Woods et al v. Vector Marketing Corporation

Filing 260

ORDER Re Supplemental Briefing on 255 Plaintiffs' Motion for Preliminary Approval. Signed by Judge Edward M. Chen on 5/9/2016. (emcsec, COURT STAFF) (Filed on 5/9/2016)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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WILLIAM WOODS, et al.,
Plaintiffs,

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VECTOR MARKETING CORPORATION,

Docket No. 255

Defendant.

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For the Northern District of California

United States District Court

ORDER RE SUPPLEMENTAL
BRIEFING ON PLAINTIFFS’ MOTION
FOR PRELIMINARY APPROVAL

v.

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Case No. 14-cv-00264-EMC

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The Court has reviewed Plaintiffs‟ motion for preliminary approval, and hereby orders the

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parties to provide a joint supplemental brief regarding the following issues. The supplemental

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briefing shall be filed no later than May 20, 2016.
Attorney‟s Fees

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1.

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Plaintiffs‟ counsel intends to seek an award of one-third (33⅓%) of the Gross Settlement

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Fund ($2,247,750.00) as the Fee Award, plus reimbursement of reasonable and actual expenses,

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not to exceed $181,000, as the Expense Award. See Docket No. 255-1 (Humphrey Dec.) at ¶

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14.E. Plaintiffs should provide specific, non-conclusory information as to why a departure from

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the 25% benchmark is appropriate (e.g., how the issues in this case were particularly difficult,

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complex, or novel, particularly given Harris v. Vector Marketing Corp.). See, e.g., Vizcaino v.

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Microsoft Corp., 290 F.3d 1043, 1047-48 (9th Cir. 2012).

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Further, to assess the fee request, even for purposes of preliminary approval only, the

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Court is in need of information as to the lodestar claimed -- i.e., the number of hours incurred in

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the case and the hourly rates claimed. Plaintiffs‟ attorneys shall file with this Court, ex parte and

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under seal, one (1) declaration that states the total number of hours worked on this litigation, and

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which breaks the number of hours down by task (e.g., “Initial Case Investigation,” “Settlement

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Negotiations and Mediation,” etc.). Counsel shall attach their actual time records to the

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declaration. The declaration and associated records shall be filed with the Court no later than May

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20, 2016. The parties should also ensure that the fee motion is filed and available on the Class

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Administrator‟s website at least twenty-one (21) days before objections to the proposed settlement

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are due.

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2.

Released Claims

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The parties should clarify whether individuals who are members of the state law classes,

Tijero v. Aaron Bros., Inc., No. C 10-01089 SBA, 2013 WL 60464, at *8 (N.D. Cal. Jan. 2, 2013)

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(“it is contrary to § 216(b) to bind class members to a release of FLSA claims where, as here, the

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members have not affirmatively elected to participate in the lawsuit by filing a written consent

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For the Northern District of California

but not the FLSA collective action, are bound by the Settlement‟s release of FLSA claims. See

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United States District Court

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form”); La Parne v. Monex Deposit Co., No. SACV 08-0302 DOC (MLGx), 2010 WL 4916606,

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at *3 (C.D. Cal. Nov. 29, 2010) (agreeing with the courts which “have determined that it would be

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contrary to the [FLSA] to bind class members who do not affirmatively elect, through opt-in

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procedures, to participate in the FLSA suit,” and that “[t]herefore, only class members who

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affirmatively „opt-in‟ to the Settlement should be bound by the Settlement‟s release of FLSA

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liability”); Kakani v. Oracle Corp., No. C 06-06493 WHA, 2007 WL 1793774, at *7 (N.D. Cal.

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June 19, 2007) (finding that “[t]he settlement agreement would violate the [FLSA] because it “is

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unconscionable to try to take away the FLSA rights of all workers, whether or not they choose to

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join in affirmatively”).

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The parties should discuss what effect the settlement will have on an individual‟s ability to

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bring a representative action under California‟s Private Attorney General Act (PAGA), Cal. Lab.

