Syed v. M-I, LLC et al
Filing
79
MEMORANDUM and ORDER re STIPULATION for final approval of the class action settlement signed by Senior Judge William B. Shubb on 1/26/16. (Kaminski, H)
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UNITED STATES DISTRICT COURT
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EASTERN DISTRICT OF CALIFORNIA
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SARMAD SYED, an individual,
on behalf of himself and all
others similarly situated,
Plaintiffs,
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CIV. NO. 1:14-742 WBS BAM
MEMORANDUM AND ORDER RE: MOTION
FOR FINAL APPROVAL OF CLASS
ACTION SETTLEMENT
v.
M-I LLC, a Delaware Limited
Liablity Company; PRECHECK,
INC., a Texas Corporation;
and DOES 1-10,
Defendants.
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Plaintiff Sarmad Syed brought this putative class
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action lawsuit against M-I, LLC (“M-I”) and PreCheck, Inc.
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(“PreCheck”), alleging that they violated federal credit
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reporting laws while conducting pre-employment background checks.
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On November 4, 2014, the court dismissed plaintiff’s action as to
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M-I.
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settlement with PreCheck, and the court granted preliminary
(Docket Nos. 46, 49-50.)
Plaintiff subsequently reached a
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approval of the class action settlement on September 18, 2015.
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(Docket Nos. 70-73.)
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motion for final approval of the class action settlement.
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(Docket No. 76.)
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I. Factual and Procedural Background
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Presently before the court is plaintiff’s
Plaintiff applied for a job with M-I on July 20, 2011.
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(First Am. Compl. (“FAC”) ¶ 14 (Docket No. 36).)
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application process, plaintiff received and signed a one-page
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disclosure form.
(Id.)
As part of the
The form stated that M-I might procure a
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consumer report on plaintiff from PreCheck for employment
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purposes and included language releasing and discharging M-I and
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PreCheck from any liability arising out of that report.
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(Id.)
Plaintiff alleges that PreCheck willfully violated the
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Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681b(b)(1), by
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furnishing consumer reports about plaintiff and class members for
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employment purposes without first obtaining from M-I and other
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employers a certification of compliance pursuant to 15 U.S.C.
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§ 1681b(b)(1).
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result, class members could recover statutory damages between
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$100 and $1,000 and punitive damages under 15 U.S.C. § 1681n(a).
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(FAC ¶ 47.)
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Supreme Court’s decision in Spokeo, Inc. v. Robins, 135 S. Ct.
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1892 (2015), which addresses whether a plaintiff who has not
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demonstrated a concrete harm has Article III standing to seek
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(FAC ¶¶ 42-50.)1
Plaintiff alleges that as a
The court subsequently stayed the action pending the
Under § 1681b(b)(1), before PreCheck can furnish a
consumer report for employment purposes, the receiving employer
must certify that it had complied with § 1681b(b)(2)’s disclosure
requirements and would comply with § 1681b(b)(3) if it decided to
take adverse action based on the consumer report. See 15 U.S.C.
§ 1681b(b)(1)(A)(i).
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statutory damages under the FCRA.
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later, the parties reached a settlement.
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(Docket No. 69.)
Two months
(Docket No. 70.)
The Settlement Agreement provides for the creation of a
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settlement fund of $1.6 million.
(Dion-Kindem Decl. in Supp. of
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Prelim. Approval Ex. A (“Settlement Agreement”) ¶ 22 (Docket No.
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72-2).)
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fees of 25%, or $400,000, and attorney costs of $4,505.81.
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¶ 26; Dion-Kindem Decl. in Supp. of Att’y Fees (“Dion-Kindem
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Decl.”) ¶ 13 (Docket No. 76-2); Blanchard Decl. in Supp. of
From this fund, class counsel may apply for attorney’s
(Id.
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Atty’s Fees (“Blanchard Decl.”) ¶ 6 (Docket No. 76-3).)
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Additionally, plaintiff may apply for a $5,000 incentive award.
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(Settlement Agreement ¶ 26.)
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$133,427 shall be paid out of the settlement fund to the
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settlement administrator, Dahl Administration, LLC (“Dahl”).
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(Id. ¶¶ 17-18.)
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Lastly, administration expenses of
The parties’ stipulated amount for class counsel’s fees
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and costs and plaintiff’s incentive award were negotiated only
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after the original settlement fund amount of $1.6 million had
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been agreed upon.
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remaining settlement fund to be distributed pro rata to the class
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is $1,057,067.19.
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at 6 (Docket No. 72-1).)
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received notice of the class settlement, and the net recovery per
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class member is approximately $16.
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76-1).)
(Id. ¶ 26.)
After the above deductions, the
(See Pl.’s Mem. in Supp. of Prelim. Approval
65,654 class members have successfully
(Kratz Decl. ¶ 10 (Docket No.
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Plaintiff now seeks final approval of the parties’
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stipulated class-wide settlement pursuant to Federal Rule of
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Civil Procedure 23(e).
