The opinion of the court was delivered by: Oliver W. Wanger United States District Judge
MEMORANDUM DECISION MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT (DOC. 40)
This is a wage-and-hour class action brought on behalf of Dairy workers employed by Rex and Sheri Nederend in, or around, Tulare and/or Kern County, California. Declaration of Stan S. Mallison, Doc. 47, ¶2; see also Second Amended Class Action Complaint ("SAC"), Doc. 27, filed Jan. 19, 2010. The action is brought on behalf of Plaintiffs and approximately 150 current and former non-exempt employees of Defendants for alleged violations of federal and state wage-and-hour laws. Id.
The parties have entered into a Joint Stipulation of Settlement. Under the terms of the Settlement, the parties move for an order: (1) conditionally certifying a Settlement Class; (2) preliminarily approving the Class Settlement; (3) appointing Class Representatives and Class Counsel; (4) approving class notice and related materials; (5) appointing a settlement administrator; and (6) scheduling a final approval hearing. Doc. 40. Although the pending motion was not filed until December 15, 2010, at which time the first available hearing date was March 7, 2011, the motion was advanced to and heard on January 10, 2011, to accommodate the settlement schedule.
Plaintiffs allege that Defendants failed to pay overtime and minimum wages; failed to pay wages due at termination of employment; failed to provide all legally required meal periods and rest breaks; and failed to provide accurate, itemized employee wage statements. Plaintiffs sought to certify a class composed of themselves and similarly situated individuals and to recover back wages, interest, penalties, and attorneys' fees and costs from Defendants. See SAC.
After the complaint was filed, Plaintiffs conducted substantial discovery and non-discovery investigation regarding class certification and the merits of their claims. Mallison Decl. at ¶ 34. Among other discovery, Plaintiffs served an extensive set of document requests, demanding all of the critical payroll and timekeeping information at issue in this case, as well as the names and contact information for Defendants' former and current employees. After meeting and conferring regarding these issues, Defendants produced the core payroll and timekeeping information. Id. at ¶ 34. Defendants' timekeeping system is both computer and "paper-based," consisting of paper time records for the earlier part of the time period and a database for the later part of the time period. Id. at ¶ 35. This required Plaintiffs' counsel to employ both database experts to analyze the data as well as to copy and review tens of thousands of pages of documents. Id. Much of the document and data review took place with Plaintiffs and other witnesses, who guided counsel through time and payroll records. Id.
III.SUMMARY OF THE SETTLEMENT.
The case was resolved with the aid of a mediator's proposal drafted by Mediator former District Court Judge Raul Ramirez. Id. at ¶ 37. The Settlement Agreement covers approximately 150 current and former Dairy employees who worked for Defendants from July 30, 2004 to September 7, 2010. Mallison Decl., Ex. 1, Doc. 47-1, Settlement Agreement ("Settlement") § I.N.
A.Gross Settlement Payment.
Under the Settlement, Defendants will make Gross Settlement Payments totaling $505,058.60 by November 8, 2011. Mallison Decl. at ¶ 38. This total sum will cover:
* Settlement Shares to be paid to Class Members who submit valid claims;
* any payroll withholding on the Settlement Shares;
* a $10,000 payment to the California Labor and Workforce Development Agency for its share of the settlement of civil penalties;
* the Settlement Administrator's reasonable fees and expenses (no more than $15,000);
* (subject to court approval) payments to Plaintiffs, in addition to their Settlement Shares, of $7,500 each in compensation of their services as Class Representatives;
* and (also subject to court approval) payments to Class Counsel of no more than 33.33% of the gross settlement amount for their reasonable attorneys' fees, as well as $10,000 in expenses incurred in investigating and prosecuting the case, preparing for and negotiating at the mediation, documenting the Settlement, securing approval of the Settlement, and related tasks.
Settlement, § III.A - C. There will be no reversion of the Gross Settlement Payment to Defendants. Mallison Decl. at ¶ 39.
B.Payment of Settlement Shares.
After the other amounts are deducted, the Gross Settlement Amount (then called the "Net Settlement Amount") will be distributed as Settlement Shares to all Class Members who submit valid claims, see Settlement § III, based upon the following allocation formula:
The Settlement Share for each Claimant will be based on (a) that Claimant's total number of Months of Employment during the Class Period (b) divided by the aggregate number of Months of Employment of all Participating Class Members during the Class Period (with the division rounded to four decimal places) (c) multiplied by the value of the Net Settlement Amount.
Settlement § III.D.1. This formula relies upon objective evidence of the term of employment, which Class Members can easily review and confirm. Mallison Decl. at ¶ 40. In addition, this information is readily available from Defendants' records, and the Settlement Administrator can apply the formula in a fair and transparent manner. Id.*fn1
The parties estimate that, if all amounts sought under the Settlement are awarded, a Class Member's average Settlement Share will average approximately $2,000 per employee. Id.
C.Distribution of Unclaimed Funds and Uncashed Checks.
In the event that not all Class Members submit claims, the residue will be redistributed to those Class Members who do submit valid claims. Settlement, § III.D.3. The settlement agreement provides that in the event that checks issued to Class Members are not cashed, these monies will be donated to California Rural Legal Assistance, Id., § III.F.10, a public interest organizations that serves low-income workers in the same geographical area as the class.
The scope of the release by all Participating Class Members (all Class Members other than those who elect not to participate in the Settlement) tracks the scope of Plaintiffs' allegations:
As of the date of the Judgment, all Participating Class Members hereby fully and finally release Defendants, and its parents, predecessors, successors, subsidiaries, affiliates, and trusts, and all of its employees, officers, agents, attorneys, stockholders, fiduciaries, other service providers, and assigns, from any and all claims, known and unknown, for or related to all claims based on or arising from the allegations that they were or are improperly compensated under federal, California, or local law (the "Class's Released Claims"). The Class's Released Claims include all such claims for alleged unpaid wages, including overtime compensation, missed meal-period and rest-break wages or penalties, and interest; related penalties, including, but not limited to, recordkeeping penalties, pay-stub penalties, minimum-wage penalties, missed meal-period and rest-break penalties, and waiting-time penalties; and costs and attorneys' fees and expenses.
E.Objections and Opt-Out Process
Any Class Member who so wishes may object to or comment on the Settlement; or may elect not to participate in the Settlement. The Class Notice fully explains the objection/comment and opt-in procedures. Settlement, § III.F.4., Exh. C. The Class Notice, as with all forms, will be provided to the Class Members in English and Spanish.
F.Class Representative Payments; Class Counsel Attorneys' Fees Payment and Class Counsel Litigation Expenses Payment.
By a motion to be filed prior to the Final Approval Hearing, Plaintiffs and their counsel will seek (and ...