United States District Court, E.D. California
KIMBERLY J. MUELLER, District Judge.
Before the court is plaintiff Tysheika Ogbuehi's ("plaintiff") unopposed motion for an order preliminarily approving a class settlement and provisionally certifying the settlement class. ECF No. 21. The court submitted the motion without oral argument. ECF No. 23. After carefully considering the motion and the applicable law, the court GRANTS plaintiff's motion for the reasons set forth below.
I. FACTUAL AND PROCEDURAL BACKGROUND
This case arises from the alleged failure of defendant Comcast Cable Communications Management, LLC (incorrectly named as Comcast of California/Colorado/ Florida/Oregon, Inc.) ("defendant") to properly compensate plaintiff and other employees under the Fair Labor Standards Act ("FLSA"), the California Labor Code, California Industrial Welfare Commission order provisions and the California Business and Professions Code.
On April 5, 2013, defendant initiated this action in this court by filing a notice of removal of plaintiff's first amended class action complaint for damages against defendant. ECF No. 1; see also ECF No. 1-2. On April 9, 2014, the parties stipulated to granting plaintiff leave to file a second amended complaint. ECF No. 14. The court approved the stipulation on April 11, 2014, ECF No. 15, and plaintiff filed her second amended complaint on that date. ECF No. 16.
The second amended complaint alleges as follows. Plaintiff and other similarly situated employees were employed in the position of Virtual Customer Account Executive with defendant. Second Am. Compl. ("SAC") ¶ 4, ECF No. 16. In this position, the employees primarily worked from home. Id. Defendant classified plaintiff and other Virtual Customer Account Executives as non-exempt, hourly employees. Id. ¶ 11. Plaintiff and other employees worked more than eight hours in a day and more than forty hours in a workweek, but defendant failed to pay them overtime wages. Id. Defendant also required Virtual Customer Account Executives to work "off the clock" but did not pay them for this work. Id. Plaintiff brings nine separate claims for relief: (1) failure to indemnify in violation of the California Labor Code; (2) failure to provide meal periods in violation of the California Labor Code; (3) failure to provide rest periods in violation of the California Labor Code; (4) failure to pay wages in violation of the FLSA; (5) failure to pay employees minimum and overtime wages for all hours worked in violation of the California Labor Code; (6) failure to pay waiting time penalties in violation of the California Labor Code; (7) failure to provide accurate written wage statements in violation of the California Labor Code; (8) unfair competition under the California Business & Professions Code; and (9) recovery of civil penalties under the California Labor Code. SAC at 10-26.
On July 11, 2014, following the parties' participation in private mediation, plaintiff filed the instant motion for preliminary approval of class action settlement. ECF No. 21.
II. STANDARDS AND PROCESS FOR CLASS SETTLEMENT APPROVAL
"Courts have long recognized that settlement class actions present unique due process concerns for absent class members.'" In re Bluetooth Headset Prods. Liab. Litig. ( Bluetooth ), 654 F.3d 935, 946 (9th Cir. 2011) (quoting Hanlon v. Chrysler Corp., 150 F.3d 1011, 1026 (9th Cir. 1998)). To protect absent class members' due process rights, Rule 23(e) of the Federal Rules of Civil Procedure permits a class action to be settled "only with the court's approval" "after a hearing and on a finding" the agreement is "fair, reasonable, and adequate." Moreover, if "the settlement agreement is negotiated prior to formal class certification, '" then "there is an even greater potential for a breach of fiduciary duty owed the class.'" Radcliffe v. Experian Info. Solutions Inc., 715 F.3d 1157, 1168 (9th Cir. 2013) (alteration omitted) (emphasis omitted) (quoting Bluetooth, 654 F.3d at 946). "Accordingly, such agreements must withstand an even higher level of scrutiny for evidence of collusion or other conflicts than is ordinarily required under Rule 23(e) before securing the court's approval as fair." Bluetooth, 654 F.3d at 946 (citations omitted). "Judicial review must be exacting and thorough." MANUAL FOR COMPLEX LITIGATION (FOURTH) § 21.61 (2004).
