United States District Court, N.D. California
For Patrick Bellinghausen, on behalf of himself, all others similarly situated, and the general public, Plaintiff: Chaim Shaun Setareh, LEAD ATTORNEY, Setareh Law Group, Beverly Hills, CA.
For Tractor Supply Company, a Delaware corporation, Defendant: Alex Santana, Ogletree, Deakins, LEAD ATTORNEY, Nash, Smoak & Stewart, P.C, San Francisco, CA; Christopher William Decker, LEAD ATTORNEY, Ogletree Deakins Nash Smoak & Stewart PC, Los Angeles, CA.
ORDER GRANTING PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT Re: Dkt. No. 69
JACQUELINE SCOTT CORLEY, United States Magistrate Judge.
In this pre-certification class action dispute, Plaintiff Patrick Bellinghausen alleges that, among other things, Defendant Tractor Supply Company failed to implement legally compliant meal and rest period policies. Now pending before the Court is the parties' joint motion for preliminary approval of a class action settlement. (Dkt. No. 69.) After reviewing the proposed settlement, and with the benefit of oral argument on November 20, 2014 and the parties' revised Class Notice, the Court GRANTS the motion as outlined below.
Plaintiff, a California citizen, worked for Defendant, a Delaware corporation, in an hourly position as retail-store clerk from approximately April 2010 to January 2013. (Dkt. No. 46 ¶ 2.) Plaintiff's Third Amended Complaint (" TAC") includes seven causes of action: 1) Failure to Provide Meal Periods (California Labor Code § § 204, 223, 226.7, 512, and 1198); 2) Failure to Provide Rest Periods (California Labor Code § § 204, 223, 226.7, and 1198); 3) Failure to Pay Hourly and Overtime Wages (California Labor Code § § 223, 510, 1194, 1197, and 1198); 4) Failure to Provide Accurate Wage Statements (California Labor Code § 226); 5) Failure to Timely Pay All Final Wages (California Labor Code § § 201-203); 6) Unfair Competition (California Business and Professions Code § § 17200, et seq.); and 7) Civil Penalties (California Labor Code § § 2698, et seq.). (Dkt. No. 46.)
Plaintiff filed his original complaint in Alameda County Superior Court on April 25, 2013. Defendant removed the case to federal court approximately one month later, asserting jurisdiction under the Class Action Fairness Act. Plaintiff subsequently filed a First Amended Complaint, which this Court dismissed with leave to amend for failure to state a claim under Rule 12(b)(6). (Dkt. No. 32.) The Court then dismissed Plaintiff's Second Amended Complaint under Rule 12(b)(6). (Dkt. No. 44.) Defendant's subsequent motion to dismiss Plaintiff's TAC was denied, and Defendant answered the TAC on February 18, 2014.
On April 2, 2014, the parties participated in a full day of mediation with Susan Haldeman. " Both parties prepared detailed mediation briefs, and through the use of experts the parties developed models for estimating Defendant's potential liability exposure in this action on a class-wide basis." (Dkt. No. 69-1 ¶ 9.) Also in anticipation of mediation, Defendant produced " hundreds of pages of documents." (Id. ¶ 8.) " These documents included, among other things, policies relating to meal and rest periods, payroll, time keeping, vacation pay, and Plaintiff's personnel file. Defendant also produced more than one million lines of payroll data." (Id.) In the weeks that followed the mediation, the parties--with the continued assistance of the mediator--continued engaging in their " arm's length" negotiations and ultimately agreed to the settlement now before the Court. (Id. ¶ 10.)
The parties' agreement provides a settlement fund of $1, 000, 000. Reduced from that fund are 1) attorney's fees up to 30 percent of the fund ($300, 000); 2) actual litigation costs up to $30, 000; 3) enhancement awards to Plaintiff up to $20, 000; 4) payment of $35, 000 in civil penalties to the Labor Workforce and Development Agency (" LWDA"); and 5) claims administration expenses up to $16, 000. The remaining funds are then distributed to the class members who do not opt out of the class. Class members will receive a pro rata share of the fund based on his or her " compensable hours"  worked during the class period, less statutorily required tax withholdings. (Dkt. No. 69-2 ¶ 4.4.) The number of compensable hours will be disclosed to each class member in the notice of settlement; further, each class member will be given an individualized estimated figure of monetary recovery based on their number of compensable hours. All checks to non-objecting class members not cashed within 120 days of mailing will escheat to the State of California and be administered in accordance with California's Unclaimed Property Law (Cal. Civ. Code § 1500, et seq.). No settlement funds will revert to Defendant.
