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Brewer v. Salyer

United States District Court, E.D. California

April 18, 2017

ROBIN BREWER, Plaintiff,
v.
SCOTT SALYER, Defendant.

          ORDER GRANTING PLAINTIFF'S MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT AND DISMISSAL OF CLASS CLAIMS (Doc. No. 225)

         This matter is before the court on April 18, 2017, for hearing of plaintiff's unopposed motion for preliminary approval of class action settlement and dismissal of class claims. (Doc. No. 225.) Attorney Matthew Galin appeared telephonically on behalf of plaintiff Robin Brewer, and attorney Malcolm Segal appeared telephonically on behalf of defendant Scott Salyer. Oral argument was heard and the motion was taken under submission. For the reasons stated below, plaintiff's motion will be granted.

         FACTUAL BACKGROUND

         On September 21, 2006, plaintiff Robin Brewer filed a class action complaint against defendant, president of a non-party company, SK Foods. (Doc. No. 1.) Plaintiffs complaint is based on allegations that defendant knowingly hired undocumented immigrants at SK Foods for the purpose of depressing wage rates.

         Plaintiff filed a first amended complaint (“FAC”) on June 1, 2007. (Doc. No. 38.) In the FAC, plaintiff alleged violations of the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1961, based on the predicate offense of violating the Immigration and Nationality Act (“INA”). (Id.) The specific INA violation plaintiff alleged involved 8 U.S.C. § 1324(a)(3), which prohibits importing undocumented aliens for employment purposes.

         On May 18, 2009, the court granted plaintiffs motion for class certification. (Doc. No. 101.) In granting the plaintiffs motion, the court certified a class of “All Seasonal Hourly Wage Earners employed by SK Foods between June 1, 2003, and June 1, 2008.” (Id. at 18.) The court subsequently granted plaintiffs motion to expand the class to include all seasonal workers employed by SK Foods from September 22, 2002, to the date of filing a second amended complaint.” (Doc. No. 112.) Plaintiffs Second Amended Complaint (“SAC”) reflecting the expanded class was filed on July 21, 2009. (Doc. No. 113.)

         In 2009, defendant Salyer was charged by way of indictment in a federal criminal prosecution. (Doc. No. 173 at 2-3; 185.) During this same period, SK Foods went into involuntary bankruptcy, with Bradley Sharp appointed as Trustee. (Id.) Because of the extensive litigation surrounding the bankruptcy and the criminal proceedings brought against Salyer, the court stayed discovery in this action. (Id.)

         Defendant entered a guilty plea in the criminal case in March 2012 and was incarcerated between April 2013 and November 2016. (Doc. No. 210 at 3.)[1] On January 20, 2017, the court lifted the discovery stay in this action, and required the parties to file a motion for settlement, voluntary dismissal, or compromise within sixty days of the date of that order. (Doc. No. 224.)

         On March 14, 2017, plaintiff filed the instant unopposed motion for preliminary approval of class action settlement and dismissal of claims. (Doc. No. 225.) Under the proposed settlement agreement, the class will dismiss all claims without prejudice, with each side to bear its own costs. (Doc. No. 226 at 5.) Plaintiff now seeks an order (i) approving the class settlement agreement; (ii) approving the form and method of service, and directing that class notice be sent to proposed class members; and (iii) setting a hearing date on final settlement approval. (Id. at 9.)

         LEGAL STANDARD

         “Courts have long recognized that settlement class actions present unique due process concerns for absent class members.” In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935, 946 (9th Cir. 2011) (citation and internal quotations omitted). To protect the rights of absent class members, Rule 23(e) of the Federal Rules of Civil Procedure requires that the court approve all class action settlements “only after a hearing and on finding that it is fair, reasonable, and adequate.” Fed.R.Civ.P. 23(e)(2); Bluetooth, 654 F.3d at 946.

         Review of a proposed class action settlement ordinarily involves two hearings. See Manual for Complex Litigation (4th) § 21.632. First, the court conducts a preliminary fairness evaluation. If the court makes a preliminary determination on the fairness, reasonableness, and adequacy of the settlement terms, the parties are directed to prepare the notice of proposed settlement to the class members. Id. (noting that if the parties move for both class certification and preliminary approval, the certification hearing and preliminary fairness evaluation can usually be combined). Second, the court holds a final fairness hearing to determine whether to approve the settlement. Id; see also Narouz v. Charter Commc'ns, Inc., 591 F.3d 1261, 1266-67 (9th Cir. 2010).

         ANALYSIS

         I. Proposed Settlement Agreement

         Plaintiff here seeks approval of their proposed settlement agreement. (Doc. No. 225.) Under Rule 23(e), a court may approve a class action settlement only if the settlement is fair, reasonable, and adequate. Bluetooth, 654 F.3d at 946. “[Preliminary approval of a settlement has both a procedural and substantive component.” See, e.g., In re Tableware AntitrustLitigation, 484 F.Supp.2d 1078, 1079 (N.D. Cal. 2007) (citing Schwartz v. Dallas Cowboys Football Club, Ltd.,157 F.Supp.2d 561, 570 n.12 (E.D. Pa. 2001)). In particular, preliminary approval of a settlement and notice to the proposed class is appropriate if: (i) the proposed settlement appears to be the product of serious, informed, non-collusive negotiations; and (ii) the settlement falls within the range of possible approval, has no obvious deficiencies, and does not improperly grant preferential treatment to class representatives or segments of the class. Id; see also Ross v. Bar None Enterprises, Inc., No. 2:13-cv-00234-KJM-KJN, 2014 WL 4109592, at *9 (E.D. Cal. Aug. ...


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