Walsh v. Apple, Inc. et al
Filing
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MOTION for Settlement Preliminary Approval for Class Settlement filed by David Kalua, David Walsh. Motion Hearing set for 2/26/2010 09:00 AM in Courtroom 3, 5th Floor, San Jose. (Attachments: # 1 Memorandum of Points and Authorities in Support of Motion for Preliminary Approval, # 2 Declaration of Norman B. Blumenthal in support of Motion for Preliminary Approval, # 3 Certificate of Service, # 4 Proposed Order)(Blumenthal, Norman) (Filed on 1/21/2010)
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BLUMENTHAL, NORDREHAUG & BHOWMIK
Norman B. Blumenthal (State Bar #068687)
norm@bamlawlj.com
Kyle R. Nordrehaug (State Bar #205975)
kyle@bamlawlj.com
Aparajit Bhowmik (State Bar #248066)
aj@bamlawlj.com
2255 Calle Clara
La Jolla, CA 92037
Telephone: (858)551-1223
Facsimile: (858) 551-1232
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UNITED EMPLOYEES LAW GROUP
Walter Haines, Esq. (CSB #71075)
walter@whaines.com
65 Pine Ave, #312
Long Beach, CA 90802
Telephone: (562) 256-1047
Facsimile: (562) 256-1006
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Attorneys for Plaintiffs
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UNITED STATES DISTRICT COURT
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NORTHERN DISTRICT OF CALIFORNIA
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SAN JOSE DIVISION
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DAVID WALSH, an individual, DAVID
KALUA, an individual, on behalf of
themselves, and on behalf of all persons
similarly situated,
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Plaintiffs,
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APPLE, INC.,
MEMORANDUM OF POINTS AND
AUTHORITIES IN SUPPORT OF MOTION
FOR PRELIMINARY APPROVAL OF
CLASS SETTLEMENT
vs.
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CASE NO. 05:08-cv-04918 JF
(Class Action)
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Judge: Hon. Jeremy Fogel
Court: Dept. 3
Defendants.
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Hearing Date: February 26, 2010
Hearing Time: 9:00 a.m.
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Action Filed: August 4, 2008
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MEMORANDUM IN SUPPORT OF MOTION FOR PRELIMINARY APPROVAL OF CLASS SETTLEMENT
Case No.: 05:08-cv-04918 JF
TABLE OF CONTENTS
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I.
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
II.
DESCRIPTION OF THE PROPOSED SETTLEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
III.
NATURE OF THE CASE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
IV.
PLAN OF ALLOCATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
V.
THE SETTLEMENT MEETS ALL CRITERIA NECESSARY FOR PRELIMINARY
APPROVAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
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A.
The Role Of The Court In Preliminary Approval
Of A Class Action Settlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
B.
Factors To Be Considered In Granting Preliminarily Approval . . . . . . . . . . . . . . . 10
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1.
The Settlement Has No "Obvious Deficiencies" and Falls Within
the Range for Approval . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.
The Settlement Does Not Improperly Grant Preferential Treatment To Class
Representatives or Segments Of The Class . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.
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The Settlement is the Product of Serious, Informed and
Noncollusive Negotiations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.
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The Stage Of The Proceedings Are Sufficiently Advanced To Permit
Preliminary Approval Of The Settlement . . . . . . . . . . . . . . . . . . . . . . . . . . 16
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VI.
THE CLASS IS PROPERLY CERTIFIED FOR SETTLEMENT PURPOSES . . . . . . . . . 17
A.
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The Class Representatives Have Fairly and Adequately Protected
the Class Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
F.
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The Claims of the Plaintiffs Are Typical of the Class Claims . . . . . . . . . . . . . . . . . 20
E.
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Common Questions of Law Bind the Class . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
D.
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The Numerosity Requirement Is Satisfied . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
C.
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Rule 23 of the Federal Rules of Civil Procedure Governs . . . . . . . . . . . . . . . . . . . 18
B.
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The Additional Requirements of Rule 23(b)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
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VII.
THE PROPOSED METHOD OF CLASS NOTICE IS APPROPRIATE . . . . . . . . . . . . . . 23
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VIII.
CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
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MEMORANDUM IN SUPPORT OF MOTION FOR PRELIMINARY APPROVAL OF CLASS SETTLEMENT
Case No.: 05:08-cv-04918 JF
TABLE OF AUTHORITIES
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Cases:
Ansari v. New York Univ.,
179 F.R.D. 112 (S.D.N.Y. 1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Armstrong v. Board of School Directors,
616 F.2d 305 (7th Cir. 1980) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Bagwell v. Florida Broadband,
2005 WL 1962562 (S.D. Fla. 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Buchholtz v. Swift & Co.,
62 F.R.D. 581 (D.Minn. 1973) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Consolidated Rail Corp. v. Town of Hyde Park,
47 F.3d 473 (2d Cir. 1995) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Detroit v. Grinnell Corp.,
495 F.2d 448 (2d Cir. 1974) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Donaldson v. Pillsbury Co.,
554 F.2d 825 (8th Cir. 1977) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Dunbar v. Albertson's, Inc.,
141 Cal. App. 4th 1422 (2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
EEOC v. Kovacevich “5” Farms,
2007 U.S. Dist. LEXIS 32330 (E.D.Cal. April 18, 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Fisher Bros. v. Cambridge-Lee Indus., Inc.,
630 F. Supp. 482 (E.D. Pa. 1985) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Gautreaux v. Pierce,
690 F.2d 616 (7th Cir. 1982) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Glass v. UBS Fin. Servs.,
2007 U.S. Dist. LEXIS 8476 (N.D. Cal. January 27, 2007) . . . . . . . . . . . . . . . . . . . . . 12-17
Hanlon v. Chrysler Co.,
150 F.3d 1011 (9th Cir. 1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13, 20
Heffelfinger v. Elec. Data Sys. Corp.,
2008 U.S. Dist. LEXIS 46461 (C.D. Cal. June 6, 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Hickman v. United States,
10 Cl. Ct. 550 (1986) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
In re General Motors Corp. Pick-Up Truck Fuel Tank Prods. Liab. Litig.,
55 F.3d 768 (3d Cir. 1995) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
In re Jiffy Lube Sec. Litig.,
927 F.2d 155 (4th Cir. 1991) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
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MEMORANDUM IN SUPPORT OF MOTION FOR PRELIMINARY APPROVAL OF CLASS SETTLEMENT
Case No.: 05:08-cv-04918 JF
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In re Wash. Public Power Supply System Sec. Litig.,
720 F. Supp. 1379 (D. Ariz. 1989) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
In re Wirebound Boxes Antitrust Lit.,
128 F.R.D. 268 (D. Minn. 1989) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
In re Workman’s Comp.,
130 F.R.D. 99 (1990) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Jenkins v. Raymark Ind., Inc.,
782 F.2d 468 (5th Cir. 1986) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Jenson v. Continental Fin. Corp.,
404 F. Supp. 806 (D. Minn. 1975) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Jordan v. County of Los Angeles,
669 F.2d 1311 (9th Cir. 1982) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Kirkorian v. Borelli,
695 F. Supp. 446 (N.D. Cal. 1988) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Koppinger v. American Interiors, Inc.,
295 F. Supp. 2d 797 (N.D. Ohio 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Krzesniak v. Cendant Corp.,
2007 U.S. Dist. LEXIS 47518 (N.D. Cal. June 20, 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Lockwood Motors, Inc. v. General Motors Corp.,
162 F.R.D. 569 (D. Minn. 1995) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19, 22
Lyons v. Marrud, Inc.,
[1972-1973 Transfer Binder] Fed. Sec. L. Rep.
