Charles W. Cooley v. Indian River Transport Co.

Filing 71

ORDER signed by Senior Judge William B. Shubb on 1/24/2019 re 67 Motion for Preliminary Approval of Class Action Settlement: IT IS ORDERED that 67 Plaintiff's Motion for Preliminary Certification of a Conditional Settlement Class and Pre liminary Approval of the Class Action Settlement be, and the same hereby is, GRANTED. A Final Fairness Hearing shall be held before this court on Monday, 5/6/2019 at 01:30 PM in Courtroom 5 (WBS) before Senior Judge William B. Shubb to determine wh ether the proposed settlement is fair, reasonable, and adequate and should be approved by this court; to determine whether the settlement class's claims should be dismissed with prejudice and judgment entered upon final approval of the settlemen t; to determine whether final class certification is appropriate; and to consider class counsel's applications for attorney's fees, costs, and an incentive award to plaintiff. The court may continue the final fairness hearing without further notice to the members of the class. [See document for further details.] (Kirksey Smith, K) (Main Document 71 replaced on 1/24/2019) (Kirksey Smith, K).

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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 ----oo0oo---- 11 12 13 CHARLES W. COOLEY, GRADY ANDERSON, and NICHOLAS MARONE on behalf of themselves and all others similarly situated, 14 15 16 17 18 No. 1:18-cv-00491 ORDER RE: PRELIMINARY APPROVAL OF CLASS SETTLEMENT Plaintiffs v. INDIAN RIVER TRANSPORT CO., a Florida Corporation, and DOES 110, inclusive, Defendant. 19 20 21 22 23 24 25 26 ----oo0oo---Plaintiffs Charles W. Cooley, Grady Anderson, and Nicholas Marone were formerly employed by Indian River Transport Co. (“Indian River”) as truck drivers. ¶¶ 1-3 (Docket No. 55).) (First Am. Compl. (“FAC”) They brought this putative class action on behalf of themselves and similarly aggrieved employees. allege that Indian River committed various violations of 27 28 1 They 1 California law1 by failing to inform its drivers they were 2 entitled to paid meal or rest breaks, not compensating them for 3 rest breaks and other time they were working but not driving, and 4 by providing them with wage statements that did not include all 5 the information required by the Labor Code. 6 (Id. ¶¶ 7-9.) The parties have reached a settlement which would 7 resolve plaintiffs’ claims against defendant. (See Desai Decl. 8 Ex. A, Joint Stipulation of Class Action Settlement and Release 9 (Docket No. 67-2).) Presently before the court is plaintiffs’ 10 unopposed motion for preliminary approval of the proposed class, 11 proposed class settlement, proposed class counsels’ fee and 12 settlement allocation, and proposed plan of notice. 13 67.) 14 I. (Docket No. Factual and Procedural Background 15 Defendant Indian River is a food-grade tank carrier 16 providing transportation throughout the United States; though 17 defendant’s headquarters are in Florida, it has a facility, 18 clients, and employee drivers in California. 19 varying points between September 2011 and October 2017, 20 plaintiffs were employed by defendants to drive routes in and 21 through California. 22 pay was piece-rate compensation at approximately $.35 a mile. 23 (Id. ¶ 6) 24 of their right to take, nor compensated them for, rest breaks. 25 (Id. ¶¶ 20-31; id. ¶¶ 37-43.) 26 27 28 (Id. ¶¶ 1-3.) (FAC ¶ 4.) At Plaintiffs allege that their They also allege that defendant neither informed them Plaintiffs also allege that they Specifically, plaintiffs allege violations of California Labor Code §§ 226 & 512; 226.7; 1194; and 200-03. Plaintiffs also allege violations of California Business and Professions Code Section 17200, et seq. 2 1 1 were not paid wages for unpaid labor at the beginning or end of 2 their shifts or for the time they spent in their trucks’ sleeper 3 births. 4 defendant failed to provide them with accurate wage statements as 5 required by law. 6 (Id. ¶¶ 32-36.) Finally, plaintiffs allege that (Id. ¶¶ 44-50.) These claims are substantively very similar to those 7 brought by former Indian River truck drivers Todd Shook and 8 Herschel Berringer. 9 F. Supp. 3d 1165 (E.D. Cal. 2017), aff’d, 716 F. App’x 589 (9th See Shook v. Indian River Transp. Co., 236 10 Cir. 2018). Following a bench trial, a judgment for defendants 11 was entered in that case. 12 claims were barred because Indian River had made Safe Harbor 13 payments under California Labor Code § 226.2,2 and therefore had 14 an affirmative defense to allegations regarding its failure to 15 properly compensate its employees for rest periods and other 16 breaks in the period between July 1, 2012 and December 31, 2015. 17 Id. at 1175. 18 during the post-Safe Harbor period, i.e. after January 1, 2016, The court ruled that plaintiffs’ Since neither plaintiff had worked for Indian River 19 27 This statute states that if an employer pays its current and former employees 4% of their gross wages between July 1, 2012 and December 31, 2015, then it will have an affirmative defense against: any claim or cause of action for recovery of wages, damages, liquidated damages, statutory penalties, or civil penalties, including liquidated damages pursuant to Section 1194.2, statutory penalties pursuant to Section 203, premium pay pursuant to Section 226.7, and actual damages or liquidated damages pursuant to subdivision (e) of Section 226, based solely on the employer's failure to timely pay the employee the compensation due for rest and recovery periods and other nonproductive time for time periods prior to and including December 31, 2015[.] 28 Cal. Lab. Code § 226.2. 2 20 21 22 23 24 25 26 3 1 their claims against Indian River were barred. 