Belote v. Rivet Software, Inc

Filing 54

ORDER that the parties request for final approval of the settlement reached in this class action, which is reflected in the Settlement Agreement attached as Exhibit A to the Parties Joint Motion for Approval of Class Settlement, is GRANTED. Dismissal Paper due by 9/10/2014, by Judge Wiley Y. Daniel on 8/11/2014. (evana, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Senior Judge Wiley Y. Daniel
Civil Action No. 12-cv-02792-WYD-MJW
FREDDIE BELOTE, on behalf of himself and all others similarly situated,
Plaintiff,
v.
RIVET SOFTWARE, INC.,
Defendant.

ORDER

I.

INTRODUCTION
THIS MATTER is before the Court on the parties’ request for final approval of the

settlement reached in this class action, which is reflected in the Settlement Agreement
attached as Exhibit A to the Parties’ Joint Motion for Approval of Class Settlement. A
hearing was held pursuant to Fed. R. Civ. P. 23(e)(2) as to the fairness of the
settlement on Wednesday, August 6, 2014. For the reasons stated below, the
settlement in this case is approved as fair, adequate and reasonable.
II.

PROCEDURAL BACKGROUND
Plaintiff filed a class action against Defendant Rivet Software, Inc. [“Rivet”]

asserting a claim under the Worker Adjustment and Retraining Notification Act, 29
U.S.C. § 2101 et seq. [“WARN Act”], and seeking damages on behalf of himself and
other similarly situated former employees. Specifically, Plaintiff alleged that Rivet did
not provide employees affected by a May 2012 layoff with the sixty-day notice required

under the WARN Act. In Rivet’s Answer, it generally denied Plaintiff’s allegations and
asserted a number of affirmative defenses which could reduce or eliminate its liability to
Plaintiff and members of the class. Among these defenses, Rivet asserted that it acted
in good faith with regard to carrying out the layoff and that the shortened WARN Act
notice was necessitated by unforeseeable business circumstances.
On March 1, 2013, Plaintiff filed an unopposed Motion for Class Certification and
Related Relief. The motion sought certification of a class pursuant to Fed. R. Civ. P. 23
comprised of Plaintiff and the other persons similarly situated who were allegedly
terminated without cause in connection with the mass layoff and/or plant closing on or
about June 1, 2012 at Defendant’s facility; the appointment of Outten & Golden LLP as
Class Counsel; the appointment of Plaintiff as the Class Representative; approval of the
form and manner of Notice of Class Action; and such other relief as this Court may
deem proper.
On May 28, 2013, an Order was issued granting class certification (certifying a
class of 123 employees) and appointing Outten & Golden LLP as Class Counsel. On
June 17, 2013, a Notice of Class Action was mailed to each Class Member. A
Declaration of Opt-Outs was executed and filed by Class Counsel on July 29, 2013,
affirming that seven putative class members opted out of the class.
On June 5, 2014, the Parties filed a Joint Motion for Approval of Settlement. The
motion asserted that after several months of good faith negotiations and consideration
regarding the uncertainty of the outcome of further costly litigation, and following formal
mediation, the parties agreed upon the settlement terms and conditions set forth in the
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Settlement Agreement attached to the motion as Exhibit A. Under the proposed
settlement, Defendants will pay to the Class Members a total of $200,000 (“Settlement
Amount”), of which $2,000.00 will be deducted for the Class Representative award, and
33 1/3% will be deducted for attorneys’ fees, plus expenses, leaving a balance of
$128,000 to be divided on a pro rata basis and made payable to each of the Class
Members, including the Plaintiff. The Joint Motion requested that the court: (a)
preliminarily approve the Settlement Agreement as fair, reasonable, and adequate; (b)
schedule a Fairness Hearing on the Settlement a agreement; and (c) approve the
Notice of Proposed Settlement of Class Action and Fairness Hearing attached as
Exhibit B.
By Order of June 12, 2014, I granted the Joint Motion for Approval of Settlement,
preliminarily approving the Settlement Agreement attached as Exhibit A. The Order
stated that the Settlement Agreement would be subject to final approval by the Court
following the fairness hearing at issue in this Order. It was ordered therein that the
Notice of Proposed Settlement of Class Action and Fairness Hearing in the form of
Exhibit B to the Motion be mailed to class members as more particularly set forth in the
Settlement Agreement, advising them of their right to request exclusion from the class
or to file objections to the Settlement Agreement.
On July 2, 2014, an Affidavit of Mailing of Notice of Proposed Settlement of Class
Action and Fairness Hearing was filed, stating that the Notice had been mailed to the
putative class members. The Notice was attached to the Affidavit, and advised the
class members that objections to the settlement were due by July 30, 2014. The Notice
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also advised the class members that objections could be made to the attorneys’ fees
and expenses to be awarded to Class Counsel under the settlement. The objections
were to include the objector’s name, address, and telephone number and the basis for
the objection. It also advised persons objecting that they may also appear at the
fairness hearing.
On August 1, 2014, an Affidavit was filed stating that no Objections to the
proposed settlement were filed.
On August 6, 2014, I held a fairness hearing to determine whether the Parties’
proposed settlement was fair, reasonable, and adequate. Counsel were present at the
hearing, either in person or by telephone. No class members were present.
III.

