Osegueda v. Northern California Inalliance

Filing 25

MEMORANDUM and ORDER GRANTING 23 Plaintiff's Motion For Preliminary Approval of Class Action Settlement, signed by Senior Judge William B. Shubb on 1/15/2020: A Fairness Hearing is set for 5/18/2020 at 01:30 PM in Courtroom 5 (WBS) before Senior Judge William B. Shubb. [See document for further details.] (Kirksey Smith, K)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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----oo0oo----

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JOSEPH OSEGUEDA, individually
and on behalf of all similarly
situated and/or aggrieved
employees of Defendants in the
State of California,

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MEMORANDUM AND ORDER RE:
MOTION FOR PRELIMINARY
APPROVAL OF CLASS ACTION
SETTLEMENT

Plaintiff,

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No. 18-cv-00835 WBS EFB

v.
NORTHERN CALIFORNIA INALLIANCE;
and DOES 1 through 50,
inclusive,
Defendants.

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----oo0oo---Plaintiff Joseph Osegueda, individually and on behalf

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of all other similarly situated employees, brought this putative

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class action against Defendant Northern California InAlliance

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alleging violations of state and federal wage and hour laws.

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(First Am. Compl. (“FAC”) (Docket No. 14).)

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plaintiff’s unopposed motion for preliminary approval of a class

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action settlement reached by the parties.
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Before the court is

(Mot. for Prelim.

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Approval (Docket No. 23).)

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I.

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Factual and Procedural Background
Defendant InAlliance is a non-for-profit that provides

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independent living services to adults with developmental

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disabilities.

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(Docket No. 23-3); Decl. of Graham Hollis (“Hollis Decl.”) ¶ 17

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(Docket No. 23-2).)

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independently in their own home, instead of living with family or

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in communal housing.

(Decl. of Joseph Osegueda (“Osegueda Decl.”) ¶ 5

These services enable participants to live

(Osegueda Decl. ¶ 5.)

Plaintiff worked for

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InAlliance as an Independent Living Facilitator (“Living

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Facilitator”) in Sacramento and Yolo County in 2017.

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Decl. ¶ 3-4.)

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(Osegueda

As a Living Facilitator, plaintiff assisted

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participants with personal care and tasks around the home.

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(Osegueda Decl. ¶ 6.)

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Living Facilitators as “personal attendants” and did not pay them

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for daily overtime.

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InAlliance also allegedly required Living Facilitators to use

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their personal cell phones to communicate with their supervisors

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and did not pay Living Facilitators for “sleep time” during

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shifts of twenty-four hours or longer.

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11.)

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(1) failure to pay minimum and regular wages; (2) failure to pay

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overtime wages; (3) failure to indemnify necessary business

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expenses; (4) failure to provide accurate itemized wage

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statements; (5) failure to timely pay all ages due upon

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separation of employment; (6) violation of California’s Business

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and Professions Code, Cal. § 17200, et seq.; (7) violation of

InAlliance classified plaintiff and other

(Osegueda Decl. ¶ 4; Hollis Decl. ¶ 130.)

(Osegueda Decl. ¶¶ 8,

Plaintiff brought this action against defendant, alleging:

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California’s Private Attorneys General Act of 2004 (“PAGA”), Cal.

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Lab. Code § 2698, et seq.; and (8) violation of the Fair labor

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Standards Act (“FLSA”), 29 U.S.C. §§ 207, 211(c), 216(b).

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¶¶ 67-158.)

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(FAC

Defendant removed the action to this court in April

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2018 (Docket No. 1) and denied any liability or wrongdoing of any

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kind.

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exchanging initial disclosures and completing an independent

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investigation, the parties participated in a private mediation

(See generally Def.’s Answer (Docket No. 16).)

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and eventually reached a settlement agreement.

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After

Prelim. Approval (Docket No. 23-1) at 5.)

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(Memo. Supp.

Under the terms of the agreement, InAlliance will pay a

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non-reversionary sum of $225,000.

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Settlement (“Settlement Agreement”) ¶ 1.19 (Docket No. 23-2, Ex.

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1).)

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follows: (1) a maximum of $75,000 to class counsel for attorney’s

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fees; (2) a maximum of $9,000 to class counsel for reimbursement

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of out-of-pocket expenses; (3) an award of $5,000 to plaintiff

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for serving as the class representative; (4) $11,250 to the

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California Labor & Workforce Development Agency (“LWDA”) to cover

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the cost of penalties, with 75 percent of the award going to LWDA

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and the remaining 25 percent to the PAGA Aggrieved Employees1;

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(5) a maximum of $10,500 to the settlement administrator, ILYM

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Group, Inc., (“ILYM Group”) for reimbursement of settlement

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“PAGA Aggrieved Employees” is defined as “all current
and former employees of [d]efendant in the State of California in
the position of Independent Living Facilitator (“ILF”) during the
PAGA Period.” (Settlement Agreement ¶ 1.25.) The “PAGA Period”
is confined from February 22, 2017 through January 15, 2020.
(Settlement Agreement ¶ 1.26.)
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(Joint Stipulation of

The total settlement amount would be distributed as

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administration costs; and (7) the remaining amount, approximately

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$122,526.50 (“class fund”) to the participating class members.

