United States District Court, N.D. California
ORDER GRANTING FINAL APPROVAL OF SETTLEMENT AGREEMENT
DKT NO. 271, 272
CHHABRIA United States District Judge.
motion for final approval of the settlement agreement is
granted. The agreement is not perfect. And the status of Lyft
drivers under California law remains uncertain going forward.
But the agreement falls within a range of reasonable outcomes
given the benefits it achieves for drivers and the risks
involved in taking the case to trial.
ruling does not rehash the history of the case or the issues
addressed in prior rulings. For a full background on the
case, please see those prior rulings, which can be accessed
at the Court's website. Cotter v. Lyft, Inc.,
Dkt. No. 94, 60 F.Supp.3d 1067 (N.D. Cal. 2015) (denying the
parties' cross-motions for summary judgment); Cotter
v. Lyft, Inc., Dkt. No. 200, 176 F.Supp.3d 930 (N.D.
Cal. 2016) (denying the motion for preliminary approval of
the $12 million settlement); Cotter v. Lyft, Inc.,
193 F.Supp.3d 1030 (N.D. Cal. 2016) (granting the motion for
preliminary approval of the $27 million settlement);
Cotter v. Lyft, Inc., Dkt. No. 293, 13-cv-4065 (N.D.
Cal. Dec 23, 2016) (requiring supplemental notice to class
members). The first section of this ruling addresses one
additional substantive objection to the settlement agreement.
The second section adopts, in large part but not fully, the
language from the proposed order submitted by the parties
relating to final approval of the settlement agreement and
the motion for attorneys' fees filed by the plaintiffs.
all substantive concerns relating to the settlement agreement
were addressed in two prior rulings: the order denying the
request for preliminary approval of the $12 million
settlement, and the order granting the request for
preliminary approval of the $27 million settlement. Of the
new substantive objections raised at the final approval
stage, all are rejected, and only one is significant enough
to merit a detailed written response: the objection by the
Teamsters to a portion of the release language. Under this
language, any driver who did not opt out of the settlement
class will release all claims that were brought in the
lawsuit, as well as all claims that arise under the facts
raised in the lawsuit (even if those claims weren't
brought). One claim not brought in this case, but that would
arise under the same facts, is a claim based on the federal
Fair Labor Standards Act. The Teamsters contend a district
judge should not approve a settlement in a Rule 23
wage-and-hour class action, brought under state law, that
releases FLSA claims.
language of the FLSA certainly doesn't cover this
situation. The language the Teamsters cite speaks only to the
circumstances in which a plaintiff will be allowed to
participate in an FLSA action, not to circumstances
in which a plaintiff who is not participating in an FLSA
action will be allowed to release potential FLSA claims:
An [FLSA] action . . . may be maintained against any employer
. . . in any Federal or State court of competent jurisdiction
by any one or more employees for and in behalf of himself or
themselves and other employees similarly situated. No
employee shall be a party plaintiff to any such action unless
he gives his consent in writing to become such a party and
such consent is filed in the court in which such action is
29 U.S.C. § 216(b).
Teamsters argue that this is worker-protective language,
designed to help ensure that potential FLSA plaintiffs will
not lose the opportunity to pursue their own claims. They
thus seem to contend that, even if the language of the
statute doesn't directly speak to waivers of future FLSA
claims, district courts should derive from this
worker-protective language a principle that FLSA waivers may
not (or should not) be included in Rule 23 class settlements.
The problem with this argument, among other things, is that
Congress did not actually adopt the above-quoted language
with a worker-protective purpose. To the contrary, it was
part of an effort by Congress in 1947 to limit FLSA liability
for employers. See 29 U.S.C. § 251;
Hoffmann-La Roche Inc. v. Sperling, 493 U.S. 165,
173 (1989). And as part of this effort, Congress amended the
statute to limit the ability of workers to participate in
FLSA actions, allowing participation only when a worker
affirmatively opts in, as opposed to before, when a
"class" in an FLSA action could include anyone who
didn't opt out. See Portal-to-Portal Act of
1947, Pub. L. No. 80-49, § 5, 61 Stat. 84, 87.
true, as the Teamsters note, that a couple of district court
rulings suggest that Rule 23 settlements can't, or
shouldn't, release FLSA claims. Stokes v. Interline
Brands, Inc., No. 12-CV-05527-JD, 2014 WL 5826335, at *4
(N.D. Cal. Nov. 10, 2014); Tijero v. Aaron Bros.,
Inc., No. C 10-01089 SBA, 2013 WL 60464, at *7-8 (N.D.
Cal. Jan. 2, 2013). But those decisions don't explain how
the literal language of section 216 could be read to preclude
a release of FLSA claims to settle a lawsuit asserting state
law claims. Nor do they explain how the purposes behind this
language could lead to a conclusion that FLSA claims should
not be released.
short, the statutory language does not bar the release of
unasserted FLSA claims in Rule 23 class actions, and there is
nothing about the purpose behind this language that should
cause a district court to decline to approve such a waiver.
In other words, there is no greater reason to prevent Rule 23
class settlements from releasing unasserted FLSA claims than
there is to prevent those settlements from releasing other
unasserted claims that arise from the facts of the case. What
matters is that the settlement terms are fair and reasonable
in light of all the claims being released (asserted or not),
that class members receive appropriate notice of the proposed
settlement, and that class members be given the chance to opt
out of the class if they wish to preserve their own claims.
customary with class action settlements, the parties have
submitted a proposed order for the Court to sign. These
proposed orders typically contain language explaining how the
procedural requirements for a class action settlement have
been met, stating that all properly-filed objections have
been considered, finding that the request for attorneys'
fees is reasonable, and holding that the overall settlement
is fair. Sometimes these proposed orders also contain
language enjoining members of the settlement class from
filing any action in the future based on claims that are
released in the agreement. The proposed order submitted by
the parties in this case includes language to that effect.
This language is unnecessary and likely inappropriate (if not
unconstitutional). If members of the settlement class wish to
file an action against Lyft in the future, it will be up to
the forum in which the action is filed to decide whether that
action is barred by this settlement. The Court therefore
declines to adopt that language. This has the practical
effect of rendering inoperable the language in the settlement
agreement by which the parties agree to an injunction barring
future claims that may be released by virtue of the
settlement. See Dkt. No. 206-1 at ¶¶ 17,
29(b), 30(1), 70.
than that, the language from the proposed order submitted by
the parties is adopted largely verbatim, as follows:
Court grants the Motion for Final Approval of the Revised
Class Action Settlement Agreement and Release and grants
final approval to the Settlement. The Settlement Agreement is
hereby incorporated into this District Court Final Approval
Order ("Order and Final Judgment"), and all terms
used herein shall have the same meanings set forth in the
Court has personal jurisdiction over all Settlement Class
Members and subject matter jurisdiction to ...