ANALYSIS
A.

The Fairness of the Settlement

I now turn to whether the settlement proposed in this class action is fair,
adequate and reasonable. Under Fed. R. Civ. P. 23(e), a class action settlement is
entitled to final approval where it is “fair, reasonable and adequate.” Gottlieb v. Wiles,
11 F.3d 1004, 1014 (10th Cir. 1993), overruled in part on other grounds, Devlin v.
Scardelletti, 531 U..S. 1 (2002)). Approval of a class action settlement is committed to
the sound discretion of the court. Jones v. Nuclear Pharmacy, Inc., 741 F.2d 322, 324
(10th Cir. 1984). “In exercising its discretion, the trial court must approve the settlement
if it is fair and reasonable.” Id. “It is the responsibility of the proponents of the
settlement to provide sufficient evidence to support a conclusion that the settlement is
fair, and where the proponents have failed in this regard, the district court may be
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justified in requiring more evidence, or in declining to approve the settlement.” Gottlieb,
11 F.3d at 1015. The evidence must be independently analyzed by the court in making
its determination, since the court “may not rely solely on the assertions of the
proponents of the settlement as to what the evidence shows.” Id.
The specific factors that must be considered in “assessing whether the
settlement is fair, reasonable and adequate” include the following:
‘(1) whether the proposed settlement was fairly and honestly negotiated;
(2) whether serious questions of law and fact exist, placing the ultimate outcome
of the litigation in doubt;
(3) whether the value of an immediate recovery outweighs the mere possibility of
future relief after protracted and expensive litigation; and
(4) the judgment of the parties that the settlement is fair and reasonable.’”
Rutter & Wilbanks Corp. v. Shell Oil Co., 314 F.3d 1180, 1188 (10th Cir. 2002) (quoting
Gottlieb, 11 F.3d at 1014); see also In Re Integra Realty Resources, Inc., 354 F.3d
1246, 1266 (10th Cir. 2004). Additional factors which may be relevant include: (1) the
risk of establishing damages at trial; (2) the extent of discovery and the current posture
of the case; (3) the range of possible settlement; and (4) the reaction of class members
to the proposed settlement. In Re New Mexico Nat. Gas Antitrust Litig., 607 F. Supp.
1491, 1504 (D. Colo. 1984).
Importantly, in evaluating the fairness of the settlement, courts should not decide
the merits of the case or resolve unsettled legal questions. Carson v. American Brands,
Inc., 450 U.S. 79, 88 n. 14 (1981); see also New Mexico Natural Gas Antitrust Litig., 607
F. Supp. at 1497. This is because the essence of settlement is compromise. E.E.O.C.
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v. Hiram Walker & Sons, Inc., 768 F.2d 884, 889 (10th Cir. 1985). Further, settlements
in class actions are favored. Williams v. FirstNat. Bank, 216 U.S. 582, 595 (1910).
I now turn to the settlement in this case, and whether the Rutter factors are
satisfied. As to the first factor, the court must first be concerned with the protection of
class members whose rights may not have been given “adequate consideration during
the settlement negotiations.” Ashley v. Regional Transp. Dist. & Amalgamated Transit
Union Div. 1001 Pension Fund Trust, No. 05-cv-01567-WYD-BNB, 2008 WL 384579, at
*5 (D. Colo. Feb. 11, 2008). Factors to be considered in this analysis include “the
experience of counsel, the vigor with which the case was prosecuted, and [any]
coercion or collusion that may have marred the negotiations themselves.” Id.
I find that the first factor is satisfied, as I find that the proposed settlement was
fairly and honestly negotiated. As noted in the Joint Motion for Approval of Settlement,
the parties reached the settlement agreement after several weeks of negotiations with
the aid of a well-established and skilled mediator who regularly mediates employment
cases, including class actions. There is no appearance of coercion or collusion. Also,
the attorneys for the parties are experienced in prosecuting and defending this type of
employment action. Class Counsel, Outten & Golden LLP, is a firm dedicated to
representing employees on individual claims and in class actions, including WARN
actions. Counsel Jack Raisner and René Roupinian have practiced employment law for
30 years and 19 years, respectively, are the co-chairs of the firm’s WARN Act Practice
Group, and have litigated more than 75 WARN Act class actions. Defense counsel,