(CCH) Paragraph 93,525 (S.D.N.Y. 1972) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
In re Mego Financial Corp. Securities Litigation,
213 F.3d 454 (9th Cir. 2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15, 17
Officers for Justice v. Civil Serv. Comm'n,
688 F.2d 615 (9th Cir. 1982) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Philadelphia Housing Authority v. American Radiator & Standard Sanitary Corp.,
323 F. Supp. 364 (E.D. Pa. 1970) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Protective Comm. for Indep. Stockholders of TMT Trailer Ferry, Inc. v. Anderson,
390 U.S. 414 (1968) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Raper v. State of Iowa,
688 N.W.2d 29 (Iowa 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Reed v. General Motors Corp.,
703 F.2d 170 (5th Cir. 1983) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Shillinglaw v. System Works, Inc.,
1993 WL 603289 (N.D. Ga. 1993) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
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MEMORANDUM IN SUPPORT OF MOTION FOR PRELIMINARY APPROVAL OF CLASS SETTLEMENT
Case No.: 05:08-cv-04918 JF
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Slaven v. BP Am., Inc.,
190 F.R.D. 649 (C.D. Cal. 2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Staton v. Boeing,
327 F.3d 938 (9th Cir. 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Tate v. Weyerhaeuser Co.,
723 F.2d 598 (8th Cir. 1983) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Valentino v. Carter-Wallace, Inc.,
97 F.3d 1227, 1234 (9th Cir. 1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Weinberger v. Kendrick,
698 F.2d 61 (2d Cir. 1982) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9, 10
White v. Local 942,
688 F.2d 85 (9th Cir. 1982) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
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Statutes:
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29 C.F.R. § 541.402 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
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29 C.F.R. § 541.201 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
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29 C.F.R. § 541.203 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
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29 U.S.C. § 216 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
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Fed. Rules Civ. Proc., rule 23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim
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Secondary Authorities:
2 H. Newberg & A. Conte, Newberg on Class Actions (3d ed. 1992) . . . . . . . . . . . . . . . 8, 9, 22, 24
Manual for Complex Litigation, Second §30.44 (1993) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8, 9, 24
3B J. Moore, Moore's Federal Practice §§23.80 - 23.85 (2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
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MEMORANDUM IN SUPPORT OF MOTION FOR PRELIMINARY APPROVAL OF CLASS SETTLEMENT
Case No.: 05:08-cv-04918 JF
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Plaintiffs David Walsh and David Kalua (“Plaintiffs”) respectfully submit this memorandum
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of points and authorities in support of Plaintiffs’ motion for preliminary approval of settlement of
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this class action.
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I.
INTRODUCTION
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Plaintiffs and Defendant Apple, Inc. (“Apple”) have reached a full and final settlement of
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the above-captioned action, which is embodied in the Stipulation and Settlement Agreement of
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Class Action Claims (“Agreement”) filed concurrently with the Court.1 By this motion, Plaintiffs
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seek preliminary approval from the Court of the Agreement (a copy of which is attached as Exhibit
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1 to the Declaration of Norman Blumenthal, served and filed herewith), conditional certification of
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the Settlement Class for settlement purposes only, approval of the Preliminary Approval Order, and
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a date for the Final Approval Hearing.
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II.
DESCRIPTION OF THE PROPOSED SETTLEMENT
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Counsel for the Parties, after litigation and settlement negotiations, agreed to a settlement
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that is fair, reasonable and favorable to the Class, which provides for Settlement Fund of no more
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than Nine Hundred Ninety Thousand Dollars ($990,000.00) to resolve the claims asserted in the
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Third Amended Complaint (“Complaint”). The Settlement Fund is all-in, except for the payment
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of payroll taxes, and will not revert back to Apple.
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The Class consists of Defendant’s current and former employees in the IS&T and/or Global
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Computing Network Services (“GNCS”) division in the United States who were classified as
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exempt holding the job titles of Network Engineer (levels 1 through 3), Telecommunication
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Engineer (levels 1 through 3), Information Systems Engineer (levels 1 through 3), Systems
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Engineer (levels 1 through 3), Information Systems Analyst (levels 1 through 3), Tech/Info Systems
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Analyst (levels 1 through 3), or substantially similar job titles at levels 1, 2 and 3 who worked at
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any time from August 4, 2004 through the date of preliminary Court approval of this Settlement.
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All other employees in all other job titles and job levels within the class definition in the Complaint
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Capitalized terms in this Memorandum have the same meaning as contained in the
Stipulation and Settlement Agreement.
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MEMORANDUM IN SUPPORT OF MOTION FOR PRELIMINARY APPROVAL OF CLASS SETTLEMENT
Case No.: 05:08-cv-04918 JF
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shall be dismissed from the Action without prejudice.
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The Class is divided into three subclasses: Subclass One is all Class Members who have
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filed with the Court a consent to join this Action as a plaintiff pursuant to 29 U.S.C 216(b) of the
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Fair Labor Standards Act (“FLSA”). Subclass Two is Class Members employed by Defendant in
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the state of California during the Class Period. Subclass Three is all Class Members who are
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members of both Subclass One and Subclass Two.
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Each Class Member who submits a timely and valid Claim Form (“Settlement Class
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Members”) will be eligible to receive a Settlement Award pursuant to the following formula: Based
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on data provided by Defendant, the Settlement Administrator shall initially calculate the number of
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weeks (including each partial week as a full week) of employment for employee in a Class Position
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in the Class Period ("Work Weeks"). Then, each Subclass One Member's Work Weeks shall be
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multiplied by 1.0 in recognition of a release of FLSA claims to arrive at that Class Member's
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"Subclass One Weekly Employment Credits."2 Each member of Subclass Two shall have his or her
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Work Weeks multiplied by 2.0 in recognition of a release of California state law claims to arrive at
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that Class Member's "Subclass Two Weekly Employment Credits." Each Member of Subclass
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Three shall have his or her Work Weeks multiplied by 2.5 to arrive at that Class Member's
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"Subclass Three Weekly Employment Credits." The Net Settlement Sum will then be divided by
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the total number of Weekly Employment Credits (defined as the sum of the Subclass One, Subclass
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Two, and Subclass Three Weekly Employment Credits) to obtain an amount per Weekly
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Employment Credit. This amount per Weekly Employment will then be multiplied by the Weekly
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Employment Credits worked by each respective Class Member to determine the Settlement Award
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available to each respective Settlement Class Member.
In the event that the entire Net Settlement Sum is not claimed by the Settlement Class
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Members, any unclaimed Settlement Award funds shall be used first to pay any corporate payroll
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The FLSA claims have less value as compared to the California state claims because FLSA
uses a different method for calculating unpaid overtime which results in less overtime compensation
paid to salaried employees. In addition, FLSA claims are only released to the extent an employee
affirmatively elects to opt in and accept the settlement amount.
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MEMORANDUM IN SUPPORT OF MOTION FOR PRELIMINARY APPROVAL OF CLASS SETTLEMENT
Case No.: 05:08-cv-04918 JF
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tax obligations, and then the remainder of any such funds shall be distributed pro rata to Settlement
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Class Members.
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The Parties engaged in private mediation before the respected Mediator of employment class
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actions, Mark Rudy, to try and resolve the claims alleged in the Action. The Parties attended the
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mediation on April 27, 2009, but the Parties were not able to reach settlement at the mediation.
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Following the exchange of additional information and subsequent discussions and negotiations, the
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Parties thereafter reached this Agreement. Declaration of Norman Blumenthal, (“Decl.
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Blumenthal”) ¶ 5. The parties prepared for the mediation by exchanging payroll data, calculating
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damages and submitting mediation briefs to Mr. Rudy. Subsequent discovery was conducted by
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both parties, including multiple sets of production requests, interrogatories and admission requests.
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As a result of the mediation process, the parties ultimately reached a settlement that they believe to
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be fair and reasonable in light of the experience of the Parties’ attorneys as Counsel in other wage
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and hour cases, and the uncertainties and cost of the years of litigation the Parties faced if the
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settlement was not reached. Decl. Blumenthal, ¶ 5.
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Under the terms to which the Parties have agreed, Apple will make a payment no more than
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Nine Hundred Ninety Thousand Dollars ($990,000.00). The settlement will be made on a
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claims-made basis without a reversion to Apple except for payment of taxes. Decl. Blumenthal, ¶ 3.
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This sum is inclusive of all claims of the Settlement Class members, as well as Class Counsel’s
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attorneys’ fees and costs, incentive awards for the Class Representatives, PAGA payments, and the
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cost of class notice and claims administration.
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This is a excellent result for the members of the Settlement Class. Liability in this case was
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uncertain because some or all of the Class Members may have been exempt from certain pay
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requirements applicable to nonexempt employees. Indeed, some courts have found exemptions to
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apply in cases involving similar facts. Decl. Blumenthal, ¶ 5. Moreover, there was further
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uncertainty as to whether class certification could have been achieved and maintained throughout
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the litigation.
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III.
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NATURE OF THE CASE
On August 4, 2008, Plaintiff David Walsh filed a complaint in the Southern District of
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MEMORANDUM IN SUPPORT OF MOTION FOR PRELIMINARY APPROVAL OF CLASS SETTLEMENT
Case No.: 05:08-cv-04918 JF
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California on behalf of a putative class of “Network Engineers” who worked for Apple by
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physically installing, physically configuring, and physically replacing and maintaining network
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equipment. [Doc. No. 1]. The central allegation of the Action was that these employees were
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misclassified as exempt. (Decl. Blumenthal, ¶ 7.)
