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Wert v. U.S. Bancorp

United States District Court, S.D. California

May 5, 2017

MONICA R. WERT, individually and on behalf of others similarly situated, Plaintiff,
v.
U.S. BANCORP, U.S. BANK NATIONAL ASSOCIATION, Defendants.

          ORDER: (1) PRELIMINARILY APPROVING CLASS ACTION SETTLEMENT; (2) OVERRULING OBJECTIONS TO THE SETTLEMENT; (3) CONDITIONALLY APPROVING PROPOSED SETTLEMENT CLASS; AND (4) SETTING HEARING OF FINAL APPROVAL OF SETTLEMENT

          Hon. Cynthia Bashant United States District Judge.

         Plaintiff Monica R. Wert, on behalf of herself and a putative class, filed claims against Defendants U.S. Bancorp and U.S. Bank National Association, claiming they failed to provide compliant itemized wage statements in violation of California Labor Code § 226 and were entitled to the recovery of civil penalties for this violation under the Private Attorneys General's Act (“PAGA”), Cal. Labor Code § 2698 et seq. (ECF No. 45.) Additionally, Plaintiff requests civil penalties under PAGA alleging that Defendants violated California Labor Code § 512 when they failed to comply with California's meal-period requirements. (Id.)

         Now pending before this Court is the parties' joint motion for preliminary approval of class action settlement (ECF No. 86), which seeks an order conditionally certifying a proposed settlement class, preliminarily approving class action settlement, and setting a hearing for final approval of the settlement. Also pending is Charles Rodriguez's objections to the preliminary approval of the class action settlement. (ECF No. 87.)

         I. UNDERLYING CLAIMS

         In the Second Amended Complaint (“SAC”), which is the operative complaint in this case, Plaintiff alleges first that Defendants “violated California Labor Code § 226 by failing to provide compliant itemized wage statements to Plaintiff and their other current and former California U.S. Bank employees.” (SAC ¶ 2.) Plaintiff claims that the wage statements failed to: (1) show total hours worked by the employee; (2) adequately show deductions from wages; (3) itemize the dates in prior pay periods in which adjustments were made; and (4) itemize the inclusive dates of the pay period, including the pay period begin date. (SAC ¶ 27.)

         In the SAC, Plaintiff also alleges that Defendants “in violation of California Labor Code §§ 512 and 226.7, failed to provide Plaintiff and California U.S. Bank employees with required meal periods.” (SAC ¶ 2.) Plaintiff alleges that she, and other non-exempt workers, were forced to work more than five hours without meal breaks. (SAC ¶¶ 29, 32.)

         II. PROPOSED SETTLEMENT

         The proposed settlement agreement is attached as Exhibit A to the Declaration of Matthew S. Dente in Support of Plaintiffs Unopposed Motion for Preliminary Approval of Class Action Settlement. (Dente Decl. Ex. A (“Settlement” or “Settlement Agreement”), ECF No. 86.) It proposes to certify for settlement only four different subclasses. The subclasses are defined as follows:

(1) “Exempt Paystub Class” is defined as “all individuals employed by either Defendant in California as exempt employees who received one or more paper paychecks and/or paper wage statements at any time between November 13, 2012 and July 17, 2014 (without regard to the fact that such individuals had access to Employee Self Service).” (Settlement ¶ 16.)
(2) “Non-exempt Paystub Class” is defined as “all individuals employed by either Defendant in California as non-exempt, hourly paid employees at any time from November 13, 2012 to December 31, 2014.” (Settlement ¶ 30.)
(3) “Meal Period Provision Class” is defined as “all individuals employed by either Defendant in California as non-exempt, hourly paid employees at any time between November 13, 2012 and December 31, 2016 and who, during that time frame, received pay under the Other Pay Code.” (Settlement ¶ 26.) “Other Pay Code” means the pay code Defendants used to make meal period premium payments. (Settlement ¶ 34.)
(4) “Meal Period Pay Computation Class” is defined as “all individuals employed by either Defendant in California as non-exempt, hourly paid employees at any time between November 13, 2009 and December 31, 2016 and who during that time frame received pay under the other Pay Code.” (Settlement ¶ 23.)

