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Williams v. Costco Wholesale Corp.

July 7, 2010


The opinion of the court was delivered by: Irma E. Gonzalez, Chief Judge United States District Court


Currently before the Court are Plaintiff Scott M. Williams' ("Williams") Motion for Final Approval of Class Action Settlement and Motion for Attorneys' Fees and Class Representative Service Payment, filed on June 14, 2010. [Doc. Nos. 72, 73.] For the reasons set forth below, the Court GRANTS Plaintiff's Motions.


The facts of this case are known to the Court and the parties and need not be repeated herein.

I. Procedural Background

Plaintiff filed suit on July 17, 2002 in San Diego County Superior Court alleging violations of California and federal overtime laws by Defendant Costco Wholesale Corporation ("Costco"). Plaintiff alleged that Costco misclassified him, and others similarly situated, as exempt from overtime pay and failed to pay appropriate overtime in violation of the Fair Labor Standards Act ("FLSA"), California Labor Code § 510, and California Code of Regulations § 11070. Plaintiff also alleged that Costco "is an employer engaged in commerce and subject to the provisions of the Fair Labor Standards Act, 29 U.S.C. § 201 et seq." (Compl. ¶ 6.)

On October 9, 2002, Costco timely removed the case to this Court on federal question jurisdiction based upon the FLSA claim. See 28 U.S.C. § 1331; 28 U.S.C. § 1441. On January 8, 2003 Plaintiff filed a First Amended Complaint ("FAC") in which he eliminated any claims under FLSA, effectively terminating any federal claim presented in the Complaint. [Doc. No. 12.] On January 30, 2003, Plaintiff filed a motion to remand the case to state court. [Doc. No. 15.] This Court granted Plaintiff's motion to remand on June 10, 2003. [Doc. No. 22.] Costco filed a Notice of Appeal as to that decision on June 20, 2003. [Doc. No. 24.] The Court thereafter stayed the proceedings pending the appeal. [Doc. No. 41.]

On February 20, 2007, the 9th Circuit entered judgment reversing this Court's order granting the motion to remand. [Doc. No. 47.] However, the Court stayed the proceedings once again on the joint stipulation of the parties, due to a pending California state court action, Randall v. Costco Wholesale Corp., No. BC 296369 (Cal. Super. Ct. L.A. County, filed May 27, 2003) ("Randall Action"), which asserted certain overlapping claims with the present action. [Doc. No. 54.] The Court lifted the stay on September 11, 2009, upon receiving notice that the state court had approved settlement of the Randall Action, effectively resolving the overlapping claims. [Doc. No. 59.] Plaintiff filed a notice of settlement in the present case on September 11, 2009. [Doc. No. 60.]

II. The Proposed Settlement

Pursuant to the proposed settlement, the class members include any person employed by Costco between July 17, 1998 and May 26, 1999 (the "Settlement Period") in California as a department manager in the bakery, deli, and meat departments. (Settlement Agreement and Release, Ex. 1 at 3 [hereinafter Settl. Agr.].) Costco agreed to pay an aggregate sum of $440,000 (the "Gross Settlement Amount"), which includes all payments to class members, the payment of a service fee to the named plaintiff, attorneys' fees, all employer taxes except for the 6.2 percent Social Security tax, and administration costs, if any, up to $25,000. (Sett. Agr. at 5.) The Gross Settlement Amount is non-reversionary, except that Costco may retain funds based on uncashed checks. (Id.) The funds will be distributed to individual class members on a pro rata basis based on the number of weeks during the Settlement Period in which the class member had an active pay code ("Workweeks") and the last effective pay rate during the Settlement Period. at 4, 7.)

Costco agreed not to oppose Class Counsel's request for an award of costs and attorneys' fees not to exceed $110,000 of the Gross Settlement Amount and a service fee for Plaintiff Scott Williams up to $5,000. (Id. at 10-11.) Costco has also agreed to exercise reasonable means to locate class members. (Id. at 9.) Within thirty days of the Court's preliminary approval of the settlement, the claims administrator sent class members notice of the settlement and an opportunity to opt out of the settlement class. (Id.) The Settlement Agreement provided that class members are able to opt out of the settlement within thirty days of the notice mailing; any class member who does not timely serve an objection within this time period shall be deemed to waive any objection to the settlement. (Id. at 9-10.)

In exchange for these awards, each final settlement class member will release Costco and its associates from all claims arising out of the facts alleged in this action relating to unpaid overtime wages, unlawful deductions, conversion, wage-statement violations, record-keeping violations, and "waiting time" penalties or other statutory penalties relating to the class member's work as a meat, bakery, or deli manager during the Settlement Period. (Id. at 11-12.)

Preliminary Approval of the Settlement

On March 4, 2010, the Court preliminarily certified the class for settlement purposes, appointed class counsel, granted preliminary approval of the settlement, and ordered Plaintiff to disseminate notice of the settlement to class members. [Doc. No. 68.] On April 6, 2010, the Claim Administrator sent the notice of class settlement to 220 class members via first class mail. (Keough Decl. ¶ 4.) The notice provided class members with an estimate of their settlement payment, as well as an opportunity to participate in the settlement, opt out of the settlement, or object to the settlement. (Id., Ex. A.) Out of the 220 notice packets mailed, 22 were returned by the U.S. Postal Service as undeliverable. (Id. ¶ 5.) As of June 14, 2010, the Claim ...

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