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

Filing 62

ORDER (1) Granting Final Settlement Motion; (2) Granting Motion for Attorney's Fees; and (3) Granting Motion to Substitute Party. Signed by Judge Janis L. Sammartino on 11/14/2017. Pursuant to the Parties Agreement, the action is dismissed with prejudice. (mpl)

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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 17 ORDER (1) GRANTING FINAL SETTLEMENT MOTION; (2) GRANTING MOTION FOR ATTORNEY’S FEES; AND (3) GRANTING MOTION TO SUBSTITUTE PARTY 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. (ECF Nos. 37, 46, 47) 18 19 20 Presently before the Court is Class Counsel’s and Defendant BAE Systems San 21 Diego Ship Repair, Inc.’s (collectively, the “Parties”) Joint Motion for Final Approval of 22 Class Action Settlement (“Final Settlement Mot.”). (ECF No. 46.) Because the Settlement 23 is fundamentally fair, reasonable, and adequate, the Court GRANTS the Parties’ Final 24 Settlement Motion. Also before the Court is Class Counsel’s Motion for Attorney’s Fees, 25 Costs, and Incentive Fees (“Fee Mot.”). (ECF No. 47.) Given that the attorney’s fees are 26 set at the Ninth Circuit benchmark, and that the remaining fees and costs are reasonable, 27 the Court GRANTS Class Counsel’s Fee Motion. Finally, the Parties seek to replace the 28 sole named Plaintiff Eduardo Nunez with another Class Member, arguing that by objecting 1 16-CV-2162 JLS (NLS) 1 to the Final Settlement, Nunez has a conflict of interest with the Class and can no longer 2 serve as an adequate Class Representative. (Joint Motion for Substitution of Class 3 Representative in Place of Eduardo Nunez (“Mot. to Substitute”). (ECF No. 37.) The 4 Court GRANTS the Parties’ Motion to Substitute and substitutes Plaintiff Bryan De Anda 5 as the sole named Plaintiff. 6 BACKGROUND 7 Plaintiff Eduardo Nunez filed a class action suit seeking compensation on behalf of 8 all non-exempt employees of Defendant BAE Systems San Diego Ship Repair Inc. (“BAE 9 SDSR”) for unpaid wages and penalties, as well as other violations of California law. (Final 10 Settlement Mot. 7,1 ECF No. 46-1; see also generally Second Am. Compl. (“SAC”), ECF 11 No. 11.) Defendant BAE SDSR is an international defense, aerospace, and security 12 company that maintains a single shipyard in San Diego Bay, where it works on virtually 13 all types of government and commercial vessels (e.g., the U.S. Navy fleet). (SAC ¶ 14.) 14 The proposed class includes all non-exempt employees at BAE SDSR who worked at any 15 time during the period May 27, 2012 through October 13, 2016 (collectively, “Class,” 16 “Settlement Class,” or “Class Members”). (Final Settlement Mot. 7.) 17 Plaintiff’s Second Amended Complaint asserts seven claims for relief under various 18 provisions of California law: 19 1. Failure to Pay Straight-Time & Overtime Wages 20 2. Violation of the Unfair Competition Law (Cal. Bus. & Prof. Code §§ 17200, et seq.) 21 3. Failure to Provide Accurate Wage Statements 22 4. Failure to Provide Rest Periods 23 5. Failure to Reimburse Employees for Business Expenses 24 6. Failure to Provide All Compensation Owed Upon Termination of Employment 25 7. Violation of the Private Attorney General Act 26 27 28 1 Pin citations to docketed material refer to the CM/ECF numbers electronically stamped at the top of each page. 2 16-CV-2162 JLS (NLS) 1 (See generally SAC.) Among other claims, Plaintiff alleges that because there would 2 typically be 100 BAE SDSR workers waiting in line to pass through a checkpoint before 3 they could break their shift for lunch, Plaintiff and other workers were not provided with a 4 full 30-minute meal break due to the time spent waiting in line. (Id. ¶ 10.) Thus, Plaintiff 5 argues Defendant failed to provide Plaintiff and other workers with a duty-free 30-minute 6 meal period and failed to pay the Class its wages for their time spent, for example, 7 disembarking from the ship, returning tools, and waiting in the security line. (Id.) Plaintiff 8 additionally alleges that Defendant improperly forced him and others to purchase clothes 9 and shoes from Defendant and that Defendant did not provide reimbursements for these 10 purchases. (Id.) As a result of this, and other, fraudulent behavior, Plaintiff alleges the 11 wage statements that Defendant provided were inaccurate. (Id. ¶ 11.) In sum, Plaintiff 12 alleges that the Class Members are “similarly situated persons who are presently employed 13 or were formerly employed as non-exempt employees of Defendant BAE SDSR in San 14 Diego, California who: 1) were not paid straight-time wages for all work time; 2) were not 15 paid premium overtime wages for all work performed in excess of eight hours in one 16 workday or over forty hours in one workweek; 3) were not provided with duty-free meal 17 30-minute meal breaks; and/or, 4) were not provided accurate itemized wage statements.” 18 (Id. ¶ 12.) 19 The Parties entered into extensive pre-suit negotiations for the purpose of settling 20 their disputes, such as (1) voluntary exchange of information, including BAE SDSR’s 21 employment policies, sworn declarations from putative class members, and thousands of 22 electronic records containing class member data (e.g., individualized rates of pay, 23 employment dates, time records, and badge swipe data); and (2) a full-day mediation in 24 San Francisco with Mr. Anthony (“Antonio”) Piazza, Esq., of Mediated Negotiations. 25 (Final Settlement Mot. 9–12; Prelim. Settlement Mot. 10, ECF No. 15-1.) The mediation 26 was successful and resulted in a non-reversionary settlement of $2.9 million, (Final 27 Settlement Mot. 11–12), though Defendant BAE SDSR maintains its complete denial of 28 wrongdoing, (e.g., Prelim. Settlement Mot. 9 n.1). 3 16-CV-2162 JLS (NLS) 1 On February 13, 2017, the Court issued an Order (1) conditionally certifying the 2 settlement class action; (2) preliminarily approving the proposed settlement; (3) approving 3 the notice to be sent to the Class; and (4) setting a final approval hearing date. (“Prelim. 4 Settlement Order,” ECF No. 18.) On March 15, 2017, the Court-appointed Settlement 5 Administrator mailed the Class Notice to 1,970 Settlement Class Members. 6 Settlement Mot. 6.) Settlement Class Members were advised that they could object to or 7 opt-out of the Settlement by no later than May 15, 2017. (Id.) Relevant to the pending 8 motions, the Notice contained the following language for those interested in objecting to 9 the proposed settlement: 10 11 12 13 14 15 16 17 18 19 20 21 (Final As long as you do not ‘opt out’ from the settlement, you have the right to object to the settlement. To do so, you must send to the Court, the attorneys for the parties whose addresses are listed below, and the Claims Administrator whose address is above your objection in writing and the objection must be postmarked no later than May 15, 2017. The objection must state: (a) your full legal name, home address, telephone number, last four digits of your social security number (for identity verification purposes); (b) the words ‘Notice of Objection’ or ‘Formal Objection;’ (c) in clear and concise terms, the legal and factual arguments supporting the objection; and (d) a list identifying the witness(es) you as the objector may call to testify at the Fairness Hearing, as well as true and correct copies of any exhibit(s) you intend to offer. Your objection should be directed to the Hon. Janis L. Sammartino, United States District Court – Southern District of California, 221 West Broadway, Suite 4135, San Diego, California 92101 and must reference case number 3:16-cv-02162-JLS-NLS. 22 23 (Id. at 21 (citing Decl. of Abigail Schwartz on Behalf of Rust Consulting, Inc. in Support 24 of Mot. for Final Approval (“Schwartz Decl.”) ¶ 8, Ex. A (“Notice”), at 4, ECF No. 46-5 25 (emphasis added by the Parties)).) Only one Class Member opted out, and six Class 26 27 28 4 16-CV-2162 JLS (NLS) 1 Members attempted2 to file objections. (Id.) 2 On May 2, 2017, Plaintiff Nunez and Defendant BAE SDSR filed a Joint Motion to 3 Reset the Final Approval Hearing to June 15, 2017, instead of the original date of July 27, 4 2017, given the lengthy delay between the opt-out and objection deadline and the date of 5 the Final Approval Hearing. (ECF No. 19.) On May 4, 2017, the Court granted the Joint 6 Motion, instructing Plaintiff and Defendant to immediately contact Class Members who 7 timely object to the Settlement or who otherwise noticed their intent to appear at the Final 8 Approval Hearing and apprise them of the new date. (ECF No. 20.) 9 Then, on May 12, 2017, the Court received a contested motion to substitute attorney 10 filed by Plaintiff Nunez. (ECF No. 24). Four days later the Court received a notice of 11 Plaintiff Nunez’s objection to the Settlement. (ECF No. 27). Given these developments, 12 the Court vacated the newly reset Final Fairness Hearing Date and ordered all parties to 13 appear for a status conference set for May 25, 2017. (ECF No. 35.) At the status 14 conference, the Court granted Nunez’s motion to substitute attorneys from the law firm 15 Hewgill & Cobb to represent him in his individual capacity as an objector to the Settlement 16 (not as new Class Counsel), and also requested briefing on the question of whether Nunez 17 could continue to serve as the sole named Class Representative given his eleventh-hour 18 objections to the Settlement. (ECF No. 36.) Briefing was completed on June 12, 2017, 19 (ECF No. 40), and the Court took all arguments under submission to be considered together 20 with any motion for final approval of the settlement. (ECF No. 41.) The Court also reset 21 the date for the Final Approval Hearing to the original date of July 27, 2017. (Id.) The 22 Court held a final fairness hearing on November 7, 2017. 23 After considering some of the arguments raised in the Class Members’ objections, 24 addressed more thoroughly below, the Court ordered supplemental notice to the Class to 25 address certain issues. (ECF Nos. 57, 59.) The Court also granted the Class a new 26 27 28 2 The Court further addresses the procedural and substantive deficiencies of these objections below. However, the Court here notes that three of the objections were not timely filed, (ECF Nos. 42, 43, 44), and the other three failed to send their objections to the Settlement Administrator, (ECF Nos. 27, 28, 32). 5 16-CV-2162 JLS (NLS) 1 opportunity to opt-out of the Settlement, as well as a limited opportunity to file new 2 objections to the Settlement and Class Counsel’s Motion for Attorney’s Fees. (Id.) 3 On October 24, 2017, the Parties (Class Members and Defendant) filed a 4 Supplemental Memorandum in Support of the Joint Motion for Final Approval of Class 5 Action Settlement. (ECF No. 60.) The Supplemental Memorandum states that on August 6 15, 2017 the Court-appointed Settlement Administrator mailed supplemental notice to 7 1,968 class members—two class members had opted out prior to the mailing. (Id. at 2.) In 8 response to the supplemental notice, no class members opted out and no new objections 9 were filed or provided to counsel or the claims administrator. (Id. at 3.) 10 The Parties now present to the Court Joint Motions for an Order: (1) reaffirming the 11 Court’s certification of the Settlement Class; (2) granting final approval of the Settlement 12 Agreement; (3) approving of and awarding attorney’s fees, costs, and a Class 13 Representative service award; and (4) removing Nunez as named Class Representative and 14 substituting De Anda in his place. The Parties have also filed a supplemental brief 15 addressing the responses from Class Members after the supplemental notice. 16 SETTLEMENT TERMS 17 The Parties have submitted a comprehensive settlement document with 18 approximately twenty-three pages of substantive terms. (Prelim. Settlement Mot. Ex. 1, 19 Joint Stipulation of Settlement and Release (“Settlement Agreement”) 31–60, ECF No. 15- 20 1.) The Settlement provides monetary relief, but no programmatic relief,3 in exchange for 21 a defined release of liability. At the time of signing and preliminary approval of this 22 Settlement Agreement, Plaintiff Eduardo Nunez, as Class Representative, supported the 23 Settlement Agreement.4 (Id. at 54.) 24 BAE SDSR stands to pay a Maximum Settlement Amount of $2.9 million. (Final 25 26 27 28 3 As noted above, although BAE SDSR stipulates both to certification of a Settlement Class and the proposed Settlement, Defendant continues to deny all allegations of unlawful conduct alleged in the Complaint, and does not admit or concede that it has, in any manner, violated federal or California laws or committed any other unlawful action that would entitle Plaintiff or any class to any recovery. 4 However, as discussed below, he now objects to its terms on several grounds. 6 16-CV-2162 JLS (NLS) 1 Settlement Mot. 7.) BAE SDSR will automatically make Settlement payments to Class 2 Members (unless they have chosen to opt out) based on the following formula: 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 After deducting from the Maximum Settlement Amount the Court-approved attorneys’ fees and costs for Class Counsel, a payment for the Settlement Administrator’s fees and expenses, payment to the State of California Labor and Workforce Development Agency (“LWDA”), the employer’s portion of FICA, FUTA, and all other state and federal payroll taxes on the “wage” portion of the Settlement payments to Class Members, an additional flat amount of $250.00 for each employee separated from employment during the Covered Period (“Wait Time Penalties”), and a Court-approved service payment to the Class Representative(s), the entirety of the remaining funds (the “Net Settlement Amount”) shall automatically be distributed to the payment-eligible Settlement Class Members. See Settlement Agreement, ¶¶ 11, 31b (ECF No. 15-1). Payment-eligible Class Members will receive a payment based on each person’s number of compensable work-weeks, which shall be all weeks worked as a non-exempt employee by the Payment-Eligible Class Members since May 12, 2012 (“Compensable Work Weeks”). The dollars per Compensable Work Week will be calculated by dividing the total Compensable Work Weeks for the entire Settlement Class into the Net Settlement Amount. That amount (in dollars per week) will be multiplied by the number of Compensable Work Weeks for each payment-eligible Class Member. Id. ¶ 31b. 19 20 (Id.) The check will escheat to the State of California or any other State having jurisdiction 21 over the Class Member’s assets if the Class Member fails to cash his or her check within 22 120 days after it is mailed. (Id. at 8.) 23 RULE 23 SETTLEMENT CLASS CERTIFICATION 24 Before granting final approval of a class action settlement agreement, the Court 25 must first determine whether the proposed class can be certified. Amchem Prods., Inc. v. 26 Windsor, 521 U.S. 591, 620 (1997) (indicating that a district court must apply “undiluted, 27 even heightened, attention [to class certification] in the settlement context” in order to 28 protect absentees). In the present case, the Court previously provisionally certified the 7 16-CV-2162 JLS (NLS) 1 Settlement Class for purposes of settlement only. (Prelim. Settlement Order 16.) While 2 the Parties now question Plaintiff Nunez’s ability to serve as an adequate Class 3 Representative, nothing has changed to affect the propriety of certification of the 4 Settlement Class as a whole. Accordingly, the Court’s analysis here is largely the same as 5 in its Preliminary Settlement Order, with the addition of a more detailed discussion of 6 Nunez’s ability to serve as an adequate representative under Federal Rule of Civil 7 Procedure 23(a)(4). 8 Class actions are governed by Federal Rule of Civil Procedure 23. In order to certify 9 a class, each of the four requirements of Rule 23(a) must first be met. Zinser v. Accufix 10 Research Inst., Inc., 253 F.3d 1180, 1186 (9th Cir. 2001). Rule 23(a) allows a class to be 11 certified only if: 12 (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. 