         Individuals may be a member of more than one class.

         The Settlement provides that Defendants will set aside a non-reversionary settlement amount of $7, 000, 000. (Settlement ¶ 22.) From this Maximum Settlement Fund will be deducted any Class Representative Enhancement Payment (Plaintiff will seek $10, 000 (Settlement ¶ 61i)), Class Counsel fees (Counsel will request 30% of the settlement or $2, 100, 000 (Settlement ¶ 61j)), Costs (not to exceed $25, 000 (Settlement ¶ 61j)), settlement administration costs (the parties estimate this to be $55, 552), and payments to the Labor and Workforce Development Agency (“LWDA”) as 75% of funds attributable to release of PAGA claims (the parties calculate this amount to be $572, 500 (Settlement ¶ 61ci-iv.)) Assuming the amounts above are approved by the Court, the net settlement amount distributed to Class Members will be $4, 236, 948.

         The parties propose that Rust Consulting be appointed Settlement Administrator. (Settlement ¶ 46.) Fourteen days after granting the preliminary approval, Defendants will provide the Settlement Administrator with information including names and addresses of all Class Members. (Settlement ¶ 60.) The Settlement Administrator will calculate the individual settlement payment for each class member, based which class each individual is a member of and how many pay period the individual was employed by Defendants. (Settlement ¶ 60a.) Within twenty-eight calendar days of receiving the list of Class Members, the Settlement Administrator will mail Notices to the Class Members which will include the estimated payment amounts, number of eligible pay periods applicable to them based on Defendants' records, and will provide a mechanism for the Class Member to challenge these calculations. (Settlement ¶ 60bii.)

         After final settlement is approved, checks will be mailed directly to Class Members. The checks will be valid for six months, after which they will revert to the State of California Department of Industrial Relations Unclaimed Wages Fund in the name of the Class Member who did not cash the check. (Settlement ¶ 61.)

         In addition to the monetary settlement, Defendants have agreed to make changes to their payroll system to resolve any issues raised by this lawsuit. (Dente Decl. ¶ 16.).

         The Agreement provides for a Release from each participating Class Member, depending on the subclass of which he or she is a member, as follows:

(1) “Exempt Paystub Class” and “Non-exempt Paystub Class” agree to release “any and all claims for failure to provide accurate and/or complete itemized wage statements in violation of Labor Code § 226(a) between [November 13, 2012 and July 17, 2014 (“Exempt Paystub Class”) or between November 13, 2012 to December 31, 2014 (“Non-exempt Paystub Class”)], including a release for statutory penalties under Labor Code § 226(e) and civil penalties recoverable under PAGA for violations of Labor Code § 226(a), as well as a release for all claims known and unknown (pursuant to Civil Code § 1542), but only as to these released claims ” (Settlement ¶¶ 17, 31.)
(2) “Meal Period Provision Class” agrees to release “any and all claims for civil penalties under PAGA for failure to provide meal periods in accordance with Labor Code §§ 512 and 226.7 and Section 11(A) of IWC Wage Order 4-2011 for the pay periods in which and/or for which they received pay under the Other Pay Code, as well as a release from all claims known and unknown (pursuant to Civil Code § 1542), but only as to these released claims, from November 13, 2012 through December 31, 2016 ” (Settlement ¶ 27.)
(3) “Meal Period Pay Computation Class” agrees to release “any and all claims for failure to properly compute compensation for paid meal period premiums under Labor Code § 226.7 and the Section 11(B) of IWC Wage Order 4-2011, including compensation claims under § 226.7 and claims for civil penalties under PAGA for § 226.7 violations for failure to properly calculate the regular rate when paying a meal period premium. For the period from November 13, 2010 to [April 14, 2013], there shall be a release of all claims for statutory penalties under Labor Code § 203, without limitation as to the underlying basis for the claim.” For the period between April 15, 2013 and December 31, 2016, there shall be a release of penalties under Labor Code § 203, but only to the extent the claim is premised on Defendants' alleged failure to properly calculate the regular rate when paying a meal period premium, not claims premised on other underlying alleged violations like unpaid overtime, off-the-clock work, or for any other violation other than Defendants' failure to properly calculate the regular rate when paying a meal period premium. (Settlement ¶ 24; Amendment to Class Action Settlement (“Settlement Amendment, ” ECF No. 90-2.)[1]