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On September 9, 2008, Plaintiff Walsh filed a First Amended Complaint. [Doc. No. 5].
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Apple filed a motion to strike and for a more definite statement on September 23, 2008. [Doc. No.
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6]. Apple also filed a motion to change the venue of the Action. [Doc. No. 7]. Upon joint motion
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of the Parties, on October 24, 2008, the Action was transferred to the United States District Court
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for the Northern District of California. [Doc. No. 12]. (Decl. Blumenthal, ¶ 7.)
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To address some of the issues raised by the motions filed by Apple, Plaintiffs filed a Second
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Amended Complaint on December 30, 2008, which in part added David Kalua as a Named Plaintiff
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and revised the class allegations to include employees in the positions “Systems Engineers,” “Data
13
Center Systems Engineers,” “WAN Network / Voice Engineers,” “Network Engineers,” “Retail
14
Engineers,” and “Information Systems Analyst,” who worked within the Global Network and
15
Computing Services Group ("GNCS") and the Information Systems & Technology Group ("IS&T")
16
at Apple. [Doc. No. 16]. (Decl. Blumenthal, ¶ 8.)
17
On January 29, 2009, Apple filed a motion to strike and for a more definite statement with
18
respect to the Second Amended Complaint. [Doc. No. 17]. Plaintiffs prepared and filed opposition
19
to the motions by Apple on February 23, 2009. [Doc. No. 19]. The Parties appeared before this
20
Court and argued the motions. On March 23, 2009, this Court granted the motions in part and
21
denied the motions in part. [Doc. No. 21]. (Decl. Blumenthal, ¶ 8.)
22
In accordance with the Order of this Court, Plaintiffs filed their Third Amended Complaint
23
on May 1, 2009. [Doc. No. 31]. Apple answered the Third Amended Complaint on May 18, 2009.
24
[Doc. No. 35]. Litigation of the Action ensued. (Decl. Blumenthal, ¶ 9.)
25
The Parties prepared a discovery plan and both Parties propounded substantial written
26
discovery. The depositions of David Walsh was taken. The Parties were completing the necessary
27
discovery for class certification, when the Parties agreed to stay formal discovery and resume their
28
settlement discussions. (Decl. Blumenthal, ¶ 9.)
4
MEMORANDUM IN SUPPORT OF MOTION FOR PRELIMINARY APPROVAL OF CLASS SETTLEMENT
Case No.: 05:08-cv-04918 JF
1
Apple provided Plaintiffs with the payroll data, employment information , policies and
2
procedures, job descriptions, performance reviews and other data and which Plaintiff required for
3
mediation. After initial exchanges of information, the Parties mediated on April 27, 2009 before
4
respected mediator, Mark Rudy. The Parties were not able to reach settlement at the mediation
5
session, however, discussions continued in the following motions. Ultimately, these subsequent
6
discussions and negotiations were successful, and the Parties reached this Agreement. (Decl.
7
Blumenthal, ¶ 10.)
8
Although a settlement has been reached and Apple is not opposing the motion for
9
preliminary approval, Apple denies any and all liability or wrongdoing of any kind associated with
10
the claims alleged in the Complaint. Apple maintains, among other things, that they have complied
11
at all times with the California Labor Code, that the members of the putative class are properly
12
classified as exempt under California law and that all members of the putative class were properly
13
paid all wages owed to them. Specifically, in Apple’s view, the Class Members are properly
14
classified as exempt because they spend the majority of their time engaged in work directly related
15
to the general business operations of Apple and were, therefore, covered under the administrative
16
exemption. (Decl. Blumenthal, ¶ 11). Apple also maintains that some Class Members were
17
exempt under the executive and professional exemptions.
18
Plaintiffs contend that Apple violated California wage and hour laws and the FLSA, and that
19
the Action is appropriate for class certification on the basis that the Plaintiffs’ claims meet the
20
requisites for class certification. Without admitting that class certification is proper, Apple has
21
stipulated that a Class of individuals employed by Apple in a Class Position in California during the
22
respective settlement subclass class periods may be certified for settlement purposes only. The
23
Parties agree that certification for settlement purposes is not an admission that class certification
24
would be proper if the class certification issue were litigated. Further, this agreement is not
25
admissible in this or any other proceeding as evidence that the Class could be certified absent a
26
settlement. Solely for purposes of settling the lawsuits, the Parties stipulate and agree that the
27
requisites for establishing class certification with respect to the Class, as defined above, have been
28
met and are met. (Decl. Blumenthal ¶ 12.)
5
MEMORANDUM IN SUPPORT OF MOTION FOR PRELIMINARY APPROVAL OF CLASS SETTLEMENT
Case No.: 05:08-cv-04918 JF
1
Class Counsel has conducted a thorough investigation into the facts of the class action.
2
Class Counsel has diligently evaluated the Class Members’ claims against Apple. Prior to the
3
Parties executing the Agreement, Apple provided Class Counsel with access to Class Member data,
4
including data reflecting the weeks worked by the Class Members and relevant salary information
5
for the positions at issue, and contact information for the employees to conduct interviews. Based
6
on the foregoing data and their own independent investigation and evaluation, Class Counsel
7
believes that the settlement with Apple for the consideration and on the terms set forth in this
8
Agreement is fair, reasonable, and adequate and is in the best interest of the Class in light of all
9
known facts and circumstances, including the risk of significant delay, defenses asserted by Apple,
10
and numerous potential appellate issues. (Decl. Blumenthal at ¶ 13.) Apple and Apple’s counsel
11
also agree that the Settlement is fair and in the best interest of the Class.
12
IV.
PLAN OF ALLOCATION
13
In consideration for settlement of this Action and a release of the claims as described in the
14
Agreement, Apple agrees to pay into a Settlement Fund a sum not to exceed Nine Hundred Ninety
15
Thousand Dollars ($ 990,000.00) (“Settlement Fund”). The Settlement Fund in this Action has five
16
components: (1) the Settlement Awards; (2) the Named Plaintiff Awards; (3) the Fee and Costs
17
Payment; (4) the Administration Payment; and (5) the PAGA Payment. The “Net Settlement Sum”
18
is the amount remaining in the Settlement Fund after deductions from the Settlement Fund for
19
Administration Costs, the Fee and Costs Award, the Named Plaintiff Awards, and the PAGA
20
Payment. (Decl. Blumenthal at ¶ 14.)
21
The Net Settlement Sum shall be paid entirely to Settlement Class Members, except that if
22
there is unclaimed residue it shall first be used to satisfy Defendant's obligations to pay payroll
23
taxes on the Settlement Awards. (Decl. Blumenthal, ¶ 15.) The Net Settlement Fund will be
24
distributed as follows:
25
Each Settlement Class Member will be eligible to receive a Settlement Award pursuant to
26
the following formula: Based on data provided by Defendant, the Settlement Administrator shall
27
initially calculate the number of weeks (including each partial week as a full week) of employment
28
for each Plaintiff in a Class Position in the Class Period ("Work Weeks"). Then, each Subclass One
6
MEMORANDUM IN SUPPORT OF MOTION FOR PRELIMINARY APPROVAL OF CLASS SETTLEMENT
Case No.: 05:08-cv-04918 JF
1
Member's Work Weeks shall be multiplied by 1.0 in recognition of a release of FLSA claims to
2
arrive at that Class Member's "Subclass One Weekly Employment Credits." Each member of
3
Subclass Two shall have his or her Work Weeks multiplied by 2.0 in recognition of a release of
4
California state law claims to arrive at that Class Member's "Subclass Two Weekly Employment
5
Credits." Each Member of Subclass Three shall have his or her Work Weeks multiplied by 2.5 to
6
arrive at that Class Member's "Subclass Three Weekly Employment Credits." The Net Settlement
7
Sum will then be divided by the total number of Weekly Employment Credits (defined as the sum
8
of the Subclass One, Subclass Two, and Subclass Three Weekly Employment Credits) to obtain an
9
amount per Weekly Employment Credit. This amount per Weekly Employment will then be
10
multiplied by the Weekly Employment Credits worked by each respective Class Member to
11
determine the Settlement Award available to each respective Settlement Class Member. In the
12
event that the entire Net Settlement Sum is not claimed by the Settlement Class Members, any
13
unclaimed Settlement Award funds shall be used first to pay any corporate payroll tax obligations,
14
and then the remainder of any such funds shall be distributed pro rata to Settlement Class Members.
