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Altamirano v. Shaw Industries, Inc.

United States District Court, N.D. California

May 14, 2015

SHAW INDUSTRIES, INC., et al., Defendants.


HAYWOOD S. GILLIAM, Jr., District Judge.

Before the Court is Plaintiff's unopposed motion for preliminary approval of the settlement and for certification of the settlement class. Dkt. No. 68. Pursuant to the parties' Settlement Agreement, Defendants Shaw Industries, Inc. and Shaw Industries Group, Inc. (collectively, "Shaw"), have agreed not to oppose Plaintiff's motion. Also pending before the Court is Plaintiff's motion to amend the complaint for purposes of settlement. Id.

On March 26, 2015, the Court held oral argument, during which it questioned the parties extensively about the terms of their Settlement Agreement and ordered supplemental briefing on certain issues. See Dkt. No. 71. After careful consideration of the Settlement Agreement, the parties' briefs, and counsel's arguments during the hearing, the Court DENIES Plaintiff's motion for preliminary approval without prejudice.


A. Litigation History

This action began on January 22, 2013, when Altamirano filed the original Complaint in the Superior Court of the State of California, County of Alameda, Case No. RG13664252. Altamirano filed a First Amended Complaint ("FAC") on February 13, 2013. On March 1, 2013, Shaw removed the action to the United States District Court for the Northern District of California. Plaintiff submitted a Second Amended Complaint ("SAC") to the Court in conjunction with the instant motion seeking preliminary approval of the class action settlement. See Dkt. No. 57-2, 68-2.

The SAC asserts nine causes of action related to allegations concerning Shaw's (1) payroll policies that "shaved" or "rounded" minutes from daily time worked, resulting in minimum wage and overtime violations, see SAC ¶¶ 13-19; (2) failure to pay employees for legally required meal breaks and rest periods, id. ¶¶ 20-27; (3) failure to provide accurate wage statements, id. ¶¶ 28-30; and (4) failure to pay employees all wages due at the time of termination or resignation, id. ¶¶ 31-32. The parties participated in a mediation on October 25, 2013 and, while no settlement was reached that day, continued to discuss settlement with the aid of the mediator until an agreement was finalized approximately one year later. See Mot. at 4. Plaintiff filed a motion for preliminary approval of the settlement agreement on November 12, 2014, Dkt. No. 57, which was amended and re-noticed after this action was reassigned to the undersigned, Dkt. No. 68.

B. Overview of the Proposed Settlement

The parties have submitted a Joint Stipulation and Settlement Agreement (the "Settlement Agreement") for the Court's review. See Declaration of Joseph Lavi ("Lavi Dec."), Ex. 1. The key provisions of the Settlement Agreement are as follows.

Payment Terms: In full settlement of the claims asserted in this lawsuit, Shaw agrees to pay $500, 000 within 15 business days from the date of entry of the order granting final approval of the class action settlement. Id. This amount includes payments to class members for release of their claims, any award of attorneys' fees and costs, the Claims Administrator's costs, a $1, 500 payment to the Labor and Workforce Development Agency pursuant to California's Private Attorneys General Act ("PAGA"), and any incentive award to Mr. Altamirano. Id. at 18-19.

The Settlement Agreement estimates that if the Court approves the maximum amount of attorneys' fees and costs, the PAGA Payment, and the incentive award to Mr. Altamirano, the estimated amount distributable to the class should be approximately $328, 100. Id. at 19. The amount payable to each class member depends on the number of class members that opt into the Settlement. Id. at 20. Payments are calculated by dividing each individual class ember's gross wages earned during class period by the total gross wages earned by all participating class members during the class period, and then multiplying that percentage by the distributable amount (the portion of the settlement after the fees, costs, and payments detailed in the previous paragraph have been made). Id. at 20. The settlement amount is non-reversionary, meaning that in no circumstance will any of the $500, 000 revert to Shaw, regardless of how many class members choose to participate in the settlement. Id. at 19. Should all 747 class members opt into the Settlement, each will receive approximately $440. Mot. at 7.

Attorneys' Fees and Costs: The Settlement Agreement authorizes class counsel to apply to the Court for an award of attorneys' fees and costs incurred in litigating this case, which Shaw agreed not to oppose. Lavi Dec., Ex. 1 at 21. Class Counsel will request $125, 000 in attorneys' fees and $17, 000 in costs. Id. at 18.

Incentive Payment: The Settlement Agreement authorizes Mr. Altamirano to seek a $4, 400 incentive payment for his participation in this lawsuit, which Shaw will not oppose. Id. at 21.

Releases: The Settlement Agreement provides that all class members other than those who opted out, shall ...

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