 2022, “to conform with the applicable federal class certification 8 requirements laid out in Rule 23.” (See Doc. 45 at 2; see also Doc. 47-3.) Plaintiff now seeks approval 9 of the settlement. (Doc. 47.) Defendant did not oppose or otherwise respond to the motion.1 10 THE PROPOSED SETTLEMENT 11 Pursuant to the proposed Settlement Agreement and Release (“the Settlement”), the parties 12 agree to a gross settlement amount of $600,000.00 for the class defined as follows: “any individual who 13 worked for Semi-Tropic in the State of California as an hourly paid, non-exempt employee at any time 14 between November 5, 2015 and June 3, 2021.” (Doc. 47-3 at 2-4, Settlement §§ I.F, I.S.) In addition, 15 the Settlement includes an “Escalator Clause,” under which the gross settlement amount will be 16 increased, pro rata, if the number of Class Members increases by more than 10% of the 155 members 17 estimated at the time of execution. (Doc. 47-3 at 9, Settlement § III.A.4.) Defendant agrees to pay 18 funds necessary to make the payments approved by the Court, including any share of employer-side 19 payroll taxes, after final approval of the Settlement.2 (Id. at 8, Settlement § III.A.) 20 I. Payment Terms 21 The settlement fund will cover payments to class members with additional compensation to the 22 Plaintiff as the Class Representative. (Doc. 42-3 at 9, Settlement § III.B.) In addition, the Settlement 23 provides for payments to Class Counsel for attorneys’ fees and costs, to the Settlement Administrator, 24 and the California Labor & Workforce Development Agency. (Id.) Specifically, the Settlement 25
26 1 As part of the agreement, Defendant indicated it would “not oppose [the] Motion for Preliminary Approval, so long as the Motion and supporting papers are consistent with the terms of [the] Settlement Agreement.” (Doc. 47-3 at 13, Settlement § 27 III.E.1.a.iv.) 2 Defendant agrees to pay the amount within ten days of the “Effective Date,” which is seven days after the completion of 28 several conditions and events, including “entry of a written final order by the Court approving [the] Settlement Agreement 1 provides for the following payments from the gross settlement amount: 2 • The Class Representative will receive an incentive award up to $10,000; 3 • Class counsel will receive up to $200,000 for attorneys’ fees, which 4 equals 33 1/3 % of the gross settlement amount, and costs in an amount to be determined by the Court3; 5 • The California Labor and Workforce Development Agency shall 6 receive $37,000 from the total PAGA payment of $50,000; and
7 • The Settlement Administrator will receive up to $5,000 for fees and expenses. 8
9 (Id. at 9-11, Settlement § III.B.) After these payments, the remaining money (“Net Settlement 10 Amount”) will be distributed as settlement shares to class members. (Id. at 5, Settlement § I.V.) If the 11 Court approves less than the amount requested for attorney’s fees, costs, or payment to the LWDA, 12 “the remainder will be retained in the Net Settlement Amount for distribution to Participating Class 13 Members.” (Id. at 47-3 at 10-11, Settlement §§ III.B.2, III.B.3.) 14 Class members are not required to submit a claim to receive a share from the Net Settlement 15 Amount. (See Doc. 47-3 at 11-12, Settlement § III.D; see also Doc. 47-4 at 5.) Class members’ shares 16 will be distributed on a pro rata basis, with shares “calculated by dividing the Net Settlement Amount 17 by the total number of workweeks worked by each Class Member from November 5, 2015 to June 3, 18 2021.” (Doc. 47-1 at 9, citing Settlement § III.D.1 [Doc. 42-3 at 11].) In addition, “the amount 19 allocated to the release of the PAGA claims that will be returned to the Net Settlement Amount… will 20 only be distributed among those Class Members/ Allegedly Aggrieved Employees employed between 21 June 25, 2018 and June 3, 2021.” (Id. at 10.) Thus, the exact amount settlement class members 22 receives depends upon how many weeks they worked for Defendant, and whether they are entitled to a 23 portion allocated for the release of PAGA claims. However, Plaintiff reports that if the Court were to 24 approve of the proposed payments—including the maximum attorney fees and class representative 25 enhancement award under the Settlement—the average payment is estimated to be about $2,157 for 26 each of the 156 class members. (Id.) 27
28 3 In the motion for preliminary approval, Plaintiff’s counsel reports the litigation expenses are “estimated not to exceed 1 The entire Net Settlement Amount will be distributed, and if any checks are not cashed or 2 returned, that money will not be returned to Defendant. (Doc. 47-3 at 12, Settlement § III.D.5.) 3 Instead, the money will be distributed to a cy pres beneficiary. (Id. at 19, Settlement § III.E.5.) 4 II. Releases 5 The Settlement provides that Plaintiff and class members, other than those who elect not to 6 participate in the Settlement, shall release Semi-Tropic4 from claims arising in the class period. 7 Specifically, the release for class members provides: 8 Upon the Effective Date, each and every Participating Class Member, on behalf him/herself and on behalf of his/her respective current, former and 9 future heirs, spouses, executors, administrators, agents, and attorneys, fully and finally releases and discharges Semi-Tropic and the Released Parties 10 from all of the Released Claims, as defined in this Settlement Agreement.
11 (Doc. 47-3 at 20, Settlement § III.G.1, emphasis omitted.) “Released Claims” are defined as: 12 [A]ll claims asserted in the Lawsuit and any and all claims, suits, actions, debts, liabilities, demands, obligations, penalties, guarantees, costs, 13 expenses, attorney’s fees, damages, debts, losses, controversies, setoffs, counterclaims, or causes of action of any kind or nature or description 14 whatsoever in law, equity, statutory or otherwise, whether known or unknown, contingent or accrued, including, but not limited to, any claim 15 which was asserted or could have been asserted at common law or under any statute, rule, regulation, order or law, whether federal, state or local, 16 arising from, or related to, the facts, claims, and/or circumstances alleged in the Lawsuit or Plaintiff’s PAGA notice letter, or which were alleged or 17 which could have been alleged against the Released Parties based on the facts or claims alleged in the Lawsuit or Plaintiff’s PAGA notice letter, 18 including, but not limited to, for or regarding the payment of wages; unpaid wages; unpaid minimum wages; unpaid overtime compensation; 19 interest or penalties for unpaid wages, unpaid minimum wages, or unpaid overtime compensation; off-the-clock work; failure to timely pay wages 20 owed; failure to provide meal periods or to pay premium pay in lieu thereof; failure to provide rest breaks or to pay premium pay in lieu 21 thereof; failure to provide and maintain accurate and itemized wage statements; inaccurate, incomplete or incorrect pay instruments/stubs 22 and/or wage or earnings statements; inaccurate payroll or time record- keeping records; failure to reimburse business expenses; waiting time 23 penalties; damages; premium pay; breach of contract or company policy; statutory penalties; civil penalties; injunctive relief; declaratory relief; 24 restitution; interest; costs and attorneys’ fees; enforcement of the California Labor Code Private Attorney General Act of 2004, Labor Code 25 §§ 2698, et seq.; fraudulent business practices or unfair competition under the California Business and Professions Code §§ 17200, et seq.; and any 26 other claims or damages arising out of or relating to Plaintiff’s and/ or any 27 4 The Settlement also indicates the release encompasses Defendant’s “present and former parent companies, subsidiaries, 28 affiliated corporations and entities, and all of their agents, shareholders, officers, directors, members, managers, employees, 1 Class Members’ employment with Semi-Tropic during the period of time from November 5, 2015 to the date of Preliminary Approval of the 2 Settlement, whether known or unknown.