PreCheck does not oppose plaintiff’s
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motion for final approval.
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II. Discussion
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(Docket No. 77.)
Rule 23(e) provides that “[t]he claims, issues, or
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defenses of a certified class may be settled . . . only with the
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court’s approval.”
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involves a two-step process in which the Court first determines
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whether a proposed class action settlement deserves preliminary
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approval and then, after notice is given to class members,
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whether final approval is warranted.”
Fed. R. Civ. P. 23(e).
“Approval under 23(e)
Nat’l Rural Telecomms.
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Coop. v. DIRECTV, Inc., 221 F.R.D. 523, 525 (C.D. Cal. 2004)
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(citing Manual for Complex Litig., Third, § 30.41 (1995)).
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The Ninth Circuit has declared a strong judicial policy
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favoring settlement of class actions.
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of Seattle, 955 F.2d 1268, 1276 (9th Cir. 1992).
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where, as here, “the parties reach a settlement agreement prior
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to class certification, courts must peruse the proposed
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compromise to ratify both the propriety of the certification and
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the fairness of the settlement.”
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938, 952 (9th Cir. 2003).
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Class Plaintiffs v. City
Nevertheless,
Staton v. Boeing Co., 327 F.3d
A. Class Certification
A class action will be certified only if it meets the
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four prerequisites identified in Rule 23(a) and additionally fits
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within one of the three subdivisions of Rule 23(b).
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Civ. P. 23(a)-(b); Ontiveros v. Zamora, Civ. No. 2:08-567 WBS
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DAD, 2014 WL 3057506, at *4 (E.D. Cal. July 7, 2014).
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the court has discretion in determining whether the moving party
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has satisfied each Rule 23 requirement, see Califano v. Yamasaki,
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442 U.S. 682, 701 (1979); Montgomery v. Rumsfeld, 572 F.2d 250,
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See Fed. R.
Although
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255 (9th Cir. 1978), the court must conduct a rigorous inquiry
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before certifying a class, see Gen. Tel. Co. of Sw. v. Falcon,
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457 U.S. 147, 161 (1982); E. Tex. Motor Freight Sys. v.
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Rodriguez, 431 U.S. 395, 403–05 (1977).
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1. Rule 23(a) Requirements
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Rule 23(a) restricts class actions to cases where:
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(1) the class is so numerous that joinder of all
members is impracticable; (2) there are questions of
law or fact common to the class; (3) the claims or
defenses of the representative parties are typical of
the claims or defenses of the class; and (4) the
representative parties will fairly and adequately
protect the interests of the class.
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Fed. R. Civ. P. 23(a).
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referred to as numerosity, commonality, typicality, and adequacy
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of representation.
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These requirements are more commonly
a. Numerosity
“A proposed class of at least forty members
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presumptively satisfies the numerosity requirement.”
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Pinkerton Gov’t Servs., 286 F.R.D. 450, 456 (C.D. Cal. 2012); see
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also, e.g., Collins v. Cargill Meat Solutions Corp., 274 F.R.D.
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294, 300 (E.D. Cal. 2011) (Wanger, J.) (“Courts have routinely
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found the numerosity requirement satisfied when the class
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comprises 40 or more members.”).
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contains more than 65,000 members, which easily satisfies the
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numerosity requirement.
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Avilez v.
The settlement class here
(Kratz Decl. ¶ 10.)
b. Commonality
Commonality requires that the class members’ claims
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“depend upon a common contention” that is “capable of classwide
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resolution--which means that determination of its truth or
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falsity will resolve an issue that is central to the validity of
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each one of the claims in one stroke.”
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Dukes, 131 S. Ct. 2541, 2550 (2011).
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and law need not be common to satisfy the rule,” and the
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“existence of shared legal issues with divergent factual
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predicates is sufficient, as is a common core of salient facts
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coupled with disparate legal remedies within the class.”
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v. Chrysler Corp., 150 F.3d 1011, 1019 (9th Cir. 1998).
Wal-Mart Stores, Inc. v.
“[A]ll questions of fact
Hanlon
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The proposed class includes all “individual[s] on whom,
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during the period from May 20, 2009 through September 18, 2015, a
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consumer report for employment purposes was furnished by
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PreCheck, Inc., and where the address provided . . . listed
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California as the state of [] residence at the time the report
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was furnished.”
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comprised of individuals alleging facts similar to the named
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plaintiff: that PreCheck furnished consumer reports regarding the
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class members to prospective employers without first obtaining
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the requisite § 1681b(b)(1) certification from those employers.
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The statutory damages could also be resolved on a class-wide
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basis.
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the commonality requirement.
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c. Typicality
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(Kratz Decl. Ex. A.)
See 15 U.S.C. § 1681n(a).
The class would be
The proposed class thus meets
Typicality requires that the named plaintiff have
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claims “reasonably coextensive with those of absent class
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members,” but those claims do not have to be “substantially
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identical.”
