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Wright v. Linkus Enterprises

July 28, 2009

GABE WRIGHT, INDIVIDUALLY AND ON BEHALF OF ALL PERSONS SIMILARLY SITUATED PLAINTIFFS,
v.
LINKUS ENTERPRISES, INC., RFG CORPORATION, RIDGELINE SERVICES, INC., PREMIER PERSONNEL AND DOES 1-10, INCLUSIVE, DEFENDANTS.



The opinion of the court was delivered by: Morrison C. England, Jr. United States District Judge

MEMORANDUM AND ORDER

Gabe Wright and Paul Crowley ("Plaintiffs") brought this action against Linkus Enterprises, Inc., RFG Corporation, Ridgeline Services, Inc. and Premier Personnel ("Defendants"), seeking compensation for Defendants' alleged failure to pay wages, including overtime wages, failure to provide meal and rest breaks, failure to reimburse business expenses incurred, and failure to maintain required records.

Plaintiffs allege Defendants violated various provisions of California law as well as the federal Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§ 201 et seq.

On November 12, 2008, Plaintiffs filed an Unopposed Motion for Preliminary Approval of Settlement (Docket No. 53). By Order entered March 3, 2009, the Unopposed Motion for Preliminary Approval was denied without prejudice because the settlement purported to relate to claims against Defendants not party to the instant litigation (Docket No. 65).

Presently before the Court is Plaintiffs' Revised Unopposed Motion for Preliminary Approval of Class Action Settlement filed April 22, 2009 ("Revised Motion") (Docket No. 71). On June 17, 2009, this Court issued an Order requiring the Plaintiffs to revise the documents (the Joint Stipulation of Settlement, Notice of Class Action Settlement, and Claim Form) submitted with the Revised Motion to include the requisite "opt-in" procedures for the release of FLSA claims (Docket No. 79). The Plaintiffs filed the Amended Joint Stipulation of Settlement, Notice of Class Action Settlement and Claim Form on July 7, 2009 ("Amended Joint Stip.") (Docket No. 82). For the reasons set forth below, Plaintiffs' Revised Motion is GRANTED.*fn1

BACKGROUND*fn2

Plaintiffs were employed as "Satellite Technicians" by Defendants. Each morning, Plaintiffs were required to report to various offices, located throughout California, Nevada, and Oregon, before being dispatched to assigned job sites using their own trucks. While at those job sites, Satellite Technicians used their own tools to install satellite systems and equipment, to install basic cable lines, and to complete the necessary paperwork associated with service orders. Once Plaintiffs returned home, they were required to complete additional work for submission the following day.

However, Plaintiffs allege that, pursuant to Linkus policy, they were permitted to report on their time cards only that time spent at the designated job sites. Thus, Plaintiffs allege they were not compensated for time spent receiving instructions for daily assignments or picking up tools and equipment, for time spent traveling from the office to various job sites, or for hours required to complete paperwork at home. As a result, according to Plaintiffs, they were forced to work in excess of eight hours per day and forty hours per week, often were putting in more than twelve hours per day, but their paychecks did not adequately reflect hours worked.

Plaintiffs further allege Defendants consistently deducted thirty minutes of time from their time cards for meal breaks, even when those breaks were not taken. Finally, Plaintiffs contend they were not accurately reimbursed for the mileage incurred while operating their own vehicles for business purposes. Accordingly, Plaintiffs commenced the instant action alleging Defendants violated various state laws and the FLSA.

Following commencement of this action, the parties conducted discovery. Defendants disclosed time record data for all Satellite Technicians, wage reports, and financial reports. Additionally, class representatives and other Linkus employees that have consented to this action have provided payroll and time records. Plaintiffs have interviewed numerous class members concerning the claims and also conducted a public records search of claims filed against Defendants with California's Division of Labor Standards Enforcement.

Moreover, on March 3, 2008, the parties enlisted the mediation services of Mark Rudy. After lengthy negotiations, the parties and Mr. Rudy devised a proposed settlement. According to the Settlement Agreement, the proposed class consists of approximately 4,000 individuals, all Satellite Technicians employed by Linkus, Premier Personnel, RFG Corporation and Ridgeline Services, Inc., in California, Oregon, or Nevada from July 6, 2003 through the present, and Defendant Linkus will pay up to $2,500,000 to settle this action. Plaintiffs now move for the Court's preliminary approval of the Settlement Agreement.

STANDARD

A court may certify a class if a plaintiff demonstrates that all of the prerequisites of Federal Rule of Civil Procedure 23(a) have been met, and that at least one of the requirements of Federal Rule of Civil Procedure 23(b) have been met. See Fed. R. Civ. P. 23; see also Valentino v. Carter-Wallace, Inc., 97 F.3d 1227, 1234 (9th Cir. 1996). Before certifying a class, the trial court must conduct a "rigorous analysis" to determine whether the party seeking certification has met the prerequisites of Rule 23. Id. at 1233. While the trial court has broad discretion to certify a class, its discretion must be exercised within the framework of Rule 23. Zinser v. Accufix Research Inst., Inc., 253 F.3d 1180, 1186 (9th Cir. 2001), amended, 273 F.3d 1266 (9th Cir. 2001).

