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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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 HENNA AHMED, an individual, 12 15 16 2:16-1747 WBS KJN Plaintiff, 13 14 Civ. No. v. BEVERLY HEALTH AND REHABILITATION SERVICES, INC.; GGNSC ADMINISTRATIVE SERVICES, LLC and DOES 1-100, inclusive, 17 MEMORANDUM AND ORDER RE: MOTION FOR PRELIMINARY SETTLEMENT APPROVAL Defendants. 18 Plaintiff Henna Ahmed brought this putative class- 19 20 action lawsuit against defendants Beverly Health and 21 Rehabilitation Services, Inc. (“Beverly Health”), GGNSC 22 Administrative Services, LLC (“GGNSC Services”), and Does 1-100, 23 alleging that defendants violated the California Labor Code. 24 Presently before the court is plaintiff’s unopposed Motion for 25 preliminary approval of the class action settlement and 26 provisional certification of the class. 27 I. 28 (Docket No. 34.) Factual and Procedural Background Plaintiff applied for a job as a Certified Nursing 1 1 Assistant with Golden Living, located at 144 F St., Galt CA 2 95632, on November 3, 2015. 3 1, 2, 8 (Docket No. 13).) 4 employee handbook and signed a number of documents which 5 identified her as an employee of Golden Living. 6 Plaintiff’s wage statements from November 2015 to May 2016 listed 7 the name and address of her employer as “GGNSC Administrative 8 Services, LLC” and “144 F Street, Galt, CA 95632.” 9 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 10 name and address of her employer as “Beverley Health and 11 Rehabilitati[sic]” and “1000 FIANA WAY, FORT SMITH, AR 72919.” 12 (Id. ¶ 17, Ex. 10.) 13 to furnish wage statements accurately showing the “name and 14 address of the legal entity that is the employer” as required by 15 Labor Code § 226(a)(8). 16 Thus, plaintiff alleges defendants failed (FAC ¶ 26.) Plaintiff also alleges that defendants uniformly paid 17 plaintiff, and defendants’ other current and former California 18 employees, more than seven calendar days following the close of 19 the payroll period, in violation of Labor Code § 204. 20 Ex. 11.) 21 2016 to March 30, 2016, plaintiff and defendants’ other current 22 and former California employees were not paid until April 7, 23 2016--eight days after the close of the pay period. 24 Ex. 27.) 25 2016 to July 6, 2016, plaintiff and defendants’ other current and 26 former California employees were not paid until July 14, 2016-- 27 also eight days after the close of the pay period. 28 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, 2 (FAC ¶ 28, 1 If plaintiff was in fact paid for the work she 2 performed during each pay period within seven days of the end of 3 each pay period, then plaintiff alleges defendants failed to 4 accurately state the inclusive dates of the pay periods on the 5 wage statements, required by Labor Code § 226(a)(6). 6 In addition, plaintiff alleges defendants failed to maintain 7 copies of the wage statements issued to her and defendants’ other 8 California employees, both current and former, for at least three 9 years, thereby violating Labor Code § 226(a). 10 (FAC ¶ 29.) (FAC ¶ 33.) On June 3, 2016, class counsel sent written notice to 11 the California Labor and Workforce Development Agency (“Labor 12 Agency”) and defendants regarding alleged violations of Labor 13 Code section 226(a)(8)--that the wage statements maintained for 14 Beverly Health employees inaccurately showed the name and address 15 of their employer as “GGNSC ADMINISTRATIVE SERVICES, LLC” and 16 “144 F Street, Galt, CA 95632.” 17 ).) 18 effective June 16, 2016, to ensure that all future wage 19 statements had Beverly Health’s name and address clearly listed 20 on top of each wage statement. (Pl.’s Mem. at 2 (Docket No 34-1 In response, defendants adjusted their payroll system 21 (Id.) On September 1, 2016, class counsel sent written notice 22 to the Labor Agency and defendants regarding alleged violations 23 of Labor Code sections 204 and 226(a)(6)--that defendants failed 24 to timely pay employees or to accurately set forth the inclusive 25 dates of the pay period for which their employees were being 26 paid. 27 remedy these violations. 