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Sandoval v. Marriott

June 15, 2010


The opinion of the court was delivered by: VIRGINIA A. Phillips United States District Judge

[Motion filed on March 12, 2010]


Plaintiff Rosalba Sandoval's motion for final approval of class action settlement ("Motion for Final Approval" or "Motion") came before the Court for hearing on June 7, 2010. After reviewing and considering all papers filed in support of the Motion, as well as the arguments advanced by counsel at the hearing, the Court GRANTS the Motion.


A. Procedural History

On October 30, 2007, in the California Superior Court for the County of San Bernardino, Plaintiff Rosalba Sandoval ("Plaintiff") filed a putative class action complaint ("Complaint") against Defendants Courtyard Marriott ("Marriott") and Tharaldson Employee Management, Inc. ("Tharaldson" or "Defendant") with the following claims: (1) failure to pay overtime compensation, in violation of California Labor Code § 1194; (2) unlawful collection or receipt of wages previously paid and failure to indemnify for expenditures in discharge of duties, in violation of California Labor Code §§ 221, 2802; (3) failure to provide required meal periods, in violation of California Labor Code § 226.7; (4) failure to provide required rest periods, in violation of California Labor Code § 226.7; (5) failure to provide accurate statements and maintain required records, in violation of California Labor Code §§ 226, 1174; and (6) unlawful business practices, in violation of Business and Professions Code §§ 17200, et seq. On April 9, 2008, Tharaldson removed the case to this Court pursuant to the Class Action Fairness Act, 28 U.S.C. § 1332(d). (Doc. No. 1.) On July 8, 2008, pursuant to Federal Rule of Civil Procedure 41, Plaintiff dismissed Defendant Courtyard Marriott from the action. (Doc. No. 11.)

On March 4, 2009, Plaintiff filed a "Notice of Settlement" as to all claims against Defendant Tharaldson. (Doc. No. 31.) On July 28, 2009, Plaintiff filed (1) the declaration of Matthew J. Matern ("Matern Decl.") and (2) a motion ("Motion for Preliminary Approval") for an order: (1) conditionally certifying settlement class, (2) granting preliminary approval to proposed class action settlement, and (3) directing dissemination of class notice, which the Court granted after allowing Plaintiff to submit supplemental briefing in support of the motion. (Doc. Nos. 32, 40.) In a November 17, 2010 order granting the Motion for Preliminary Approval ("Preliminary Approval Order"), the Court:

(1) conditionally certified a class ("Class") consisting of "[a]ll persons who were employed in any non-exempt position at any Courtyard by Marriott property ("Property") which was or is managed by Tharaldson in the State of California between October 30, 2003, and the Date of Preliminary Approval."

(2) granted preliminary approval of the parties' settlement ("Settlement") set forth in the joint stipulation of class action settlement ("Stipulation") (Motion for Preliminary Approval of Class Action Settlement, Ex. 4);

(3) directed dissemination of the class notice and claim form to the class; and

(4) set a scheduling order and dates a final approval hearing. (See Doc. No. 40.)

The Court established February 6, 2010, as the deadline for class members ("Class Members") to file claims or objections, and ordered the parties to file a motion for final approval of the settlement no later than March 12, 2010. (Preliminary Approval Order at 31.)

On March 12, 2010, Plaintiff filed the Motion for Final Approval and the declaration of Caryn Donly ("Donly Decl."). (Doc. No. 42.) On March 29, 2010, Tharaldson filed a notice of non-opposition. (Doc. No. 46.) On June 4, 2010, Plaintiff filed the supplemental declaration of Caryn Donly ("Donly Supplemental Decl."). (Doc. No. 48.) At the June 7, 2010 hearing on the Motion, the Court directed the parties to submit supplement briefing by June 14, 2010 regarding the average payment each Class Member will receive and the final number of valid claim forms received. (Doc. No. 49.) On June 14, 2010, Defendant filed the declaration of Sabrina Shadi ("Shadi Decl."). (Doc. No. 50.)

B. Settlement Terms

The proposed settlement calls for a total settlement amount ("Gross Settlement Amount") of $750,000.00 (Settlement Stip. § 1.19), from which the parties propose to deduct: (1) $225,000.00 (30% of the settlement) for attorneys' fees (Settlement Stip. § 7.1); (2) $13,934.68 for costs (Mot. for Final Approval at 9; Matern Decl. ¶ 6); (3) $12,500.00 for an incentive award for the class representative (Mot. for Final Approval at 6-7); and (4) $31,493.34 for claims administration (Donly Decl. ¶ 16; Settlement Stip. § 8.1). After these deductions, the remaining settlement amount ("Net Settlement Amount") is $467,071.98.

