Alexander et al v. FedEx Ground Package System, Inc. et al
Filing
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ORDER re Supplemental Briefing re 119 Plaintiffs' Motion for Preliminary Approval. The joint supplemental brief, including any or all supporting evidence, shall be filed within one week of the date of this order. Signed by Judge Edward M. Chen on 7/10/2015. (emclc2, COURT STAFF) (Filed on 7/10/2015)
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UNITED STATES DISTRICT COURT
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NORTHERN DISTRICT OF CALIFORNIA
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DEAN ALEXANDER, et al.,
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Plaintiffs,
For the Northern District of California
United States District Court
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No. C-05-0038 EMC
v.
FEDEX GROUND PACKAGE SYSTEM,
INC.,
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ORDER RE SUPPLEMENTAL
BRIEFING RE PLAINTIFFS’ MOTION
FOR PRELIMINARY APPROVAL
(Docket No. 119)
Defendant.
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___________________________________/
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The Court has conducted an initial review of Plaintiffs’ motion for preliminary approval.
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Having considered the papers, the Court hereby orders that the parties file a joint supplemental brief
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to address the issues identified below. The supplemental brief, including any or all supporting
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evidence, shall be filed within one week of the date of this order.
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1.
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Class Definition
Under the settlement agreement, there is a settlement class and a settlement subclass (for the
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overtime claim specifically). The class and subclass are defined similarly. The class is defined as
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follows:
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All persons who: 1) entered into an [sic] FedEx Ground or FedEx
Home Delivery Form Operating Agreement (now known as OP-149
and Form OP-149-RES); 2) drove a vehicle on a full-time basis
(meaning exclusive of time off for commonly excused employment
absences) from November 17, 2000 through October 15, 2007 to
provide package pick-up and delivery services pursuant to the
Operating Agreement; and 3) were dispatched out of a terminal in the
state of California.
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Sett. Agreement ¶ I.B. “Persons” include both individuals and business entities. See Sett.
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Agreement ¶ I.B. Moreover, “persons” include “business entities (of whatever type) which entered
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into, or assumed an assignment of, an FXG Operating Agreement on or after October 15, 2007
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where the authorized officer or owner of the business entity was a Class Member.” Sett. Agreement
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¶ I.B.
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The class definition under the settlement agreement appears to be somewhat different from
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the class that was certified by the Indiana district judge. In particular, the class certified by the
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Indiana district judge uses the time frame “since November 17, 2000 [or 2001]” while the class
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definition under the settlement agreement uses the time frame “from November 17, 2000 through
October 15, 2007.” The parties shall address this difference.
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For the Northern District of California
United States District Court
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The parties shall also explain the provision in the settlement agreement that “persons” in the
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class include “business entities (of whatever type) which entered into, or assumed an assignment of,
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an FXG Operating Agreement on or after October 15, 2007 where the authorized officer or owner of
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the business entity was a Class Member.” Sett. Agreement ¶ I.B (emphasis added).
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Finally, the parties shall explain why the class notices seem to define the class differently
from the above. For example, the settlement notice provides as follows:
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You received this notice because [FXG’s] records show that (1) you
signed FedEx Ground Pickup and Delivery Contractor Operating
Agreement to provide service in California sometime during the
period between November 17, 2000 and October 15, 2007 and that
you may have personally worked as a full-time driver under that
contract between November 17, 2000 and the present . . . .
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Ross Decl., Ex. D (Settlement Notice, Question 1).
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2.
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Class Period
The settlement agreement class definition suggests a class period between November 17,
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2000, and October 15, 2007. But in their motion, Plaintiffs state that the class period is from
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November 17, 2000, through the date of the preliminary approval. See Mot. at 1 n.1. Even if the
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class period were the latter, and not the former, FXG appears to have provided information for the
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period November 17, 2000, through April 15, 2015, only. See, e.g., Mot. at 14; Ross Decl., Ex. C
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(claimant identification form). The parties shall clarify the class period, including how the class
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period works in conjunction with the class definition.
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3.
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Maximum Value of Case
As Plaintiffs note in their motion, “[i]n deciding whether the proposed settlement is adequate
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and falls within the range of possible approval, ‘courts primarily consider plaintiffs’ expected
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recovery balanced against the value of the settlement offer,’ taking into account the risks of
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continuing litigation.” Mot. at 8 (quoting In re Tableware Antitrust Litig., 484 F. Supp. 2d 10778,
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1080 (N.D. Cal. 2007) (Walker, J.)). However, based on Plaintiffs’ motion, it is not clear what the
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maximum value of their case is, or what they anticipate it would be, if they were to prevail at trial.
Plaintiffs shall identify what the maximum value of their case is, and how they reached that
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For the Northern District of California
United States District Court
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calculation (e.g., per claim).
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4.
