Nunez v. BAE Systems San Diego Ship Repair Inc. et al

Filing 18

ORDER: (1) Conditionally Certifying Settlement Class Action; (2) Preliminarily Approving Proposed Settlement; (3) Approving Notice To Class; And (4) Setting Final Approval Hearing Date (ECF No. 15 ). The Court grants the parties' Joint Motion for preliminary approval of class action settlement. It is ordered that a Final Approving Hearing is set for 7/27/2017 at 1:30 p.m. in courtroom 4A.Signed by Judge Janis L. Sammartino on 2/13/2017. (dxj)

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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 12 EDUARDO NUNEZ, individually and on behalf of others similarly situated, 15 16 ORDER: (1) CONDITIONALLY CERTIFYING SETTLEMENT CLASS ACTION; (2) PRELIMINARILY APPROVING PROPOSED SETTLEMENT; (3) APPROVING NOTICE TO CLASS; AND (4) SETTING FINAL APPROVAL HEARING DATE Plaintiff, 13 14 Case No.: 16-CV-2162 JLS (NLS) v. BAE SYSTEMS SAN DIEGO SHIP REPAIR INC., a California Corporation; and DOES 1 through 50 inclusive, Defendants. 17 18 (ECF No. 15) 19 20 Presently before the Court is Plaintiff Eduardo Nunez’s and Defendant BAE 21 Systems San Diego Ship Repair Inc.’s (the “Parties”) Joint Motion for Order (1) 22 Conditionally Certifying Settlement Class Action; (2) Preliminarily Approving Proposed 23 Settlement; (3) Approving Notice to Class; and (4) Setting Final Approval Hearing Date. 24 (“Prelim. Settlement Mot.”) (ECF No. 15). Because the settlement is fundamentally fair, 25 reasonable, and adequate, the Court GRANTS the Parties’ Preliminary Settlement Motion. 26 /// 27 /// 28 /// 1 16-CV-2162 JLS (NLS) 1 BACKGROUND 2 Plaintiff Eduardo Nunez brings a class action suit seeking compensation on behalf 3 of all non-exempt employees of Defendant BAE Systems San Diego Ship Repair Inc. 4 (“SDSR”) for unpaid wages and penalties, as well as other violations of California law. 5 (Prelim. Settlement Mot. 9,1 ECF No. 15-1.) Defendant SDSR is an international defense, 6 aerospace, and security company that maintains a single shipyard in San Diego Bay, where 7 it works on virtually all types of government and commercial vessels (e.g., the U.S. Navy 8 fleet). (FAC ¶ 14, ECF No. 11.) The proposed class includes all non-exempt employees at 9 SDSR who worked at any time during the period May 27, 2012 through October 13, 2016 10 (“Settlement Class / Class Members”). (Prelim. Settlement Mot. 10, ECF No. 15-1.) Plaintiff’s Amended Complaint asserts seven claims for relief under various 11 12 provisions of California law: 13 1. 2. 3. 4. 5. 6. 7. Failure to Pay Straight-Time & Overtime Wages Violation of the Unfair Competition Law Cal. Bus. & Prof. Code §§ 17200, et seq. Failure to Provide Accurate Wage Statements Failure to Provide Rest Periods Failure to Reimburse Employees for Business Expenses Failure to Provide All Compensation Owed Upon Termination of Employment 8. Violation of the Private Attorney General Act 14 15 16 17 18 19 20 21 (See generally FAC, ECF No. 11.) Plaintiff generally alleges that because there would 22 typically be 100 SDSR workers waiting in line to pass through a checkpoint before they 23 could break their shift for lunch, Plaintiff and other workers were not provided with a full 24 30-minute meal break due to the time spent waiting in line. (Id. ¶ 10.) Thus, Plaintiff argues 25 Defendant failed to provide Plaintiff and other workers with a duty-free 30-minute meal 26 period and failed to pay them wages for their time spent disembarking from the ship, 27 28 1 Pin citations refer to the CM/ECF page numbers electronically stamped at the top of each page. 2 16-CV-2162 JLS (NLS) 1 returning tools, and waiting in the security line, among other activities. (Id.) Plaintiff 2 additionally alleges that Defendant improperly forced him and others to purchase clothes 3 and shoes from Defendant and that Defendant did not provide reimbursements for these 4 purchases. (Id.) As a result of this fraudulent behavior, the wage statements that Defendant 5 provided were inaccurate. (Id. ¶ 11.) 6 The Parties entered into extensive pre-suit negotiations for the purpose of settling 7 their disputes, such as (1) voluntary exchange of information, including SDSR’s 8 employment policies, sworn declarations from putative class members, and thousands of 9 electronic records containing class member data (e.g., individualized rates of pay, 10 employment dates, time records, and badge-swipe data); and (2) a full-day mediation in 11 San Francisco with Antonio Piazza, Esq., of Mediated Negotiations. (Prelim. Settlement 12 Mot. 10, ECF No. 15-1.) The mediation was successful and resulted in a non-reversionary 13 settlement of $2.9 million, (id.), though Defendant SDSR maintains its complete denial of 14 wrongdoing, (id. at 9 n.1). 