"Review of a proposed class action settlement generally involves two hearings." Id. § 21.632. First, the parties submit the proposed terms of the settlement so the court can make "a preliminary fairness evaluation, " and if the parties move "for both class certification and settlement approval, the certification hearing and preliminary fairness evaluation can usually be combined." Id. Then, "[t]he judge must make a preliminary determination on the fairness, reasonableness, and adequacy of the settlement terms and must direct the preparation of notice of the certification, proposed settlement, and the date of the final fairness hearing." Id. After the initial certification and notice to the class, the court then conducts a second fairness hearing before finally approving any proposed settlement. Narouz v. Charter Commc'ns, LLC, 591 F.3d 1261, 1267 (9th Cir. 2010).
Regarding class certification, the parties' stipulation that the class should be certified is not sufficient; instead the court must pay "undiluted, even heightened, attention" to class certification requirements. Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 620 (1997); but see NEWBERG ON CLASS ACTIONS § 11:28 (4th ed.) ("Since Amchem, approval of settlement classes is generally routine and courts are fairly forgiving of problems that might hinder class certification were the case not to be settled." (collecting cases)). Regarding notice to the class, the court must ensure the class members "receive the best notice that is practicable under the circumstances.'" Wal-Mart Stores, Inc. v. Dukes, 131 S.Ct. 2541, 2558 (2011) (quoting FED. R. CIV. P. 23(c)(2)(B)).
A. Class Certification
Plaintiff seeks certification of the following class for settlement purposes:
[A]ll persons employed by Comcast in the State of California from February 26, 2009 through and including the implementation of the California Call Center Closure, who held positions as Virtual Customer Account Executives, and were not paid a severance payment that was offered as a result of the California Call Center Closure.
Spivak Decl. Ex. 1, ¶ 2.7, ECF No. 21-2 ("Settlement Agreement"). "The Class includes the estates of such persons and, if any such person is incompetent or deceased, the legal representative or successor in interest as evidenced by reasonable verification." Id.
A party seeking to certify a class must demonstrate that it has met the requirements of Rule 23(a) and at least one of the requirements of Rule 23(b). Amchem, 521 U.S. at 614; Ellis v. Costco Wholesale Corp., 657 F.3d 970, 979-80 (9th Cir. 2011). Although the parties in this case have stipulated that a class exists for purposes of settlement, the court must nevertheless undertake the Rule 23 inquiry independently, both at this stage and at the later fairness hearing. West v. Circle K Stores, Inc., No. CIV. S-04-0438 WBS GGH, 2006 WL 1652598, at *2 (E.D. Cal. June 13, 2006).
Under Rule 23(a), before certifying a class, the court must be satisfied that:
(1) the class is so numerous that joinder of all members is impracticable (the "numerosity" requirement); (2) there are questions of law or fact common to the class (the "commonality" requirement); (3) the claims or defenses of representative parties are typical of the claims or defenses of the class (the "typicality" requirement); and (4) the representative parties will fairly and adequately protect the interests of the class (the "adequacy of representation" requirement).
Collins v. Cargill Meat Solutions Corp., 274 F.R.D. 294, 300 (E.D. Cal. 2011) (quoting In re Itel Sec. Litig., 89 F.R.D. 104, 108 (N.D. Cal. 1981)); accord FED. R. CIV. P. 23(a).
The court must also determine whether the proposed class satisfies Rule 23(b)(3), on which plaintiff relies in this action. To meet the requirements of this subdivision of the rule, the court must find "questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and effectively adjudicating the controversy.'" Dukes, 131 S.Ct. at 2558 (quoting Fed.R.Civ.P. 23(b)(3)). "The matters pertinent to these findings include: (A) the class members' interests in individually controlling the prosecution or defense of separate actions; [and] (B) the extent and nature of any litigation concerning the controversy already begun by or against class members...." Fed.R.Civ.P. 23(b)(3)(A)-(B).
