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Munoz v. Giumarra Vineyards Corp.

United States District Court, E.D. California

March 24, 2017

RAFAEL MUNOZ, et al., Plaintiffs,
v.
GIUMARRA VINEYARDS CORP., Defendant.

          ORDER GRANTING THE PARTIES' JOINT MOTION FOR PRELIMINARY APPROVAL OF CLASS SETTLEMENT (DOC. 217)

          Jennifer L. Thurston UNITED STATES MAGISTRATE JUDGE

         Rafael Munoz, Lidia Cruz, Yanet Hernandez, Santos R. Valenzula, Trindad Ruis, Marta Rincon de Diaz, Ramon Cervantes Perals and Hugo Perez Rios (collectively, “Plaintiffs”) and Defendant Giumarra Vineyards Corporation seek preliminary approval of a class settlement reached in this action. (Doc. 217) Previously, the Court granted class certification as to two classes in this action, identified as the “Late Meal Break Class” and the “Tool Class.” The parties now request (1) preliminary approval of the settlement, (2) approval of the proposed class notice and related materials; (3) appointment of Rust Consulting as the Claims Administrator; (4) approval of the Settlement distribution plan; and (5) scheduling for final approval of the settlement. (See Doc. 220)

         The Court has considered the proposed settlement between the parties, and the proposed Notice and related forms. For the following reasons, the joint motion for preliminary approval of class settlement is GRANTED.

         FACTUAL AND PROCEDURAL HISTORY

         On November 9, 2005, Plaintiffs' counsel initiated an action against table grape growers based in Kern County, including Giumarra Vineyards Corporation; Marko Zaninovich, Inc.; Sunview Vineyards of California, Inc.; Castlerock; D.M. Camp & Sons; Sunview Vineyards of California; El Rancho Farms; Stevco, Inc; and FAL, Inc.[1] (See Doc. 46 at 12, n.17); see also Doe v. D.M. Camp & Sons, 624 F.Supp.2d 1153 (E.D. Cal. 2008). At the time the action was initiated, the plaintiffs were unnamed former and current employees of the defendants. Id. at 1156. The Court acknowledged the Doe matter was related to several other cases initiated against grape growers. Id.

         On December 16, 2005, Santos R. Valenzuela, Trinidad Ruiz, Marta Ricon de Diaz, Ramon Cervantes Perales, and Hugo Perez Rios filed a complaint against Giumarra Vineyards, initiating Case No. 1:05-cv-1600-AWI-SMS. The plaintiffs alleged violations of the Migrant and Seasonal Agricultural Worker Protection Act, common law breach of contract, failure to pay wages and/or overtime, failure to reimburse expenses in violation of California Labor Code § 2802, failure to allow for meal and rest breaks pursuant to California Labor Code § 226.7, failure to keep accurate records, and violations of California Business and Professions Code § 17200. (Valenzuela, Doc. 1 at 1-2)

         Defendants in Doe action, including Giumarra Vineyards, filed motions to dismiss the operative complaint. The Court granted the motions to dismiss and to sever the action and ordered the plaintiffs to file amended pleadings against each defendant. (Doe, Doc. 168) On May 29, 2008, Rafael Munoz, Lidia Cruz, and Yanet Hernandez were identified as plaintiffs in the Third Amended Complaint against Giumarra Vineyards. (Doe, Doc. 172) On March 31, 2009, the Court ordered Plaintiffs to re-file their suit in a new action within twenty days to finalize the severance. (Doe, Doc. 238)

         On April 20, 2009, plaintiffs Rafael Munoz, Lidia Cruz, and Yanet Hernandez filed a complaint against Giumarra Vineyards. (Doc. 1) The plaintiffs filed a notice of related cases, including Valenzuela. (Doc. 6) The Court directed the parties to file briefs regarding consolidation (Doc. 8), and on August 20, 2009, the Court ordered the cases be consolidated. (Doc. 26)