15 The Parties present to the Court a Joint Motion for an Order: (1) conditionally 16 certifying the proposed Settlement Class, defined below; (2) preliminarily approving the 17 proposed settlement of $2.9 million; (3) approving the proposed Notice and directing 18 distribution of the Notice and related documents; and (4) setting a schedule for final 19 approval. As noted above, although SDSR stipulates both to certification of a Settlement 20 Class and the proposed Settlement, Defendant continues to deny all allegations of unlawful 21 conduct alleged in the Complaint, and does not admit or concede that it has, in any manner, 22 violated federal or California laws or committed any other unlawful action that would 23 entitle Plaintiff or any class to any recovery. 24 SETTLEMENT TERMS 25 The Parties have submitted a comprehensive settlement document with 26 approximately twenty-three pages of substantive terms, and a five-page proposed class 27 notice. (Joint Stipulation of Settlement and Release (“Settlement Agreement”) 31–60, ECF 28 /// 3 16-CV-2162 JLS (NLS) 1 No. 15-1.) The settlement provides monetary relief but no programmatic relief. Plaintiff 2 Eduardo Nunez, as class representative, supports the Settlement Agreement. (Id. at 54.) 3 I. Monetary Relief 4 SDSR proposes to pay a Maximum Settlement Amount of $2.9 million. (Prelim. 5 Settlement Mot. 10, ECF No. 15-1.) From this amount will be deducted: (a) all Settlement 6 payments to Class Members eligible for Settlement payments; (b) the Class Representative 7 service payment approved by the Court; (c) Class Counsel’s attorneys’ fees and expenses 8 approved by the Court; (d) the Settlement Administrator’s fees and expenses; (e) payment 9 made to the State of California Labor Workforce and Development Agency (“LWDA”); 10 (f) the employer’s portion of FICA, FUTA, and all other state and federal payroll taxes on 11 the “wage” portion of the Settlement payments to Class Members; and (g) an additional 12 flat amount of $250 for each employee who separated employment during the Covered 13 Period (“Wait Time Penalties”). (Id. at 11.) SDSR will automatically make Settlement 14 payments to Class Members (unless they choose to opt out) based on the following 15 formula: 16 17 18 19 20 21 22 23 24 25 26 27 28 After deductions of the Court-approved service payment to the Class Representative, the Court-approved attorneys’ fees and costs for Class Counsel, a payment for the Settlement Administrator’s fees and expenses, payment to the LWDA, the employer’s portion of state and federal payroll taxes and payment of Wait Time Penalties, the Remainder of the Maximum Payment will be available for distribution to the Payment-Eligible Class Members (the “Class Settlement Proceeds”). The Remainder shall be distributed as follows: Payment-Eligible Class Members will receive a payment based on each person’s compensable work weeks, which shall be all weeks worked as non-exempt employees by the Payment-Eligible Class Members during the Covered Period (“Compensable Work Weeks”). The dollars per Compensable Work Week will be calculated by dividing the total Compensable Work Weeks into the Remainder. That amount (dollars per week) will be multiplied by the number of Compensable Work Weeks for each Payment-Eligible Class Member. (Id.) The check will escheat to the State of California or any other State having jurisdiction 4 16-CV-2162 JLS (NLS) 1 over the Class Member’s assets if the Class Member fails to cash his or her check within 2 120 days after it is mailed. (Id. at 12.) 3 RULE 23 SETTLEMENT CLASS CERTIFICATION 4 Before granting preliminary approval of a class action settlement agreement, the 5 Court must first determine whether the proposed class can be certified. Amchem Prods. v. 6 Windsor, 521 U.S. 591, 620 (1997) (indicating that a district court must apply “undiluted, 7 even heightened, attention [to class certification] in the settlement context” in order to 8 protect absentees). 9 Class actions are governed by Federal Rule of Civil Procedure 23. In order to certify 10 a class, each of the four requirements of Rule 23(a) must first be met. Zinser v. Accufix 11 Research Inst., Inc., 253 F.3d 1180, 1186 (9th Cir. 2001). Rule 23(a) allows a class to be 12 certified only if: 13 (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 (4) the representative parties will fairly and adequately protect the interests of the class. 14 15 16 17 18 19 Next, in addition to Rule 23(a)’s requirements, the proposed class must satisfy the 20 requirements of one of the subdivisions of Rule 23(b). Zinser, 253 F.3d at 1186. Here, 21 Plaintiff seeks to certify the Settlement Class under subdivision Rule 23(b)(3), which 22 permits certification if “questions of law or fact common to class members predominate 23 over any questions affecting only individual class members,” and “a class action is superior 24 to other available methods for fairly and efficiently adjudicating the controversy.” The 25 Court addresses each of these requirements in turn. 26 I. Rule 23(a)(1): Numerosity 27 Federal Rule of Civil Procedure 23(a)(1) requires that a class must be “so numerous 28 that joinder of all members is impracticable.” “[C]ourts generally find that the numerosity 5 16-CV-2162 JLS (NLS) 1 factor is satisfied if the class comprises 40 or more members and will find that it has not 2 been satisfied when the class comprises 21 or fewer.” Celano v. Marriott Int’l, Inc., 242 3 F.R.D. 544, 549 (N.D. Cal. 2007). 