28 (Id.) Almost immediately, defendants undertook efforts to (Id.) On November 10, 2016, plaintiff filed a First Amended 3 1 Complaint alleging the following: (1) failure to furnish accurate 2 itemized wage statements in violation of California Labor Code § 3 226(a)(8); (2) failure to maintain copies of accurate itemized 4 wage statements in violation of California Labor Code § 226(a), 5 and (3) failure to timely pay wages in violation of California 6 Labor Code § 204. 7 claims for disability discrimination and retaliation under the 8 California Fair Employment and Housing Act (“FEHA”). 9 (See FAC.) Plaintiff also asserts individual (Id.) Based on the alleged violations of California Labor 10 Code §§ 226(a)(8), 226(a)(6), and 204, plaintiff seeks to certify 11 a class of “[a]ll current and former California employees of 12 Beverly Health and Rehabilitation Services, Inc. who were issued 13 one or more wage statements from July 25, 2015, through September 14 1, 2016.” 15 ¶ 7 (Docket No. 34-2); Pl.’s Mem at 2.) 16 this case for over a year before finalizing a settlement 17 agreement on December 11, 2017. (Pl.’s Mem. at 3.) 18 now seek preliminary approval of the parties’ stipulated class- 19 wide settlement, pursuant to Federal Rule of Civil Procedure 20 23(e). 21 II. 22 (Decl. of Robert Wasserman Ex. 1, Settlement Agreement The parties litigated Plaintiffs Discussion Rule 23(e) provides that “[t]he claims, issues, or 23 defenses of a certified class may be settled . . . only with the 24 court’s approval.” 25 involves a two-step process in which the Court first determines 26 whether a proposed class action settlement deserves preliminary 27 approval and then, after notice is given to class members, 28 whether final approval is warranted.” Fed. R. Civ. P. 23(e). 4 “Approval under 23(e) Nat’l Rural Telecomms. 1 Coop. v. DIRECTV, Inc., 221 F.R.D. 523, 525 (C.D. Cal. 2004) 2 (citing Manual for Complex Litig., Third, § 30.41 (1995)). 3 This Order is the first step in that process and 4 analyzes only whether the proposed class action settlement 5 deserves preliminary approval. 6 Co., 266 F.R.D. 468, 473 (E.D. Cal. 2010) (Shubb, J.) 7 Preliminary approval authorizes the parties to give notice to 8 putative class members of the settlement agreement and lays the 9 groundwork for a future fairness hearing, at which the court will See Murillo v. Pac. Gas & Elec. 10 hear objections to (1) the treatment of this litigation as a 11 class action and (2) the terms of the settlement. 12 v. Tr. Territory of Pac. Islands, 876 F.2d 1401, 1408 (9th Cir. 13 1989) (stating that a district court’s obligation when 14 considering dismissal or compromise of a class action includes 15 holding a hearing to “inquire into the terms and circumstances of 16 any dismissal or compromise to ensure that it is not collusive or 17 prejudicial.”). 18 whether the parties should be allowed to settle the class action 19 on their proposed terms after that hearing. 20 See id.; Diaz The court will reach a final determination as to The Ninth Circuit has declared a strong judicial policy 21 favoring settlement of class actions. 22 of Seattle, 955 F.2d 1268, 1276 (9th Cir. 1992). 23 where, as here, “the parties reach a settlement agreement prior 24 to class certification, courts must peruse the proposed 25 compromise to ratify both [1] the propriety of the certification 26 and [2] the fairness of the settlement.” 27 327 F.3d 938, 952 (9th Cir. 2003). 28 Class Plaintiffs v. City Nevertheless, Staton v. Boeing Co., The first part of this inquiry requires the court to 5 1 “pay ‘undiluted, even heightened, attention’ to class 2 certification requirements” because, unlike in a fully litigated 3 class action suit, the court “will lack the opportunity . . . to 4 adjust the class, informed by the proceedings as they unfold.” 5 Amchem Prods. Inc. v. Windsor, 521 U.S. 591, 620 (1997); see 6 Hanlon v. Chrysler Corp., 150 F.3d 1011, 1019 (9th Cir. 1998). 7 The parties cannot “agree to certify a class that clearly leaves 8 any one requirement unfulfilled,” and consequently the court 9 cannot blindly rely on the fact that the parties have stipulated 10 that a class exists for purposes of settlement. 11 U.S. at 621-22 (stating that courts cannot fail to apply the 12 requirements of Rule 23(a) and (b)). 