13 14 15 16 17 Next, in addition to Rule 23(a)’s requirements, the proposed class must satisfy the 18 requirements of one of the subdivisions of Rule 23(b). Zinser, 253 F.3d at 1186. Here, 19 Plaintiff seeks to certify the Settlement Class under subdivision Rule 23(b)(3), which 20 permits certification if “questions of law or fact common to class members predominate 21 over any questions affecting only individual members,” and “a class action is superior to 22 other available methods for fairly and efficiently adjudicating the controversy.” Fed. R. 23 Civ. P. 23(b)(3). The Court addresses each of these requirements in turn. 24 I. Rule 23(a)(1): Numerosity 25 Federal Rule of Civil Procedure 23(a)(1) requires that a class must be “so numerous 26 that joinder of all members is impracticable.” “[C]ourts generally find that the numerosity 27 factor is satisfied if the class comprises 40 or more members and will find that it has not 28 been satisfied when the class comprises 21 or fewer.” Celano v. Marriott Int’l, Inc., 242 8 16-CV-2162 JLS (NLS) 1 F.R.D. 544, 549 (N.D. Cal. 2007). Here, the proposed Settlement Class consists of approximately 1,968 individuals, 5 2 3 all of who are identifiable from BAE SDSR’s data. 4 Accordingly, joinder of all members would be impracticable for purposes of Rule 23(a)(1), 5 and the numerosity requirement is therefore satisfied. 6 II. (Final Settlement Mot. 6.) Rule 23(a)(2): Commonality 7 Federal Rule of Civil Procedure 23(a)(2) requires that there be “questions of law or 8 fact common to the class.” Commonality requires that “the class members ‘have suffered 9 the same injury.’” Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 349–50 (2011) (quoting 10 Gen. Tel. Co. of Sw. v. Falcon, 457 U.S. 147, 157 (1982)). “The existence of shared legal 11 issues with divergent factual predicates is sufficient, as is a common core of salient facts 12 coupled with disparate legal remedies within the class.” Hanlon v. Chrysler Corp., 150 13 F.3d 1011, 1019 (9th Cir. 1998). 14 Here, the Parties have carefully defined the Settlement Class to encompass all BAE 15 SDSR employees adversely affected by the allegedly fraudulent policies and practices set 16 forth above. (See generally SAC.) All common questions thus revolve around whether 17 the alleged fraudulent policies and practices in fact were fraudulent and impacted the class 18 members. Accordingly, it is appropriate for these issues to be adjudicated on a class-wide 19 basis, and Rule 23(a)(2) is satisfied. 20 III. Rule 23(a)(3): Typicality 21 To satisfy Federal Rule of Civil Procedure 23(a)(3), Plaintiff’s claims must be 22 typical of the claims of the Class. The typicality requirement is “permissive” and requires 23 only that Plaintiff’s claims “are reasonably coextensive with those of absent class 24 members.” Hanlon, 150 F.3d at 1020. “The test of typicality ‘is whether other members 25 have the same or similar injury, whether the action is based on conduct which is not unique 26 27 28 5 The original notice was mailed to 1,970 members; however, two Class Members opted out in between the original notice and the supplemental notice. (ECF No. 60, at 2 n.1.) 9 16-CV-2162 JLS (NLS) 1 to the named plaintiffs, and whether other class members have been injured by the same 2 course of conduct.’” Hanon v. Dataproducts Corp., 976 F.2d 497, 508 (9th Cir. 1992) 3 (quoting Schwartz v. Harp, 108 F.R.D. 279, 282 (C.D. Cal. 1985)). “[C]lass certification 4 should not be granted if ‘there is a danger that absent class members will suffer if their 5 representative is preoccupied with defenses unique to it.’” Id. (citation omitted). 6 Here, Plaintiff Nunez is a BAE SDSR employee whose claims allegedly arise out of 7 the same underlying BAE SDSR policies and practices as those pertaining to the proposed 8 Settlement Class. (See SAC; Prelim. Settlement Mot. 17–18.) Accordingly, Plaintiff’s 9 claims are typical of the claims of the members of the proposed Settlement Class, thus 10 satisfying Rule 23(a)(3). 11 IV. Rule 23(a)(4): Adequacy 12 Federal Rule of Civil Procedure 23(a)(4) requires that the named representatives 13 fairly and adequately protect the interests of the class. “To satisfy constitutional due 14 process concerns, absent class members must be afforded adequate representation before 15 entry of judgment which binds them.” Hanlon, 150 F.3d at 1020 (citing Hansberry v. Lee, 16 311 U.S. 32, 42–43 (1940)). To determine legal adequacy, the Court must resolve two 17 questions: “(1) do the named plaintiffs and their counsel have any conflicts of interest with 18 other class members, and (2) will the named plaintiffs and their counsel prosecute the 19 action vigorously on behalf of the class?” Id. 20 The Court previously found that there was no reason to believe either Class Counsel 21 or Plaintiff Nunez, the sole named representative, had any conflicts of interest with the 22 Class or would not vigorously prosecute the action on their behalf. (Prelim. Settlement 23 Order 7.) But that was before Nunez objected to the Settlement, which, at the May 25, 24 2017 Status Conference, Class Counsel and Defendant argued put Nunez in direct conflict 25 with the best interests of the Class. The Parties briefed the issue, seeking to remove Nunez 26 and replace him with Mr. De Anda, and Nunez opposed the motion. (See ECF Nos. 37, 27 38, 40.) 28 This scenario appears to be one of first impression in the Ninth Circuit, and seems 10 16-CV-2162 JLS (NLS) 1 to raise two distinct questions. First, before anything can happen with this Settlement, the 2 Court must determine whether Nunez can serve as an adequate Class Representative under 3 Rule 23(a)(4). This is a prerequisite to certifying the Class for the present settlement 4 purposes. Second, if the Court determines that Nunez can adequately serve the Class and 5 also determines that the Settlement is fair, reasonable, and adequate, the Court must further 6 determine whether Nunez can continue to serve as an adequate Class Representative, given 7 that his continued objections to the Settlement at that point would put the Class’s recovery 8 under the Settlement, which the Court would have determined to be in their best interests, 9 in jeopardy. The question thus becomes whether Nunez would at that point have a conflict 10 of interest with the Class such that he could no longer serve as an adequate representative 11 on their behalf. Given the different procedural postures of these questions, the Court 12 reserves its discussion of the second question until later. See infra “MOTION TO 13 SUBSTITUTE CLASS REPRESENTATIVE” (pp. 38–42) [hereinafter Class Rep. 14 Discussion]. For now, the Court considers whether Nunez is an adequate representative 15 for class certification purposes. 16 In the Ninth Circuit, “‘[e]xamination of potential conflicts of interest has long been 17 an important prerequisite to class certification” and “is especially critical when the . . . class 18 settlement is tendered along with a motion for class certification.” In re Online DVD- 19 Rental Antitrust Litig., 779 F.3d 934, 942 (9th Cir. 2015) (citing Hanlon, 150 F.3d at 1020). 20 However, “‘[o]nly conflicts that are fundamental to the suit and that go to the heart of the 21 litigation prevent a plaintiff from meeting the Rule 23(a)(4) adequacy requirement.’” Id. 22 (quoting 1 William B. Rubenstein et al., Newberg on Class Actions § 3.58 (5th ed. 2011)). 23 “A conflict is fundamental when it goes to the specific issues in controversy.” Id. 24 The Parties argue Nunez has a conflict of interest with the Class, and thus can no 25 longer adequately represent them, because (1) he objects to the final approval of the 26 Settlement, (see generally Mot. to Substitute), and (2) he has undermined his own 27 credibility and thus is an unsuitable Class Representative, (Mot. to Substitute Reply 6–7, 28 ECF No. 40). 11 16-CV-2162 JLS (NLS) 1 The Court rejects the Parties’ first argument—namely, that by virtue of objecting to 2 the Settlement Nunez is automatically conflicted out of representing the Class. Of course, 3 the nature of the objections implicate distinct considerations and may reveal a conflict. But 4 the mere act of objecting itself is insufficient, since those objections may instead reveal 5 deficiencies in the Settlement to the benefit of the class; such an objection would be in 6 concert—not in conflict—with the best interests of the class. Indeed, as the Sixth Circuit 7 recently opined in a similar scenario in Olden v. Gardner, 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 [a]lthough we ultimately conclude that the district court did not abuse its discretion in replacing the original class representatives, this is a close question in this case and we may well have made a different decision if we were the trial judges. Replacing class representatives for objecting to a proposed settlement appears inconsistent with the theory of class representatives. Class representatives are expected to protect the interests of the class. See Fed. R. Civ. P. 23(a)(4). This requires that the class representatives exercise some oversight of the class counsel so as to avoid simply turning the conduct of the case over to the class counsel. See Bovee v. Coopers & Lybrand, 216 F.R.D. 596, 615 (S.D. Ohio 2003). Oversight from the class representatives is particularly important in the context of settlements. See In re Cal. Micro Devices Sec. Litig., 168 F.R.D. 257, 262 (N.D. Cal. 1996) (risk of unfair settlement is greater when negotiations are carried out “without meaningful oversight by class representative”). These principles suggest that class representatives should not be removed from their positions as class representatives simply because they have attempted to fulfill their duty to protect the interests of the class. 294 F. App’x 210, 220 (6th Cir. 2008). 23 Of course, in Gardner the Sixth Circuit ultimately concluded that the district court 24 did not abuse its discretion in replacing the class representatives for objecting to the 25 settlement. And the Parties cite the district court’s underlying decision in Gardner, among 26 others, to bolster their argument that objecting to a class settlement puts a representative in 27 conflict with the class. But, as Nunez points out, those motions were granted after the 28 respective district courts granted final approval of the settlement agreements. (Mot. to 12 16-CV-2162 JLS (NLS) 1 Substitute Opp’n 11–12, ECF No. 38.) In other words, the crux of those decisions was that 2 because the Court found the settlements fair, reasonable, and adequate, the objecting- 3 representatives’ continued objections to the settlement put them in direct conflict with the 4 class as a whole, which now had impending judicially approved relief absent further 5 protestation. Thus, while certainly relevant to the present case, the Court considers these 6 cases below, in the later-presented procedural posture, infra Class Rep. Discussion, when 7 discussing the Parties’ Motion to Substitute Class Representative. At this juncture, the 8 Court concludes that the mere act of a class representative objecting to a settlement is 9 insufficient, on its own, to demonstrate that the representative has a conflict of interest with 10 the class. 11 That said, as discussed, the substance of those objections may reveal a conflict of 12 interest with the Class. 13 procedural deficiencies of these objections, the Parties argue that one objection in particular 14 makes Nunez an inadequate representative even at this procedural step: that is, that Nunez 15 has undermined his own credibility and thus can no longer serve as class representative. 16 (Mot. to Substitute Reply 6–7.) Specifically, the Parties point to Nunez’s first objection, 17 that he “did not attend the settlement conference held on September 16, 2016, nor did [he] 18 know it was occurring beforehand.” (Notice of Objection filed by Eduardo Nunez (“Nunez 19 Objs.”) ¶ 1, ECF No. 27 (emphasis added).) However, Nunez later backtracked and 20 admitted that Mr. Dychter called him and said “[g]ood news, I got a date for the mediation.” 21 (Decl. of Plaintiff Eduardo Nunez in Support of his Opposition to the Joint Mot. to 22 Substitute New Class Representative (“Nunez Substitute Opp’n Decl.”) ¶ 34, ECF No. 38- 23 3.) But Nunez still declares that Mr. Dychter “did not tell [him] the date of the mediation.” 24 (Id.) And although the Court later addresses the substance and 25 These are, at some level, inconsistent statements: Nunez first says he had no idea a 26 mediation was occurring, and later reveals that he had notice of the mediation, just not a 27 specific date. And the Parties are right that “[t]he honesty and credibility of a class 28 representative is a relevant consideration when performing the adequacy inquiry ‘because 13 16-CV-2162 JLS (NLS) 1 an untrustworthy plaintiff could reduce the likelihood of prevailing on the class claims.’” 2 Harris v. Vector Mktg. Corp., 753 F. Supp. 2d 996, 1015 (N.D. Cal. 2010); see also In re 3 Computer Memories Sec. Litig., 111 F.R.D. 675, 682 (N.D. Cal. 1986) (“[I]t is self-evident 4 that a Court must be concerned with the integrity of individuals it designates as 5 representatives for a large class of plaintiffs.”). 6 But “[c]redibility problems do not automatically render a proposed class 7 representative inadequate.” Harris, 753 F. Supp. 2d at 1015 (internal quotation marks 8 omitted). “‘Only when attacks on the credibility of the representative party are so sharp as 9 to jeopardize the interests of absent class members should such attacks render a putative 10 class representative inadequate.’” Id. (quoting Lapin v. Goldman Sachs & Co., 254 F.R.D. 11 168, 177 (S.D.N.Y. 2008)). Here, the Court finds that this single inconsistency in Nunez’s 12 testimony, while somewhat disquieting, is not “so sharp as to jeopardize the interests of 13 absent class members.” Id. After all, Nunez at least sticks to his story that he did not know 14 what day the mediation would take place. Moreover, the remainder of his declaration 15 demonstrates that he was at some level engaged with the litigation by, for example, 16 contacting Mr. Dychter for updates on the case. (See, e.g., Nunez Substitute Opp’n Decl. 17 ¶¶ 28–44.) Accordingly, the Court finds that Nunez is an adequate representative for class 18 certification purposes. 19 In sum, 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 21 no reason to believe that the named representative and Class Counsel have thus far failed 22 to vigorously investigate and litigate this case. Plaintiff has retained competent Class 23 Counsel, who have conducted extensive investigation, research, and informal discovery in 24 this case. (See generally Final Settlement Mot.) 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. 14 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 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 e.g., Prelim. Settlement Mot. 19–20.) Further, for purposes of settlement, Class Members 16 are not required to prove any evidentiary or factual issues that could arise in litigation. 17 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 (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. See also Zinser, 253 F.3d at 1190. A court need not consider the fourth factor, however, 24 25 26 27 28 Superiority 15 16-CV-2162 JLS (NLS) 1 when certification is solely for the purpose of settlement. See True v. Am. Honda Motor 2 Co., 749 F. Supp. 2d 1052, 1066 n.12 (C.D. Cal. 2010); see also Amchem, 521 U.S. at 620 3 (“Confronted with a request for settlement-only class certification, a district court need not 4 inquire whether the case, if tried, would present intractable management problems, for the 5 proposal is that there be no trial.”). The superiority inquiry focuses “‘on the efficiency and 6 economy elements of the class action so that cases allowed under [Rule 23(b)(3)] are those 7 that can be adjudicated most profitably on a representative basis.’” Zinser, 253 F.3d at 8 1190 (quoting 7A Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal 9 Practice and Procedure § 1780, at 562 (2d ed. 1986)). A district court has “broad 10 discretion” in determining whether class treatment is superior. Kamm v. Cal. City Dev. 11 Co., 509 F.2d 205, 210 (9th Cir. 1975). 12 Here, Class Members’ claims involve the same issues arising from the same factual 13 bases. If Class Members’ claims were considered on an individual basis, roughly 1,968 14 cases would follow a similar trajectory, and each would come to a similar result. 15 Furthermore, individual cases would consume a significant amount of the Court’s and the 16 Class Members’ resources. It is also likely that Class Members would not pursue litigation 17 on an individual basis due to the high costs of pursuing individual claims. The interests of 18 the Class Members in individually controlling the litigation are minimal, especially given 19 the same broad-based policy and practices would be at issue. Moreover, while the Court 20 has received a few objections to the Settlement, which the Court addresses in more detail 21 below, none actually challenge the resolution of this matter on a class-wide basis. (See 22 ECF Nos. 27, 28, 32, 42, 43, 44.) Additionally, because the majority of BAE SDSR’s 23 employees are located in San Diego, many of the individual cases would likely be filed in 24 this district, and thus it is desirable to concentrate the litigation in a single forum. Given 25 all of the above, class treatment is the superior method of adjudicating this controversy, 26 and the superiority requirement of Rule 23(b)(3) is met. 27 VI. 28 Conclusion For the reasons stated above, the Court finds certification of the Settlement Class 16 16-CV-2162 JLS (NLS) 1 proper under Rule 23(b)(3). Accordingly, the Court REAFFIRMS certification of the 2 Settlement Class for settlement purposes only. 3 RULE 23 FINAL APPROVAL DETERMINATION 4 Having certified the Settlement Class, the Court must next determine whether the 5 proposed settlement is “fair, reasonable, and adequate” pursuant to Federal Rule of Civil 6 Procedure 23(e). Relevant factors to this determination 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. 