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Allocation of Settlement Fund
Based on Plaintiffs’ motion, it appears that the following amounts will not be distributed to
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the class:
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Agreement ¶ VII.A;
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Attorney’s fees and costs, capped at 25% of the $227 million settlement1, see Sett.
Settlement administration fees, which appear to be approximately $30,000, see Ross Decl.,
Ex. H (settlement administration estimate);
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Incentive awards totaling $170,000 (i.e., $10,000 for each of the seventeen named Plaintiffs),
see Sett. Agreement ¶ VII.B;
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PAGA penalties to the state of California, totaling $1.2 million, see Sett. Agreement ¶ III.A;
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Settlement of the named Plaintiffs’ individual claims, for a total of $1 million. See Mot. at 1
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n.1; and
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A “reserve fund” of $2 million. See Mot. at 2.
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Although FXG will actually be paying out a total of $228 million, the Court understands
that Plaintiffs will ask for fees and costs based on $227 million only because the remaining $1
million is being allocated to settlement of the named Plaintiffs’ individual claims.
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For the remaining $166.6 million to be distributed to the class, it appears that $16 million has
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been set aside for the overtime subclass. See Ross Decl. ¶ 18; see also Sett. Agreement ¶ III.A.
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Any of the $166.6 million that is not ultimately claimed by the class will go to a cy pres beneficiary.
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See Sett. Agreement ¶ III.D.
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If any of the above is incorrect, the parties shall address that in supplemental briefing.
Assuming the above, the Court has the following questions/comments about the above allocation.
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a.
Incentive awards. Plaintiffs state that they will provide supporting declarations for
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the incentive awards at the time of final approval. See Mot. at 17. But for the Court to do a fair
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evaluation of the proposed settlement, that information must be provided now.
b.
Individual claims of the named Plaintiffs. Plaintiffs have not explained why $1
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For the Northern District of California
United States District Court
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million has been set aside for the benefit of the named Plaintiffs, beyond the incentive awards.
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Plaintiffs shall address what claims the named Plaintiffs have beyond those at issue in this litigation
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and the value of those claims. This can best be addressed in the supporting declarations that the
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Court is requiring for the incentive awards.
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c.
and whether that fund will eventually be distributed to the class.
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Reserve fund. Plaintiffs shall explain what the reserve fund is, the rationale for it,
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Overtime subclass. Plaintiffs shall explain how they determined that $16 million
should be set aside for the overtime subclass.
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e.
Cy pres beneficiary. The parties shall identify who the cy pres beneficiary is and
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how the beneficiary is related to the subject matter of the lawsuit and the class members, including
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their location. See, e.g., Dennis v. Kellogg Co., 697 F.3d 858 (9th Cir. 2012); Nachsin v. AOL, LLC,
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663 F.3d 1064 (9th Cir. 2011).
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5.
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Release Language
The settlement agreement defines “Released Claims” as all claims:
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(i)
that are owned by Plaintiffs or the class members; and
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(ii)
that “arise under any statutory or common law claims which was asserted, or could be
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asserted in Plaintiffs’ operative complaint or are related to, or arise from, the employment
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classification of the Class or Subclass including but not limited to claims under[, e.g., various
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California statutes]”; and
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(iii)
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that “pertain to any time period prior to the entry of the Preliminary Approval Order by the
Court.”
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Sett. Agreement ¶ I.R. The Court has concerns over the language used in (ii) above, in particular the
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phrase that precedes the word “or.” That language could be interpreted quite broadly. The parties
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shall address whether they can agree on different language for the release so that it will not be
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misconstrued.
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6.
Claim Form
The claim form, see Ross Decl., Ex. C (claim form), contains a sworn certification to be
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For the Northern District of California
United States District Court
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signed by a claimant. The certification refers to the November 17, 2000-October 15, 2007 time
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period but does not reflect that the class definition can apparently go beyond October 15, 2007.
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7.
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Settlement Notice
a.
Page 1. The first bolded paragraph refers to the November 17, 2000-October 15,
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2007 time period but does not reflect that the class definition can apparently go beyond October 15,
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2007.
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b.
Page 1. The parties shall include as part of the first bolded paragraph a statement that
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the average estimated payment for an individual class member falls within the range of $65,000 to
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$85,000. See Ross Decl. ¶ 16.
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c.
she must still submit a claim in order to protect the right to payment.
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Page 1. The chart shall clarify that, where a class member decides to object, he or
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Page 1. The chart is confusing by having the option “GO TO A HEARING” separate
from the “OBJECT” option.
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e.
Page 5. In Question 13, there shall be a reminder that, if a class member decides to
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object, he or she must still submit a claim in order to protect the right to payment.
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///
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///
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///
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Supplemental Class and Settlement Notice
The comments in Paragraph 7, above, are equally applicable here.
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IT IS SO ORDERED.
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Dated: July 10, 2015
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_________________________
EDWARD M. CHEN
United States District Judge
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For the Northern District of California
United States District Court
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