13 See Windsor, 521 The second part of this inquiry obliges the court to 14 “carefully consider ‘whether a proposed settlement is 15 fundamentally fair, adequate, and reasonable,’ recognizing that 16 ‘[i]t is the settlement taken as a whole, rather than the 17 individual component parts, that must be examined for overall 18 fairness . . . .’” 19 F.3d at 1026); see also Fed. R. Civ. P. 23(e) (outlining class 20 action settlement procedures). 21 22 A. Staton, 327 F.3d at 952 (quoting Hanlon, 150 Class Certification A class action will be certified only if it meets the 23 four prerequisites identified in Rule 23(a) and additionally fits 24 within one of the three subdivisions of Rule 23(b). 25 P. 23(a)-(b). 26 determining whether the moving party has satisfied each Rule 23 27 requirement, the court must conduct a rigorous inquiry before 28 certifying a class. Fed. R. Civ. Although a district court has discretion in See Califano v. Yamasaki, 442 U.S. 682, 701 6 1 (1979); Gen. Tel. Co. of Sw. v. Falcon, 457 U.S. 147, 161 (1982). 2 1. 3 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. 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 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). 7 Wal-Mart Stores, Inc. v. “[A]ll questions of fact 1 and law need not be common to satisfy the rule,” and the 2 “existence of shared legal issues with divergent factual 3 predicates is sufficient, as is a common core of salient facts 4 coupled with disparate legal remedies within the class.” 5 150 F.3d at 1019. 6 Hanlon, Here, the settlement class is comprised of “[a]ll 7 current and former California employees of Beverly Health and 8 Rehabilitation Services, Inc. who were issued one or more wage 9 statements from July 25, 2015, through September 1, 2016.” 10 (Decl. of Robert Wasserman Ex. 1, Settlement Agreement ¶ 7.) 11 These claims all flow from the same facts and legal claims that 12 allege that defendants failed to furnish and maintain wage 13 statements that comply with the California Labor Code. 14 Accordingly, the settlement class meets Rule 23’s commonality 15 requirement. 16 17 c. Typicality Typicality requires that the named plaintiff have 18 claims “reasonably coextensive with those of absent class 19 members,” but does not require their claims to be “substantially 20 identical.” 21 “is whether other members have the same or similar injury, 22 whether the action is based on conduct which is not unique to the 23 named plaintiff[], and whether other class members have been 24 injured by the same course of conduct.” 25 Corp., 976 F.2d 497, 508 (9th Cir. 1992) (citation omitted). 26 Hanlon, 150 F.3d at 1020. The test for typicality Hanon v. Dataproducts Again, plaintiff avers that defendants furnished and 27 maintained wage statements for plaintiff and all other class 28 members and that these statements failed to comply with the 8 1 California Labor Code. 2 allegedly been injured by the same system-wide policies and 3 practices, received wage statements with the same deficiencies, 4 and seek the same penalties. 5 23’s typicality requirement. 6 d. 7 Thus, plaintiff and class members have Accordingly, plaintiff has met Rule Adequacy of Representation Rule 23(a)(4) requires a showing that the proposed 8 class representatives “will fairly and adequately protect the 9 interests of the class.” Fed. R. Civ. P. 23(a)(4). In deciding 10 whether plaintiff has met that requirement, the court must answer 11 two questions: “(1) do the named plaintiff[] and [his] counsel 12 have any conflicts of interest with other class members and (2) 13 will the named plaintiff[] and [his] counsel prosecute the action 14 vigorously on behalf of the class?” 15 Hanlon, 150 F.3d at 1020. With respect to the first question, plaintiff is a 16 member of the class and her interests appear to be aligned with 17 those of the class. 18 would be beneficial to each class member, and there appears to be 19 no conflicts between plaintiff as class representative and the 20 class members. 21 reward $4,500 to plaintiff, or 1% of the Gross Settlement Amount 22 in consideration for her service as class representative (Decl. 23 of Robert Wasserman ¶ 23), federal courts have generally held 24 that such awards do not create conflicts of interest as to defeat 25 class settlements. 