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Chavez v. WIS Holding Corp

June 7, 2010

EDUARDO CHAVEZ AND LYNDA DREISBACH, INDIVIDUALLY AND ON BEHALF OF A CLASS OF OTHERS SIMILARLY SITUATED, PLAINTIFFS,
v.
WIS HOLDING CORP, ET AL., DEFENDANTS.



The opinion of the court was delivered by: M. James Lorenz United States District Court Judge

ORDER GRANTING MOTION FOR FINAL APPROVAL OF CLASS ACTION SETTLEMENT AND APPLICATION FOR ATTORNEY'S FEES AND SERVICE AWARDS [doc. #182]

On June 7, 2010, the Court held a hearing to consider Plaintiffs' Unopposed Motion for Final Approval of Class Action Settlement and Award of Attorney's Fees and Service Awards. (Doc. 182). After review of the Motion (Doc. 182), the Memorandum in Support of the Motion (Doc. 182), and the Supplemental Brief in Support of the Motion (Doc. 186), and the argument at the hearing, the Court hereby GRANTS Plaintiffs' Unopposed Motion for Final Approval of Class Action Settlement and Award of Attorney's Fees and Service Awards and GRANTS final approval of this class action settlement pursuant to Rule 23 of the Federal Rules of Civil Procedure for the following reasons:

1. On May 18, 2009, Plaintiffs and Defendants WIS Holdings Corp. and WIS International ("WIS") entered into a Settlement Agreement and Release, which was amended on December 17, 2009 by Joint Stipulation Regarding Settlement (collectively "Settlement Agreement"). The Settlement Agreement sets forth the terms and conditions for a proposed class action settlement and dismissal with prejudice of the claims of all California Class Members.

2. The Court preliminarily approved this Settlement Agreement on January 4, 2010. (Doc. 172).

3. The Preliminary Approval Order (Doc. 172) and several orders amending or clarifying that Order (Docs. 177, 174 & 178) outlined the form and manner by which Plaintiffs were to provide the California Class with notice of the settlement, the fairness hearing and related matters. The notice program included individual notice to California Class Members who could be identified through reasonable efforts.

4. The third-party administrator selected by Counsel and approved by the Court to administer the notice and claims process ("Garden City Group Inc.") verified that the mailing conformed to the preliminary approval order. (Doc. 182). The Court finds that the notice program fully complied with Rule 23 of the Federal Rule of Civil Procedure and the requirements of due process, providing to the California Class the best notice practicable under the circumstances.

5. The Court hereby grants final approval of the settlement on the basis that the settlement is fair, reasonable, and adequate to the settlement class. See FED. R. CIV. P. 23(e).

6. The Court is satisfied that the settlement was fairly and honestly negotiated as it was the result of vigorous arms-length negotiations which were undertaken in good faith by experienced counsel, and that serious questions of law and fact exists such that the value of an immediate recovery outweighs the mere possibility of further relief after protracted and expensive litigation. Further, the Court concludes that this settlement is the result of a bona fide dispute and reached as part of contested litigation over coverage under the Fair Labor Standards Act and, therefore, approves the release of claims as set forth in the Settlement Agreement.

7. The Court gives weight to the parties' judgment that the settlement is fair and reasonable. See In re Pac. Enter. Sec. Litig., 47 F.3d 373, 378 (9th Cir. 1995).

8. Moreover, the Court gives weight to the California Class' reaction to the settlement. Despite a California Class that numbered 16,650 individuals, no individual objected to this settlement. A significant number of individuals have participated in the claims process. The opt-out rate is low. These facts all indicate a positive reaction to the settlement. See McPhail v. First Command Financial Planning, Inc., No. 05-179, 2009 WL 839841 at *6 (S. D. Cal. March 30, 2009) ("The presence of a small minority of objectors strongly supports a finding that the settlement is fair, reasonable, and adequate."); Brailsford v. Jackson Hewitt Inc., No. 06-00700, 2007 WL 1302978, at *4 (N.D. Cal. May 3, 2007) (a "low level of opt-outs is an indication of the Class Members' acceptance of the settlement as fair and adequate.")

9. In light of these facts, the Court finds that the settlement is fair, reasonable, and adequate and should be approved by the Court. The Court hereby approves the Settlement and certifies a Class of individuals under Rule 23(b)(3) which includes: "Current and former Inventory Associated employed by Defendants in the State of California from October 7, 2003 to November 13, 2008." Excluded from the California Class are (a) all federal court judges who have presided over this case and their spouses and anyone within three degrees of consanguinity from those judges and their spouses, (b) all persons who elect to exclude themselves from the Settlement Class; and, (c) any person who opted into this case who claims they were not properly paid overtime under the FLSA and who did not work in the State of California.

10. The persons identified on Exhibit 1 requested exclusion from the California Class and are therefore excluded from this Settlement. These persons identified on Exhibit 1 are not included in or bound by this Order and may individually pursue claims (if any) against Defendants. Those persons are not entitled to any recovery from the settlement proceeds obtained through this settlement.

11. A small number of California Class Members submitted a timely and otherwise valid claim and a timely and otherwise valid request to be excluded. Obviously, the Court must disregard one or the other submission. The settlement administrator has attempted to remediate the issue by sending a letter to each of the affected individuals asking them to clarify their intent. Many responded, but sixty-six individuals did not. The Parties propose that these sixty-six individuals be treated as participating and claiming members of the California Class because among other reasons the claim form was submitted under penalty of perjury and the request to be excluded was not. The Court agrees with this approach and deems these individuals California Class Members, entitled to any benefits accruing to them under the terms of the Settlement Agreement, and bound by this Order and the release of claims.

12. Defendants are hereby ordered to pay the settlement awards to the California Class Members in accordance with the ...


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