15
(Decl. Blumenthal, ¶ 16.)
16
As per paragraph 64 of the Agreement, Apple and their counsel will not oppose an
17
attorneys’ fees award to Class Counsel of 25% of the Settlement Fund or $247,500 (Two Hundred
18
Forty-Seven Thousand and Five Hundred Dollars) as a Fee and Costs Payment to compensate Class
19
Counsel for all of the work already performed in this case and all of the work remaining to be
20
performed in documenting the Settlement, securing Court approval of the Settlement, making sure
21
that the Settlement is fairly administered and implemented and obtaining dismissal of the actions.
22
The amounts paid in fees and costs shall constitute full satisfaction of any obligation to pay for
23
attorneys’ fees, expenses or costs past, present and future incurred in the Action. (Decl.
24
Blumenthal, ¶ 17.)
25
As per paragraph 67 of the Agreement, Class Counsel will request that Class
26
Representatives Walsh and Kalua each receive an class representative service award of $10,000
27
(Ten Thousand Dollars) as Named Plaintiff Awards for their service as a Class Representative.
28
These awards will be paid in addition to their individual claims for a share to which they are
7
MEMORANDUM IN SUPPORT OF MOTION FOR PRELIMINARY APPROVAL OF CLASS SETTLEMENT
Case No.: 05:08-cv-04918 JF
1
otherwise entitled through the claims process. Apple will not oppose this request. (Decl.
2
Blumenthal, ¶ 18.)
3
As per paragraph 71 of the Agreement, a PAGA Payment in the amount of $49,500
4
(Forty-Nine Thousand and Five Hundred Dollars) shall be allocated from the Settlement Fund to
5
pay all applicable penalties under the California Labor Code's Private Attorney General Act of
6
2004, as amended, California Labor Code sections 2699 et. seq. The PAGA Payment shall be paid
7
to the California Labor and Workforce Development Agency within 30 days after the Effective
8
Date. (Decl. Blumenthal, ¶ 19.)
9
As per paragraphs 2 and 52 of the Agreement, the reasonable costs of the Settlement
10
Administrator associated with the administration of this Settlement will be paid from the Settlement
11
Fund. The Parties currently project the Administration Payment to be no more than $10,000 (Ten
12
Thousand Dollars). The Settlement Administrator will be Gilardi & Company LLC. (Decl.
13
Blumenthal, ¶ 20.)
14
V.
THE SETTLEMENT MEETS ALL CRITERIA NECESSARY FOR PRELIMINARY
APPROVAL
15
When a proposed class-wide settlement is reached, the settlement must be submitted to the
16
court for approval. Fed. R. Civ. P. 23(e)(1)(A); 2 H. Newberg & A. Conte, Newberg on Class
17
Actions (3d ed. 1992) at §11.41, p.11-87. Preliminary approval is the first of three steps that
18
comprise the approval procedure for settlements of class actions. The second step is the
19
dissemination of notice of the settlement to all class members. The third step is a final settlement
20
approval hearing, at which evidence and argument concerning the fairness, adequacy, and
21
reasonableness of the settlement may be presented and class members may be heard regarding the
22
settlement. See Manual for Complex Litigation, Second §30.44 (1993).
23
The question presented on a motion for preliminary approval of a proposed class action
24
settlement is whether the proposed settlement is "within the range of possible approval." Manual
25
for Complex Litigation, Second §30.44 at 229; Gautreaux v. Pierce, 690 F.2d 616, 621 n.3 (7th Cir.
26
1982). Preliminary approval is merely the prerequisite to giving notice so that "the proposed
27
settlement . . . may be submitted to members of the prospective Class for their acceptance or
28
8
MEMORANDUM IN SUPPORT OF MOTION FOR PRELIMINARY APPROVAL OF CLASS SETTLEMENT
Case No.: 05:08-cv-04918 JF
1
rejection.” Philadelphia Housing Authority v. American Radiator & Standard Sanitary Corp., 323
2
F. Supp. 364, 372 (E.D. Pa. 1970). There is an initial presumption of fairness when a proposed
3
settlement, which was negotiated at arm's length by counsel for the Class, is presented for court
4
approval. Newberg, 3d Ed., §11.41, p.11-88. However, the ultimate question of whether the
5
proposed settlement is fair, reasonable and adequate is made after notice of the settlement is given
6
to the class members and a final settlement hearing is held by the Court.
7
A.
8
The Role Of The Court In Preliminary Approval Of A Class Action Settlement
The approval of a proposed settlement of a class action suit is a matter within the broad
9
discretion of the trial court. Staton v. Boeing, 327 F.3d 938, 959 (9th Cir. 2003). Preliminary
10
approval does not require the trial court to answer the ultimate question of whether a proposed
11
settlement is “fair, reasonable and adequate.” In re Jiffy Lube Sec. Litig., 927 F.2d 155, 158 (4th
12
Cir. 1991); Manual for Complex Litigation, Third, §§ 20.212. That determination is made only
13
after notice of the settlement has been given to the members of the class and after the class members
14
have been given an opportunity to voice their views of the settlement or to be excluded from the
15
settlement Class. See, e.g., 3B J. Moore, Moore's Federal Practice §§23.80 - 23.85 (2003).
16
In considering a potential settlement for preliminary approval purposes, the trial court does
17
not have to reach any ultimate conclusions on the issues of fact and law which underlie the merits of
18
the dispute (Detroit v. Grinnell Corp., 495 F.2d 448, 456 (2d Cir. 1974)), and need not engage in a
19
trial on the merits. Officers for Justice v. Civil Serv. Comm'n, 688 F.2d 615 (9th Cir. 1982), cert.
20
denied, 459 U.S. 1217 (1983). The court is not required to determine that certification of a
21
settlement class is appropriate until the final settlement approval. In re General Motors Corp.
22
Pick-Up Truck Fuel Tank Prods. Liab. Litig., 55 F.3d 768, 797 (3d Cir. 1995).
23
The question of whether a proposed settlement is fair, reasonable and adequate necessarily
24
requires a judgment and evaluation by the attorneys for the parties based upon a comparison of “the
25
terms of the compromise with the likely rewards of litigation.” Weinberger v. Kendrick, 698 F.2d
26
61, 73 (2d Cir. 1982), cert. denied 464 U.S. 818 (1983) (quoting Protective Comm. for Indep.
27
Stockholders of TMT Trailer Ferry, Inc. v. Anderson, 390 U.S. 414, 424-25 (1968)). Therefore,
28
many courts recognize that the opinion of experienced counsel supporting the settlement is entitled
9
MEMORANDUM IN SUPPORT OF MOTION FOR PRELIMINARY APPROVAL OF CLASS SETTLEMENT
Case No.: 05:08-cv-04918 JF
1
to considerable weight. Kirkorian v. Borelli, 695 F. Supp. 446, 451 (N.D. Cal. 1988); Reed v.
2
General Motors Corp., 703 F.2d 170, 175 (5th Cir. 1983); Weinberger, 698 F.2d at 74; Armstrong
3
v. Board of School Directors, 616 F.2d 305, 325 (7th Cir. 1980); Fisher Bros. v. Cambridge-Lee
4
Indus., Inc., 630 F. Supp. 482, 489 (E.D. Pa. 1985). For example, in Lyons v. Marrud, Inc.,
5
[1972-1973 Transfer Binder] Fed. Sec. L. Rep. (CCH) Paragraph 93,525 (S.D.N.Y. 1972), the court
6
noted that "[e]xperienced and competent counsel have assessed these problems and the probability
7
of success on the merits. They have concluded that compromise is well-advised and necessary.
8
The parties’ decision regarding the respective merits of their position has an important bearing on
9
this case." Id. at ¶ 92,520.
10
11
B.
Factors To Be Considered In Granting Preliminarily Approval
A number of factors are to be considered in evaluating a settlement for purposes of
12
preliminary approval. No one factor should be determinative, but rather all factors should be
13
considered. These criteria have been summarized as follows:
14
If the proposed settlement appears to be the product of serious, informed, non-collusive
15
negotiations, has no obvious deficiencies, does not improperly grant preferential treatment to class
16
representatives or segments of the class, and falls within the range of possible approval, then the
17
court should direct that notice be given to the class members of a formal fairness hearing, at which
18
evidence may be presented in support of and in opposition to the settlement. Manual of Complex
19
Litigation, Second §30.44, at 229. Here, the settlement meets all of these criteria.
20
1.
