Cordova et al v. R&A Oysters, Inc. et al
Order granting 173 Joint MOTION to Approve Settlement Agreement. Fairness Hearing set for 12/6/2016 02:00 PM in Courtroom 2A. Signed by Chief Judge William H. Steele on 9/12/2016. (tgw)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
MIGUEL ANGEL FUENTES
CORDOVA, et al., etc.,
R & A OYSTERS, INC., et al.,
) CIVIL ACTION 14-0462-WS-M
This matter is before the Court on the parties’ joint motion for preliminary
approval of class action settlement agreement and notice to class members. (Doc.
173). The Court has by separate order conditionally certified a settlement class
and appointed a class representative and class counsel. (Doc. 175).
A class action can be settled “only with the court’s approval.” Fed. R. Civ.
P. 23(e). Final approval can be had only following class notice and a hearing. Id.
First, however, the Court is to “make a preliminary evaluation of the fairness of
the settlement before directing that notice be given to the settlement class.” Smith
v. William Wrigley Jr. Co., 2010 WL 2401149 at *2 (S.D. Fla. 2010).
“Preliminary approval is not binding, and it is granted unless a proposed
settlement is obviously deficient.” Id. (internal quotes omitted). “Preliminary
approval is appropriate where the proposed settlement is the result of the parties’
good faith negotiations, there are no obvious deficiencies and the settlement falls
within the range of reason.” Id.
The settlement agreement provides a pot of $86,500.00, with $42,654.86
allocated to settle the class members’ contract claims and the balance allocated to
settle the FLSA retaliation claims of seven individuals. Three class members, who
separately settled with the defendants in December 2015 for $500 each, will
receive the amount to which they then agreed. The remaining 48 class members
will split the remaining $41,654.86. Each such class member will receive
approximately half the full remaining value of his or her contract claim.1 Given
the uncertainties raised by the defendants’ arguments regarding the existence vel
non of enforceable contracts to pay class members the prevailing wage, as well as
the vagaries of the trial process, the Court preliminarily finds this to be a fair and
reasonable settlement percentage.
The named plaintiffs and FLSA opt-in plaintiffs provided detailed
information regarding their annual travel and tool expenses, and as to these class
members the full value of their contract claims is known precisely. As to the
remaining class members, each is deemed by the settlement to have incurred travel
and tool expenses in the average amount, per work season, incurred by the named
plaintiffs and opt-in plaintiffs. In the absence of more precise information, the
Court preliminarily finds this to be a fair and reasonable means of approximating
the full potential damages of these class members.2
The proposed settlement, reached after almost two years of energetic
litigation and after extensive mediation, appears on its face to be the result of good
faith negotiations, and the Court detects no obvious fatal deficiencies.
The two named plaintiffs, as well as sixteen opt-in plaintiffs, settled their FLSA
claims on terms that provided full recovery of unpaid hours at the minimum wage rate of
$7.25. As to such class members and such hours, the full remaining value of their
contract claims is the difference between the hourly minimum wage and the (higher)
hourly prevailing wage.
The Court is concerned with Section VI.5, which appears to contemplate a lower
recovery for some or all class members if any class member files a claim form
establishing that he or she worked more seasons than the defendants’ records reflect or
that he or she is a class member despite not being one of the 51 individuals identified by
the defendants as the universe of class members. It appears that class members will be
compensated for such additional seasons, but generally only out of the fixed pool of
$41,654.86 – which could result in lower recoveries than those promised should all or
most class members submit claim forms. The Court will not withhold preliminary
approval on this basis, but it will not finally approve the settlement before this concern is
Accordingly, the motion for preliminary approval of class action settlement
agreement is granted, and the settlement agreement is preliminarily approved.3
II. Class Notice.
Before a class settlement can be finally approved, “[t]he court must direct
notice in a reasonable manner to all class members who would be bound by the
proposal.” Fed. R. Civ. P. 23(e)(1). Moreover, “[f]or any class certified under
Rule 23(b)(3), the court must direct to class members the best notice that is
practicable under the circumstances, including individual notice to all members
who can be identified through reasonable effort.” Id. Rule 23(c)(2)(B). The
notice requirement, which stems from both Rule 23 and the Due Process Clause,
has two primary components: content and manner of distribution. Adams v.
Southern Farm Bureau Life Insurance Co., 493 F.3d 1276, 1286 (11th Cir. 2007).
The settlement agreement provides for notice to each listed class member
by “mail” to the last known addresses as maintained by the defendants. (Doc.
173-2 at 10). Notice is the responsibility of class counsel, which is “empowered”
to use “electronic mail, facsimile, or other means” to distribute notice. (Id.).
