Ahmed v. Beverly Health and Rehabilitation Services, Inc., et al.

Filing 39

MEMORANDUM AND ORDER signed by Senior Judge William B. Shubb on 2/6/2018 GRANTING 34 Plaintiff's Motion for preliminary certification of a conditional settlement class and preliminary approval of the class action settlement; Defendant and the claims administrator shall notify class members of the settlement in the manner specified in the settlement agreement; the parties agree that Atticus Administration, LLC will serve as the settlement administrator; the court also approves declared fee s and costs of administering the settlement of up to $16,000; All discovery and pretrial proceedings and deadlines are stayed and suspended until further notice from the court, except for such actions as are necessary to implement the settlement agreement and this Order; the final Approval Hearing is set for 5/14/2018 at 01:30 PM in Courtroom 5 (WBS) before Senior Judge William B. Shubb; to determine whether the settlement agreement should be finally approved as fair, reasonable, and adequate; the court will also consider plaintiff's motion for attorneys' fees, costs, and service payment; Plaintiff shall file a motion for attorneys' fees no later than 35 calendar days after the mailing of the class notice. (Reader, L)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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HENNA AHMED, an individual,

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2:16-1747 WBS KJN

Plaintiff,

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Civ. No.

v.
BEVERLY HEALTH AND
REHABILITATION SERVICES,
INC.; GGNSC ADMINISTRATIVE
SERVICES, LLC and DOES 1-100,
inclusive,

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MEMORANDUM AND ORDER RE: MOTION
FOR PRELIMINARY SETTLEMENT
APPROVAL

Defendants.

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Plaintiff Henna Ahmed brought this putative class-

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action lawsuit against defendants Beverly Health and

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Rehabilitation Services, Inc. (“Beverly Health”), GGNSC

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Administrative Services, LLC (“GGNSC Services”), and Does 1-100,

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alleging that defendants violated the California Labor Code.

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Presently before the court is plaintiff’s unopposed Motion for

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preliminary approval of the class action settlement and

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provisional certification of the class.

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I.

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(Docket No. 34.)

Factual and Procedural Background
Plaintiff applied for a job as a Certified Nursing
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Assistant with Golden Living, located at 144 F St., Galt CA

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95632, on November 3, 2015.

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1, 2, 8 (Docket No. 13).)

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employee handbook and signed a number of documents which

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identified her as an employee of Golden Living.

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Plaintiff’s wage statements from November 2015 to May 2016 listed

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the name and address of her employer as “GGNSC Administrative

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Services, LLC” and “144 F Street, Galt, CA 95632.”

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18, Exs. 9, 11.)

(First Am. Compl. (“FAC”) ¶ 8, Exs.
Plaintiff was issued a badge and an

(Id. ¶¶ 11-13.)

(Id. ¶¶ 16,

However, plaintiff’s IRS Form W-2 listed the

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name and address of her employer as “Beverley Health and

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Rehabilitati[sic]” and “1000 FIANA WAY, FORT SMITH, AR 72919.”

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(Id. ¶ 17, Ex. 10.)

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to furnish wage statements accurately showing the “name and

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address of the legal entity that is the employer” as required by

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Labor Code § 226(a)(8).

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Thus, plaintiff alleges defendants failed

(FAC ¶ 26.)

Plaintiff also alleges that defendants uniformly paid

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plaintiff, and defendants’ other current and former California

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employees, more than seven calendar days following the close of

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the payroll period, in violation of Labor Code § 204.

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Ex. 11.)

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2016 to March 30, 2016, plaintiff and defendants’ other current

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and former California employees were not paid until April 7,

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2016--eight days after the close of the pay period.

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Ex. 27.)

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2016 to July 6, 2016, plaintiff and defendants’ other current and

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former California employees were not paid until July 14, 2016--

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also eight days after the close of the pay period.

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Ex. 28.)

(FAC ¶ 28,

For example, for the pay period that ran from March 17,

(FAC ¶ 28,

Similarly, for the pay period that ran from June 23,

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(FAC ¶ 28,

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If plaintiff was in fact paid for the work she

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performed during each pay period within seven days of the end of

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each pay period, then plaintiff alleges defendants failed to

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accurately state the inclusive dates of the pay periods on the

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wage statements, required by Labor Code § 226(a)(6).

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In addition, plaintiff alleges defendants failed to maintain

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copies of the wage statements issued to her and defendants’ other

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California employees, both current and former, for at least three

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years, thereby violating Labor Code § 226(a).

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(FAC ¶ 29.)

(FAC ¶ 33.)

On June 3, 2016, class counsel sent written notice to

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the California Labor and Workforce Development Agency (“Labor

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Agency”) and defendants regarding alleged violations of Labor

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Code section 226(a)(8)--that the wage statements maintained for

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Beverly Health employees inaccurately showed the name and address

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of their employer as “GGNSC ADMINISTRATIVE SERVICES, LLC” and

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“144 F Street, Galt, CA 95632.”

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).)

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effective June 16, 2016, to ensure that all future wage

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statements had Beverly Health’s name and address clearly listed

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on top of each wage statement.

(Pl.’s Mem. at 2 (Docket No 34-1

In response, defendants adjusted their payroll system

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(Id.)

On September 1, 2016, class counsel sent written notice

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to the Labor Agency and defendants regarding alleged violations

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of Labor Code sections 204 and 226(a)(6)--that defendants failed

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to timely pay employees or to accurately set forth the inclusive

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dates of the pay period for which their employees were being

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paid.

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remedy these violations.

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(Id.)

Almost immediately, defendants undertook efforts to
(Id.)