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Code § 2698 et seq., which is a claim that is on behalf of the state rather than the individual.

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3.

Maximum Value of Case

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Plaintiffs emphasize in their motion that the settlement value is a significant amount when

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compared to the potential recovery of the case. However, Plaintiffs provide only an estimate of

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the minimum wage claim. The parties must provide an estimated value of claims other than the

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minimum wage claim, i.e., PAGA penalties, and failure to pay wages upon termination for the
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New York Subclass.

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4.

Reversionary

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The Settlement Agreement provides that all checks tendered to participating class members

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will remain valid for 180 days, after which it is automatically canceled if not cashed by the class

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member. The class member‟s claim to any settlement award is then deemed “null and void,”

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although the class member is still bound by the settlement. The parties should provide an estimate

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of what proportion of settlement checks they expect will be uncashed, and will therefore revert

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back to Defendants. The parties should also explain whether following the 180-day period,

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additional follow-up by the Settlement Administrator and further time to negotiate the check may

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be warranted rather than automatically voiding a class member‟s claim.
5.

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For the Northern District of California

United States District Court

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If the parties have any responses to objections from class members, the parties should file

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Responses to Objections from Class Members

their responses fourteen (14) days before the final approval hearing.

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6.

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The parties should address when CAFA notice was given. See 28 U.S.C. § 1715(b).

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7.

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CAFA Notice

Class Notice (Exhibit A of Settlement Agreement)
a.

Terms of the Settlement

On the first page of the notice, there should be a short statement regarding the expected
average recovery per class member. It must be bolded.
b.

Class Definitions (Pages 2-3)

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The California State Law Class excludes individuals who “(c) signed Defendant‟s Sales

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Representative Agreement containing the arbitration and class action waiver which the Court in

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this Case ruled was enforceable, in its Order filed in the Action on August 29, 2014 (the

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„Arbitration Agreement‟)”. Docket No. 255-4 (Class Notice) at 2. This should be corrected to

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August 28, 2014, the date of the Court‟s order granting Vector‟s motion to compel arbitration. See

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Docket No. 54.

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c.

What is This Settlement About (Page 4)

The parties must remove the sentence in that states, “Therefore, Plaintiffs‟ Counsel
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believes that the Settlement is fair, reasonable and adequate for the Class Members.”
d.

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Opt-Out (Page 5)

In order for a class member to opt-out from the Settlement, they are required to submit a

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written, signed Request for Exclusion that contains the name of the Action, identifying

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information, the words “Request for Exclusion” at the top of the document, and the following

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statement:

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“I wish to be excluded from the Settlement of this case, William
Woods v. Vector Marketing Corp. (Case No. 14-CV-00264-EMC). I
understand that by requesting to be excluded from the Settlement, I
will receive no money from the Settlement and I may bring a
separate action. I understand that in any separate action, I may
receive nothing or less than I would have received if I had not asked
to be excluded from the Settlement. I understand that I should
consult with an attorney, at my own expense, regarding the
applicable statute of limitation.”

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For the Northern District of California

United States District Court

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Class Notice at 5. The parties should address why such a lengthy statement is required to exclude

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oneself from the action, and/or whether it would be more efficient to provide a pre-printed

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document with the above statement that class members could fill out, sign, and mail to the

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Settlement Administrator.
In addition, the Settlement Agreement provides that the Request for Exclusion must be

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personally signed by the Class Member, such that a Request for Exclusion cannot be submitted by

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an agent or attorney acting on behalf of the Class Member. Settlement Agreement at ¶ 4.3.2.

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However, the Notice does not state that the Request for Exclusion must be personally signed by

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the Class Member. See Class Notice at 5. The Class Notice must clearly state this requirement.

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e.

Contact Information for the Claims Administrator (Page 7)

The parties should provide additional contact information for the Claims Administrator,
e.g., a mailing address, an e-mail address, and a fax number.

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IT IS SO ORDERED.

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Dated: May 9, 2016
______________________________________
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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