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(Memo. Supp. Prelim. Approval at 6.)

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The parties now seek the court’s preliminary approval

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of the proposed settlement agreement.

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II.

Discussion

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Federal Rule of Civil Procedure 23(e) provides that

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“[t]he claims, issues, or defenses of a certified class may be

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settled . . . only with the court’s approval.”

Fed. R. Civ. P.

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23(e).

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however, judges have the responsibility of ensuring fairness to

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all members of the class presented for certification.”

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

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parties negotiate a settlement agreement before the class has

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been certified, settlement approval requires a higher standard of

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fairness and a more probing inquiry than may normally be required

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under Rule 23(e).”

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2019 WL 6721190, at *10 (9th Cir. 2019).

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“To vindicate the settlement of such serious claims,

Staton v.

“Where [] the

Roes, 1-2 v. SFBSC Mgmt., LLC, --- F.3d ---,

The approval of a class action settlement takes place

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in two stages.

In the first stage, “the court preliminarily

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approves the settlement pending a fairness hearing, temporarily

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certifies a settlement class, and authorizes notice to the

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class.”

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3057506, at *2 (E.D. Cal. July 7, 2014).

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court will entertain class members’ objections to (1) treating

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the litigation as a class action and/or (2) the terms of the

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settlement agreement at the fairness hearing.

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will then reach a final determination as to whether the parties

Ontiveros v. Zamora, No. 2:08-567 WBS DAD, 2014 WL

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In the second, the

Id.

The court

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should be allowed to settle the class action following the

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fairness hearing.

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determine whether the proposed class action settlement deserves

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preliminary approval and lay the ground work for a future

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fairness hearing.”

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A.

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Id.

Consequently, this order “will only

See id. (citations omitted).

Class Certification
To be certified, the putative class must satisfy both

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the requirements of Federal rule of Civil Procedure 23(a) and

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(b).

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Leyva v. Medline Indus. Inc., 716 F.3d 510, 512 (9th Cir.

2013).

Each will be discussed in turn.

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1.

Rule 23(a)

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In order to certify a class, Rule 23(a)’s four

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threshold requirements must be met: numerosity, commonality,

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typicality, and adequacy of representation.

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23(a).

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has concluded, after a ‘rigorous analysis,’ that Rule 23(a) has

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been satisfied.”

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542-43 (9th Cir. 2013) (quoting Wal-Mart Stores, Inc. v. Dukes,

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564 U.S. 338, 351 (2011)).

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“Class certification is proper only if the trial court

i.

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Fed. R. Civ. P.

Wang v. Chinese Daily News, Inc., 737 F.3d 538,

Numerosity

While Rule 23(a)(1) requires that the class be “so

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numerous that joinder of all members is impracticable,” Fed. R.

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Civ. P. 23(a)(1), it does not require “a strict numerical cut-

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off.”

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(S.D. Cal. 2019) (Bashant, J.) (citations omitted).

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“the numerosity factor is satisfied if the class compromises 40

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or more members.”

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242 F.R.D. 544, 549 (N.D. Cal. 2007).)

McCurley v. Royal Seas Cruises, Inc., 331 F.R.D. 142, 167
Generally,

Id. (quoting Celano v. Marriott Int’l, Inc.,

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Here, defendant has

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already identified over 350 potential class members that worked

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for InAlliance from 2015 to 2018.

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Accordingly, the numerosity element is satisfied.

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ii.

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(Hollis Decl. ¶ 128.)

Commonality

Next, Rule 23(a) requires that there be “questions of

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law or fact common to the class.”

Fed. R. Civ. P. 23(a)(2).

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Rule 23(a)(2) is satisfied when there is a “common contention . .

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. of such a nature that it is capable of classwide resolution--

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which means that determination of its truth or falsity will

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resolve an issue that is central to the validity of each one of

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the claims in one stroke.”

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“Plaintiffs need not show that every question in the case, or

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even a preponderance of questions, is capable of classwide

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resolution.

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a would-be class can satisfy the commonality requirement of Rule

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23(a)(2).”

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U.S. at 350).

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Wal-Mart Stores, 564 U.S. at 350.

So long as there is ‘even a single common question,’

Wang, 737 F.3d at 544 (citing Wal-Mart Stores, 564

Here, the “class” is defined as members of the

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Independent Living Facilitator Class and the Waiting Time

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Penalties Subclass.