3 (Doc. 42-3 at 5-6, Settlement § I.BB, emphasis omitted.) 4 The release for Plaintiff encompasses more claims than those identified for Settlement Class 5 Members, because he agreed to release any claims that could have arisen during the course of his 6 employment with Semi-Tropic, not just those claims constrained to the facts alleged in this lawsuit. 7 Specifically, Plaintiff’s release provides: 8 As of the Effective Date, and in consideration of his Settlement Share, and the other terms and conditions of the Settlement Agreement, Plaintiff, on 9 behalf of himself and his current, former and future heirs, executors, administrators, executors, spouses, agents, and attorneys, hereby fully and 10 finally releases and discharges Semi- Tropic and the Released Parties from all of the Released Claims and any and all claims, rights, demands, 11 liabilities, obligations, penalties, costs, expenses, attorneys’ fees, rights, damages, suits, indemnities, controversies, setoffs, debts, losses, 12 counterclaims, guarantees, actions and causes of action of any kind, nature or description whatsoever in law, equity statutory, administrative, or 13 otherwise, or any other monetary or non-monetary relief, that any of them had, now have, or may have in the future, including, but not limited to, any 14 arising in any way from Plaintiff’s employment with Semi-Tropic or the cessation thereof, whether such claims are known or unknown, suspected 15 or unsuspected, arising on or before the Effective Date of this Agreement (unless a release of claims is excluded by law). 16 17 (Doc. 47-3 at 20, Settlement § III.G.3, emphasis omitted.) Thus, claims released by Plaintiff—but not 18 the Settlement Class—include any claims arising under the Americans with Disabilities Act, Title VII 19 of the Civil Rights Act of 1964, 42 U.S.C. § 1981, and the Employee Retirement Income Security Act. 20 Indeed, the Settlement indicates: “Plaintiff intends that this Agreement be, and is, a general release that 21 shall be affective as a bar to any and all claims against the Released Parties.” (Id. at 21, § III.G.4.) 22 III. Objections and Opt-Out Procedure 23 The proposed “Notice of Class Action Settlement and Your Rights” (the “Notice”) explains to 24 class members they do not need to “take any action” to receive a settlement share. (Doc. 47-4 at 5.) 25 However, any class member who wishes may file objections or elect not to participate in the 26 Settlement. (Doc. 47-3 at 15-16, Settlement § III.E.) The Notice also explains the procedures to object 27 to the terms or elect not to participate in the Settlement Class, and includes a form to be completed by a 28 class member seeking exclusion. (Doc. 47-4 at 5-6, 8-9.) 1 IV. Cy Pres Beneficiary 2 Since many class action settlements result in unclaimed funds, parties should have a plan for 3 distributing unclaimed funds. Six Mexican Workers v. Arizona Citrus Growers, 904 F.2d 1301, 1305 4 (9th Cir. 1990). The options for such distribution include cy pres distribution, escheat to the 5 government, and reversion to the defendants. Id., 904 F.2d at 1307. Here, the parties agree that a cy 6 pres beneficiary should be designated for uncashed or returned funds under the Settlement, and indicate 7 the recipient should be “Legal Aid at Work or some similar organization as approved by the Court.” 8 (Doc. 47-3 at 19, Settlement § III.E.5.) 9 The Ninth Circuit determined a proposed cy pres recipient should be “tethered to the nature of 10 the lawsuit and the interest of the silent class members.” Nachshin v. AOL, LLC, 663 F.3d 1034, 1039 11 (9th Cir. 2011). In other words, the Ninth Circuit “require[s] that there be a driving nexus between the 12 plaintiff class and the cy pres beneficiaries.” Dennis v. Kellogg Co., 697 F.3d 858, 865 (9th Cir. 2012) 13 (citing Nachshin, 663 F.3d at 1038). The Court explained that without such tethering, the distribution 14 of funds “may create the appearance of impropriety” by catering “to the whims and self interests of the 15 parties, their counsel, or the court.” Nachshin, 663 F.3d at 1038. Thus, a cy pres award should not 16 benefit a group that is “too remote from the plaintiff class.” Six Mexican Workers, 904 F.2d at 1308. 17 In identifying a cy pres beneficiary, the Ninth Circuit directs courts to consider whether awards 18 to the beneficiary “(1) address the objectives of the underlying statutes, (2) target the plaintiff class, or 19 (3) provide reasonable certainty that any member will be benefitted.” Nachshin, 663 F.3d at 1040. 20 Further, the Court must consider whether the cy pres distribution is appropriate given the “size and 21 geographic diversity” of the class members. Id. at 1040-41 (citing, e.g., In re Airline Ticket Comm’n 22 Antitrust Litig., 307 F.3d 679, 683 (8th Cir. 2002); Houck on Behalf of U.S. v. Folding Carton Admin. 23 Comm., 881 F.2d 494, 502 (7th Cir. 1989)). Plaintiff has not provided any analysis of these factors to 24 assist the Court in evaluating whether Legal Aid at Work is an appropriate cy pres beneficiary.5 25
26 5 Mr. Mallison reports only that “Legal Aid at Work is a 501(c)(3) non-profit organization which assists indigent workers with employment law claims.” (Doc. 47-2 at 12, ¶ 27.) However, there is no evidence before the Court that class members 27 are “indigent” and qualify for the assistance of Legal Aid at Work. Similarly, there is no information provided regarding the location of the organization, such that the Court may determine any member of the class lives in the same community and could benefit from its assistance. See Nachshin, 663 F.3d at 1040 (giving significant weight to the geographic scope of the 28 settlement class). Indeed, a cursory review demonstrates that in many cases in which Mr. Mallison or Mr. Martinez were 1 Nevertheless, the Ninth Circuit observed also that issues related to the identity of a cy pres 2 beneficiary are not generally ripe until there are funds that remain unclaimed. See Rodriguez v. West 3 Publ’g Corp., 563 F.3d 948, 966 (9th Cir. 2009) (finding cy pres distribution “becomes ripe only if 4 entire settlement fund is not distributed to class members” and declining to determine propriety of cy 5 pres at that time). The Court explained that where a cy pres distribution is contingent on the outcome 6 of the claims process for a cash distribution, issues regarding the identification of recipients “will not 7 be ripe until it is determined that available cash remains in th[e] fund after the claims process has 8 concluded.” Dennis v. Kellogg Co., 697 F.3d 858, 865 (9th Cir. 2012). Clearly, at this point in the 9 proceedings, there is no way to know whether funds will remain. Accordingly, the identity of the cy 10 pres beneficiary does not prevent preliminary approval of the proposed settlement. 11 PRELIMINARY APPROVAL OF A CLASS SETTLEMENT 12 When parties settle the action prior to class certification, the Court has an obligation to “peruse 13 the proposed compromise to ratify both the propriety of the certification and the fairness of the 14 settlement.” Staton v. Boeing Co., 327 F.3d 938, 952 (9th Cir. 2003). Preliminary approval of a class 15 settlement is generally a two-step process. First, the Court must assess whether a class exists. Id. 16 (citing Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 620 (1997)). Second, the Court must “determine 17 whether the proposed settlement is fundamentally fair, adequate, and reasonable.” Id. (citing Hanlon v. 18 Chrysler Corp., 150 F.3d 1011, 1026 (9th Cir. 2998)). The decision to approve or reject a settlement is 19 within the Court’s discretion. Hanlon, 150 F.3d at 1026. 20 I. Conditional Certification of a Settlement Class 21 Class certification is governed by Rule 23 of the Federal Rules of Civil Procedure, which 22 provides that “[o]ne or more members of a class may sue or be sued as representative parties on behalf 23 of all.” Fed. R. Civ. P. 23(a). The proposed Settlement Class includes: “any individual who worked 24
25 2015 WL 4460635, at *9 (E.D. Cal. July 21, 2015), report and recommendation adopted, No. 1:09-CV-00707AW IJLT, 2015 WL 13659310 (E.D. Cal. Oct. 2, 2015); Ontiveros v. Zamora, 2014 WL 3057506, at *1 (E.D. Cal. July 7, 2014), Doc. 26 123-3 at 8-10; Sandoval Ortega v. Aho Enterprises, Inc., 2021 WL 5584761, at *13 (N.D. Cal. Nov. 30, 2021); Sandoval v. M1 Auto Collisions Centers, 2017 WL 11679905, at *5 (N.D. Cal. Mar. 20, 2017). This suggests that pro bono law firms 27 represent the interests of counsel, rather than the class. Moreover, both Mr. Mallison and Mr. Martinez worked for CRLA, which was the recipient of the cy pes funds in many o the cases cited here. Thus, in keeping with the growing numbers of courts who strongly question the wisdom of cy pres beneficiaries, the Court finds, preliminarily, that the proposed cy 28 pres beneficiary is not appropriate. Plaintiff SHALL clearly address the factors identified by the Ninth Circuit in 1 for Semi-Tropic in the State of California as an hourly paid, non-exempt employee at any time between 2 November 5, 2015 and June 3, 2021.” (Doc. 47-3 at 2, Settlement § I.F.) Plaintiff seeks conditional 3 approval of the class for settlement pursuant to Fed. R. Civ. P. 23(c)(1), under which a court may 4 “make a conditional determination of whether an action should be maintained as a class action, subject 5 to final approval at a later date.” (Doc. 47-1 at 20, quoting Fry v. Hayt, Hayt & Landau, 198 F.R.D. 6 461, 466 (E.D. Pa. 2000).) 7 Parties seeking class certification bear the burden of demonstrating the elements of Rule 23(a) 8 are satisfied, and “must affirmatively demonstrate … compliance with the Rule.” Wal-Mart Stores, 9 Inc. v. Dukes, 564 U.S. 338, 350 (2011); Doninger v. Pacific Northwest Bell, Inc., 563 F.2d 1304, 1308 10 (9th Cir. 1977). If an action meets the prerequisites of Rule 23(a), the Court must consider whether the 11 class is maintainable under one or more of the three alternatives set forth in Rule 23(b). Narouz v. 12 Charter Communs., LLC, 591 F.3d 1261, 1266 (9th Cir. 2010). 13 A. Rule 23(a) Requirements 14 The prerequisites of Rule 23(a) “effectively limit the class claims to those fairly encompassed 15 by the named plaintiff’s claims.” General Telephone Co. of the Southwest. v. Falcon, 457 U.S. 147, 16 155-56 (1982). Certification of a class is proper if: 17 (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 18 or defenses of the representative parties are typical of the claims or defenses of the class; and (4) the representative parties will fairly and 19 adequately protect the interests of the class.