The Settlement Agreement proposes to divide the Net Settlement Amount among all Class Members in proportion to the gross wages earned by the Class Member during the specified period. (Settlement Stip. § 6.2.1.) The Class Members will receive a share of the Net Settlement Amount equal to his or her gross pay, divided by the aggregate gross pay for all Class Members, and then multiplied by the Net Settlement Amount. (Id.) Defendant will provide personnel and payroll records for determining Class Members' gross compensation during the class period. (Settlement Stip. § 9.3.3.) These records are presumed determinative with respect to whether each employee is a Class Member and the Class Members' gross pay. (Id.)

B. Settlement Procedure

1. Notice to Class Members and Claims Received

The parties retained Rust Consulting, Inc. ("Rust" or "Settlement Administrator") as the settlement administrator over the claim proceedings. (Settlement Stip. § 1.2; Mot. for Preliminary Approval at 16.) Per the Settlement, the cost for settlement administration was not to exceed $35,000.00. (Id.) The total cost of settlement administration, including fees and future costs for completion of the administration, is $31,493.34. (Donly Decl. ¶ 16.)

On December 16, 2009, Rust received from Defendant the class notice and claim forms, and a list ("Class List") of the Class Members' names, last known addresses, and Social Security numbers. (Donly Decl. ¶¶ 6-7; Mot. for Preliminary Approval at 16; Settlement Stip. § 9.1.) Rust processed the mailing addresses from the Class List and updated them as needed using the National Change of Address Database maintained by the U.S. Postal Service. (Donly Decl. ¶ 8.)

On December 28, 2009, Rust mailed class notices to 975 Class Members via First Class Mail. (Donly Decl. ¶ 9.) The class notices advised Class Members that they could submit a claim form or exclusion form post-marked by February 11, 2010. (Id.) Rust received 319 undeliverable class notices and performed address traces on 286; of those, Rust mailed class notices to 182 Class Members, with an updated filing deadline of March 8, 2010; of those, 53 were returned as undeliverable. (Donly Decl. ¶ 11.) On April 5, 2010, Rust mailed class notices to 13 Class Members, bringing the total number of Class Members to 988. (Donly Supplemental Decl. ¶ 11.) Accordingly, 190 of 988, or 19.23%, of the class notices were undeliverable.

Of 988 Class Members, Rust received 244 claim forms; of the 244 claim forms, four were deficient, three were untimely, and 237 were valid. (Id.) Thus, a total of 24.7% of Class Members submitted claim forms, and 24% submitted valid claim forms . (Id.) Rust received two exclusion forms, and no objections. (Donly Decl. ¶¶ 13-14.) The docket does not show that any Class Member filed an objection.

2. Claims Procedure

Class Members had forty-five days after the class notice was mailed to consider the proposed Settlement and object to the Settlement or request not to participate in the Settlement. (Settlement Stip. § 9.3.1.) Defendant's employees who fall within the Class definition and were employed at any time during the period of August 1, 2008 through November 17, 2009, "shall be deemed to have submitted claim forms." (Id.) The date of mailing of the claim form was the date the form was deposited in the U.S. Mail, postage prepaid, as evidenced by the postmark. (Id.) Class Members who did not properly or timely submit the claim form did not become participating claimants, and are not entitled to a settlement payment. (Id.)

Within five business days after the expiration of the notice period the Settlement Administrator shall notify class counsel of (i) the number of Class Members who have opted out of the Class, and (ii) the number of Class Members who have submitted qualifying claim forms. (Settlement Stip. § 9.3.4.) Within ten business days after the expiration of the notice period, the Settlement Administrator shall provide a list of participating claimants to Defendant. (Id.) Within thirty-five days after the expiration of the notice period, the Settlement Administrator shall provide an updated listing of claims data and an update list of participating claimants reflecting Class Members who receive re-mailed notices. (Id.)

The Settlement provided that in the event that 10% or more of all Class Members timely requested exclusion (opt-out) from the Settlement Class by submitting a request for exclusion, Defendant shall have the right to revoke and terminate the agreement. (Settlement Stip. § 9.3.5.) Here, only two of 988 Class Members, or .002%, submitted valid exclusion forms. Thus, Defendant has no right to revoke the agreement on this basis.

3. Notice of Settlement

The notice informed Class Members regarding:

(1) the nature of this action, the Settlement Class, Class Counsel, and the essential terms of the Settlement; (2) the allocation of the Settlement fund, including the method by which each Class Member's settlement share will be calculated, the requests for the Class Representative Payments and the Class Counsel Attorneys' Fees and Costs Payment, and the Settlement Administration costs that will be deducted from the Settlement fund; (3) how to participate in the Settlement; (4) how to comment on, opt-out of, or object to the Settlement; (5) this ...

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