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Living Facilitator Class Member” means “all current or former

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employees of InAlliance who worked in the State of California in

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the position of Independent Living Facilitator (“ILF”) at any

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time from February 22, 2014 through the Preliminary Approval

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Date.”

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Penalties Subclass” includes “any members of the Independent

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Living Facilitator Class whose employment ended, according to

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InAlliance records, between February 22, 2015 and the Preliminary

(Settlement Agreement ¶ 1.1.)

(Id. ¶ 1.16.)

“Independent

Additionally, members of the “Waiting Time

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Approval Date and who does not timely opt-out of the Settlement

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Class.”

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(Id. ¶ 1.42.)
Plaintiff contends that each class member was subjected

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to the same overtime policy that resulted in their underpayment

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and each class member was not informed that they were entitled to

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reimbursement for the work-related use of their cell phones.

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(Hollis Decl. ¶¶ 18-23.)

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challenges a policy common to the class as a whole creates a

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common question whose answer is apt to drive the resolution of

Generally, “the fact that an employee

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the litigation.”

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calculations of wages due might vary based on the individual,2

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“the presence of individual damages cannot, by itself, defeat

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class certification.”

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Stores, 564 U.S. at 362).

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questions of law and fact because they are premised on a common

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policy.

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examining common methods of proof, which weighs in favor of

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finding commonality.

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(collecting cases).

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the commonality requirement.

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Ontiveros, 2014 WL 3057506, at *5.

While

Leyva, 716 F.3d at 514 (quoting Wal-Mart
Here, the claims implicate common

Additionally, the claims can be substantiated by

See Ontiveros, 2014 WL 3057506, at *6
Accordingly, the putative class satisfies

iii. Typicality

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Rule 23(a) further requires that the “claims or

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defenses of the representative parties [be] typical of the claims

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or defenses of the class.”

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

The test

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Class members shall receive a pro-rata portion of the
class fund based upon their number of qualifying work weeks.
(Settlement Agreement ¶ 2.3.4.) The Waiting Time Penalties
Subclass participants will receive an allotment of six additional
qualifying work weeks. (Id.)
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for typicality is “whether other members have the same or similar

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injury, whether the action is based on conduct which is not

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unique to the named plaintiffs, and whether other class members

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have been injured by the same course of conduct.”

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Reg’l Medical Ctr., 909 F.3d 996, 1006 (9th Cir. 2018) (quoting

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Hanon v. Dataproducts Corp., 976 F.2d 497, 508 (9th Cir. 1992)).

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Sali v. Corona

As discussed above, all of the Living Facilitators were

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classified as non-exempt and all allegedly suffered the same or

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similar overtime violations and failures to reimburse for their

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business expenses.

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Similarly, plaintiff’s waiting time penalties claim is typical of

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the Waiting Time Penalties Subclass because they are derivative

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of the same alleged failure to properly pay for all overtime

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hours worked.

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plaintiff and the putative class are based on identical legal

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theories.

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appear to be reasonably coextensive with those of the proposed

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class, and Rule 23(a)’s typicality requirement is satisfied.

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(Osegueda Decl. ¶ 4; Hollis Decl. ¶¶ 18-23.)

(See FAC ¶¶ 103-110.)

(See generally FAC.)

iv.

Furthermore, the claims of

Accordingly, plaintiff’s claims

Adequacy of Representation

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Finally, Rule 23(a) requires that “the representative

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parties will fairly and adequately protect the interests of the

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class.”

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uncover conflicts of interest between named parties and the class

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they seek to represent” as well as the “competency and conflicts

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of class counsel.”

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625, 626 n.20 (1997).

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whether the named plaintiffs and their counsel have any conflicts

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of interest with other class members and (2) whether the named

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

Rule 23(a)(4) “serves to

Amchem Prods., Inc. v. Windsor, 521 U.S. 591,
The court must consider two factors: (1)

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plaintiffs and their counsel will vigorously prosecute the action

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on behalf of the class.

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Litig., 926 F.3d 539, 566 (9th Cir. 2019) (quoting Hanlon v.

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Chrysler Corp., 150 F.3d 1011, 1020 (9th Cir. 1998)).

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a.

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In re Hyundai and Kai Fuel Economy

Conflicts of Interest

The first portion of the adequacy inquiry considers

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whether plaintiff’s interests are aligned with those of the

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class.

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possess the same interest and suffer the same injury as the class

“[A] class representative must be part of the class and

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members.”

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omitted).

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Amchem, 521 U.S. at 625-26 (internal modifications

In most respects, the named plaintiff’s interests

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appear to be aligned with those of the class for the reasons set

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forth above.