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“is whether other members have the same or similar injury,
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whether the action is based on conduct which is not unique to the
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named plaintiff[], and whether other class members have been
Hanlon, 150 F.3d at 1020.
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The test for typicality
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injured by the same course of conduct.”
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Corp., 976 F.2d 497, 508 (9th Cir. 1992) (citation omitted).
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Hanon v. Dataproducts
Plaintiff’s and the class members’ claims are based on
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substantially similar factual allegations regarding PreCheck’s
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course of conduct: PreCheck’s furnishing of a consumer report for
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employment purposes without having first obtained a § 1681b(b)(1)
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certification.
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PreCheck failed to comply with its obligations under
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§ 1681b(b)(1) of the FCRA.
Their claims are based on the legal theory that
Plaintiff and class members thus
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allege similar injuries and class members would presumably seek
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the same remedy that plaintiff does here: statutory and punitive
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damages under § 1681n(a).
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to be reasonably coextensive with those of the proposed class,
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and the proposed class thus meets the typicality requirement.
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Accordingly, plaintiff’s claims appear
d. Adequacy of Representation
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To resolve the question of adequacy, the court must
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make two inquiries: “(1) do the named plaintiffs and their
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counsel have any conflicts of interest with other class members
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and (2) will the named plaintiffs and their counsel prosecute the
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action vigorously on behalf of the class?”
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1020.
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factors, including “a sharing of interests between
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representatives and absentees.”
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F.2d 386, 390 (9th Cir. 1992).
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Hanlon, 150 F.3d at
These questions involve the consideration of a number of
Brown v. Ticor Title Ins., 982
The Settlement Agreement provides for an incentive
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payment of $5,000 to plaintiff to be paid out of the settlement
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fund.
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incentive payments” to named plaintiffs, such payments
Although the Ninth Circuit has approved “reasonable
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nonetheless raise the possibility that a plaintiff’s interest in
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receiving his payment will cause his interests to diverge from
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the class’s interest in a fair settlement.
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977–78 (declining to approve a settlement agreement where the
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size of the incentive payment suggested that the named plaintiffs
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were “more concerned with maximizing [their own] incentives than
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with judging the adequacy of the settlement as it applies to
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class members at large”).
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carefully [such] awards so that they do not undermine the
Staton, 327 F.3d at
The court must thus “scrutinize
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adequacy of the class representatives.”
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Info. Sys., Inc., 715 F.3d 1157, 1163 (9th Cir. 2013).
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Radcliffe v. Experian
A $5,000 incentive award to plaintiff does not on its
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face appear to create a conflict of interest.
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generally found that a $5,000 incentive payment is reasonable.
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See In re Mego Fin. Corp. Sec. Litig., 213 F.3d 454, 463 (9th
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Cir. 2000); Alberto v. GMRI, Inc., 252 F.R.D. 652, 669 (E.D. Cal.
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2008).
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recovery of other class members, who will each receive
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approximately $16.
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plaintiff’s incentive award include “the actions the plaintiff
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has taken to protect the interests of the class, the degree to
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which the class has benefitted from those actions, . . . and
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reasonabl[e] fear[s of] workplace retaliation.”
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at 977 (citation omitted).
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Courts have
The proposed award, however, is disproportionate to the
Relevant factors for evaluating a named
Staton, 327 F.3d
The incentive payment here is not particularly unfair
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to other class members, given that it will not significantly
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reduce the amount of settlement funds available to the rest of
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the class.
In addition, none of the class members have objected
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to the amount of additional compensation sought by the named
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plaintiff.
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seventy-five hours assisting class counsel, including traveling
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to the mediation, participating in extensive telephone
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conversations with counsel, responding to emails, looking for and
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reviewing documents, and explaining the contents of documents to
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counsel.
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Plaintiff also explains that he dedicated over
(Syed Decl. ¶ 3 (Docket No. 76-4.)
Plaintiff also says he bore the risk that his future
employers might learn about this lawsuit and be hesitant to hire
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him, but nonetheless pursued this action for the benefit of the
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proposed class members.
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risked being personally liable for PreCheck’s costs if this
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action was unsuccessful, and that those costs could have been
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substantial.
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that the $5,000 incentive payment to the named plaintiff is
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reasonable and does not create a conflict of interest.
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(Id. ¶ 4.)
(Id. ¶ 2.)
He further states that he
Given this information, the court finds
The second prong of the adequacy inquiry examines the
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vigor with which the named plaintiff and his counsel have pursued
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the common claims.
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which ‘vigor’ can be assayed, considerations include competency
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of counsel and, in the context of a settlement-only class, an
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assessment of the rationale for not pursuing further litigation.”
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Hanlon, 150 F.3d at 1021.
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“Although there are no fixed standards by
Plaintiff’s counsel state that they have expertise in
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prosecuting employment claims throughout their careers.
