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Cicero v. DirecTv

July 27, 2010


The opinion of the court was delivered by: Hon. Avern Cohn


I. Introduction

This is a class action claiming violations of California's wage and hour laws. The parties settled. The Court preliminary approved the settlement. See Doc. No. 76. Plaintiffs' motions for final approval and for an award of attorneys' fees were heard on June 28, 2010. Plaintiffs, Defendant DIRECTV, Inc. d/b/a DIRECTV Home Services ("Directv") and Objector Francisco Marenco ("Marenco") appeared at the hearing through their respective counsel. Before the Court is the Motion of Michael W. Cicero and Dmitry Gurevich ("Named Plaintiffs") for Final Approval of Settlement (Doc. No. 82) and Named Plaintiffs' Motion for Award of Attorneys' Fees, Approval of Administrative Expenses, Reimbursement of Expenses, and Incentive Award Payments (Doc. No. 83).

Also before the Court are Marenco's objection to the settlement (Doc. No. 80). After considering the various filings, and for the reasons below, the Named Plaintiffs' Motions will be granted and Marenco's objections will be overruled.

II. Background

A. Factual Background

The Named Plaintiffs are former satellite television installation and service technicians who brought this case individually and on behalf of all other similarly situated current and former satellite installation and/or service technicians against their former employers Mountain Center, Inc., and Ironwood Communications Inc. (currently DirecTV, Inc. doing business as DirecTV Home Services, collectively "Defendant") for allegedly violating California's labor and unfair competition laws. Named Plaintiffs alleged that Defendant violated applicable provisions of the Industrial Welfare Commission's ("the IWC") Wage Orders, the Labor Code, and the Business and Professions Code by: (1) failing to provide employees duty-free meal periods; (2) failing to reimburse employees for tools necessary to the performance of the employees' work; (3) failing to pay wages for all hours worked, including hours worked in excess of eight per day and forty per week; (4) failing to pay all wages owed employees upon termination of the employment relationship; and (5) failing to provide accurate wage statements.

After conducting extensive investigation, including numerous witness interviews and depositions, exchanging written discovery requests and responses, and voluminous document and data productions, inspections and analysis, the Parties engaged in two mediations of the matter before the Hon. William Cahill (Ret.) in March, 2009, and subsequently before the Hon. Diane Wayne (Ret.). On October 19, 2009, the Parties reached the settlement now before the Court for final approval.

B. Settlement

The Stipulation and Settlement Agreement of Class Action Claims ("Settlement Agreement"), provides for (1) a Payout Fund to Settlement Class Members of $4,407,500.00; (2) an Attorneys' Fees Award of $1,950,000.00; (3) Named Plaintiffs' Incentive Awards of $7,500 to Plaintiff Cicero and $5,000.00 to Plaintiff Gurevich; (4) claims administration expenses not to exceed $60,000; and (5) litigation costs not to exceed $70,000.00. "Plaintiffs" are defined as All persons who at any time from July 1, 2004, through the [date of preliminary approval] (the "Class Period") were non-exempt employees of Defendant, employed in California and engaged in the installation and/or service of satellite equipment on a piece-rate basis who have not already settled statutory wage or Labor Code claims against Defendant, pursued and recovered a remedy for statutory wage or Labor Code claims with the Division of Labor Standards Enforcement or some other government agency, or pursued and adjudicated a remedy for statutory wage or Labor Code claims with the Division of Labor Standards Enforcement or some other government agency. The "Class Members" (also referred to as the "Class") consist of all Plaintiffs who do not properly elect to exclude themselves from the terms of this Agreement. "Settlement Class Members" are all Class Members who submit a Claim Form/FLSA Consent Form that is approved for payment under the Settlement Agreement. Defendant has identified 6,006 potential Class Members using contact information from its personnel records.

The Gross Settlement Amounts will be allocated among the Settlement Class Members, i.e. Class Members who timely complete and return a Claim Form/FLSA Consent Form, based upon the number of weeks each class member worked during the class period for an estimated payment of $17.24 per work week. Potential Class Members were given a chance to opt out or object to the settlement by submitting a written request for exclusion within forty-five (45) days after the notice was mailed.