2 Id. This case was filed in May 2017 in Orange County 3 Superior Court. Defendant removed the case to the United States 4 District Court for the Central District of California (Docket No. 5 3) and then, in April 2018, the case was transferred to this 6 district (Docket No. 42). 7 complaint in June 2018 (Docket No. 55) and, in September 2018, 8 the parties engaged in a full-day mediation in Irvine, CA. 9 the end of the day, the parties had reached an agreement and Plaintiffs filed a first amended By 10 executed a memorandum of understanding codifying their intention 11 to settle all claims of plaintiffs and the putative class against 12 defendant for $1.4 million. 13 Preliminary Approval of Class Action Settlement at 3-4 (Docket 14 No. 67).) 15 II. (Mem. in Supp. of Mot. for Discussion 16 Judicial policy strongly favors settlement of class 17 actions. 18 1276 (9th Cir. 1992). 19 serious claims, however, judges have the responsibility of 20 ensuring fairness to all members of the class presented for 21 certification.” 22 Cir. 2003). 23 Class Plaintiffs v. City of Seattle, 955 F.2d 1268, “To vindicate the settlement of such Staton v. Boeing Co., 327 F.3d 938, 952 (9th There are two stages to a court’s approval of a 24 proposed class action settlement. 25 temporarily certifies a class, authorizes notice to that class, 26 and preliminarily approves the settlement, with final approval 27 contingent on the outcome of a fairness hearing. 28 Zamora, No. 2:08-567-WBS-DAD, 2014 WL 3057506, at *2 (E.D. Cal. 4 In the first phase, the court Ontiveros v. 1 July 7, 2014.) 2 action settlement does deserve preliminary approval, then notice 3 of the action is given to the class members and a fairness 4 hearing is held. 5 If a court determines that a proposed class At the fairness hearing, the court will entertain class 6 members’ objections to both the suitability of the class action 7 as a vehicle for this litigation and the terms of the settlement. 8 See Murillo v. Pac. Gas & Elec. Co., 266 F.R.D. 468, 473 (E.D. 9 Cal. 2010) (Shubb, J.). After the fairness hearing, the court 10 will make a final determination regarding whether the parties 11 should be allowed to settle the class action pursuant to the 12 agreed upon terms. 13 1:15-CV-1490-LJO-EPG, 2018 WL 3201764, at *3 (E.D. Cal. June 28, 14 2018), report and recommendation adopted, No. 1:15-CV-1490 LJO 15 EPG, 2018 WL 4027017 (E.D. Cal. Aug. 22, 2018)(“Following the 16 fairness hearing, taking into account all of the information 17 before the court, the court must confirm that class certification 18 is appropriate, and that the settlement is fair, reasonable, and 19 adequate.”). 20 See Mora v. Cal W. Ag Servs., Inc., No. Here, the court performs only the preliminary step of 21 class settlement approval. Before turning to the propriety of 22 the proposed settlement, however, the court must first determine 23 whether certification of the settlement class is proper. 24 Staton, 327 F.3d at 952 (stating that in cases where “parties 25 reach a settlement agreement prior to class certification, courts 26 must peruse the proposed compromise to ratify both [1] the 27 propriety of the certification and [2] the fairness of the 28 settlement.”). 5 See 1 A. 2 Class Certification To be certified, the putative class must satisfy both 3 the requirements of Federal Rule of Civil Procedure 23(a) (“Rule 4 23(a)”) and Federal Rule of Civil Procedure 23(b)(“Rule 23(b)”). 5 See Leyva v. Medline Indus. Inc., 716 F.3d 510, 512 (9th Cir. 6 2013). 7 of the extent to which the putative class complies with the 8 requirements of Rules 23(a) and 23(b) is especially important 9 since the court will “lack the opportunity, present when a case In the settlement context, the court’s careful scrutiny 10 is litigated, to adjust the class, informed by the proceedings as 11 they unfold.” 12 (1997). Amchem Prods. Inc. v. Windsor, 521 U.S. 591, 620 13 1. 14 Rule 23(a) restricts class actions to cases where: 15 (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. 16 17 18 Rule 23(a) Requirements 19 Fed. R. Civ. P. 23(a). 20 requirements in turn. 21 22 a. The court will address each of these four Numerosity A proposed class must be “so numerous that joinder of 23 all members is impracticable.” Fed. R. Civ. P. 23(a)(1). Though 24 there is no definite threshold for determining numerosity, the 25 requirement is presumptively satisfied by a proposed class of at 26 least forty members. 27 274 F.R.D. 294, 300 (E.D. Cal. 2011) (Wanger, J.) (“Courts have 28 routinely found the numerosity requirement satisfied when the See Collins v. Cargill Meat Sols. Corp., 6 1 class comprises 40 or more members.”). 2 represent a class of approximately 2,303 Indian River employees 3 and former employees. 4 requirement is easily satisfied by the proposed settlement class. 5 b. 6 Here, plaintiffs seek to (Desai Decl. ¶ 28.) The numerosity Commonality Commonality hinges on whether the class members’ claims 7 “depend upon a common contention” that is “capable of classwide 8 resolution – – which means that determination of its truth or 9 falsity will resolve an issue that is central to the validity of 10 each one of the claims in one stroke.” 11 Dukes, 564 U.S. 338, 350 (2011). 12 fact and law need not be common to satisfy the rule.” 13 150 F.3d at 1019. 14 with divergent factual predicates is sufficient, as is a common 15 core of salient facts coupled with disparate legal remedies 16 within the class.” 17 Wal-Mart Stores, Inc. v. Moreover, “all questions of Hanlon, Rather, the “existence of shared legal issues Id. Here, the settlement classes are comprised of all 18 California and non-California resident drivers employed by Indian 19 River “who performed work in California for at least one full day 20 from 4 years prior to the filing of this complaint to the 21 present.” 