Vega v. Weatherford U.S., LP

          ORDER GRANTING PLAINTIFFS’ MOTION FOR PRELIMINARY APPROVAL OF CLASS SETTLEMENT (DOC. 67)

          Jennifer L. Thurston UNITED STATES MAGISTRATE JUDGE

         Plaintiffs Stephanie Vega and Michael McNatt request preliminary approval of the class settlement with Defendants. (Doc. 67) By and through this motion, Plaintiff seeks: (1) conditional certification of settlement classes; (2) preliminary approval of the settlement terms; (3) appointment of Plaintiffs as the class representatives; (4) appointment of Hernaldo Baltodano of Baltodano & Baltodano LLP, and Paul Haines, Tuvia Korobkin and Fletcher Schmidt of Haines Law Group as Class Counsel; (5) approval of the class notice and related materials; (6) appointment of Rust Consulting, Inc., as the claims administrator; and (7) scheduling for final approval of the settlement. Defendants do not oppose the motion for preliminary approval of the class settlement. (Doc. 69)

         The Court has considered the proposed settlement agreement between the parties, and the proposed Class Notice and documents. For the following reasons, Plaintiff’s motion for preliminary approval of class settlement is GRANTED.

         BACKGROUND

         Plaintiffs Stephanie Vega and Michael McNatt were employees at Defendants’ Bakersfield, California location. (Doc. 44 at 5, ¶11) Ms. Vega was a full-time non-exempt employee between September 2011 and September 2013. (Id.) She was then promoted to a full-time exempt position, which she retained until May 2014. (Id.) Mr. McNatt was employed as a full-time hourly employee between September 2012 and July 2013. (Id.)

         Plaintiffs assert that non-exempt hourly employees “regularly worked shifts in excess of 8 hours per day and/or 40 hours per week. (Doc. 44 at 5, ¶ 13) Plaintiffs contend Defendants “underpaid all of their required overtime wages.” (Id. at 6, ¶ 14) In addition, Plaintiffs allege Defendants maintained unlawful break policies, and “failed to authorize and permit…hourly non-exempt employees with all rest breaks to which they were entitled.” (Id., ¶ 15) Similarly, Plaintiffs assert Defendants “failed to provide legally compliant meal periods...by failing to schedule timely meal periods and failing to ensure adequate coverage so as to not impede and/or discourage Plaintiffs and hourly non-exempt employees from taking legally compliant meal periods.” (Id. at 7, ¶ 16) Further, Plaintiffs assert Defendants failed to pay all final wages within 72 hours of the end of their employment due to the wage, rest break, and meal break violations. (Id., ¶ 17)

         Based upon these factual allegations, Plaintiffs contend Defendants are liable for failure to pay overtime wages in violation of Cal. Labor Code §§ 204, 510, 558, 1194 and 198; violations of the Fair Labor Standards Act, 29 U.S.C. § 201; violations of the meal and rest break provisions of Cal. Labor Code § 226.7, 512, 516 and 558; wage statement penalties under Cal. Labor Code § 226; waiting time penalties under Cal. Labor Code §§ 201-203; unfair competition under Cal. Bus. & Prof. Code § 17200; and civil penalties under the Private Attorneys General Act, Cal. Labor Code § 2698. (See Doc. 44)

         On April 30, 2015, the parties stipulated to conditional class certification for the FLSA claims only (Docs. 37, 38), and provided notice to the putative class members. (Doc. 67-1 at 16) According to the parties, following a 75-day notice period, 865 individuals opted into the action. (Id. at 8)

         In November 2015, the parties agreed to attend mediation, and the Court stayed all deadlines pending mediation. (Docs. 55, 56) The parties attended a full-day of mediation with Mark Rudy on March 24, 2016, after which “Mr. Rudy made a mediator’s proposal for a class-wide resolution of all claims.” (Doc. 56 at 15) The parties accepted the proposal, and filed a Notice of Settlement with the Court on April 12, 2016. (Doc. 61) On June 8, 2016, Plaintiffs filed the motion for preliminary approval of the class action settlement (Doc. 67), 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 $6, 000, 000. (Doc. 67-1 at 18, Settlement § 3)

