Campanelli v. Image First Uniform Rental Service, Inc. et al

Filing 132

ORDER APPROVING SETTLEMENT AND DISMISSING ACTION by Judge Phyllis J. Hamilton. (pjhlc2S, COURT STAFF) (Filed on 4/30/2019)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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KYLE L. CAMPANELLI,

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Case No. 15-cv-04456-PJH

Plaintiff,

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v.

ORDER APPROVING SETTLEMENT
AND DISMISSING ACTION

IMAGE FIRST HEALTHCARE
LAUNDRY SPECIALISTS, INC., et al.,

Re: Dkt. No. 129

United States District Court
Northern District of California

Defendants.
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Before the court is the parties’ joint request for court approval of an individual

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settlement between plaintiff Kyle Campanelli and defendants ImageFirst Healthcare

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Laundry Specialist, Inc. and ImageFirst of California, LLC. Having read the papers filed

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by the parties and carefully considered their arguments and the relevant legal authority,

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and good cause appearing, the court hereby GRANTS the parties’ request, for the

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following reasons.

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ImageFIRST of California employed Campanelli as a delivery person from March

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2014 to March 2015. In general, Campanelli alleges that he worked over forty hours a

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week but was denied meal and rest periods and was never paid overtime compensation,

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in violation of the Fair Labor Standards Act (the “FLSA”) and the California Labor Code.

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Campanelli originally brought this action as a putative collective action under the

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FLSA and as a class action under Federal Rule of Civil Procedure 23. On December 21,

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2018, the court denied defendants’ motion to deny FLSA certification and granted their

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motion to deny Rule 23 class certification. Dkt. 123. From that point, therefore, this

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action has proceeded as only a putative collective action under the FLSA.

On April 5, 2019, the parties filed the now pending joint request for approval of

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settlement. Dkt. 129. Subsequently, in response to a court order, the parties filed

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additional support for that request. Dkt. 131.

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A.

The Fair Labor Standards Act
An employee's claims under the FLSA are nonwaivable and may not be settled

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without supervision of either the Secretary of Labor or a district court. Yue Zhou v.

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Wang's Restaurant, No. 05–cv–0279 PVT, 2007 WL 2298046, *1 (N.D. Cal. Aug. 8,

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2007) (citing Barrentine v. Ark.–Best Freight Sys., Inc., 450 U.S. 728, 740 (1981); Lynn's

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Food Stores, Inc. v. United States, 679 F.2d 1350, 1352–53 (11th. Cir. 1982)). “When
employees bring a private action for back wages under the FLSA, and present to the

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United States District Court
Northern District of California

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district court a proposed settlement, the district court may enter a stipulated judgment

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after scrutinizing the settlement for fairness.” Lynn’s Food Stores, 679 F.2d at 1353.

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Because “[t]he Ninth Circuit has not established the criteria that a district court must

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consider in determining whether an FLSA settlement warrants approval,” district courts in

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this Circuit widely follow the Eleventh Circuit’s Lynn’s Food Stores standard. Dunn v.

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Teachers Ins. & Annuity Ass’n of Am., 2016 WL 153266, at *3 (N.D. Cal. Jan. 13, 2016).

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Under Lynn’s Food Stores, a district court may approve an FLSA settlement only if it

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reflects “a fair and reasonable resolution of a bona fide dispute over FLSA provisions.”

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Otey v. CrowdFlower, Inc., 2015 WL 6091741, at *4 (N.D. Cal. Oct. 16, 2015) (quoting

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Lynn’s Food Stores, 679 F.2d at 1355).
After reviewing the settlement agreement, the factual representations made by the

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parties, the allegations in the complaint, and the legal issues presented by this case, the

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court finds that the settlement is fair and warrants approval under the standard articulated

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in Lynn’s Food Stores.

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B.

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Dismissal of Putative Collective Claims
Federal Rule of Civil Procedure 23(e) requires courts to approve the proposed

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voluntary dismissal of Rule 23 class claims. The Ninth Circuit has held that Rule 23(e)

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also applies to pre-certification classes. Diaz v. Tr. Territory of Pac. Islands, 876 F.2d
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1401, 1408 (9th Cir. 1989). Further, “[c]ourts generally apply the same [Rule 23(e)]

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standard to FLSA collective action settlements.” Kempen v. Matheson Tri-Gas, Inc.,

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2017 WL 475095, at *4 (N.D. Cal. Feb. 6, 2017); Gonzalez v. Fallanghina, LLC, No. 16-

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CV-01832-MEJ, 2017 WL 1374582, at *4 (N.D. Cal. Apr. 17, 2017) (collecting cases);

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Luo v. Zynga Inc., 2014 WL 457742, at *3-4 (N.D. Cal. Jan. 31, 2014). In Diaz, the Ninth

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Circuit enumerated three factors for courts to consider when determining whether

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dismissal of class claims will prejudice putative class members: “(1) class members'

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possible reliance on the filing of the action if they are likely to know of it either because of

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publicity or other circumstances, (2) lack of adequate time for class members to file other
actions, because of a rapidly approaching statute of limitations, (3) any settlement or

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United States District Court
Northern District of California

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concession of class interests made by the class representative or counsel in order to

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further their own interests.” Diaz, 876 F.2d at 1408; Luo, 2014 WL 457742, at *3-4

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(applying Diaz to dismissal of putative FLSA collective claims).

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After considering the Diaz factors and other possible sources of prejudice, the

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court finds that dismissal of this action will not prejudice the putative FLSA collective.
CONCLUSION

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In light of the foregoing, the court hereby ORDERS as follows:

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(1)

The parties’ settlement is APPROVED.

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(2)

The parties’ motion to seal the settlement amount is GRANTED.

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(3)

The action in its entirety is DISMISSED WITH PREJUDICE. That dismissal,

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however, is without prejudice to non-present putative FLSA collective action

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members.

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IT IS SO ORDERED.
Dated: April 30, 2019

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PHYLLIS J. HAMILTON
United States District Judge

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