22 33).) 23 plaintiffs, would be alleging that defendant failed to notify 24 them of their right to meal and rest breaks, failed to separately 25 pay them for rest periods, failed to compensate them for time 26 spent in the sleeper berth, and failed to provide them with 27 accurate pay stubs as required by law. 28 out of a common core of salient facts and constitute a shared set (Pl.’s Mot. for Class Certification at 1 (Docket No. The members of the putative class, like the named 7 These contentions arise 1 of allegations regarding the legality of defendant’s conduct vis- 2 à-vis California’s wage and hours laws. 3 4 Since the class’s claims implicate common issues of law, the putative class satisfies the commonality requirement. 5 c. 6 Typicality Rule 23(a) also requires that the “claims or defenses 7 of the representative parties [be] typical of the claims or 8 defenses of the class.” 9 Circuit has held that to meet the typicality requirement, the 10 named plaintiffs’ claims must be “reasonably coextensive with 11 those of absent class members.” 12 evaluating the named plaintiffs’ typicality, courts must look to 13 “whether other members have the same or similar injury, whether 14 the action is based on conduct which is not unique to the named 15 plaintiffs, and whether other class members have been injured by 16 the same course of conduct.” 17 497, 508 (9th Cir. 1992) (citation and internal quotation marks 18 omitted). 19 Fed. R. Civ. P. 23(a)(3). The Ninth Hanlon, 150 F.3d at 1020. In Hanon v. Dataprods. Corp., 976 F.2d The putative class members allege a set of facts that 20 is essentially identical to those alleged by the named 21 plaintiffs. 22 employed by the Indian River as truck drivers and allege that 23 they were injured by defendant’s wage and wage statement 24 policies. 25 varying lengths of time and may therefore have suffered to 26 varying degrees does not mean that the injuries of the named 27 plaintiffs are atypical of the class. 28 Best Buy Stores, L.P., 291 F.R.D. 443, 450 (E.D. Cal. 2013) Both the class members and the named plaintiffs were The mere fact that class members may have worked for 8 See, e.g., Monterrubio v. 1 (England, J.) (holding that named plaintiff satisfied the 2 typicality requirement in spite of “minor factual differences” 3 amongst the size of class members’ claims because he was “subject 4 to the same policies and practices” as other class members); 5 Kamar v. Radio Shack Corp., 254 F.R.D. 387, 396 (C.D. Cal. 2008) 6 (noting that variation in “actual hours of work” between class 7 members in a wage-and-hour class action “does not defeat 8 typicality”). 9 taken into account by the settlement agreement’s “Plan of Moreover, the differences in the amount worked are 10 Allocation,” which allots payments based on the total weeks 11 worked in California during the class period. (Mot. for Prelim. 12 Class Action Settlement at 5 (Docket No. 67).) 13 class therefore meets the typicality requirement. 14 d. The proposed Adequacy of Representation 15 Finally, Rule 23(a) requires that “the representative 16 parties will fairly and adequately protect the interests of the 17 class.” 18 determines legal adequacy: (1) do the named plaintiffs and their 19 counsel have any conflicts of interest with other class members 20 and (2) will the named plaintiffs and their counsel prosecute the 21 action vigorously on behalf of the class?” 22 1020. Fed. R. Civ. P. 23(a)(4). “Resolution of two questions Hanlon, 150 F.3d at 23 In most respects, for reasons discussed above in the 24 “commonality” and “typicality” sections, the named plaintiffs’ 25 interests appear to be co-extensive with those of the class. 26 However, the settlement provides for an incentive award of 27 $10,000 to each of the three named plaintiffs. 28 Agreement ¶ 15 (Docket No. 67-2).) 9 (Settlement Although the Ninth Circuit 1 has specifically approved the award of “reasonable incentive 2 payments” to named plaintiffs, the use of an incentive award 3 nonetheless raises the possibility that a plaintiff’s interest in 4 receiving that award will cause his interests to diverge from the 5 class’s interest in a fair settlement. 6 977-78 (declining to approve a settlement agreement where size of 7 incentive award suggested that named plaintiffs were “more 8 concerned with maximizing [their own] incentives than with 9 judging the adequacy of the settlement as it applies to class See Staton, 327 F.3d at 10 members at large”). As a result, district courts must 11 “scrutinize carefully the awards so that they do not undermine 12 the adequacy of the class representatives.” 13 Experian Info. Sys., Inc., 715 F.3d 1157, 1163 (9th Cir. 2013). 14 Though the proposed incentive award of $10,000 is not Radcliffe v. 15 per se unreasonable,3 it is very high considering the average 16 class member’s recovery of $374 and the fact that, collectively, 17 the incentive rewards constitute more than 2% of the gross 18 recovery. 19 08-482 VAP OPx, 2010 WL 2486346, at *10 (C.D. Cal. June 15, 2010) 20 (finding that an award of 1.66 percent of the gross settlement 21 amount was “excessive under the circumstances of this case”). 22 See, Sandoval v. Tharaldson Emp. Mgmt., Inc., Civ. No. The court’s concerns about the reasonableness of the 23 proposed incentive fees are heightened by the fact that there is 24 no evidence in the record of exceptional contributions by the 25 See, e.g., Van Vranken v. Atl. Richfield Co., 901 F. Supp. 294, 300 (N.D. Cal. 1995) (holding that incentive award of $50,000 to each named plaintiff was fair and reasonable); Glass v. UBS Fin. Servs., Inc., Civ. No. 04-4068 MMC, 2007 WL 221862 (N.D. Cal. Jan. 26, 2007) (approving incentive award of $25,000 for each of four named plaintiffs). 