On November 10, 2016, plaintiff filed a First Amended
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Complaint alleging the following: (1) failure to furnish accurate

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itemized wage statements in violation of California Labor Code §

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226(a)(8); (2) failure to maintain copies of accurate itemized

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wage statements in violation of California Labor Code § 226(a),

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and (3) failure to timely pay wages in violation of California

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Labor Code § 204.

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claims for disability discrimination and retaliation under the

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California Fair Employment and Housing Act (“FEHA”).

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(See FAC.)

Plaintiff also asserts individual

(Id.)

Based on the alleged violations of California Labor

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Code §§ 226(a)(8), 226(a)(6), and 204, plaintiff seeks to certify

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a class of “[a]ll current and former California employees of

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Beverly Health and Rehabilitation Services, Inc. who were issued

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one or more wage statements from July 25, 2015, through September

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1, 2016.”

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¶ 7 (Docket No. 34-2); Pl.’s Mem at 2.)

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this case for over a year before finalizing a settlement

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agreement on December 11, 2017. (Pl.’s Mem. at 3.)

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now seek preliminary approval of the parties’ stipulated class-

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wide settlement, pursuant to Federal Rule of Civil Procedure

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23(e).

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II.

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(Decl. of Robert Wasserman Ex. 1, Settlement Agreement
The parties litigated

Plaintiffs

Discussion
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).

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“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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This Order is the first step in that process and

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analyzes only whether the proposed class action settlement

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deserves preliminary approval.

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Co., 266 F.R.D. 468, 473 (E.D. Cal. 2010) (Shubb, J.)

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Preliminary approval authorizes the parties to give notice to

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putative class members of the settlement agreement and lays the

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groundwork for a future fairness hearing, at which the court will

See Murillo v. Pac. Gas & Elec.

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hear objections to (1) the treatment of this litigation as a

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class action and (2) the terms of the settlement.

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v. Tr. Territory of Pac. Islands, 876 F.2d 1401, 1408 (9th Cir.

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1989) (stating that a district court’s obligation when

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considering dismissal or compromise of a class action includes

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holding a hearing to “inquire into the terms and circumstances of

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any dismissal or compromise to ensure that it is not collusive or

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prejudicial.”).

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whether the parties should be allowed to settle the class action

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on their proposed terms after that hearing.

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See id.; Diaz

The court will reach a final determination as to

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 [1] the propriety of the certification

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and [2] the fairness of the settlement.”

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327 F.3d 938, 952 (9th Cir. 2003).

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Class Plaintiffs v. City
Nevertheless,

Staton v. Boeing Co.,

The first part of this inquiry requires the court to
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“pay ‘undiluted, even heightened, attention’ to class

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certification requirements” because, unlike in a fully litigated

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class action suit, the court “will lack the opportunity . . . to

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adjust the class, informed by the proceedings as they unfold.”

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Amchem Prods. Inc. v. Windsor, 521 U.S. 591, 620 (1997); see

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Hanlon v. Chrysler Corp., 150 F.3d 1011, 1019 (9th Cir. 1998).

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The parties cannot “agree to certify a class that clearly leaves

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any one requirement unfulfilled,” and consequently the court

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cannot blindly rely on the fact that the parties have stipulated

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that a class exists for purposes of settlement.

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U.S. at 621-22 (stating that courts cannot fail to apply the

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requirements of Rule 23(a) and (b)).

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See Windsor, 521

The second part of this inquiry obliges the court to

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“carefully consider ‘whether a proposed settlement is

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fundamentally fair, adequate, and reasonable,’ recognizing that

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‘[i]t is the settlement taken as a whole, rather than the

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individual component parts, that must be examined for overall

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fairness . . . .’”

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F.3d at 1026); see also Fed. R. Civ. P. 23(e) (outlining class

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action settlement procedures).

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A.

Staton, 327 F.3d at 952 (quoting Hanlon, 150

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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P. 23(a)-(b).

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determining whether the moving party has satisfied each Rule 23

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requirement, the court must conduct a rigorous inquiry before

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certifying a class.

Fed. R. Civ.

Although a district court has discretion in

See Califano v. Yamasaki, 442 U.S. 682, 701
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(1979); Gen. Tel. Co. of Sw. v. Falcon, 457 U.S. 147, 161 (1982).

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1.

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Rule 23(a) restricts class actions to cases where:
(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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Rule 23(a)

Fed. R. Civ. P. 23(a).

These requirements are commonly referred

to as numerosity, commonality, typicality, and adequacy of
representation.
a.

Numerosity

Under the first requirement, “[a] proposed class of at
least forty members presumptively satisfies the numerosity
requirement.”

Avilez v. Pinkerton Gov’t Servs., 286 F.R.D. 450,

456 (C.D. Cal. 2012); see also, Collins v. Cargill Meat Solutions
Corp., 274 F.R.D. 294, 300 (E.D. Cal. 2011) (Wanger, J.) (“Courts
have routinely found the numerosity requirement satisfied when
the class comprises 40 or more members.”).

Here, plaintiff

estimates that the settlement class will contain “approximately
1,500 Class Members.”

(Pl.’s Mem. at 4.)

This satisfies Rule

23’s numerosity requirement.
b.

Commonality

Commonality requires that the class members’ claims
“depend upon a common contention” that is “capable of classwide
resolution--which means that determination of its truth or
falsity will resolve an issue that is central to the validity of
each one of the claims in one stroke.”
Dukes, 131 S. Ct. 2541, 2550 (2011).
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Wal-Mart Stores, Inc. v.

“[A]ll questions of fact

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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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150 F.3d at 1019.

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Hanlon,

Here, the settlement class is comprised of “[a]ll

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current and former California employees of Beverly Health and

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Rehabilitation Services, Inc. who were issued one or more wage

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statements from July 25, 2015, through September 1, 2016.”

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(Decl. of Robert Wasserman Ex. 1, Settlement Agreement ¶ 7.)