         In compliance with the Court's order consolidating Valenzuela with Munoz, Plaintiffs filed an Amended Complaint against Giumarra Vineyards on September 22, 2009. (Doc. 28) Plaintiffs alleged Defendant was liable for: violations of the Agricultural Workers Protection Act, 29 U.S.C. § 1801, failure to pay wages, failure to pay reporting time wages, failure to reimburse required expenses, failure to provide meal and rest periods, failure to pay wages of terminated or resigned employees, knowing and intentional failure to comply with itemized employee wage statement provisions and record keeping requirements, breach of contract, and violation of unfair competition law. (Id. at 1-2) Plaintiffs brought the action “on behalf of Plaintiffs and members of the Plaintiff Class comprising all non-exempt agricultural, packing shed, and storage cooler employees employed, or formerly employed, by each of the Defendants within the State of California.” (Id. at 9) In April 2011, the parties stipulated to amend the operative complaint, “withdrawing Lidia Cruz and Yanet Hernandez as named plaintiffs and class representatives.” (Doc. 36)

         In November 2011, the parties requested stay in the action pending the resolution of Brinker Restaurant Corp. v. Sup. Ct., 165 Cal.App.4th 25 (2008). The parties noted, “At issue in Brinker is the standard for determining an employer's obligations with respect to California's rest and meal break laws.” (Doc. 79 at 2) Because Plaintiffs' amended complaint raised issues pending resolution in Brinker, the Court granted the request for a stay. (Doc. 80) On April 12, 2012, the California Supreme Court issued its decision in Brinker. Therefore, the Court lifted the stay and heard oral arguments regarding the motion for class certification.

         The Court granted Plaintiff's motion for class certification in part, certifying the “Late Meal Class” and “Tools Class” on June 13, 2013. (Docs. 109, 121) Each class included “all fieldworkers employed by Giumarra from 11/9/2001 to the present.” (See Doc. 121 at 16) Plaintiffs' proposed Class Notice-which included “the nature of the action, the class definitions approve by the Court, the claims and issues to be resolved, how a class member may enter appear through an attorney or chose to be excluded from the class, the time and method to opt-out of the class, and the binding effect of a class judgment”-was approved by the Court on December 11, 2013. (Doc. 137 at 1)

         Following the Court's rulings on the parties' cross-motions for summary judgment, Defendant filed a motion to decertify the Late Meals Class (Doc. 189), which was denied by the Court on September 30, 2016. (See Docs. 202, 210)

         The parties engaged in mediation with Steven Vartabedian, a retired justice of California's Fifth District Court of Appeal. (Doc. 218 at 8) On November 29, 2016, Plaintiffs notified the Court that the parties had “come to an agreement in principle to resolve the matter entirely, ” and began “the process of formally documenting the timers of the proposed settlement.” (Doc. 213 at 3) By January 6, 2017, the parties reported the terms had been finalized “and the settlement agreement [was being] circulated for signatures.” (Doc. 215 at 3) The parties filed the joint motion for approval of the settlement now pending before the Court on February 24, 2017. (Doc. 217)

         THE PROPOSED SETTLEMENT

         Pursuant to the proposed settlement (“the Settlement”), the parties agree to a “Gross Settlement Amount” totaling $6, 100, 000.00, plus interest. (Doc. 219-1 at 4, Settlement § I.S) Defendant Giumarra agrees to fund the Settlement for the following classes:

The Tools Class: all fieldworkers employed by Giumarra from 11/9/2001 to the present who were required to purchase necessary tools.
The Late Meal Break Class: all field workers by Giumarra from 11/9/2001 to the present who were not provided a timely meal period.

(Id., Settlement § I.D) These classes include only “employees, exclusive of foremen, assigned to crews that performed tasks similar to those of the named Plaintiffs: tying, pruning, pickling and packing.” (Id.) Thus, the classes do not include irrigators and drivers. (Id.) The parties report that for purposes of settlement, the Settlement Class “consists of the combined Tool and Late Meal Break Class.” (Id.)