         I. Payment Terms

         The settlement fund will cover payments to members of two classes: (1) the California Settlement Class comprised of “all non-exempt employees who worked for Weatherford in California” between August 28, 2010 and July 4, 2016 and (2) the FLSA Settlement Class including “all individuals who opted into the lawsuit during the notice period.” (Doc. 67-1 at 16-17, Settlement § 1) In addition, the Settlement provides for payments to Class Representatives, Class Counsel, the Claims Administrator, and the California Labor & Workforce Development Agency. (Id. at 18; Settlement § 3.A) Specifically, the Settlement provides for the following payments from the gross settlement fund:

• Class Representatives will receive up to $ 10, 000;

• Class Counsel will receive up to $1, 500, 000- which equals 25% of the gross settlement fund-and up to $55, 000 for expenses;

• The Claims Administrator will receive up to $35, 000 for fees and expenses; and

• The California Labor & Workforce Development Agency will receive $50, 000 for PAGA civil penalties.

(Doc. 67-1 at 18, Settlement § 3) In addition, $156, 000.00 of the gross settlement fund has been “designated as the ‘FLSA Net Settlement Fund, ” to be paid to members of the FLSA Settlement Class only. (Id. at 19, Settlement § 4) After these payments have been made, the remaining funds -estimated to total $4, 184, 000.00 - will be distributed to California Settlement Class Members. (Id.)

         II. Releases

         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, release Defendants from the claims arising in the class period. Specifically, the Settlement provides:

California Settlement Class members will release all claims pled in this Lawsuit or could have been pled in this Lawsuit and based on the factual allegations set forth in the Second Amended Complaint, including, but not limited to, any and all claims under California law for: (i) failure to pay overtime wages; (ii) failure to provide meal periods; (iii) failure to authorize and permit rest periods; (iv) wage statement penalties; (v) waiting time penalties; (vi) unfair competition; and (vii) civil penalties under the Private Attorneys General Act (“PAGA”) (hereinafter collectively referred to as the “California Released Claims”). For members of the Settlement Class who do not opt out, the release period shall run from August 28, 2010 through the date of entry of a Preliminary Approval Order or July 4, 2016, whichever occurs first.

FLSA Settlement Class members will release all claims that are asserted or could have been asserted under the FLSA, based on Weatherford’s alleged failure to pay all overtime wages based on a miscalculation of the regular rate of pay. For members of the FLSA Settlement Class, the release period shall run from actual date the individual opted in to the Lawsuit through the date of Preliminary Approval or July 4, 2016, whichever occurs first.

(Doc. 67-1 at 17, Settlement § 2)

         The release for Plaintiffs encompasses more claims than the release of Class Members, including “all claims that are asserted or that could have been asserted in the Lawsuit, whether known or unknown, under federal law or state law against Weatherford arising out of their employment with Weatherford or the termination thereof..” (See Doc. 67-1 at 17, Settlement § 2.C)

         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 Pendency of Class Action and Proposed Settlement (“the Notice”) explains the claims that are released as part of the Settlement. (Doc. 67-1 at 32-33) In addition, the Notice explains the procedures for class members to request exclusion from the class and object to the terms of the Settlement. (Id. at 33)

         PRELIMINARY APPROVAL OF A CLASS SETTLEMENT

         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.

         I. 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 classes are defined as:

California Settlement Class: all non-exempt employees who worked for Weatherford in California between August 28, 2010 through the date of Preliminary Approval or July 4, 2016, whichever occurs first.

FLSA Settlement Class: all individuals [who] opted into the lawsuit during the notice period.

(Doc. 67-7 at 16, Settlement § 1) Plaintiffs seek conditional approval of the classes for settlement pursuant to Fed.R.Civ.P. 23, 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.” See 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, 564 U.S. 338, 350 (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 classes are 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.

         1. Numerosity

         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, 865 individuals opted in to the FLSA Settlement Class^[1], and Defendants determined there are 1, 009 members in the California Settlement Class.^[2] (Doc. 67 at 9-10) Therefore, the numerosity requirement is satisfied.

         2.Commona ...