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claims are based on identical legal theories).)

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similarities, plaintiff alone stands to benefit for his

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participation in this litigation by receiving an incentive award

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of $5,000.

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plaintiff and class counsel have certified that they are unaware

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of any conflicts of interest between him and the class, (Hollis

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Decl. ¶¶ 125, 133; Osegueda Decl. ¶ 34), the use of an incentive

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award raises the possibility that a plaintiff’s interest in

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receiving that award will cause his interests to diverge from the

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class’s in a fair settlement.

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Consequently, the court must “scrutinize carefully the awards so

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that they do not undermine the adequacy of the class

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representatives.”

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F.3d 1157, 1163 (9th Cir. 2013).

(See generally FAC; Hollis Decl. ¶ 132 (noting
Despite the many

(Settlement Agreement ¶¶ 2.5.1-2.5.3.)

While both

Staton, 327 F.3d at 977-78.

Radcliffe v. Experian Info. Sys., Inc., 715

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The parties estimate that if all of the 375 estimated

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class members participate in the class action, the average

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recovery per class member will be approximately $328.06.

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Decl. ¶ 80.)

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more.

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cases, has spent significant amounts of time and subjected

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himself to reputational risk to act as the named plaintiff in

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this case.

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Indeed, the Ninth Circuit has consistently recognized incentive

(Hollis

Plaintiff’s award of $5,000 represents considerably

However, plaintiff, like similar named plaintiffs in other

(Osegueda Decl. ¶¶ 17-25; Hollis Decl. ¶ 124.)

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awards are “fairly typical” way to “compensate class

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representatives for work done on behalf of the class” or “to make

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up for financial or reputational risk undertaken in bringing the

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action.”

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(9th Cir. 2009).

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have held that a $5,000 incentive award is “presumptively

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reasonable.”

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WL 1927342, at *8 (N.D. Cal. Apr. 28, 2015) (citations omitted).

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Rodriguez v. West Publ’g Corp., 563 F.3d 948, 958-59
Furthermore, many courts in the Ninth Circuit

Hawthorne v. Umpqua Bank, No. 11-cv-06700-JST, 2015

Here, the $5,000 incentive payment represents .45

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percent of the total settlement amount.

The Ninth Circuit has

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approved incentive awards of this amount under similar, if not

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more extreme, circumstances.

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Antitrust Litig., 779 F.3d 934, 947-48 (9th Cir. 2015) (finding

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district court did not abuse its discretion by awarding nine

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class representatives $5,000 each when class members stood to

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recover $12 each).

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this case does not appear to create a conflict of interest,

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although the court emphasizes this finding is only a preliminary

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determination.

See In re Online DVD-Rental

Accordingly, the $5,000 incentive award in

On or before the date of the final fairness
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hearing, the parties should present or be prepared to present

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further evidence of plaintiff’s substantial efforts taken as a

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class representative to better justify the discrepancy between

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this award and those of the unnamed class members.

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b.

Vigorous Prosecution

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The second portion of the adequacy inquiry examines the

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vigor with which the named plaintiff and his counsel have pursued

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the class’s claims.

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which ‘vigor’ can be assayed, considerations include competency

“Although there are no fixed standards by

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of counsel and, in the context of a settlement-only class, an

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assessment of the rationale for not pursuing further litigation.”

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Hanlon, 150 F.3d at 1021.

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Here, class counsel states they are experienced

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employment and class action litigators who are fully qualified to

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pursue the interests of the class.

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the past ten years, class counsel has settled over seventy class

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action lawsuits in state and federal courts.

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Both parties represent that the settlement is a product of “an

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‘arms’ length,’ full-day mediation . . . which occurred after an

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exchange of discovery and an extensive investigation of the

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claims.”

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that they have invested a significant amount of time, money, and

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resources into reaching this compromise.

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118.)

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reasonable, and adequate, and in the best interest of the

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[c]lass.”

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(Hollis Decl. ¶¶ 7-11.)

(Settlement Agreement at V.)

Over

(Hollis Decl. ¶ 8.)

Counsel has certified

(Hollis Decl. ¶¶ 113-

In counsel’s informed opinion, the settlement is “fair,

(Hollis Decl. ¶ 135.)
Additionally, counsel has explained that defendant’s

non-for-profit status places it in a “precarious financial
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situation” that makes settlement preferable.

(Hollis Decl. ¶

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101.)

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federal programs.

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can avoid bankruptcy and the class can safeguard its recovery.

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(Hollis Decl. ¶¶ 101-102.)

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plaintiff and plaintiff’s counsel are adequate representatives of

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the class.

Defendant receives most of its income from grants and
(Hollis Decl. ¶ 63.)

By settling, InAlliance

Accordingly, the court finds that

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2.