The Settlement is the Product of Serious, Informed and Noncollusive
Negotiations
21
This settlement is the result of extensive and hard fought negotiations. Apple denies each
22
and every one of the claims and contentions alleged in this Action. Apple has asserted and
23
continues to assert many defenses thereto, and has expressly denied and continues to deny any
24
wrongdoing or legal liability arising out of the conduct alleged in the Action. Nonetheless, Apple
25
has concluded that this Action be settled in the manner and upon the terms and conditions set forth
26
in the Agreement in order to avoid the expense, inconvenience, and burden of further legal
27
proceedings, and the uncertainties of trial and appeals. Apple has decided to put to rest the
28
10
MEMORANDUM IN SUPPORT OF MOTION FOR PRELIMINARY APPROVAL OF CLASS SETTLEMENT
Case No.: 05:08-cv-04918 JF
1
2
Released Claims of the Settlement Class.
The parties scheduled a private mediation to take place before Mark Rudy, one of the
3
preeminent mediators of wage and hour class actions. In preparation for the mediation, Apple
4
provided Class Counsel with job descriptions, performance evaluations, time records and payroll
5
information for the members of the Class. Plaintiffs analyzed the data with the assistant of damages
6
expert DM&A and prepared and submitted a mediation brief to Mr. Rudy. The scheduled
7
mediation was contentious and arm’s length, and did not result in a settlement at that session. The
8
parties, however, continued settlement discussions and were ultimately able to reach the settlement
9
contained in the Agreement. (Decl. Blumenthal ¶ 5.) Importantly, Plaintiffs and Class Counsel
10
believes that this settlement is fair, reasonable and adequate. By reason of the settlement, Apple has
11
agreed to pay $990,000.00, as payment in full of all of the Class claims arising from the events
12
described in the Complaint including Class Counsel’s attorneys’ fees and expenses, PAGA
13
payments, Class Representatives’ service awards, and the cost of class notice and claims
14
administration.
15
Class Counsel has conducted a thorough investigation into the facts of the class action,
16
including an extensive review of relevant documents and data, contact information to hundreds of
17
Class Members, and have diligently pursued an investigation of the Class Members’ claims against
18
Apple. (Decl. Blumenthal, ¶ 11.) Based on the foregoing documents and data and their own
19
independent investigation and evaluation, Class Counsel is of the opinion that the settlement with
20
Apple for the consideration and on the terms set forth in the Agreement is fair, reasonable, and
21
adequate and is in the best interest of the class in light of all known facts and circumstances,
22
including the risk of significant delay, defenses asserted by Apple, and numerous potential appellate
23
issues. Apple and Apple’s counsel also agree that the Settlement is fair and in the best interest of
24
the Class Members.
25
Plaintiffs and Class Counsel recognize the expense and length of continuing to litigate and
26
trying this Action against Apple through possible appeals which could take several years. Class
27
Counsel has also taken into account the uncertain outcome and risk of litigation, especially in
28
complex actions such as this Action. Class Counsel is also mindful of and recognize the inherent
11
MEMORANDUM IN SUPPORT OF MOTION FOR PRELIMINARY APPROVAL OF CLASS SETTLEMENT
Case No.: 05:08-cv-04918 JF
1
problems of proof under, and alleged defenses to, the claims asserted in the Action. Based upon
2
their evaluation, Plaintiffs and Class Counsel has determined that the settlement set forth in the
3
Agreement is in the best interest of the Class Members. (Decl. Blumenthal, ¶ 21.)
4
Here the negotiations have been hard-fought and aggressive with capable advocacy on both
5
sides. Accordingly, "[t]here is likewise every reason to conclude that settlement negotiations were
6
vigorously conducted at arms' length and without any suggestion of undue influence." In re Wash.
7
Public Power Supply System Sec. Litig., 720 F. Supp. 1379, 1392 (D. Ariz. 1989).
8
2.
The Settlement Has No "Obvious Deficiencies" and Falls Within
the Range for Approval
9
The proposed Settlement herein has no "obvious deficiencies" and is well within the range
10
of possible approval. All Class Members will receive an opportunity to participate in and receive
11
payment.
12
The damage estimate calculations to compensate for the amount due for the nonpayment of
13
wages were calculated by DM&A, Plaintiffs’ damage expert. (Blumenthal Decl., ¶ 6.) For the
14
Class Members whose claims are at issue here, DM&A reviewed Apple’s time and payroll data and
15
assumed that each employee was not paid for five (5) overtime hours for each week worked during
16
the Class period and missed one meal break per work week. Plaintiffs’ expert then calculated the
17
compensation owed to the members of the class and found that Apple was subject to a Class-wide
18
claim of $2,901,942 for the 5 unpaid hours of overtime. (Blumenthal Decl., ¶ 6.) Once estimates
19
for meal break compensation, wage statement penalties, waiting time penalties and other statutory
20
penalties are included, the total damage estimates were $3.6 million. (Blumenthal Decl., ¶ 6.)
21
Consequently, Plaintiffs reasonably believed that Apple was subject to total claims of about
22
$3.6 million for the entire Class Period for unpaid overtime and penalties that was susceptible to
23
solid proof. The settlement of $990,000, before deductions, represents 27% of the total possible
24
claims, assuming these amounts could be proven at trial, and represents 34% of the total overtime
25
estimate. Clearly the goal of this litigation has been met. (Decl. Blumenthal, ¶ 6).
26
In Glass v. UBS Fin. Servs., 2007 U.S. Dist. LEXIS 8476 (N.D. Cal. January 27, 2007) the
27
federal district court for the Northern District of California recently approved a settlement of an
28
12
MEMORANDUM IN SUPPORT OF MOTION FOR PRELIMINARY APPROVAL OF CLASS SETTLEMENT
Case No.: 05:08-cv-04918 JF
1
action claiming unpaid overtime wages where the settlement amount constituted only
2
approximately 25 to 35% of the estimated actual loss to the class. Here the settlement
3
consideration falls well within the realm of this range of approved percentages based on the
4
estimated actual loss to the class.3 Blum. Decl., ¶ 27.
5
In Glass, the federal court ruled that the settlement which represented approximately 25% to
6
35% of the loss to the class was fair, reasonable, and adequate. Id. at 28. As a result, this
7
settlement is most certainly entitled to preliminary approval.
8
9
Where both sides face significant uncertainty, the attendant risks favor settlement. Hanlon
v. Chrysler Corp., 150 F.3d 1011, 1026 (9th Cir. 1998). Here, a number of defenses asserted by
10
Apple present serious threats to the claims of Plaintiffs and the other Class Members. For example
11
Apple contended that many Class Members were barred from recovery by the “administrative
12
exemption” set forth in 29 C.F.R. Section 541.402, which provides:
13
16
Computer employees within the scope of [the computer professional exemption] may
also have . . . administrative duties which qualify the employees for exemption under
[the administrative exemption]. For example, systems analysts and computer
programmers generally meet the duties requirement for the administrative exemption
if their primary duty includes work such as planning, scheduling, and coordinating
activities required to develop systems to solve complex business, scientific or
engineering problems of the employer or the employer’s customers.
17
Apple also relied on 29 C.F.R. § 541.201(a)(b) which provides:
18
21
Work “directly related to management or general business operations” includes, but is
not limited to, work in functional areas such as tax; finance; accounting; budgeting;
auditing; insurance; quality control; purchasing procurement; advertising; marketing;
research; safety and health; personnel management; human resources; employee
benefits; labor relations; public relations; government relations; computer network,
internet and database administration; legal and regulatory compliance; and similar
activities.
22
These new federal regulations specifically identify work as a project manager as an example
14
15
19
20
23
of that which qualifies for the administrative exemption. 29 C.F.R. Section 541.203 (c) states: “An
24
3
25
26
27
28
In Glass, the federal court granted preliminary approval of the settlement although the
parties failed to submit evidence verifying their estimate of the total loss to the class. At the final
fairness hearing, the parties presented a lengthy discussion of the above-referenced estimate, in
which they represented that their estimate of the maximum loss to the class was based on hard data
obtained from interviews with class members, computer log-in records, and payroll records. Id. at
*28-*29. The parties estimate of the total loss to the Settlement Class here is based on the same
type of hard data that was not submitted in Glass until final settlement approval was sought.
13
MEMORANDUM IN SUPPORT OF MOTION FOR PRELIMINARY APPROVAL OF CLASS SETTLEMENT
Case No.: 05:08-cv-04918 JF
1
employee who leads a team of other employees assigned to complete major projects for the
2
employer . .. generally meets the duties requirements for the administrative exemption, even if the
3
employee does not have direct supervisory responsibility over the other employees on the team.”
