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Tapia v. Zale Delaware Inc.

United States District Court, S.D. California

April 18, 2017

NAOMI TAPIA, individually and on behalf of other members of the general public similarly situated, Plaintiff,
v.
ZALE DELAWARE INC. d/b/a ZALE CORPORATION, a Delaware Corporation; and DOES 1 through 50, inclusive, Defendant.

          ORDER GRANTING MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT

          Hon. Peter C. Lewis United States Magistrate Judge.

         Presently before the Court is Plaintiff's Motion for Preliminary Approval of Class Action Settlement (“Settlement Agreement”). (Doc. 115.) Because the Settlement is unopposed, the Court took the matter under submission without oral argument pursuant to Civil Local Rule 7.1(d). After reviewing Plaintiff's arguments and the law, the Court concludes that the settlement is fundamentally fair, reasonable, and adequate, and therefore GRANTS the Preliminary Settlement Motion.

         GENERAL BACKGROUND

         1. Plaintiff's Claims

         Plaintiff commenced this action against Defendant on July 3, 2013. (Doc. 1.) Plaintiff alleges that she and “all other class members were and are currently denied the benefits and protections of the Fair Labor Standards Act of 1938 (“FLSA”) and the California labor Code, due to the institutionalized pay practices of Defendant.” (Doc. 13 at 7.) Plaintiff's First Amended Complaint (“FAC”) includes claims Defendant violated various sections of the California Labor Code, FLSA, and contains a representative action for penalties pursuant to the Private Attorneys General Act of 2004 (“PAGA”). (Id.)

         2. Rule 23 Class and FLSA Collective Action Certification

         Plaintiff moved to certify a class under Federal Rule of Civil Procedure 23 and to conditionally certify a collective action under the FLSA. (Doc. 44.) On April 6, 2016, District Judge Bashant granted Plaintiff's motion. (Doc. 76.) The Court certified for class treatment under Rule 23 Plaintiff's (1) California unpaid overtime claim (id. at 4-8), (2) inaccurate wage statement claim (id. at 8-9), (3) meal period claim (id. at 10-13), (4) rest break claim (id. at 13-15), and (5) waiting-time penalties claim (id. at 15-23). Thus, the Court certified a class of “[a]ll current and former hourly employees of [Defendant] who were designated by [Defendant] as non-exempt and who worked in California any time between July 3, 2009, and the trial of this matter.” (Id. at 21-22.)

         Judge Bashant also granted Plaintiff's request to conditionally certify a collective action under the FLSA based on Plaintiff's claim that Defendant failed to pay overtime compensation. (Doc. 76 at 19-21.) As such the Court conditionally certified a collective action of “[a]ll current and former hourly employees of Zale Delaware Inc. d/b/a Zale Corporation who were designated by Zale as non-exempt and who worked in the United States any time between July 3, 2010 and the trial of this matter.” (Id. at 22.)

         Defendant moved to decertify the Conditionally Certified FLSA Class and Rule 23 Overtime Class pursuant to Corbin v. Time Warner Entm't-Advance/Newhouse Partnership, 821 F.3d 1096 (9th Cir. 2016). (Doc. 85.) That motion was denied. (Doc. 99.)

         Plaintiff informed the Court on December 30, 2016 that the case had settled and the parties consented to Magistrate Judge jurisdiction to oversee settlement approval on March 29, 2017. (Docs. 112, 122.)

         SETTLEMENT TERMS

         The parties have submitted a comprehensive settlement document with approximately twenty pages of substantive terms, (see generally Settlement Agreement), and several documents related to class notice, (Doc. 117-2 at 24-29 (notice), 31-32 (claim form), 34-35 (opt-out form). The Settlement Class is defined as “all non-exempt, hourly-paid employee who worked for Zale in California during the Class Period.”[1] (Doc. 117-2 at 3.) This includes approximately 2, 480 putative Class Members. (Doc. 115-3 at 3.)

         The Settlement Agreement provides for a Settlement Fund of $1, 800, 000 to be used to pay:

(1) a proposed Class Representative Award of $10, 000; (2) PAGA penalties of $20, 000 in which $15, 000 shall be awarded to California Labor & Workforce Development Agency and the remaining $5, 000 is allocated to class members and is included in the Payout Fund; (3) a payment of no more than $29, 276.31 paid as fees to the third-party Claims Administrator; (4) a Fee Award to Class Counsel not to exceed 28% of the Settlement Agreement, totaling $504, 000; (5) a Costs Award to Class Counsel not to exceed $6, 000; (6) the remaining funds, totaling approximately $1, 230, 723.69 will be available to pay class members on a claims-made basis.

(Doc. 115-1 at 8-9.) The average recovery to class members is estimated to be approximately $500, to be determined based on the number of workweeks the class member worked for Zale. (Id. at 9.) Though class members will be paid on a claims-made basis, Zale will pay, at minimum, $504, 000 to the Settlement Fund and will make available additional funds should additional claims be made. Should the claims made total less than the original $504, 000, the difference between the aggregate value of the claims and $504, 000 will escheat to the Industrial Relations Unpaid Wages Fund maintained by the California Department of Finance. (Id.)

         RULE 23 PRELIMINARY FAIRNESS DETERMINATION

         Because the Rule 23 Class has already been certified, the Court next must make a preliminary determination as to whether the proposed settlement is “fair, reasonable, and adequate” pursuant to Federal Rule of Civil Procedure 23(e)(1)(C). Relevant factors to this determination include:

The strength of the plaintiffs' case; the risk, expense, complexity, and likely duration of further litigation; the risk of maintaining class action status throughout the trial; the amount offered in settlement; the extent of discovery completed and the state of the proceedings; the experience and views of counsel; the presence of a ...

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