Rule 23(b)

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After fulfilling the threshold requirements of Rule

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23(a), the proposed class must satisfy the requirements of one of

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the three subdivisions of Rule 23(b).

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Plaintiff seeks provisional certification under Rule 23(b)(3),

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which provides that a class action may be maintained only if “the

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court finds that questions of law or fact common to class members

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predominate over questions affecting only individual members” and

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“that a class action is superior to other available methods for

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fairly and efficiently adjudicating the controversy.”

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

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demanding,” than that of Rule 23(a).

20

N. Am., LLC, 617 F.3d 1168, 1172 (9th Cir. 2010) (quoting Amchem,

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521 U.S. at 623-24).

22
23

i.

Leyva, 716 F.3d at 512.

Fed. R.

The test of Rule 23(b)(3) is “far more
Wolin v. Jaguar Land Rover

Predominance

“The predominance analysis under Rule 23(b)(3) focuses

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on ‘the relationship between the common and individual issues’ in

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the case and ‘tests whether proposed classes are sufficiently

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cohesive to warrant adjudication by representation.’”

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F.3d at 545 (quoting Hanlon, 150 F.3d at 1022).

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plaintiff is not required to prove that the predominating
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Wang, 737

However,

1

question will be answered in his favor at the class certification

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stage.

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468 (2013).

Amgen Inc. v. Conn. Ret. Plans & Tr. Funds, 568 U.S. 455,

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For the reasons set forth above, plaintiff’s individual

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claims and the class members’ claims rely upon common question of

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law and fact.

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personal attendants and covered under the same overtime policy.

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(Hollis Decl., Ex. 5.)

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uniting plaintiff’s individual claims and the class claims.

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For example, all class members were classified as

This policy serves as the common fact
(See

generally FAC.)

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Common questions of law include, inter alia, whether

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class members are entitled to overtime pay for hours worked after

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the ninth hour of work under California’s Domestic Worker Bill of

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Rights; whether defendant’s common written overtime policy

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results in liability for overtime hours worked after the ninth

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hour of work; and whether class members are entitled to

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reimbursement of their cell phone expenses for their use of their

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cell phone for work related purposes.

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129-132.)

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facts and potential legal remedies” that can properly be resolved

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in a single adjudication.

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Accordingly, the court finds common questions of law and fact

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predominate over questions affecting only individual class

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members.

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26

(Hollis Decl. ¶¶ 18-23;

The class claim thus demonstrates a “common nucleus of

ii.

See Hanlon, 150 F.3d at 1022.

Superiority

Rule 23(b)(3) sets forth four non-exhaustive factors

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that courts should consider when examining whether “a class

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action is superior to other available methods for fairly and
13

1

efficiently adjudicating the controversy.”

Fed. R. Civ. P.

2

23(b)(3).

3

individually controlling the prosecution or defense of separate

4

actions; (B) the extent and nature of any litigation concerning

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the controversy already begun by or against class members; (C)

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the desirability or undesirability of concentrating the

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litigation of the claims in the particular forum; and (D) the

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likely difficulties in managing a class action.”

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(C) and (D) are inapplicable because the parties settled this

They are: “(A) the class members’ interests in

Id.

Factors

10

action before class certification.

11

1:14-cv-00742 WBS BAM, 2019 WL 1130469, at *6 (E.D. Cal. Mar. 12,

12

2019) (citation omitted).

13

primarily on facts (A) and (B).

14

See Syed v. M-I LLC, No.

Therefore, the court will focus

Rule 23(b)(3) is concerned with the “vindication of the

15

rights of groups of people who individually would be without

16

effective strength to bring their opponents into court at all.”

17

Amchem, 521 U.S. at 617.

18

is relatively modest, the class members’ interests generally

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favors certification.

20

F.3d 1180, 1190 (9th Cir. 2001).

21

if all of the 375 estimated class members participate in the

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class action, the average recovery per class member will be

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approximately $328.06.

24

of recovery would likely discourage putative class members from

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pursuing direct individual lawsuits on their own.

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this factor favors certification.

27
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When class members’ individual recovery

Zinser v. Accufix Res. Inst., Inc., 253
Here, the parties estimate that

(Hollis Decl. ¶ 80.)

The modest amount

Accordingly,

Factor (B), concerning the “extent and nature of the
litigation,” is “intended to serve the purpose of assuring
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1

judicial economy and reducing the possibility of multiple

2

lawsuits.”

3

Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and

4

Procedure § 1780 at 568-70 (2d ed. 1986)).

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counsel is not aware of any other related litigation (Hollis

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Decl. ¶ 6), nor do defendants assert any concerns about related

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litigation.