4 Here, the proposed Settlement Class consists of approximately 1,930 individuals, all 5 of which are identifiable from SDSR’s data. (Prelim. Settlement Mot. 16, ECF No. 15-1.) 6 Accordingly, joinder of all members would be impracticable for purposes of Rule 23(a)(1), 7 and the numerosity requirement is therefore satisfied. 8 II. Rule 23(a)(2): Commonality 9 Federal Rule of Civil Procedure 23(a)(2) requires that there be “questions of law or 10 fact common to the class.” Commonality requires that “the class members ‘have suffered 11 the same injury.’” Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 349–50 (2011) (quoting 12 Gen. Tel. Co. of Sw. v. Falcon, 457 U.S. 147, 157 (1982)). “The existence of shared legal 13 issues with divergent factual predicates is sufficient, as is a common core of salient facts 14 coupled with disparate legal remedies within the class.” Hanlon v. Chrysler Corp., 150 15 F.3d 1011, 1019 (9th Cir. 1998). 16 Here, the Parties have carefully defined the Settlement Class to encompass all SDSR 17 employees adversely affected by the allegedly fraudulent policies and practices set forth 18 above. All common questions thus revolve around whether the alleged fraudulent policies 19 and practices in fact were fraudulent and impacted the class members. Accordingly, it is 20 appropriate for these issues to be adjudicated on a class-wide basis, and Rule 23(a)(2) is 21 satisfied. 22 III. Rule 23(a)(3): Typicality 23 To satisfy Federal Rule of Civil Procedure 23(a)(3), Plaintiff’s claims must be 24 typical of the claims of the Class. The typicality requirement is “permissive” and requires 25 only that Plaintiff’s claims “are reasonably coextensive with those of absent class 26 members.” Hanlon, 150 F.3d at 1020. “The test of typicality ‘is whether other members 27 have the same or similar injury, whether the action is based on conduct which is not unique 28 to the named plaintiffs, and whether other class members have been injured by the same 6 16-CV-2162 JLS (NLS) 1 course of conduct.’” Hanon v. Dataproducts Corp., 976 F.2d 497, 508 (9th Cir. 1992) 2 (quoting Schwartz v. Harp, 108 F.R.D. 279, 282 (C.D. Cal. 1985)). “[C]lass certification 3 should not be granted if ‘there is a danger that absent class members will suffer if their 4 representative is preoccupied with defenses unique to it.’” Id. (citation omitted). 5 Here, Plaintiff is an SDSR employee whose claims allegedly arise out of the same 6 underlying SDSR policies and practices as those pertaining to the proposed Settlement 7 Class. (Prelim. Settlement Mot. 17–18, ECF No. 15-1.) Accordingly, Plaintiff’s claims are 8 typical of the claims of the members of the proposed Settlement Class, thus satisfying Rule 9 23(a)(3). 10 IV. Rule 23(a)(4): Adequacy 11 Federal Rule of Civil Procedure 23(a)(4) requires that the named representatives 12 fairly and adequately protect the interests of the class. “To satisfy constitutional due 13 process concerns, absent class members must be afforded adequate representation before 14 entry of judgment which binds them.” Hanlon, 150 F.3d at 1020 (citing Hansberry v. Lee, 15 311 U.S. 32, 42–43 (1940)). To determine legal adequacy, the Court must resolve two 16 questions: “(1) do the named plaintiffs and their counsel have any conflicts of interest with 17 other class members, and (2) will the named plaintiffs and their counsel prosecute the 18 action vigorously on behalf of the class?” Id. 19 Here, there is no reason to believe that the named representative and Class Counsel 20 have any conflict of interest with the proposed Settlement Class members. There is also no 21 reason to believe that the named representative and Class Counsel have thus far failed to 22 vigorously investigate and litigate this case. Plaintiff has retained competent counsel, who 23 have conducted extensive investigation, research, and informal discovery in this case. 24 (Prelim. Settlement Mot. 18–19, ECF No. 15-1.) Furthermore, Class Counsel have 25 significant class action litigation experience, are knowledgeable about the applicable law, 26 and will continue to commit their resources to further the interests of the Class. (Id. at 19.) 27 Accordingly, the named representative and Class Counsel adequately represent the 28 proposed Settlement Class members, and Rule 23(a)(4)’s adequacy requirement is met. 7 16-CV-2162 JLS (NLS) 1 V. Rule 23(b)(3) 2 Federal Rule of Civil Procedure 23(b)(3) permits certification if “questions of law 3 or fact common to class members predominate over any questions affecting only individual 4 class members,” and “a class action is superior to other available methods for fairly and 5 efficiently adjudicating the controversy.” 