20 Fed. R. Civ. P. 23(a). These prerequisites are generally referred to as numerosity, commonality, 21 typicality, and adequacy of representation. Falcon, 457 U.S. at 156. 22 1. Numerosity 23 This prerequisite requires the Court to consider “specific facts of each case and imposes no 24 absolute limitations.” General Telephone Co. v. EEOC, 446 U.S. 318, 330 (1980). Although there is 25 not a specific threshold, joining more than one hundred plaintiffs is impracticable. See Immigrant 26 Assistance Project of Los Angeles Cnt. Fed’n of Labor v. INS, 306 F.3d 842, 869 (9th Cir. 2002) 27 (finding the numerosity requirement … “satisfied solely on the basis of the number of ascertained 28 class members”); see also Gay v. Waiters’ & Dairy Lunchmen’s Union, 549 F.2d 1330, 1332 n.7 (9th 1 Cir. 1977) (a proposed class with 110 members “clearly [included] a sufficient number to meet the 2 numerosity requirements”). Plaintiff reports there are “approximately 156 similarly situated Class 3 Members.” (Doc. 47-1 at 21, citing Mallison Decl. ¶ 22 [Doc. 47-2 at 11].) Therefore, joinder of all 4 identified class members as plaintiffs is impracticable, and the numerosity requirement is satisfied. 5 2. Commonality 6 Rule 23(a) requires “questions of law or fact common to the class.” Fed. R. Civ. P. 23(a)(2). 7 To satisfy the commonality requirement, the plaintiff must demonstrate common points of facts and 8 law. See Wal-Mart Stores, 564 U.S. at 350. Thus, “commonality requires that the class members’ 9 claims depend upon a common contention such that determination of its truth or falsity will resolve an 10 issue that is central to the validity of each claim in one stroke,” and the “plaintiff must demonstrate the 11 capacity of classwide proceedings to generate common answers to common questions of law or fact 12 that are apt to drive the resolution of the litigation.” Mazza v. Am. Honda Motor Co., 666 F.3d 581, 13 588 (9th Cir. 2012) (internal quotation marks, citations omitted). 14 Plaintiff asserts the commonality requirement is satisfied because “common questions of both 15 law and fact … exist regarding Defendant’s alleged violations, including requiring Class Members to 16 work off-the-clock and its practice of time rounding.” (Doc. 47-1 at 21.) Plaintiff contends “these 17 policies and practices were committed against the Class uniformly.” (Id.) Because it appears resolution 18 of issues—such whether Defendant’s policies violated California wage and hour law—would apply to 19 the claims of each of the Class Members, the Court finds the commonality requirement is satisfied for 20 purposes of settlement. 21 3. Typicality 22 This requirement demands that the “claims or defenses of the representative parties are typical 23 of the claims or defenses of the class.” Fed. R. Civ. P. 23(a)(3). A claim or defense is not required to 24 be identical, but rather “reasonably coextensive” with those of the absent class members. Hanlon, 150 25 F.3d at 1020. “The test of typicality is whether other members have the same or similar injury, whether 26 the action is based on conduct which is not unique to the named plaintiffs, and whether other class 27 members have been injured by the same course of conduct.” Hanon v. Dataproducts Corp., 976 F.2d 28 497, 508 (9th Cir. 1992) (internal quotation marks, citation omitted); see also Kayes v. Pac. Lumber 1 Co., 51 F.3d 1449, 1463 (9th Cir. 1995) (the typicality requirement is satisfied when named plaintiffs 2 have the same claims as other members of the class and are not subject to unique defenses). 3 Plaintiff asserts he performed “janitorial work and moving and sorting loads of almonds for 4 shipment” for Defendant, and was classified as a non-exempt employee. (Doc. 16 at 4, ¶ 11.) He 5 reports that “employees were required to show up early for their shifts to ensure that someone is 6 always present to monitor the machines during shift changes.” (Id. at 7, ¶ 27.) Plaintiff asserts he also 7 remained at work “up to 20 minutes after his shift ended to allow his replacement to relieve him,” and 8 he was “aware that other employees were required to do the same. (Id., ¶ 28.) He alleges Defendant 9 improperly rounded the time worked, and did not provide compensation for this time. (Id.) Plaintiff 10 also contends Defendant “failed to provide Class members, including Plaintiff, with accurate itemized 11 wage statements,” because the time employees were required to be present before and after scheduled 12 shifts was not reflected in the wage statements. (Id. at 8, ¶ 31.) 13 According to Plaintiff, his “claims are essentially identical to all other non-exempt workers in 14 Defendant’s almond hulling plant.” (Doc. 47-1 at 21.) Because Plaintiff was subjected to the same 15 company policies and payment procedures as Settlement Class Members—and Defendant does not 16 dispute this— the Court finds the typicality requirement is satisfied for purposes of settlement. See 17 Hanon, 976 F.2d at 508; Kayes, 51 F.3d at 1463. 18 4. Fair and Adequate Representation 19 Absentee class members must be adequately represented for judgment to be binding upon 20 them. Hansberry v. Lee, 311 U.S. 32, 42-43 (1940). Accordingly, this prerequisite is satisfied if the 21 representative party “will fairly and adequately protect the interests of the class.” Fed. R. Civ. P. 22 23(a)(4). “[R]esolution of this issue requires that two questions be addressed: (a) do the named 23 plaintiffs and their counsel have any conflicts of interest with other class members and (b) will the 24 named plaintiffs and their counsel prosecute the action vigorously on behalf of the class?” In re Mego 25 Fin. Corp. Sec. Litig., 213 F.3d 454, 462 (9th Cir. 2000) (citing Hanlon, 150 F.3d at 1020). 26 a. Proposed class representative 27 Plaintiff seeks appointment as the class representative for the Settlement Class. (See Doc. 47-1 28 at 21-22.) Mr. Mallison reports Plaintiff “carried out all required tasks in this case to help [counsel] 1 pursue this action, providing [counsel] with information, documents, insights, opinions, and necessary 2 decisions to make this case successful.” (Doc. 47-2 at 9, Mallison Decl. ¶ 16.) Moreover, the interests 3 of the named plaintiff are aligned with those of the class members: to maximize their recovery. Thus, 4 for settlement purposes only, the Court also finds Plaintiff is a suitable class representative. 5 b. Proposed class counsel 6 The law firm of Mallison & Martinez has extensive experience litigating wage and hour class 7 actions and serving as class counsel. (See Doc. 42-2 at 2-8, Mallison Decl. ¶¶ 4, 7-14.) Mr. Mallison 8 asserts: “Neither I, nor any member of the firm, have any personal affiliation or family relationship 9 with the Plaintiff. The only relationship with Plaintiff in this current litigation is an attorney-client 10 relationship.” (Id. at 9, ¶ 16.) Defendant does not oppose appointment of the proposed Class Counsel, 11 or assert they are inadequate to represent the interest of the class. After reviewing the qualifications of 12 Mallison & Martinez, the Court finds counsel satisfy the adequacy requirements. 13 B. Certification of a Class under Rule 23(b)(3) 14 As noted above, once the requirements of Rule 23(a) are satisfied, a class may only be certified 15 if it is maintainable under Rule 23(b). Fed. R. Civ. P. 23(b); see also Narouz, 591 F.3d at 1266. 16 Plaintiff asserts certification of the settlement class is appropriate under Rule 23(b)(3), which requires a 17 finding that (1) “the questions of law or fact common to class members predominate over any questions 18 affecting only individual members,” and (2) “a class action is superior to other available methods for 19 fairly and efficiently adjudicating the controversy.” These two requirements are generally called the 20 “predominance” and “superiority” requirements. See Hanlon, 150 F.3d at 1022-23; see also Wal-Mart 21 Stores, 564 U.S. at 363 (“(b)(3) requires the judge to make findings about predominance and 22 superiority before allowing the class”). 23 Plaintiff asserts “the parties agree for purposes of the Settlement only that certification of the 24 Class is appropriate under Rule 23(b)(3)” and agree the predominance and superiority requirements are 25 satisfied. (Doc. 47-1 at 22.) Indeed, it appears Plaintiff’s class claims are subject to proof by common 26 evidence related to the alleged policies and practices. There is no evidence—particularly at this 27 juncture— that class members desire to individually litigate the claims. Further, there are no identified 28 issues of manageability that would preclude certification. Consequently, the Court finds conditional 1 certification of the proposed Settlement Class is proper under Rule 23(b)(3). 2 II. Evaluation of the Settlement Terms 3 Settlement of a class action requires approval of the Court, which may be granted “only after a 4 hearing and on finding that [the settlement] is fair, reasonable, and adequate.” Fed. R. Civ. P. 23(e)(2). 5 Approval is required to ensure settlement is consistent with the plaintiff’s fiduciary obligations to the 6 class. See Ficalora v. Lockheed Cal. Co., 751 F.2d 995, 996 (9th Cir. 1985). Toward that end, 7 “Congress and the Supreme Court amended Rule 23(e) to set forth specific factors to consider in 8 determining whether a settlement is ‘fair, reasonable, and adequate.’” Briseño v. Henderson, 998 F.3d 9 1014, 1023 (9th Cir. 2021); see Fed. R. Civ. P. 23(e)(2) (effective Dec. 1, 2018). Rule 23(e)(2) now 10 directs the Court to consider whether: 11 (A) the class representatives and class counsel have adequately represented the class; 12 (B) the proposal was negotiated at arm’s length; (C) the relief provided for the class is adequate, taking into account: 13 (i) the costs, risks, and delay of trial and appeal; (ii) the effectiveness of any proposed method of distributing relief to 14 the class, including the method of processing class-member claims; (iii) the terms of any proposed award of attorney’s fees, including 15 timing of payment; and (iv) any agreement required to be identified under Rule 23(e)(3); and 16 (D) the proposal treats class members equitably relative to each other.