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Kindem Decl. ¶ 2; Blanchard Decl. ¶ 2.)
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states that he has been counsel of record for at least forty
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class actions in federal and state court.
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(Dion-
Peter R. Dion-Kindem
(Dion-Kindem Decl.
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¶ 3.)
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of record for at least thirty employment class actions.
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(Blanchard Decl. ¶ 2.)
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plaintiff’s counsel has the experience necessary to maximize the
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return on this matter and vindicate the injuries of the class.
Lonnie C. Blanchard, III states that he has been counsel
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The court thus has some assurance that
Plaintiff’s counsel also indicate that the decision to
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settle plaintiff’s claim was made after taking into account the
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uncertainty and risk of further litigation, the potential outcome
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of pursuing the case, and the difficulties and delays inherent in
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class action litigation.
(Dion-Kindem Decl. in Supp. of Prelim.
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Approval ¶ 7.)
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in Spokeo, which will determine whether a plaintiff seeking only
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statutory damages for a violation of the FCRA has Article III
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standing.
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weigh in favor of settlement.
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the named plaintiff is an adequate class representative.
Plaintiff’s counsel point to the pending decision
(Id.)
The court agrees that these considerations
Accordingly, the court holds that
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2. Rule 23(b)
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An action that meets all the prerequisites of Rule
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23(a) may be certified as a class action only if it also
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satisfies the requirements of one of the three subdivisions of
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Rule 23(b).
Leyva v. Medline Indus. Inc., 716 F.3d 510, 512 (9th
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Cir. 2013).
Plaintiffs seek certification under Rule 23(b)(3),
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which provides that a class action may be maintained only if (1)
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“the court finds that questions of law or fact common to class
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members predominate over questions affecting only individual
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members” and (2) “that a class action is superior to other
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available methods for fairly and efficiently adjudicating the
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controversy.”
Fed. R. Civ. P. 23(b)(3).
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a. Predominance
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“Because Rule 23(a)(3) already considers commonality,
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the focus of the Rule 23(b)(3) predominance inquiry is on the
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balance between individual and common issues.”
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Gas & Elec. Co., 266 F.R.D. 468, 476 (E.D. Cal. 2010) (citing
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Hanlon, 150 F.3d at 1022); see also Amchem Prods. Inc. v.
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Windsor, 521 U.S. 591, 623 (1997) (“The Rule 23(b)(3)
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predominance inquiry tests whether proposed classes are
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sufficiently cohesive to warrant adjudication by
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Murillo v. Pac.
representation.”).
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Plaintiff’s and the class members’ claims turn on the
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legality of a common method used by PreCheck to furnish consumer
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reports for employment purposes and whether that method
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constituted a willful violation of the FCRA.
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thus demonstrates a “common nucleus of facts and potential legal
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remedies” for the class members that can be resolved in a single
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adjudication.
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The class claim
See Hanlon, 150 F.3d at 1022.
To the extent that any variations may exist, there is
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no indication that any variations in class members’ claims are
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“sufficiently substantive to predominate over the shared claims.”
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See id. at 1023.
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questions of law and fact predominate over questions affecting
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only individual class members.
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Accordingly, the court finds that common
b. Superiority
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Rule 23(b)(3) also requires a showing that “a class
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action is superior to other available methods for fairly and
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efficiently adjudicating the controversy.”
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23(b)(3).
Fed. R. Civ. P.
In considering whether a class action is superior, the
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court considers four non-exhaustive factors:
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(A) the class members’ interests in individually
controlling the prosecution or defense of separate
actions; (B) the extent and nature of any litigation
concerning the controversy already begun by or against
class members; (C) the desirability or undesirability
of concentrating the litigation of the claims in the
particular forum; and (D) the likely difficulties in
managing a class action.
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Id.
The parties settled this action prior to certification,
making factors (C) and (D) inapplicable.
See Murillo, 266 F.R.D.
at 477 (citing Windsor, 521 U.S. at 620).
Given that they will recover approximately $16 under
the settlement, class members might have an interest in
individually prosecuting their own separate actions.
If class
members pursued individual litigation, they could possibly
recover statutory damages between $100 and $1,000 and punitive
damages under the FCRA.
See 15 U.S.C. § 1681n(a).
As discussed
in greater detail below, however, the substantial risks
associated with litigating this case make class members’
interests in pursuing individual actions likely low.
Additionally, notice of the settlement had been
successfully mailed to 65,654 class members, out of which only
five members opted out and none had filed objections.
Decl. ¶¶ 10, 12-13.)
(Kratz
The court is also unaware of any concurrent
litigation already begun by class members regarding the FCRA
issues presented here against PreCheck.
The class action device
thus appears to be the superior method for adjudicating this
controversy.
Accordingly, because the settlement class has satisfied
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both Rule 23(a) and Rule 23(b)(3), the court will grant final
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certification of the settlement class.