4
In Bagwell v. Florida Broadband, 2005 WL 1962562, (S.D. Fla. 2005), the district court
5
found that a network operation engineer was exempt under both the administrative and the
6
computer professional exemptions to the FLSA. The court found that the administrative exemption
7
applied where plaintiff’s primary duty was developing, improving, and making Florida Broadband’s
8
network system function reliably. Although the plaintiff performed some physical work, the court
9
found that the plaintiff’s primary duty was not manual because the predominance of plaintiff’s
10
duties were problem-solving, office and administrative duties. Id. at 1323-24.
In Koppinger v. American Interiors, Inc., 295 F. Supp. 2d 797 (N.D. Ohio 2003), the court
11
12
granted summary judgment for the employer, finding that the plaintiff who was responsible for
13
maintaining the company’s computer system qualified for the administrative exemption.
14
[The plaintiff’s] duties consisted of ordering replacement parts, recommending
purchases of new software and hardware, installing software, and repairing equipment
for the company’s computer users. When users called in with computer problems,
plaintiff determined the priority of and when and how to handle those problems. No one
set his priorities; he worked largely, if not entirely, independently. . . . While the
plaintiff did a fair amount of work loading software and fixing computers and other
equipment, he also made recommendations about what software and hardware the
company should purchase.
15
16
17
18
Id. at 799.4 (See also Decl. Blumenthal, ¶ 23 - 25.)
19
There was also a significant risk that, if the Actions were not settled, Plaintiffs would be
20
unable to obtain class certification and thereby not recover on behalf of any Apple employees other
21
than themselves. In Dunbar v. Albertson's, Inc., 141 Cal. App. 4th 1422, 1431-32 (2006), the
22
California Court of Appeal recently affirmed an order denying class certification to a class of
23
24
4
25
26
27
28
See also Heffelfinger v. Elec. Data Sys. Corp., 2008 U.S. Dist. LEXIS 46461 (C.D. Cal.
June 6, 2008) (holding that classes of information technology workers were exempt under the
administrative exemption); Hickman v. United States, 10 Cl. Ct. 550, 561 (1986)(holding that
electronics technician and computer equipment analyst were exempt under the administrative
exemption); Shillinglaw v. System Works, Inc., 1993 WL 603289 (N.D. Ga. 1993)(holding that
computer programmer/analyst was an exempt administrative employee); Raper v. State of Iowa,
688 N.W.2d 29, 43 (Iowa 2004).
14
MEMORANDUM IN SUPPORT OF MOTION FOR PRELIMINARY APPROVAL OF CLASS SETTLEMENT
Case No.: 05:08-cv-04918 JF
1
employees who claimed that they were denied overtime pay because whether the executive
2
exemption applied would have had to have been individually determined for each class member
3
which meant that common issues did not predominate. Similarly, here Apple would have certainly
4
argued in opposing class certification that individual issues predominated because the applicability
5
of the administrative exemption would have to be separately determined for each Class Member
6
based on their individual experience. While other cases have approved class certification in
7
overtime wage claims, class certification in this action would have been hotly disputed and was by
8
no means a foregone conclusion. (Decl. Blumenthal at ¶26).
9
After vigorous negotiations, including the preparation and submission of mediation briefs to
10
mediator Mark Rudy, as well as a study of hard data provided to Plaintiff’s expert, the parties
11
recognized the potential risks and agreed on the settlement of $990,000. As the federal court
12
recently held in Glass, where the parties faced uncertainties similar to those here:
13
14
15
16
In light of the above-referenced uncertainty in the law, the risk, expense, complexity,
and likely duration of further litigation likewise favors the settlement. Regardless of
how this Court might have ruled on the merits of the legal issues, the losing party
likely would have appealed, and the parties would have faced the expense and
uncertainty of litigating an appeal. "The expense and possible duration of the
litigation should be considered in evaluating the reasonableness of [a] settlement."
See In re Mego Financial Corp. Securities Litigation, 213 F.3d 454, 458 (9th Cir.
2000).
17
Here, the risk of further litigation is substantial.
18
3.
19
20
The Settlement Does Not Improperly Grant Preferential Treatment To The
Class Representative or Segments Of The Class
The relief provided in the settlement will benefit all Class Members equally. The settlement
21
does not improperly grant preferential treatment to the Class Representative or any individual
22
segments of the Class.
23
Each Settlement Class member, including the Named Plaintiffs, will be entitled to payment
24
based on the plan of allocation. Each Settlement Class member’s lump sum payment will be
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determined as follows:
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Based on data provided by Defendant, the Settlement Administrator shall initially calculate
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the number of weeks (including each partial week as a full week) of employment for each Plaintiff
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in a Class Position in the Class Period ("Work Weeks"). Then, each Subclass One Member's Work
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Weeks shall be multiplied by 1.0 in recognition of a release of FLSA claims to arrive at that Class
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Member's "Subclass One Weekly Employment Credits." Each member of Subclass Two shall have
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his or her Work Weeks multiplied by 2.0 in recognition of a release of California state law claims to
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arrive at that Class Member's "Subclass Two Weekly Employment Credits." Each Member of
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Subclass Three shall have his or her Work Weeks multiplied by 2.5 to arrive at that Class Member's
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"Subclass Three Weekly Employment Credits." The Net Settlement Sum will then be divided by
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the total number of Weekly Employment Credits (defined as the sum of the Subclass One, Subclass
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Two, and Subclass Three Weekly Employment Credits) to obtain an amount per Weekly
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Employment Credit. This amount per Weekly Employment will then be multiplied by the Weekly
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Employment Credits worked by each respective Class Member to determine the Settlement Award
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available to each respective Settlement Class Member. In the event that the entire Net Settlement
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Sum is not claimed by the Settlement Class Members, any unclaimed Settlement Award funds shall
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be used first to pay any corporate payroll tax obligations, and then the remainder of any such funds
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shall be distributed pro rata to Settlement Class Members.
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In addition, the Class Representatives will each apply to the Court for a Named Plaintiff
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Enhancement of $10,000. In Glass, the district court recently awarded each of the class
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representatives in an overtime wages class action a service award of $25,000. Glass, 2007 U.S.
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Dist. LEXIS 8476 at *51-52.
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4.
The Stage Of The Proceedings Is Sufficiently Advanced
To Permit Preliminary Approval Of The Settlement
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The stage of the proceedings at which this settlement was reached also militates in favor of
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preliminary approval and ultimately, final approval of the settlement. Class Counsel has conducted
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a thorough investigation into the facts of the class action. Class Counsel began investigating the
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Class Members’ claims before this action was filed. Class Counsel also obtained production of
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extensive business and payroll records produced through both formal and informal discovery. Class
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Counsel engaged in an extensive review and analysis of the relevant documents and data with the
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assistance of experts. Class Counsel also received contact information for the Class and
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interviewed potential Class Members. Accordingly, the agreement to settle did not occur until
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Class Counsel possessed sufficient information to make an informed judgment regarding the
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likelihood of success on the merits and the results that could be obtained through further litigation.
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(Decl. Blumenthal at ¶27.)
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Based on the foregoing data and their own independent investigation and evaluation, Class
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Counsel is of the opinion that the settlement with Apple for the consideration and on the terms set
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forth in the Agreement is fair, reasonable, and adequate and is in the best interest of the class in
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light of all known facts and circumstances, including the risk of significant delay, defenses asserted
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by Apple, and numerous potential appellate issues. Apple and Apple’s counsel also agree that the
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Agreement is fair and in the best interest of the Class Members. There can be no doubt that
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Counsel for both parties possessed sufficient information to make an informed judgment regarding
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the likelihood of success on the merits and the results that could be obtained through further
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litigation. (Decl. Blumenthal ¶¶ 27-29.)
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In Glass, the Northern District of California recently granted final approval of an overtime
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and meal wage action although in Glass no formal discovery had been conducted prior to the
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settlement:
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Here, no formal discovery took place prior to settlement. As the Ninth Circuit has
observed, however, "[i]n the context of class action settlements, 'formal discovery is
not a necessary ticket to the bargaining table' where the parties have sufficient
information to make an informed decision about settlement." See In re Mego
Financial Corp. Securities Litigation, 213 F.3d at 459.
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Glass, 2007 U.S. Dist. LEXIS 8476 at *14.