26 27 28 1 Thus, any beneficial recovery for plaintiff While the settlement provides for an incentive 1 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). 9 1 “reasonable incentive payments” do not create conflicts of 2 interest as to defeat class settlements); Hopson v. Hanesbrands 3 Inc., Civ. No. 08-0844 EDL, 2009 WL 928133, at *10 (N.D. Cal. 4 Apr. 3, 2009) (“In general, courts have found that $5,000 5 incentive payments are reasonable.”); Alberto v. GMRI, Inc., 252 6 F.R.D. 652, 669 (E.D. Cal. 2008) (holding the same). 7 have held the same with respect to class counsel’s plans to apply 8 for a 33% attorneys’ fee. 9 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 11 certification). 12 In contrast, each member of the proposed class will 13 recover approximately $175 under the terms of the settlement 14 agreement. 15 the plaintiff is somewhat disproportionate to the recovery of 16 other class members. 17 L.P., 291 F.R.D. 443, 463 (E.D. Cal. 2013) (England, J.) (finding 18 $7,500 incentive award unreasonable when average class member 19 would receive $65.79 and reducing the award to $2,500). 20 disproportionality does not automatically render plaintiff an 21 inadequate class representative, but it gives the court pause, 22 particularly given the lack of evidence before the court 23 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 24 2 25 26 27 28 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 10 1 However, the incentive award is not dispositive of 2 plaintiff’s adequacy, and its justification can be further 3 explored at the final Fairness Hearing. 4 at 662-63, 669 (certifying plaintiff as an adequate class 5 representative “pending the introduction at the final fairness 6 hearing of evidence in support of counsel’s findings”). 7 Accordingly, the court preliminarily finds that the proposed 8 incentive award does not render plaintiff an inadequate 9 representative of the class. See Alberto, 252 F.R.D. On or before the date of the 10 Fairness Hearing, however, the parties shall present or be 11 prepared to present evidence of the named plaintiff’s efforts 12 taken as class representative, such as her hours of service or an 13 itemized list of his activities, to justify the discrepancy 14 between her award and those of the unnamed plaintiffs.3 15 “Although there are no fixed standards by which [the 16 second question of Hanlon] can be assayed, considerations include 17 competency of counsel and . . . an assessment of the rationale 18 for not pursuing further litigation.” 19 Here, plaintiff has provided evidence that class counsel has 20 substantial experience in prosecuting class actions, including 21 employment actions and wage-and-hour matters. 22 Wasserman ¶¶ 25-28.) Hanlon, 150 F.3d at 1021. (Decl. of Robert Class counsel decided to forgo further 23 24 25 26 27 28 has participated in discovery and traveled to attend a full-day of mediation. (Id. ¶ 24.) 3 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.) 11 1 litigation after engaging in “extensive formal and informal 2 investigation and discovery,” “months of [] negotiation,” and 3 assessment of the risks of further litigation including 4 “anticipate[d] challenges to both class certification and the 5 merits of the Action” and costs. 6 the court finds that plaintiff and plaintiff’s counsel are 7 adequate representatives of the class, and therefore plaintiff 8 has satisfied all of the requirements set forth in Rule 23(a). 9 10 2. (Id. ¶¶ 2-8, 12.) Accordingly, Rule 23(b) An action that meets all the prerequisites of Rule 11 23(a) may be certified as a class action only if it also 12 satisfies the requirements of one of the three subdivisions of 13 Rule 23(b). Leyva v. Medline Indus. Inc., 716 F.3d 510, 512 (9th 14 Cir. 2013). Plaintiff seeks certification under Rule 23(b)(3), 15 which provides that a class action may be maintained only if (1) 16 “the court finds that questions of law or fact common to class 17 members predominate over questions affecting only individual 18 members” and (2) “that a class action is superior to other 19 available methods for fairly and efficiently adjudicating the 20 controversy.” 21 22 Fed. R. Civ. P. 23(b)(3). a. Predominance “Because Rule 23(a)(3) already considers commonality, 23 the focus of the Rule 23(b)(3) predominance inquiry is on the 24 balance between individual and common issues.” 