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Newman v. Crst Van Expedited, Inc.

United States District Court, S.D. California

April 30, 2014

CHARLES SMITH; HECTOR CASAS; and BARRY NEWMAN, individually and on behalf of all others similarly situated, Plaintiffs,
v.
CRST VAN EXPEDITED, INC. and DOES 1 through 50, Defendants.

ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFFS' MOTION TO ENFORCE SETTLEMENT AGREEMENT [DKT NO. 101]

ROGER T. BENITEZ, District Judge.

Presently before the Court is Plaintiffs' Motion to Enforce Settlement Agreement. (Docket No. 101.) For the reasons stated below, the Motion is GRANTED IN PART AND DENIED IN PART. Defendant is ORDERED to submit documentation of its compliance with the Settlement Agreement, as detailed below.

BACKGROUND

This is a class action brought by truck drivers against their employer for failure to pay minimum wages during certain stages of the company's driver training program ("DTP") and related violations of California Business and Professions Code Section 17200. The class representatives are Charles Smith, Hector Casas, and Barry Newmann, and the defendant trucking company is CRST Van Expedited, Inc. ("CRST").

The parties agreed to a proposed settlement that Judge Irma E. Gonzalez preliminarily approved on April 23, 2012. On September 24, 2012, the parties moved for final approval of the settlement. The settlement provided the class with a financial benefit of more than $11, 600, 000. This included a non-reversionary $2, 625, 000 cash payment to class members and over $9, 000, 000 in outstanding debt for training and related expenses under the Driver Employment Contracts that CRST agreed to relieve. In addition, CRST agreed to significant changes to its policies and training program, including a full disclosure form provided to employees prior to enrollment in the training program, temporary employee status for drivers when tested by the Department of Motor Vehicles, payment for drivers during orientation, payment by a split mile basis rather than $50 per day for over-the-road training, and a $250 bonus for all drivers who remain employed eight months after completion of the training program. On January 14, 2013, Judge Gonzalez granted the motion for final approval of class action settlement.

Presently before the Court is Plaintiffs' Motion to Enforce Settlement Agreement. (Docket No. 101.)

DISCUSSION

The Court approved and adopted the Settlement Agreement, maintaining jurisdiction for enforcement purposes. (Settlement Agr. ¶ XII(18).) This Court has the authority to enforce the Settlement Agreement. See Callie v. Near, 829 F.2d 888, 890 (9th Cir. 1987).

I. REQUEST FOR DOCUMENTATION OF COMPLIANCE WITH THE SETTLEMENT AGREEMENT

Plaintiffs argue that they cannot determine whether CRST has implemented several of the provisions of the Settlement Agreement. Class Counsel seeks documentation of CRST's compliance with the disputed provisions of the Settlement Agreement. Class Counsel argues that although CRST agreed to provide a declaration to Class Counsel within 30 days of the date the changes were implemented, or by June 14, 2013, they did not receive the required declaration.

Each disputed provision of the Settlement Agreement will be addressed in turn.

A. Collection of Debts from Settlement Class Members

Class Counsel argues that it cannot determine whether the debt forgiveness portion of the Settlement Agreement has been implemented. The Settlement Agreement provides:

Defendant will not enforce the alleged contractual rights it believes it has to receive payment for training and related expenses owed by Settlement Class Members, which Defendant estimates is an amount in excess of $6, 900, 000. The amounts owed by the Settlement Class Members will be shown on CRST's books as satisfied, and, if notified as to any issues related to those amounts, Defendant will confirm that the amounts owed have been satisfied.... In addition, within 30 days after the Effective Date, Defendant will notify its third-party collection agencies that the outstanding amounts owed by the Settlement Class Members in the approximate amount of $9, 000, 000 have been satisfied and that further collection actions shall cease all collection efforts as of the Effective Date.... Defendant shall cause its third-party collection agencies to notify the credit reporting agencies that the outstanding amounts have been satisfied and that any negative references on the credit reports of the Contract Students arising out of those outstanding amounts shall be removed.

(Settlement Agr. § IV.2.a.)

As evidence of its compliance with this provision of the Settlement Agreement, CRST submits a declaration by Eric A. Baker, General Counsel of CRST. Baker testified:

CRST ceased all collection efforts on amounts owed by Settlement Class Members in connection with training and related expenses. CRST considers the outstanding amounts owed in the approximate amount of $9 million to have been satisfied. Within 30 days of February 14, 2013, CRST notified its third-party collection agency, United Resource Systems, Inc. that (1) all further collection actions were to cease effective March 16, 2013, 30 days after February 14, 2013; (2) all amounts collected from Settlement Class Members to satisfy debts for training and related expenses after February 14, 2013 were to be returned; and (3) that credit agencies were to be notified that the ...

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