17 Fed. R. Civ. P. 23(e)(2); see also Briseño, 998 F.3d at 1023-24. The Ninth Circuit determined this 18 revision to Rule 23 requires courts “to go beyond [its] precedent.” Briseño, 998 F.3d at 1026.6 19 A. Representation of the Class 20 To determine adequacy of representation under Rule 23(e)(2), the Court may consider whether 21 the interests of the named plaintiff are “aligned with the interests of the Class Members.” See Cottle v. 22 23 6 Previously, the Ninth Circuit had identified several factors to determine whether a settlement agreement meets these 24 standards, including: the strength of plaintiff’s case; the risk, expense, complexity, and likely duration of further 25 litigation; the risk of maintaining class action status throughout the trial; the amount offered in settlement; the extent of discovery completed, and the stage of the proceedings; the experience and views of counsel; the presence of a governmental participant; and the reaction 26 of the class members to the proposed settlement. Staton, 327 F.3d at 959 (citation omitted). Although Plaintiff refers to the factors under the Ninth Circuit precedent (Doc. 27 75 at 22-23), the Court focuses its analysis on the factors enumerated in Rule 23. See Briseño, 998 F.3d at 1026; see also Herrera v. Wells Fargo Bank, N.A., 2021 U.S. Dist. LEXIS 170195, at *21 (C.D. Cal. June 8, 2021) (“The goal of [amended Rule 23(e)] is … to focus the [district] court and the lawyers on the core concerns of procedure and substance 28 that should guide the decision whether to approve the proposal”) (quoting Fed. R. Civ. P. 23(e)(2), 2018 Advisory 1 Plaid Inc., 240 F.R.D. 356, 376 (N.D. Cal. 2021). In addition, a finding that “Class Counsel are 2 experienced and competent” supports a conclusion that the class is adequately represented. Id.; see 3 also In re Pac. Enters. Sec. Litig., 47 F.3d 373, 378 (9th Cir. 1995) (“Parties represented by competent 4 counsel are better positioned than courts to produce a settlement that fairly reflects each party's 5 expected outcome in litigation.”). Thus, the adequacy analysis under Rule 23(e)(2) is “redundant of 6 the requirements of Rule 23(a)(4) and Rule 23(g), respectively.” Moreno v. Beacon Roofing Supply, 7 Inc., 2020 WL 1139672 *at 5 (S.D. Cal. Mar. 9, 2020). 8 Plaintiff’s interests appear aligned with those of class members, as they share a common 9 interest in challenging the alleged wrongful wage and hour policies. In addition, Class Counsel are 10 clearly experienced in class action litigation. (See Doc. 42-2 at 2-8, Mallison Decl. ¶¶ 4, 7-9.) 11 Because Plaintiff carried the burden to show the adequacy prerequisite was satisfied under Rule 23(a), 12 the Court finds the requirement under Rule 23(e)(2) is also satisfied. See Moreno, 2020 WL 1139672 13 *at 5 (“Because the Court found that adequacy under Rule 23(a)(4) has been satisfied above, due to 14 the similarity, the adequacy factor under Rule 23(e)(2)(A) is also met.”). 15 B. Negotiation of the Settlement 16 Under Rule 23, the Court must consider whether “the proposal was negotiated at arm’s length.” 17 Fed. R. Civ. P. 23(e)(2)(B). The Ninth Circuit also “put[s] a good deal of stock in the product of an 18 arms-length, non-collusive, negotiated resolution” in evaluating a proposed class action settlement. 19 Rodriguez v. W. Publ’g Corp., 563 F.3d 948, 967 (9th Cir. 2009). The inquiry of collusion addresses 20 the possibility that the settlement agreement is the result of either “overt misconduct by the negotiators” 21 or improper incentives of class members at the expense of others. Staton, 327 F.3d at 960. The Ninth 22 Circuit observed that “settlement class actions present unique due process concerns for absent class 23 members” because the “inherent risk is that class counsel may collude with the defendants, tacitly 24 reducing the overall settlement in return for a higher attorney’s fee.” See In re Bluetooth Headset 25 Prods. Liab. Litig., 654 F.3d 935, 946 (9th Cir. 2011) (internal quotation marks, citations omitted). 26 Thus, the Court must consider whether the process by which the parties arrived at their settlement is 27 truly the product of arm’s length bargaining—as Plaintiff asserts (Doc. 47-1 at 15)— or the product of 28 collusion or fraud. Millan v. Cascade Water Servs., Inc., 310 F.R.D. 593, 613 (E.D. Cal. 2015). 1 In particular, when a class action settlement agreement is reached prior to a class being 2 certified, district courts must be watchful “not only for explicit collusion, but also for more subtle 3 signs that class counsel have allowed pursuit of their own self-interests and that of certain class 4 members to infect the negotiations.” In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d at 94; see 5 also Briseño, 998 F.3d at 1023. These “more subtle signs” include: (1) “when counsel receive a 6 disproportionate distribution of the settlement, or when the class receives no monetary distribution but 7 class counsel are amply rewarded”; (2) the existence of a “clear sailing” arrangement, which provides 8 “for the payment of attorneys’ fees separate and apart from class funds” and “carries the potential of 9 enabling a defendant to pay class counsel excessive fees and costs in exchange for counsel accepting 10 an unfair settlement on behalf of the class”; and (3) “when the parties arrange for fees not awarded to 11 revert to defendants rather than be added to the class fund.” Id. (internal quotations, citations omitted). 12 1. Whether there is a disproportionate distribution to counsel 13 The Settlement provides that Class counsel may request attorneys’ fees up to $ 200,000, which 14 is one third of the gross settlement fund. (Doc. 47-3 at 9, Settlement § III.B.2.) The typical range of 15 acceptable attorneys’ fees in the Ninth Circuit is 20% to 33 1/3% of the total settlement value, with 16 25% considered the benchmark. Powers v. Eichen, 229 F.3d 1249, 1256 (9th Cir. 2000). Because the 17 fees requested are within the range awarded by the Ninth Circuit from the gross settlement fund, the 18 Court finds the Settlement Agreement does not provide a disproportionate distribution to Class 19 Counsel. See Millan v. Casvade Water Servs., 310 F.R.D. 593, 612 (E.D. Cal. 2015) (finding no 20 disproportionate distribution where class counsel was to receive a third of the settlement fund “although 21 significantly above the benchmark for this Circuit,” because it was “not unreasonable as an upper 22 bound” of fees awarded in the Circuit). 23 2. Existence of a “clear sailing” agreement 24 In general, a “clear sailing” provision is one in which the parties agree to the “payment of 25 attorneys’ fees separate and apart from class funds.” In re Bluetooth Headset Prods. Liab. Litig., 654 26 F.3d at 947. However, the Ninth Circuit recognized also a “clear sailing” arrangement exists when a 27 defendant expressly agrees not to oppose an award of attorneys’ fees up to an agreed upon amount. 28 Lane, 696 F.3d at 832; In re Bluetooth Headset Prods., 654 F.3d at 947. 1 Defendant agreed the company “will not oppose Class Counsel’s application to the Court for 2 an award of not more than 33 1/3% of the Goss Settlement Amount as their Class Counsel Fees 3 Payment, plus an additional mount for reasonable costs.” (Doc. 47-3 at 9, Settlement § III.B.2.) Thus, 4 the Settlement includes a version of a “clear sailing agreement.” Nevertheless, the existence of a clear 5 sailing provision is not necessarily fatal to approval. See In re Bluetooth Headset Prods. Liab. Litig., 6 654 F.3d at 948; see also In re Toys R Us-Delaware, Inc.–Fair and Accurate Credit Transactions Act 7 (FACTA) Litig., 295 F.R.D. 438, 458 (C.D. Cal. 2014) (“a clear sailing agreement is one where the 8 party paying the fee agrees not to contest the amount to be awarded by the fee-setting court so long as 9 the award falls beneath a negotiated ceiling”). Rather, “when confronted with a clear sailing 10 provision, the district court has a heightened duty to peer into the provision and scrutinize closely the 11 relationship between attorneys’ fees and benefit to the class.” Id. (citing Staton, 327 F.3d at 954). 12 No evidence is currently before the Court to evaluate the reasonableness of the fees requested 13 or the tasks undertaken on behalf of the Settlement Class. However, the Court will determine at the 14 final approval stage whether the fees are reasonable, based upon evidence submitted by counsel. 15 Thus, this factor does not weigh against preliminary approval of the settlement and will be revisited 16 upon the filing of a motion for attorneys’ fees and final approval of the terms. See Singh v. 17 Roadrunner Intermodal Servs. LLC, 2019 WL 316814 at *7-8 (E.D. Cal. Jan 24, 2019) (not finding 18 collusion between the parties, despite a clear sailing agreement, where the fee award was analyzed and 19 determined to be reasonable). 20 3. Whether there is a reversion to Defendant 21 Finally, the parties did not arrange for any unawarded fees to revert to Defendant. Instead, the 22 parties acknowledge in the Settlement Agreement that the Court may approve less than the requested 23 amount of fees, in which case the Net Settlement Amount will be adjusted. (Doc. 47-3 at 9, Settlement 24 § III.B.2) Because unawarded fees will be retained in the Net Settlement Amount for distribution to 25 participating class members, this factor does not support a finding of collusion between the parties. 26 4. Findings on collusion 27 Based upon the factors set forth by the Ninth Circuit, the Court finds the proposed settlement 28 “appears to be the product of serious, informed, non-collusive negotiations.” See In re Tableware 1 Antitrust Litig., 484 F. Supp. 2d 1078, 1079-80 (N.D. Cal. 2007). Thus, this factor under Rule 23 2 supports preliminary approval of the class settlement. 