7 8 9 10 11 12 13 Hanlon, 150 F.3d at 1026. Furthermore, due to the “dangers of collusion between class 14 counsel and the defendant, as well as the need for additional protections when the 15 settlement is not negotiated by a court designated class representative,” any “settlement 16 approval that takes place prior to formal class certification requires a higher standard of 17 fairness.” Id. 18 I. Strength of Plaintiff’s Case 19 In order to succeed on the merits, Plaintiff would have to prove that Defendant’s 20 practices and policies were fraudulent. (See, e.g., SAC ¶ 1 (listing causes of action).) 21 Plaintiff estimates BAE SDSR’s potential liability exposure on the underlying Labor Code 22 claims to be approximately $11.5 million. (See, e.g., Prelim. Settlement Mot. 23; Decl. of 23 Alexander I. Dychter in Supp. of Mot. for Final Approval of Class Action Settlement 24 (“Dychter Decl.”) ¶ 9, ECF No. 46-3 (noting a potential maximum liability of eight 25 figures).) BAE SDSR denies any wrongdoing, that Plaintiff is entitled to any relief at law 26 or equity, and that Plaintiff would be able to validly certify a class in the absence of the 27 proposed settlement. 28 arguments against Plaintiff’s claims, such as the difficulty of proving liability under the (See, e.g., Final Settlement Mot. 13–16 (listing Defendant’s 17 16-CV-2162 JLS (NLS) 1 California Labor Code given its inapplicability to workers who worked on federal ships 2 under the Federal Enclave Doctrine)); (Decl. of Anthony Piazza in Supp. of Joint Mot. to 3 Substitute New Class Rep. in Place of Eduardo Nunez (“Piazza Decl.”) ¶ 7, ECF No. 37-6 4 (noting the strengths of Defendant’s positions relative to Plaintiff’s claims).) Additionally, 5 the Settlement is the result of arm’s-length negotiations conducted over several months, 6 including each Party’s individual discovery and valuation of the case and one full-day 7 mediation session before an experienced and nationally renowned mediator. 8 Settlement Mot. 9–12.) 9 evaluation of the same, the Court finds that this factor weighs in favor of the $2.9 million 10 settlement being fair, reasonable, and adequate. See, e.g., Bond v. Ferguson Enters., Inc., 11 No. 1:09-CV-01662, 2011 WL 284962, at *7 (E.D. Cal. Jan. 25, 2011) (“Even if Plaintiffs 12 were to prevail, they would be required to expend considerable additional time and 13 resources potentially outweighing any additional recovery obtained through successful 14 litigation.”). 15 II. (Final Given the Parties’ disagreement and a neutral third-party Risk, Expense, Complexity, and Likely Duration of Further Litigation 16 Were the case to proceed to further litigation rather than settlement, the Parties 17 would each bear substantial risk and a strong likelihood of protracted and contentious 18 litigation. Even though the Parties have agreed to settle this action, they fundamentally 19 disagree regarding the validity of Plaintiff’s claims, and, as discussed, Defendant highlights 20 a number of likely meritorious arguments against Plaintiff’s claims. (See, e.g., Final 21 Settlement Mot. 9–16.) Additionally, the Parties predict lengthy discovery disputes over 22 class member contact information, site inspections of secure government facilities, and 23 significant electronic discovery were this Settlement to be rejected and litigation to ensue, 24 and thus argue that the present Settlement affords Class Members at least some 25 compensation where there might be none. (Id. at 16.) Indeed, the fact that Defendant 26 disputes all aspects of Plaintiff’s claims, including the propriety of class certification in the 27 absence of the Settlement Agreement, suggests that these issues would be vigorously (and 28 therefore costly) litigated were there to be further litigation. Given the foregoing, this 18 16-CV-2162 JLS (NLS) 1 factor weighs in favor the settlement being fair, reasonable, and adequate. See, e.g., Nat’l 2 Rural Telecomms. Coop. v. DIRECTV, Inc., 221 F.R.D. 523, 527 (C.D. Cal. 2004) 3 (“Avoiding such a trial and the subsequent appeals in this complex case strongly militates 4 in favor of settlement rather than further protracted and uncertain litigation.”). 5 III. Risk of Maintaining Class Action Status Throughout Trial 6 The Parties dispute whether the Class can be validly certified in the absence of the 7 Settlement Agreement. Implicit in this disagreement is the likelihood of initial challenges 8 to class certification and the potential for decertification motions even if class status is 9 granted. (See, e.g., Final Settlement Mot. 16–17 (noting in particular that the Federal 10 Enclave Doctrine would serve as a significant bar to certification).) Weighed against the 11 fact that Defendant does not object to a finding that the class elements are met for purposes 12 of this settlement, this factor also weighs in favor of the settlement being fair, reasonable, 13 and adequate. See, e.g., Rodriguez v. W. Publ’g Corp., 563 F.3d 948, 966 (9th Cir. 2009); 14 Couser v. Comenity Bank, 125 F. Supp. 3d 1034, 1042 (S.D. Cal. 2015) (“Where there is a 15 risk of maintaining class action status throughout the trial, this factor favors approving the 16 settlement.” (citation omitted)). 17 IV. Amount Offered in Settlement 18 BAE SDSR has agreed to pay $2.9 million to settle this lawsuit. (Final Settlement 19 Mot. 6.) The crux of Plaintiff’s claims is that BAE SDSR failed to pay the Class Members 20 the entirety of their earned wages. Because BAE SDSR has data regarding each affected 21 Class Member, which it provided to Plaintiff prior to negotiating the Settlement 22 Agreement, the proof of each Class Member’s damages is largely calculable and less prone 23 to subjective considerations. Indeed, the Parties note that the average settlement amount 24 for each Class Member is approximately $890 and the highest individual settlement 25 payment is estimated to be approximately $2,500. (Id. at 6 (citing Schwartz Decl. ¶ 13).) 26 Of course, Class Counsel admits that the Settlement reflects recovery equal to 27 approximately 26% of the potential estimated value of all Plaintiff’s underlying California 28 Labor Code claims. (Id. at 17.) But Class Counsel readily admits that such claims may 19 16-CV-2162 JLS (NLS) 1 never have been proved in light of the federal enclave issue and other available defenses, 2 and that a more realistic assessment of class-wide damages would have been a fraction of 3 the “soaking wet” evaluation of roughly $11.5 million. (Id. (citing Dychter Decl. ¶¶ 13– 4 15).) Accordingly, this factor weighs in favor of the settlement being fair, reasonable, and 5 adequate. See, e.g., In re Mego Fin. Corp. Sec. Litig., 213 F.3d 454, 459 (9th Cir. 2000), 6 as amended (June 19, 2000) (finding that a settlement amount worth roughly one-sixth of 7 the potential recovery was fair and adequate given the difficulties in proving the case); 8 Bennett v. SimplexGrinnell LP, No. 11-CV-01854-JST, 2015 WL 1849543, at *7 (N.D. 9 Cal. Apr. 22, 2015) (“The Court finds that the class members’ net recovery of at least . . . 10 approximately thirty percent of the maximum exposure figure . . . is fair, reasonable, and 11 adequate . . . .”). 12 V. 13 Extent of Discovery Completed and Stage of Proceedings Prior to the agreed-upon settlement, the Parties engaged in substantial informal 14 discovery, including exchanging payroll, timekeeping, and other records. 15 Settlement Mot. 18–19.) Defendant also performed its own investigation, interviewing 16 approximately ninety potential class members and collecting approximately eighty-three 17 declarations, on which it relied to demonstrate the disparity of Class Member experiences 18 and that proper compensation was paid for time worked. (Id. at 10) And as discussed, the 19 Parties engaged a neutral third-party mediator who fully examined and discussed with each 20 party the strengths and weakness of each party’s case. (Id. at 9–12.) Both Class Counsel 21 and Defense Counsel gained significant knowledge of the relevant facts and law throughout 22 the informal discovery process and through independent investigation and evaluation. 23 Accordingly, it appears the Parties have entered into the Settlement Agreement with a 24 strong working knowledge of the relevant facts, law, and strengths and weaknesses of their 25 claims and defenses. Given all of the above, this factor weighs in favor of the proposed 26 settlement being fair, reasonable, and adequate. See In re Mego Fin. Corp. Sec. Litig., 213 27 F.3d at 459 (upholding district court finding and explaining that in the absence of formal 28 discovery this factor turns on whether “the parties have sufficient information to make an (Final 20 16-CV-2162 JLS (NLS) 1 informed decision about settlement”); In re Immune Response Sec. Litig., 497 F. Supp. 2d 2 1166, 1174 (S.D. Cal. 2007) (approving settlement where informal discovery gave the 3 parties “a clear view of the strength and weaknesses of their cases”). 4 VI. Experience and Views of Counsel 5 “The recommendations of plaintiffs’ counsel should be given a presumption of 6 reasonableness.” Boyd v. Bechtel Corp., 485 F. Supp. 610, 622 (N.D. Cal. 1979). And 7 here, Class Counsel believes the Settlement Agreement is fair, reasonable, adequate, and 8 in the best interest of the Settlement Class. 9 Agreement ¶ 63.) Furthermore, in the present case the presumption of reasonableness is 10 warranted based on Class Counsel’s expertise in complex litigation, familiarity with the 11 relevant facts and law, and significant experience negotiating other class and collective 12 action settlements. (See, e.g., Dychter Decl. ¶¶ 3–4 (describing experience); Decl. of 13 Walter L. Haines in Supp. of Mot. for Final Approval of Class Action Settlement (“Haines 14 Decl.”) ¶ 3, ECF No. 46-4 (same).) Given the foregoing, and according the appropriate 15 weight to the judgment of these experienced counsel, this factor weighs in favor of the 16 proposed settlement being fair, reasonable, and adequate. See, e.g., Rodriguez, 563 F.3d 17 at 967 (“[P]arties represented by competent counsel are better positioned than courts to 18 produce a settlement that fairly reflects each party’s expected outcome in litigation . . . .” 19 (citation omitted)); see also Lane v. Facebook, Inc., 696 F.3d 811, 821–23 (9th Cir. 2012) 20 (“[T]he district court properly declined to undermine [the parties’] negotiations by second- 21 guessing the parties’ decision as part of its fairness review over the settlement 22 agreement.”); Vasquez v. Coast Valley Roofing, Inc., 266 F.R.D. 482, 490 (E.D. Cal. 2010) 23 (“[T]he trial judge, absent fraud, collusion, or the like, should be hesitant to substitute its 24 own judgment for that of counsel.” (quoting Cotton v. Hinton, 559 F.2d 1326, 1330 (5th 25 Cir. 1977))). 26 VII. Reaction of Class Members to the Proposed Settlement (Final Settlement Mot. 19; Settlement 27 “The reactions of the members of a class to a proposed settlement is a proper 28 consideration for the trial court.” Vasquez, 266 F.R.D. at 490 (quoting Nat’l Rural 21 16-CV-2162 JLS (NLS) 1 Telecomms. Coop., 221 F.R.D. at 528). “Class representatives’ opinions of the settlement 2 are especially important because ‘[t]he representatives’ views may be important in shaping 3 the agreement and will usually be presented at the fairness hearing; they may be entitled to 4 special weight because the representatives may have a better understanding of the case than 5 most members of the class.’” Id. (quoting Nat’l Rural Telecomms. Coop., 221 F.R.D at 6 528 (citing Manual for Complex Litigation, Third, § 30.44 (1995))). “Generally, ‘the 7 absence of a large number of objections to a proposed class action settlement raises a strong 8 presumption that the terms of a proposed class action settlement are favorable to the class 9 members.’” Wren v. RGIS Inventory Specialists, No. C-06-05778 JCS, 2011 WL 1230826, 10 at *11 (N.D. Cal. Apr. 1, 2011) (quoting Nat’l Rural Telecomm. Coop., 221 F.R.D. at 529). 11 Of the 1,970 originally noticed Class Members, only one—or .05% of the Class—opted 12 out. (Schwartz Decl. ¶ 11.) Additionally, a total of six Class Members—or .3% of the 13 Class— attempted to file objections. (ECF Nos. 27, 28, 32, 42, 43, 44.) Of the 1,9686 14 Class Members receiving supplemental notice none objected. (ECF No. 60, at 2.) Thus, as 15 a purely numerical observation, the overwhelming positive response to the Settlement 16 strongly supports final approval. See, e.g., Churchill Vill., L.L.C. v. Gen. Elec., 361 F.3d 17 566, 577 (9th Cir. 2004) (affirming final approval where approximately 0.61% of class 18 members either opted out or objected); In re Lifelock, Inc. Mktg. & Sales Practices Litig., 19 No. MDL 08-1977-MHM, 2010 WL 3715138, at *6 (D. Ariz. Aug. 31, 2010) (finding that 20 low number of timely written objections and requests for exclusion supported settlement 21 approval). 22 A. Objections 23 But as discussed, six Class Members attempted to file objections to the Settlement. 24 The Court uses the term “attempted” because the Parties argue that these objections are 25 procedurally improper and, even if considered, are insufficient to demonstrate that the 26 27 28 6 Two members are no longer part of the class because they opted out of the settlement. (ECF No. 60, at 2 n.1.) 22 16-CV-2162 JLS (NLS) 1 Settlement is not fair, reasonable, and adequate. (Final Settlement Mot. 20–27.) The Court 2 agrees with both arguments. 3 First, the Parties argue that the six objections are procedurally improper because the 4 Objectors failed to follow the Court-approved Notice to the Settlement Class, mailed on 5 March 15, 2017, which read as follows: 6 7 8 9 10 11 12 13 14 15 16 17 As long as you do not ‘opt out’ from the settlement, you have the right to object to the settlement. To do so, you must send to the Court, the attorneys for the parties whose addresses are listed below, and the Claims Administrator whose address is above your objection in writing and the objection must be postmarked no later than May 15, 2017. The objection must state: (a) your full legal name, home address, telephone number, last four digits of your social security number (for identity verification purposes); (b) the words ‘Notice of Objection’ or ‘Formal Objection;’ (c) in clear and concise terms, the legal and factual arguments supporting the objection; and (d) a list identifying the witness(es) you as the objector may call to testify at the Fairness Hearing, as well as true and correct copies of any exhibit(s) you intend to offer. Your objection should be directed to the Hon. Janis L. Sammartino, United States District Court – Southern District of California, 221 West Broadway, Suite 4135, San Diego, California 92101 and must reference case number 3:16-cv-02162-JLS-NLS. 18 19 (Final Settlement Mot. 21 (citing Notice 4 (emphasis added by the Parties)).) 20 The Court agrees with the Parties that no compliant objections were submitted. 21 Three objections were postmarked after May 15, 2017 and filed late. (ECF Nos. 42, 43, 22 44 (bearing signatures of June 1 and June 7, 2017).) The other three, (ECF Nos. 27, 28, 23 32), were never sent to the Settlement Administrator. (Schwartz Decl. ¶ 12.) Furthermore, 24 no objections were submitted to the Settlement Administrator until June 14, 2017, nearly 25 one month later than the May 15, 2017 deadline. (Schwartz Decl. ¶ 12.) Accordingly, the 26 Court overrules these objections for failure to follow the objection procedures outlined in 27 the Court-approved Notice. See, e.g., Noll v. eBay, Inc., 309 F.R.D. 593, 612 (N.D. Cal. 28 2015) (discounting objection for failure to timely file); see also Chavez v. PVH Corp., No. 23 16-CV-2162 JLS (NLS) 1 13-CV-01797-LHK, 2015 WL 9258144, at *3 (N.D. Cal. Dec. 18, 2015), appeal dismissed 2 (Feb. 4, 2016) (same and collecting authority); Moore v. Verizon Commc’ns Inc., No. C 3 09-1823 SBA, 2013 WL 4610764, at *12 (N.D. Cal. Aug. 28, 2013) (overruling several 4 objections for failure to meet various noticed procedural requirements). 