6 A. 7 “The Rule 23(b)(3) predominance inquiry tests whether the proposed classes are 8 sufficiently cohesive to warrant adjudication by representation.” Amchem Prods., 521 U.S. 9 at 623. “Rule 23(b)(3) focuses on the relationship between the common and individual 10 Predominance issues.” Hanlon, 150 F.3d at 1022. 11 Here, the common issues of whether Defendant’s policies and practices failed to, for 12 example, compensate Class Members for all time worked, provide an opportunity for 13 compliant meal and rest periods, and provide accurate wage statements predominate over 14 the individual issues such as length of employment and particularized grievances. (See 15 Prelim. Settlement Mot. 19–20, ECF No. 15-1.) Further, for purposes of settlement, Class 16 Members are not required to prove any evidentiary or factual issues that could arise in 17 litigation. Accordingly, the predominance requirement of Rule 23(b)(3) is satisfied. 18 B. 19 The final requirement for certification pursuant to Federal Rule of Civil Procedure 20 23(b)(3) is “that a class action [be] superior to other available methods for fairly and 21 efficiently adjudicating the controversy.” The superiority inquiry requires the Court to 22 consider the four factors listed in Rule 23(b)(3): 23 24 25 26 27 Superiority (A) the class members’ interests in individually controlling the prosecution or defense of separate actions; (B) the extent and nature of any litigation concerning the controversy already begun by or against class members; (C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; and (D) the likely difficulties in managing a class action. 28 8 16-CV-2162 JLS (NLS) 1 See also Zinser, 253 F.3d at 1190. A court need not consider the fourth factor, however, 2 when certification is solely for the purpose of settlement. See True v. Am. Honda Motor 3 Co., 749 F. Supp. 2d 1052, 1066 n.12 (C.D. Cal. 2010); see also Amchem, 521 U.S. at 620 4 (“Confronted with a request for settlement-only class certification, a district court need not 5 inquire whether the case, if tried, would present intractable management problems, for the 6 proposal is that there be no trial.”). The superiority inquiry focuses “‘on the efficiency and 7 economy elements of the class action so that cases allowed under [Rule 23(b)(3)] are those 8 that can be adjudicated most profitably on a representative basis.’” Zinser, 253 F.3d at 1190 9 (quoting 7A Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice 10 and Procedure § 1780, at 562 (2d ed. 1986)). A district court has “broad discretion” in 11 determining whether class treatment is superior. Kamm v. Cal. City Dev. Co., 509 F.2d 12 205, 210 (9th Cir. 1975). 13 Here, Class Members’ claims involve the same issues arising from the same factual 14 bases. If Class Members’ claims were considered on an individual basis, almost 1,930 cases 15 would follow a similar trajectory, and each would come to a similar result. Furthermore, 16 individual cases would consume a significant amount of the Court’s and the Class 17 Members’ resources. It is also likely that Class Members would not pursue litigation on an 18 individual basis due to the high costs of pursuing individual claims. The interests of the 19 Settlement Class Members in individually controlling the litigation are minimal, especially 20 given the same broad-based policy and practices would be at issue. Additionally, because 21 the majority of SDSR’s employees are located in San Diego, many of the individual cases 22 would likely be filed in this district, and thus it is desirable to concentrate the litigation in 23 a single forum. Given all of the above, class treatment is the superior method of 24 adjudicating this controversy, and the superiority requirement of Rule 23(b)(3) is met. 25 VI. Conclusion 26 For the reasons stated above, the Court finds certification of the Settlement Class 27 proper under Rule 23(b)(3). Accordingly, the Settlement Class is CERTIFIED for 28 settlement purposes only. 9 16-CV-2162 JLS (NLS) 1 RULE 23 PRELIMINARY FAIRNESS DETERMINATION 2 Having certified the Settlement Class, the Court must next make a preliminary 3 determination as to whether the proposed settlement is “fair, reasonable, and adequate” 4 pursuant to Federal Rule of Civil Procedure 23(e). Relevant factors to this determination 5 include: The strength of the plaintiffs’ case; the risk, expense, complexity, and likely duration of further litigation; the risk of maintaining class action status throughout the trial; the amount offered in settlement; the extent of discovery completed and the stage of the proceedings; the experience and views of counsel; the presence of a governmental participant; and the reaction of the class members to the proposed settlement. 