3 C. Relief Provided to the Class 4 The Ninth Circuit observed “the very essence of a settlement is compromise, ‘a yielding of 5 absolutes and an abandoning of highest hopes.’” Officers for Justice v. Civil Serv. Commission, 688 6 F.2d 615, 624 (9th Cir. 1982) (citation omitted). When analyzing an agreement, the Court should 7 examine “the complete package taken as a whole,” and the proposed settlement is “not to be judged 8 against a hypothetical or speculative measure of what might have been achieved by the negotiators.” 9 Officers for Justice, 688 F.2d at 625, 628. 10 The proposed gross settlement amount is $600,000.00. (Doc. 45-3 at 4, Settlement § I.S.) 11 After the anticipated deductions from the gross settlement, Plaintiff estimates that $336,500 will be 12 dispersed to Participating Class Members. (Doc. 47-1 at 10.) Plaintiff believes the average net 13 recovery for each Class Member is $2,157. (Id.) Analyzing the factors identified in Rule 23, as 14 discussed below, the Court finds the amount offered and relief provided to the Settlement Class 15 supports preliminary approval of the Settlement. 16 1. Costs, risks, and delays 17 “A[] central concern [when evaluating a proposed class action settlement] … relate[s] to the 18 cost and risk involved in pursuing a litigated outcome.” Feltzs v. Cox Comm’s Cal., LLC, 2022 WL 19 2079144 at *9 (C.D. Cal. Mar. 2, 2022) quoting Fed. R. Civ. P. 23(e), 2018 Advisory Committee 20 Notes [modifications in original].) Approval of settlement is “preferable to lengthy and expensive 21 litigation with uncertain results.” Nat’l Rural Telecomms. Coop. v. DIRECTV, Inc., 221 F.R.D. 523, 22 529 (C.D. Cal. 2004). If the settlement were to be rejected, the parties would have to engage in further 23 litigation, including seeking class certification and discovery on the issue of damages. 24 The parties agree the claims are “highly disputed.” (Doc. 47-3 at 7, Settlement § II.F.) 25 Defendant indicates it “has taken into account the uncertainty and risks inherent in any litigation and 26 has also concluded that further defense of the Lawsuit would be protracted and expensive.” (Id.) 27 Similarly, Plaintiff reports counsel “carefully considered the risks of trial and other normal perils of 28 litigation, including the merits of the affirmative defenses asserted by Defendant, the difficulties of 1 complex litigation, the lengthy process of establishing specific damages, new legal decisions affecting 2 pivotal issues in the case7, and other various possible risks and delays.” (Doc. 47-1 at 7, citing 3 Mallison Decl. ¶¶ 32-37 [Doc. 47-2 at 13-15].) Plaintiff acknowledges that even if he prevailed upon 4 the “wage and break violation claims,” there are “legal obstacles in obtaining other damages and 5 penalties derivative thereof.” (Id. at 15.) For example, Plaintiff observes: 6 [T]he possibility existed that the Court would decline to enter a finding of “willfulness” with regard to Defendant’s untimely payment of wages to 7 severed employees, thus foreclosing on any recovery under Labor Code section 203. Similarly, the Court may have declined to find that there was 8 any “injury” to Class Members resulting from allegedly inaccurate wage statements. See Cal. Lab. Code § 226(e)(1). 9
10 (Doc. 47-1 at 15.) Further, Plaintiff contends the Settlement “provides a certainty of recovery,” while 11 “further litigation or trial of the matter would substantially delay any compensation to Class Members 12 and/or potentially imperil the financial stability of Defendants, and their ability to provide any remedies 13 in this action.” (Id. at 7.) 14 Employment law class actions are, by their nature, time-consuming and expensive to litigate. 15 Hightower v. JPMorgan Chase Bank, N.A., 2015 WL 9664959 at *6 (C.D. Cal. Aug. 4, 2015). If the 16 Settlement is rejected, the parties would have to engage in further litigation, including seeking class 17 certification and discovery on the issue of damages. The time and expense of continued litigation could 18 outweigh any additional recovery. On the other hand, the proposed settlement provides for immediate 19 recovery on claims presented by Plaintiff on behalf of the class. Due to the acknowledged risk of the 20 claims of class members, costs of future litigation that may reduce the recovery to class members, and 21 delay in payments if the settlement is not approved, this factor weighs in favor of preliminary approval 22 of the Settlement. See Rodriguez, 563 F.3d at 966 (risk, expense, complexity and duration of litigation 23 supports settlement); Curtis-Bauer v. Morgan Stanley & Co., Inc., 2008 WL 4667090, at *4 (N.D. Cal. 24 Oct. 22, 2008) (“Settlement avoids the complexity, delay, risk and expense of continuing with the 25 litigation and will produce a prompt, certain, and substantial recovery for the Plaintiff class.”). 26
27 7 Counsel acknowledges that “Plaintiff’s meal break claim might not readily support awards of wage statement and waiting time violations,” and resolution of the issue is expected with the California Supreme Court’s pending review in Naranjo v. 28 Spectrum Security Services, Inc., 40 Cal. App. 5th 444 (2019), review granted, 257 Cal. Rptr. 3d 188 (Jan. 2, 2020). (Doc. 1 2. Proposed distribution 2 “[T]he goal of any distribution method is to get as much of the available damages remedy to 3 class members as possible and in as simple and expedient a manner as possible.” Hilsley v. Ocean 4 Spray Cranberries, Inc., 2020 WL 520616 at *7 (S.D. Cal. Jan. 31, 2020) (citing “Final approval 5 criteria—Rule 23(e)(2)(C)(ii): Distribution method,” 4 NEWBERG ON CLASS ACTIONS § 13:53 6 (5th ed.)). “Often it will be important for the court to scrutinize the method of claims processing to 7 ensure that it facilitates filing legitimate claims.” Fed. R. Civ. P. 23(e), 2018 Advisory Committee 8 Notes. “A claims processing method should deter or defeat unjustified claims, but the court should be 9 alert to whether the claims process is unduly demanding.” Id. 10 Class members are not required to “take any action,” such as submitting a claim form, to 11 receive their settlement share. (See Doc. 47-4 at 5.) Rather, class members need only take specific 12 action if they wish to opt-out of the settlement, object to any of the terms of the settlement, or dispute 13 the amount of their individual settlement share. Because the class members are not required to submit 14 and claim form, the proposed method of distribution will facilitate payment for legitimate claims and 15 is not “unduly demanding” upon Settlement Class members. Thus, this factor weighs in favor of 16 preliminary approval of the settlement. See Jackson v. Fastenal Co., 2021 WL 5755583 at *11 (E.D. 17 Cal. Dec. 3, 2021) (finding “the proposed method of distributing relief is effective, and weighs in 18 favor of a finding that the settlement agreement is fair, reasonable and adequate” where the class 19 members did not have to file a claim). 20 3. Attorneys’ fees 21 Under Rule 23, “courts must scrutinize ‘the terms of any proposed award of attorney’s fees.’” 22 McKinney-Drobnis v. Oreshack, 16 F.14th 594, 607 (9th Cir. 2021) (quoting Fed. R. Civ. P. 23 23(e)(2)(C)(iii). The Ninth Circuit explained, “the new Rule 23(e) makes clear that courts must balance 24 the ‘proposed award of attorney’s fees’ vis-à-vis the ‘relief provided for the class’ in determining 25 whether the settlement is ‘adequate’ for class members.” Id., quoting Briseño, 998 F.3d at 1024. 26 As discussed above, Class Counsel may request fees in the amount of one third of the 27 settlement fund. (Doc. 47-3 at 9, Settlement § III.B.2.) The Court-approved payment shall be made 28 by the Settlement Administrator “out of the Gross Settlement Amount promptly upon receipt.” (Id.) 1 Notably, the Settlement Administrator shall pay approved payments to Class Members within 15 2 business days of the Effective Date. (Id. at 11, Settlement § III.D.) Although it appears counsel will 3 receive payment prior to the Class Members, the gap between payments does not appear so significant 4 as to weigh against preliminary approval of the Class Settlement. 5 The fees to which the parties have agreed fall within the range of acceptable attorneys’ fees in 6 the Ninth Circuit. See Powers, 229 F.3d at 1256. Importantly, however, any party seeking fees bears 7 the burden of establishing that the fees and costs were reasonably necessary to achieve the results 8 obtained. See Fischer v. SJB-P.D., Inc., 214 F.3d 1115, 1119 (9th 2000). Therefore, a fee applicant 9 must provide time records documenting the tasks completed and the amount of time spent on 10 the action. Hensley v. Eckerhart, 461 U.S. 424, 424 (1983); Welch v. Metropolitan Life Ins. Co., 480 11 F.3d 942, 945-46 (9th Cir. 2007). Because the identified percentage of the gross fund is within the 12 accepted range outlined by the Ninth Circuit, this amount is approved preliminarily. The Court will 13 evaluate the reasonableness of the fee request and the exact amount of the fee award upon application 14 by Class Counsel with final approval of the settlement. 15 4. Agreement required to be identified 16 The Court must consider any agreement that is required to be identified under Rule 23(e)(3). 17 Fed. R. Civ. P. 23(e)(2)(C)(iv). Specifically, “parties seeking approval must file a statement 18 identifying any agreement made in connection with the proposal.” Fed. R. Civ. P. 23(e)(3). The parties 19 have identified no such agreement and the Court is not aware of any such agreement. Thus, this factor 20 does not weigh against preliminary approval. 