10 26 27 28 3 1 named plaintiffs in service of the class. 2 to be deposed” and “readily available” to counsel, (Desai Decl. ¶ 3 31,) but those are the typical duties of class representatives, 4 not the extraordinary contributions that would merit incentive 5 payments constituting such a substantial portion of the gross 6 settlement. 7 Yes, they were “ready Nevertheless, at this stage, the court cannot determine 8 that the proposed $10,000 incentive awards render named 9 plaintiffs inadequate representatives of the class. 10 emphasizes, however, that this is only a preliminary 11 determination. 12 hearing, the parties should prepare evidence of the named 13 plaintiffs’ substantial efforts as class representatives in order 14 to better justify the discrepancy between their awards and those 15 of the unnamed class members. 16 It On or before the date of the final fairness Plaintiffs’ counsel are experienced attorneys with 17 significant knowledge of class actions, specifically wage and 18 hour class actions. 19 indicate that the decision to settle this case was reached after 20 considerable deliberation, review of hundreds of documents, and 21 an all-day mediation session on September 8, 2018. 22 10.) 23 counsel has vigorously sought to maximize the return on its labor 24 and to vindicate the injuries of the entire class.” 25 F.R.D. at 476. 26 plaintiffs’ counsel are adequate representatives of the class, 27 and therefore that plaintiffs have satisfied all of the 28 requirements for certification set forth in Rule 23(a). (Desai Decl. ¶¶ 11-12.) Class counsel also (Id. ¶¶ 5- As such, “the court can safely assume that plaintiff’s Murillo, 266 Accordingly, the court finds that plaintiffs and 11 1 2. Rule 23(b) 2 To be certified as a class action, an action must not 3 only meet all of the prerequisites of Rule 23(a), but also 4 satisfy the requirements of one of the three subdivisions of Rule 5 23(b). 6 provides that a class action may be maintained only if (1) “the 7 court finds that questions of law or fact common to class members 8 predominate over questions affecting only individual members” and 9 (2) “that a class action is superior to other available methods Plaintiffs seek certification under Rule 23(b)(3), which 10 for fairly and efficiently adjudicating the controversy.” 11 R. Civ. P. 23(b)(3). 12 a. 13 Fed. Predominance “Because Rule 23(a)(3) already considers commonality, 14 the focus of the Rule 23(b)(3) predominance inquiry is on the 15 balance between individual and common issues.” 16 Gas & Elec. Co., 266 F.R.D. 468, 476 (E.D. Cal. 2010) (citing 17 Hanlon, 150 F.3d at 1022); see also Amchem, 521 U.S. at 623 (“The 18 Rule 23(b)(3) predominance inquiry tests whether proposed classes 19 are sufficiently cohesive to warrant adjudication by 20 representation.”). 21 Murillo v. Pac. Here, plaintiffs’ allegations concern Indian Rivers’ 22 alleged failure to inform drivers about their right to paid 23 breaks, as well as its practices regarding driver compensation 24 for rest breaks, meal breaks, and time spent in the sleeper 25 berths.4 26 27 28 The evidence therefore demonstrates that a “common Even if these claims were ultimately incorrect on the merits, that fact alone would not undermine a finding of predominance. See Amgen Inc. v. Conn. Ret. Plans & Tr. Funds, 568 U.S. 455, 459 (2013) (“Rule 23(b)(3) requires a showing that 12 4 1 nucleus of facts and potential legal remedies dominates this 2 litigation.” 3 individualized issues remain in the litigation, those issues 4 largely relate to the amounts that individual drivers were 5 allegedly underpaid. 6 are damages questions that do not undermine a finding of 7 predominance. 8 F.R.D. 361, 372 (C.D. Cal. 2009) (concluding that discrepancies 9 in compensation under piece rate system did not undermine Hanlon, 150 F.3d at 1022. Insofar as Discrepancies in the amount of underpayment See, e.g., Ortega v. J.B. Hunt Transp., Inc., 258 10 predominance when liability could be assessed on a class-wide 11 basis); Kamar, 254 F.R.D. at 404 (finding that discrepancy in 12 hours worked between class members “bears not on the predominance 13 of common questions of liability, but on the amount of damages”). 14 To the extent that any further individual issues may 15 exist, there is no indication that those issues would be anything 16 more than “local variants of a generally homogenous collection of 17 causes,” Hanlon, 150 F.3d at 1022, related to the named 18 plaintiff’s allegations. 19 sufficiently substantive to predominate over the shared claims.” 20 Id. at 1022-23. 21 requirement is satisfied. 22 23 These divergences, therefore, are “not Accordingly, the court finds the predominance b. Superiority In addition to the predominance requirement, Rule 24 23(b)(3) permits class certification only upon a showing that “a 25 class action is superior to other available methods for fairly 26 27 questions common to the class predominate, not that those questions will be answered, on the merits, in favor of the class.”). 28 13 1 and efficiently adjudicating the controversy.” Fed. R. Civ. P. 2 23(b)(3). 3 should consider in making this determination. 4 class members’ interests in individually controlling the 5 prosecution or defense of separate actions; (B) the extent and 6 nature of any litigation concerning the controversy already begun 7 by or against class members; (C) the desirability or 8 undesirability of concentrating the litigation of the claims in 9 the particular forum; and (D) the likely difficulties in managing It sets forth four non-exhaustive factors that courts 10 a class action.” 