6 7 8 9 10 11 Hanlon, 150 F.3d at 1026. Furthermore, due to the “dangers of collusion between class 12 counsel and the defendant, as well as the need for additional protections when the 13 settlement is not negotiated by a court designated class representative,” any “settlement 14 approval that takes place prior to formal class certification requires a higher standard of 15 fairness.” Id. Additionally, although in the present case the Court has not been presented 16 with formal applications for Class Counsel’s attorney fees or class service awards, the 17 Court nonetheless considers these potential fees because they form part of the settlement 18 agreement. 19 I. Strength of Plaintiff’s Case 20 In order to succeed on the merits, Plaintiff would have to prove that Defendant’s 21 practices and policies were fraudulent. (See generally FAC, ECF No. 11.) SDSR denies 22 any wrongdoing, that Plaintiff is entitled to any relief at law or equity, and that Plaintiff 23 would be able to validly certify a class in the absence of the settlement agreement. (See 24 Def.’s Answer to FAC, ECF No. 14.) Plaintiff, however, estimates SDSR’s potential 25 liability exposure on the underlying Labor Code claims to be approximately $11.5 million. 26 (Prelim. Settlement Mot. 23, ECF No. 15-1.) Additionally, the Settlement is the result of 27 arm’s-length negotiations conducted over several months, including each Party’s 28 individual discovery and valuation of the case and one full-day mediation session before 10 16-CV-2162 JLS (NLS) 1 an experienced and nationally renowned mediator. (Id. at 22–23.) Given this disagreement 2 and neutral third-party evaluation of the same, the Court thus finds that this factor weighs 3 in favor of the $2.9 million settlement being fair, reasonable, and adequate. 4 II. Risk, Expense, Complexity, and Likely Duration of Further Litigation 5 Were the case to proceed to further litigation rather than settlement, the Parties 6 would each bear substantial risk and a strong likelihood of protracted and contentious 7 litigation. Even though the Parties have agreed to settle this action, they fundamentally 8 disagree regarding the validity of Plaintiff’s claims. (Prelim. Settlement Mot. 23–26, ECF 9 No. 15-1.) Additionally, the Parties document a number of risks in litigating Plaintiff’s 10 claims—including the fact that a class might not even be certified—and thus argue that the 11 present Settlement affords class members at least some compensation where there might 12 be none. (Id.) Indeed, the fact that Defendant disputes all aspects of Plaintiff’s claims, 13 including the propriety of class certification in the absence of the settlement agreement, 14 suggests that these issues would be vigorously (and therefore costly) litigated were there 15 to be further litigation. Given the foregoing, this factor weighs in favor the settlement being 16 fair, reasonable, and adequate. 17 III. Risk of Maintaining Class Action Status Throughout Trial 18 The Parties dispute whether the classes can be validly certified in the absence of the 19 Settlement Agreement. Implicit in this disagreement is the likelihood of initial challenges 20 to class certification and the potential for decertification motions even if class status is 21 granted. Weighed against the fact that Defendant does not object to a finding that the class 22 elements are met for purposes of this settlement, this factor also weighs in favor of the 23 settlement being fair, reasonable, and adequate. 24 IV. Amount Offered in Settlement 25 SDSR has agreed to pay $2.9 million to settle this lawsuit. (Prelim. Settlement Mot. 26 26, ECF No. 15-1.) The crux of Plaintiff’s claims are that SDSR failed to pay the class 27 members the entirety of their earned wages. Because SDSR has data regarding each 28 affected class member, which it provided to Plaintiff prior to negotiating the Settlement 11 16-CV-2162 JLS (NLS) 1 Agreement, the proof of each class member’s damages is largely calculable and less prone 2 to subjective considerations. Indeed, the Parties note that the Settlement Agreement 3 provides for Settlement Shares that are divided proportionally based on each Participating 4 Class Member’s number of workweeks, and that each former employee will additionally 5 receive a flat amount of $250 in full satisfaction of wait time penalties. (Id. at 27.) 6 Accordingly, this factor weighs in favor of the settlement being fair, reasonable, and 7 adequate. 