Although there is no absolute numerical threshold for numerosity, courts have approved classes consisting of thirty-nine, sixty-four and seventy-one plaintiffs. Murillo v. Pac. Gas & Elec. Co., 266 F.R.D. 468, 474 (E.D. Cal. 2010) (citing Jordan v. L.A. Cnty., 669 F.2d 1311, 1319 (9th Cir. 1982), vacated on other grounds, 459 U.S. 810). When a class size is small, courts consider factors such as "the geographical diversity of class members, the ability of individual claimants to institute separate suits, and whether injunctive or declaratory relief is sought." Jordan, 669 F.2d at 1319.
Here, plaintiff states the potential class consists of approximately eighty-eight Virtual Customer Account Executives employed by defendant. Pl.'s Mem. P. & A. in Supp. Mot. Prelim. Approval Class Settlement ("Mem.") at 16, ECF No. 21-1. Plaintiff argues numerosity is satisfied "[b]ecause it would be impracticable to join" the potential class members with relatively small claims "as plaintiffs in a single lawsuit." Id. at 16.
The judicial efficiency of addressing class claims in one action weighs in favor of class certification. See Harris v. Palm Springs Alpine Estates, Inc., 329 F.2d 909, 913-14 (9th Cir. 1967) (explaining "impracticability does not mean impossibility but only the difficulty or inconvenience of joining all members of the class" (internal quotations and citation omitted)); see also McCluskey v. Trs. of Red Dot Corp. Emp. Stock Ownership Plan & Trust, 268 F.R.D. 670, 673-76 (W.D. Wash. 2010) (finding numerosity satisfied for class of twenty-seven members after considering several factors including judicial economy and the ability of the members to file individual suits). Accordingly, the numerosity requirement has been met.
To satisfy the commonality requirement, plaintiff must do more than show class members "have all suffered a violation of the same provision of law." Dukes, 131 S.Ct. at 2551. The claims must depend upon a common contention that "must be of such a nature that it is capable of classwide resolution-which means that determination of its truth or falsity will resolve an issue that is central to the validity of each one of those claims in one stroke." Id. It is not so much that the class raises common questions: what is necessary is "the capacity of a classwide proceeding to generate common answers....'" Id. (emphasis omitted). "[T]he merits of the class members' substantive claims are often highly relevant when determining whether to certify a class." Ellis, 657 F.3d at 981.
Here, plaintiff argues the common question shared by potential class members includes, inter alia, whether they were not compensated for preliminary and postliminary work, provided with accurate written wage statements, timely paid earned wages and failed to receive meal and rest breaks or mileage reimbursement. Mem. at 16-17. All the potential class members were employed by defendant as Virtual Customer Account Executives and were allegedly subject to the same general wage and hour policies. Id. at 16. If the policies are unlawful, each class member will have been injured by defendant's conduct. This satisfies the requirement that plaintiff's claims "depend upon a common contention... [that is] of such a nature that it is capable of classwide resolution." Dukes, 131 S.Ct. at 2551. Accordingly, the commonality requirement has been met.
"[T]he commonality and typicality requirements of Rule 23(a) tend to merge'" because both act "as guideposts for determining whether under the particular circumstances maintenance of a class action is economical and whether the named plaintiff's claim and the class claims are so interrelated that the interests of the class members will be fairly and adequately protected in their absence.'" Dukes, 131 S.Ct. at 2551 n.5 (quoting Gen. Tel. Co. of Sw. v. Falcon, 457 U.S. 147, 157-58 n.13 (1982)). A court resolves the typicality inquiry by considering "whether other members have the same or similar injury, whether the action is based on conduct which is not unique to the named plaintiffs, and whether other class members have been injured by the same course of conduct." Ellis, 657 F.3d at 984 (internal quotations and citation omitted); Morales v. Stevco, Inc., No. 1:09-cv-00704 AWI JLT, 2011 WL 5511767, at *6 (E.D. Cal. Nov. 10, 2011). In this case, the potential class members had similar job duties and were similarly subject to defendant's alleged failure to "pay minimum and overtime wages for off-the-clock work, provide meal and rest breaks, and reimburse Virtual [Customer Account Executives] for mileage incurred in driving to [d]efendant's call centers." Mem. at 17. This satisfies the typicality inquiry. See Murillo, 266 F.R.D. at 475.