11 prior to certification, factors (C) and (D) are inapplicable. 12 See Murillo, 266 F.R.D. at 477 (“Some of these factors, namely 13 (D) and perhaps (C), are irrelevant if the parties have agreed to 14 a pre-certification settlement.”). 15 Id. They are: “(A) the Since the parties settled this action The court is unaware of any concurrent litigation 16 regarding the issues presented here against Indian River. Given 17 the lack of ongoing competing lawsuits, it is unlikely that other 18 individuals have an interest in controlling the prosecution of 19 this action or other actions against Indian River for related 20 claims, although objectors at the fairness hearing may reveal 21 otherwise. 22 considerations, the class action appears to be the superior 23 method for adjudicating this controversy. At this stage, and in light of the above 24 3. Rule 23(c)(2) Notice Requirements 25 If the court certifies a class under Rule 23(b)(3), it 26 “must direct to class members the best notice that is practicable 27 under the circumstances, including individual notice to all 28 members who can be identified through reasonable effort.” 14 Fed. 1 R. Civ. P. 23(c)(2)(B). Actual notice is not required. Silber 2 v. Mabon, 18 F.3d 1449 (9th Cir. 1994). 3 absent class members, however, must be “reasonably certain to 4 inform the absent members of the plaintiff class”. 5 (quoting In re Victor Techs. Sec. Litig., 792 F.2d 862, 865 (9th 6 Cir. 1986).) The notice provided to Id. at 1454 7 The proposed settlement notice (Docket No. 67-2) as 8 well as plaintiffs’ memorandum in support of their Motion for 9 Preliminary Class Action Approval indicate that Rust Consulting 10 Inc. will serve as the settlement administrator. 11 is the nation’s largest labor and employment settlement 12 administrator and has experience on more than 2700 labor and 13 employment cases. 14 have been in this district. 15 1:09-CV-00705-AWI-JLT, 2015 WL 13662178 (E.D. Cal. Oct. 2, 2015); 16 McCulloch v. Baker Hughes Inteq Drilling Fluids, Inc., No. 1:16- 17 CV-00157-DAD-JLT, 2017 WL 5665848 (E.D. Cal. Nov. 27, 2017). 18 (Desai Decl. Ex. B.) Rust Consulting Several of those cases See, e.g., Rojas v. Zaninovich, No. The settlement agreement provides that following 19 preliminary approval, defendant will provide Rust Consulting with 20 the names, addresses, work week information, and social security 21 numbers of all class members during the class period. 22 settlement administrator shall take steps to confirm the contact 23 information provided and within approximately 30 days following 24 the preliminary approval of the settlement shall, via First Class 25 U.S. Mail, mail a notice packet to all class members. 26 is satisfied that this system of providing notice is reasonably 27 calculated to provide notice to class members. 28 The The court Likewise, the notice itself clearly identifies the 15 1 options available to putative class members and comprehensively 2 explains the proceedings, the definition of the class, the terms 3 of the settlement, and the procedure for objecting to, or opting 4 out of, the settlement. 5 content of the notice is therefore sufficient to satisfy Rule 6 23(c)(2)(B). 7 566, 575 (9th Cir. 2004) (“Notice is satisfactory if it 8 ‘generally describes the terms of the settlement in sufficient 9 detail to alert those with adverse viewpoints to investigate and 10 to come forward and be heard.’”) (quoting Mendoza v. Tucson Sch. 11 Dist. No. 1, 623 F.2d 1338, 1352 (9th Cir. 1980)). (Desai Decl. Ex. A at 2 (67-2).) The See Churchill Vill., LLC v. Gen. Elec., 361 F.3d 12 The court notes, however, that rather than providing 13 class members with an opt-out form, the notice instructs class 14 members to compose a letter clearly stating their desire not to 15 participate in the settlement. 16 on class members, the notice shall be revised to offer class 17 members fixed language which they can recite in a letter if they 18 wish to opt-out of the settlement. 19 B. To ease the burden of opting out Preliminary Settlement Approval 20 Having determined that the proposed class preliminarily 21 satisfies the requirements of Rule 23, the court will now examine 22 whether the terms of the parties’ settlement appear fair, 23 adequate, and reasonable. 24 process requires the court to “balance a number of factors,” 25 including: 26 27 28 See Fed. R. Civ. P. 23(e)(2). This 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 16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 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. Since many of these factors cannot be considered until the final fairness hearing, “the court need only conduct a preliminary review so as to resolve any ‘glaring deficiencies’ in the settlement agreement before authorizing notice to class members” Ontiveros 2014 WL 3057506, at *12 (citing Murillo, 266 F.R.D. at 478).) 1. Negotiation of the Settlement Agreement Plaintiffs’ counsel stated that the settlement was reached “through arms-length bargaining with sufficient investigation and discovery to allow a cogent evaluation.” (Desai Decl. ¶ 29.) He declares he took into account the risk that the class would not be certified as well as the present value of receiving the settlement funds now as opposed to after lengthy litigation. (Id. ¶¶ 26-28.) Moreover, plaintiffs’ counsel has reviewed thousands of pages of documents and extensively analyzed the legal defenses available to the defendant. (Id. ¶ 27.) The parties’ negotiations culminated in a private mediation on September 6, 2018, in Irvine California before Judge Gail Andler (Ret.). Prelim. Class Settlement at 3.) (Mem. in Supp. of Mot. for The participation of Retired Judge Gail Andler in the settlement process suggests that the proposed settlement is in fact the result of arms-length bargaining. See Satchell v. Fed. Express Corp., No. C 03 2878 SI, 2007 WL 1114010, at *4 (N.D. Cal. Apr. 13, 2007) (observing that, “[t]he assistance of an experienced mediator in the 28 17 1 settlement process confirms that the settlement is non- 2 collusive.”). 