United States District Court, E.D. California
ORDER GRANTING PLAINTIFF'S MOTION FOR PRELIMINARY APPROVAL OF CLASS SETTLEMENT
(Docs. 24, 31)
JENNIFER L. THURSTON, Magistrate Judge.
Plaintiff Kathy Torchia requests preliminary approval of the class settlement with Defendant W.W. Grainger, Inc. (Doc. 24.) By and through this motion, Plaintiff seeks: (1) conditional certification of the settlement class; (2) preliminary approval of the settlement; (3) appointment of Plaintiff as the class representative; (4) appointment of S. Brett Sutton and Jared Hague as Class Counsel; (5) approval of the class notice and related materials; (6) appointment of Simplurius, Inc., as the settlement administrator; and (7) scheduling for final approval of the settlement. (Doc. 29 at 2-3.) Defendant does not oppose the motion for preliminary approval of the class settlement.
The Court has considered the proposed settlement between the parties, and the proposed Notice, Claim Form, and Elusion Form. On August 13, 2014, the Court heard the oral arguments of counsel. For the following reasons, Plaintiff's motion for preliminary approval of class settlement is GRANTED.
FACTUAL AND PROCEDURAL HISTORY
Plaintiff initiated this action by filing a complaint in Kern County Superior Court on May 31, 2013. (Doc. 1 at 11.) She brought her claims "on behalf of herself and all other similarly situated current and former employees of [Defendant]." ( Id. at 13.) Defendant filed a Notice of Removal on September 6, 2013, thereby initiating the matter before this Court. (Doc. 1.) Defendant asserted the Court has original jurisdiction over the action pursuant to the Class Action Fairness Act, because the parties are diverse and the matter in controversy exceeded $5 million. ( Id. at 3-4.)
Plaintiff filed a First Amended Complaint on November 12, 2013. (Doc. 14.) Plaintiff asserts Defendant is liable for (1) failure to pay minimum wages in violation of Cal. Labor Code §§ 1197, 1194 and 1194.2; (2) failure to pay overtime in violation of Cal. Labor Code § 510; (3) failure to provide meal periods or additional wages in lieu thereof; (4) failure to provide rest periods or additional wages in lieu thereof; (5) failure to issue accurate wage statements in violation of Cal. Labor Code § 226; (6) failure to reimburse employees for business related expenses in violation of Cal. Labor Code § 2802; (7) failure to timely pay wages due to upon termination in violation of Cal. Labor Code §§ 201, 202 and 203; (8) and violations of California's unfair competition laws, as set forth in Cal. Bus & Prof. Code § 17200, et seq. ( See id. at 12-26.) Further, Plaintiff sought penalties pursuant to the Private Attorneys General Act ("PAGA") for the alleged Labor Code violations. ( Id. at 26.) Defendant filed its answer on December 13, 2013. (Doc. 15.)
The Court issued its scheduling order governing the action on January 9, 2014. (Doc. 18.) The parties engaged in discovery, and Plaintiff "issued formal written discovery requests in or about February 2014." (Doc. 25 at 11.) In response to the requests for discovery, Defendant "produced extensive electronic data and hard copy documents equivalent to thousands of pages of documentary evidence." ( Id. ) In addition, Plaintiff took the deposition of Brian Williams, Defendant's Regional Vice President of Customer Service and Defendant's person most knowledgeable pursuant to Federal Rule of Civil Procedure 30(b)(6). ( Id. )
The parties engaged in private mediation with Mark Rudy on May 15, 2014. (Doc. 25 at 11.) Although the matter was not resolved on that date, the parties continued to work with Mr. Rudy, and "ultimately gave their tentative agreement to the terms of a settlement on or about May 28, 2014." ( Id. at 12.) Thereafter, Plaintiffs filed the motion for preliminary approval of class settlement on July 16, 2014 (Doc. 24), which is now pending before the Court.
THE PROPOSED SETTLEMENT
Pursuant to the proposed settlement ("the Settlement"), the parties agree to a gross settlement amount not to exceed $2, 750, 000. (Doc. 26 at 19, Settlement ¶¶ 22-23.) Defendant agrees to fund the Settlement by providing funds to the Claims Administrator fourteen days after the Court holds a Final Approval and Fairness Hearing and issues a final order approving the terms of the Settlement. ( Id. at 19, 26, Settlement ¶¶ 19, 48.)