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3. Rule 23(c)(2) Notice Requirements
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If the court certifies a class under Rule 23(b)(3), it
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“must direct to class members the best notice that is practicable
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under the circumstances, including individual notice to all
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members who can be identified through reasonable effort.”
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R. Civ. P. 23(c)(2)(B).
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content of a proposed notice.
Fed.
Rule 23(c)(2) governs both the form and
See Ravens v. Iftikar, 174 F.R.D.
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651, 658 (N.D. Cal. 1997) (citing Eisen v. Carlisle & Jacquelin,
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417 U.S. 156, 172–77 (1974)).
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“reasonably certain to inform the absent members of the plaintiff
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class,” actual notice is not required.
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1449, 1454 (9th Cir. 1994) (citation omitted).
15
Although that notice must be
Silber v. Mabon, 18 F.3d
PreCheck provided records for 72,261 individuals about
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whom it furnished consumer reports for employment purposes.
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(Kratz Decl. ¶ 4.)
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records, processed the records through the U.S. Postal Service
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National Change of Address database to update the addresses for
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class members who had moved within the last four years, and
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successfully mailed summary notice of the class settlement to
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65,654 class members.
Dahl then removed duplicate and incomplete
(Id. ¶¶ 4-13.)
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The mailed notice contained a summary of the settlement
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terms, explained that class members do not have to do anything to
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receive their settlement payments, described the binding effect
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of the class action and the procedure for opting out and
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objecting to the settlement, and provided the time and place of
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the final fairness hearing.
(Id. Ex. A.)
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The notice also
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directed class members to the settlement website, which provided
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further information on the proceedings, class members’ rights,
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and answers to frequently asked questions; allowed class members
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to view and download the Settlement Agreement and other
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settlement documents filed with the court; and listed the contact
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information for the claims administrator.
(Id. ¶ 11, Exs. A-B.)
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The court finds that the notice provided was reasonably
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certain to inform class members of the settlement and that it was
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the best notice practicable under the circumstances.
The notice
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provided to class members therefore satisfies Rule 23(c)(2)(B).
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See also Churchill Vill., L.L.C. v. Gen. Elec., 361 F.3d 566, 575
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(9th Cir. 2004) (“Notice is satisfactory if it ‘generally
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describes the terms of the settlement in sufficient detail to
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alert those with adverse viewpoints to investigate and to come
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forward and be heard.’” (citation omitted)).
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B. Rule 23(e): Fairness, Adequacy, and Reasonableness of
Proposed Settlement
Having determined class treatment to be warranted, the
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court must now determine whether the terms of the parties’
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settlement appear fair, adequate, and reasonable.
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Civ. P. 23(e)(2); Hanlon, 150 F.3d at 1026.
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requires the court to “balance a number of factors,” including:
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See Fed. R.
This process
the strength of the plaintiff’s case; the risk,
expense, complexity, and likely duration of further
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 of the class members
to the proposed
settlement.
Hanlon, 150 F.3d at 1026.
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1. Strength of Plaintiff’s Case
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An important consideration is the strength of the
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plaintiff’s case on the merits balanced against the amount
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offered in the settlement.
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district court, however, is not required to reach any ultimate
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conclusions on the merits of the dispute, “for it is the very
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uncertainty of outcome in litigation and avoidance of
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wastefulness and expensive litigation that induce consensual
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settlements.”
10
DIRECTV, 221 F.R.D. at 526.
The
Officers for Justice v. Civil Serv. Comm’n of the
City & Cty. of S.F., 688 F.2d 615, 625 (9th Cir. 2004).
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Plaintiff alleges that PreCheck willfully violated
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§ 1681b(b)(1) of the FCRA by improperly furnishing consumer
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reports about class members for employment purposes without first
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obtaining the required certification that the employers had
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complied with their obligations under the FCRA.
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faced substantial risks associated with litigating this case.
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PreCheck has vigorously denied that it violated § 1681b(b)(1)
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because it had obtained prospective, blanket certifications from
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M-I and other employers before furnishing consumer reports to
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them.
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certifications were not proper, it nonetheless did not willfully
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violate the FCRA.
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the two motions to dismiss it had previously filed in this
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litigation.
Plaintiff here
PreCheck further contends that even if those blanket
PreCheck’s denial of liability is evidenced by
(Docket Nos. 10, 38.)
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There was a risk that PreCheck’s prospective
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certifications indeed complied with the FCRA or that even if they
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did not comply, that PreCheck’s actions did not amount to willful
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noncompliance.
Furthermore, this action was stayed pending the
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Supreme Court’s resolution of Spokeo two months before the
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parties settled.
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decision in Spokeo could have undermined plaintiff’s action
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entirely if the Supreme Court ruled that a plaintiff does not
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have standing under the FCRA without first proving a concrete
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injury.
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Absent a settlement, the Supreme Court’s
The settlement terms, which provide some payment to
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over 65,000 members of the class, compare favorably to these
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uncertainties regarding PreCheck’s liability.
