The opinion of the court was delivered by: David O. Carter United States District Judge
ORDER GRANTING PRELIMINARY SETTLEMENT APPROVAL
Before the Court is the parties' Joint Motion for Preliminary Approval of Class Action Settlement and Release ("Joint Motion") (Docket 180). The parties request that the Court (1) enter an order preliminarily approving the Settlement, including a proposed draft of the Class Notice; (2) set a schedule for a hearing on Final Approval of the Settlement, Plaintiffs' application for attorney's fees, and enhancement payments; (3) determine the scope of the release; (4) determine whether the unclaimed portion of the Net Settlement Amount shall revert to Defendant or be distributed as a cy pres award to the Red Cross, (5) approve the mailing of the class notice, and (6) enter an order prohibiting class members from filing any new actions similar to those covered by the settlement until the Court's judgment becomes final.
Plaintiffs represent a group of approximately 379 people who worked as account representatives for Monex Deposit Company ("Defendant") at any time between March 18, 2004 and the present. Plaintiffs allege that they worked over forty hours per week without receiving overtime pay and that Defendant failed to reimburse them for headsets purchased in relation to their job duties. As a result, Plaintiffs assert claims under the federal Fair Labor Standards Act ("FLSA") and the California Labor Code. Plaintiffs also assert that the above-described actions constitute unfair business practices in contravention of Cal. Bus. & Prof. Code § 17200.
The Court granted class certification with respect to the claims discussed above on December 22, 2009 (Docket 94).
Approval of a class action settlement rests in the sound discretion of the court. Class Plaintiffs v. Seattle, 955 F.2d 1268, 1291 (9th Cir. 1992). Under Federal Rule of Civil Procedure 23(e), the Settlement, when taken as a whole, must be (1) fundamentally fair, (2) adequate, and
(3) reasonable to the Class. See Hanlon v. Chrysler Corp., 150 F.3d 1011, 1026 (9th Cir. 1998); see also Dail v. George A. Arab, Inc., 391 F. Supp. 2d 1142, 1145 (M.D. Fla. 2005) (applying general class action settlement standards in FLSA case).
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, 150 F.3d at 1026; Staton v. Boeing Co., 327 F.3d 938, 959 (9th Cir. 2003). In addition, judicial policy favors settlement in class actions and other complex litigation where substantial resources can be conserved by avoiding the time, cost, and rigors of formal litigation. In re Pacific Enterprises Securities Litigation, 720 F. Supp. 1379, 1387 (D. Ariz. 1989).
To determine whether preliminary approval is appropriate, the settlement need only be potentially fair, as the Court will make a final determination of its adequacy at the hearing on final approval, after such time as any party has had a chance to object and/or opt out. See Armstrong v. Bd. of Sch. Dirs. of the City of Milwaukee, 616 F.2d 305, 314 (7th Cir. 1980), overruled on other grounds by Felzen v. Andreas, 134 F.3d 873 (7th Cir. 1998).
Settlement Terms The parties propose a total settlement fund value of $78,786.00, to be known as the "Gross Settlement Amount." Joint Motion at 3. Under the proposed agreement, the following amounts shall be deducted from the Gross Settlement Amount:
* Up to $4,500 in class representative enhancement payments. Defendant planS to object to the awarding of enhancement payments. Id. at 3-4.
* Up to $400 for reasonable address verification measures to determine the addresses of absent ...