The opinion of the court was delivered by: Oliver W. Wanger United States District Judge
MEMORANDUM DECISION RE UNOPPOSED MOTION FOR FINAL APPROVAL OF CLASS ACTION SETTLEMENT (DOC. 41) AND FOR ATTORNEYS' FEES AND COSTS (DOC. 48)
This is a wage-and-hour class action brought on behalf of truck drivers employed by Ferguson Enterprises Inc., in Kern County, California. Declaration of Craig Ackermann, Doc. 44 ¶ 12; see also First Amended Complaint filed July 30, 2010. The action is brought on behalf of Plaintiffs and approximately 553 current and former employees of Defendants' from July 17, 2005 for alleged violations of state wage-and-hour laws. Id.
The parties have entered into a Joint Stipulation of Settlement Agreement. See Ackermann Decl., Doc. 30 at Ex.
1. A January 25, 2011 memorandum decision: (1) conditionally certified a Settlement Class; (2) preliminarily approved the Class Settlement; (3) Class Counsel; (4) appointed Class Representatives; (5) appointed a settlement administrator, (6) approved the class Notice and related materials for distribution; and (7) required plaintiffs to submit a form of order consistent with the decision within five (5) days following electronic service. Doc. 35. Plaintiffs have filed a motion for final approval of the settlement, Docs. 41-42, along with numerous supporting declarations, Docs. 43-46. Plaintiffs have also moved for approval of their request for attorneys' fees and costs, Docs. 48-49, and filed the supporting declaration of Melissa M. Harnett, Doc. 50. No objections to approval have been received.
Plaintiffs allege that Defendants failed to provide timely off-duty meal periods; failed to pay for missed, on-duty and untimely meal periods; failed to provide accurate itemized wage statements; and failed to pay all wages due upon termination or separation of employment.
Plaintiffs sought to certify a class composed of themselves and similarly situated individuals, and sought declaratory relief and recovery of back wages, interest, penalties, attorneys' fees, and costs. See First Amended Complaint ("FAC"), Doc. 21-1.
From November 2009 through the day of the settlement, the Plaintiffs conducted substantial formal and informal discovery concerning the Defendant's policy and practices. Harnett Decl., Doc. 43 at ¶ 42. Among other discovery, Plaintiffs served document requests seeking information on the size of the Class and identity of each of the Class members, and on Defendant's meal break policies, including the persons responsible for developing, implementing and monitoring Defendant's meal break policies. Id. at ¶ 45. Defendants produced a variety of responsive documents including all of its meal and rest period policies and several other categories of responsive documents, but objected to most of the class discovery on the grounds that it violated the Class Members' rights to privacy, and was premature and irrelevant to a ruling on a class certification. Harnett Decl., Doc. 31 at ¶ 46. Plaintiff's counsel reviewed the information amassed during discovery including: analysis of thousands of documents produced by Defendant, 1 including time records and payroll data for 34 class members and Defendant's employment records; (2) analysis of Defendant's legal arguments; (3) obtaining more than thirty sworn declarations from former and current truck drivers of Defendant; (4) taking the Rule 30(b)(6) deposition of Defendant's corporate representative; (5)analysis of class-wide violation rates on the automatic deduction and meal break claims on the basis of a sample of thirty-four (34) class members; (6) analysis of class-wide violations and damages on derivative claims; and (7) research of the applicable law with respect to Plaintiffs' claims. Id. at ¶ 4.
III. SUMMARY OF THE SETTLEMENT
The case was resolved with the aid of a mediator, Gig Kyraicou. The Settlement covers approximately 553 current and former truck drivers employed by Defendant in California from July 17, 2005 to the date the court enters an Order of Preliminary Approval ("Class Period"), excluding new truck drivers hired after November 3, 2010 and 46 truck drivers who previously signed severance release agreements prior to the filing of the lawsuit ("Class Members"). See Settlement, Doc. 30-1, Exhibit 1, § 6. There will be no reversion of the Gross Settlement Amount to Defendant; see also Declaration of Craig J. Ackermannn, Doc. 30 at ¶ 48.
A.Gross Settlement Amount.
Under the Settlement, Defendant will pay up to $2,250,000 ("Gross Settlement Amount"). This total sum will cover:
* settlement awards to be paid to Class Members who timely submit valid claims ("Settlement Awards");
* any payroll withholding on the Settlement Awards;
* the Settlement Administrator's reasonable fees and expenses (no more than $18,000);
* (subject to court approval) payments to Plaintiffs, in addition to their Settlement Awards, of $11,250 each in compensation of their services as Class Representatives;
* and (also subject to court approval) payments to Class Counsel of no more than 30% of the Gross Settlement Amount, or $675,000, for their reasonable attorneys' fees, as well as litigation costs, up to $10,000.
See Settlement, § 6. There will be no reversion of the Gross Settlement Amount to Defendant.
B.Payment of Settlement Awards.
After the other amounts are deducted, the balance of the Gross Settlement Amount, approximately $1,524,500 (the "Net Settlement Amount") will be distributed to all Class Members who timely submit valid claims ("Claimants"), based upon the following allocation formula:
The dollar amount payable to each member of the Class will be calculated by taking the "Potential Gross Individual Settlement Proceeds", i.e., the "Net Settlement Amount" (estimated to be slightly more than $1,500,000) divided by the total number of weeks worked by all members of the Class during the Class Period, and then multiplied by the total number of weeks worked by each individual member of the Settlement Class.