“In most
10
situations, unless the settlement is clearly inadequate, its
11
acceptance and approval are preferable to lengthy and expensive
12
litigation with uncertain results.”
13
(citation omitted).
14
case with the settlement, the court thus finds that the proposed
15
settlement is a fair resolution of the issues in this case.
16
DIRECTV, 221 F.R.D. at 529
In comparing the strength of plaintiff’s
2. Risk, Expense, Complexity, and Likely Duration of
17
Further Litigation
18
Further litigation could greatly delay the resolution
19
of this case and increase expenses.
20
to wait until the Supreme Court’s decision in Spokeo and, if that
21
decision allowed plaintiff’s action to proceed, they would have
22
had to litigate class certification and a jury trial.
23
factor weighs in favor of settling this action.
24
The parties would have had
This
3. Risk of Maintaining Class Action Status Throughout
25
Trial
26
Plaintiff states that if the case proceeded to trial,
27
there would be a risk that PreCheck would succeed in decertifying
28
the class.
(Pls.’ Mot. at 3-4.)
16
Thus, this factor also favors
1
approval of the settlement
2
4. Amount Offered in Settlement
3
In assessing the amount offered in settlement, “[i]t is
4
the complete package taken as a whole, rather than the individual
5
component parts, that must be examined for overall fairness.”
6
Officers for Justice, 688 F.2d at 628.
7
that a cash settlement amounting to only a fraction of the
8
potential recovery will not per se render the settlement
9
inadequate or unfair.”
Id.
“It is well-settled law
The value of the settlement fund in
10
this case is $1.6 million with each class member receiving
11
approximately $16.
12
is a fair resolution of the issues given the litigation risks
13
involved regarding the merits and the costs and delays of further
14
litigation.
As discussed above, the class recovery here
This factor thus weighs in favor of settlement.
15
5. Extent of Discovery and the State of Proceedings
16
The parties represent that they have conducted an
17
extensive exchange of information in this matter.
18
Decl. in Supp. of Prelim. Approval ¶ 5.)
19
information, PreCheck has provided plaintiff with information
20
regarding its agreements with the employers, its certification
21
process, and information on the class members on whom it
22
furnished consumer reports.
23
Ex. B at 2.)
24
(Dion-Kindem
Among other
(Pl.’s Mot. at 4; Kratz Decl. ¶ 4,
The parties also engaged in a full day of mediation
25
before Joan Jessler, a well-known mediator, and the matter was
26
settled based on the mediator’s proposal.
27
of Prelim. Approval at 19.)
28
claims through informal discovery and mediation, and their
(Pl.’s Mem. in Supp.
The parties’ investigation of the
17
1
consideration and acceptance of the views of a third-party
2
mediator weigh in favor of settlement.
3
6. Experience and Views of Counsel
4
As discussed above, plaintiff’s counsel indicate that
5
they have extensive expertise in prosecuting employment claims
6
and class actions throughout their careers.
7
¶¶ 2-3; Blanchard Decl. ¶ 2.)
8
believe that the settlement is fair, reasonable, and in the best
9
interests of the class members given the uncertainty and risk of
(Dion-Kindem Decl.
Based on their experience, counsel
10
further litigation, the potential outcome of pursuing the case,
11
the difficulties and delays inherent in class action litigation,
12
and the Supreme Court’s pending decision in Spokeo.
13
Decl. in Supp. of Prelim. Approval ¶ 7.)
14
considerable weight to class counsel’s opinions regarding the
15
settlement due to counsel’s experience and familiarity with the
16
litigation.
17
2008 WL 4891201, at *10 (E.D. Cal. Nov. 12, 2008).
18
assertion that the settlement is fair, adequate, and reasonable
19
is a factor supporting the court’s final approval of the
20
agreement.
(Dion-Kindem
The court gives
Alberto v. GMRI, Inc., Civ. No. 07-1895 WBS DAD,
Counsel’s
See Hanlon, 150 F.3d at 1026.
21
7. Presence of Government Participant
22
No governmental entity participated in this matter;
23
24
25
26
this factor, therefore, is irrelevant to the court’s analysis.
8. Reaction of the Class Members to the Proposed
Settlement
Notice of the settlement was successfully mailed to
27
65,654 class members and no objections were filed prior to the
28
December 28, 2015 deadline.
(Kratz Decl. ¶¶ 10, 12.)
18
“It is
1
established that the absence of a large number of objections to a
2
proposed class action settlement raises a strong presumption that
3
the terms of a proposed class settlement action are favorable to
4
the class members.”
5
this factor weighs in favor of the court’s approval of the
6
settlement.
7
DIRECTV, 221 F.R.D. at 529.
Accordingly,
Having considered the above factors, the court finds
8
that the settlement is fair, adequate, and reasonable pursuant to
9
Rule 23(e).
10
See Hanlon, 150 F.3d at 1026.
