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Shaunetta Eddings, Individually and On Behalf of A Class of Similarly v. Health Net

January 16, 2013

SHAUNETTA EDDINGS, INDIVIDUALLY AND ON BEHALF OF A CLASS OF SIMILARLY SITUATED INDIVIDUALS, PLAINTIFF,
v.
HEALTH NET, INC., ET AL. DEFENDANTS.



The opinion of the court was delivered by: Josephine Staton Tucker United States District Judge

O

ORDER GRANTING PLAINTIFF'S MOTION FOR PRELIMINARY APPROVAL OF SETTLEMENT AND SETTING A FAIRNESS HEARING FOR FRIDAY, MAY 31, 2013, AT 2:30 P.M. (Docs. 212, 213.)

I.INTRODUCTION

Before the Court is Plaintiff Shaunetta Eddings' ("Plaintiff's") unopposed Motion for Preliminary Approval of Settlement ("Motion"). (Doc. 212.) The Motion asks the Court to preliminarily approve the proposed settlement, approve the form and method of class notice, and set the schedule for final settlement approval. The Court finds this matter appropriate for decision without oral argument. Fed. R. Civ. P. 78(b); C.D. Cal. R.. 7-15. Accordingly, the hearing set for January 18, 2013, at 2:30 p.m. is VACATED. Having reviewed and considered the papers, the Court GRANTS Plaintiff's Motion, orders certain modifications to be made, particularly as to the notice form to class members, and sets a fairness hearing for Friday, May 31, 2013, at 2:30 p.m.

II.BACKGROUND

On October 6, 2010, Plaintiff filed the operative complaint, the Second Amended Complaint ("SAC"), against Defendants Health Net, Inc.; Health Net of California, Inc.; Health Net Federal Services, LLC; Managed Health Network, Inc.; Health Net of the Northeast, Inc.; Health Net Pharmaceutical Services, Inc. (collectively "Defendants"). Plaintiff's SAC asserted that Defendants violated the Fair Labor Standards Act ("FLSA") and various California state labor laws by failing to pay Plaintiff, and other similarly situated employees, for all time worked, based on time worked "off-the-clock" and Defendants' alleged rounding of timekeeping entries. (Mem. P. & A. ISO Mot. ("Memo.") at 2, Doc. 212-1.).

On February 23, 2011, the Court conditionally certified a nationwide class under the FLSA based solely on Defendants' timekeeping and rounding policies. (Doc. 109.) The Court also certified a class under Plaintiff's state law claims for failure to pay straight-time wages, failure to pay overtime wages, failure to pay all compensation due and owing at termination, failure to provide accurate wage statements, and violation of California Business & Professions Code § 17200, et seq. (Id.) Plaintiff's other claims were not certified and are retained by her in her individual capacity. (Id.)

On March 23, 2012, the Court granted in part and denied in part Defendants' motion for partial summary judgment. (Doc. 202.) The Court granted summary judgment against claims arising from the rounding system that was in place after July 19, 2008, and denied summary judgment on claims arising from the timekeeping system between March 10, 2006, to July 18, 2008, and also denied the motion as to the claim for failure to timely pay wages due at termination pursuant to California Labor Code § 203. (Id.) Plaintiff then filed the instant Motion on September 18, 2012.

Terms of the Settlement Agreement

Defendants have agreed to pay $600,000 as the total settlement fund ("Settlement Fund"), without admitting any liability, and to deposit the money with a settlement administrator following approval.*fn1 (Jason M. Lindner Decl. ("Lindner Decl. II") Ex. A ("Settlement Agreement") ¶ 45, Doc. 216-2.) Class Members are to be given notice of the Settlement, including an estimate of their recovery, and they have 45 days from the time of the initial mailing of the Class Notice to opt-out of the settlement. (Settlement Agreement

¶¶ 48-51.) Each Class Member who does not opt out will receive a cash payment, with a minimum payment of $25. (Id. ¶ 45(d)(v).) Each Class Member's share of the Settlement is based on a pro rata share of the funds based on that Class Member's time worked within the relevant time period, his or her rate of pay, and multipliers including whether he or she worked in California, whether he or she opted in to the FLSA claim, and his or her standing as a terminated employee within the applicable statute of limitations period to maintain a claim for penalties under California Labor Code § 203. (Id. ¶ 45(d).)