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These claims all flow from the same facts and legal claims that

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allege that defendants failed to furnish and maintain wage

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statements that comply with the California Labor Code.

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Accordingly, the settlement class meets Rule 23’s commonality

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requirement.

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c.

Typicality

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 does not require their claims 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

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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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Hanlon, 150 F.3d at 1020.

The test for typicality

Hanon v. Dataproducts

Again, plaintiff avers that defendants furnished and

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maintained wage statements for plaintiff and all other class

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members and that these statements failed to comply with the
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California Labor Code.

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allegedly been injured by the same system-wide policies and

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practices, received wage statements with the same deficiencies,

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and seek the same penalties.

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23’s typicality requirement.

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d.

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Thus, plaintiff and class members have

Accordingly, plaintiff has met Rule

Adequacy of Representation

Rule 23(a)(4) requires a showing that the proposed

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class representatives “will fairly and adequately protect the

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interests of the class.”

Fed. R. Civ. P. 23(a)(4).

In deciding

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whether plaintiff has met that requirement, the court must answer

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two questions: “(1) do the named plaintiff[] and [his] counsel

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have any conflicts of interest with other class members and (2)

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will the named plaintiff[] and [his] counsel prosecute the action

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vigorously on behalf of the class?”

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Hanlon, 150 F.3d at 1020.

With respect to the first question, plaintiff is a

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member of the class and her interests appear to be aligned with

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those of the class.

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would be beneficial to each class member, and there appears to be

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no conflicts between plaintiff as class representative and the

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class members.

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reward $4,500 to plaintiff, or 1% of the Gross Settlement Amount

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in consideration for her service as class representative (Decl.

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of Robert Wasserman ¶ 23), federal courts have generally held

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that such awards do not create conflicts of interest as to defeat

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class settlements.

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Thus, any beneficial recovery for plaintiff

While the settlement provides for an incentive

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See Staton, 327 F.3d at 977–78 (holding that

“Incentive awards are payments to class representatives
for their service to the class in bringing the lawsuit.”
Radcliffe v. Experian Info. Sols. Inc., 715 F.3d 1157, 1163 (9th
Cir. 2013).
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“reasonable incentive payments” do not create conflicts of

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interest as to defeat class settlements); Hopson v. Hanesbrands

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Inc., Civ. No. 08-0844 EDL, 2009 WL 928133, at *10 (N.D. Cal.

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Apr. 3, 2009) (“In general, courts have found that $5,000

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incentive payments are reasonable.”); Alberto v. GMRI, Inc., 252

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F.R.D. 652, 669 (E.D. Cal. 2008) (holding the same).

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have held the same with respect to class counsel’s plans to apply

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for a 33% attorneys’ fee.

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2:14-25851 WBS AC, 2016 WL 3538354, at *4 (E.D. Cal. June 28,

The courts

See Garnett v. ADT, LLC, Civ. No.

10

2016) (counsel’s application for 33% fee does not defeat class

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certification).

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In contrast, each member of the proposed class will

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recover approximately $175 under the terms of the settlement

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agreement.

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the plaintiff is somewhat disproportionate to the recovery of

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other class members.

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L.P., 291 F.R.D. 443, 463 (E.D. Cal. 2013) (England, J.) (finding

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$7,500 incentive award unreasonable when average class member

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would receive $65.79 and reducing the award to $2,500).

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disproportionality does not automatically render plaintiff an

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inadequate class representative, but it gives the court pause,

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particularly given the lack of evidence before the court

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demonstrating the quality of plaintiff’s representative service.2

(Pl.’s Mem. at 4.)

An incentive award of $4,500 to

See, e.g., Monterrubio v. Best Buy Stores,

This

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In his declaration, plaintiff’s counsel states
“Plaintiff . . . has demonstrated her ability to advocate for the
interests of the putative class by initiating this litigation,
bringing about the June 2016 and September 2016 revisions to
defendants’ wage statements, and helping facilitate the
Settlement for which approval is now sought. (Decl. of Robert
Wasserman ¶ 23.) Moreover, plaintiff’s counsel states plaintiff
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However, the incentive award is not dispositive of

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plaintiff’s adequacy, and its justification can be further

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explored at the final Fairness Hearing.

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at 662-63, 669 (certifying plaintiff as an adequate class

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representative “pending the introduction at the final fairness

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hearing of evidence in support of counsel’s findings”).

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Accordingly, the court preliminarily finds that the proposed

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incentive award does not render plaintiff an inadequate

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representative of the class.

See Alberto, 252 F.R.D.

On or before the date of the

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Fairness Hearing, however, the parties shall present or be

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prepared to present evidence of the named plaintiff’s efforts

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taken as class representative, such as her hours of service or an

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itemized list of his activities, to justify the discrepancy

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between her award and those of the unnamed plaintiffs.3

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“Although there are no fixed standards by which [the

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second question of Hanlon] can be assayed, considerations include

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competency of counsel and . . . an assessment of the rationale

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for not pursuing further litigation.”

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Here, plaintiff has provided evidence that class counsel has

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substantial experience in prosecuting class actions, including

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employment actions and wage-and-hour matters.

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Wasserman ¶¶ 25-28.)

Hanlon, 150 F.3d at 1021.

(Decl. of Robert

Class counsel decided to forgo further

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has participated in discovery and traveled to attend a full-day
of mediation. (Id. ¶ 24.)
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The settlement also includes an individual settlement
payment to plaintiff. Separate and apart from the class claims,
plaintiff agreed to settle her individual and retaliation claims
against defendant. Plaintiff requests, and the court
preliminarily approves, a payment of $15,000 in settlement of her
individual claims. (Decl. of Robert Wasserman Ex. 2 § G.)
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litigation after engaging in “extensive formal and informal

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investigation and discovery,” “months of [] negotiation,” and

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assessment of the risks of further litigation including

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“anticipate[d] challenges to both class certification and the

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merits of the Action” and costs.

