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Mitchinson v. Love's Travel Stops & Country Stores, Inc.

United States District Court, E.D. California

May 25, 2017

IAN MITCHINSON, individually and on behalf of all others similarly situated, Plaintiff,
v.
LOVE'S TRAVEL STOPS & COUNTRY STORES, INC., an Oklahoma corporation, and LOVE'S COUNTRY STORES OF CALIFORNIA, a California corporation, Defendants.

          ORDER GRANTING PLAINTIFF'S MOTIONS FOR FINAL APPROVAL OF CLASS ACTION SETTLEMENT AND FOR ATTORNEYS' FEES (Doc. Nos. 37-38.)

         This action came before the court on April 18, 2017, for hearing of plaintiff Ian Mitchinson's motion for final approval of class settlement and motion for attorneys' fees. (Doc. Nos. 37-38.) The motions are unopposed. Attorneys Stuart Talley and Maggie Realin appeared on behalf of plaintiff Ian Mitchinson. Attorney Chris Truxler appeared on behalf of defendants Love's Travel Stops & Country Stores, Inc., and Love's Country Stores of California. Oral argument was heard at that time and the motions were taken under submission. For the reasons discussed below, the court will grant plaintiffs motions.

         FACTUAL BACKGROUND

         On September 28, 2015, plaintiff filed a class action complaint against defendants Love's Travel Stops & Country Stores, Inc. (“Love's Travel”), and Love's Country Stores of California (“Love's Country”). (Doc. No. 1.) Plaintiff brings a single claim for relief, alleging failure to provide itemized wage statements in violation of California Labor Code § 226. (Id. at 4.)

         In his complaint, plaintiff alleges as follows. Defendant Love's Travel is an Oklahoma corporation that oversees a chain of truck stops and convenience stores, and that forms the parent corporation for Love's Country, a California corporation. (Id. at 2, ¶¶ 4-5.) Plaintiff and other similarly situated employees were employed by defendants. (Id.) While employed with defendants, plaintiff and other employees received wage statements that failed to indicate the address of the employer or the inclusive dates for their pay periods. (Id. at 3-4, ¶¶ 11-12.)

         On September 1, 2016, the parties appeared before mediator Steve Cerveris in Los Angeles, California, for mediation. (Doc. No. 38-1 at 8.) While the parties were not able to reach a settlement agreement at the conclusion of the one-day mediation, the parties continued the settlement dialogue with the aid of Mr. Cerveris, and ultimately reached an agreement to settle. (Id.)

         On December 22, 2016, the court granted plaintiffs motion for preliminary approval of the class action settlement and preliminary class certification. (Doc. No. 34.) In granting the plaintiffs motion, the court preliminarily certified the proposed class of “[a]ll employees of Defendant in the State of California from September 28, 2014, through April 1, 2015.” (Doc. No. 34 at 2.) In addition, the court (i) appointed plaintiff Ian Mitchinson as class representative; (ii) appointed Ilym Group, Inc. as claims administrator; (iii) appointed plaintiffs class counsel as class representatives; and (iv) approved the proposed notice to class members. (Id. at 19.)

         Class notice was mailed to the settlement class on January 24, 2017. (Doc. No. 38-1 at 8.) The opt-out and objection period closed on March 10, 2017. (Doc. No. 38-2 at 4, ¶ 12.) Of the 364 class members, two class members submitted opt-out requests, and no class members objected to the settlement. (Id.)

         On February 23, 2017, plaintiff filed the instant motion for approval of attorneys' fees and costs and for plaintiffs service enhancement. (Doc. No. 37.) On March 21, 2017, plaintiff filed their unopposed motion for final approval of class action settlement. (Doc. No. 38.)

         The parties now request that the court confirm certification of the proposed settlement class and approve the terms of the settlement agreement. (Doc. Nos. 37-38.) Under the agreement, defendants will make a gross payment of $290, 000. (Doc. No. 38-1 at 9.) The agreement provides the following allocation for payment: (i) attorneys' fees of one third, or $96, 666.67 to be paid to class counsel; (ii) litigation costs and expenses of up to $17, 000 be paid to class counsel; (iii) settlement administration costs of up to $14, 500 to be paid to the third party administrator, Ilym Group, Inc.; (iv) class representative fees of $5, 000 to be paid to plaintiff in addition to plaintiffs entitlement as a class member; (v) the remaining funds (“net settlement amount”) of approximately $156, 834 to be paid to class members. (Doc. No. 38-2 at 4, ¶ 15.)