8 V. Extent of Discovery Completed and Stage of Proceedings 9 Prior to the agreed-upon settlement, the Parties engaged in substantial informal 10 discovery, including payroll, timekeeping, and other records. (Prelim. Settlement Mot. 23, 11 ECF No. 15-1.) Defendant also performed its own investigation, interviewing 12 approximately ninety potential class members and collecting approximately eighty-three 13 declarations, on which it relied to demonstrate the disparity of class member experiences 14 and that proper compensation was paid for time worked. (Id.) And as discussed, the Parties 15 engaged a neutral third-party mediator who fully examined and discussed with each party 16 the strengths and weaknesses of each party’s case. (Id.) Both Class Counsel and Defense 17 Counsel gained significant knowledge of the relevant facts and law throughout the 18 discovery process and through independent investigation and evaluation. Accordingly, it 19 appears the Parties have entered into the Settlement Agreement with a strong working 20 knowledge of the relevant facts, law, and strengths and weaknesses of their claims and 21 defenses. Given all of the above, this factor weighs in favor of the proposed settlement 22 being fair, reasonable, and adequate. 23 VI. Experience and Views of Counsel 24 “The recommendations of plaintiffs’ counsel should be given a presumption of 25 reasonableness.” Boyd v. Bechtel Corp., 485 F. Supp. 610, 622 (N.D. Cal. 1979). And here, 26 Class Counsel believes the Settlement Agreement is fair, reasonable, adequate, and in the 27 best interest of the Settlement Class. (Settlement Agreement ¶ 63, ECF No. 15-1.) 28 Furthermore, in the present case the presumption of reasonableness is warranted based on 12 16-CV-2162 JLS (NLS) 1 Class Counsel’s expertise in complex litigation, familiarity with the relevant facts and law, 2 and significant experience negotiating other class and collective action settlements. Given 3 the foregoing, and according the appropriate weight to the judgment of these experienced 4 counsel, this factor weighs in favor the proposed settlement being fair, reasonable, and 5 adequate. 6 VII. Settlement Attorneys’ Fees Provision 7 In the Ninth Circuit, a district court has discretion to apply either a lodestar method 8 or a percentage-of-the-fund method in calculating a class fee award in a common fund case. 9 Fischel v. Equitable Life Assur. Soc’y of U.S., 307 F.3d 997, 1006 (9th Cir. 2002). When 10 applying the percentage-of-the-fund method, an attorneys’ fees award of “twenty-five 11 percent is the ‘benchmark’ that district courts should award . . . .” In re Pac. Enters. Sec. 12 Litig., 47 F.3d 373, 379 (9th Cir. 1995) (citing Six (6) Mexican Workers v. Ariz. Citrus 13 Growers, 904 F.2d 1301, 1311 (9th Cir. 1990)); Fischel, 307 F.3d at 1006. However, a 14 district court “may adjust the benchmark when special circumstances indicate a higher or 15 lower percentage would be appropriate.” In re Pac. Enters. Sec. Litig., 47 F.3d at 379 16 (citing Six (6) Mexican Workers, 904 F.2d at 1311). “Reasonableness is the goal, and 17 mechanical or formulaic application of either method, where it yields an unreasonable 18 result, can be an abuse of discretion.” Fischel, 307 F.3d at 1007. 19 In the present case, the Settlement Agreement specifies that SDSR will not oppose 20 Class Counsel’s request to the Court for approval of attorneys’ fees in the amount equal to 21 25% of the Maximum Settlement Amount ($725,000), and reasonable costs in an amount 22 not to exceed $20,000. (Settlement Agreement ¶ 29, ECF No. 15-1.) In support of this 23 provision, Class Counsel note that the provision is completely consistent with the Ninth 24 Circuit’s benchmark for reasonableness. (Prelim. Settlement Mot. 23, ECF No. 15-1 (citing 25 Vasquez v. Coast Valley Roofing, Inc., 266 F.R.D. 482, 491 (E.D. Cal. 2010) (stating that 26 “[t]he typical range of acceptable attorneys’ fees in the Ninth Circuit is 20% to 33 1/3% of 27 the total settlement value, with 25% considered the benchmark”)).) Because Class 28 /// 13 16-CV-2162 JLS (NLS) 1 Counsel’s attorneys’ fees provision is set at the benchmark, the Court concludes that the 2 provision is reasonable. 3 VIII. Class Representative Service Award Provision 4 The Ninth Circuit recognizes that named plaintiffs in class action litigation are 5 eligible for reasonable incentive payments. Staton v. Boeing Co., 327 F.3d 938, 977 (9th 6 Cir. 2003). The district court must evaluate each incentive award individually, using 7 “‘relevant factors includ[ing] the actions the plaintiff has taken to protect the interests of 8 the class, the degree to which the class has benefitted from those actions, . . . the amount 9 of time and effort the plaintiff expended in pursuing the litigation . . . and reasonabl[e] 10 fear[s of] workplace retaliation.’” Id. (citing Cook v. Niedert, 142 F.3d 1004, 1016 (7th 11 Cir. 1998)). 12 In the present case, the Settlement Agreement provides up to $5,000 to the Class 13 Representative, to be paid from the Maximum Payment, in addition to the Settlement 14 payment he may otherwise receive as a class member. (Settlement Agreement ¶ 30, ECF 15 No. 15-1.) The Class Notice states that this award is “an enhancement fee to the named 16 plaintiff to compensate him for the time, work, and risks undertaken in bringing this Class 17 Action.” (Id. at 57.) Given the foregoing, the Court concludes that the current Settlement 18 Agreement Class Representative Payment provision should not bar preliminary approval 19 of the Settlement Agreement. 