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Accordingly, it appears a class action is the superior means to

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resolve the common questions of law and fact that predominate

10

Zinser, 253 F.3d at 1191 (quoting 7A Charles Alan

Here, plaintiff’s

This factor, too, favors certification.

here.

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3.

Rule 23(c)(2) Notice Requirements

12

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

15

members who can be identified through reasonable effort.”

16

R. Civ. P. 23(c)(2)(B).

17

notice provided must be “reasonably certain to inform the absent

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members of the plaintiff class.”

19

1454 (9th Cir. 1994) (citation omitted).

20

Fed.

Actual notice is not required, but the

Silber v. Mabon, 18 F.3d 1449,

The parties have jointly selected ILYM Group, to serve

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as the Settlement Administrator.

22

The defendants will provide the ILYM Group with the information

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necessary to contact members of the class within 10 business days

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of the order granting preliminary approval.

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class members will be notified of the suit by first class mail

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within fourteen business days following the receipt of the class

27

information.

28

including the contentions and denials of the parties, the

(Id. ¶ 4.4.)

(Settlement Agreement ¶ 1.37.)

(Id. ¶ 4.1.)

All

The notice summarizes the lawsuit,

15

1

proceedings to date, and the terms and conditions of the

2

settlement.

3

inform class members of where and how to get additional

4

information, and it will inform them of their right to object to

5

the adequacy of the class representatives and settlement.

6

(Settlement Agreement ¶ 4.6, Hollis Decl., Ex. 2.)

7

it will notify class members of the procedure to request

8

exclusion from the class and how to opt in to the FLSA action.

9

(Settlement Agreement ¶¶ 4.7-4.9; Hollis Decl., Ex. 2.)

(Id. ¶¶ 4.4-4.6; Hollis Decl., Ex. 2.)

It will

Additionally,

ILYM

10

Group will update the parties’ counsel with weekly reports

11

reflecting the attempts to contact the class members, the number

12

of requests for exclusion, and the number of objections to the

13

class submitted, if any.

14

(Settlement Agreement ¶ 4.13.)

The system set forth in the Settlement Agreement is

15

reasonably calculated to provide notice to class members and

16

inform class members of their options under the agreement.

17

Accordingly, the manner of notice and the content of notice is

18

sufficient to satisfy Rule 23(c)(2)(B).

19

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

20

satisfactory if it ‘generally describes the terms of the

21

settlement in sufficient detail to alert those with adverse

22

viewpoints to investigate and to come forward and be heard.’”).

23
24
25

B.

See Churchill Vill., LLC

Rule 23(e): Fairness, Adequacy, and Reasonableness of
Proposed Settlement
Because the proposed class preliminarily satisfies the

26

requirements of Rule 23, the court must consider whether the

27

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

28

reasonable.

See Fed. R. Civ. P. 23(e)(2).
16

To determine the

1

fairness, adequacy, and reasonableness of the agreement, the

2

court must consider “a number of factors,” including:

3

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.

4
5
6
7
8
9

Hanlon, 150 F.3d at 1026.

Many of these factors cannot be

10

considered until the final fairness hearing; accordingly, the

11

court’s review will be confined to resolving any “‘glaring

12

deficiencies’ in the settlement agreement.”

13

1130469, at *7 (citations omitted).

Syed, 2019 WL

14

1.

15

Counsel for both sides appear to have diligently

Negotiation of the Settlement Agreement

16

pursued settlement after thoughtfully considering the strength of

17

their arguments and potential defenses.

(Memo. Supp. Prelim.

18

Approval at 15; Hollis Decl. ¶¶ 33-34.)

Parties employed David

19

L. Perrault, a mediator well-versed in wage and hour class action

20

matters, to aid in the settlement negotiations.

21

31.)

22

parties’ joint agreement that the settlement reached was the

23

product of arms-length bargaining, (Settlement Agreement at V),

24

the court does not question that the proposed settlement is in

25

the best interest of the class.

26

966 F. Supp. 2d 939, 942 (N. D. Cal. 2013) (holding that a

27

settlement reached after informed negotiations “is entitled to a

(Hollis Decl. ¶

Given the plaintiff’s sophisticated representation and the

See Fraley v. Facebook, Inc.,

28
17

1

degree of deference as the private consensual decision of the

2

parties” (citing Hanlon, 150 F.3d at 1027)).

3

2.

Amount Recovered and Distribution

4

In determining whether a settlement agreement is

5

substantively fair to class members, the court must balance the

6

value of expected recovery against the value of the settlement

7

offer.

8

1078, 1080 (N.D. Cal. 2007).

9

recovery per class member will be approximately $328.06.

See In re Tableware Antitrust Litig., 484 F. Supp. 2d
The parties estimate the average
(Hollis

10

Decl. ¶ 80.)