I. Payment Terms
The settlement fund will cover payments to class members with additional compensation to the Class Representative. (Doc. 25 at 2; Doc. 26 at 19.) In addition, the Settlement provides for payments to Class Counsel for attorneys' fees and expenses, to the Settlement Administrator, and the California Labor & Workforce Development Agency. (Doc. 26 at 34, Settlement ¶ 61.) Specifically, the settlement provides for the following payments from the gross settlement amount:
The Class Representative will receive up to $20, 000;
Class counsel will receive no more than $916, 575 for attorneys' fees, which equals 33.33% of the gross settlement amount, and $10, 000 for expenses;
The California Labor and Workforce Development Agency shall receive $7, 500 from the total award of $10, 000 under PAGA; and
The Settlement Administrator will receive up to $22, 000 for fees and expenses.
(Doc. 26 at 29-30, Settlement ¶¶ 53-56.) After these payments have been made, the remaining money ("Net Settlement Amount") will be distributed as settlement shares to Class Members. (Doc. 26 at 20, 34, Settlement ¶¶ 28, 61.)
To receive a settlement share from the Net Settlement Amount, a class member must submit a timely and valid claim form. (Doc. 26 at 32, Settlement ¶ 59.) Settlement shares will be calculated based upon the following formula:
The Settlement Administrator shall divide the Net Settlement Amount by the total number of pay periods Class Members were employed during the Class Period, in order to determine the amount to which each Class Member is entitled for each pay period he or she was employed by Grainger within the Class Period (the "Weekly Amount"). The Settlement Administrator will multiply the Weekly Amount by the total number of pay periods that each Class Member was employed by Grainger during the Class Period.
(Doc. 26 at 35, Settlement ¶ 62.) Consequently, the exact amount each receives depends upon how many class members submit timely and valid claim forms.
The Settlement provides that Plaintiffs and Class Members, other than those who elect not to participate in the Settlement, at the time final judgment is entered, shall release Defendant from the claims arising in the class period. Specifically, the release for class members provides:
"Released Claims" shall mean any and all claims, demands, rights, debts, obligations, costs, expenses, wages, liquidated damages, statutory damages, penalties, liabilities, and/or causes of action of any nature and description whatsoever, whether known or unknown, at law or in equity, whether concealed or hidden, whether under federal, state, and/or local law, statute, ordinance, regulation, common law, or other source of law, which were asserted in the Action or could have been asserted against the Released Patties arising out of, derived from, or related to the facts and circumstances alleged in the Complaint.
(Doc. 26 at 21, Settlement ¶ 33; Doc. 25 at 13.)
The release for Plaintiff encompasses more claims than the release of Class Members, providing the release of any claims that could have arisen during the course of her employment with Defendant. (Doc. 26 at 39, Settlement ¶ 75; Doc. 25 at 14.) Specifically, Plaintiff's release provides:
The Named Plaintiff, on behalf of herself and her heirs, executors, administrators, and representatives, shall and does hereby forever release, discharge and agree to hold harmless the Released Parties from any and all charges, complaints, claims, liabilities, obligations, promises, agreements, controversies, damages, actions, causes of action, suits, rights, demands, costs, losses, debts and expenses (including attorney fees and costs), known or unknown, at law or in equity, which she may now have or may have after the signing of this Stipulation, against Defendant arising out of or in any way connected with her employment with Grainger including, the Released Claims, claims that were asserted or could have been asserted in the Complaint, and any and all transactions, occurrences, or matters between the parties occurring prior to the Preliminary Approval Date.
( Id. ) Thus, claims released by Plaintiff, but not Class Members, include any claims arising under the Americans with Disabilities Act, Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 1981, and the Employee Retirement Income Security Act. ( Id. at 40, ¶ 45.)