5 Even if the Court considers the substance of the objections, which it need not given 6 their procedural deficiencies, none of the objections persuade the Court that the Settlement 7 is not fair, reasonable, and adequate. In assessing these objections, the Court “keep[s] in 8 mind that objectors to a class action settlement bear the burden of proving any assertions 9 they raise challenging the reasonableness of a class action settlement.” Noll, 309 F.R.D at 10 611 (citing United States v. Oregon, 913 F.2d 576, 581 (9th Cir. 1990)). 11 These objections, which the Parties label “cookie-cutter,” (Final Settlement Mot. 12 22), raise largely the same issues. First, two of the unsworn and untimely objections claim 13 that Defendant forced employees to arrive inside of the BAE SDSR shipyard before 6 a.m., 14 but did not pay them “for they time [they] are there prior to 6 a[.]m[.]” (ECF Nos. 42, ¶ 1; 15 43, ¶ 3.) However, this claim that employees were not paid for all time under Defendant’s 16 control is one of the primary causes of action asserted in the operative complaint. Indeed, 17 the SAC specifically states that the class members were required to arrive prior to the 6:00 18 a.m. start time, and that such time was uncompensated in violation of California law. (Final 19 Settlement Mot. 22–23 (citing SAC ¶¶ 8, 9).) The Parties evaluated and discounted the 20 value of this claim during their negotiations. (Id.) 21 Second, some of these Objectors claim that “BAE has always, and still does, deducts 22 [sic] a minimum of 15 minutes’ worth of time from my paycheck when I clock in one or 23 more minutes late to work. This is not addressed in the complaint or the settlement of the 24 case.” (See, e.g., Nunez Objs. ¶ 4.) However, as discussed above, the Parties note that the 25 operative complaint specifically addressed unlawful deductions and uncompensated work 26 time, claims that were undermined both by the Federal Enclave Doctrine and the 27 information collected from the declarants in preparation for the Parties’ negotiations. 28 (Final Settlement Mot. 23 (citing SAC ¶¶ 1, 12, 28–29, 53; Wemmer Decl. ¶ 4j, ECF No. 24 16-CV-2162 JLS (NLS) 1 15-2).) The value of this claim was also evaluated and discounted during the Parties’ 2 negotiations. (Id.) 3 Third, some of these Objectors allege that Defendant “is still forcing us to take the 4 bus into work, [and] is not paying us for our time riding their buses to work.” (See, e.g., 5 Nunez Objs. ¶ 2.) No Objector substantiates this claim with any evidence or an offer to 6 provide witness testimony. (Id. ¶ 13 (“Witnesses for my statements: [blank.]”).) On the 7 other hand, Defendant offers evidence that employees are not forced to take a bus; rather, 8 employees are permitted to drive to and park at the different sites at which they may be 9 assigned to work. (Final Settlement Mot. 24 (citing Decl. of Mary Dollarhide in Supp. of 10 Mot. for Final Approval of Class Action Settlement (“Dollarhide Decl.”) ¶ 7, ECF No. 46- 11 2).) BAE SDSR employees are allowed—but not required—to take courtesy shuttles 12 provided by Defendant to their work locations. (Id.) 13 Fourth, these Objectors state that they “believe that the settlement is too low of an 14 amount for all of the money BAE owes us for these problems.” (See, e.g., Nunez Objs., 15 ¶ 8; Notice of Objection filed by Juan Pablo Lopez Donan (“Donan Objs.”) ¶ 4, ECF No. 16 28); Notice of Objection filed by Jose Cruz (“Cruz Objs.”) ¶ 3, ECF No. 32).) This 17 objection is unpersuasive for at least two reasons. For one, to the extent a Class Member 18 felt the settlement amount was too low, he or she was free to opt out and pursue separate 19 claims against Defendant BAE SDSR; out of 1,970 original Class Members, three people 20 chose to do so. Additionally, not one Objector substantiates his belief with any evidence 21 or argument that this settlement amount is too low. This is insufficient to rebut the Parties’ 22 evidence and argument that the settlement was negotiated at arms’ length between 23 experienced counsel and a respected mediator who actually evaluated the case. Indeed, the 24 question before the Court 25 26 27 28 “is not whether the final product could be prettier, smarter or snazzier, but whether it is fair, adequate and free from collusion.’ Even if every suggestion represents an actual potential ‘improvement,” and even considering all the suggestions cumulatively, they do not support a conclusion that this 25 16-CV-2162 JLS (NLS) 1 settlement is the product of collusion, or otherwise fails to meet the minimum threshold of fairness and adequacy. 2 3 Fraley v. Facebook, Inc., 966 F. Supp. 2d 939, 948 (N.D. Cal. 2013), aff’d sub nom. Fraley 4 v. Batman, 638 F. App’x 594 (9th Cir. 2016) (citing Hanlon, 150 F.3d at 1027). 5 The remaining objections appear to be personal to the Objector, and thus do not 6 speak to the overall fairness or value of the Settlement itself.7 (See, e.g., Nunez Objs. ¶ 6 7 (claiming that BAE SDSR is retaliating against him for being the named Plaintiff by giving 8 him “unwarranted and baseless write ups”); Donan Objs. ¶ 3 (claiming that BAE SDSR 9 penalizes him for calling in sick); ECF No. 43, ¶ 1 (claiming he was reprimanded for calling 10 into work sick, which was the reason why he did not receive pay raises).) Indeed, to the 11 extent these Objectors feel that the Settlement Agreement does not adequately address their 12 specific circumstances, the more appropriate course of action was for these Objectors to 13 opt out of the Class, rather than bar final approval of a settlement where 99.64% of the 14 Class Members find the Settlement to be in their best interests. (Final Settlement Mot. 25.) 15 And those claiming retaliation of some sort remain free to pursue his or her claim in an 16 appropriate legal forum; no such causes of action are resolved, released, or waived with 17 the approval of this Settlement. (Id. at 27.) 18 In sum, the Court overrules the six Objectors’ set of objections as raising concerns 19 that are either (1) already adequately addressed by the Settlement Agreement or (2) specific 20 to the individual Objectors such that they do not raise a genuine concern as to all Class 21 Members. 22 /// 23 24 25 26 27 28 Several of the objections also note that the Objector “went to the Boilermakers union, Local 1998 to get help because of all of the ongoing problems at BAE” and that they “asked for help from the Law Office of Hewgill & Cobb” because of these alleged problems. (See, e.g., Nunez Objs. ¶¶ 9–11.) These are not proper objections to the settlement itself. Indeed, BAE SDSR employees remained free to pursue any legal claims they feel they may have, and were also free to opt out of the settlement if they wished to litigate these specific claims, with or without the aid of the law firm Hewgill & Cobb. 7 26 16-CV-2162 JLS (NLS) 1 B. Opposition Brief 2 In addition to the six objections above, Plaintiff Nunez filed a Response in 3 Opposition to the Final Approval of Proposed Settlement and Current Class Counsel’s Mot. 4 for Fee. (“Final Settlement Mot. Opp’n,” ECF No. 48.) As with the procedurally deficient 5 objections, the Court again notes that this opposition brief failed to follow the Court- 6 noticed procedure, which, as already discussed, required that any objections to final 7 approval be filed with the Court by May 15, 2017. These objections were to include: “in 8 clear and concise terms, the legal and factual arguments supporting the objection; and . . . 9 a list identifying the witness(es) you as the objector may call to testify at the Fairness 10 Hearing, as well as true and correct copies of any exhibit(s) you intend to offer.” (See 11 Notice 4.) Thus, this opposition brief, filed two weeks before the Final Approval Hearing, 12 is untimely and procedurally deficient. On this basis the Court may overrule the objections 13 and arguments set forth therein. See, e.g., Noll v. eBay, Inc., 309 F.R.D. 593, 612 (N.D. 14 Cal. 2015) (discounting objection for failure to timely file); Chavez v. PVH Corp., No. 13- 15 CV-01797-LHK, 2015 WL 9258144, at *3 (N.D. Cal. Dec. 18, 2015), appeal dismissed 16 (Feb. 4, 2016) (same and collecting authority); Moore v. Verizon Commc’ns Inc., No. C 17 09-1823 SBA, 2013 WL 4610764, at *12 (N.D. Cal. Aug. 28, 2013) (overruling several 18 objections for failure to meet various noticed procedural requirements). 19 That said, “settlement class actions present unique due process concerns for absent 20 class members, and the district court has a fiduciary duty to look after the interests of those 21 absent class members.” Allen v. Bedolla, 787 F.3d 1218, 1223 (9th Cir. 2015) (internal 22 citations and quotation marks omitted); see also id. (citing, e.g., Sullivan v. DB Invs., Inc., 23 667 F.3d 273, 319 (3d Cir. 2011) (stating that “trial judges bear the important responsibility 24 of protecting absent class members, and must be assur[ed] that the settlement represents 25 adequate compensation for the release of the class claims” (internal quotation marks 26 omitted)); Reynolds v. Beneficial Nat’l Bank, 288 F.3d 277, 280 (7th Cir. 2002) (at the 27 settlement phase, the district judge is “a fiduciary of the class,” subject “to the high duty 28 of care that the law requires of fiduciaries”); and Maywalt v. Parker & Parsley Petrol. Co., 27 16-CV-2162 JLS (NLS) 1 67 F.3d 1072, 1078 (2d Cir. 1995) (noting that “the district court has a fiduciary 2 responsibility to ensure that the settlement is fair and not a product of collusion, and that 3 the class members’ interests were represented adequately” (internal quotation marks 4 omitted))). Accordingly, as the fiduciary of the Class and in order to protect the interests 5 of absent Class Members, the Court exercises its discretion and nevertheless consider the 6 substance of Nunez’s Opposition in its fiduciary duty to the Class.8 7 In his Opposition, Nunez outlines several objections to the proposed Settlement: (1) 8 the waiver is overly broad, not properly noticed, and fails the Exact Factual Predicate 9 doctrine; (2) $2.9 million is insufficient to compensate the class for the harms Class 10 Members have suffered; (3) Plaintiffs’ claims have a high likelihood of success; (4) the 11 proposed Settlement is based on inadequate investigation and lacks factual and evidentiary 12 support; and (5) the Settlement should be rejected because the circumstances show 13 collusion and conflict with the Class. (See generally Final Settlement Mot. Opp’n.) The 14 Court considers each argument in turn. 15 1. Waiver Concerns 16 Where there is a class settlement, Federal Rule of Civil Procedure 23(e)(1) requires 17 the court to “direct notice in a reasonable manner to all class members who would be bound 18 by the proposal.” “Notice is satisfactory if it ‘generally describes the terms of the 19 settlement in sufficient detail to alert those with adverse viewpoints to investigate and to 20 come forward and be heard.’” Rodriguez v. W. Publ’g Corp., 563 F.3d 948, 962 (9th Cir. 21 22 23 24 25 26 27 28 8 Plaintiff Nunez also filed a Sur Reply styled as a Response to Joint Evidentiary Objections to Declarations Submitted in Support of Opposition to Joint Motion for Final Approval of Class Action Settlement. (ECF No. 53.) This sur reply was filed the night before the previous final fairness hearing without an order from the Court. Nunez cites Gulf Oil Co. v. Bernard, 452 U.S. 89 (1981), for the proposition that this Court has the duty to allow objectors’ comments, declarations, and evidence to be considered during the final fairness hearing. (ECF No. 53, at 2.) Gulf Oil dealt with the “authority of district courts under the Federal Rules to impose sweeping limitations on communications by named plaintiffs and their counsel to prospective class members.” Gulf Oil, 452 U.S. at 99. This issue is inapposite to the settlement here. Further, to the extent that Gulf Oil directs district courts to follow the Federal Rules, the Court considered the substance of Nunez’s objection as briefed in his Opposition. Because the Court exercised its discretion to consider Nunez’s Opposition, the Court denies the Sur Reply, (ECF No. 53), as improperly filed and duplicative of the substance of Nunez’s Opposition. 28 16-CV-2162 JLS (NLS) 1 2009) (quoting Churchill Vill., LLC v. Gen. Elec., 361 F.3d 566, 575 (9th Cir. 2004)); see 2 also Grunin v. Int’l House of Pancakes, 513 F.2d 114, 120 (8th Cir. 1975) (“[T]he 3 mechanics of the notice process are left to the discretion of the court subject only to the 4 broad ‘reasonableness’ standards imposed by due process.”). 5 6 7 Nunez objects to the waiver provision of the Settlement Agreement for various reasons. The Court considers each in turn. a. Inadequate Notice 8 First, Nunez argues that the Class was not given adequate notice of the entire scope 9 of the waiver—that is, that the period of release described in the waiver is greater than that 10 described in the notice sent out to Class Members. (Id. at 13–14.) On August 2, 2017, the 11 Court agreed with this argument and ordered that supplemental notice be sent to the Class 12 to apprise them of the full scope of their release of liability. (ECF No. 57.) The Court 13 approved of the supplemental notice, (ECF No. 59), and the Court now finds that the Class 14 has been fully apprised of their release of liability. 15 b. Waiver Overbreadth 16 Second, Nunez argues that the scope of the Settlement release is overbroad with 17 respect to which harms are released. (Final Settlement Mot. Opp’n 14.) Specifically, 18 Nunez argues that settlements in class cases must only waive those causes of action which 19 have been raised by the applicable complaint pursuant to the exact factual predicate 20 doctrine. (Id. (citing Hesse v. Sprint Corp., 598 F.3d 581 (9th Cir. 2010)).) 21 In the Ninth Circuit, “[a] settlement agreement may preclude a party from bringing 22 a related claim in the future ‘even though the claim was not presented and might not have 23 been presentable in the class action,’ but only where the released claim is ‘based on the 24 identical factual predicate as that underlying the claims in the settled class action.’” Hesse, 25 598 F.3d at 590 (quoting Williams v. Boeing Co., 517 F.3d 1120, 1133 (9th Cir. 2008)). 26 The Ninth Circuit has “held that federal district courts properly released claims not alleged 27 in the underlying complaint where those claims depended on the same set of facts as the 28 claims that gave rise to the settlement.” Id. (collecting authority). 29 16-CV-2162 JLS (NLS) 1 Nunez argues that language in releases which waive claims “in any way related” to 2 the facts claimed in the operative complaint are too expansive and fail this doctrine, (Final 3 Settlement Mot. Opp’n 14), which, according to him, is exactly the type of language used 4 in the release in this Settlement Agreement, (id. at 14–17.) 5 The full scope of the release reads as follows: 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Class Members’ Released Claims: All Class Members who do not timely opt out of the Settlement, whether or not they endorse, cash, deposit or otherwise accept their Settlement checks, including but not limited to those Class Members whose checks are returned as undeliverable and/or those for whom no current addresses can be found, will release and discharge SDSR, and all of its former and present parents, subsidiaries, and affiliates, and their current and former officers, directors, employees, partners, shareholders and agents, and the predecessors and successors, assigns, and legal representatives of all such entities and individuals (“Class Members’ Released Parties”), from any and all disputes regarding wages and hours worked, claims, rights, demands, liabilities and causes of action of every nature and description, whether known or unknown, related in any way to unpaid wages, including overtime premium pay, meal and rest period penalty pay, failure to reimburse business expenses, and statutory or civil penalties arising during the period from May 27, 2012, to the date on which the Court gives final approval of the Settlement. The claims released by the Class Members include, but are not limited to, statutory, constitutional, contractual or common law claims for wages, damages, unpaid costs, penalties, liquidated damages, punitive damages, interest, attorney’s fees, litigation costs, restitution, or equitable relief, for the following categories of allegations: (a) all claims for failure to pay wages for hours worked, including overtime premium pay; (b) all claims for failure to pay the minimum wage in accordance with applicable law; (c) all claims for the failure to provide meal and/or rest periods in accordance with applicable law, including payments for missed meal and/or rest periods and alleged nonpayment of wages for meal periods worked and not taken; (d) all claims for unlawful deductions from wages; (e) all claims for failure to reimburse expenditures; and (f) any and all claims for recordkeeping or pay stub violations, waiting time penalties and all other civil and statutory penalties, including those recoverable 30 16-CV-2162 JLS (NLS) under PAGA (“Class Members’ Released Claims”). The Class Members’ Released Claims include without limitation claims meeting the above definition(s) under any and all applicable statutes, including without limitation California Labor Code sections 96 through 98.2 et seq., the California Payment of Wages Law, and in particular, California Labor Code §§ 200 et seq., including California Labor Code §§ 200 through 243 and §§ 203 and 218 and 218.5 in particular, California Labor Code §§ 300 et seq.; California Labor Code §§ 400 et seq.; California Working Hours Law, California Labor Code §§ 500 et seq., California Labor Code §§ 750 et seq., California Labor Code §§ 1194 and 1197; California Labor Code §§ 2802 and 2804; the California Unfair Competition Act, and in particular, California Bus. & Prof. Code §§ 17200 et seq.; the PAGA; California Code of Civil Procedure § 1021.5; and any other provision of the California Labor Code or any applicable California Industrial Welfare Commission Wage Orders, in all of their iterations, as well as any applicable federal labor laws. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 (Settlement Agreement ¶ 57 (emphases added by Nunez).) 15 Nunez targets the language “related in any way to unpaid wages” 9 to argue that the 16 release is overly broad or otherwise fails the factual predicate doctrine. (Final Settlement 17 Mot. Opp’n 15–17.) Nunez also argues that this language is similar to the language found 18 overly broad in Willner v. Manpower Inc., No. 11-CV-02846-JST, 2014 WL 4370694, at 19 *7 (N.D. Cal. Sept. 3, 2014). 20 As an initial matter, Nunez’s reliance on Willner is misplaced. The Court in Willner 21 found to be overly broad release language that “improperly releases any claims ‘whether 22 known or unknown, up to and including January 20, 2012, that are related in any way to 23 any claim alleged in the lawsuit.’” Id. Specifically, the Court noted that the phrase “related 24 in any way” could “capture claims that go beyond the scope of the allegations in the 25 operative complaint, which the Ninth Circuit has held is inappropriate.” Id. (citing Hesse, 26 27 28 The actual language Nunez cites is “in any way related to unpaid wages.” (Final Settlement Mot. Opp’n 15.) However, that language does not appear in the Settlement Agreement. Accordingly, the Court assumes Nunez instead meant to cite the language “related in any way to.” 9 31 16-CV-2162 JLS (NLS) 1 598 F.3d at 590.) 2 The present release is not as broad. Unlike the release language in Willner, that 3 purported to release claims “that are related in any way to any claim alleged in the lawsuit,” 4 id. (emphasis added), the present release is tied to claims “related in any way to unpaid 5 wages,” (Settlement Agreement ¶ 57). The Notice further reinforces this limitation, 6 informing Class Members that “individual claims for non-wage related claims such as for 7 workers’ compensation shall be specifically excluded from this release.” (Notice 5.) 8 However, the release itself does not contain language tethering the released claims 9 to the facts alleged in the operative Complaint. (See generally Settlement Agreement ¶ 56.) 10 The Willner Court suggested that the “excessive breadth [of the settlement release] could 11 be cured by changing the phrase ‘related in any way’ to ‘arise out of the allegations in the 12 operative complaint.’” Id. (citing Collins v. Cargill Meat Sols. Corp., 274 F.R.D. 294, 303 13 (E.D. Cal. 2011)). Indeed, the Parties urge the Court to rely on Collins to find the release 14 adequate, (Final Settlement Mot. Reply 8–9), but even that court found adequate a release 15 that was limited to “the Covered Claims based on the facts alleged in the Second Amended 16 Complaint [] filed in the Lawsuit,” Collins, 274 F.R.D. at 303 (alternations in original); see 17 also id. (noting that the released claims “appropriately track the breadth of Plaintiffs’ 18 allegations in the action and the settlement does not release unrelated claims that class 19 members may have against defendants”). 20 That said, the Notice sent to the Class Members states that Class Members “will be 21 releasing the claims and causes of action asserted in the operative Complaint on file in the 22 Class Action between May 27, 2012 and October 13, 2016, or which could have been 23 alleged based on the facts set forth in the operative Complaint, related to allegations that 24 you failed to receive all wages.” (Notice 4 (emphasis added).) So cabined, the release 25 does not run afoul of the exact factual predicate doctrine because the released claims are 26 tethered to “the facts set forth in the operative Complaint.” (Id.) And at the July 27, 2017 27 hearing Defendant BAE SDSR reaffirmed that it is bound by the terms sent out in the 28 Notice. Accordingly, the Court finds that the release is not overbroad. 32 16-CV-2162 JLS (NLS) 1 Nunez further argues that he “and his fellow objectors are particularly concerned 2 with preserving claims they have against the Defendant for violation of California and 3 municipal sick leave laws.” (Final Settlement Mot. Opp’n 15.) Thus, Nunez argues that 4 such claims would be released because the release encompasses claims arising out of 5 California Labor Code § 200 through § 243, on which Nunez and his fellow objectors 6 would rely to bring sick leave claims against Defendant. (Id. at 15–16.) However, the 7 Parties note that those California Labor Code sections are released only insofar as they 8 relate to claims “related in any way to unpaid wages,” as the release makes clear. (Final 9 Settlement Mot. Reply 7–8.) The Parties further reference the Notice, which, as discussed, 10 states that “individual claims for non-wage related claims . . . shall be specifically excluded 11 from this release.” (Id.) And the Parties affirmatively state to the Court that such claims 12 “have not been released.” (Id. at 8; see also Final Settlement Mot. 26 (“Neither the 13 operative Complaint nor the Settlement Agreement address such allegations regarding 14 Defendant’s treatment of absences. No such claims have been resolved in this Settlement. 15 Therefore, the ‘Objectors’ remain able to pursue such claims, with or without the legal 16 representation of Hewgill & Cobb, should they so desire.”). Accordingly, the Court finds 17 that the release does not release any claims related to Defendant’s potential violation of 18 California and municipal sick leave laws.10 19 2. Sufficiency of the Settlement Fund 20 21 Nunez also argues that $2.9 million is insufficient to compensate the Class for the harms they have suffered. (Final Settlement Mot. Opp’n 18.) According to Nunez: 22 Based on investigations, counsel for Mr. Nunez and his fellow objectors estimate that during the class period there were on average roughly eight hundred (800) nonexempt employees working at the Defendant’s facility at an average hourly rate of not less than $20.00. Under these assumptions just the meal break violations alone could sum as high as $20,736,000. See 23 24 25 26 27 28 10 Additionally, to the extent any such claims are brought against Defendant in the future, and Defendant contests them based on the language of the release, such arguments would be judicially estopped based on the statements made to the Court in this proceeding. 33 16-CV-2162 JLS (NLS) 1 the Declaration of Rusanne Anthony at ¶3. The rest break violations could sum to an equal $20,736,000. Id. If we assume that on average Class members were subjected to ten (10) minutes of unpaid time a shift the unpaid wages in this matter sum at $2,073,600.00 (in reality this number could be significantly higher because it is quite possible Class Members on average worked more than ten minutes of unpaid time). Id. at ¶ 3. Finally, under the same assumptions the waiting time penalties (Labor Code § 203) sum as high $5,616,000.00. Id. at ¶ 3. 2 3 4 5 6 7 8 9 (Id. at 11–12.) The Parties lay out a number of evidentiary objections to these calculations. (See 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Joint Evidentiary Objs. to Decls. Submitted in Supp. of Opp’n to Joint Mot. for Final Approval of Class Action Settlement (“Evid. Objs.”) ¶ C, ECF No. 51-2 (noting that, among other things, these calculations are improper hypotheticals presented by a lay witness, lack foundation, personal knowledge, and assume facts regarding the number of full-time workers for the purposes of damages calculations).) The Court finds the substance of these objections persuasive, and a few are worth noting.11 For one, Nunez claims that the “rest break violations could sum to an equal $20,736,000.” (Final Settlement Mot. Opp’n 11.) This calculation appears to rest, in part, on the premise that “[a]ll Class Members are subjected to the delay of walking off the ship single file, walking down three flights of stairs, and occasional enhanced security.” (Id. at 9.) However, the Parties point out that there is no evidence of this claim, and that such a claim ignores the fact that many Class Members never worked aboard a ship at all, let alone one with enhanced security or three flights of stairs. (Final Settlement Mot. Reply 6.) Additionally, as to the claim that “there were on average roughly 800 nonexempt employees working at the Defendant’s facility at an average hourly rate of not less than $20.00,” the Parties note 26 11 27 28 As a procedural matter, the Court DENIES AS MOOT the Joint Evidentiary Objections, (ECF No. 51-2). Given that the Court considered and ultimately rejects the arguments in Nunez’s Opposition Brief, the Court has considered the substance of the Joint Evidentiary Objections and given the outcome of the present motions the objections themselves are moot. 34 16-CV-2162 JLS (NLS) 1 that (1) there is no basis for these “estimates;” (2) these numbers ignore the lack of state 2 law applicability for those working on a federal enclave; and (3) the analysis fails to 3 differentiate how many of these employees are ship workers, to whom these conditions 4 may be applicable, versus other employees who have never set foot on a ship or had to 5 travel anywhere to enjoy their breaks. (Id.) 6 More importantly, however, the Court reiterates that the question before the Court 11 “is not whether the final product could be prettier, smarter or snazzier, but whether it is fair, adequate and free from collusion.” Even if every suggestion represents an actual potential “improvement,” and even considering all the suggestions cumulatively, they do not support a conclusion that this settlement is the product of collusion, or otherwise fails to meet the minimum threshold of fairness and adequacy. 12 Fraley, 966 F. Supp. 2d at 948. Thus, even if Nunez could demonstrate that the potential 13 recovery in this case was significantly higher than the results achieved in the Settlement 14 Agreement, that alone would not render the present Settlement unfair, unreasonable, or 15 inadequate. See, e.g., In re Mego Fin. Corp. Sec. Litig., 213 F.3d 454, 459 (9th Cir. 2000), 16 as amended (June 19, 2000) (“‘It is well-settled law that a cash settlement amounting to 17 only a fraction of the potential recovery does not per se render the settlement inadequate 18 or unfair.’” (quoting Officers for Justice, 688 F.2d at 628)). Absent evidence of collusion, 19 the resolution reached by the Parties during arms-length negotiations should not normally 20 be disturbed. See, e.g., Garner v. State Farm Mut. Auto. Ins. Co., No. CV 08 1365 CW 21 EMC, 2010 WL 1687832, at *9 (N.D. Cal. Apr. 22, 2010) (noting that “the Court may 22 presume that through negotiation, the Parties, counsel, and mediator arrived at a reasonable 23 range of settlement by considering Plaintiff’s likelihood of recovery”). Rather, “it is the 24 nature of a settlement, as a highly negotiated compromise . . . that ‘[i]t may be unavoidable 25 that some class members will always be happier with a given result than others.’” Allen v. 26 Bedolla, 787 F.3d 1218, 1223 (9th Cir. 2015) (citing Officers for Justice, 688 F.2d at 624). 27 A settlement that is fair, reasonable, and adequate for the Class as a whole may nevertheless 28 leave a smaller recovery for a small subset of Class Members who had a chance of larger 7 8 9 10 35 16-CV-2162 JLS (NLS) 1 individual recovery. But as already noted, such individuals were free to opt-out of the 2 Settlement. And, indeed, such individuals had another opportunity to opt-out given that 3 the original Notice was inadequate. Accordingly, the Court finds that the $2.9 million 4 Settlement amount is fair even if Nunez is right that a larger sum could have been achieved. 5 3. Likelihood of Success on Plaintiffs’ Claims 6 Nunez argues that the Parties “rely heavily on supposed low likelihoods of success 7 of the Plaintiff Class’ causes of action,” to which the objectors cannot assent. (Final 8 Settlement Mot. Opp’n 19.) Nunez then summarily discusses the four categorical claims 9 he contends are meritorious and have a high likelihood of success: (1) meal break claims, 10 (2) rest break claims, (3) unpaid hours claims, and (4) waiting time claims. (Id. at 19–21.) 11 Lastly, Nunez argues that damages are ascertainable from Defendant’s extensive records 12 and that the Parties greatly overstate Defendant’s potential federal enclave defense. (Id. at 13 21.) In response, the Parties argue that Nunez seeks “to turn this hearing into a trial of the 14 contested issues of fact and law that underlie the merits of this case while attempting to 15 show that a better settlement ought to have been negotiated.” (Final Settlement Mot. Reply 16 3.) The Parties maintain that they settled “precisely to eliminate the uncertainty, delay, 17 risk, and expense of litigating all of these various issues” and briefly highlight such issues 18 (Id. at 3, 6–7.) 19 The Parties correctly note the Court’s role in this Circuit is not “to reach any ultimate 20 conclusions on the contested issues of fact and law which underlie the merits of the dispute, 21 for it is the very uncertainty of outcome in litigation and avoidance of wasteful and 22 expensive litigation that induce consensual settlement.” Officers for Justice, 688 F.2d at 23 625. “The proposed settlement is not to be judged against a hypothetical or speculative 24 measure of what might have been achieved by the negotiators” because “the very essence 25 of a settlement is compromise, ‘a yielding of absolutes and an abandoning of highest 26 hopes.’” Id. at 624–25 (emphasis added). “Ultimately, the district court’s determination 27 is nothing more than ‘an amalgam of delicate balancing, gross approximations and rough 28 justice.’” Id. at 625 (quoting City of Detroit v. Grinnell Corp., 495 F.2d 448, 468 (2d Cir. 36 16-CV-2162 JLS (NLS) 1 1974)). 2 Nunez’s arguments objecting to the proposed settlement on the basis of Plaintiff 3 Class’ claims purportedly having a high likelihood of success are unavailing. Although 4 the Court’s determination on the proposed settlement must consider “the strength of 5 plaintiffs’ case,” the Court must also balance that consideration with various other factors, 6 including at least: 7 8 9 10 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. 11 12 Hanlon, 150 F.3d at 1026. 13 The Parties argue that had they litigated the case, the following issues, among others, 14 would have been litigated aggressively: “the applicability of the Federal Enclave Doctrine, 15 the reliance on California versus federal labor laws, Mr. Nunez’s ability to represent 16 secretaries and other workers, as well as the ability to certify a class including disparate 17 workers and requiring inquiries into meal and rest breaks . . . .” (Final Settlement Mot. 18 Reply 5.) Moreover, the Parties note that the violating conduct alleged by Nunez on behalf 19 of all class members does not apply to the “many Class members [that] never worked 20 aboard a ship at all, let alone one with enhanced security or three flights of stairs.” (Id. at 21 6.) Therefore, the Court does not find Nunez’s cursory discussion of the merits of his 22 claims, which does little more than recite applicable California law and general allegations 23 with minimal supporting evidence, sufficient to overturn the Court’s determinations above 24 regarding the strength of Plaintiff’s case, supra RULE 23 FINAL APPROVAL 25 DETERMINATION, Part I, or otherwise outweigh the other factors the Court must 26 consider in assessing the fairness and adequacy of this Settlement, supra RULE 23 FINAL 27 APPROVAL DETERMINATION, Parts I—VII. 28 To be sure, the Court acknowledges Nunez’s arguments regarding Defendant’s 37 16-CV-2162 JLS (NLS) 1 potential federal enclave defense. However, the Court also finds that Nunez’s arguments 2 only further highlight the risk, expense, complexity, and likely duration of further litigation 3 on that issue alone. 