The opinion of the court was delivered by: Hon. Michael M. Anello United States District Judge
ORDER ON FINAL APPROVAL OF CLASS ACTION SETTLEMENT, JUDGMENT AND DISMISSAL
ORDER ON FINAL APPROVAL OF CLASS ACTION SETTLEMENT
On June 6, 2011, this matter came before the Court on Plaintiffs' Motion for Final Approval of Class Settlement, Approval of Attorneys Fees and Costs, and Class Representative Service Payment [Doc. No. 57]. At the hearing, the Court advised the parties of its tentative decision to grant Plaintiffs' motion. For the following reasons, the Court AFFIRMS its tentative ruling and GRANTS Plaintiffs' motion in its entirety.
The operative pleading in this case is the First Amended Consolidated Complaint (the "complaint") [Doc. No. 35], filed on July 1, 2009. Individually named plaintiffs acting as class representatives include: Lloyd Martin, Kirk Sword, Daniel Gore, Grady O'Bryant, Jorge Mejia, Paul Luna, Kye Jacoby, and Rigo Martinez. These individuals were employed by Defendant AmeriPride Services, Inc. as route delivery drivers (holding the official title of customer service representatives or "CSRs") during the class period commencing on January 15, 2004. AmeriPride is in the business of linen supply, supplying to customers clean laundered towels, linens, uniforms, wearing apparel, and other items. AmeriPride employs CSRs to operate delivery trucks to supply its products and services to its local customers on routes assigned to them by AmeriPride.
Plaintiffs brought this class action against their employer AmeriPride alleging that they and other CSRs are mis-classified as "exempt" employees and are thus entitled to unpaid overtime wages and other remedies under California law. Specifically, Plaintiffs' complaint alleges that AmeriPride violated California state law, and alleges five causes of action under the California Labor Code and California Business and Professions Code for (1) overtime pay for introductory employees; (2) overtime pay for regular full-time employees; (3) meal periods; (4) rest periods; and (5) unfair business practices.
This matter began as two separate purported class action law suits filed in California state court by Martin, Sword, and Gore in San Diego County, and O'Bryant in Sacramento County. AmeriPride answered the complaint in each case, and simultaneously removed the Martin, et al. action to this Court and the O'Bryant action to the United States District Court for the Eastern District of California. The O'Bryant court transferred that action to this Court. On October 15, 2008, this Court ordered the two actions consolidated. The operative complaint was filed on July 1, 2009.
On September 7, 2010, the parties notified the Court that the action had settled and the Court ordered the parties to file a motion for preliminary approval of class settlement. See Doc. No. 46. On December 3, 2010, Plaintiffs filed an unopposed motion for preliminary approval. See Doc. No. 51. On January 4, 2011, the Court granted the motion and approved a preliminary settlement, authorized the notice process, and scheduled a hearing on final approval. See Doc. No. 55.
On April 11, 2011, Plaintiffs filed the motion for final approval currently pending before the Court. See Doc. Nos. 57-59. On April 15, 2011, AmeriPride filed an opposition to the motion, asserting that Plaintiffs "are now seeking to fundamentally alter the terms of the agreed-upon Settlement Agreement." See Doc. No. 60. According to AmeriPride, disputes developed between the parties with respect to material terms of the Settlement Agreement, including the definition of the class, the effective date of the Settlement Agreement, the timing for deposit of settlement funds, the release of claims, and payment of employment taxes.
In light of the issues raised in AmeriPride's opposition, the Court vacated the Final Approval Hearing which had been previously set for April 25, 2011 and rescheduled the hearing for June 6, 2011, in order to allow counsel for the parties to meet and confer regarding the outstanding disputes related to the Settlement Agreement. See Doc. No. 61. On May 27, 2011, in compliance with the Court's order, the parties filed a Joint Statement advising the Court regarding the status of settlement, confirming that all disputes except one have been resolved, and setting forth each party's position on the sole remaining dispute -- the effective date of the Settlement Agreement. Because the parties indicated in the Joint Statement that they would seek the Court's determination on the issue, and the dispute did not threaten the integrity of the Settlement Agreement, the Court found the settlement of this class action ready for final approval.
This Court provisionally certified the settlement class as follows: "Any individual who was employed as Customer Service Representative (including introductory and/or probationary Customer Service Representatives) in California for AmeriPride during the Class Period (January 15, 2004 through December 31, 2009)." Several class members have claimed compensation for time worked during the class period as relief drivers, wholesale drivers or "route jumpers." Subsequent to their meet and confer efforts during the month of May, the parties agreed that the settlement class does not include these types of drivers because they are in a different payroll category and are compensated differently than CSRs, except as to those class member CSRs who may have been relief and/or wholesale drivers at times during the class period. See Joint Hearing Statement, Doc. No. 62.
On Friday, May 20, 2011, the Settlement Administrator mailed responses to claimants who filed claims or disputes indicating whether the claim or dispute was accepted or denied and the basis for the denial consistent with the parties' agreed upon definition of the Settlement Class.
Subsequent to their meet and confer efforts during the month of May, the parties also agreed that all named plaintiffs have agreed to a comprehensive release that releases all claims against AmeriPride "arising out of their employment with Defendant or termination thereof and/or any other event, act, occurrence, or omission taking place on or before the Settlement Effective Date." See Joint Hearing Statement, 4. With respect to the unnamed class members, the parties agree that all class members -- as defined above -- are releasing any and all wage claims that were brought or could have been brought against AmeriPride during the class period. The parties agree that AmeriPride employees who are not part of the settlement class are not releasing any claims.
AmeriPride has agreed to pay a gross settlement amount of $5,250,000 (five million two hundred fifty thousand dollars) ("the common fund"). Upon final approval, the common fund will be allocated among payments to class members, administrative costs, attorneys fees, litigation costs, and class representative service awards. The entire fund is non-reversionary and will be distributed to individual class members on a pro rata basis based on the time and location of where the class member worked as well as the number of weeks worked.
Subsequent to their meet and confer efforts during the month of May, the parties agreed that the Settlement Agreement states that AmeriPride will pay the employer taxes on the portion of each Settlement Payment deemed to be wages, which is fifty percent (50%) of the Settlement Payment. See Joint Hearing Statement, 5. This portion will be issued via W-2 form. The other portion is for penalties and interests for which no taxes are due because it will be issued via 1099-MISC form. The employer taxes will be paid by AmeriPride from monies separate and apart from the common fund.
The class representatives will receive an enhancement award of $18,500. The parties stipulate to award attorneys fees to Class Counsel in the amount of 25% of the common fund ($1,312,500), to be split equally between Wagner & Jones LLP and Tosdal Smith Steiner & Wax LLP, plus actual litigation costs of $16,891.77 to Wagner & Jones and $14,720.42 to Tosdal Smith Steiner & Wax.
3. Effective Settlement Date
The meaning of the term "Effective Settlement Date" remains in dispute. The parties have requested that the Court determine the issue. The "Effective Settlement Date" is defined in the Settlement Agreement as:
Effective Settlement Date: The Effective Settlement Date is the date on which this Settlement will become final and effective, which shall be upon the ...