25 F.R.D. at 476 (citing Hanlon, 150 F.3d at 1022); see also 26 Windsor, 521 U.S. at 623 (“The Rule 23(b)(3) predominance inquiry 27 tests whether proposed classes are sufficiently cohesive to 28 warrant adjudication by representation.”). 12 Murillo, 266 1 As previously discussed, the claims of class members in 2 this case appear to raise similar, if not identical questions of 3 fact and law. 4 nucleus of facts and potential legal remedies dominates this 5 litigation.” 6 “predominance” requirement has been satisfied. 7 Hanlon, 150 F.3d at 1022. Accordingly, the b. Superiority 8 9 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 10 adjudicating the controversy.” 11 sets forth four non-exhaustive factors in determining 12 “superiority”: (a) class members’ interests in individually 13 controlling the litigation; (b) the extent and nature of any 14 litigation concerning the controversy already begun by class 15 members; (c) the desirability of concentrating the litigation in 16 the particular forum; and (d) likely difficulties in managing a 17 class action. 18 Fed. R. Civ. P. 23(b)(3). It Id. Here, each class member stands to receive approximately 19 $175, depending upon the number of wage statements each 20 participating class member actually received during the class 21 period. 22 likely low given that all of the members stand to recover 23 relatively little compared to the costs of individual litigation. 24 Additionally, the court is unaware of any reason why this forum 25 would be undesirable, and neither party alleges that managing 26 this class action would present undue difficulties. 27 28 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 13 1 decisions as to persons similarly situated.” 2 Inflight Motion Pictures, Inc., 582 F.2d 507, 512 (9th Cir. 3 1978). 4 to a class action, plaintiffs have satisfied the “superiority” 5 requirement. 6 244 F.3d 1152, 1161 (9th Cir. 2001) (explaining that “if a 7 comparative evaluation of other procedures reveals no other 8 realistic possibilities, this superiority portion of Rule 9 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., 10 3. Rule 23(c)(2) Notice Requirements 11 If the court certifies a class under Rule 23(b)(3), it 12 “must direct to class members the best notice that is practicable 13 under the circumstances, including individual notice to all 14 members who can be identified through reasonable effort.” 15 R. Civ. P. 23(c)(2)(B). 16 content of a proposed notice. 17 651, 658 (N.D. Cal. 1997) (citing Eisen v. Carlisle & Jacquelin, 18 417 U.S. 156, 172–77 (1974)). 19 “reasonably certain to inform the absent members of the plaintiff 20 class,” actual notice is not required. 21 1449, 1454 (9th Cir. 1994) (citation omitted). 22 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 23 (“Atticus”) will serve as the claims administrator. (Decl. of 24 Robert Wasserman ¶ 18.) 25 soliciting bids from Rust Consulting, Inc., CPT Group, Inc., 26 Simpluris, Inc., and Atticus. The parties settled on Atticus after (Id.) 27 Here, the parties agree that within fourteen calendar 28 days after preliminary approval, defendant will provide Atticus 14 1 in an accessible electronic format the name, last known address, 2 and social security number of each class member. 3 Agreement § 48). 4 verifications as necessary prior to the first meeting. 5 Within fourteen calendar days after receipt of the class list by 6 defendant, Atticus shall send the class members, by first-class 7 mail, at their last known mailing address or other address 8 located by Atticus, the approved class notice. 9 (Settlement Atticus will perform address updates and (Id.) (Id. § 49). The parties have also supplied a proposed “Notice of 10 Pendency of Class Action, Preliminary Approval of Settlement, and 11 Hearing for Final Approval.” 12 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 15 out of the class. 16 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. 18 Elec., 361 F.3d 566, 575 (9th Cir. 2004) (“Notice is satisfactory 19 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))). 24 25 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

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