4 determination based on Nunez’s assertion that Plaintiffs’ claims have a high likelihood of 5 success. 6 Accordingly, the Court does not modify its final approval 4. Factual and Evidentiary Basis of the Settlement 7 Nunez argues that the Settlement should be rejected because it is based on inadequate 8 investigation and lacks factual and evidentiary support. (Final Settlement Mot. Opp’n 25– 9 26.) Specifically, Nunez states that “Mr. Dychter’s lack of discovery resulted in a severe 10 undervaluing of the issues underlining [sic] this case, and also the overlooked and missed 11 findings of other issues that are, [sic] highly valued.” (Id. at 25.) 12 The Court finds these allegations unfounded as they relate to the damages model 13 Class Counsel used to arrive at the $11.5 million maximum damages figure used for 14 mediation purposes. 15 Settlement, Mr. Dychter claimed that after receiving substantial amounts of data and 16 information (including approximately 500,000 rows of electronic time-punch data in excel 17 format listing dates of employment for all class members, pay rates, shift counts, work 18 schedules), he retained the services of an experienced statistician, Dr. James R. Lackritz, 19 Ph.D., who assisted Plaintiff’s counsel in performing random selections for purposes of 20 selecting a statistically significant sample of time-punch data and wage data. (Decl. of 21 Alexander I. Dychter in Supp. of Joint Mot. for Prelim. Settlement Order (“Prelim. 22 Settlement Dychter Decl.”) ¶ 5, ECF No. 15-3.) Counsel retained Dr. Lackritz solely for 23 purposes of mediation preparation. (Id.) As a result of this analysis and the information 24 exchanged, Class Counsel valued Defendant’s potential liability on the underlying Labor 25 Code claims to be approximately $11.5 million. (Id. ¶ 7.) As a refresher, when moving for preliminary approval of the 26 However, Hewgill & Cobb, as counsel representing Nunez, asked Mr. Dychter for 27 the file related to this case for review, especially any and all expert reports. (Final 28 Settlement Mot. Opp’n 25–26 (citing Decl. of Efaon Cobb in Supp. of Objectors’ Resp. to 38 16-CV-2162 JLS (NLS) 1 the Joint Mot. to Approve Settlement and Atty’s Fees (“Cobb Decl.”) ¶ 2, ECF No. 49-3).) 2 After a phone conversation and several emails, Mr. Dychter confirmed that Dr. Lackritz 3 “has not been designated as an expert in this case . . . [and] has not prepared any report, 4 opinion, or testimony.” (Cobb Decl., Ex. D, at 14 n.1.) 5 This is irrelevant. As the Parties explain, “there are no facts presented that Mr. 6 Dychter relied on Dr. Lackritz’s work to calculate the damages,” and that “[w]hether or 7 not an expert provided a written statement or report for mediation is also irrelevant and 8 immaterial.” (Evid. Objs. 17.) This appears to be true—specifically, Class Counsel only 9 claims that Dr. Lackritz performed random sample calculations that Class Counsel then 10 used to calculate damages. Nunez cites no authority suggesting that this is an improper 11 way to arrive at a potential damages cap for mediation purposes. And Mr. Piazza declares 12 that Class Counsel “had conducted a sophisticated damage model that accounted for the 13 value of each of the claims asserted, including potential violations that were later 14 enumerated in an amended complaint, which was part of the mediated agreement.” (Piazza 15 Decl. ¶ 8.) 16 Nunez also argues generally that the settlement is “inadequate because it is not 17 supported by sufficient discovery, investigation, and development of arguments in 18 opposition to anticipated legal defenses posited by Defense counsel.” (Final Settlement 19 Mot. Opp’n 26.) In support of that statement, Nunez cites Hanlon, 150 F.3d at 1022, for 20 the proposition that the court “twice discussed the plaintiffs’ counsel discovery efforts, and 21 the fact that ‘traditional’ discovery consisting of document requests, interrogatories, and 22 taking and defending depositions had occurred.” (Id. (emphasis added by Nunez).) While 23 unclear, this statement presumably attacks Class Counsel for failure to depose certain 24 witnesses as part of their settlement discovery efforts. 25 But Hanlon does not stand for the proposition that class counsel must depose 26 witnesses for their efforts to be sufficiently vigorous to satisfy any Rule 23(a)(4) concerns. 27 Rather, “[i]n the context of class action settlements, ‘formal discovery is not a necessary 28 ticket to the bargaining table’ where the parties have sufficient information to make an 39 16-CV-2162 JLS (NLS) 1 informed decision about settlement.” In re Mego Fin. Corp. Sec. Litig., 213 F.3d at 461 2 (internal quotations omitted). As discussed above, supra RULE 23 FINAL APPROVAL 3 DETERMINATION, Part V, the Court has determined that the Parties engaged in 4 substantial informal discovery efforts. Specifically, Class Counsel received “multiple 5 employment policies, time records (approximately 500,000 rows of electronic time-punch 6 data in excel format were produced), dates of employment for all class members, pay rates, 7 shift counts, work schedules, Plaintiff’s employment file, and other miscellaneous pieces 8 of data/information,” (Prelim. Settlement Dychter Decl. ¶ 5), and retained the services of 9 Dr. Lackritz to perform random selections for purposes of selecting a statistically 10 significant sample of time-punch data and wage data, (id. ¶ 5; see also Piazza Decl. ¶ 8 11 (noting that “Plaintiff’s counsel had obtained a substantial amount of data and documents 12 from defense counsel through informal exchanges prior to the mediation”); id. ¶ 4 (“It was 13 clear to me based on my extensive experience that both Class Counsel and Defense Counsel 14 were well-prepared and highly familiar with the pertinent facts and applicable law . . . .”).) 15 Nunez may argue that Class Counsel could have done more, (Final Settlement Mot. Opp’n 16 26), but this does not change the calculus where the Court finds, as here, that the Parties 17 had “sufficient information to make an informed decision about settlement.” In re Mego 18 Fin. Corp. Sec. Litig., 213 F.3d at 461. Accordingly, the Court finds that Class Counsel 19 did not conduct inadequate discovery or otherwise have an inadequate factual basis in 20 crafting and supporting the Settlement. 21 5. Collusion and Conflict 22 Finally, Nunez argues that the Settlement should be rejected because the 23 circumstances of the Settlement being negotiated show collusion and conflict with the 24 Class. (Final Settlement Mot. Opp’n 26–28.) This is a hefty charge, and the Court is 25 mindful that due to the “dangers of collusion between class counsel and the defendant, as 26 well as the need for additional protections when the settlement is not negotiated by a court 27 designated class representative,” any “settlement approval that takes place prior to formal 28 class certification requires a higher standard of fairness.” Hanlon, 150 F.3d at 1026. 40 16-CV-2162 JLS (NLS) 1 Nunez makes two arguments in support of its contention that the Settlement is the result of 2 collusion. The Court considers each in turn. 3 a. Coercion 4 First, Nunez argues that he is “the only named plaintiff[,] opposes this settlement, 5 and was coerced into assenting.” (Final Settlement Mot. Opp’n 26.) The first assertion in 6 that sentence is, on its own, irrelevant, since merely opposing a settlement does not indicate 7 that it was the result of collusion. The second assertion—that he was coerced into assenting 8 to its terms—likewise does not definitively prove that the Parties actually colluded. 9 Specifically, the allegation that Class Counsel coerced Nunez to sign the Settlement, on its 10 own, does not speak in any way to the actions and views of Defendant BAE SDSR in 11 pursuing and accepting the proposed Settlement. Nor does Nunez offer any other evidence 12 to suggest that the Parties colluded in any way to arrive at the Settlement before the Court. 13 To the contrary, and as already discussed at length, the record is replete with evidence that 14 the Settlement was reached through arms-length negotiations between experienced Class 15 and Defense Counsel before a respected third-party mediator. (See, e.g., Piazza Decl. ¶ 5 16 (“The outcome was reached based on arms’ length negotiation between counsel that were 17 each zealously advocating for their respective clients.”).) 18 Of course, Nunez’s allegation of coercion, though not direct proof of collusion, is 19 nevertheless relevant in the Court’s assessment of the overall fairness and adequacy of this 20 Settlement. As the Ninth Circuit has instructed: 21 22 23 24 25 26 Even when there is no direct proof of explicit collusion, there is always the possibility in class action settlements that the defendant, class counsel, and class representatives will all pursue their own interests at the expense of the class. For that reason, the absence of direct proof of collusion does not reduce the need for careful review of the fairness of the settlement, particularly those aspects of the settlement that could constitute inducements to the participants in the negotiation to forego pursuit of class interests. 27 28 Staton v. Boeing Co., 327 F.3d 938, 958 (9th Cir. 2003). Otherwise put, Nunez’s 41 16-CV-2162 JLS (NLS) 1 allegations of coercion may reveal, for instance, that Mr. Dychter has a conflict with the 2 Class. But that all depends on whether Nunez’s allegations are sufficient to support a 3 finding that Mr. Dychter coerced him into signing the Settlement Agreement. To that end, 4 Nunez alleges the following: 5 6 7 8 9 10 11 12 38. I asked Alex what would happen if I didn’t sign because I didn’t think it was a good amount for the settlement. Alex said that if I don’t sign another thing that may happen is that BAE will just send out checks, and when people cash them the settlement will be accepted. Alex told me that BAE would also just find someone else to take my place and get the $5,000.00. He asked me, “You don’t want that, do you?” 39. I asked him why the problems at the work site did not change. He told me, “Don’t think they are going to change because they’re not.” I felt like I had no choice but to sign, so I did. 13 (Nunez Substitute Opp’n Decl. ¶¶ 38–39.) As an initial matter, the Court finds that, even 14 if these allegations were true, there is nothing to suggest that Mr. Dychter coerced Nunez 15 into signing the document. While Nunez “felt like” he had no choice but to sign, there is 16 no indication that he was forced to do so; if anything, this exchange possibly reveals that 17 he valued a potential $5,000 banner award over his objections to the Settlement. 18 Of course, this is all assuming that Nunez’s allegations are true. At the July 27, 2017 19 hearing, Mr. Dychter vehemently denied making this statement or any suggestion that he 20 coerced Nunez into signing the Settlement Agreement. Additionally, Mr. Dychter claims 21 that he “spent considerable time going through the Settlement Agreement with Mr. Nunez 22 to ensure that he had no questions or concerns before he decided to sign it.” (Decl. of 23 Alexander I. Dychter in Supp. of Joint Mot. to Substitute New Class Rep. in Place of 24 Eduardo Nunez (“Mot. to Substitute Dychter Decl.”) ¶ 16.) Mr. Dychter also notes that 25 “[a]t no time since Mr. Nunez signed the Settlement Agreement has he asked to rescind or 26 revoke the agreement. At no time during this matter have I ever received a phone call, text 27 message, e-mail, personal visit, or any other form of communication from Mr. Nunez to 28 advise me that [he] was unhappy with the settlement or that he did not want to proceed as 42 16-CV-2162 JLS (NLS) 1 the class representative.” (Id.) 2 There is no evidence that Mr. Dychter has not been forthcoming with this Court. On 3 the other hand, the Court has identified several inconsistencies in Nunez’s representations 4 to this Court. See supra RULE 23 SETTLEMENT CLASS CERTIFICATION, Part IV 5 (noting that Nunez first stated he did not know a mediation was occurring, and later stated 6 that he did know one was occurring); see also infra n.14 (noting that Nunez simultaneously 7 states that (1) he has never heard of Mr. De Anda; and that (2) Mr. De Anda does not work 8 at BAE SDSR and has not for some time). Given the conflicting testimony between Nunez 9 and Mr. Dychter, the fact that Nunez did not otherwise communicate his dissatisfaction 10 with the Settlement for months after signing it, and the inconsistencies in Nunez’s own 11 testimony, the Court finds that Nunez’s allegations do not credibly establish that he was 12 coerced into signing the Settlement Agreement. b. Motion for Attorney’s Fees 13 14 Second, Nunez argues that Class Counsel positioned itself in conflict with the Class 15 by (i) negotiating his fees from the corpus of the settlement, and (ii) failing to make a fee 16 motion prior to the close of the objection period.12 (Final Settlement Mot. Opp’n 27.) 17 i. Negotiating Fees from Corpus of Settlement 18 Nunez argues that Class Counsel negotiated his fee from the common fund while 19 simultaneously negotiating this proposed Settlement in contradiction of the Ninth Circuit’s 20 guidance in Staton v. Boeing, 327 F.3d 938 (9th Cir. 2003). But Nunez misreads Staton. 21 In that case, the court condoned the “regular common fund procedure, [where] the parties 22 settle for the total amount of the common fund and shift the fund to the court’s supervision. 23 The plaintiffs’ lawyers then apply to the court for a fee award from the fund.” Id. at 969. 24 Rather, the court was concerned that when “the ordinary procedure is not followed and 25 instead the parties explicitly condition the merits settlement on a fee award justified on a 26 27 28 Nunez also argues that the attorney’s fees are unreasonable. (See Final Settlement Mot. Opp’n 28.) However, the Court need not reach this argument now because the Class will have another opportunity to object to the reasonableness of the attorney’s fees. 12 43 16-CV-2162 JLS (NLS) 1 common fund basis, the obvious risk arises that plaintiffs’ lawyers will be induced to forego 2 a fair settlement for their clients in order to gain a higher award of attorneys’ fees.” Id. at 3 970 (emphasis added). 4 Here, the Parties followed the ordinary procedure. The Settlement provided for an 5 anticipated attorney’s fees award of 25% of the common fund. Such an award was 6 conditioned on the Court finally approving the Settlement as fair, reasonable, and adequate. 7 Additionally, the Court ordered Class Counsel to move for fees so that the Court could 8 decide whether those fees are appropriate in this case. Most importantly, there is no 9 indication that the Settlement would rise or fall depending on whether Class Counsel 10 received their requested fees. Indeed, rather than conditioning the Settlement on a fee 11 award, the Settlement Agreement provides that if the Court were to award a lower amount 12 of attorneys’ fees, the Settlement would not be disturbed. (See Settlement Agreement ¶ 48 13 (“If the Court does not grant approval of the Settlement, or if the Court’s approval of the 14 Settlement is reversed or materially modified on appellate review, then this Settlement will 15 become null and void, except that an award of a class representative payment or class 16 counsel’s attorneys’ fees and expenses in an amount less than sought will not constitute a 17 failure to grant approval or a material modification.” (emphasis added)).) Thus, Nunez’s 18 reliance on Staton is misplaced. 19 ii. Failure to Timely Move for Attorney’s Fees 20 Nunez also argues that Class Counsel failed to timely move for attorney’s fees. 21 (Final Settlement Mot. Opp’n 27.) Specifically, Nunez argues that the Ninth Circuit 22 requires class counsel to seek its fees prior to the close of the objection period. (Id. (citing 23 In re Mercury Interactive Corp. Sec. Litig., 618 F.3d 988, 993 (9th Cir. 2010)).) On August 24 2, 2017, the Court agreed with Nunez and, as part of the supplemental notice, directed 25 Class Counsel to notify the Class of the existence of their Motion for Attorney’s Fees and 26 provide them reasonable means to object to the same. (ECF No. 57; see also ECF No. 59.) 