3 about the nature and intensity of the negotiations and the 4 involvement of a mediator in the settlement process, the court 5 does not question that the proposed settlement was the result of 6 arms-length bargaining. 7 F.Supp.2d 939, 942 (N. D. Cal. 2013) (holding that a settlement 8 reached after informed negotiations “is entitled to a degree of 9 deference as the private consensual decision of the parties” 10 Given the parties’ representations to the court See Fraley v. Facebook, Inc., 966 (citing Hanlon, 150 F.3d at 1027)). 11 2. Amount Recovered and Distribution 12 In determining whether a settlement agreement is 13 substantively fair to class members, the court must balance the 14 value of expected recovery against the value of the settlement 15 offer. 16 1078, 1080 (N.D. Cal. 2007). 17 consideration of the uncertainty class members would face if the 18 case were litigated to trial. 19 *14. 20 over $12,000,000. 21 upon the defendant’s Notice of Removal (Docket No. 3), which 22 stated the amounts in controversy for plaintiff’s causes of 23 action as follows: (1) $2,663,250 for failure to advise employees 24 of right to take meal breaks; (2) $2,663,250 for failure to 25 advise employees of right to take rest breaks; (3) $3,309,026 for 26 failure to pay all wages for sleeper berth time (for the 27 California resident class only); and (4) $3,960,504 for waiting 28 time penalties. See In re Tableware Antitrust Litig., 484 F. Supp. 2d This inquiry may involve See Ontiveros, 2014 WL 3057506, at Plaintiffs’ counsel estimates defendant’s total exposure at (Desai Decl. ¶ 25.) This estimate is based (Notice of Removal ¶ 40.) 18 1 The proposed gross settlement amount of $1.4 million is 2 just over 11% of the estimated potential recovery in this case. 3 Class counsel represents that the $12 million pretrial recovery 4 does not account for the delay of litigation; the risk that the 5 class may not be certified; or the possibility that some claims 6 may not proceed on the merits. 7 settlement represents far less than plaintiffs could have 8 potentially secured had the case gone to trial, it is not plainly 9 deficient. (Desai Decl. ¶ 25.) Though this See Officers for Justice v. Civil Serv. Comm’n of 10 City & Cty. of San Francisco, 688 F.2d 615, 628 (9th Cir. 1982) 11 (“It is well-settled law that a cash settlement amounting to only 12 a fraction of the potential recovery will not per se render the 13 settlement inadequate or unfair.”) 14 For reasons discussed elsewhere in this order, the 15 amount of the attorney’s fee award, see infra II.B.3, and the 16 amount of plaintiff’s incentive award, see supra II.A.1.D, do 17 give the court pause. 18 this stage that either award is excessive, let alone so grossly 19 excessive that it imperils the fairness or adequacy of this 20 settlement. 21 approving settlement in spite of concerns that attorney’s fee 22 award was excessive). 23 appears “fair, reasonable, and adequate,” Fed. R. Civ. P. 24 23(e)(2), the court will preliminarily approve the settlement 25 agreement pending a final fairness hearing. Nonetheless, the court cannot conclude at Cf. Murillo, 266 F.R.D. at 480 (preliminarily Accordingly, because the settlement 26 3. 27 If a negotiated class action settlement includes an 28 Attorney’s Fees award of attorney’s fees, that fee award must be evaluated in the 19 1 overall context of the settlement. 2 312 F.3d 1123, 1126 (9th Cir. 2002). 3 independent obligation to ensure that the award, like the 4 settlement itself, is reasonable, even if the parties have 5 already agreed to an amount.” 6 Liab. Litig., 654 F.3d 935, 941 (9th Cir. 2011). 7 Knisley v. Network Assocs., The court “ha[s] an In re Bluetooth Headset Prods. When, as in the instant case, a federal court sits in 8 diversity, state law governs the right to fees as well as the 9 calculation of fees. 10 11 See Mangold v. California Pub. Utils. Comm’n, 67 F.3d 1470 (9th Cir. 1995). In California, “when a number of persons are entitled 12 in common to a specific fund, and an action brought by a 13 plaintiff or plaintiffs for the benefit of all results in the 14 creation or preservation of that fund, such plaintiff or 15 plaintiffs may be awarded attorneys’ fees out of the fund.” 16 Serrano v. Priest, 20 Cal. 3d 25, 34 (1977). 17 calculating a reasonable award of attorneys’ fees may do so 18 either by taking a percentage of the benefit secured for the 19 class, or by using a lodestar. 20 Inc., No. 1:14-CV-0273-BAM, 2016 WL 1366952, at *7 (E.D. Cal. 21 Apr. 6, 2016). 22 that California courts mandate or endorse for determining the 23 reasonableness of attorneys’ fees in the context of a common-fund 24 percentage-of-the-benefit approach.” 25 this court will turn to Ninth Circuit case law on the 26 reasonableness of attorneys’ fee awards in evaluating plaintiffs’ 27 counsel’s request. 28 California courts Richardson v. THD At-Home Servs., However, there is no “definitive set of factors Id. at *7. Accordingly, Cf. Id. Given that the percentage method is particularly 20 1 appropriate in common fund cases where “the benefit to the class 2 is easily quantified,” Bluetooth, 654 F.3d at 942, this court 3 will primarily use the percentage method in evaluating 4 plaintiffs’ counsel’s requested fees. 5 approved a “benchmark” percentage of 25%, and courts may adjust 6 this figure upwards or downwards if the record shows “‘special 7 circumstances’ justifying a departure.” 