While modest, “[t]he value of recovery is

11

especially significant in light of the ‘significant amount of

12

uncertainty’ class members would face if the case were litigated

13

to trial.”

14

Murillo v. Pac. Gas & Elec. Co., 266 F.R.D. 468, 480 (E.D. Cal.

15

2010)).

16

and maintains plaintiff’s damages estimates were inflated.

17

(Hollis Decl. ¶¶ 54-57.)

18

absent a settlement, InAlliance would likely go bankrupt

19

defending individual actions because they are a non-for-profit

20

organization.

21

settlement amount represents “more than the defendants feel those

22

individuals are entitled to” and will potentially be “less than

23

what some class members feel they deserve,” the settlement offers

24

class members the prospect of some recovery, instead of none at

25

all.

26

615, 628 (9th Cir. 1982).

27

the defendant’s potential exposure, the court finds that the

28

substance of the settlement is fair to class members and thereby

See Ontiveros, 2014 WL 3057506, at *14 (quoting

Defendant denies any liability for the claims alleged

However, both parties recognize that,

(Memo. Supp. Prelim. Approval at 16.)

While the

See Officers for Justice v. Civil Serv. Comm’n, 688 F.2d
In light of the claims at issue and

18

1

“falls within the range of possible approval.”

2

See Tableware,

484 F. Supp. 2d at 1079.

3

3.

Attorney’s Fees & Costs

4

“Under the ‘common fund’ doctrine, ‘a litigant or a

5

lawyer who recovers a common fund for the benefit of persons

6

other than himself or his client is entitled to a reasonable

7

attorney’s fee from the fund as a whole.’”

8

969 (quoting Boeing Co. v. Van Gemert, 444 U.S. 472, 478 (1980)).

9

If a negotiated class action settlement includes an award of

Staton, 327 F.3d at

10

attorney’s fees, then the court “ha[s] an independent obligation

11

to ensure that the award, like the settlement itself, is

12

reasonable, even if the parties have already agreed to an

13

amount.”

14

935, 941 (9th Cir. 2011).

In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d

15

The Ninth Circuit has recognized two different methods

16

for calculating reasonable attorney’s fees in common fund cases:

17

the lodestar method or the percentage-of-recovery method.

18

941-42.

19

hours the prevailing party expended on the litigation by a

20

reasonable hourly rate.

21

method, courts typically delineate 25 percent of the total

22

settlement as the fee.

23

courts may adjust this figure if the record reflects “special

24

circumstances justifying a departure.”

25

942.

26

for the benefit of the entire class, courts have discretion to

27

use either method.

28

Corp., 618 F.3d 988, 992 (9th Cir. 2010)).

Id. at

In the lodestar method, courts multiply the number of

Id.

Under the percentage-of-recovery

Hanlon, 150 F.3d at 1029.

However,

Bluetooth, 654 F.3d at

Where, as here, the settlement has produced a common fund

Id. at 942 (citing In re Mercury Interactive

19

1

Class counsel requests $75,000 in attorney’s fees,

2

which constitutes 33.33 percent of the total settlement.

3

(Settlement Agreement ¶ 2.6.1.)

4

percentage awards as high as 33.3 [percent], awards of that size

5

are typically disfavored unless they are corroborated by the

6

lodestar or reflect exceptional circumstances.”

7

WL 3057506, at *15 (collecting cases).

8

their request by comparing it to their lodestar, which by their

9

calculations exceeds $175,000.

“While some courts have approved

Ontiveros, 2014

Class counsel justifies

(Hollis Decl. ¶ 114.)

After

10

discussing the calculated fee with counsel at the preliminary

11

approval hearing and considering the additional time counsel will

12

have to spend on this matter to finalize the settlement, the

13

court is satisfied that the requested fee is reasonable.

14

IT IS THEREFORE ORDERED that plaintiff’s motion for

15

preliminary certification of a conditional settlement class and

16

preliminary approval of the class action settlement (Docket No.

17

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

18
19

IT IS FURTHER ORDERED THAT:
(1) the following class be provisionally certified for the

20

purpose of settlement: all current or former employees of

21

InAlliance who worked in the State of California in the position

22

of Independent Living Facilitator (“ILF”) at any time from

23

February 22, 2014 through January 15, 2020.

