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Brandon Duran, et al v. Sheet Metal

November 21, 2011


The opinion of the court was delivered by: Hon. Dana M. Sabraw United States District Judge


In this wages and hours action, the parties reached a settlement and seek an order conditionally certifying a settlement class, preliminarily approving the settlement agreement, and approving the proposed notice of class certification and settlement. For the reasons which follow, the joint motion is GRANTED WITH MODIFICATIONS to the proposed notice of class action.

In their third amended complaint the named Plaintiffs assert claims under California Labor Code for failing to pay the proper minimum wage for all hours worked; failing to pay sufficient overtime; taking unauthorized deductions from employees' paychecks; failing to provide accurate itemized wage statements as required by law; failing to pay employees all wages due at resignation or termination; and failing to provide adequate funds in construction contracts. They also assert a claim pursuant to California Business & Professions Code Section 17200. They requested declaratory and injunctive relief prohibiting Defendants from committing future violations, an order imposing statutory / / / / / and/or civil penalties, restitution according to proof, and attorneys' fees and costs. The parties have settled their claims and, for settlement purposes only, agreed to class certification.

In general, the Conditional Settlement Agreement dated October 14, 2011 (Decl. of Ricardo Ochoa, Ex. 1 ("Settlement Agreement")) provides for Defendant Challenger Sheet Metal, Inc. ("Challenger") to pay $350,000 to be allocated as follows: (1) a maximum of $76,000 for attorneys' fees and costs, subject to an appropriate motion, which Defendants would not oppose; (2) a maximum of $24,000 for enhancement awards to the three named Plaintiffs, subject to an appropriate motion, which Defendants would not oppose; (3) $8,000 for claim administration expenses pursuant to a firm quote from the agreed-upon claims administrator Simpluris, Inc. (Decl. of Ricardo Ochoa, Ex. 2); (4) estimated $18,000 in Challenger's portion of employer taxes; and (5) the balance of approximately $224,000 to be divided among class members pro-rata based on their total hours worked for Challenger during the class period on construction projects other than federal projects. (Mem. of P.&A. at 4; Settlement Agreement ¶¶ 2.2 & 1.) In exchange, Plaintiffs abandoned their claims for any other relief against Challenger and any relief against other named Defendants, and they agreed to a release of known and unknown claims. The proposed settlement class consists of all past and present employees of Challenger who performed construction work for Challenger during the period of time from November 22, 2006, to October 14, 2011, but excluding those who were employed by Challenger only on federal projects during that period of time.

Settlement Class Certification

Before it can approve a class action settlement agreement, the court must make a finding that a class could be certified. See, e.g., Molski v. Gleich, 318 F.3d 937, 943, 946-50 (9th Cir. 2003), rev'd on other grounds by Dukes v. Wal-Mart Stores, Inc., 603 F.3d 571 (9th Cir. 2010). In this regard, Federal Rule of Civil Procedure 23 contains two sets of class certification requirements set forth in Rule 23(a) and (b). United Steel, Paper & Forestry, Rubber, Mfg. Energy, Allied Indus. & Serv. Workers Int'l Union v. ConocoPhillips Co., 593 F.3d 802, 806 (9th Cir. 2010). Where, as here, the court "is confronted with a request for settlement-only certification, the court must look to the factors designated to protect absentees." Molski, 318 F.3d at 953 (internal quotation marks and citations omitted).

"Rule 23(a) ensures that the named plaintiffs are appropriate representatives of the class whose claims they wish to litigate. The Rule's four requirements -- numerosity, commonality, typicality, and adequate representation -- effectively limit the class claims to those fairly encompassed by the named plaintiff's claims." Wal-Mart Stores, Inc. v. Dukes, __ U.S. __, 131 S.Ct. 2541, 2550-51 (2011) (internal quotation marks and citations omitted).

The proposed class consists of approximately 166 members. Joinder of all members is therefore impracticable for purposes of Federal Rule of Civil Procedure 23(a)(1).

Certification also requires the existence of "questions of law or fact common to the class." Fed. R. Civ. P. 23(a)(2). This requirement is met through the existence of a "common contention" that is of "such a nature that it is capable of classwide resolution[.]" Dukes, 131 S.Ct. at 2551. Because the action is premised on Challenger's policies which were applied to all putative class members and named Plaintiffs, the case meets this requirement.

The typicality requirement of Rule 23(a)(3) is met if "the claims or defenses of the representative parties are typical of the claims or defenses of the class." Fed. R. Civ. P. 23(a)(3). "[R]epresentative claims are typical if they are reasonably co-extensive with those of absent class members; they need not be substantially identical." Hanlon v. Chrysler Corp., 150 F.3d 1011, 1020 (9th Cir. 1998). Because the named Plaintiffs assert the same claims arising out of the same compensation policies, they meet the typicality requirement.

Finally, Rule 23(a)(4) requires a showing that "the representative parties will fairly and adequately protect the interests of the class." This requirement is grounded in constitutional due process concerns; "absent class members must be afforded adequate representation before entry of judgment which binds them." Hanlon, 150 F.3d at 1020, citing Hansberry v. Lee, 311 U.S. 32,42-43 (1940). In reviewing this issue, courts must resolve two questions: "(1) do the named plaintiffs and their counsel have any conflicts of interest with other class members, and (2) will the named plaintiffs and their counsel prosecute the action vigorously on behalf of the class?" Id. (citation omitted). Based on the counsel's experience in labor law and class action litigation and the efforts he and the named Plaintiffs have made so far to investigate and litigate this case, the adequacy requirement is met. (See Decl. of Ricardo Ochoa at 1-3.)

"Where a putative class satisfies all four requirements of Rule 23(a), it must still meet at least one of the three additional requirements outlined in Rule 23(b) in order to be eligible for certification." United Steel, 593 F.3d at 806. The parties seek certification under Rule 23(b)(3), which is proper when "the questions of law or fact common to class members predominate over any questions affecting only individual members, and . . . a class action is superior to other available methods for fairly and efficiently adjudicating the controversy." Fed. R. Civ. Proc. 23(b)(3).

"The predominance inquiry focuses on the relationship between the common and individual issues and tests whether the proposed class [is] sufficiently cohesive to warrant adjudication by representation." Vinole v. Countrywide Home Loans, Inc., 571 F.3d 935, 944 (9th Cir. 2009) (internal quotation marks, footnote and citation omitted). The parties agree that all putative class members were subject to the same policies. On the other hand, it is apparent from the proposed claim-submission process that each class member's share of the settlement is subject to individual determination. This, however, does not defeat class certification because the amount of damages is invariably an individual question. Yokoyama v. Midland Nat'l Life Ins. Co., 594 F.3d 1087, 1094 (9th Cir. 2010). The parties therefore meet the predominance requirement.

Last, the superiority inquiry requires the consideration of:

(A) the class members' interests in individually controlling the prosecution or defense of separate actions;

(B) the extent and nature of any litigation concerning the controversy already begun by or against class members;

(C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; and

(D) the likely difficulties in managing a class action.

Fed. R. Civ. Proc. 23(b)(3). This inquiry "requires the court to determine whether maintenance of this litigation as a class action is efficient and whether it is fair," such that the proposed class is superior to other methods for adjudicating the controversy. Wolin v. Jaguar Land Rover N. Am., LLC, 617 F.3d 1168, 1175-76 (9th Cir. 2010). Individual actions by putative class members would be expensive and time-consuming for the parties and the Court and would create the risk of conflicting decisions. The parties are unaware of any other action begun regarding the claims presented here and represent ...

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