20 IX. For the reasons stated above, the Parties’ Joint Motion for Preliminary Approval of 21 22 Conclusion Class Settlement is GRANTED regarding the Settlement Agreement. 23 NOTICE OF CLASS CERTIFICATION AND SETTLEMENT 24 Pursuant to Federal Rule of Civil Procedure 23(c)(2)(B), “[f]or any class certified 25 under Rule 23(b)(3) the court must direct to class members the best notice that is 26 practicable under the circumstances, including individual notice to all members who can 27 be identified through reasonable effort.” Because the Court has determined that 28 /// 14 16-CV-2162 JLS (NLS) 1 certification is appropriate under Rule 23(b)(3), the mandatory notice procedures required 2 by Rule 23(c)(2)(B) must be followed. 3 Where there is a class settlement, Federal Rule of Procedure 23(e)(1) requires the 4 court to “direct notice in a reasonable manner to all class members who would be bound 5 by the proposal.” “Notice is satisfactory if it ‘generally describes the terms of the settlement 6 in sufficient detail to alert those with adverse viewpoints to investigate and to come forward 7 and be heard.’” Rodriguez v. W. Publ’g Corp., 563 F.3d 948, 962 (9th Cir. 2009) (quoting 8 Churchill Vill., LLC v. Gen. Elec., 361 F.3d 566, 575 (9th Cir. 2004)); see also Grunin v. 9 Int’l House of Pancakes, 513 F.2d 114, 120 (8th Cir. 1975) (“[T]he mechanics of the notice 10 process are left to the discretion of the court subject only to the broad ‘reasonableness’ 11 standards imposed by due process.”). 12 The Parties have agreed to notify the Class Members in writing by mailing all class 13 members a Notice of Pendency of Class Action (“Notice”). (Prelim. Settlement Mot. 14, 14 ECF No. 15-1.) Given that some Class Members may only read Spanish, the proposed 15 Notice will also be translated into and distributed in Spanish. (Id.) The Parties have agreed 16 to have the Settlement Administrator send the Class Notice Packets to all identified Class 17 Members using the mailing address information provided by SDSR, including use of all 18 standard skip tracing to verify the accuracy of all addresses. (Id. at 27; Settlement 19 Agreement ¶ 38, ECF No. 15-1.) If the packet is returned because of an incorrect address, 20 the Settlement Administrator will make reasonable efforts to locate Class Members and re- 21 send the notices. (Prelim. Settlement Mot. 27, ECF No. 15-1.) The proposed Notice 22 explains: 23 24 25 26 (i) the nature of the action; (ii) the definition of class certified; (iii) the class claims, issues, or defenses; (iv) that class members may enter an appearance through counsel if the member so desires; (v) that the court will exclude from the class any member who requests exclusion; (vi) the time and manner for requesting exclusion; and (v) the binding effect of a class judgment on class members under Rule 23(c)(3). 27 28 (Id.) Having thoroughly reviewed the jointly drafted Notice, the Court finds that the method 15 16-CV-2162 JLS (NLS) 1 and content of the Notice comply with Rule 23. Accordingly, the Court approves the 2 Parties’ proposed notification plan. 3 CONCLUSION 4 For the reasons stated above, the Court GRANTS the Parties’ Joint Motion for 5 Preliminary Approval of Class Action Settlement (ECF No. 15). The Court ORDERS as 6 follows: 7 1. 8 AGREEMENT: The Settlement Agreement is preliminarily approved as fair, reasonable, 9 and adequate pursuant to Federal Rule of Civil Procedure 23(e). PRELIMINARY APPROVAL OF PROPOSED SETTLEMENT 10 2. 11 Procedure 23(b)(3), the action is preliminarily certified, for settlement purposes only, as a 12 class action on behalf of the following Settlement Class Members with respect to the claims 13 asserted in this Action: 14 PRELIMINARY CLASS CERTIFICATION: Pursuant to Federal Rule of Civil Settlement Class: All non-exempt employees at BAE Systems San Diego Ship Repair Inc. who worked at any time during the period May 27, 2012 through October 13, 2016. 15 16 17 3. CLASS REPRESENTATIVE, CLASS COUNSEL, AND SETTLEMENT 18 ADMINISTRATOR: Pursuant to Federal Rule of Civil Procedure 23, the Court 19 preliminarily certifies, for settlement purposes only, Plaintiff Eduardo Nunez as the Class 20 Representative, and Alexander Dychter, of Dychter Law Offices, APC, and Walter Haines, 21 of United Employees Law Group, PC, as Class Counsel. Additionally, the Court approves 22 and appoints Rust Consulting, Inc. as the Settlement Administrator. 23 4. 