C. Attorney’s Fees
11
Federal Rule of Civil Procedure 23(h) provides that
12
“[i]n a certified class action, the court may award reasonable
13
attorney’s fees and nontaxable costs that are authorized by law
14
or by the parties’ agreement.”
15
settlement includes an award of attorney’s fees, that fee award
16
must be evaluated in the overall context of the settlement.
17
Knisley v. Network Assocs., 312 F.3d 1123, 1126 (9th Cir. 2002);
18
Monterrubio v. Best Buy Stores, L.P., 291 F.R.D. 443, 455 (E.D.
19
Cal. 2013) (England, J.).
20
obligation to ensure that the award, like the settlement itself,
21
is reasonable, even if the parties have already agreed to an
22
amount.”
23
935, 941 (9th Cir. 2011).
24
If a negotiated class action
The court “ha[s] an independent
In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d
“Under the ‘common fund’ doctrine, ‘a litigant or a
25
lawyer who recovers a common fund for the benefit of persons
26
other than himself or his client is entitled to a reasonable
27
attorney’s fee from the fund as a whole.’”
28
969 (quoting Boeing Co. v. Van Gemert, 444 U.S. 472, 478 (1980)).
19
Staton, 327 F.3d at
1
In common fund cases, the district court has discretion to
2
determine the amount of attorney’s fees to be drawn from the fund
3
by employing either the percentage method or the lodestar method.
4
Id.
5
fund cases where, as here, “the benefit to the class is easily
6
quantified.”
7
permitted courts to award attorney’s fees using the percentage
8
method “in lieu of the often more time-consuming task of
9
calculating the lodestar.”
10
11
The percentage method is particularly appropriate in common
Bluetooth, 654 F.3d at 942.
Id.
The Ninth Circuit has
The court will thus adopt the
percentage method here.
Under the percentage method, the court may award class
12
counsel a percentage of the total settlement fund.
13
Microsoft Corp., 290 F.3d 1043, 1047 (9th Cir. 2002).
14
Circuit “has established 25% of the common fund as a benchmark
15
award for attorney fees.”
16
counsel request $400,000 in attorney’s fees, which constitutes
17
25% of the total $1.6 million settlement fund.
18
Decl. ¶ 11; Blanchard Decl. ¶ 3.)
19
amount for attorney’s fees only after the original settlement
20
amount of $1.6 million had been agreed upon.
21
Agreement ¶ 26.)
22
Hanlon, 150 F.3d at 1029.
Vizcaino v.
The Ninth
Class
(Dion-Kindem
The parties negotiated the
(Settlement
As discussed above, there were substantial risks and
23
delays inherent in this litigation and a possibility that class
24
members would not have recovered anything.
25
filed any objections to the settlement, nor to the proposed
26
attorneys fees, and PreCheck does not oppose class counsel’s
27
application for fees.
28
finds that class counsel’s request for attorney’s fees is fair,
No class members have
(Id.; Kratz Decl. ¶ 13.)
20
The court thus
1
appropriate, and reasonable under the circumstances.
2
Accordingly, the court will approve class counsel’s application
3
for $400,000 in attorney’s fees.
4
D. Costs
5
“There is no doubt that an attorney who has created a
6
common fund for the benefit of the class is entitled to
7
reimbursement of reasonable litigation expenses from that fund.”
8
Alberto, 2008 WL 4891201, at *12.
9
list of itemized costs relating to scanning, photocopying,
10
mediation, travel expenses, postage, court fees, and other
11
office-related costs.
12
¶ 6.)
13
Accordingly, the court will grant class counsel’s request for
14
costs in the amount of $2,877.59 to Dion-Kindem and $1,628.22 to
15
Blanchard.
16
Class counsel have submitted a
(Dion-Kindem Decl. ¶ 13; Blanchard Decl.
The court finds these are reasonable litigation expenses.
E. Incentive Payment to Named Plaintiff
17
“Incentive awards are payments to class representatives
18
for their service to the class in bringing the lawsuit.”
19
Radcliffe, 715 F.3d at 1163.
20
discussed, see supra Part II.A.1.d, the court finds that an
21
incentive payment of $5,000 is reasonable and proper in this
22
case.
23
III. Conclusion
For the reasons previously
24
Based on the foregoing, the court grants final
25
certification of the settlement class and approves the settlement
26
set forth in the Settlement Agreement (Docket No. 72-2) as fair,
27
reasonable, and adequate.
28
Agreement is therefore approved, and the definitions provided in
Consummation of the Settlement
21
1
the Settlement Agreement shall apply to the terms used herein.
2
The Settlement Agreement shall be binding upon all members of the
3
class action who did not timely elect to be excluded.
4
IT IS THEREFORE ORDERED that plaintiff’s motion for
5
final approval of the class action settlement (Docket No. 76) be,
6
and the same hereby is, GRANTED.
