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Roe v. Frito-Lay, Inc.

United States District Court, N.D. California

April 7, 2017

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


          HAYWOOD S. GILLIAM, JR. United States District Judge.


         Pending before the Court are two motions in this putative class action dispute. First, Plaintiff Jane Roe moves the Court for an order granting final approval of the parties' proposed settlement. Dkt. No. 108. Second, Plaintiff moves the Court for an award of attorneys' fees and costs. Dkt. No. 109. The Court held a final fairness hearing on both motions on February 9, 2017. For the reasons stated below, the Court GRANTS final approval. The Court also GRANTS IN PART AND DENIES IN PART Plaintiff's motion for attorneys' fees and costs.


         A. Litigation History

         Plaintiff Jane Roe's operative class action complaint alleges a single claim for violations of the Fair Credit Reporting Act (“FCRA”) against Defendant Frito-Lay, Inc. Dkt. No. 27 (“FAC”). Specifically, Plaintiff alleges that Defendant violated 15 U.S.C. § 1681b(b)(3)(A) by failing to provide notice to prospective and existing employees before taking adverse employment action based on information disclosed in consumer reports. Id. ¶¶ 12, 28, 30-34, 38. Without proper notice, putative class members could not challenge the accuracy or relevancy of the report. Id. ¶¶ 6, 33. Defendant answered on October 3, 2014, denying Plaintiff's allegations and arguing that the case is not appropriate for class certification. Dkt. No. 28 ¶¶ 18-43, 46-50. Defendant also raised twenty-five affirmative defenses. See Id. at 11-16.

         The settlement process was protracted. Following lengthy mediation sessions with mediator Mark Rudy, Esq., see Dkt. No. 31, 35, Plaintiff filed its initial motion for preliminary approval on October 14, 2015. See Dkt. No. 53. Nevertheless, at the November 19, 2015, hearing on the motion, the Court determined that the parties were not actually in agreement. The parties consequently engaged Mr. Rudy to assist with further settlement negotiations. The parties notified the Court that they had reached a new settlement on May 11, 2016, see Dkt. No. 93, and filed another motion for preliminary approval of class action settlement on June 23, 2016. Dkt. No. 100. On August 5, 2016, the Court granted preliminary approval. Dkt. No. 103. The Court also appointed Plaintiff as class representative; appointed Devin H. Fok, Joshua E. Kim of A New Way of Life Reentry Project, and John A. Girardi Keese as class counsel; and provisionally certified a Rule 23(b)(3) damages class. Id. Plaintiff represented that it would file a motion for attorneys' fees not to exceed thirty-three and one-third percent and for reasonable costs. Dkt. No. 100-5 at 16.

         B. Overview of Settlement Agreement

         On June 23, 2016, the parties submitted a class action settlement agreement that details the provisions of the proposed settlement. See SA. The key terms are as follows:

         Class Definition: All individuals residing in the United States who were the subject of a consumer report obtained by Frito Lay, Inc. for employment between December 20, 2011, and February 28, 2014, and (1) for whom a disposition of “Background Check Review - Fail” or “Criminal Background Fail” was entered in Frito-Lay, Inc.'s applicant tracking system; and/or (2) whose report was updated following a dispute with Frito-Lay's background check vendor; and/or (3) whose applicant file includes a letter sent to the applicant on the basis of the applicant's failure of a pre-employment background check. Dkt. No. 100-5 (“SA”) at 9. The parties have represented that there are a total of 2, 931 persons who fall within this class definition. Dkt. No. 108 at 4.

         Monetary Relief: In full settlement of the claim asserted in the FAC, Defendant agrees to pay a gross settlement sum of $950, 000. This includes any award of attorneys' fees and costs, an incentive award to the named Plaintiff, and all costs of administration, including settlement administration fees. SA at 3. Given the currently estimated class size and fees, each class member will receive a payment of approximately $193.45. Dkt. No. 108 at 7. To the extent that any funds remain after all claims are paid, the National Consumer Law Center will receive the balance as a cy pres recipient. SA at 15-16.

         Release: The class will release Defendant from all claims, whether known or unknown, that were alleged or asserted or that could have been asserted based on the factual allegations forth in the operative complaint. Id. at 10-12. Named Plaintiff Roe also provides a general release to Defendant for any past, present, or future claims under state and federal law in connection with any act or omission by Defendant. Id. at 12-13.

         Attorneys' Fees and Costs: The settlement agreement authorizes class counsel to seek attorneys' fees not to exceed thirty-three and one-third percent of the gross settlement fund and to seek reasonable costs. Id. at 16. It further provides that class counsel may seek an incentive award for named Plaintiff not to exceed $10, 000. 17.


         A. Final Settlement Approval

         1. Class Certification

         Final approval of a class action settlement requires, as a threshold matter, an assessment of whether the class satisfies the requirements of Federal Rule of Civil Procedure 23(a) and (b). Hanlon v. Chrysler Corp., 150 F.3d 1011, 1019-1022 (9th Cir. 1998). Because no facts that would affect these requirements have changed since the Court preliminarily approved the class on August 5, 2016, this order incorporates by reference its prior analysis under Rules 23(a) and (b) as set forth in the order granting preliminary approval. See Dkt. No 103 at 3-8. The Court affirms its previous findings and certifies the settlement class.

         2. The Settlement

         “The claims, issues, or defenses of a certified class may be settled . . . only with the court's approval.” Fed.R.Civ.P. 23(e). The Court may finally approve a class settlement “only after a hearing and on finding that it is fair, reasonable, and adequate.” Fed.R.Civ.P. 23(e)(2); Officers for Justice v. Civil Serv. Comm'n of the City and County of San Francisco, 688 F.2d 615, 625 (9th Cir. 1982) (“The district court's role in evaluating a proposed settlement must be tailored to fulfill the objectives outlined above. In other words, the court's intrusion upon what is otherwise a private consensual agreement negotiated between the parties to a lawsuit must be limited to the extent necessary to reach a reasoned judgment that the agreement is not the product of fraud or overreaching by, or collusion between, the negotiating parties . . . .”). To assess whether a proposed settlement comports with Rule 23(e), the Court “may consider some or all” of the following factors: (1) the strength of plaintiff's case; (2) the risk, expense, complexity, and likely duration of further litigation; (3) the risk of maintaining class action status throughout the trial; (4) the amount offered in settlement; (5) the extent of discovery completed, and the stage of the proceedings; (6) the experience and views of counsel; (7) the presence of a governmental participant; and (8) the reaction of the class members to the proposed settlement. Rodriguez v. West Publ'g Corp., 563 F.3d 948, 963 (9th Cir. 2009); see also Hanlon, 150 F.3d at 1026. “The relative degree of importance to be attached to any particular factor” is case specific. Officers for Justice, 688 F.2d at 625.

         In addition, “[a]dequate notice is critical to court approval of a class settlement under Rule 23(e).” Hanlon, 150 F.3d at 1025. As discussed below, the Court finds that the proposed settlement is fair, adequate, ...

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