27 No objections were received. (See ECF No. 60.) This supplemental notice cured any 28 deficiency and, thus, the Court finds that Class Counsel is not in conflict with the Class. 44 16-CV-2162 JLS (NLS) 1 VIII. Conclusion For the reasons stated, the Court GRANTS the Parties’ Final Approval Motion 2 3 regarding the Rule 23 Settlement. 4 ATTORNEY FEE AND COST AWARD 5 In the Ninth Circuit, a district court has discretion to apply either a lodestar method 6 or a percentage-of-the-fund method in calculating a class fee award in a common fund case. 7 Fischel v. Equitable Life Assur. Soc’y of U.S., 307 F.3d 997, 1006 (9th Cir. 2002). When 8 applying the percentage-of-the-fund method, an attorney’s fees award of “twenty-five 9 percent is the ‘benchmark’ that district courts should award.” In re Pac. Enters. Sec. Litig., 10 47 F.3d 373, 379 (9th Cir. 1995) (citing Six (6) Mexican Workers v. Ariz. Citrus Growers, 11 904 F.2d 1301, 1311 (9th Cir. 1990)); see also Fischel, 307 F.3d at 1006. However, a 12 district court “may adjust the benchmark when special circumstances indicate a higher or 13 lower percentage would be appropriate.” In re Pac. Enters. Sec. Litig., 47 F.3d at 379 14 (citing Six (6) Mexican Workers, 904 F.2d at 1311). “Reasonableness is the goal, and 15 mechanical or formulaic application of either method, where it yields an unreasonable 16 result, can be an abuse of discretion.” Fischel, 307 F.3d at 1007. 17 Defendant has agreed not to oppose a request by Class Counsel for fees up to the 18 amount of $725,000, which is 25% of the Settlement Amount of $2.9 million. (Fee Mot. 19 2.) 20 communicated in the Class Notice, which provided that “Class Counsel’s reasonable 21 attorney’s fees in an amount not to exceed $725,000 (if finally approved by the Court)” 22 would be paid out of the Maximum Settlement Amount. (Settlement Agreement ¶ 29; 23 Schwartz Decl. Ex. A.) The Court previously found that this amount was presumptively 24 reasonable given that it represents 25% of the Settlement Fund, the benchmark percentage 25 approved by the Ninth Circuit. (See Prelim. Settlement Order 13–14.) Class Counsel argue 26 their fee request is reasonable under a percentage of the fund approach. (Fee Mot. 3.) This amount is authorized by the Settlement Agreement and was specifically 27 As an initial matter, the Court agrees with Class Counsel that the percentage-of-the- 28 fund calculation is preferable to the lodestar approach. See, e.g., Aichele v. City of Los 45 16-CV-2162 JLS (NLS) 1 Angeles, No. CV1210863DMGFFMX, 2015 WL 5286028, at *5 (C.D. Cal. Sept. 9, 2015) 2 (“Many courts and commentators have recognized that the percentage of the available fund 3 analysis is the preferred approach in class action fee requests because it more closely aligns 4 the interests of the counsel and the class, i.e., class counsel directly benefit from increasing 5 the size of the class fund and working in the most efficient manner.” (citations omitted)). 6 Additionally, 7 11 [a]lthough not mandated by the Ninth Circuit, courts often consider the following factors when determining the benchmark percentage to be applied: (1) the result obtained for the class; (2) the effort expended by counsel; (3) counsel’s experience; (4) counsel’s skill; (5) the complexity of the issues; (6) the risks of nonpayment assumed by counsel; (7) the reaction of the class; and (8) comparison with counsel’s lodestar. 12 Id. at *2 (citing In re Heritage Bond Litig., No. 02-ML-1475 DT, 2005 WL 1594403, *18 13 (C.D. Cal. June 10, 2005); In re Quintus Sec. Litig., 148 F. Supp. 2d 967, 973–74 (N.D. 14 Cal. 2001)). 8 9 10 15 In the present case, the Court finds that Class Counsel reached a favorable result for 16 the Class. The financial terms of the settlement are favorable to Class Members—as 17 discussed, the average settlement amount for each Class Member is approximately $890 18 and the highest individual settlement payment is estimated to be approximately $2,500. 19 (Schwartz Decl. ¶ 13.) The Court has already described the experience and skill of Class 20 Counsel, and here briefly notes the significant effort expended by Class Counsel to see this 21 case settled to the benefit of the Class, including, for instance: (1) investigating Plaintiff’s 22 claims and filing the complaint and successive amended complaints; (2) negotiating and 23 preparing extensive settlement documents, including preparation for the mediation with 24 Mr. Piazza that ultimately resulted in the present Settlement Agreement; (3) moving for 25 preliminary and final approval of the Settlement; and (4) moving to replace Plaintiff Nunez 26 on the grounds that his objections to the Settlement Agreement conflicted with the best 27 interests of the Class as a whole. 28 Additionally, as the Court has previously noted, the issues in this case are complex 46 16-CV-2162 JLS (NLS) 1 and it is not at all clear that the Class would be able to recover any damages for Defendant’s 2 alleged wrongs, much less an average of almost $1,000. Specifically, Class Counsel notes 3 that class-wide recovery would be difficult to obtain in litigation based on Defendant’s 4 arguments, including, for example, that: (1) individualized inquiries would defeat class 5 certification of the meal break claim since not all class members were required to 6 disembark from a ship, return tools, or wait in a security line when starting a meal period, 7 (Fee Mot. 4); (2) the Federal Enclave Doctrine would make proof of Class-wide damages 8 difficult, since Class Members worked on vastly different work sites where California state 9 labor laws would not apply, (id. at 5); and (3) due to the fact that virtually all of Defendant’s 10 work was through the U.S. Navy pursuant to “cost-plus” contracts, there was no rational 11 basis for Defendant to underpay its workers because the U.S. Navy paid Defendant for 12 every minute worked by Class Members, and added a markup, which increased 13 Defendant’s profits, (id.). The efforts and risk Class Counsel undertook are underscored 14 by the fact that Class Counsel represented the Class on a contingent fee basis. (Id. at 6.) 15 Further, only three Class Members requested exclusion, and only six filed 16 (procedurally deficient) objections, which collectively represent roughly .45% of the entire 17 Class. And, notably, while the objections raised a number of disparate issues related to 18 Defendant and the proposed Settlement Agreement, not one Class Member objected to the 19 requested award of attorney fees. Nor were there any objections to the award of attorney 20 fees after supplemental notice was sent to Class Members. (See ECF No. 60.) This near- 21 unanimous class approval and absence of fee-specific objections also weighs in favor of 22 settlement. See, e.g., Singer v. Becton Dickinson & Co., No. 08-CV-821-IEG (BLM), 2010 23 WL 2196104, at *9 (S.D. Cal. June 1, 2010) (noting that 33.33% fee request was 24 “especially” warranted “in light of the fact that not a single class member objected to 25 Plaintiff’s counsel’s” request). For all this, Class Counsel seek only 25% of the Settlement 26 Fund in accordance with the Ninth Circuit’s benchmark percentage fee award. See, e.g., 27 Vasquez v. Coast Valley Roofing, Inc., 266 F.R.D. 482, 491 (E.D. Cal. 2010) (stating that 28 “[t]he typical range of acceptable attorneys’ fees in the Ninth Circuit is 20% to 33 1/3% of 47 16-CV-2162 JLS (NLS) 1 the total settlement value, with 25% considered the benchmark”). 2 Finally, the lodestar cross-check of 1.82, (Decl. of Alexander I. Dychter in Supp. of 3 Fee Mot. (“Dychter Fee Decl.”) ¶ 17 ECF No. 47-2), is reasonable in this case, given the 4 risks, discussed above, of no recovery to the Class should the case proceed on the merits, 5 as well as Class Counsel’s taking the case on a contingency fee basis. See Vizcaino v. 6 Microsoft Corp., 290 F.3d 1043, 1050 (9th Cir. 2002) (approving multiplier of 3.65); id. 7 n.6 (citing appendix “finding a range of 0.6–19.6, with most (20 of 24, or 83%) from 1.0– 8 4.0 and a bare majority (13 of 24, or 54%) in the 1.5–3.0 range[,]” and noting that 9 “[m]ultiples ranging from one to four are frequently awarded in common fund cases when 10 the lodestar method is applied” (citation omitted)). 11 Nunez objects to the Class Counsel’s requested attorney’s fees because they are 12 “distinctly higher” than the fees class counsel could justify using the lodestar method. 13 Staton, 327 F.3d at 966. Nunez explains that Class Counsel incurred at most $288,040.00 14 in attorney’s fees and the lodestar cross check of 1.82 yields $439,344.00. (Final Settlement 15 Mot. Opp’n 28.) Thus, Class Counsel’s requested fee of $725,000 represents a lodestar of 16 2.5. (Id.) 17 Nunez’s argument misses the mark. First, the Court chose to apply the percentage 18 method and 25% is the established benchmark percentage in these types of cases. See 19 Hanlon, 150 F.3d at 1029. The lodestar calculation serves only to check that the requested 20 fee is reasonable. 21 multiplier. Mr. Dychter’s lodestar is $244,080; Mr. Speiwak’s is $87,112.50; and Mr. 22 Haines’s amount is $64,745. (ECF No. 52, at 7.) Class Counsel’s fees total $395,937.50. 23 The requested fee ($725,000) divided by incurred attorney’s fees ($395,937.50) yields a 24 lodestar of 1.83. This is well within the range approved by courts in this Circuit. See 25 Vizcaino, 290 F.3d at 1050–51 & n.6. Finally, the Court notes that no Class Member 26 objected to the proposed attorney’s fees. (See ECF No. 60.) Further, Nunez erroneously calculates Class Counsel’s lodestar 27 Given the foregoing, the Court concludes that Class Counsel’s requested attorney’s 28 fees of $725,000, which constitutes 25% of the Settlement Fund, are reasonable and 48 16-CV-2162 JLS (NLS) 1 therefore GRANTS Class Counsel’s Fee Motion in this regard. (See also Fee Mot. 12 2 (collecting cases where Class Counsel has been awarded 25% of the total settlement value 3 in similar employment actions).) 4 Additionally, Class Counsel move for reimbursement for costs in the amount of 5 $14,995.34. (Id. at 14 (citing Dychter Fee Decl. ¶ 21).) The Settlement Agreement also 6 provided that Class Counsel would be entitled to reimbursement of “costs in an amount not 7 to exceed $20,000.” (Id. (citing, e.g., Settlement Agreement ¶ 29).) Class Counsel 8 represents that these costs were reasonably incurred in the prosecution of this matter and 9 provides declarations to that effect. (Id. (citing, e.g., Dychter Fee Decl. ¶ 21).) 10 Specifically, Class Counsel’s costs include (1) $12,000 towards mediation fees, (2) $1,435 11 towards the complaint filing fee in San Diego County Superior Court, (Dychter Fee Decl. 12 ¶ 21), and (3) $991.47 for Mr. Haines’ court fees and travel fees associated with the 13 September 16, 2016 mediation and the status conference held on May 25, 2017, (Decl. of 14 Walter L. Haines in Supp. of Fee Mot. (“Haines Fee Decl.”) ¶ 9, ECF No. 47-4). 15 The Court finds reasonable the costs associated with researching and filing the 16 complaint commencing the action. See, e.g., In re Immune Response Sec. Litig., 497 F. 17 Supp. 2d 1166, 1177 (S.D. Cal. 2007) (noting that “filing fees and photocopies are also a 18 necessary expense of litigation”). The Court also finds reasonable Class Counsel’s travel 19 costs associated with attending the mediation and the May status conference. Id. at 1177 20 (“‘The reimbursement for travel expenses, both under 28 U.S.C. § 1920 and [Rule] 54(d), 21 is within the broad discretion of the Court.’” (quoting In re Media Vision Tech. Sec. Litig., 22 913 F. Supp. 1362, 1369 (1996))). And the Court finds reasonable the fees incurred with 23 mediating this complex case before Mr. Piazza, particularly given Class Counsel’s 24 preparation and participation in the mediation, the reputation of the mediator, and the fact 25 that the mediation resulted in this Settlement Agreement, which the Court has found to be 26 fair, reasonable, and adequate. See, e.g., id. at 1178 (concluding that “mediation expenses 27 in this case are both reasonable and necessary” and collecting cases awarding fees for 28 mediation expenses). Accordingly, the Court concludes that all of these costs are validly 49 16-CV-2162 JLS (NLS) 1 recoverable and therefore GRANTS Class Counsel’s Fee Motion in this regard. See, e.g., 2 Harris v. Marhoefer, 24 F.3d 16, 19 (9th Cir. 1994) (noting an attorney usually may recover 3 “out-of-pocket expenses that ‘would normally be charged to a fee paying client’” and 4 holding that facts of the case demonstrated the reasonableness of costs for “service of 5 summons and complaint, service of trial subpoenas, fee for defense expert at deposition, 6 postage, investigator, copying costs, hotel bills, meals, messenger service and employment 7 record reproduction”). 8 CLASS REPRESENTATIVE SERVICE AWARD PROVISION 9 The Ninth Circuit recognizes that named plaintiffs in class action litigation are 10 eligible for reasonable incentive payments. Staton, 327 F.3d at 977. The district court 11 must evaluate each incentive award individually, using “‘relevant factors includ[ing] the 12 actions the plaintiff has taken to protect the interests of the class, the degree to which the 13 class has benefitted from those actions, . . . the amount of time and effort the plaintiff 14 expended in pursuing the litigation . . . and reasonabl[e] fear[s of] workplace retaliation.’” 15 Id. (quoting Cook v. Niedert, 142 F.3d 1004, 1016 (7th Cir. 1998)). This individualized 16 inquiry naturally means that “a court need not award all named plaintiffs the same incentive 17 payment.” In re High-Tech Emp. Antitrust Litig., No. 11-CV-02509-LHK, 2015 WL 18 5158730, at *17 (N.D. Cal. Sept. 2, 2015). 19 In the present case, the Settlement Agreement provides up to $5,000 to the Class 20 Representative, to be paid from the Maximum Payment, in addition to the Settlement 21 payment he may otherwise receive as a Class Member. (Settlement Agreement ¶ 30.) The 22 Class Notice states that this award is “an enhancement fee to the named plaintiff to 23 compensate him for the time, work, and risks undertaken in bringing this Class Action.” 24 (Id. Ex. A, ECF No. 15-1, at 57; Schwartz Decl. Ex. A, ¶ 1.) 25 Given the Parties’ Motion to Substitute, Class Counsel suggest either that (1) if the 26 Court finds that Nunez is not an adequate representative, Bryan De Anda should be 27 awarded $2,500; or (2) if the Court determines that Nunez is an adequate representative, 28 Nunez and De Anda should each receive an incentive award of $2,500. (Fee Mot. 14 n.4.) 50 16-CV-2162 JLS (NLS) 1 The Court is inclined to agree with Class Counsel’s second proposal, with a slight 2 modification—namely, that Nunez and De Anda should receive $3,000 and $2,000, 3 respectively, for their efforts. Nunez has lent his name and time to this case since the 4 beginning, bearing the risk of possible retaliation on behalf of the Class. He met with Mr. 5 Dychter and signed the Settlement Agreement, setting the stage for preliminary and final 6 approval of the Settlement. Although he later objected to the Settlement, the Court finds 7 that, as discussed above, he was in some sense attempting to achieve a better outcome for 8 his Class Members. While the Court ultimately grants the Parties’ Motion to Substitute, 9 discussed below, the Court finds that Nunez is nevertheless deserving of an incentive award 10 for the time he spent representing the Class. See, e.g., Eubank v. Pella Corp., 753 F.3d 11 718, 723 (7th Cir. 2014) (noting that “the judge rightly made incentive awards to the class 12 representatives who had opposed the settlement as well as to those who had approved it”). 13 De Anda, while relatively new, is “willing to serve as the class representative and to do 14 whatever is necessary to facilitate the Court granting final approval of” the Settlement. 15 (See generally Decl. of Bryan De Anda in Supp. of Mot. to Substitute (“De Anda Decl.”) 16 ¶ 10, ECF No. 37-5.) In determining to support the Settlement, De Anda reviewed the 17 Settlement Agreement itself, (id. ¶ 3), the mediation brief, the briefs filed with the Court 18 seeking Preliminary Approval, and the Court’s Order preliminarily approving the 19 Settlement, (id. ¶ 4). The Court finds that the Class has—and will—benefit from his 20 informed support of the Settlement, given that the Court has found it to be in the best 21 interests of the Class. Finally, and importantly, there have been no Class Member 22 objections to the service award provision, further indicating the reasonableness of a $5,000 23 total incentive award for the named representatives. 