Settlement, § 7(a). A Claim Form, which will be mailed to Class Members with the Notice of Proposed Class Action Settlement and Fairness Hearing ("Notice"), will include for each Class Member the number of weeks actively worked during the Class Period and the Class Member's estimated Settlement Amount. Ackermannn Decl., Doc. 31 at ¶ 52.
For tax purposes, one-third (1/3) of each Settlement Award will be deemed wages and two-thirds (2/3) will be treated as penalties and interest. Settlement Awards will be subject to applicable tax withholding and reporting. Settlement, § 7(c).
The formula relies upon objective evidence of the number of weeks worked during the Class Period. Class 1 Members can review and confirm this information, and the Claim Form permits Class Members to challenge the number of weeks worked. Settlement, § 7(e).
C.Distribution of Unclaimed Funds and Uncashed Checks.
If less than 60% of the Gross Settlement Amount is claimed and distributed to all Claimants, then each Claimant's Settlement Award will be proportionately increased, up to a maximum of 1.5 times their original Settlement Award, until the total individual Settlement Awards equals 60% of the Net Settlement Amount. If the combined total of all Claimants' Settlement Awards at 1.5 times the original amount is still less than 60% of the Gross Settlement Amount, the balance of the funds will be paid to a 501(c)(3) nonprofit organization, to be agreed upon by the parties and approved by the court. Settlement, § 6(a).
The Settlement provides that all Class Members other than those who elect not to participate in the Settlement shall have released the "Released Parties" from the "Released Claims." The Notice contains the following release:
For purposes of this Notice and the Settlement Agreement, the "Released Claims" of the Settlement 1 Class are defined as: All claims, demands, rights, liabilities, and causes of action, whether brought directly, representatively, or in any capacity, that were or could have been asserted in the Lawsuit based upon the facts alleged therein, whether in tort, contract, statute, rule, ordinance, order, regulation, or otherwise, including state, federal, and local laws, whether for economic damages, non-economic damages, restitution, penalties, punitive damages, wages, premium payments, liquidated damages, attorneys' fees, or any other type of recovery thereon, arising out of any act, omission, transaction, or event that occurred or is alleged to have occurred up to the date of this Agreement.
Claims specifically included in this release without limitation are those for alleged failure to provide meal or rest breaks, alleged failure to pay for all hours worked based on the application of an "automatic lunch deduction" (including claims for unpaid overtime, whether known or unknown, arising during the Class Period for the Class Members based on the claims reasonably related to those alleged in the Lawsuit), alleged failure to provide accurate itemized wage statements, alleged failure to provide timely pay upon termination, alleged unfair competition by means of the foregoing, and any other claims arising out of alleged failure to pay wages or penalties or for any other claims asserted in the Lawsuit. This release shall be in addition to, and not in lieu of, any release previously executed by any member of the Settlement Class.
With respect to the Released Claims, Plaintiffs and the members of the Settlement Class stipulate and agree that, upon the effective date of the settlement, all of them shall be deemed to have, and by operation of the Final Judgment shall have, expressly waived and relinquished, to the fullest extent permitted by law, the provisions, rights and benefits of Section 1542 of the California Civil Code, or any other similar provision under federal or state law that purports to limit the scope of a general release. Section 1542 provides:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER 1 SETTLEMENT WITH THE DEBTOR.
Settlement Class Members shall fully and finally release and discharge Ferguson, and each of their past, present, or future officers, directors, owners, shareholders, employees, agents, principals, heirs, representatives, accountants, auditors, attorneys, consultants, insurers, and reinsurers, and their respective successors and predecessors in interest, subsidiaries, affiliates, parents, and each of their company-sponsored employee benefit plans, and all of their respective officers, directors, employees, administrators, fiduciaries, trustees, and agents ("Released Parties"), from the Released Claims. See Notice, Doc. 30, Ex. 1-A, § 5.
E.Objections and Opt-Out Process
Any Class Member who so wishes may object or elect not to participate in the Settlement. The Notice fully explains the objection and opt-out procedures. See Notice, § 3.
F.Class Representative Payments; Class Counsel Attorneys' Fees Payment and Class Counsel Litigation Expenses Payment.
The settlement also permits Plaintiffs and their counsel to seek by separate motion:
* payments to Plaintiffs, in addition to their Settlement Awards, of $11,250 each in compensation of their services as Class Representatives; and
* payments to Class Counsel of no more than 30% of the Gross Settlement Amount, or $675,000, for their reasonable attorneys' fees, as well as litigation costs, up to $10,000.
See Settlement, § 6(b), (d).
A.Certification of a Class for Settlement
As the Class has only been conditionally certified, final certification is required and is governed by Federal Rule of Civil Procedure Rule 23.
1. Rule 23(a) Requirements.
Federal Rule of Civil Procedure 23(a) states in pertinent part that "[o]ne or more members of a class may sue or be sued as representative parties on behalf of all." As a threshold matter, in order to certify a class, a court must be satisfied that (1) the class is so numerous that joinder of all members is impracticable (the "numerosity" requirement); (2) there are questions of law or fact common to the class (the "commonality" requirement); (3) the claims or defenses of representative parties are typical of the claims or defenses of the class (the "typicality" ...