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the court finds that plaintiff and plaintiff’s counsel are

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adequate representatives of the class, and therefore plaintiff

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has satisfied all of the requirements set forth in Rule 23(a).

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2.

(Id. ¶¶ 2-8, 12.)

Accordingly,

Rule 23(b)

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).

Plaintiff seeks 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.”

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Fed. R. Civ. P. 23(b)(3).
a. Predominance

“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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F.R.D. at 476 (citing Hanlon, 150 F.3d at 1022); see also

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Windsor, 521 U.S. at 623 (“The Rule 23(b)(3) predominance inquiry

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tests whether proposed classes are sufficiently cohesive to

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warrant adjudication by representation.”).
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Murillo, 266

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As previously discussed, the claims of class members in

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this case appear to raise similar, if not identical questions of

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fact and law.

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nucleus of facts and potential legal remedies dominates this

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litigation.”

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“predominance” requirement has been satisfied.

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Hanlon, 150 F.3d at 1022.

Accordingly, the

b. Superiority

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Thus, the class claims demonstrate “[a] common

Rule 23(b)(3) also requires “that a class action is
superior to other available methods for fairly and efficiently

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adjudicating the controversy.”

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sets forth four non-exhaustive factors in determining

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“superiority”: (a) class members’ interests in individually

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controlling the litigation; (b) the extent and nature of any

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litigation concerning the controversy already begun by class

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members; (c) the desirability of concentrating the litigation in

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the particular forum; and (d) likely difficulties in managing a

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class action.

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Fed. R. Civ. P. 23(b)(3).

It

Id.

Here, each class member stands to receive approximately

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$175, depending upon the number of wage statements each

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participating class member actually received during the class

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period.

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likely low given that all of the members stand to recover

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relatively little compared to the costs of individual litigation.

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Additionally, the court is unaware of any reason why this forum

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would be undesirable, and neither party alleges that managing

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this class action would present undue difficulties.

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Thus, class members’ interest in litigating this case is

Furthermore, separate litigation “would be expensive
and time-consuming and would create the danger of conflicting
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decisions as to persons similarly situated.”

2

Inflight Motion Pictures, Inc., 582 F.2d 507, 512 (9th Cir.

3

1978).

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to a class action, plaintiffs have satisfied the “superiority”

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requirement.

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244 F.3d 1152, 1161 (9th Cir. 2001) (explaining that “if a

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comparative evaluation of other procedures reveals no other

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realistic possibilities, this superiority portion of Rule

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23(b)(3) has been satisfied.”).

See Lerwill v.

Accordingly, because there is no reasonable alternative

See Local Joint Exec. Bd. v. Las Vegas Sands, Inc.,

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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.

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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).

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Fed.

Rule 23(c)(2) governs both the form and
See Ravens v. Iftikar, 174 F.R.D.

Although that notice must be

Silber v. Mabon, 18 F.3d

The parties agree that Atticus Administration, LLC

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(“Atticus”) will serve as the claims administrator.

(Decl. of

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Robert Wasserman ¶ 18.)

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soliciting bids from Rust Consulting, Inc., CPT Group, Inc.,

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Simpluris, Inc., and Atticus.

The parties settled on Atticus after

(Id.)

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Here, the parties agree that within fourteen calendar

28

days after preliminary approval, defendant will provide Atticus
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in an accessible electronic format the name, last known address,

2

and social security number of each class member.

3

Agreement § 48).

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verifications as necessary prior to the first meeting.

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Within fourteen calendar days after receipt of the class list by

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defendant, Atticus shall send the class members, by first-class

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mail, at their last known mailing address or other address

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located by Atticus, the approved class notice.

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(Settlement

Atticus will perform address updates and
(Id.)

(Id. § 49).

The parties have also supplied a proposed “Notice of

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Pendency of Class Action, Preliminary Approval of Settlement, and

11

Hearing for Final Approval.”

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The notice identifies the parties, explains the nature of the

13

proceedings, defines the class, provides the terms of the

14

settlement, and explains the procedure for objecting or opting

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out of the class.

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the content of the notice satisfies Rule 23(c)(2)(B).

17

R. Civ. P. 23(c)(2)(B); see also Churchill Vill., L.L.C. v. Gen.

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Elec., 361 F.3d 566, 575 (9th Cir. 2004) (“Notice is satisfactory

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if it ‘generally describes the terms of the settlement in

20

sufficient detail to alert those with adverse viewpoints to

21

investigate and to come forward and be heard.’” (quoting Mendoza

22

v. Tucson Sch. Dist. No. 1, 623 F.2d 1338, 1352 (9th Cir.

23

1980))).

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B.

(Decl. of Robert Wasserman Ex. 2.)

(Decl. of Robert Wasserman Ex. B.)

Therefore,
See Fed.

Preliminary Settlement Approval
After determining that the proposed class satisfies the

26

requirements of Rule 23, the court must determine whether the

27

terms of the parties’ settlement appear fair, adequate, and

28

reasonable.

See Fed. R. Civ. P. 23(e)(2); Hanlon, 150 F.3d at
15

1

1026.

2

factors,” including:

3
4
5
6
7

This process requires the court to “balance a number of

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.

8

Hanlon, 150 F.3d at 1026.

Many of these factors cannot be

9

considered until the final Fairness Hearing, so the court need

10

only conduct a preliminary review at this time to resolve any

11

“glaring deficiencies” in the settlement agreement before

12

authorizing notice to class members.

13

No. 2:08-567 WBS DAD, 2014 WL 3057506, at *12 (E.D. Cal. July 7,

14

2014) (citing Murillo, 266 F.R.D. at 478).