         Giumarra agrees to pay $2, 100, 000 of the Gross Settlement Amount by June 1, 2017; another $2, 000, 000 plus 5% interest on December 1, 2017; and a final payment of $2, 000, 000 plus 5% interest on November 1, 2018. (Doc. 219-1 at 11-12, Settlement §III.F.7) If any of the payments are made after these deadlines, the interest rate will rise to 10%. (Id. at 13; Doc. 218 at 8)

         I. Payment Terms

         The settlement fund will cover payments to class members with additional compensation to the Class Representatives. (Doc. 219-1 at 6-7, Settlement § III.B) In addition, the Settlement provides for payments to Class Counsel for attorneys' fees and expenses, to the Settlement Administrator, and the California Labor & Workforce Development Agency. (Id.) Specifically, the settlement provides for the following payments from the gross settlement amount:

• The named Class Representatives will receive up to $7, 500 each;
• Plaintiffs who withdrew from the action will receive up to $3, 500 each;
• Class counsel will receive no more than 33 1/3% of the gross settlement amount for fees, and up to $175, 000 for expenses;
• The Claims Administrator will receive up to $75, 000 for fees and expenses.[2]

(Doc. 219-1 at 6-7, Settlement § III.B; Doc. 218-7 at 17) After these payments have been made, the remaining money (“Net Settlement Amount”) will be distributed as settlement shares to Class Members. (Doc. 219-1 at 4, Settlement §§ I.V, III.D)

         Class members must submit a claim form to receive a share from the Net Settlement Amount. (Doc. 219-1 at 7, Settlement § III.D) Settlement shares for each class member will be based upon:

(a) that Claimant's total number of Months of Employment during the Class Period (b) divided by the aggregate number of Months of Employment of all Participating Class Members during the Class Period (with the division rounded to four decimal places) (c) multiplied by the value of the Net Settlement Amount. Months of employment during the time period 2001 through 2008 will be weighted four times higher than those subsequent to 2008 because of Defendants' changes in practices.

(Id., Settlement § III.D.1) Therefore, the formula acknowledges Defendants' contention that the practices employed by the company changed in 2008. In addition, the exact amount each individual will receive depends upon how many class members submit timely and valid claim forms and the period of time Giumarra employed each class member.

         II. Releases

         The Settlement provides that Plaintiffs and Class Members, other than those who elect to participate in the Settlement, shall release Giumarra from the claims arising in the class period at the time final judgment is entered. Specifically, the release for class members states:

As of the date of the Judgment, all Participating Class Members hereby fully and finally release Defendant, and its shareholders, parents, predecessors, successors, subsidiaries, affiliates, and trusts, and all of its employees, directors, officers, agents, attorneys, stockholders, fiduciaries, other service providers, and assigns, from any and all claims, known and unknown, for or related to all claims provided for in the certified class, namely meal period violations and reimbursement claims for tools for the time period of November 9, 2001 to December 1, 2016.

(Doc. 219-1 at 14, Settlement § III.G) The release for Plaintiffs encompasses more claims than the release of Class Members, which releases any claims related to improper compensation. (Id.; see also Doc. 218-1 at 10) Specifically, Plaintiffs' release provides:

As of the date of the Judgment, Plaintiffs and their Counsel hereby fully and finally release Defendant, and its shareholders, parents, predecessors, successors, subsidiaries, affiliates, and trusts, and all of its employees, directors, officers, agents, attorneys, fiduciaries, other service providers, and assigns, from claims based on or arising from the allegations that they were or are improperly compensated under federal, California, or local law (the “Class's Released Claims”). The Class's Released Claims include all such claims for alleged unpaid wages, including overtime compensation, missed meal-period and rest-break wages or penalties, and interest; related penalties, including, but not limited to, recordkeeping penalties, pay-stub penalties, minimum-wage penalties, missed meal-period and rest-break penalties, and waiting-time penalties; and costs and attorneys' fees and expenses, and reimbursements for tools purchased.

(Id., emphasis added). Plaintiffs' claims are intended to “include all claims, whether known or unknown” at this time. (Doc. 219-1 at 15, Settlement § III.G.4)

         Defendant also agrees to “fully and finally release Plaintiffs and each of their parents, predecessors, successors, subsidiaries, affiliates, and trusts, and all of its employees, officers, agents, attorneys, stockholders, fiduciaries, other service providers, and assigns, from any and all claims.” (Doc. 219-1 at 15) This release covers all claims “known and unknown, including but not limited to claims arising from or related to Defendant's employment of Plaintiffs and Participating Class Members, ...


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