III. Objections and Opt-Out Procedure
Any class member who wishes may file objections or elect not to participate in the Settlement. The Notice of Proposed Settlement ("the Notice") explains the procedures to claim a share of the settlement, object to the settlement, or elect not to participate in the Settlement. (Doc. 25 at 14; Doc. 26 at 52-58.) The Notice explains the claims that are released as part of the Settlement. (Doc. 26 at 51-52). With the Notice, each class member will receive the Claim Form, which will include number of pay periods each the class member was employed by Defendant and an estimate of the amount the class member will receive under the Settlement. ( Id. at 57; Doc. 26 at 32, Settlement ¶ 58.)
PRELIMINARY APPROVAL OF A CLASS SETTLEMENT
I. Legal Standard
When parties settle the action prior to class certification, the Court has an obligation to "peruse the proposed compromise to ratify both the propriety of the certification and the fairness of the settlement." Staton v. Boeing Co., 327 F.3d 938, 952 (9th Cir. 2003). Preliminary approval of a class settlement is generally a two-step process. First, the Court must assess whether a class exists. Id. (citing Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 620 (1997)). Second, the Court must "determine whether the proposed settlement is fundamentally fair, adequate, and reasonable." Id. (citing Hanlon v. Chrysler Corp., 150 F.3d 1011, 1026 (9th Cir. 2998)). The decision to approve or reject a settlement is within the Court's discretion. Hanlon, 150 F.3d at 1026.
II. Conditional Certification of a Settlement Class
Class certification is governed by Rule 23 of the Federal Rules of Civil Procedure, which provides that "[o]ne or more members of a class may sue or be sued as representative parties on behalf of all." Fed.R.Civ.P. 23(a). Under the terms of the Settlement, the proposed class is comprised of "All current and former employees who were employed by W.W. Grainger, Inc. in California at any time from May 31, 2009 through the Preliminary Approval Date who have not settled all of the claims asserted herein." (Doc. 29 at 3.) Plaintiffs seek conditional approval of the class for settlement pursuant to Fed.R.Civ.P. 23(c)(1), under which the Court may "make a conditional determination of whether an action should be maintained as a class action, subject to final approval at a later date." (Doc. 25at 15) (quoting Fry v. Hayt, Hayt & Landau, 198 F.R.D. 461, 466 (E.D. Pa. 2000)).
Parties seeking class certification bear the burden of demonstrating the elements of Rule 23(a) are satisfied, and "must affirmatively demonstrate... compliance with the Rule." Wal-Mart Stores, Inc. v. Dukes, 131 S.Ct. 2541, 2551 (2011); Doninger v. Pacific Northwest Bell, Inc., 563 F.2d 1304, 1308 (9th Cir. 1977). If an action meets the prerequisites of Rule 23(a), the Court must consider whether the class is maintainable under one or more of the three alternatives set forth in Rule 23(b). Narouz v. Charter Communs., LLC, 591 F.3d 1261, 1266 (9th Cir. 2010).
A. Rule 23(a) Requirements
The prerequisites of Rule 23(a) "effectively limit the class claims to those fairly encompassed by the named plaintiff's claims." General Telephone Co. of the Southwest. v. Falcon, 457 U.S. 147, 155-56 (1982). Certification of a class is proper if:
(1) the class is so numerous that joinder of all members is impracticable; (2) there are questions of law or fact common to the class; (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and (4) the representative parties will fairly and adequately protect the interests of the class.
Fed. R. Civ. P. 23(a). These prerequisites are generally referred to as numerosity, commonality, typicality, and adequacy of representation. Falcon, 457 U.S. at 156.
A class must be "so numerous that joinder of all members is impracticable." Fed.R.Civ.P. 23(a)(1). This requires the Court to consider "specific facts of each case and imposes no absolute limitations." General Telephone Co. v. EEOC, 446 U.S. 318, 330 (1980). Although there is not a specific numerical threshold, joining more than one hundred plaintiffs is impracticable. See Immigrant Assistance Project of Los Angeles Cnt. Fed'n of Labor v. INS, 306 F.3d 842, 869 (9th Cir. 2002) ("find[ing] the numerosity requirement... satisfied solely on the basis of the number of ascertained class members... and listing thirteen cases in which courts certified classes with fewer than 100 members"). Here, after reviewing Defendants' ...