24 discretion determines that the requested Service Awards are reasonable on the facts of this 25 particular case. Given the foregoing, the Court GRANTS the Class Counsel’s Fee Motion 26 regarding Class Representative Service Awards and AWARDS $3,000 to Nunez and 27 $2,000 to De Anda. 28 /// Accordingly, the Court in its 51 16-CV-2162 JLS (NLS) 1 2 MOTION TO SUBSTITUTE CLASS REPRESENTATIVE As discussed, the Court has found that Nunez is an adequate representative at the 3 class certification stage. 4 Representative and substitute another in his stead now that the Court has determined that 5 the Settlement is fair, reasonable, and adequate. (See generally Mot. to Substitute.) The 6 crux of the Parties’ argument is that now that the Court has determined the Settlement is in 7 the best interests of the Class, Nunez’s continued objection to the Settlement places him in 8 direct conflict with the Class. (Id. at 9–10.) But the Parties also move to remove Nunez as Class 9 Federal Rule of Civil Procedure 23(a)(4) requires that representative parties in a 10 class action “will fairly and adequately protect the interests of the class.” Courts have the 11 inherent power to replace class representatives. See, e.g., Robichaud v. Speedy PC 12 Software, No. C 12 04730 LB, 2013 WL 818503, at *8 (N.D. Cal. Mar. 5, 2013) (noting 13 that when a representative plaintiff cannot serve as the class representative “for a reason 14 that does not affect the viability of the class claims, courts regularly allow or order the 15 plaintiffs’ counsel to substitute a new representative plaintiff” and collecting cases); 16 Bogner v. Masari Investments, LLC, 257 F.R.D. 529, 533 n.1 (D. Ariz. 2009) (“[I]f 17 Plaintiffs prove to be incapable of representing the class effectively, the Court has power 18 to replace them.”); see also U.S. Parole Comm’n v. Geraghty, 445 U.S. 388, 416 n.8 (1980) 19 (Powell, J., dissenting) (noting that a court “can re-examine [a class representative’s] 20 ability to represent the interests of class members [and s]hould it be found wanting, the 21 court may seek a substitute representative or even decertify the class” (citing, e.g., Fed. R. 22 Civ. P. 23(c)(1), (d))). “‘If events occurring after class certification render a class 23 representative inadequate, a court may remedy the problem by substituting a new 24 representative.’” Olden v. LaFarge Corp., 472 F. Supp. 2d 922, 937 (E.D. Mich. 2007) 25 (quoting Moore’s Federal Practice § 23.25[6]). 26 As discussed, this appears to be a matter of first impression within the Ninth Circuit. 27 However, the Parties cite two out-of-circuit district court cases that dealt with very similar 28 facts. (Mot. to Substitute 13–14 (citing Heit v. Van Ochten, 126 F. Supp. 2d 487 (W.D. 52 16-CV-2162 JLS (NLS) 1 Mich. 2001), and Olden, 472 F. Supp. 2d at 937).) Indeed, this case closely resembles the 2 situation in Heit. In Heit, the parties reached a proposed settlement agreement, 126 F. Supp. 3 2d at 488, to which the named plaintiff and class representative Heit orally agreed, id. at 4 491 n.1. The Court ordered notice of the settlement be sent to the class, including a 5 deadline for class members to object to the proposed settlement. Id. at 488. But, like 6 Nunez, plaintiff Heit later objected to the proposed settlement. Id. at 491 n.1, 494–95. 7 Plaintiff’s counsel sought to replace Heit with another class member as class representative 8 given his objections to the settlement. Id. at 494–95. The Court granted the request, finding 9 that [i]n this case, it seems apparent that Mr. Heit’s ability to represent the class is wanting and inadequate. Mr. Heit’s two written objections to the Proposed Settlement contain mostly the objections addressed in this Opinion. Mr. Heit’s objections also make it clear that he absolutely opposes the Proposed Settlement. Yet, a thorough review of the Proposed Settlement by the Court indicates approval is appropriate and in the class’s best interest. Having found Mr. Heit’s ability to represent the class wanting and inadequate, the Court therefore grants Plaintiff’s counsel’s Motion to add Mr. Corsetti as the named Plaintiff. 10 11 12 13 14 15 16 17 Id. at 495. 18 The court in Olden faced a similar scenario. There, like here, the three named class 19 representatives objected to the fairness and adequacy of the settlement for the class as a 20 whole, 472 F. Supp. at 938, which objections the court rejected, id. Having found that the 21 settlement was fair, reasonable, and adequate, the Court considered class counsel’s motion 22 to substitute these three class representatives by virtue of their continued objection to the 23 settlement. Id. at 937–40. The Olden Court found Heit instructive, noting that “[t]he 24 implications of [Heit] are quite clear. If the named class representatives object to a 25 settlement recommended by class counsel that the court otherwise finds in the better 26 interests of the class as a whole, then class counsel cannot continue to represent that party 27 and the class representatives ought to be replaced.” Id. at 938 (emphasis added). The court 28 granted class counsel’s motion to substitute, concluding that “the named class 53 16-CV-2162 JLS (NLS) 1 representatives no longer represent the best interests of the class and a substitution of class 2 representatives is appropriate.” Id. at 939. 3 The Sixth Circuit ultimately affirmed the district court’s decision to replace the 4 original class representatives. Olden v. Gardner, 294 F. App’x 210, 220 (6th Cir. 2008). 5 Although the panel noted that they “may well have made a different decision if [they] were 6 the trial judges,” the panel recognized that “the law allows class representatives to be 7 replaced when events occurring after class certification have rendered them inadequate.” 8 Id. (citing, e.g., Heit, 126 F. Supp. 2d at 495). 9 Here, the Court finds the reasoning of Heit and Olden persuasive and finds that 10 because Nunez continues to object to the Settlement, which the Court has found fair, 11 reasonable, and adequate, he stands in direct conflict with the Class and thus cannot 12 continue to serve as an adequate Class Representative. In so holding, the Court is again 13 mindful of the Sixth Circuit’s observation that, in their view, the principles and purpose of 14 class representatives “suggest that class representatives should not be removed from their 15 positions as class representatives simply because they have attempted to fulfill their duty 16 to protect the interests of the class.” Gardner, 294 Fed. App’x at 220. The Court agreed 17 with this observation insofar as it concerned Nunez’s ability to object to the settlement for 18 class certification purposes, finding that his objection alone did not make him an 19 inadequate class representative. 20 CERTIFICATION,” Part III. Rather, in that context, objecting to a Settlement on the 21 grounds that it inadequately provided for the Class actually served to bolster his status as 22 an adequate representative. But in the Court’s view, Nunez’s continued objection to the 23 Settlement, now deemed fair, reasonable, and adequate, is a conflict “fundamental to the 24 suit” that “go[es] to the heart of the litigation,” thus preventing Nunez from continuing to 25 serve as an adequate Class Representative under Rule 23(a)(4). In re Online DVD-Rental 26 Antitrust Litig., 779 F.3d at 942. Specifically, the Class Members now await their 27 payments from the Settlement, and Nunez, through continued objection, seeks to delay or 28 deny their recovery. This is by definition a conflict of interest; he cannot continue to serve See supra “RULE 23 SETTLEMENT CLASS 54 16-CV-2162 JLS (NLS) 1 as the flag-bearer when he would rather see the castle burned to the ground. Accordingly, 2 the Court finds that by virtue of his continued objection to the Settlement, deemed fair, 3 reasonable, and adequate, Nunez can no longer serve as an adequate Class Representative 4 under Rule 23(a)(4). 5 None of Nunez’s cited authority require a different result. For example, Nunez cites 6 several cases for the proposition that “case precedent [is] replete with examples of named 7 plaintiffs opposing proposed settlements.” (Mot. to Substitute Opp’n 11 (citing Pettway v. 8 Am. Cast Iron Pipe Co., 576 F.2d 1157 (5th Cir. 1978); Officers for Justice v. Civil Serv. 9 Com., 688 F.2d 615 (9th Cir. 1982); Mendoza v. United States, 623 F.2d 1338 (9th Cir. 10 1980); Kincade v. Gen. Tire & Rubber Co., 635 F.2d 501 (5th Cir. 1981)).) The Court does 11 not dispute that proposition. But this authority does not address the situation where, as 12 here, a party seeks to substitute a class representative based on those objections. 13 Furthermore, Nunez’s reliance on Eubank v. Pella Corp., 753 F.3d 718 (7th Cir. 14 2014), perhaps his strongest authority, is similarly misplaced. In that case, the Seventh 15 Circuit dealt with an approved class action settlement where “almost every danger sign in 16 a class action settlement that our court and other courts have warned district judges to be 17 on the lookout for was present.” Id. at 728. Among other deficiencies with the settlement 18 agreement, there was only one original class representative, Leonard Saltzman, whose son- 19 in-law was lead counsel for the class. Id. at 721. Shortly thereafter four other class 20 members were added as plaintiffs, making a total of five named plaintiffs. Id. at 722. When 21 the settlement was presented for preliminary approval, the four newly added plaintiffs 22 objected to the settlement, leaving only Saltzman supporting it. Id. A motion was brought 23 to replace these objecting plaintiffs, and the court granted it, leaving Saltzman and four 24 new named plaintiffs who supported the settlement. Id. at 722. The Seventh Circuit 25 ultimately reversed the district court’s grant of final approval, noting that the settlement 26 “flunked the ‘fairness’ standard by the one-sidedness of its terms and the fatal conflicts of 27 interest on the part of Saltzman and [class counsel].” Id. at 729. On remand, the court 28 ordered the four original plaintiffs, who it called “defrocked” plaintiffs, reinstated. Id. 55 16-CV-2162 JLS (NLS) 1 This case is different than Eubank for a multitude of reasons, not all of which are 2 worth addressing here. 3 procedural posture of the “defrocking” in Eubank. Specifically, the district court in Eubank 4 removed the objecting named plaintiffs at a much earlier stage in the case—before 5 preliminary approval of the settlement agreement. Here, in contrast, Nunez was aware of 6 the proposed settlement, signed off on its terms, failed to object for seven months 7 thereafter, and even supported preliminary approval of the Settlement Agreement. And, as 8 discussed above, Nunez objected as a named class representative and is currently 9 represented in his individual capacity as an objector by a separate law firm. The Court 10 found that his act of objecting to the Settlement, on its own, was insufficient to render him 11 inadequate to represent the Class. Now, however, the Court has determined that the 12 settlement is fair, reasonable, and adequate, and has also determined that his continued 13 objection puts him at odds with the remainder of the Class. The court in Eubank did not 14 address this discrete question, and therefore Eubank does not here counsel a different 15 outcome. For present purposes, however, the Court finds critical the 16 This leaves the Parties’ Motion to Substitute Bryan De Anda as the named Class 17 Representative. (Mot. to Substitute 15–16.) To substitute De Anda for Nunez, the Court 18 must determine whether De Anda meets the typicality and adequacy requirements of Rule 19 23(a)(3) and (4). In support of their motion, the Parties note that De Anda (1) is a member 20 of the Settlement Class who worked as a non-exempt employee of BAE SDSR for just over 21 152 work-weeks during the Class Period, between 2013 and 2016; (2) is set to receive $821 22 based on the amount of time he worked during the time period, and an additional $250 in 23 resolution of the section 203 Waiting Time Penalty claims as a former employee; (3) did 24 not opt out or file an objection in this matter; (4) has met with and spoken with Class 25 Counsel several times and fully understands the responsibilities of being a class 26 representative; and (5) has thoroughly reviewed the previously negotiated settlement 27 agreement preliminarily approved by the Court and finds that it is fair, reasonable, and 28 adequate, having also reviewed Plaintiff’s mediation brief as well as the Joint Motion for 56 16-CV-2162 JLS (NLS) 1 Preliminary Approval and the Court’s Order on the same. (Id.) Based on the above, there 2 is no reason to believe De Anda has any conflict of interest with the proposed Class 3 Members, or that he has failed to vigorously investigate and assess the Settlement on behalf 4 of his Class. Nor does it matter that De Anda seeks to represent the Class at this stage in 5 the case, since he seeks to defend a Settlement he—and the Court—views as fair, 6 reasonable, and adequate. See, e.g., Jaffe v. Morgan Stanley & Co., No. C 06-3903 TEH, 7 2008 WL 346417, at *4 (N.D. Cal. Feb. 7, 2008) (“Courts have found that even class 8 representatives who join litigation after a settlement has been reached can adequately 9 represent the class.”). Accordingly, the Court finds that De Anda’s claims and defenses 10 are typical of the Class’s claims and defenses in accordance with Rule 23(a)(3), and that 11 he adequately represents the proposed Class members in accordance with Rule 23(a)(4). 12 Nunez’s arguments to the contrary are unpersuasive. First, he argues that De Anda 13 is inadequate because he does not provide a description of the “nature, department, shift, 14 and title” of his work for BAE SDSR, which “has an effect on the duration and frequency 15 of the occurrence of violations [he] may have experienced.” (Mot. to Substitute Opp’n 21.) 16 This is unnecessary. Aside from the fact that Nunez never before provided this information 17 to the Class, all “non-exempt” workers during the covered period are included in the 18 certified class. Nunez further argues that De Anda is not “equipped” to understand the 19 meaning of “non-exempt.” (Id.) However, Nunez later admits that he has “never heard of 20 Bryan De Anda” and thus has no basis to make such a statement.13 (Nunez Substitute 21 Opp’n Decl. ¶ 47.) Finally, Nunez objects to the fact that De Anda has not worked since 22 2016, “which may indicate he is not able to comment on the ongoing violations that 23 occurred after the filing of the complaint, a major issue facing the merits of the proposed 24 settlement.” (Mot. to Substitute Opp’n 21.) This argument fails for at least two reasons. 25 First, Nunez’s argument is premised on a speculative conflict, and “this circuit does not 26 27 28 Further confounding Nunez’s credibility is his claim that he has never heard of De Anda and then, just one sentence later, stating that he “believe[s] that [De Anda] no longer works for BAE, and has not for some time.” (Nunez Substitute Opp’n Decl. ¶ 47.) Both cannot be true. 13 57 16-CV-2162 JLS (NLS) 1 favor denial of class certification on the basis of speculative conflicts.” Cummings v. 2 Connell, 316 F.3d 886, 896 (9th Cir. 2003). Second, former employees are included as 3 Class Members in this Settlement Agreement, and former employees have routinely been 4 found adequate to serve as class representatives. See, e.g., Glass v. UBS Fin. Servs., Inc., 5 331 F. App’x 452, 455 (9th Cir. 2009) (finding that former employees could adequately 6 serve as class representatives for a class that included current and former employees). In 7 sum, Nunez has failed to demonstrate that De Anda is an inadequate class representative 8 or that his claims and defenses are otherwise not typical of the claims and defenses of the 9 class. Rather, the record shows that De Anda is informed and willing to act in the best 10 interests of the Class. (See generally De Anda Decl.) Accordingly, the Court finds that 11 De Anda’s claims and defenses are typical of those of the Class under Rule 23(a)(3) and 12 that he adequately represents the Class in accordance with Rule 23(a)(4). Thus, the Court 13 GRANTS the Parties’ Motion to Substitute. 14 CONCLUSION 15 For the foregoing reasons, the Court: (1) AFFIRMS its certification of the 16 Settlement Class; (2) FINDS that the Settlement Agreement is fair, reasonable, and 17 adequate; (3) GRANTS Class Counsel’s Motion for Fees and Costs; and (4) GRANTS the 18 Parties’ Joint Motion to Substitute Class Representative. 19 Agreement, the action is DISMISSED WITH PREJUDICE. 20 21 Pursuant to the Parties IT IS SO ORDERED. Dated: November 14, 2017 22 23 24 25 26 27 28 58 16-CV-2162 JLS (NLS)

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