Although not set forth in the settlement agreement, the parties’ brief asserts that
notice will be sent to the last known address “in both Mexico and the United
States.” (Doc. 173-1 at 10). The Court assumes, and will require, that “mail”
constitutes first class mail or better, with provision for return (or notice) of
undelivered mailings. Given what the parties admit are “challenges with mail
service in Mexico,” (id.), and given that it has been five years or more since some
of the class members last worked for the defendants, the Court will require class
counsel to utilize all available means – including telephone, telefax and e-mail – to
reach the 51 class members, and – in light of the deadline for filing a claim – to
Because the class action aspect of this lawsuit extends only to the breach of
contract claim, the Court expresses no opinion regarding the settlement of the FLSA
retaliation aspect of the lawsuit.
begin such efforts no later than 14 days after the first mailing. The Court will also
require periodic reports regarding these efforts and their results.
To pass muster as to content, notice “must also contain an adequate
description of the proceedings written in objective, neutral terms, that, insofar as
possible, may be understood by the average absentee class member.” Twigg v.
Sears, Roebuck & Co., 153 F.3d 1222, 1227 (11th Cir. 1998) (internal quotes
omitted). “Not only must the substantive claims be adequately described but the
notice must also contain information reasonably necessary to make a decision to
remain a class member and be bound by the final judgment or opt out of the
action.” Id. (internal quotes omitted). Such information includes “the relief
available, the steps necessary to opt out, and the implications of remaining a
member of the class.” Adams, 493 F.3d at 1287.
The proposed notice is written in English, but the parties represent that it be
translated into Spanish before distribution. (Doc. 173-1 at 9). The Court makes
this assurance a requirement. The Court also requires that reference to Inclan as a
class representative, (Doc. 173-3 at 4), be deleted, as the Court has not appointed
him to such a position.
While the settlement agreement is clear that timely submission of a claim,
objection or request for exclusion depends on the date it is “postmarked,” (Doc.
173-2 at 7, 8, 11), the notice uses a variety of terms, including “receive,” “file,”
and “send.” (Doc. 173-3 at 7-9). Especially given the admitted unreliability of the
Mexican postal system, the Court requires that the notice use only the term
“postmarked” with respect to objections and requests for exclusion (which are to
be filed with the Court). With respect to claim forms, which may be mailed,
telefaxed or e-mailed to class counsel, the Court requires that the notice clearly use
only the term “postmarked” (for mailed forms) or “received” (for telefaxed or emailed forms).
Section 16 of the notice addresses objections. The Court believes that four
alterations to this provision are required. First, language must be added that
advises class members to set forth in their written objections all the reasons they
believe the settlement should not be approved, with as much explanation as they
desire to include. Second, the words “in person” must be added to the final
sentence of the first paragraph, between “object” and “to the terms.” Third, a new
sentence must be added, advising class members that their timely written
objections will be considered by the Court even if they do not attend the fairness
hearing. Fourth, a new sentence must be added that advises class members they
may file an objection even if they also submit a claim form.
Because the claim form will be included with each class notice, the Court
concludes that the parties have moved for approval of the claim form. The Court
notes that the claim form states that class counsel must “receive” the completed
form by the deadline. (Doc. 173-4 at 3). As discussed above, the Court requires
that the claim form clearly use the term “postmarked” (for mailed forms) and
“received” (for telefaxed or e-mailed forms).
With the understanding that these directives will be followed, the Court
preliminarily concludes that the proposed notice is the best notice practicable
under the circumstances and that it satisfies the requirements of Rule 23 and due
process. Accordingly, the motion for preliminary approval of class notice
(including claim form) is granted, and the class notice (including claim form) is
III. Establishment of Dates.
The defendants are to provide class counsel with the last known addresses
of all class members on or before September 16, 2016.
Class counsel is to complete mailing of the class notice and claim form to
all class members on or before September 26, 2016. Class counsel is to file and
serve a notice confirming accomplishment of this task on or before September 27,
Final approval of the manner of notice must await the receipt of information
regarding the results of class counsel’s notification efforts.
2016. Class counsel is to begin contacting class members by the other means
identified in this order no later than October 10, 2016.
Class counsel is to file and serve three reports addressing: (1) the number
of completed claim forms received from class members; (2) the number of class
notices known not to have been received by class members; and (3) the efforts
made by class counsel to ensure class members’ receipt of class notice. These
reports are to be filed and served on or before November 7, November 21 and
December 5, 2016.
To be timely, objections and exclusion requests must be mailed to the Court
and postmarked no later than November 25, 2016. To be timely, claim forms
must be mailed to class counsel and postmarked no later than November 25, 2016
or telefaxed or e-mailed to class counsel and received no later than November 25,
2016. This deadline may be extended by the Court as to any class member who,
according to class counsel’s November 7, 2016 report, has not received the class
notice and claim form.
A hearing on the fairness and reasonableness of the settlement and whether
final approval shall be given will be held on December 6, 2016 at 2:00 p.m. in
The parties shall file a motion for final approval of the settlement, and may
file memoranda in support of same, no fewer than ten days before the hearing.
DONE and ORDERED this 12th day of September, 2016.
s/ WILLIAM H. STEELE
CHIEF UNITED STATES DISTRICT JUDGE
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