7
8
IT IS FURTHER ORDERED THAT:
(1)
solely for the purpose of this settlement, and pursuant
9
to Federal Rule of Civil Procedure 23, the court hereby
10
certifies the following class: All individuals on whom,
11
during the period from May 20, 2009 through the date of
12
this Order, a consumer report for employment purposes was
13
furnished by PreCheck, Inc., and where the address
14
provided listed California as the individual’s state of
15
residence at the time the report was furnished, but not
16
any individuals who timely opt-out of the settlement.
17
Specifically, the court finds that:
18
(a)
the settlement class members are so numerous that
19
joinder of all settlement class members would be
20
impracticable;
21
(b)
there are questions of law and fact common to the
22
settlement class which predominate over any
23
individual questions;
24
(c)
25
26
claims of the named plaintiff are typical of the
claims of the settlement class;
(d)
the named plaintiff and plaintiff’s counsel have
27
fairly and adequately represented and protected the
28
interests of the settlement class; and
22
1
(e)
a class action is superior to other available
2
methods for the fair and efficient adjudication of
3
the controversy.
4
(2)
the court appoints the named plaintiff, Sarmad Syed, as
5
representative of the class and finds that he meets the
6
requirements of Rule 23;
7
(3)
the court appoints Peter R. Dion-Kindem, P.C., 21550
8
Oxnard St., Suite 900, Woodland Hills, CA 91367; and
9
Blanchard Law Group, APC, 3311 East Pico Boulevard
10
Los Angeles, CA 90023, as counsel to the settlement class
11
and finds that counsel meets the requirements of Rule 23;
12
(4)
the Settlement Agreement’s plan for class notice is the
13
best notice practicable under the circumstances and
14
satisfies the requirements of due process and Rule 23.
15
The plan is approved and adopted.
16
class complies with Rule 23(c)(2) and Rule 23(e) and is
17
approved and adopted;
18
(5)
The notice to the
the parties have executed the notice plan in the court’s
19
Preliminary Approval Order and successfully mailed notice
20
to 65,654 class members, in response to which five class
21
members requested to be excluded, and none objected.
22
Having found that the parties and their counsel took
23
extensive efforts to locate and inform all putative class
24
members of the settlement, and given that no class
25
members have filed any objections to the settlement, the
26
court finds and orders that no additional notice to the
27
class is necessary;
28
(6)
as of the date of the entry of this Order, plaintiff and
23
1
all class members who have not timely opted out of the
2
settlement, and all those acting or purporting to act on
3
their behalf, fully and forever release, waive, acquit,
4
and discharge PreCheck, Inc., and the Released Persons
5
(as defined by paragraph 10 of the Settlement Agreement)
6
from any and all claims set forth in the complaint or any
7
amended complaint, and any and all claims, known or
8
unknown, that arise out of or that could have arisen out
9
of, the facts, transactions, occurrences,
10
representations, or omissions set forth in the First
11
Amended Complaint, based on claims arising out of or
12
based on the Fair Credit Reporting Act; and all
13
penalties, tax, and interest associated with the
14
foregoing.
15
members are subject to the conditions stated in paragraph
16
33 of the Settlement Agreement;
17
(7)
The claims released by plaintiffs and class
class administrator, Dahl Administration, LLC, is awarded
18
$133,427.00 for its services as settlement administrator
19
and payment shall be made in accordance with paragraph 28
20
of the Settlement Agreement;
21
(8)
class representative, Sarmad Syed, is awarded $5,000 as
22
an incentive payment and payment shall be made in
23
accordance with paragraphs 26, 30, and 31 of the
24
Settlement Agreement;
25
(9)
class counsel, Peter R. Dion-Kindem, P.C. and Blanchard
26
Law Group, APC, are awarded $400,000 in attorney’s fees
27
and payment shall be made in accordance with paragraph 29
28
of the Settlement Agreement;
24
1
(10) class counsel, Peter R. Dion-Kindem, P.C., is awarded
2
$2,877.59 in costs and payment shall be made in
3
accordance with paragraph 29 of the Settlement Agreement;
4
(11) class counsel, Blanchard Law Group, APC, is awarded
5
$1,628.22 in costs and payment shall be made in
6
accordance with paragraph 29 of the Settlement Agreement;
7
(12) all class members who did not opt out from the settlement
8
will receive a settlement share from the Net Settlement
9
Fund (as defined in paragraph 12 of the Settlement
10
Agreement) and payment shall be made in accordance with
11
paragraphs 26, 30, and 31 of the Settlement Agreement;
12
(13) this action is dismissed with prejudice; however, without
13
affecting the finality of this Order, the court shall
14
retain continuing jurisdiction over the interpretation,
15
implementation, and enforcement of the Settlement
16
Agreement with respect to all parties to this action and
17
their counsel of record.
18
Pursuant to Federal Rule of Civil Procedure 58, the
19
Clerk of the Court is instructed to enter judgment accordingly.
20
Dated:
January 26, 2016
21
22
23
24
25
26
27
28
25
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