Notices were initially mailed to 6,006 potential Class Members, and as of June 3, 2010, 2,328 Claim Forms and 6 Opt-Out Requests were returned. The 2,328 participating Settlement Class Members account for 61.9 % percent of the total weeks worked by all Plaintiffs. To the extent that Class Members do not submit claim forms for their provisional share of the fund, the unclaimed share shall be redistributed to the class members who make timely claims on a proportional basis.

In return for the $6.5 million settlement, Class Members agree to release Defendants from: all claims, demands, rights, liabilities, and causes of action of every nature and description whatsoever, known or unknown, asserted or that might have been asserted, whether in tort, contract, or for violation of any state or federal constitution, statute, rule or regulation, including state wage and hour laws, whether for economic damages, non-economic damages, restitution, penalties or liquidated damages, arising out of, relating to, or in connection with: any and all facts, transactions, events, policies, occurrences, acts, disclosures, statements, omissions or failures to act, which are, or could be, the basis of claims (1) that DTVHS failed to provide Plaintiffs with meal periods and/or rest breaks, failed to compensate Plaintiffs for all hours worked, including overtime hours, or failed to reimburse Plaintiffs for work related expenses in accordance with California law; and/or (2) that Directv owes wages, commissions, penalties, reimbursement, interest, attorneys' fees or other damages of any kind based on a failure to comply with any state wage and hour laws, including the Private Attorneys General Act, Labor Code § 2699 at any times on or before the last day of the Class Period (whether based on California state wage and hour law, contract, or otherwise); and/or the causes of action asserted, or which could have been asserted, in the Class Action, including any and all claims for alleged failure to reimburse Plaintiffs for work related expenses, failure to provide accurate wage statements, failure to provide meal periods and/or rest breaks or to compensate Plaintiffs for all hours worked, including overtime hours, in accordance with California law, including the Private Attorneys General Act, Labor Code § 2699 et seq. and, as related to the foregoing, for alleged unlawful, unfair and/or fraudulent business practices under California Business and Professions Code § 17200, et seq.

III. Legal Standard

Federal Rule of Civil Procedure 23(e) requires the Court to approve a class action settlement and requires notice of settlement to all class members. "[I]n the context of a case in which the parties reach a settlement agreement prior to class certification, courts must peruse the proposed compromise to ratify both the propriety of the certification and the fairness of the settlement." Staton v. Boeing Co., 327 F. 3rd 938, 952 (9th Cir. 2003). The first step is to assess whether a class exists. Id. (citing Amchem Prods. Inc. v. Windsor, 521 U.S. 591, 620, 117 S.Ct. 2231 (1997)).

Second, district courts must evaluate "whether a proposed settlement is fundamentally fair, adequate, and reasonable," and, in doing so, the court "must pay undiluted, even heightened, attention to class certification requirements." Id. (internal quotation marks and citations omitted). To determine if a settlement is fair, some or all of the following factors should be considered: (1) the strength of Plaintiffs' case; (2) the risk, expense, complexity, and duration of further litigation; (3) the risk of maintaining class certification; (4) the amount of settlement; (5) investigation and discovery; (6) the experience and views of counsel; and (7) the reaction of class members to the proposed settlement. See, e.g., Hanlon v. Chrysler Corp., 150 F.3d 1011, 1027 (9th Cir. 1998); Staton, 327 F.3d at 959.

However, where a class settlement has been reached "after meaningful discovery, after arm's length negotiation, conducted by capable counsel, it is presumptively fair." M Berenson Co. v. Faneuil Hall Marketplace, Inc., 671 F. Supp. 819, 822 (D. Mass. 1987); see also Manual for Complex Litigation, 2d ยง 30.45 (1993). Judicial policy favors settlement in class action and other complex litigation where substantial resources can be conserved by avoiding the time, ...

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