8 Mexican Workers v. Ariz. Citrus Growers, 904 F.2d 1301, 1311 (9th 9 Cir. 1990).) 10 The Ninth Circuit has Id. (quoting Six (6) Plaintiffs’ counsel requests a percentage award of 11 33.3% of the common fund. 12 Approval of Class Action Settlement at 13.) 13 have approved percentage awards as high as 33.3%, awards of that 14 size are typically disfavored unless they are corroborated by the 15 lodestar or reflect exceptional circumstances. 16 913 F. Supp. 2d at 982–83 (rejecting class counsel’s argument 17 that a 33.3% award was appropriate and distinguishing cases). 18 (Mem. in Supp. of Mot. for Preliminary While some courts See, e.g., Adoma, Class counsel attempts to justify the requested upward 19 departure from the Ninth Circuit’s 25% benchmark by comparing the 20 $462,000 in requested attorneys’ fees with a supposed $899,848 21 lodestar. 22 Class Action Settlement at 16-17.) 23 this attempted justification. 24 (Mem. in Supp. of Mot. for Preliminary Approval of The court is not convinced by Lodestar calculation is a two-step process. Fischer v. 25 SJB-P.D. Inc., 214 F.3d 1115, 1119 (9th Cir. 2000). 26 court “tak[es] the number of hours reasonably expended on the 27 litigation and multipl[ies] it by a reasonable hourly rate.” 28 Second, the court may adjust the resulting figure upwards or 21 First, the Id. 1 2 downwards based on a variety of factors. Id. In this case, the problems with the first step of 3 plaintiffs’ counsel’s lodestar calculation process are so 4 fundamental that the court will not even reach the second part of 5 the analysis. 6 Plaintiffs’ counsel asks for $850 per hour for Mr. 7 Desai and $550 per hour for his associate Ms. De Castro. 8 Desai Decl. ¶ 16.) 9 on the assumption that the typical hourly rates of his Orange 10 11 (See Plaintiffs’ counsel’s lodestar figure relies County, CA firm are “reasonable” in this case. They are not. The definition of a “reasonable hourly rate” for 12 purposes of lodestar calculation is tethered to the “prevailing 13 market rate in the relevant community.” 14 CHD Transp. Inc., No. 1:17-CV-00625-DAD-BAM, 2018 WL 4242355, at 15 *7 (E.D. Cal. Sept. 6, 2018). 16 “relevant community” is the forum in which the adjudicating 17 district court sits. 18 community” for purposes of lodestar calculation in this case is 19 the Fresno Division of the Eastern District of California. 20 In other words, “Fresno rates for Fresno cases.” 21 2016 WL 1366952, at *11. 22 Id. BMO Harris Bank N.A. v. When calculating lodestar, the As in BMO Harris Bank, the “relevant Id. Richardson, Typical rates for highly experienced attorneys in the 23 Fresno Division of the Eastern District of California are between 24 $350.00 and $400.00 per hour. 25 JND Thomas Co., Inc., No. 1:16-cv-01181-LJO-SAB, 2017 WL 128502, 26 at *13 (E.D. Cal. Jan. 12, 2017), report and recommendation 27 adopted in part, No. 1:16-cv-01181-LJO-SAB, 2017 WL 432480 (E.D. 28 Cal. Feb. 1, 2017). See, e.g., Leprino Foods Co. v. Even the high end of that range is less than 22 1 half of the $850 per-hour fee requested for Mr. Desai. 2 in Fresno, “$300 is the upper range for competent attorneys with 3 approximately a decade of experience.” 4 LLC, No. 1:14–CV–01698–LJO, 2015 WL 5797828, at *5 (E.D. Cal. 5 Sept. 30, 2015) (O'Neill, J.). 6 $550 per hour for Ms. De Castro, who graduated law school in 7 2005, is 1.83 times that amount. 8 rates in Fresno, these requested hourly rates for Mr. Desai and 9 Ms. De Castro are unreasonably high. 10 Likewise, Barkett v. Sentosa Props. Plaintiffs’ counsel’s request of Given the prevailing market Plaintiffs’ counsel’s lodestar request is also faulty 11 because it includes costs and fees stemming from a separate 12 lawsuit that plaintiff’s counsel previously litigated - - and 13 lost - - against Indian River. 14 information” gained from the Shook case may have been to the 15 class members in the instant case (Desai Decl. ¶ 9), plaintiff 16 has not convincingly shown that the class members in this case 17 ought to pay for the loss in Shook, 1:14-CV–1415-WBS-BAM. 18 Whatever benefit the “background In spite of these reservations, the court need not 19 reduce the fee award at this point in the case. See Murillo, 266 20 F.R.D. at 480 (granting preliminary approval of the settlement 21 despite concerns that the proposed attorney’s fee award was 22 unreasonable). 23 award on the understanding that class counsel must demonstrate, 24 on or before the date of the final fairness hearing, that the 25 proposed award is reasonable in light of the hours expended and 26 the circumstances of the case. In the event that class counsel is 27 unable to do so, the court would then be forced to reduce class 28 counsel’s fees to a reasonable amount or to deny final approval Instead, the court preliminarily approves the fee 23 1 of this settlement. 2 1043, 1047 (9th Cir. 2002). 3 See Vizcaino v. Microsoft Corp., 290 F.3d IT IS THEREFORE ORDERED that plaintiff's motion for 4 preliminary certification of a conditional settlement class and 5 preliminary approval of the class action settlement (Docket No. 6 67) be, and the same hereby is, GRANTED. 