Ontiveros v. Zamora, Civ.

15

1.

Terms of the Settlement Agreement

16

The key terms of the Settlement Agreement can be

17

summarized as follows:

18

(1)

Settlement Class: All current and former

19

California employees of Beverly Health and

20

Rehabilitation Services, Inc. who were issued one

21

or more wage statements from July 25, 2015,

22

through September 1, 2016. (Settlement Agreement

23

§ 7.)

24

(2)

Notice: Atticus, the claims administrator, shall

25

mail the class notice to the class members within

26

14 calendar days after receiving the Class List

27

from defendants.

28

to Atticus in an accessible electronic format by

The class list will be provided

16

1

defendant and will contain the following

2

information from each class member: name, last

3

known mailing address, and social security number.

4

The notice shall be mailed by Atticus, by first-

5

class mail, to class members at their last known

6

mailing address.

7

updates and verifications as necessary prior to

8

the first mailing.

9

Atticus will perform additional follow-up and will

10

re-mail the class notice to an updated address (if

11

any) within five calendar days of receipt of the

12

returned mail.

13

of the class list, or as otherwise directed by the

14

court, Atticus shall launch its information only

15

website.

16

contained in the class notice and the Order of

17

preliminary approval, the motion for final

18

approval, the motion for attorney’s fees, costs,

19

and service payment, and the Order of final

20

approval when each is filed with the court.

21

§§ 48-49.)

22
23

(3)

Atticus will perform address

If the mail is returned,

Within fourteen days after receipt

The website will contain the information

(Id.

Calculation of Individual Settlement Payments:
a. Step 1: The Gross Settlement Fund will be

24

deposited into the Qualified Settlement Fund.

25

b. Step 1: From the Gross Settlement Amount, the

26
27
28

following will be deducted:
i. The court-approved fees and costs of the
claims administrator;
17

1

ii. The court-approved payment to the Labor

2

Agency;

3

iii. The court-approved incentive payment to

4

the class representative; and

5

iv. The court-approved fees and costs of class

6

members.

7

c. Step 3:

Each participating class member’s

8

share of the Net Settlement Amount--the

9

remaining amount after all deductions--will

10

then be calculated as a percentage, the

11

numerator of which is the number of wage

12

statements he or she received between July 25,

13

2015 and September 1, 2016 (allocated points

14

for each wage statement), the denominator of

15

which is the total number of points allocated

16

for all Participating class members.

17

Participating class members who were also

18

parties to the Veurink Class Action Settlement

19

will not be allocated points for the wage

20

statements they received between July 25, 2015

21

and February 12, 2016.

22

wage statements issued and number of wage

23

statements issued to each participating class

24

member shall be determined using defendants’

25

records.

26

(4)

Opt-Out Procedure:

The total number of

To opt-out of the settlement,

27

a class member must, within forty-five calendar

28

days from the date of mailing of the class notice,
18

1

submit their desire to opt-out in writing to

2

Atticus indicating his or her full name, current

3

home (or mailing address), and the last four

4

digits of his or her social security number as

5

well as written affirmation of the desire to opt-

6

out containing the following or substantially

7

similar language:

8

“I elect to opt-out of the Ahmed v. Beverly

9

Health and Rehabilitation Services, Inc., et

10

al. class action settlement.

11

that by doing so, I will not be able to

12

participate in the settlement and will not

13

receive a share of the settlement proceeds.”

14
15

I understand

(Id. § 40.)
(5)

Objections to Settlement: Any class member who

16

wishes to object to the proposed settlement at the

17

final Approval Hearing must, within forty-five

18

calendar days from the date of mailing of the

19

class notice, submit their objection in writing to

20

Atticus.

21

clearly identify the case name and number, include

22

the class member’s full name, address, telephone

23

number, and the last four digits of his or her

24

social security number, concisely state the

25

grounds for their objection, whether they would

26

like to appear at the final Approval Hearing, and

27

be filed in writing with Atticus.

28

who have filed a timely and proper objection may,

All objections and support papers must:

19

Class members

1

but are not required to, appear and present

2

argument at the final Approval Hearing in person

3

or through counsel.

4

the final Approval Hearing to object to the terms

5

of the settlement unless he or she has filed a

6

timely objection that complies with the procedures

7

herein.

8

individual objecting to the settlement must file a

9

notice of appearance with the court and serve

No class member may appear at

Any attorney who will represent an

10

counsel for all parties no later than forty-five

11

calendar days after the class notice if first

12

mailed.

13

(6)

(Id.)

Settlement Amount: Defendant will pay $450,000 to

14

settle this case (referred to as the “Gross

15

Settlement Amount”).

16

includes payments to participating class members,

17

the fees and costs of the claims administrator,

18

the service payment to plaintiff, and class

19

counsel’s attorneys’ fees and costs, as well as a

20

payment to the State of California.

21

Agreement §§ 34-36; Notice § 4.)

22

(7)

The Gross Settlement Amount

(Settlement

Attorneys’ Fees, Costs, and Plaintiff’s Incentive

23

Award: Defendant has agreed to pay class counsel

24

one-third of the Gross Settlement Amount, or

25

$150,000, and reimbursement of litigation costs up

26

to $12,500.

27

to the court for a service payment to plaintiff in

28

an amount not to exceed $4,500, or one percent of

(Notice § 4.)

20

Plaintiff will apply

1

the Gross Settlement Amount, in consideration for

2

her service as a participating class member.

3

service payment is in addition to whatever

4

plaintiff is entitled to as a participating class

5

member.

6

(8)

This

(Settlement Agreement § 38.)