4. Adequacy of Representation
To determine whether the named plaintiff will protect the interests of the class, the court must explore two factors: (1) do the named plaintiff and her counsel have any conflicts of interest with the class as a whole, and (2) have the named plaintiff and counsel vigorously pursued the action on behalf of the class. Hanlon, 150 F.3d at 1020 (citation omitted); see also True v. Am. Honda Motor Co., Inc., No. EDCV 07-287-VAP (OPx), 2009 WL 838284, at *5 (C.D. Cal. Mar. 25, 2009) ("(1) the class representative must not have interests antagonistic to the unnamed class members, and (2) the representative must be able to prosecute the action vigorously through qualified counsel'" (quoting Lerwill v. Inflight Motion Pictures, Inc., 582 F.2d 507, 512 (9th Cir. 1978))).
Nothing in the papers presently before the court suggests the representative plaintiff has any conflicts of interest with the other class members. See Mot. at 21. Because plaintiff's claims appear to be "completely aligned with [that] of the class, " the court concludes at this stage there is no conflict. Collins, 274 F.R.D. at 301.
With regard to the second factor, "[a]lthough there are no fixed standards by which vigor' can be assayed, considerations include competency of counsel and, in the context of a settlement-only class, an assessment of the rationale for not pursuing further litigation." Hanlon, 150 F.3d at 1021. In addition, a named plaintiff will be deemed to be adequate "as long as the plaintiff has some basic knowledge of the lawsuit and is capable of making intelligent decisions based upon [the plaintiff's] lawyers' advice...." Kaplan v. Pomerantz, 131 F.R.D. 118, 122 (N.D. Ill. 1990).
Plaintiff's counsel provide a description of their experience in wage and hour litigation, including class action lawsuits. Spivak Decl. ¶¶ 23-30, ECF No. 21-2; Haines Decl. ¶ 3, ECF No. 21-3. Plaintiff's counsel also describes the effort expended on this action thus far, which includes investigation into the strengths and weaknesses of the class claims and participation in private settlement negotiations with a "highly regarded mediator after sufficient discovery was exchanged." Spivak Decl. ¶ 33. Additionally, plaintiff herself has participated in the litigation process, see, e.g., id. ¶ 49, which is a relevant factor to determining the adequacy of representation. See Sepulveda, 237 F.R.D. at 244. These representations support a finding of vigor. At least at this stage of the settlement-approval process, plaintiff is an adequate class representative. See Falcon, 457 U.S. at 160 (observing that finding of adequacy "particularly during the period before any notice is sent to members of the class is inherently tentative'" (quoting Coopers & Lybrand v. Livesay, 437 U.S. 463, 469 n.11 (1978))).
"The Rule 23(b)(3) predominance inquiry tests whether proposed classes are sufficiently cohesive to warrant adjudication by representation." Amchem, 521 U.S. at 623. Although predominance is similar to Rule 23(a)'s commonality requirement, it is more demanding. Id. at 623-24. To determine whether common questions predominate, the court must consider "the relationship between the common and individual issues" by looking at the questions that preexist any settlement. Hanlon, 150 F.3d at 1022. The predominance inquiry focuses on the "notion that the adjudication of common issues will help achieve judicial economy." In re Wells Fargo Home Mortg. Overtime Pay Litig., 571 F.3d 953, 958 (9th Cir. 2009) (internal quotations and citations omitted).
Here, plaintiff argues the answers to the predominant common questions shared by the class members "will resolve [d]efendant's alleged liability to Class Members except with respect to the amounts of damages to be awarded...." Mem. at 19. Plaintiff's motion demonstrates "[a] common nucleus of facts and potential legal remedies dominates this litigation." Hanlon, 150 F.3d at 1022. This action turns on whether defendant failed to compensate Virtual Customer Account Executives for, inter alia, overtime, meal and rest period breaks and mileage. While each class member will be entitled to damages according to the duration of their employment with defendant, "individual issues regarding damages will not, by ...