24

the proposed settlement is not consummated for any reason, the

25

conditional certification shall be of no further force or effect

26

and shall be vacated without further action or order of this

27

court;

28

In the event that

(2) the proposed settlement is preliminarily approved as
20

1

fair, just, reasonable, and adequate to the members of the

2

settlement class, subject to further consideration at the final

3

fairness hearing after distribution of notice to members of the

4

settlement class;

5
6

(3) for purposes of carrying out the terms of the settlement
only:

7

(a) Joseph Osegueda is appointed as the representative

8

of the settlement class and is provisionally found to be an

9

adequate representative within the meaning of Federal Rule of

10

Civil Procedure 23;

11

(b) the law firm of GrahamHollis APC is provisionally

12

found to be a fair and adequate representative of the settlement

13

class and is appointed as class counsel for the purposes of

14

representing the settlement class conditionally certified in this

15

Order;

16

(4) ILYM Group is appointed as the settlement administrator;

17

(5) the form and content of the proposed Notice of Class

18

Action Settlement (Hollis Decl., Ex 2) is approved, except to the

19

extent that it must be updated to reflect dates and deadlines

20

specified in this order;

21

(6) no later than ten (10) days from the date this order is

22

signed, defendant’s counsel shall provide the names and contact

23

information of all settlement class members to ILYM Group;

24

(7) no later than fourteen (14) days from the date defendant

25

submits the contact information to ILYM Group, ILYM shall mail a

26

Notice of Class Action Settlement to all members of the

27

settlement class;

28

(8) no later than sixty (60) days from the date this order
21

1

is signed, any member of the settlement class who intends to

2

object to, comment upon, or opt out of the settlement shall mail

3

written notice of that intent to ILYM Group pursuant to the

4

instructions in the Notice of Class Action Settlement;

5

(9) a final fairness hearing shall be held before this court

6

on Monday, May 18, 2020, at 1:30 p.m. in Courtroom 5 to determine

7

whether the proposed settlement is fair, reasonable, and adequate

8

and should be approved by this court; to determine whether the

9

settlement class’s claims should be dismissed with prejudice and

10

judgment entered upon final approval of the settlement; to

11

determine whether final class certification is appropriate; and

12

to consider class counsel’s applications for attorney’s fees,

13

costs, and an incentive award to plaintiff.

14

continue the final fairness hearing without further notice to the

15

members of the class;

16

The court may

(10) no later than twenty-eight (28) days before the final

17

fairness hearing, class counsel shall file with this court a

18

petition for an award of attorney’s fees and costs.

19

objections or responses to the petition shall be filed no later

20

than fourteen (14) days before the final fairness hearing.

21

counsel may file a reply to any objections no later than seven

22

(7) days before the final fairness hearing;

23

Any

Class

(11) no later than twenty-eight (28) days before the final

24

fairness hearing, class counsel shall file and serve upon the

25

court and defendant’s counsel all papers in support of the

26

settlement, the incentive award for the class representative, and

27

any award for attorney’s fees and costs;

28

(12) no later than twenty-eight (28) days before the final
22

1

fairness hearing, ILYM Group shall prepare, and class counsel

2

shall file and serve upon the court and defendants’ counsel, a

3

declaration setting forth the services rendered, proof of

4

mailing, a list of all class members who have opted out of the

5

settlement, a list of all class members who have commented upon

6

or objected to the settlement;

7

(13) any person who has standing to object to the terms of

8

the proposed settlement may appear at the final fairness hearing

9

in person or by counsel and be heard to the extent allowed by the

10

court in support of, or in opposition to, (a) the fairness,

11

reasonableness, and adequacy of the proposed settlement, (b) the

12

requested award of attorney’s fees, reimbursement of costs, and

13

incentive award to the class representative, and/or (c) the

14

propriety of class certification.

15

the final fairness hearing, a person must, no later than ninety

16

(90) days from the date this order is signed, (a) serve by hand

17

or through the mails written notice of his or her intention to

18

appear, stating the name and case number of this action and each

19

objection and the basis therefore, together with copies of any

20

papers and briefs, upon class counsel and counsel for defendants,

21

and (b) file said appearance, objections, papers, and briefs with

22

the court, together with proof of service of all such documents

23

upon counsel for the parties.

To be heard in opposition at

24

Responses to any such objections shall be served by hand or

25

through the mails on the objectors, or on the objector’s counsel

26

if there is any, and filed with the court no later than fourteen

27

(14) calendar days before the final fairness hearing. Objectors

28

may file optional replies no later than seven (7) calendar days
23

1

before the final fairness hearing in the same manner described

2

above.

3

objection in the manner provided herein shall be deemed to have

4

waived such objection and shall forever be foreclosed from

5

objecting to the fairness or adequacy of the proposed settlement,

6

the judgment entered, and the award of attorneys’ fees, costs,

7

and an incentive award to the class representative unless

8

otherwise ordered by the court;

9

Any settlement class member who does not make his or her

(14) pending final determination of whether the settlement

10

should be ultimately approved, the court preliminarily enjoins

11

all class members (unless and until the class member has

12

submitted a timely and valid request for exclusion) from filing

13

or prosecuting any claims, suits, or administrative proceedings

14

regarding claims to be released by the settlement.

15

Dated:

January 15, 2020

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