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Simon V. Garcia, Roy Van Kempen v. Gordon Trucking

October 29, 2012

SIMON V. GARCIA, ROY VAN KEMPEN, CHRISTOPHER YANEZ, AND EMMA YANEZ, ON BEHALF OF THEMSELVES AND ALL OTHERS SIMILARLY SITUATED,
PLAINTIFFS,
v.
GORDON TRUCKING, INC., A CALIFORNIA CORPORATION; STEVE GORDON, AN INDIVIDUAL, BOB GOLDBERG, AN INDIVIDUAL; AND DOES 1 THROUGH 20 INCLUSIVE,
DEFENDANTS.



ORDER APPROVING CLASS SETTLEMENT AND ENTRY OF FINAL JUDGMENT

Plaintiffs move for a final approval of class action settlement and attorneys' fees. Pursuant to this Court's June 8, 2012 Order Granting Preliminary Approval of Class Action Settlement, this Court conducted a final approval and fairness hearing on October 29, 2012 in Courtroom 2 (AWI). Plaintiffs appeared by S. Brett Sutton and Jared Hague, Sutton Hatmaker Law Corporation, and James Patterson, Patterson Law Group, APC. Defendants appeared by Defendants appeared by Adam Smedstad, Scopelitis Garvin Light Hanson & Freary, P.C. No one appeared to object to the proposed settlement, and no objections were received before or after the August 31, 2012*fn1 deadline.

To determine whether this class settlement fundamentally is fair, adequate and reasonable, this Court considered the proposed Joint Stipulation of Settlement*fn2 between the parties, the relative strengths of Plaintiffs' claims, the risks and expense involved in continuing litigation, the proposed expense for settlement administration, and attorneys' fees, among other things. This Court further considered the unopposed motion and supporting declarations. For the reasons stated on the record and set forth below, this Court will approve the settlement, as ordered below.

BACKGROUND

Representative Plaintiffs, Simon V. Garcia, Roy Van Kempen,*fn3 Christopher Yanez, and Emma Yanez, are former employees of Defendant Gordon Trucking, Inc. ("GTI") whose job duties consisted of driving commercial trucks to transport freight for GTI's customers. GTI compensated drivers on a mileage-based piece-rate compensation system whereby they were paid on a cents-per-mile basis, plus accessorial pay. Plaintiffs challenged GTI's compensation system, alleging that it did not compensate drivers with at least the California minimum wage for all hours worked during both driving and non-driving activities. Plaintiffs further claimed that GTI did not provide drivers with required meal periods and rest periods, that GTI did not pay all compensation due and owing to to drivers as of the time of their separation of employment, that GTI did not maintain proper employment records, and that the paystubs provided to drivers did not comport with the requirements of California law. Plaintiffs alleged eight causes of action: (1) minimum wage as under 29 U.S.C. §206; (2) minimum wage under Cal. Labor Code §1194; (3) meal periods under Cal. Labor Code §226.7; (4) rest periods under Cal. Labor Code §226.7; (5) itemized wage statements under Cal. Labor Code §226; (6) timely wages at termination under Cal. Labor Code §201; (7) unfair business practice under Cal. Bus. & Prof. Code §17200; and (8) recovery under the Private Attorney General Act, Cal. Labor Code §2699. Doc. 72, Complaint.

In a June 8, 2012 order, this Court granted class certification for the purposes of settlement only. The Settlement Class was certified as follows: "All current and former employee drivers of GTI who resided in California at any time within the Class Period, as defined below, whose job duties include, among other things, driving commercial motor vehicles and who are/were paid, in part, on a cents-per-mile basis, and whose names appear on the list attached as Exhibit 1 to the Settlement."

The Court's June 8, 2012 order approved a notice to be issued to the class members and included a time period in which class members had to submit a timely and valid claim form in order to receive a settlement share. The class notice further included a time period in which class members had to comment on or object to the settlement, or elect not to participate. The class administrator mailed the class notice to 1,868 individuals. A total of 17 class members submitted opt-out forms. Of the opt-out forms received, 15 were considered valid and timely. The opt-outs constitute less than 1% of the class. As of the filing of the instant motion, the settlement administrator received 886 Claim Forms. Of the 886 claim forms received, four were untimely. Of the 882 class members who submitted timely claim forms, 91 submitted claim forms with incomplete information and were sent a letter and asked to supply the missing information. Of those 91, 80 resolved the deficiencies and 11 remain deficient. Therefore, the settlement administrator received 871 claim forms that are considered valid and timely.