The Settlement further provides that funds remaining after distribution to Class Members-including checks uncashed after 320 days and checks returned as undeliverable-are to be distributed in cy pres to the Legal Aid Society-Employment Law Center. (Id. ¶ 45(e).)

Under the Settlement, Plaintiff's counsel may apply for up to one-third of the Settlement Fund (i.e., $200,000), and Defendants agree to not oppose such a motion. (Id. ¶ 45(a).) Plaintiff's counsel also has the right to seek an "enhancement award" of up to $6,000 for Plaintiff Shaunetta Eddings, based on her service as class representative and in consideration for her execution of a general release. (Id. ¶ 45(b).)

Class Members who do not opt-out agree to release Defendants from liability for all claims related to rounding of time, including self-rounding, during the period before July 18, 2008 for unpaid wages, excluding the FLSA claims of Class Members who did not affirmatively opt-in to this lawsuit. (Id. ¶ 43(a).)

III. PRELIMINARY APPROVAL OF THE PROPOSED SETTLEMENT

Rule 23(e)(2) requires the Court to determine whether the proposed settlement is fair, reasonable, and adequate. Fed. R. Civ. P. 23(e)(2). In turn, review of a proposed settlement typically proceeds in two stages, with preliminary approval followed by a final fairness hearing. Federal Judicial Center, Manual for Complex Litigation, § 21.632 (4th ed. 2004).

To determine whether a settlement agreement is fair, adequate, and reasonable, "a district court must [ultimately] consider a number of factors, including: the strength of plaintiffs' case; the risk, expense, complexity, and likely duration of further litigation; the risk of maintaining class action status throughout the trial; the amount offered in settlement; the extent of discovery completed, and the stage of the proceedings; the experience and views of counsel; the presence of a governmental participant;*fn2 and the reaction of the class members to the proposed settlement." Staton v. Boeing Co., 327 F.3d 938, 959 (9th Cir. 2003) (internal citation and quotation marks omitted). "The relative degree of importance to be attached to any particular factor will depend upon and be dictated by the nature of the claims advanced, the types of relief sought, and the unique facts and circumstances presented by each individual case." Officers for Justice v. Civil Serv. Comm'n, 688 F.2d 615, 625 (9th Cir. 1982). "It is the settlement taken as a whole, rather than the individual component parts, that must be examined for overall fairness, and the settlement must stand or fall in its entirety." Staton, 327 F.3d at 960 (quoting Hanlon v. Chrysler Corp., 150 F.3d 1011, 1026 (9th Cir. 1998) (internal quotation marks omitted)).

Moreover, at this preliminary stage and because class members will receive an opportunity to be heard on the settlement, "a full fairness analysis is unnecessary . . . ." Alberto v. GMRI, Inc., 252 F.R.D. 652, 665 (E.D. Cal. 2008) (internal quotation marks omitted). Instead, preliminary approval and notice of the settlement terms to the proposed class are appropriate where "[1] the proposed settlement appears to be the product of serious, informed, non-collusive negotiations, [2] has no obvious deficiencies, [3] does not improperly grant preferential treatment to class representatives or segments of the class, and [4] falls with the range of possible approval . . . ." In re Tableware Antitrust Litig., 484 F. Supp. 2d 1078, 1079 (N.D. Cal.2007) (internal quotation and citation omitted) (emphasis added); see also Acosta v. Trans Union, LLC, 243 F.R.D. 377, 386 (C.D. Cal. 2007) ("To determine whether preliminary approval is appropriate, ...


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