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Roe v. Frito-Lay, Inc.

United States District Court, N.D. California

August 5, 2016

JANE ROE, Plaintiff,
FRITO-LAY, INC., Defendant.


          HAYWOOD S. GILLIAM, JR. United States District Judge

         Pending before the Court is Plaintiff Jane Roe’s unopposed motion for preliminary approval of class action settlement. Dkt. No. 100 (“Mot.”). After careful consideration of the settlement agreement and the parties’ arguments, the Court GRANTS Plaintiff’s motion for preliminary approval.

         I. BACKGROUND

         A. Litigation History

         On December 20, 2013, Plaintiff filed a class action complaint against Defendant Frito-Lay, Inc. and Does 1-10 in Alameda Superior Court. Dkt. No. 1-2. Plaintiff’s initial complaint alleged that Defendant failed to provide notice to prospective and existing employees prior to taking adverse employment actions based on information disclosed in a consumer report. Id. Plaintiff asserted violations of the Fair Credit Reporting Act, 15 U.S.C. §§ 1681b(b)(3)(A) (“FCRA”), and California Labor Code § 432.7(a). Id. On February 19, 2014, Defendant removed the action to this Court. Dkt. No. 1. Plaintiff filed a first amended complaint on September 3, 2014, asserting a single claim for violation of the FCRA. Dkt. No. 27.

         The parties participated in an initial mediation session with Mark Rudy, Esq., on November 20, 2014. Dkt. No. 31. The parties were unable to reach an agreement, but they continued to engage Mr. Rudy’s services in pursuit of settlement. Id.; Dkt. No. 35. On March 3, 2015, the parties informed the Court that they had reached a settlement. Dkt. No. 35. After further lengthy negotiations and several deadline extensions, the parties filed their initial motion for preliminary approval on October 14, 2015. Dkt. No. 53. However, at the November 19, 2015, hearing on the initial motion for preliminary approval, it became apparent that the parties were not in agreement as to the terms of the settlement. Following the hearing, the parties reengaged Mr. Rudy to assist with further settlement negotiations. Dkt. No. 58. In light of the continuing dispute, the Court entered a case schedule on January 5, 2016. Dkt. No. 66. On May 5, 2016, Plaintiff filed a motion to certify a class. Dkt. No. 92.

         On May 11, 2016, the parties again notified the Court that they had reached a settlement. Dkt. No. 93. After an additional case management conference, the parties filed the pending motion for preliminary approval of class action settlement on June 23, 2016. Dkt. No. 100.

         B. Overview of the Proposed Agreement

         The parties’ Stipulation and Settlement of Class Action Claims (“Settlement Agreement”) contains the following key provisions:

         Payment Terms. In full settlement of the claim asserted in this lawsuit, Defendant agrees to pay a gross settlement sum (“GSS”) of $950, 000. This amount includes payment to individuals who do not opt out of the Settlement Agreement (“Settlement Class Members”) for release of their claims, any award of attorneys’ fees and costs, an incentive award to the named Plaintiff, and all costs of administration, including settlement administration fees.

         Allocation Method. After attorneys’ fees, costs, the named Plaintiff’s incentive award, and reasonable settlement administration costs are subtracted, the remainder of the GSS (“Payout Fund”) will be distributed to the Settlement Class Members equally on a pro-rata basis. All checks that remain uncashed after sixty (60) days will revert to the Payout Fund, and Settlement Class Members who timely cash their initial checks will receive a pro-rata share of the remaining Payout Fund, so long as the pro-rata share meets or exceeds $5.00.

         Unclaimed Settlement Funds. If after the first distribution, the Payout Fund will not result in a second pro-rata payment that meets or exceeds $5.00, the remaining funds will be distributed cy pres to the National Consumer Law Center (“NCLC”). None of the GSS will revert to Defendant.

         Attorneys’ Fees and Costs. The Settlement Agreement authorizes class counsel to apply to the Court for an attorneys’ fees award of up to thirty-three and one-third percent (33 1/3%) of the GSS. Class counsel may also apply to the Court for an award of reasonable costs.

         Incentive Payment. The Settlement Agreement provides that class counsel will petition the Court for approval of an incentive payment of no more than $10, 000 to the named Plaintiff.

         Releases. Settlement Class Members will release all claims “asserted or that might have been asserted . . .arising out of, relating to, or in connection with all causes of action pleaded or that could have been pleaded based upon the facts asserted in the Action.” Settlement Agreement at 10-11. The named Plaintiff will release Defendant from all claims in existence prior to the final approval of the Settlement Agreement. Id. at 12-13.

         Procedure for Claims and Settlement. Class members must object to, or opt out of, the settlement within forty-five (45) days of the initial mailing of the notice packet.

         Objections. Any Settlement Class Members may file an objection to the Settlement Agreement. Settlement Class Members must give written notice of their intention to appear at the Court’s settlement hearing.


         Class certification under Rule 23 is a two-step process. First, Plaintiff must demonstrate that Rule 23(a)’s four requirements are met: numerosity, commonality, typicality, and adequacy. Class certification “is proper only if the trial court is satisfied, after a rigorous analysis, that the prerequisites of Rule 23(a) have been satisfied.” Wal-Mart Stores, Inc. v. Dukes, 131 S.Ct. 2541, 2551 (2011) (internal quotation marks omitted). Second, Plaintiff must satisfy one of the bases for certification in Rule 23(b). Here, by invoking Rule 23(b)(3), Plaintiff must establish that “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). The party seeking class certification bears the burden of demonstrating by a preponderance of the evidence that all four Rule 23(a) requirements and at least one of the three requirements under Rule 23(b) are met. See Wal-Mart, 131 S.Ct. at 2551.

         A. Rule 23(a)(1) - Numerosity

         Rule 23(a)(1) requires that the class be “so numerous that joinder of all members is impracticable.” The settlement class is comprised of 2, 928 members. The Court finds that numerosity is satisfied here because joinder of all the class members would be impracticable.

         B. Rule 23(a)(2) - Commonality

         A Rule 23 class is certifiable only if “there are questions of law or fact common to the class.” Fed.R.Civ.P. 23(a)(2). Under Rule 23(a)(2), even a single common question is sufficient. Wal-Mart, 131 S.Ct. at 2556. The question, however, “must be of such a nature that it is capable of classwide resolution - which means that determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke.” Id. at 2551. “What matters to class certification . . . is not the raising of common ‘questions’ - even in droves - but rather the capacity of a classwide proceeding to generate common answers apt to drive the resolution of the litigation.” Id. (emphasis in original) (citation omitted).

         The Court finds that the proposed class satisfies the commonality requirement because, at a minimum, Defendant’s alleged policies and practices concerning provision of a pre-adverse action notice as required by the FCRA implicate the class members’ claims as a whole.

         C. Rule ...

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