21 D. Treatment of Class Members 22 Rule 23 requires the Court to consider whether the proposed settlement “treats class members 23 equitably relative to each other.” Fed. R. Civ. P. 23(e)(2)(D). “A distribution of relief that favors some 24 class members at the expense of others may be a red flag that class counsel have sold out some of the 25 class members at the expense of others, or for their own benefit.” Hilsley, 2020 WL 520616 at *7 26 (citation omitted). 27 The parties agreed that class members who do not timely opt-out of the Settlement will receive 28 a pro rata share of the Net Settlement Amount, “calculated by dividing the Net Settlement Amount by 1 the total number of workweeks worked by each class member during the Class Period.” (Doc. 47-3 at 2 11, Settlement § III.D.1.) The Class Member Payment will also include any “Aggrieved Employee” 3 payment under Cal. Lab. Code § 2699(c). Id. Thus, the agreement treats the Class Members equitably, 4 and the proposed distribution plan supports preliminary approval. See Cooks v. TNG GP, 2021 WL 5 5139613 at *4 (E.D. Cal. Nov. 4, 2021) (observing that the calculation of payments to class members 6 “on a pro-rata basis based on the number of compensable workweeks each member worked … is fair 7 and treats class members equitably”); see also Gomez-Gasca v. Future AG Mgmt. Inc., 2020 WL 8 6149688 at *4 (N.D. Cal. Oct. 20, 2020) (noting that in the preliminary approval stage, “the Court 9 approved the proposed plan pro rata allocation based on the number of workweeks the class member 10 performed work during the Class Period”); In re Regulus Therapeutics Sec. Litig., 2020 WL 6381898 11 at *5 (S.D. Cal. Oct. 29, 2020) (finding a pro rata distribution plan was equitable and weighed in favor 12 of approving the settlement terms). 13 E. Class Representative Service Payment 14 Incentive awards, service payments, for class representatives are not to be given routinely by 15 the Court. In Staton, 327 F.3d at 975, the Ninth Circuit explained: 16 Indeed, ‘[i]f class representatives expect routinely to receive special awards in addition to their share of the recovery, they may be tempted 17 to accept suboptimal settlements at the expense of the class members whose interests they are appointed to guard.” Weseley v. Spear, Leeds 18 & Kellogg, 711 F. Supp. 713, 720 (E.D.N.Y. 1989); see also Women’s Comm. for Equal Employment Opportunity v. Nat’l Broad. Co., 76 19 F.R.D. 173, 180 (S.D.N.Y. 1977) (“[W]hen representative plaintiffs make what amounts to a separate peace with defendants, grave 20 problems of collusion are raised.”).
21 In fact, “‘excessive payments to named class members can be an indication that the agreement was 22 reached through fraud or collusion.’” Id. (citation omitted). In evaluating the enhancement award to a 23 class representative, a court should consider all “relevant factors including the actions the plaintiff has 24 taken to protect the interests of the class, the degree to which the class has benefitted from those 25 actions, … the amount of time and effort the plaintiff expended in pursuing the litigation … and 26 reasonable fears of workplace retaliation.” Staton, 327 F.3d at 977. 27 Pursuant to the agreement of the parties, Plaintiff may seek a “Class Representative Payment of 28 up to $10,000.” (Doc. 47-3 at 9, Settlement § III.B.1.) The Settlement explains the enhancement is to 1 be given to Plaintiff “to compensate him for initiating the Lawsuit, performing work in support of the 2 Lawsuit, undertaking the risk of liability for attorneys’ fees and expenses in the event he was 3 unsuccessful in the prosecution of the Lawsuit.” (Id. at 3, § I.K.) Significantly, however, Plaintiff did 4 not submit a declaration in support of the motion addressing the tasks undertaken on behalf of the class 5 in this action. There is no evidence related to the work performed by Plaintiff—such as whether he 6 attended meetings with counsel or attended the mediation—or the actual number of hours Plaintiff 7 spent working with Class Counsel. Without additional information the Court is unable to evaluate the 8 reasonableness of this requested award at this time. In seeking final approval, Plaintiff must provide 9 evidence supporting the requested enhancement. Nevertheless, given the flexibility for an award 10 up to $10,000, the request for approval of a class representative enhancement is preliminarily 11 approved.8 12 F. Views of Counsel 13 As addressed above, Plaintiff’s counsel are experienced in class action litigation. Mr. Mallison 14 indicates a belief that “the Amended Settlement is fair, adequate, and reasonable, as it provides 15 substantial compensation to employees who worked for Defendant.” (Doc. 47-2 at 11, Mallison Decl. 16 ¶ 22.) The Settlement also provides: “The Parties and their respective counsel believe and warrant that 17 this Settlement Agreement reflects a fair, reasonable, and adequate settlement of the Lawsuit.” (Doc. 18 47-3 at 22, § III.I.7.) These opinions of counsel are entitled to significant weight and support approval 19 of the Settlement. See Nat’l Rural Telecomms., 221 F.R.D. at 528 (“Great weight is accorded to the 20 recommendation of counsel, who are most closely acquainted with the facts of the underlying 21 litigation”); Barbosa v. Cargill Meat Solutions Corp., 297 F.R.D. 431, 447 (E.D. Cal. 2013) (“the trial 22 court is entitled to, and should, rely upon the judgment of experienced counsel for the parties.”). 23
24 8 A class representative enhancement of $10,000 appears to be excessive. See, e.g., Monterrubio v. Best Buy Stores, L.P., 291 F.R.D. 443, 463 (E.D. Cal. 2013) (indicating the Court’s intent to reduce the requested enhancement from $7,500 to 25 $2,500 upon final approval, where the class representative was deposed, assisted with preparation for mediation, and traveled out of town for the mediation); Valentine v. Rehab. Ctr. of Santa Monica Holding Co. GP, LLC, 2021 U.S. Dist. LEXIS 243660, at *13-14 (C.D. Cal. Dec. 20, 2021) (finding the class representative failed to justify an enhancement of 26 $10,000, though the plaintiff reported 59.5 hours of work during which she “was deposed, worked closely with [class] counsel, assisted in the preparation of pleadings, provided factual information and assisted in identifying potential 27 witnesses”). This Court indicated “substantial effort” by a plaintiff is necessary to support the enhancement of $10,000. Coburn v. City of Sacramento, 2020 WL 7425345, at *8 (E.D. Cal. Dec. 17, 2020); see also Amaro v. Gerawan Farming Inc., 2020 WL 6043936, at *10 (E.D. Cal. Oct. 12, 2020) (awarding a payment of $10,000 to plaintiffs who spent over 370 28 hours each during the course of the litigation on tasks such as “talking to co-workers, assisting class counsel, attending the 1 G. Reaction of Class Members to the Proposed Settlement 2 Plaintiff has agreed to the terms of Settlement Agreement. (See Doc. 47-3 at 24.) However, 3 because Class Members have not yet received notice, this factor shall be revisited for final approval of 4 the Settlement. See Cottle, 340 F.R.D. at 376 (“The reaction of the class members is best assessed at 5 the final approval hearing since the court can look at how many class members submitted … 6 objections”). 7 APPROVAL OF PAGA SETTLEMENT 8 California adopted its Private Attorney General Act to allow individual plaintiffs “to bring a 9 civil action to collect civil penalties for Labor Code violations previously only available in 10 enforcement actions initiated by the State’s labor law enforcement agencies.” Caliber Bodyworks, Inc. 11 v. Superior Court, 134 Cal. App. 4th 365, 374 (2005); see also Cal. Lab. Code § 2699(a); Urbino v. 12 Orkin Servs. of Cal., Inc., 726 F.3d 1118, 1121 (9th Cir. 2013). Thus, a PAGA plaintiff now acts “as 13 the proxy or agent of the state’s labor law enforcement agencies.” Arias v. Superior Court, 46 Cal. 4th 14 969, 986 (2009). 15 Pursuant to PAGA, an “aggrieved employee” may bring an action for civil penalties for labor 16 code violations on behalf of himself and other current or former employees. Cal. Lab. Code § 2699(a). 17 PAGA defines an “aggrieved employee” as “any person who was employed by the alleged violator 18 and against whom one or more of the alleged violations was committed.” Id. A judgment in a PAGA 19 action “binds all those, including nonparty aggrieved employees, who would be bound by a judgment 20 in an action brought by the government.” Arias, 46 Cal. 4th at 986. 21 To bring an action under PAGA, an aggrieved employee must first provide written notice to the 22 employer and the Labor and Work Force Development Agency. Cal. Lab. Code § 2699.3(a)(1). 23 Recovery under PAGA is limited to civil penalties, and the civil penalties must be allocated with 75% 24 directed to the LWDA and 25% to aggrieved employees. Id. § 2699(i). Any proposed settlement of 25 PAGA claims must be submitted to the LWDA, and a trial court must “review and approve” any 26 settlement of PAGA claims. Id. § 2699(l)(2); see also Haralson v. U.S. Aviation Servs. Corp., 383 F. 27 Supp. 3d 959, 971 (N.D. Cal. 2019) (because settling a PAGA claim “compromises a claim that could 28 otherwise be brought be the state,” it requires that a court “review and approve any settlement of any 1 civil action pursuant to [PAGA]”) (citation omitted). 