United States District Court, E.D. California
ORDER REQUIRING SUPPLEMENTAL BRIEFING DEADLINE:
AUGUST 5, 2016
before the Court is the parties’ motion for final
approval of a class action settlement to resolve this action.
The Court has reviewed the motion and exhibits attached and
finds it lacking in certain areas. For that reason, the Court
shall order the parties to file supplemental briefing
addressing the areas identified herein.
of Funds for Subclass B:
has agreed to establish a settlement fund of $850, 000.00 in
this matter. The funds available to subclass B are $200,
000.00. While the amount of settlement appears to be within
the range of reasonableness in this action, the Court has
concerns regarding the manner in which the funds are being
distributed to subclass B.
class member of subclass B will receive a payment based upon
the number of years that the employee was laid off. The
notice of settlement informed the members of Subclass B that
they would be reimbursed a set amount which is determined by
the number of years that the individual employee was laid
off. There are 2, 293 class members in subclass B. (Decl. of
Ani Shirinaian ¶ 15, ECF No. 82.) Based upon the agreed
to reductions to the settlement fund, the net settlement fund
available to this subclass is $125, 948.25. (Id. at
¶¶ 16, 17.) The funds designated to this subclass
are not sufficient to make the payments as set forth in the
settlement agreement, so each payment was reduced by $41.54.
Due to this reduction the class awards have been reduced as
Years Laid Off
have not set forth any reasoning for why an individual who
worked 1 year has had their award reduced 83.08 percent;
while an individual who worked 6 years has only had their
award reduced 23.74 percent. The parties did not address
whether they considered reducing each award by a set
percentage to achieve an equitable adjustment to each
category and still remain within the funding available.
the parties may be able to set forth valid reasons for
finding the proposed manner of distribution to be fair to the
class members, the disparity in the percentage of reduction
between employees based upon the amount of time they worked
raises a concern regarding whether the settlement is being
distributed fairly to all members of subclass B or unfairly
favors class members with employment longevity.
the Court shall require supplemental briefing addressing the
fairness of the proposed reductions to the subclass B
April 8, 2016 order granting preliminary approval of the
class action settlement, the Court expressed concern
regarding the appropriateness of the designated cy pres
beneficiary, Firebaugh-Las Deltas Unified School District. Cy
pres distribution allows the distribution of unclaimed funds
to indirectly benefit the entire class. Six Mexican
Workers v. Arizona Citrus Growers, 904 F.2d 1301, 1305
(9th Cir. 1990). This requires the cy pres award to qualify
as “the next best distribution” to giving the
funds directly to the class members. Dennis v. Kellogg
Co., 697 F.3d 858, 865 (9th Cir. 2012). “Not just
any worthy charity will qualify as an appropriate cy pres
beneficiary[, ]” there must be “a driving nexus
between the plaintiff class and the cy pres
beneficiary.” Dennis, 697 F.3d at 865 (quoting
Nachshin v. AOL, LLC, 663 F.3d 1034, (9th Cir.
2011)). “A cy pres award must be guided by (1) the
objectives of the underlying statute(s) and (2) the interests
of the silent class members and must not benefit a group too
remote from the plaintiff class.” Dennis, 697
F.3d at 865 (internal punctuation and citations omitted).
purpose of the statutes at issue here are to compensate
employees for the actions of the employer and to deter future
violations. See Smith v. Superior Court, 39 Cal.4th
77, 92 (2006) (“The plain purpose of sections 201 and
203 is to compel the immediate payment of earned wages upon a
discharge.”); Brinker Rest. Corp. v. Superior
Court, 53 Cal.4th 1004, 1036-37 (2012) (duty imposed by
enacting section 512 was to ensure that employees receive an
uninterrupted thirty minute meal break); Kenny v.
Supercuts, Inc., 252 F.R.D. 641, 642 (N.D. Cal. 2008)
(Labor Code section 226.7 requires employer to pay one
additional hour of pay at the employee’s regular rate
of compensation for each day that a meal or rest period is
not provided); Iskanian v. CLS Transp. Los Angeles,
LLC, 59 Cal.4th 348, 383 (2014) cert. denied, 135 S.Ct.
1155 (2015) (“the Legislature’s purpose in
enacting the PAGA was to augment the limited enforcement
capability of the Labor and Workforce Development Agency by
empowering employees to enforce the Labor Code as
representatives of the Agency”).
Court previously found that:
The purpose of the statutes at issue here are to ensure that
employees receive the pay and breaks they are entitled to
receive. While some of the class members may live in the
Firebaugh-Las Deltas Unified School District, and may have
children that attend the school district, there is no
reasonable certainty that any class member would benefit from
the distribution of funds to the school district. Therefore,
the Court would be required to monitor the distribution to
ensure that the funds benefited the purpose of the statute
and the silent class members. Six American Workers,
904 F.2d at 1308. When requesting final approval of the class
action settlement the parties will need to establish the
appropriateness of the cy pres beneficiary.
(ECF No. 76 at 17:24-18:7.) The parties were informed that in
seeking final approval they would be required to address the
cy pres beneficiary and establish a driving nexus between the
chosen beneficiary and the class. (Id. at 18:5-9.)
Further, the parties were required to show “that the
chosen beneficiary would adequately ...