PROCEDURAL HISTORY

Plaintiff Simon Garcia filed this action in this Court on February 23, 2010. GTI filed an answer to the complaint on April 19, 2010.

Plaintiff Garcia filed a Motion for Partial Summary Judgment on his PAGA claim. Plaintiffs also moved for class certification. These motions were pending at the time the parties reached a settlement.

The parties engaged in extensive formal and informal discovery efforts. They exchanged numerous sets of written discovery, thousands of pages of documentary evidence, and took and defended 16 depositions, including those of the class representatives, several of GTI's executives, and putative members of the settlement class. Class counsel also interviewed dozens of putative class members and obtained written statements from those persons.

On March 23, 2012, Plaintiffs filed a Notice of Settlement. Plaintiffs moved for preliminary approval of the class action settlement. The Court granted the motion, certified the class, and set a final approval and fairness hearing.

Plaintiffs filed the instant motion for final approval of the class action settlement. The motion is unopposed. This Court conducted a fairness hearing on October 29, 2012.

SETTLEMENT AGREEMENT

Terms

Under the Settlement, GTI agreed to pay a maximum of $3.7 million. This figure is defined by the Settlement as the Gross Settlement Amount. The Net Settlement Amount consists of the Gross Settlement Amount less: (1) court-approved attorneys' fees not to exceed 33% of the Gross Settlement Amount; (2) reasonable litigation expenses; (3) incentive awards to the Plaintiffs; (4) costs of administration; and (5) PAGA penalties payable to the California Labor Workforce and Development Agency ("LWDA"). Under the terms of the Settlement, GTI agreed to pay the Class at least 60% of the Net Settlement Amount without reversion. The parties agreed that if the aggregate of the individual amounts claimed by the class members represented less than 60% of the Net Settlement Amount, the difference would be paid to a court-approved Cy Pres recipient. As of the filing of the instant motion, the class members have claimed approximately 65% of the Net Settlement Amount. Therefore, the parties have not designated a Cy Pres recipient.

Each member of the Settlement Class is eligible to receive his or her individual share of the Net Settlement Amount based on the number of pay periods worked by each member of the Settlement Class during the class period. The primary benefit of this formula is that it relies upon objective evidence of the term of employment, which class members can easily review and confirm for themselves.

GTI provided the settlement administrator with an electronic file which included the names of the class members, their last known mailing address, and the number of weeks worked by each class member falling within the scope of the class definition. Each Settlement Class member's individual share of the Net Settlement Amount is net of any taxes and required withholdings, as defined by the Settlement.

Labor Workforce and Development Agency Payment

In satisfaction of the claims arising under Plaintiff Garcia's PAGA claims, the parties have agreed that GTI will allocate $10,000 to PAGA claims, with $7,500 paid to the California Labor and Workforce Development Agency and $2,500 distributed to the participating members of the Settlement Class on a pro-rata basis.

Claims Administration

The parties agreed that the Gross Settlement Amount includes $25,000 for the costs associated with the administration of this Settlement by Rust Consulting, Inc. Rust's total costs of administration totaled $35,155.27, less a discount of $5,155.27. The parties have agreed to satisfy the remaining administration costs from the Net Settlement Amount on a pro-rata basis from those Class Members who timely submitted Claim Forms.

Attorneys' Fees and Expenses

The parties have agreed that an award of attorneys' fees not to exceed thirty three percent (33%) of the Gross Settlement Amount, or $1,221,000 should be awarded. The parties further agree to an award of costs and expenses not to exceed $100,000.

Class Representative Incentive Awards

The parties agreed that Plaintiffs shall receive an incentive award of $15,000 each, in addition to their individual shares of the Settlement, in compensation for their services as Class Representatives.

Scope of the Release

The scope of the release by the Class Members (other than those who elect not to participate in the Settlement), defined in the Settlement as the "Released Claims," tracks the scope of Plaintiffs' allegations. The release for Class Representatives ...


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