2 Although there is no binding authority establishing the standard of review for PAGA 3 settlements, California district courts “have applied a Rule 23-like standard, asking whether the 4 settlement of the PAGA claims is ‘fundamentally fair, adequate, and reasonable in light of PAGA’s 5 policies and purposes.’” Haralson, 383 F. Supp. 3d at 972. This standard is derived principally from 6 the LWDA itself. See O’Connor v. Uber Techs., Inc., 201 F. Supp. 3d 1110, 1133 (N.D. Cal. 2016). 7 The LWDA indicated: 8 It is thus important that when a PAGA claim is settled, the relief provided for under the PAGA be genuine and meaningful, consistent with the 9 underlying purpose of the statute to benefit the public and, in the context of a class action, the court evaluate whether the settlement meets the 10 standards of being “fundamentally fair, reasonable, and adequate” with reference to the public policies underlying the PAGA. 11 12 Id. (citation omitted). When a proposed settlement involves overlapping class action and PAGA 13 claims, courts may employ a “sliding scale” in determining if the proposed settlement is 14 “fundamentally fair, reasonable, and adequate with reference to the public policies underlying the 15 PAGA.” O’Connor, 201 F. Supp. 3d at 1134; see also Haralson, 383 F. Supp. 3d at 972 (following 16 O’Connor); Cooks v. TNG GP, 2020 WL 5535397 at *9-10 (E.D. Cal. Sept. 15, 2020) (same). 17 “[W]here the settlement for the rule 23 class is robust, the purposes of PAGA may be concurrently 18 fulfilled.” Cooks, 2020 WL 5535397 at *10 (quoting O’Connor, 201 F. Supp. 3d at 1134). 19 Stan Mallison reports that “Plaintiff submitted the initial Settlement Agreement to the LWDA 20 on March 2, 2022.”9 (Doc. 47-2 at 15, Mallison Decl. ¶ 38.) The settlement fund of $600,000.00 21 appears sufficiently robust—with more than $330,000 going to the class members—such that the 22 Court finds the purposes of PAGA to address the alleged labor violations are fulfilled by the proposed 23
24 9 The parties agreed that “a copy of the proposed settlement will be provided to the LWDA at the same time it is submitted to the Court.” (Doc. 47-3 at 10, Settlement § III.B.3.) However, there is no evidence the revised settlement agreement was 25 submitted to the LWDA. Although the purpose of the parties’ amendment was to refer to class certification under Rule 23 rather than state law— and the proposed payments remain the same— it appears the revised agreement should be submitted 26 to the LWDA. See Mondrian v. Trius Trucking, Inc., 2022 WL 2306963, at *13 (E.D. Cal. June 27, 2022) (observing the parties submitted their original agreement to the LWDA, and following revision, indicated the revised Settlement 27 Agreement would be served on the LWDA at the same time as briefing to the Court); see also Orosco v. Teva Parenteral Meds, 2021 Cal. Super. LEXIS 148227 at *3 (Cal. Sup. Ct. Dec. 16, 2021) (directing the plaintiff to serve the LWDA with 28 any revisions to the class settlement made following the court’s order). Accordingly, Plaintiff SHALL submit the 1 agreement. Under the Settlement Agreement, $50,000 of the Gross Settlement Amount is designated 2 as the PAGA payment. (Doc. 47-3 at 10, Settlement § III.B.3.) The Settlement properly designates 3 75% of the PAGA funds to the LWDA—in the amount of $37,500 from the Gross Settlement 4 Amount—and the remaining $12,500 to the aggrieved employees. (Id.) Accordingly, the Court finds 5 approval of the PAGA payment is also appropriate. See Jamil v. Workforce Resources, 2020 WL 6 6544660 at *6 (S.D. Cal. Nov. 5, 2020) (finding a $10,000 PAGA award to be fair and adequate as 7 part of a class settlement). 8 APPOINTMENT OF SETTLEMENT ADMINISTRATOR 9 The parties agreed upon and propose that the Court appoint Simpluris, Inc., to serve as the 10 Settlement Administrator. (Doc. 47-3 at 6, Settlement § I.EE.) Under the terms of the agreement, the 11 duties of the Settlement Administrator will be responsible for “printing, distributing, and tracking 12 forms for this Settlement, calculating estimated amounts per Class Member, tax reporting, distributing 13 all payments from the Gross Settlement Amount (including conducting skip trace address searches, as 14 necessary), and providing necessary reports and declarations.” (Id. at 11, Settlement § III.B.4; see also 15 id. at 15- 20.) In anticipation of the administration expenses, $5,000 from the settlement fund was 16 designated for the Settlement Administrator. (Id. at 11, Settlement § III.B.4.) Based upon the 17 recommendation and request of the parties, Simpluris is appointed as the Settlement Administrator. 18 APPROVAL OF CLASS NOTICE 19 The class notice must satisfy the requirements of the Federal Rules of Civil Procedure, which 20 provides the notice “must clearly and concisely state in plain, easily understood language” the 21 following information: 22 (i) the nature of the action; (ii) the definition of the class certified; (iii) the class claims, issues, or defenses; (iv) that a class member may enter an 23 appearance through an attorney if the member so desires; (v) that the court will exclude from the class any member who requests exclusion; (vi) the 24 time and manner for requesting exclusion; and (vii) the binding effect of a class judgment on members under Rule 23(c)(3). 25 26 Fed. R. Civ. P. 23(c)(2)(B). A class notice must be “reasonably calculated, under all circumstances, to 27 apprise interested parties of the pendency of the action and afford them an opportunity to present their 28 objections.” See Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306, 314 (1950). 1 I. Content of the Notice 2 Plaintiff submitted the proposed Notice and the “Election to Not Participation in Settlement” 3 form (collectively, the “Notice Packet”). (Doc. 47-4 at 2-16.) The Notice provides information 4 regarding the background of the action and claims asserted by Plaintiff that resolved as a result of 5 settlement, and defines the class. (Id. at 2.) The Notice also explains the terms and provisions of the 6 Settlement, including the claims released by participating class members and the binding effect of 7 judgment. (Id. at 2-6.) 8 The Notice Packet will include an estimate of the Class Member’s share based upon the 9 number of workweeks employed by Defendant during the relevant period, and informs class members 10 how to challenge any information used to calculate the payment. (Doc. 47-4 at 4-5.) Further, the 11 Notice informs class members of the payments to be made from the Gross Settlement Amount— 12 including the maximum attorneys’ fees of $200,000 and class representative payment of $10,000—and 13 that the payments from the Gross Settlement Amount are subject to Court approval. (Id. at 3.) The 14 Notice explains the rights and procedures to object to the Settlement, or elect not to participate in the 15 Settlement, and will include the applicable deadlines. (Id. at 5-6.) Finally, the Notice informs class 16 members: “You also have the right to retain an attorney, at your own expense, to speak on your 17 behalf.” (Id. at 6.) Thus, the proposed Notice Packet, the Court finds the content is adequate and 18 satisfies the requirements of Rule 23(c)(2)(b.) 19 II. Method and Administration of Notice Packet 20 Within 15 days of the date of service of this Order, Defendant “shall provide the Settlement 21 Administrator with (i) the names, (ii) most recent known mailing address, (iii) most recent known 22 telephone number, (iv) Social Security Number and (v) the respective number of workweeks that each 23 Class Member worked for Semi-Tropic in a Covered Position during the Settlement Class Period.” 24 (Doc. 47-3 at 16, Settlement § III.E.2.e.) This Class list and data shall be provided “in a readable 25 Microsoft Office Excel spreadsheet.” (Id.) 26 Within 10 days of receiving this data, the Settlement Administrator will mail the Notice Packet 27 to all Class Members. (Doc. 47-3 at 17, Settlement § III.E.2.g.) However, “[p]rior to mailing, the 28 Settlement Administrator will perform a search based on the National Change of Address Database or 1 any other similar services available, such as provided by Experian, to update and correct for any known 2 or identifiable address change.” (Id., § III.E.2.f.) For any Notice Packet returned due to an incorrect 3 address, “the Settlement Administrator will perform a computer/SSN and ‘skiptrace’ search” for a 4 current address, and re-mail the packet. (Id.) If a current address is not located, “the Class Notice for 5 that individual will be deemed undeliverable.” (Id.) 6 Class Members who elect not to participate in the Settlement will have 45 days from date the 7 Notice is mailed to submit the “Election Not to Participate in Settlement” form to the Settlement 8 Administrator. (Doc. 47-3 at 15, Settlement § III.E.2.c; see also Doc. 47-4 at 8.) Individuals who 9 properly complete the “Election Not to Participate in the Settlement” will not be entitled to a settlement 10 share; will not be bound by the terms of the settlement agreement; and will not have the right to object, 11 appeal, or comment upon the terms.10 (See id. at 19, § III.E.3; see also Doc. 47-4 at 8.) 12 Similarly, Class Members who wish to object to the Settlement have 45 days to submit a written 13 objection to the Settlement Administrator. (Doc. 47-3 at 16, Settlement § III.E.2.d.) Any objection 14 must include: 15 (i) the objecting person’s full name, address, and telephone number; (ii) the words “Notice of Objection” or “Formal Objection”; (iii)[] in 16 clear and concise terms, the legal and factual arguments supporting the objection; (iv) list of identifying witness(es) the objector may call to 17 testify at the Final Approval hearing and (v) provide true and correct copies of any exhibit(s) the objector intends to offer at the Final 18 Approval hearing.
