United States District Court, E.D. California
STEPHANIE VEGA and MICHAEL McNATT, individually and behalf of all others similarly situated, Plaintiffs,
v.
WEATHERFORD U.S., LIMITED PARTNERSHIP, et al., Defendants.
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 ...