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Here, Class Counsel was in a significantly stronger position to evaluate the fairness of this
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settlement than in Glass because they conducted formal discovery and informal discovery, as well
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as independent investigations and due diligence to confirm the accuracy of the information supplied
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by Apple.
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VI.
THE CLASS IS PROPERLY CERTIFIED FOR SETTLEMENT PURPOSES
The proposed settlements meet all of the requirements for class certification under F.R.C.P.
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§23(b)(2) as demonstrated below, and therefore, the Court may appropriately approve the
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Settlement Class as defined in the Agreement. This Court should conditionally certify a settlement
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class for settlement purposes only that consists of all of Defendant's current and former employees
in the IS&T and/or Global Computing Network Services ("GNCS") division in the United States
who were classified as exempt holding the job titles of Network Engineer (levels 1 through 3),
Telecommunication Engineer (levels 1 through 3), Information Systems Engineer (levels 1 through
3), Systems Engineer (levels 1 through 3), Information Systems Analyst (levels 1 through 3),
Tech/Info Systems Analyst (levels 1 through 3), or substantially similar job titles at levels 1, 2 and 3
who worked at any time from August 4, 2004 through the date of preliminary Court approval of this
Settlement. All other employees in all other job titles and job levels within the class definition in
the Third Amended Complaint shall be dismissed from the Action without prejudice. (Agreement
at ¶¶9, 31.)
A.
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Plaintiffs seek certification of this Action for settlement purposes under F.R.C.P §23(b)(3).
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This portion of rule 23 applies to class actions where “the court finds that the questions of law or
fact common to the members of the class predominate over any questions affecting only individual
members, and that a class action is superior to other available methods for the fair and efficient
adjudication of the controversy.” Fed.R.Civ.P. 23(b)(3).
To maintain a class action under rule 23(b)(3), the four prerequisites of F.R.C.P. Rule 23(a)
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must first be satisfied. These prerequisites are referred to as numerosity, commonality, typicality,
and adequacy of representation, and are set forth in Rule 23(a) as follows:
(1)
the class is so numerous that joinder of all members is impracticable,
(2)
there are questions of law or fact common to the class,
(3)
the claims or defenses of the representative parties are typical of the claims or defenses of
the class, and
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Rule 23 of the Federal Rules of Civil Procedure Governs
(4)
the representative parties will fairly and adequately protect the interests of the class.
While Apple disputes that the Plaintiffs can satisfy any of these requirements, the Parties
agree that, for purposes of settlement, these requirements may be satisfied in this case, and
therefore, the proposed Settlement Class should be certified for purposes of settlement.
B.
The Numerosity Requirement Is Satisfied
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Rule 23(a) merely requires that the class be “so numerous that joinder of all members is
impracticable.” F.R.C.P. §23(a). “Courts have routinely found the numerosity requirement
satisfied when the class comprises 40 or more members.” EEOC v. Kovacevich “5” Farms, 2007
U.S. Dist. LEXIS 32330 at *57 (E.D.Cal. April 18, 2007); see also Slaven v. BP Am., Inc., 190
F.R.D. 649, 654 (C.D. Cal. 2000); Ansari v. New York Univ., 179 F.R.D. 112, 114 (S.D.N.Y.
1998); Lockwood Motors, Inc. v. General Motors Corp., 162 F.R.D. 569, 574 (D. Minn. 1995). In
Consolidated Rail Corp. v. Town of Hyde Park, 47 F.3d 473, 483 (2d Cir. 1995), the Court held that
“numerosity is presumed at a level of 40 members.” The Ninth Circuit observed that classes with
fewer than 70 members have been certified in numerous cases. Jordan v. County of Los Angeles,
669 F.2d 1311, 1320 n.10 (9th Cir. 1982), vacated on other grounds, 459 U.S. 810, 103 S. Ct. 35, 74
L. Ed. 2d 48 (1982) (noting that classes with fewer than 70 members have been certified in
numerous cases).
Here, the Settlement Class is composed of over 100 current and former employees, which is
sufficiently numerous. (Decl. Blumenthal at ¶30(a).)
C.
Common Questions of Law and Fact Bind the Class
Rule 23(a) requires that there be a common question of law or fact. There is no requirement
that the members of the class be identically situated, only that there exists one or more factual or
legal questions common to all members. Jenson v. Continental Fin. Corp., 404 F. Supp. 806 (D.
Minn. 1975). This threshold of “commonality” is not particularly high. Jenkins v. Raymark Ind.,
Inc., 782 F.2d 468, 472 (5th Cir. 1986). The fundamental question is whether the resolution of the
common legal or factual questions would affect all or a substantial number of the class members.
Jenkins, supra, 782 F.2d at 472. Indeed, if a claim “arises out of the same legal or remedial theory,
the presence of factual variations is normally not sufficient to preclude class action treatment.”
Donaldson v. Pillsbury Co., 554 F.2d 825, 831 (8th Cir. 1977), cert. denied, 434 U.S. 856 (1977).
Rule 23(a) is satisfied where “the course or conduct giving rise to the cause of action affects
all class members, and at least one of the elements of that cause of action is shared by all of the
class members.” Lockwood Motors, 162 F.R.D. at 575. This requirement is met if common
questions of liability are present, even if there may be individual variations. In re Workman’s
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Comp., 130 F.R.D. 99, 104 (D. Minn. 1990).
Here, common questions of law and fact, as alleged by the Plaintiffs, are present,
specifically the question of whether the GNCS and IS&T Support Staff employees employed by
Apple are “exempt.” (Decl. Blumenthal at ¶30(b).) Apple does dispute that commonality actually
exists, but will not oppose such a finding for purposes of this settlement only.
D.
The Claims of the Plaintiffs Are Typical of the Class Claims
The typicality requirement of Rule 23(a) requires the Plaintiffs to demonstrate that the
members of the class have the same or similar claims as the named Plaintiffs. “The typicality
requirement is met when the claims of the named Plaintiff arise from the same event or are based on
the same legal theories.” Tate v. Weyerhaeuser Co., 723 F.2d 598, 608 (8th Cir. 1983). In Hanlon
v. Chrysler Co., 150 F.3d 1011 (9th Cir. 1998), the Ninth Circuit held that “[u]nder the rule's
permissive standards, representative claims are 'typical' if they are reasonably coextensive with
those of absent class members; they need not be substantially identical.” 50 F.3d at 1020.
Typicality “does not mean that the claims of the class representative[s] must be identical or
substantially identical to those of the absent class members.” Stanton, supra, at 957.
In the instant case, there can be little doubt that the typicality requirement is fully satisfied.
The Plaintiffs, like every other member of the Class, were employed by Apple and classified as
“exempt” by Apple. The Plaintiffs performed the same type of computer installation and
maintenance work as the members of the Class. The Plaintiffs, like every other member of the
Class, claim unpaid overtime wages for work performed in the same job classifications. Thus, the
claims of both the Plaintiffs and the Members of the Class arise from the same course of conduct by
the Apple, involve the same work performed in connection with the Apple computer systems, and
are based on the same legal theories. (Decl. Blumenthal at ¶30(c).) The typicality requirement of
Rule 23 is met as to the common issues presented in this case. While Apple disputes that Plaintiffs
have claims typical of the individuals they purport to represent, it will not oppose a finding of
typicality for purposes of this settlement only.
E.
The Class Representatives Fairly and Adequately Protected the Class Interests
The Class Representatives provided adequate representation of the interests of the class in
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that: (a) their attorneys are competent, experienced in class litigation and generally able to conduct
the proposed litigation; and (b) the Class Representatives do not have interests antagonistic to those
of the class. White v. Local 942, 688 F.2d 85, (9th Cir. 1982). Simply put, Rule 23 asks whether
the Class Representatives will vigorously prosecute on behalf of the class and have a basic
understanding of the claims. This requirement has been met here. First, Plaintiffs are well aware of
their duties as representatives of the class and have actively participated in the prosecution of this
case to date. They effectively communicated with counsel, providing documents to counsel and
participated extensively in discovery and investigation of the Action. Plaintiff Walsh appeared for
deposition and testified thoroughly about his claims. (Decl. Blumenthal at ¶30(d).) Second, the
Plaintiffs have retained competent counsel who have extensive experience in employment class
actions. (Decl. Blumenthal at ¶ 31.) Class Counsel has extensive experience in class action
litigation in California and throughout the country. Class Counsel has been involved as class
counsel in over two hundred (200) class action matters, including many wage and hour class
actions. See, e.g., Resume, attached as Exhibit 3 to the Declaration of Blumenthal. Third, there is
no antagonism between the interests of the named Plaintiffs and those of the Class. Both the
Plaintiffs and the Members of the Class seek monetary relief under the same set of facts and legal
theories. Under such circumstances, there can be no conflicts of interest, and adequacy of
representation is presumed. In re Wirebound Boxes Antitrust Lit., 128 F.R.D. 268 (D. Minn. 1989).