Rule 23(a) provides four prerequisites that must be satisfied for class certification: (1) the class must be so numerous that joinder of all members is impracticable, (2) questions of law or fact exist that are 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. See Fed. R. Civ. P. 23(a). Rule 23(b) requires a plaintiff to establish one of the following:

(1) that there is a risk of substantial prejudice from separate actions; (2) that declaratory or injunctive relief benefitting the class as a whole would be appropriate; or (3) that common questions of law or fact predominate and the class action is superior to other available methods of adjudication. See Fed. R. Civ. P. 23(b). For purposes of preliminary approval of class certification and proposed settlement, a district court must evaluate the terms of the settlement to determine whether they are within a range of possible judicial approval. See Newburg on Class Actions (4th ed. 2002) § 11:25.

If, upon receiving notice regarding the class action suit, a large number of class members decide to "opt-out" of the class, the Court may refuse to grant final approval of the class. In re N. Dist. of Cal., Dalkon Shield IUD Prods. Liab. Litig., 693 F.2d 847, 856 (9th Cir. 1982). Similarly, the Court will have the opportunity to review evidence that bears on the Rule 23 requirements for class certification and settlement approval at the Final Fairness Hearing. Accordingly, the Court may reconsider the findings on a motion for preliminary approval of a class action settlement should additional information come to light that bears on whether the proposed settlement satisfies the requirements of Rule 23.

ANALYSIS

1. Rule 23(a)

The Settlement Class Meets the Requirements of Defendants do not oppose Plaintiffs' Motion for Preliminary Approval of Settlement Agreement. However, even where a proposed settlement is unopposed, a court must fully examine whether the settlement satisfies the Rule 23(a) requirements of numerosity, commonality, typicality, and adequacy of representation. Hanlon v. Chrysler Corp., 150 F.3d 1011, 1019 (9th Cir. 1998). A court that is asked to approve a settlement agreement prior to class certification "must pay 'undiluted, even heightened, attention' to class certification requirements...." Id. (quoting Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 620 (1997)). Accordingly, the Court must apply this standard in evaluating whether Plaintiffs' proposed Settlement Agreement satisfies the Rule 23(a) requirements. Id.

The numerosity requirement of Rule 23(a)(1) is established if "the class is so numerous that joinder of all members is impracticable." The geographical disbursement of class members outside of one district increases the impracticability of joinder, and "when the class is large, numbers alone are dispositive." Riordan v. Smith Barney, 113 F.R.D. 60, 62 (N.D. Ill. 1986). At the same time, courts have been inclined to certify classes of fairly modest size.

See, e.g., Jordan v. Los Angeles County, 669 F.2d 1311, 1319 (9th Cir. 1982) (willing to find numerosity for classes with thirty-nine, sixty-four, and seventy-one people), vacated on other grounds, 459 U.S. 810 (1982). In the instant case, the class of Satellite Technicians consists of approximately 4,000 individuals dispersed throughout California, Nevada, and Oregon. The size of the class itself satisfies the numerosity requirements of Rule 23(a)(1). Additionally, the geographical location of Satellite Technicians throughout three states increases the impracticability of joining all class members. Accordingly, Plaintiffs proposed class meets the numerosity requirements of Rule 23(a)(1).

Under Rule 23(a)(2), commonality is established if "there are questions of law or fact common to the class." This requirement is construed permissively and can be satisfied upon a finding of "shared legal issues with divergent factual predicates...." Hanlon, 150 F.3d at 1019. The instant case presents the common legal issue of whether class members are entitled to unpaid wages as a result of Defendants' implementation of workplace policies in violation of federal and state law. The minor factual differences stemming from each class member's unpaid work hours do not defeat commonality. Parra v. Basha's, Inc. 536 F.3d 975, 978 (9th Cir. 2008). Here, Plaintiffs establish commonality because they allege Linkus' unlawful workplace policies applied equally to the various class members and entitles the class members to a common remedy.

Typicality under Rule 23(a)(3) is satisfied if "the claims or defenses of the representative parties are typical of the claims or defenses of the class." Typicality does not require the claims to be identical. Hanlon, 150 F.3d at 1020. Rather, the Ninth Circuit has found typicality if the requisite claims "'share a common issue of law or fact' ... and are 'sufficiently parallel to insure a vigorous and full presentation of all claims for relief.'" Cal. Rural Legal Assistance, Inc. v. Legal Servs. Corp., 917 F.2d 1171, 1175 (9th Cir. 1990) (citations omitted), amended, 937 F.2d 465 (9th Cir. 1991). The representative plaintiffs in the present matter assert the same claims that could be brought by any of the other class members for the allegedly unlawful policies of Linkus. Although class members may have minor factual differences in the number of hours worked, miles traveled, and expenses incurred, the differences do not preclude a finding of typicality.

The last requirement of Rule 23(a) is that "the representative parties will fairly and adequately protect the interests of the class." Fed. R. Civ. P. 23(a)(4). In Hanlon, the Ninth Circuit identified two issues for determining the adequacy of representation: (1) whether the named plaintiffs and their counsel have any conflicts of interest with other class members, and (2) whether the named plaintiffs and their counsel will "prosecute the action vigorously on behalf of the class." 150 F.3d at 1020. With respect to the existence of conflicts of interest, ...


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