24 forth in the Settlement Agreement and the Notice attached as Exhibit A to the Settlement 25 Agreement. (Settlement Agreement Ex. A, ECF No. 15-1.) The form and method for 26 notifying the Class Members of the Settlement and its terms and conditions satisfies the 27 requirements of Federal Rules of Civil Procedure 23(c)(2)(B) and 23(e). The Court finds 28 that the Notice Procedure submitted by the Parties constitutes the best notice practicable NOTICE: The Court approves the form and substance of the proposed notice set 16 16-CV-2162 JLS (NLS) 1 under the circumstances. As provided in the Settlement Agreement, the Settlement 2 Administrator SHALL provide notice to the Class Members and respond to Class Member 3 inquiries. 4 Within thirty (30) days of the date on which this Order is electronically docketed, 5 the Parties SHALL disseminate the Notice in the form attached as Exhibit A to the 6 Settlement Agreement and in the manner and form provided in the Settlement Agreement. 7 5. 8 Approval Hearing on July 27, 2017 at 1:30 p.m. at 221 W. Broadway, Courtroom 4A, 4th 9 Floor, San Diego, CA 92101, to consider: 10 FINAL APPROVAL HEARING: Judge Sammartino shall conduct a Final a. 11 13 b. c. d. 14 e. 12 the fairness, reasonableness, and adequacy of the proposed settlement; Plaintiff’s request for the award of attorneys’ fees and costs; the Class Representative enhancement; dismissal with prejudice of the class action with respect to Defendant; and the entry of final judgment in this action. 15 16 At the Final Approval Hearing, the Parties shall also be prepared to update the Court on 17 any new developments since the filing of the motion, including any untimely submitted 18 opt-outs, objections, and claims, or any other issues as the Court deems appropriate. The date and time of the Final Approval Hearing shall be included in the Notice to 19 20 be mailed to all class members. 21 6. 22 No later than twenty-one (21) days before the Final Approval Hearing, the Parties shall file 23 a Motion for Final Approval of Class Action Settlement. The Motion shall include and 24 address any objections received as of the filing date. In addition to the class certification 25 and settlement fairness factors, the motion shall address the number of putative Settlement 26 Class members who have opted out and the corresponding number of claims. 27 7. 28 REPRESENTATIVE SERVICE AWARDS: No later than twenty-one (21) days before MOTION FOR FINAL APPROVAL OF CLASS ACTION SETTLEMENT: APPLICATION FOR ATTORNEYS’ FEES, COSTS, AND CLASS 17 16-CV-2162 JLS (NLS) 1 the Final Approval Hearing, Class Counsel shall file an application for attorneys’ fees, 2 costs, and class representative service awards. Class Counsel shall provide documentation 3 detailing the number of hours incurred by attorneys in litigating this action, supported by 4 detailed time records, as well as hourly compensation to which those attorneys are 5 reasonably entitled. Class Counsel should address the appropriateness of any upward or 6 downward departure in the lodestar calculation, as well as reasons why a percentage-of- 7 the-fund approach to awarding attorney fees may be more preferable in this case. Class 8 Counsel should be prepared to address any questions the Court may have regarding the 9 application for fees at the Final Approval Hearing. 10 8. 11 consummated for any reason, the conditional class certification shall be of no further force 12 or effect. Should the settlement not become final, the fact that the Parties were willing to 13 stipulate to class certification as part of the settlement shall have no bearing on, nor be 14 admissible in connection with, the issue of whether a class should be certified in a non- 15 settlement context. 16 9. MISCELLANEOUS PROVISIONS: In the event the proposed settlement is not SCHEDULE: The Court orders the following schedule for further proceedings: 17 Event 18 Defendant to Deliver Class List to Within 7 days of the date on which 19 Settlement Administrator 20 Settlement Administrator to Send Within 30 days of the date on which 21 Notice to Class Members 22 Last Day for Class Members to File No later than 60 days from the date of 23 Request 24 Settlement 25 Last Day for Class Members to File No later than 60 days from the date of 26 Objections to the Settlement Date for Exclusion this Order is electronically docketed this Order is electronically docketed from mailing the Notice mailing the Notice 27 28 18 16-CV-2162 JLS (NLS) 1 Last Day for Class Members to File No later than 60 days from the date of 2 Notice of Intention to Appear at Final mailing the Notice 3 Approval Hearing 4 Parties to File Motion for Final No later than 21 days before the Final 5 Approval 6 Class Counsel to File Motion for No later than 21 days before the Final 7 Attorneys’ Fees and Costs and Approval Hearing 8 Incentive Fees 9 Final Approval Hearing Approval Hearing July 27, 2017 at 1:30 p.m. 10 11 12 IT IS SO ORDERED. Dated: February 13, 2017 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 19 16-CV-2162 JLS (NLS)

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