Settlement Distribution: After being reduced by

7

the fees and costs of the claims administrator,

8

the service payment to plaintiff, and class

9

counsel’s attorneys’ fees and costs, as well as a

10

payment to the State of California, the remaining

11

settlement fund will be distributed by the claims

12

administrator to each participating class member

13

in the form of a check.

14

compensation from the settlement fund that remains

15

after the expiration of 180 days will be

16

transmitted by the claims administrator to the

17

State of California Unclaimed Property Fund, to be

18

held there in the name of and for the benefit of

19

such class members under California’s escheatment

20

laws.

21

(9)

Any uncashed settlement

(Settlement Agreement §§ 42, 44.)

Release: Class members who participate in the

22

settlement agree to “release Defendants and the

23

Releases [] from any and all claims based upon

24

Defendants’ alleged failure to furnish and/or

25

maintain accurate wage statements under Labor Code

26

section 226(a), or the California Labor Code

27

Private Attorneys General Act of 2004, Labor Code

28

section 2698 et. seq., based on any violation of
21

1

Labor Code section 226(a), whether known or

2

unknown, suspected or unsuspected, that existed or

3

came into existence between July 25, 2015 and

4

September 1, 2016.

5

also agree to release defendants and releases from

6

any and all claims based upon defendants’ alleged

7

failure to (i) furnish and/or maintain accurate

8

wage statements under Labor Code sections 226(a),

9

and (ii) to pay wages within seven days of the

10

close of each pay period in violation of Labor

11

Code section 204, between July 25, 2015 and

12

September 1, 2016.

13

to release defendants and releases from all

14

claims, demands, rights, liabilities and cause of

15

action of every nature and description whatsoever,

16

known or unknown, asserted or that could have been

17

asserted, for any violation of state and federal

18

law, arising out of, relating to, or in connection

19

with any act or omission by or on the part of

20

defendants and releases committed or omitted prior

21

to the execution of the settlement agreement

22

including a waiver of California Civil Code

23

section 1542.

24

additional $15,000 as consideration for the above,

25

and for which she will execute a separate

26

individual settlement agreement.

(Id. §§ 50-51.)

Class Members

In addition, plaintiff agrees

Plaintiff will receive an

(Id. § 52.)

27

2. Preliminary Determination of Adequacy

28

At the preliminary stage, “the court need only
22

1

‘determine whether the proposed settlement is within the range of

2

possible approval.’”

3

Gautreaux v. Pierce, 690 F.2d 616, 621 n.3 (7th Cir. 1982)).

4

This generally requires consideration of “whether the proposed

5

settlement discloses grounds to doubt its fairness or other

6

obvious deficiencies, such as unduly preferential treatment of

7

class representatives or segments of the class, or excessive

8

compensation of attorneys.”

9

Stores, Inc., Civ. No. 04-438 WBS GGH, 2006 WL 1652598, at *11-12

Murillo, 266 F.R.D. at 479 (quoting

Id. (quoting West v. Circle K

10

(E.D. Cal. June 13, 2006)).

Courts often begin by examining the

11

process that led to the settlement’s terms to ensure that those

12

terms are “the result of vigorous, arms-length bargaining” and

13

then turn to the substantive terms of the agreement.

14

West, 2006 WL 1652598, at *11-12; In re Tableware Antitrust

15

Litig., 484 F. Supp. 2d 1078, 1080 (N.D. Cal. 2007)

16

(“[P]reliminary approval of a settlement has both a procedural

17

and a substantive component.”).

See, e.g.,

18

a. Negotiation of the Settlement Agreement

19

Here, plaintiff’s counsel states that the settlement

20

agreement is the result of formal and informal settlement

21

negotiations, including the voluntary exchange of extensive

22

information and documents related to claims in this case.

23

P. & A at 3.)

24

was informed by the time and expense that both sides would incur

25

in the course of further litigation, given the anticipation of a

26

vigorous and lengthy challenge to both class certification and

27

the merits of the action.

28

these considerations, the court sees no reason to second-guess

(Pl.’s

Counsel further states that the decision to settle

(Pl.’s P. & A. at 15.)

23

In light of

1

counsel’s determination that settlement is in the best interest

2

of the class.

3

942 (N.D. Cal. 2013) (holding that a settlement reached after

4

informed negotiations “is entitled to a degree of deference as

5

the private consensual decision of the parties” (citing Hanlon,

6

150 F.3d at 1027)).

7

b. Amount Recovered and Distribution

8
9

See Fraley v. Facebook, Inc., 966 F. Supp. 2d 939,

In determining whether a settlement agreement is
substantively fair to the class, the court must balance the value

10

of expected recovery against the value of the settlement offer.

11

See Tableware, 484 F. Supp. 2d at 1080.

12

consideration of the uncertainty class members would face if the

13

case were litigated to trial.

14

*14.

15

This inquiry may involve

See Ontiveros, 2014 WL 3057506, at

Here, class members may claim penalties under section

16

226(e) of approximately $100 per wage statement.

17

at 14.)

18

occur after years of costly litigation.

19

defendants’ records, it is estimated that the average individual

20

settlement payment for each participating class member will be

21

approximately $175.

22

there is not a significant difference between the settlement

23

amount and the possible recovery under section 226(e).

24

the value of recovery is significant in light of the “significant

25

amount of uncertainty” class members would face if the case were

26

litigated to trial.

27
28

(Pl.’s P. & A.

However, recovery is far from guaranteed and could only
(Id.)

Based upon

(Decl. of Robert Wasserman ¶ 15.)

Here,

Moreover,

Murillo, 266 F.R.D. at 480.

Turning to the distribution of this amount, Atticus, is
an experienced claims administrator.
24

(Declaration of Robert

1

Wasserman ¶ 18.)

2

fees are $15,882.

3

awarded by other judges of this district in similar cases.