B. Proposed Class
In the joint motion, the parties stated that " Plaintiff seeks to represent a putative class of all non-exempt employees employed by Tractor Supply in California between April 25, 2009 until the date this Court grants preliminary approval, except any employee who has individually adjudicated his or her claims during that same time period." (Dkt. No. 69 at 3.) Although the parties' settlement agreement does not define a proposed " Class, " the agreement refers to " Putative Class Members" as " all persons employed in California by [Defendant] as an 'Hourly Employee' at any time during the Class Period." (Dkt. No. 69-2 ¶ 1.36.) The agreement, in turn, defines " Hourly Employee" as " an individual employed by [Defendant] in California and classified as a non-exempt, hourly employee" ( id . ¶ 1.25), and the " Class Period" as the period from April 25, 2009 through the date the Court enters an order granting preliminary approval of the settlement ( id . ¶ ¶ 1.9, 1.18). The parties estimate that there are currently 1, 062 putative class members. (Dkt. No. 69-1
A class action settlement must be fair, adequate, and reasonable. Fed.R.Civ.P. 23(e)(2). When, as here, parties reach an agreement before class certification, " courts must 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). If the Court temporarily certifies the class and finds the settlement appropriate after " a preliminary fairness evaluation, " then the class will be notified and a final " fairness" hearing scheduled to determine if the settlement is fair, adequate, and reasonable pursuant to Federal Rule of Civil Procedure 23. Villegas v. J.P. Morgan Chase & Co., No. CV 09-00261 SBA (EMC), 2012 WL 5878390, at *5 (N.D. Cal. Nov. 21, 2012).
A. Conditional Certification of the Settlement Class
Class actions must meet the following requirements prior to certification:
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).
In addition to meeting the requirements of Rule 23(a), a potential class must also meet one of the conditions outlined in Rule 23(b)--of relevance here, the condition that " the court finds that the 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 efficiently adjudicating the controversy." Fed.R.Civ.P. 23(b)(3). In evaluating the proposed class, " pertinent" matters include:
(A) the class members' interests in individually controlling the prosecution or defense of separate actions;
(B) the extent and nature of any litigation concerning the controversy already begun by or against class members;
(C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; and
(D) the likely difficulties in managing a class action.
Fed. R. Civ. P. 23(b)(3). Prior to certifying the class, the Court must determine that Plaintiffs have satisfied their burden to demonstrate that the proposed class satisfies each element of Rule 23.
1. Rule 23(a)
There is no exact class size that meets the numerosity requirement; rather, " [w]here the exact size of the class is unknown but general knowledge and common sense indicate that it is large, the numerosity requirement is satisfied, " particularly where the proposed " class is geographically dispersed" with " difficult to identify" members. In re Rubber Chems. Antitrust Litig., 232 F.R.D. 346, 350-51 (N.D. Cal. 2005) (internal quotation marks and citation omitted). Numerosity is satisfied here. ( See Dkt. No. 69-1 ¶ 13.)
The commonality requirement is " construed permissively, " and " [a]ll questions of fact and law need not be in common." Hanlon v. Chrysler Corp., 150 F.3d 1011, 1019 (9th Cir. 1998). In fact, both " divergent factual predicates" with " shared legal issues" and " a common core of salient facts coupled with disparate legal remedies within the class" can be sufficient. Graham v. Overland Solutions, Inc., No. 10-CV-0672 BEN (BLM), 2012 WL 4009547, *2 (S.D. Cal. Sept. 12, 2012) (quoting Hanlon, 150 F.3d at 1019).
In this case, the common questions of law and fact center around Defendant's employment practices and policies; for example, whether Defendant maintained legally compliant meal and rest period policies; whether Defendant paid class members with instruments that were subject to discount in violation of California Labor Code Section 212; and whether Defendant subjected class members' accrued vacation to unlawful forfeiture. The parties assert that, " based on discovery responses and documents produced pursuant to the mediation privilege, " class members are subject to the " same policies and procedures" with regard to meal periods, rest periods, reporting time pay, paycards, and payroll. (Dkt. No. 69 at 13.) If ...