         III. ANALYSIS

         A. Class Certification (for Settlement Purposes Only)

         Here, the Parties seek to certify a class for settlement purposes only. Federal Rule of Civil Procedure 23(a) provides that a class may be certified “only if (1) the class is so numerous that joinder of members is impracticable; (2) there are questions of law or fact common to the class; (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and (4) the representative parties will fairly and adequately protect the interests of the class.” Fed.R.Civ.P. 23(a). In addition to meeting the Rule 23(a) requirements, a class action must fall into one of the categories laid out in Rule 23(b). Fed.R.Civ.P. 23(b). The parties seek to certify the class under Rule 23(b)(3). Both Rules 23(a) and 23(b) are satisfied in this case.

         1. Rule 23(a)

         a. Numerosity

         The numerosity requirement is generally satisfied when the class contains 40 or more members, a threshold exceeded in this case. Consolidated Rail Corp. v. Town of Hyde Park, 47 F.3d 473, 483 (2d Cir. 1995); Cleano v. Marriott Int'l, Inc., 242 F.R.D. 544, 549 (N.D. Cal. 2007). The Settlement Agreement represents that the “Meal Period Pay Computation Class” has 15, 092 members, and the “Meal Period Provision Class” has 9, 429 members. (Settlement ¶¶ 23, 26.) Presumably the other two subclasses have at least this many members. Thus, the first requirement of numerosity is satisfied.

         b. Commonality

         The commonality requirement requires that there be “questions of law or fact common to the class.” Fed.R.Civ.P. 23(a)(2). Here, the class claims raise similar questions including: (1) whether the itemized wage statements issued to Class members omitted or misreported information required by Labor Code § 226(a) and whether that omission or misreporting resulted in injury under § 226(e); (2) whether Defendants had a policy of not providing meal periods to Class Members as required by California law, as evidenced by Defendants' payment of extra compensation under § 226.7; (3) whether civil penalties are available despite Defendants' payment of extra compensation under § 226.7; and (4) whether the extra compensation under § 226.7 was correctly calculated. Because Class Members here have the same or similar allegations, there are common questions of law and fact and Rule 23(a)(2) is satisfied.

         c. Typicality

         In general, the claims of the representative parties “need not be substantially identical” to those of all absent class members and need only be “reasonably coextensive” in order to qualify as typical. Hanlon v. Chrysler Corp., 150 F.3d 1011, 1020 (9th Cir. 1998). Here, Plaintiff worked for Defendants in California as a non-exempt, hourly employee during the time periods at issue, received wage statements with the alleged deficiencies, received extra hours for pay in lieu of missed meal periods and claims these extra hours were incorrectly calculated. Rule 23(a)(3) is therefore satisfied.

         d. Adequacy of Representation

         For the class representative to adequately and fairly protect the interests of the class, two criteria must be satisfied. “First, the named representatives must appear able to prosecute the action vigorously through qualified counsel, and second, the representatives must not have antagonistic or conflicting interests with the unnamed members of the class” Lerwill v. Inflight Motion Picture, Inc.,582 F.2d 507, 512 (9th Cir. 1978). Here, the Named Plaintiff has vigorously pursued the action thus far and appears capable of continuing to do so. Although Plaintiff seeks an incentive award in addition to her award as a Class Member, this does not necessarily mean she has a conflicting interest with the remaining members of the class. See In re Online DVD-Rental Antitrust Litig.,779 F.3d 934, 943 (9th Cir. 2015) (“[I]ncentive awards that are intended to compensate class representatives for work undertaken on behalf of a class are fairly typical in class action cases” and “do not, by themselves, create an impermissible conflict between class members and their ...


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