4

e.g., Adoma, 913 F.Supp.2d at 985 (approving a $19,000 fee for

5

Simpluris, a claims administrator, to manage 1,725-member class);

6

Vasquez v. Coast Valley Roofing, Inc., 266 F.R.D. 482, 484 (E.D.

7

Cal. 2010) (Wanger, J.) (approving a $25,000 fee for a settlement

8

administrator that managed 177 class members).

9

counsel’s claims estimate of actual litigation costs of up to

Class counsel indicates that Atticus’s expected
(Id.)

These fees are consistent with those
See,

Likewise, class

10

$12,500 do not appear unreasonable at this stage in the

11

litigation.

12

Co., 273 F.R.D. 630, 646 (S.D. Cal. 2011) (awarding $111,002.22

13

in costs where defendant agreed to create a settlement fund of at

14

least $7 million); Loretz v. Regal Stone, Ltd., 756 F. Supp. 2d

15

1203, 1218 (N.D. Cal. 2010) (awarding a total of over $70,000 in

16

costs to two law firms acting as class counsel).

17

(Pl.’s P. & A. at 20); See, e.g., Hartless v. Clorox

The parties also allocate $4,500, or 1% of the Gross

18

Settlement Amount, to the Private Attorney General Act (“PAGA”)

19

claims.

20

aggrieved employees shall be distributed as follows: 75 percent

21

to the Labor and Workforce Development Agency for enforcement of

22

labor laws, . . . and 25 percent to the aggrieved employees.”

23

Cal. Lab. Code § 2699.

24

PAGA claims, 75% or $3,375 will be paid to the Labor Agency, and

25

25% or $1,125 will be returned to the Net Settlement Amount.

26

(Settlement Agreement § 45.)

27

approved by other courts in class actions with PAGA components.

28

See Munoz v. UPS Ground Freight, Inc., Civ. No. 07-970 MHP, 2009

Pursuant to PAGA, “civil penalties recovered by

Here, of the $4,5000 allocated to the

This amount is in the range

25

1

WL 1626376, at *1 (N.D. Cal. June 9, 2009) (approving $60,000 or

2

2% of the total settlement be sent to the California Labor Agency

3

pursuant to PAGA); Hopson v. Hanesbrands Inc., Civ. No. 08-844

4

EDL, 2009 WL 928133, at *9 (N.D. Cal. Apr. 3, 2009) (approving

5

PAGA settlement of $1,500 or .03%); Schiller v. David’s Bridal,

6

Inc., Civ. No. 1:10-616-AWI, 2012 WL 2117001, at *2 (E.D. Cal.

7

June 11, 2012) (Oberto, J.) (approving $7,500 to California Labor

8

Agency for payment of civil penalties where Maximum Settlement

9

Amount totaled $518,245).

10

Accordingly, the court finds such

amount is reasonable and sufficient under the circumstances.

11

The court therefore concludes that the substance of the

12

settlement is fair to class members and thereby “falls within the

13

range of possible approval.”

14

3. Attorneys’ Fees

15

Tableware, 484 F. Supp. 2d at 1079.

If a negotiated class action settlement includes an

16

award of attorneys’ fees, that fee award must be evaluated in the

17

overall context of the settlement.

18

312 F.3d 1123, 1126 (9th Cir. 2002); Monterrubio, 291 F.R.D. at

19

455.

20

the award, like the settlement itself, is reasonable, even if the

21

parties have already agreed to an amount.”

22

Headset Prods. Liab. Litig., 654 F.3d 935, 941 (9th Cir. 2011).

Knisley v. Network Assocs.,

The court “ha[s] an independent obligation to ensure that

23

In re Bluetooth

Here, class counsel seeks fees under the common fund

24

doctrine.

“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)).
26

Staton, 327 F.3d at

1

The Ninth Circuit has approved two methods of assigning

2

attorneys’ fees in common fund cases: the “percentage of the

3

fund” method and the “lodestar” method.

4

Corp., 290 F.3d 1043, 1047 (9th Cir. 2002) (citing In re Wash.

5

Pub. Power Supply Sys. Litig., 19 F.3d 1291, 1295–96 (9th Cir.

6

1994)).

7

counsel a percentage of the common fund recovered for the class.

8

Id.

9

fund cases, where “the benefit to the class is easily

Vizcaino v. Microsoft

Under the percentage method, the court may award class

The percentage method is particularly appropriate in common

10

quantified.”

11

approved a “benchmark” percentage of twenty-five percent, and

12

courts may adjust this figure upwards or downwards if the record

13

shows “‘special circumstances’ justifying a departure.”

14

(quoting Six (6) Mexican Workers v. Ariz. Citrus Growers, 904

15

F.2d 1301, 1311 (9th Cir. 1990)).

16

Bluetooth, 654 F.3d at 942.

The Ninth Circuit has

Id.

The settlement agreement provides that class counsel

17

will apply to the court for a fee in an amount not to exceed

18

$150,000, or one-third, of the Gross Settlement Account.

19

(Settlement Agreement § 39.)

20

Gross Settlement Account.

21

settlement agreement is not contingent upon court approval of the

22

full amount of the requested attorneys’ fees and that a court

23

order granting a lesser fee will not invalidate the settlement

24

agreement. (Id.)

25

fees in class actions for as much as one-third to forty percent

26

of the common fund in similar actions.

27

Specialists, Civ. No. 06-5778 JCS, 2011 WL 1230826, at *29 (N.D.

28

Cal. Apr. 1, 2011) (finding attorneys’ fees amounting to just

The fees are to be paid from the

(Id.)