7 IT IS FURTHER ORDERED THAT: 8 (1) the following class be provisionally certified for 9 the purpose of settlement in accordance with the terms of the 10 stipulation: all persons who were employed by Indian River 11 Transport Co. as a truck driver at any time during the period 12 from April 7, 2013 through January 23, 2019, and performed work 13 for Indian River for at least one full day in the State of 14 California at any time; 15 (2) Charles W. Cooley, Grady Anderson, and Nicholas 16 Marone are appointed as the representatives of the settlement 17 class and are provisionally found to be adequate representatives 18 within the meaning of Federal Rule of Civil Procedure 23; 19 (3) Desai Law Firm, P.C., is provisionally found to be 20 a fair and adequate representative of the settlement class and is 21 appointed as class counsel for the purposes of representing the 22 settlement class conditionally certified in this order; 23 (4) Rust Consulting, Inc. is appointed as the 24 25 settlement administrator; (5) the form and content of the proposed Notice of 26 Class Action Settlement (Desai Decl. Ex. A) are approved, upon 27 the condition that they be modified to: (a) contain language 28 which class members who wish to opt-out can recite in opt-out 24 1 letters sent to the settlement administrator; and (2) reflect 2 dates modified by this order; 3 (6) no later than ten (10) days from the date this 4 order is signed, defendants’ counsel shall provide the names and 5 contact information of all settlement class members to Rust 6 Consulting, Inc.; 7 (7) no later than thirty (30) days from the date this 8 order is signed, Rust Consulting shall mail a Notice of Class 9 Action Settlement to all members of the settlement class; 10 (8) no later than sixty (60) days from the date this 11 order is signed, any member of the settlement class who intends 12 to object to, comment upon, or opt out of the settlement shall 13 mail written notice of that intent to Rust Consulting, pursuant 14 to the instructions in the Notice of Class Action Settlement; 15 (9) a Final Fairness Hearing shall be held before this 16 court on Monday, May 6, 2019 at 1:30 p.m. in Courtroom 5 to 17 determine whether the proposed settlement is fair, reasonable, 18 and adequate and should be approved by this court; to determine 19 whether the settlement class’s claims should be dismissed with 20 prejudice and judgment entered upon final approval of the 21 settlement; to determine whether final class certification is 22 appropriate; and to consider class counsel’s applications for 23 attorney’s fees, costs, and an incentive award to plaintiff. The 24 court may continue the final fairness hearing without further 25 notice to the members of the class; 26 (10) no later than twenty-eight (28) days before the 27 final fairness hearing, class counsel shall file with this court 28 a petition for an award of attorneys’ fees and costs. 25 Any 1 objections or responses to the petition shall be filed no later 2 than fourteen (14) days before the final fairness hearing. 3 counsel may file a reply to any objections no later than seven 4 (7) days before the final fairness hearing; 5 Class (11) no later than twenty-eight (28) days before the 6 final fairness hearing, class counsel shall file and serve upon 7 the court and defendant’s counsel all papers in support of the 8 settlement, the incentive award for the class representative, and 9 any award for attorneys’ fees and costs; 10 (12) no later than twenty-eight (28) days before the 11 final fairness hearing, Rust Consulting, Inc. shall prepare, and 12 class counsel shall file and serve upon the court and defendants’ 13 counsel, a declaration setting forth the services rendered, proof 14 of mailing, a list of all class members who have opted out of the 15 settlement, and a list of all class members who have commented 16 upon or objected to the settlement; 17 (13) any person who has standing to object to the terms 18 of the proposed settlement may appear at the final fairness 19 hearing in person or by counsel and be heard to the extent 20 allowed by the court in support of, or in opposition to, (a) the 21 fairness, reasonableness, and adequacy of the proposed 22 settlement, (b) the requested award of attorneys’ fees, 23 reimbursement of costs, and incentive award to the class 24 representative, and/or (c) the propriety of class certification. 25 To be heard in opposition at the final fairness hearing, a person 26 must, no later than forty-five (45) days from the date this order 27 is signed, (a) serve by hand or through the mails written notice 28 of his or her intention to appear, stating the name and case 26 1 number of this action and each objection and the basis therefore, 2 together with copies of any papers and briefs, upon class counsel 3 and counsel for defendants, and (b) file said appearance, 4 objections, papers, and briefs with the court, together with 5 proof of service of all such documents upon counsel for the 6 parties. 7 Responses to any such objections shall be served by 8 hand or through the mails on the objectors, or on the objector’s 9 counsel if any there be, and filed with the court no later than 10 fourteen (14) calendar days before the final fairness hearing. 11 Objectors may file optional replies no later than seven (7) 12 calendar days before the final fairness hearing in the same 13 manner described above. 14 make his or her objection in the manner provided herein shall be 15 deemed to have waived such objection and shall forever be 16 foreclosed from objecting to the fairness or adequacy of the 17 proposed settlement, the judgment entered, and the award of 18 attorneys’ fees, costs, and an incentive award to the class 19 representative unless otherwise ordered by the court. 20 Any settlement class member who does not (14) pending final determination of whether the 21 settlement should be ultimately approved, the court preliminarily 22 enjoins all class members (unless and until the class member has 23 submitted a timely and valid request for exclusion) from filing 24 or prosecuting any claims, suits, or administrative proceedings 25 regarding claims to be released by the settlement. 26 Dated: January 24, 2019 27 28 27

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