F.
The Additional Requirements of Rule 23 Are Satisfied
Since the requirements of Rule 23(a) have been satisfied, the Court now must look to Rule
23(b)(3) in order to determine whether a class should be maintained under one of the listed
categories. Under Rule 23(b)(3), a class action may be maintained if, first, common questions
predominate over individual issues, and second, the class action must be superior to other available
other methods for the fair and efficient adjudication of the controversy.
1.
The Predominance Requirement Is Met
Rule 23(b)(3) provides that a class may be maintained if “the court finds that the questions
of law and fact common to the members of the class predominate over any questions affecting only
individual members.” There is no bright line to determine whether common issues predominate. A
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claim will meet the predominance requirement in cases where generalized evidence of the
Defendants’ conduct will prove or disprove an element of the claim on a simultaneous class-wide
basis. The “fundamental question” is whether the claim asserted is seeking a remedy to a “common
legal grievance.” Lockwood Motors, 162 F.R.D. at 580; Buchholtz v. Swift & Co., 62 F.R.D. 581,
598 (D.Minn. 1973). Further, the mere fact that there are certain issues that may need to be
determined on an individual basis does not preclude the satisfaction of the predominance
requirement. See Newberg & Comte, Newberg on Class Actions §4.25 (3d ed. 1992).
Here, the adjudication of the common issues surrounding Apple’s alleged uniform and
systematic acts could establish Apple’s liability on a class-wide basis. Plaintiffs contend that Apple
had engaged in a uniform course of conduct with respect to the Settlement Class; the only question
is whether Apple’s conduct supports a meritorious claim. Such suits challenging the legality of a
standardized course of conduct are generally appropriate for resolution by means of a class action.
(Decl. Blumenthal at ¶30(e).) Accordingly, Plaintiffs argue that common issues of law and fact
present in this case predominate.
In the context of overtime pay litigation, courts have often found that common issues
predominate where an employer treats the putative class members uniformly with respect to
compensation and where, as here, (a) company-wide policies governing how employees spend their
time, or (b) uniformity in work duties and experiences that diminish the need for individualized
inquiry. See, e.g., Wamboldt v. Safety-Kleen Sys., 2007 U.S. Dist. LEXIS 65683, *40-41 (N.D.
Cal. 2007) (plaintiffs classified as exempt all share same job description); Breeden v. Benchmark
Lending Group, Inc., 229 F.R.D. 623, 630 (N.D. Cal. 2005) (parties agree putative class members
"all performed the same duties at the same location."); Krzesniak v. Cendant Corp., 2007 U.S. Dist.
LEXIS 47518 (N.D. Cal. 2006).
While Apple disputes that the predominance requirement may be satisfied, it will not oppose
such a finding for purposes of this settlement only.
2.
The Superiority Requirement Is Met
To certify a class, the Court must also determine “that a class action is superior to other
available methods for the fair and efficient adjudication of the controversy.” F.R.C.P. Rule 23
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(b)(3). “Where classwide litigation of common issues will reduce litigation costs and promote
greater efficiency, a class action may be superior to other methods of litigation." Valentino v.
Carter-Wallace, Inc., 97 F.3d 1227, 1234 (9th Cir. 1996).
“If the plaintiffs’ claims are substantiated, a question as to which the court presently has no
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opinion, the class action mechanism is clearly the most efficient means of resolving the many
claims which may be asserted. If the case were not handled as a class, thousands of small claims
would either be brought or unjustly abandoned. The first possibility would be a flood of cases, the
second would involve individual claims abandoned because of cost.” In re Workers Compensation.,
130 F.R.D. 99, 110 (D.Minn. 1990).
Here, a class action is the superior mechanism for adjudication of the claims as pled by the
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Plaintiffs. While Apple disputes that the superiority requirement may be satisfied, it will not
oppose such a finding for purposes of this settlement only.
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VII.
THE PROPOSED METHOD OF CLASS NOTICE IS APPROPRIATE
The Parties have agreed upon procedures by which the Class will be provided with written
notice of the Settlement similar to that approved and utilized in hundreds of class action
settlements. The Parties have jointly drafted a Notice of Preliminary Approval of the Settlement,
attached to the Agreement as Exhibit 1 and is hereby submitted to the District Court for Approval.
Within 45 days after entry of the Preliminary Approval Order as provided herein, the Settlement
Administrator shall send a copy of the Class Notice, Claim Form and Opt In Form in the form
approved by the Court in its Preliminary Approval Order to the members of the Class via first-class
regular U.S. mail using the most current mailing address information available from Apple’s payroll
records, which shall be updated by the Settlement Administrator to correct for any known or
identifiable address changes. (Agreement at ¶56).
The Notice, drafted jointly and agreed upon by the Parties through their respective counsel,
includes information regarding the nature of the Action; a summary of the substance of the
Settlement, including Apple’s denial of liability; the definition of the Class; the procedure and time
period for objecting to the Settlement and participating in the Final Approval hearing; a statement
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that the District Court has preliminarily approved the Settlement; and information regarding the
claims filing procedure and the opt-out procedure. See Exhibit 1 to the Agreement. Attached to
the Notice will be a Claim Form and Opt In Form, in the form attached to the Agreement as
Exhibits 2.
The costs associated with the mailing will be paid out of the Settlement Fund. The Claims
Administrator shall disseminate the settlement Notice and Claim Form and Opt In Form to the
Class, by U.S. mail, within forty-five (45) days of the entering of the order granting preliminary
approval of the Settlement. The Notice shall state that Class Members who wish to participate in
the settlement shall complete and return the Claim Form pursuant to the instructions contained
therein by first class mail or equivalent, postage paid. The Notice shall also provide that any Class
Member may choose to opt out of the Class, and that any such person who chooses to opt out of the
Class will not be entitled to any recovery obtained by way of the settlement and will not be bound
by the settlement or have any right to object, appeal or comment thereon.
The Notice will provide that all objections to the Settlement by anyone, including members
of the Settlement Class, must be filed in the District Court and served upon all counsel of record by
no later than forty-five (45) days from the mailing of the Notice of Preliminary Approval (the
“Objection/Exclusion Deadline”). The 45-day period applies notwithstanding any argument
regarding non-receipt of the notice. All objections must state with particularity the basis on which
they are asserted. Further, if any objector intends to appear at the Final Approval hearing, either in
person or through counsel, he or she must include notice of that fact and state the purpose for the
appearance in his or her objection.
This notice program was designed to meaningfully reach the largest possible number of
potential Class Members. The mailing and distribution of the Notice satisfies the requirements of
due process and is the best notice practicable under the circumstances and constitutes due and
sufficient notice to all persons entitled thereto. (Agreement at ¶56).
This notice satisfies the content requirements for notice following the exemplar class notice
in the Manual for Complex Litigation, Second §41.43. This notice also fulfills the requirement that
Class notices be neutral. Newberg, at §8.39.
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VIII. CONCLUSION
Counsel for the Parties have committed substantial amounts of time, energy, and resources
litigating and ultimately settling this case. In the judgment of Plaintiffs and Class Counsel, the
proposed settlement is a fair and reasonable compromise of the issues in dispute in light of the
strengths and weaknesses of each party’s case. After weighing the substantial, certain and
immediate benefits of these settlements against the uncertainty of trial, and appeal, Plaintiffs believe
the proposed settlement is fair, reasonable and adequate, and warrants this Court's preliminary
approval.
Accordingly, Plaintiffs respectfully request that the Court preliminarily approve the
proposed settlements, certify the Class for settlement purposes, schedule a date for a hearing on
Final Approval, and sign the proposed Preliminary Approval Order, submitted herewith.
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Dated: January 21, 2010
BLUMENTHAL, NORDREHAUG & BHOWMIK
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By: /s/Norman B. Blumenthal
Norman B. Blumenthal
Attorneys for Plaintiffs
UNITED EMPLOYEES LAW GROUP
Walter Haines (State Bar #71075)
65 Pine Ave, #312
Long Beach, CA 90802
Telephone: (562) 256-1047
Facsimile: (562) 256-1006
K:\D\NBB\Walsh v. Apple\Preliminary Approval\Memorandum-FINAL.wpd
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