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Brett Painter and Kristi Walton, have practiced employment law for 19 years and 9
years, respectively, and have defended against employment class actions.
The second factor addresses whether serious questions of law and fact exist,
placing the ultimate outcome of the litigation in doubt. The presence of such doubt
augurs in favor of settlement because settlement creates a certainty of some recovery,
and eliminates doubt, meaning the possibility of no recovery after long and expensive
litigation.” Ashley, 2008 WL 384579, at *6. I find that this factor is satisfied. Plaintiff
alleges that Rivet violated the WARN Act by failing to provide 60 days of notice to the
individuals affected by the layoff. As part of its defense, Rivet argues that it could not
provide the full notice because of exigent business circumstances. Specifically, the loss
of its largest customer meant that it could not keep a significant part of its workforce
employed for two months. The parties assert, and I agree, that in light of the foregoing,
should the matter be litigated further, it is unclear if Plaintiff could establish liability and
recover any damages under the WARN Act.
I now turn to the third factor—whether the value of an immediate recovery
outweighs the mere possibility of future relief after protracted and expensive litigation. I
note that in assessing whether the value of the settlement outweighs the possibility of
future relief, the “‘value of an immediate recovery’ means ‘the monetary worth of the
settlement.’” Wilkerson v. Martin Marietta Corp., 171 F.R.D. 273, 283 (D. Colo. 1997)
(quoting Gottlieb, 11 F.3d at 1015).
I agree with the parties that the third factor is met for at least two reasons. First,
if the parties must continue litigating the case, there is no certainty that the Class will
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recover $200,000 or any amount for that matter, as the parties represent that there is a
risk that Rivet will not have the financial means to pay a judgment at that point in time.
Second, the parties have not expended a significant amount of resources in litigating
the case to this point. While some discovery has been conducted, neither party has
deposed the other and no dispositive motions have been filed. If the case continues,
additional discovery would be required, and Rivet likely would file a motion for summary
judgment. By reaching a settlement at this stage, Plaintiff seeks to avoid significant
expense and delay and ensure recovery for the Class in a prompt and efficient manner.
The fourth factor addresses the judgment of the parties that the settlement is fair
and reasonable. When evaluating this factor, “[c]ounsels’ judgment as to the fairness of
the agreement is entitled to considerable weight.” Lucas v. Kmart Corp., 234 F.R.D.
688, 695 (D. Colo. 2006). “Courts have consistently refused to substitute their business
judgment for that of counsel and the parties.” Alvarado Partners, L.P. v. Mehta, 723
F. Supp. 540, 548 (D. Colo. 1989).
I find that the fourth factor is satisfied. The parties’ counsel—among whom are
attorneys with substantial experience in employment class action litigation, including
WARN cases—unanimously support this settlement. Further, no objections have been
filed, indicating that the Class Members do not oppose the settlement.
Based on the foregoing, I find that all the factors relevant to assessing whether
the settlement is fair, reasonable and adequate are satisfied.
As to attorneys’ fees and costs, the Settlement Agreement provides that “Class
Counsel shall be entitled to be paid from the Settlement Amount its fees, of 33a of the
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Settlement Amount, in the total amount of $64,000 (“Class Counsel’s Fees”), plus
reimbursement of its expenses capped at $6,000.” (Settlement Agreement, ¶ 13, Ex. A,
Joint Mot. for Approval of Settlement.) The total amount sought in the Joint Motion is
thus $70,000. Fed. R. Civ. P. 23(h) states that “[i]n a certified class action, the court
may award reasonable attorney’s fees and nontaxable costs that are authorized by law
or by the parties’ agreement.”
I find that the fees and expenses sought are reasonable in light of the difficulty of
the questions in the case, the skill requisite to perform the legal services properly, the
customary fee in this type of cases, the amount involved and the results obtained, the
experience, reputation and ability of the attorneys, and awards in similar cases. See
Brown v. Phillips Petroleum Co., 838 F.2d 451, 454-55 (10th Cir. 1988). Further, Class
Counsel indicated at the hearing that its lodestar amount was over $100,000. See
Robinson v. City of Edmond, 160 F.3d 1275, 1281 (10th Cir. 1998) (“a claimant is
entitled to the presumption that th[e] lodestar amount reflects a ‘reasonable’ fee)
(quotations omitted).
In conclusion, I have considered the terms of the proposed settlement, including
the amount of the settlement and the manner of distribution to Class Members, the
$2,000 amount to be awarded to the Class Representative, and the amount of attorney
fees and expenses to be awarded. I find based on the totality of the circumstances in
this case that the terms of the settlement in the form of the Settlement Agreement
attached as Exhibit A to the Joint Motion for Approval of Class Settlement are fair,

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reasonable, and adequate under the circumstances. Accordingly, the settlement of this
Class Action is approved pursuant to Fed. R. Civ. P. 23(e)(2).
II.

CONCLUSION
Based upon the foregoing, it is
ORDERED that the parties’ request for final approval of the settlement reached

in this class action, which is reflected in the Settlement Agreement attached as Exhibit A
to the Parties’ Joint Motion for Approval of Class Settlement, is GRANTED. The
settlement is approved as fair, adequate and reasonable, including the amount of the
settlement and the manner in which the amount will be distributed to Class Members,
the amount of the award to the Class Representative, and the amount of attorneys’ fees
and expenses to be awarded to Class Counsel. It is
FURTHER ORDERED that a joint stipulation for dismissal of the case shall be
filed within 30 days, or by Wednesday, September 10, 2014.
Dated: August 11, 2014
BY THE COURT:

s/ Wiley Y. Daniel
Wiley Y. Daniel
Senior United States District Judge

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