The parties agree that the

Courts have approved payments of attorneys’

27

Wren v. RGIS Inventory

1

under 42% of the settlement amount appropriate and reasonable);

2

Bond v. Ferguson Enters., Inc., Civ. No. 1:09-1662 OWW MJS, 2011

3

WL 2648879, at *9 (E.D. Cal. June 30, 2011) (“[T]he exact

4

percentage [of attorneys’ fees] varies depending on the facts of

5

the case, and in most common fund cases, the award exceeds [the

6

25%] benchmark.”); Castillo v. ADT, LLC, Civ. No. 2:15-383 WBS

7

DB, 2017 WL 363108, at *7 (E.D. Cal. Jan. 25, 2017) (finding

8

attorneys’ fees amounting to 33% reasonable).

9

Accordingly, the court will preliminarily approve the

10

fee award on the understanding that plaintiff’s counsel must

11

demonstrate, on or before the date of the final Fairness Hearing,

12

that the proposed award is reasonable in light of the court’s

13

concerns.

14

court will be forced to reduce fees to a reasonable amount or to

15

deny final approval of this settlement.

16

at 1047; Alberto, 252 F.R.D. at 667–68.

17

In the event that counsel is unable to do so, the

See Vizcaino, 290 F.3d

IT IS THEREFORE ORDERED that plaintiff’s motion for

18

preliminary certification of a conditional settlement class and

19

preliminary approval of the class action settlement (Docket No.

20

34) be, and the same hereby is, GRANTED.

21

IT IS FURTHER ORDERED THAT:

22

(1)

Defendant and the claims administrator shall

23

notify class members of the settlement in the manner specified in

24

the settlement agreement (Docket 34-2 Ex. 1);

25

(2) Class members who wish to opt-out of the settlement

26

must submit such opt-out in writing to the clams administrator in

27

accordance with the procedures set forth in the settlement

28

agreement and class notice, postmarked no later than forty-five
28

1
2

calendar days after the mailing of the class notice;
(3) Any class member who wishes to object to the

3

settlement must submit such objection in writing to the claims

4

administrator in accordance with the procedures set forth in the

5

settlement agreement and class notice, postmarked no later than

6

forty-five calendar days after the mailing of the class notice;

7

(4) Class members who have not complied with the

8

procedures set forth in the settlement agreement and class notice

9

shall not be permitted to speak at the final Approval Hearing;

10

(5) Subject to further consideration by the court at

11

the time of the final Approval Hearing, the proposed service

12

payment of $4,500, or 1% of the gross settlement amount, for

13

plaintiff Henna Ahmed, in consideration of her services as class

14

representative, is preliminarily approved;

15

(6)

Subject to further consideration by the court at

16

the time of the final Approval Hearing, the class counsel’s

17

request of attorneys’ fees in the amount of $150,000 service or

18

one-third of the gross settlement amount, and declared costs of

19

up to $12,500, are preliminary approved;

20

(7) Subject to further consideration by the court at

21

the time of the final Approval Hearing, the court preliminarily

22

approves, pursuant to California Labor Code section 2699(l)(2),

23

the parties’ allocation of $4,500 to settlement of claims under

24

the California Labor Code Private Attorneys General Act of 2004;

25

(8) the following class be provisionally certified for

26

the purpose of the settlement: all current and former California

27

employees of Beverly Health and Rehabilitation Services, Inc. who

28

were issued one or more wage statements from July 25, 2015,
29

1
2

through September 1, 2016;
(9) Plaintiff Henna Ahmed is conditionally certified as

3

the class representative to implement the parties' settlement in

4

accordance with the settlement agreement.

5

Hurley P.C., by and through Lead Counsel Robert J. Wasserman,

6

William J. Gorham, Nicholas J. Scardigli, and Vladimir J. Kozina,

7

is her, is conditionally appointed as class counsel. Plaintiffs

8

and Mayall Hurley P.C. must fairly and adequately protect the

9

class’s interests;

10

The law firm of Mayall

(10) The parties agree that Atticus Administration, LLC

11

will serve as the settlement administrator.

12

approves declared fees and costs of administering the settlement

13

of up to $16,000;

14

The court also

(11) If the settlement agreement terminates for any

15

reason, the following will occur: (a) class certification will be

16

automatically vacated; (b) plaintiff will stop functioning as

17

class representative; and (c) this action will revert to its

18

previous status in all respects as it existed immediately before

19

the parties executed the settlement agreement;

20

(12) All discovery and pretrial proceedings and

21

deadlines are stayed and suspended until further notice from the

22

court, except for such actions as are necessary to implement the

23

settlement agreement and this Order;

24

(13) The final Approval Hearing is set for May 14, 2018

25

at 1:30 p.m., in Courtroom No. 5, to determine whether the

26

settlement agreement should be finally approved as fair,

27

reasonable, and adequate.

28

plaintiff’s motion for attorneys’ fees, costs, and service

The court will also consider

30

1

payment;

2

(14) The court approves the establishment of a

3

Qualified Settlement Fund pursuant to Treas. Reg. § 1.468B-1 to

4

receive, hold, and distribute the gross settlement amount in

5

accordance with the terms of the settlement agreement and this

6

Order, and that the qualified settlement agreement and the claims

7

administrator will be subject to the continuing jurisdiction of

8

this court;

9

(15) Based on the date this Order is signed and the

10

date of the final Approval Hearing, the following are the certain

11

associated dates in this settlement:

12

(a) Defendant shall provide the contact

13

information of the class members (“class list”) to

14

the claims administrator within 14 calendar days

15

of the entry of this Order;

16

(b) The claims administrator shall launch its

17

information only website within 14 calendar days

18

after receiving the class list;

19

(c) The last day for class members to file a

20

claim, request exclusion, or object to the

21

settlement is 45 calendar days after the mailing

22

of the notice;

23

(16) Plaintiff shall file a motion for attorneys’ fees

24

no later than 35 calendar days after the mailing of the class

25

notice.

26

Dated:

February 6, 2018

27
28
31