19 (Id.) Class Members who fail to comply with these requirements “shall be deemed to have waived any 20 and all objections.” (Id.) In addition, Class Members will not be permitted to make objections at the 21 Final Approval and Fairness Hearing unless they have submitted a timely written objection that 22 includes notice of intention to appear. (Id.) 23 Prior to the hearing for final approval, the Settlement Administrator shall serve the parties with 24 a declaration due diligence, setting forth its compliance with its obligations under the Agreement. 25 (Doc. 47-3 at 19, Settlement § 5, ¶ 43) The declaration shall include the number of Class Members to 26
27 10 If an individual submits a deficient “Election Not to Participate,” the Settlement Administrator will return the form to the Class Member within seven days, “explaining the deficiencies and stating that the Class Member will have ten (10) business 28 days from the date of the [deficient] notice to correct the deficiency and resubmit the form.” (Doc. 47-3 at 15, Settlement § 1 whom Notice Packets were sent and the number of Class Members to whom the Notice Packets were 2 delivered. Further, this declaration shall be filed with the Court with the motion for final approval of 3 the Settlement. (Id.) 4 III. Required Revisions to the Notice Packet 5 The Notice Packet must be modified to include information in this Order, including deadlines 6 for requesting exclusion, any objections to the Settlement, and disputes of the employment information 7 for the class member. The Notice Packet also must be updated with contact information for Simpluris 8 as the Settlement Administrator. In addition, Plaintiff should correct the case number for this action 9 (which is now Case No. 1:19-cv-1581-JLT-CDB) in the Notice Packet, to prevent any confusion if 10 class members elect to file objections or elect to not participate. (See, e.g., Doc. 47-4 at 2, 8.) 11 If Plaintiff intends to issue a Spanish language translation of the Notice, as was provided in 12 support of the motion, he is informed the Court requires a declaration that the Notice was translated by 13 a certified court interpreter, asserting the translation is an accurate translation of the Court-approved 14 English version of the Notice. 15 CONCLUSION AND ORDER 16 Based upon the foregoing, the Court finds the proposed class settlement is fair, adequate, and 17 reasonable. The factors set forth under Rule 23 and Ninth Circuit precedent weigh in favor of 18 preliminary approval of the settlement agreement. Accordingly, the Court ORDERS: 19 1. Plaintiff’s request for conditional certification of the Settlement Class is GRANTED, 20 and the class is defined as follows: 21 Any individual who worked for Semi-Tropic in the State of California as an hourly paid, non-exempt employee at any time between 22 November 5, 2015 and June 3, 2021.
23 2. Preliminary approval of the parties’ proposed settlement agreement is GRANTED. 24 3. Preliminary approval of the parties’ PAGA payment is GRANTED. 25 4. Plaintiff SHALL serve the “Amended Settlement Agreement and Release” to the 26 LWDA within seven days of the date of service of this Order. 27 5. Plaintiff SHALL address whether the LWDA commented on either the initial 28 settlement or amended settlement in the motion for final approval. 1 6. The proposed notice plan and deadlines are APPROVED. 2 7. Fabian Caballero Martinez is APPOINTED the Class Representative for the 3 Settlement Class. 4 8. The firm of Mallison & Martinez is APPOINTED as Class Counsel. 5 9. Simpluris, Inc. is APPOINTED as the Settlement Administrator, with responsibilities 6 pursuant to the terms set forth in the Settlement Agreement. 7 10. The Class Representative incentive award for Plaintiff is GRANTED preliminarily up 8 to the amount of $10,000, subject to a petition and review at the Final Approval and 9 Fairness Hearing. Class Members and their counsel may support or oppose this 10 request, if they so desire, at the Final Approval and Fairness Hearing. 11 11. Class Counsel’s request for fees not to exceed 33 1/3% of the gross settlement amount 12 and identified costs is GRANTED preliminarily, subject to review of counsel’s petition 13 for fees and costs at the Final Approval and Fairness Hearing. Class Members and their 14 counsel may support or oppose this request, if they so desire, at the Final Approval and 15 Fairness Hearing. 16 12. The petition for attorneys’ fees and for class representative enhancement fee SHALL 17 be filed no later than January 18, 2023. 18 13. Costs of settlement administration shall not exceed $5,000. 19 14. The proposed Notice Packet is preliminarily APPROVED, and the parties SHALL file 20 a finalized Notice with the required revisions for the Court’s approval within seven 21 days of the date of service of this Order. 22 15. Defendants SHALL provide the Settlement Administrator with the Class List and Data 23 no later than November 2, 2022. 24 16. The Settlement Administrator SHALL mail the approved Class Notice Packet no later 25 than November 14, 2022. 26 17. A Class Member who wishes to be excluded from settlement shall postmark the 27 “Election Not to Participate in the Settlement” no later than December 27, 2022. 28 1 18. Any objections to or comments on the Settlement Agreement must be submitted to the 2 Settlement Administrator no later than November 2, 2022. 3 19. A Final Approval and Fairness Hearing is SET for February 15, 2023, at 9:00 a.m. A 4 this hearing, the Court shall determine whether the Settlement should be granted final 5 approval as fair, reasonable, and adequate as to the class members. The Court shall he 6 all evidence and argument necessary to evaluate the Settlement and other motions and 7 requests, including the class representative enhancement request and motion for 8 attorneys’ fees. 9 20. Class Members may appear at the hearing on February 15, 2023, in person or □□□□□□ 10 his or her own attorney, to show cause why this Court should not approve the 11 Settlement Agreement, or to object to the motion for attorneys’ fees or class member 12 representative enhancement award. For comments or objections to be considered at th 13 hearing, the Class Member must file comments with the Clerk of this Court indicating 14 briefly the nature of the Class Member’s comments, support, or objection. 15 21. The Court reserves the right to vacate the Final Approval and Fairness Hearing if no 16 comments or objections are filed with this Court on or before January 18, 2023. 17 22. The Court reserves the right to continue the date of the Final Approval and Fairness 18 Hearing without further notice to class members. 19 23. The Court retains jurisdiction to consider all further applications arising from or relate 20 to the Settlement Agreement. 21 22 IT IS SO ORDERED. 23 |! Dated: _ October 18, 2022 ( LAW ph L. wan 24 TED STATES DISTRICT JUDGE 25 26 27 28 31
Martinez v. Semi-Tropic Cooperative Gin & Almond Huller, Inc. (Martinez v. Semi-Tropic Cooperative Gin & Almond Huller, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.