         The settlement is non-reversionary, and class members need not submit a claim to receive payment. (Doc. No. 38-1 at 6.) The funds for any settlement checks that remain uncashed for more than 180 calendar days after mailing will be paid to the California Department of Labor Standards Enforcement Unpaid Wage Fund with an identification of the corresponding class member. (Id. at 9.)

         After conducting the final fairness hearing and carefully considering the terms of the settlement, the court now addresses whether the proposed settlement is fair, reasonable, and adequate; and whether class counsel's request for attorneys' fees and costs should be granted.

         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. However, it has been recognized that when parties seek approval of a settlement agreement negotiated prior to formal class certification, “there is an even greater potential for a breach of fiduciary duty owed the class during settlement.” Bluetooth, 654 F.3d at 946. Thus, the court must review such agreements with “a more probing inquiry” for evidence of collusion or other conflicts of interest than what is normally required under the Federal Rules. Hanlon v. Chrysler Corp., 150 F.3d 1011, 1026 (9th Cir. 1998); see also Lane v. Facebook, Inc., 696 F.3d 811, 819 (9th Cir. 2012).

         When parties seek class certification only for purposes of settlement, Rule 23 “demand[s] undiluted, even heightened, attention” to the certification requirements. Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 620 (1997). The district court must examine the propriety of certification under Rule 23 both at this preliminary stage and at a later fairness hearing. See, e.g., Ogbuehi v. Comcast, 303 F.R.D. 337, 344 (E.D. Cal. Oct. 2, 2014); West v. Circle K Stores, Inc., No. 04-cv-0438 WBS GGH, 2006 WL 1652598, at *2 (E.D. Cal. June 13, 2006).

         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 and, if applicable, considers class certification. Id. 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 certification and 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).

         Here, the parties now move for final approval of the class action settlement..

         ANALYSIS

         I. Final Certification of the Settlement Class

         The court previously certified the proposed settlement class on a preliminary basis. (Doc. No. 34 at 4-10.) In that order, the court determined that based on the evidence before the court at that time, the requirements of Federal Civil Procedure Rule 23(a) and (b) had been met. Accordingly, the court will not repeat that analysis here. See Taylor v. FedEx Freight, Inc., No. 1:13-cv-01137-DAD-BAM, 2016 WL 6038949, at *2 (E.D. Cal. Oct. 13, 2016); Harris v. Vector Mktg, No. C-08-5198, 2012 WL 381202, at *3 (N.D. Cal. Feb. 6, 2012) (“As a preliminary matter, the Court notes that it previously certified . . . a Rule 23(b)(3) class . . . [and thus] need not analyze whether the requirements for certification have been met and may focus instead on whether the proposed settlement is fair, adequate, and reasonable”); cf. Emmons v. Quest Diagnostics Clinical Lab., Inc., No. 1:13-cv-00474-DAD-BAM, 2017 WL 749018, at *2 (E.D. Cal. Feb. 27, 2017) (revisiting certification analysis on plaintiffs motion for final approval of class action settlement because the court had expressed reservations about certification in its order granting preliminary approval of settlement). The court therefore certifies the proposed settlement class.

         II. Final Approval of the Settlement

         A class action may be settled only with the court's approval. Fed.R.Civ.P. 23(e). “Approval under 23(e) involves a two-step process in which the Court first determines whether a proposed class action settlement deserves preliminary approval and then, after notice is given to class members, whether final approval is warranted.” Nat'l Rural Telecomms. Coop. v. DIRECTV, Inc., 221 F.R.D. 523, 525 (CD. Cal. 2004). At the final approval stage, the primary inquiry is whether the proposed settlement “is fundamentally fair, adequate, and reasonable.” Lane v. Facebook, Inc., 696 F.3d 811, 818 (9th Cir. 2012); Hanlon v. Chrysler Corp., 150 F.3d 1011, 1026 (9th Cir. 1998). “It is the settlement taken as a whole, rather than the individual component parts, that must be examined for overall fairness.” Hanlon, 150 F.3d at 1026 (citing Officers for Justice v. Civil Serv. Comm 'n of S.F., 688 F.2d 615, 628 (9th Cir. 1982)); see also Lane, 696 F.3d at 818-19. Having already completed a preliminary examination of the agreement, the court reviews it again, mindful that the law favors the compromise and settlement of class action suits. See, e.g., In re Syncor ERISA Litig., 516 F.3d 1095, 1101 (9th Cir. 2008); Churchill Village, LLC. v. Gen. Elec, 361 F.3d 566, 576 (9th Cir. 2004); Class Plaintiffs v. City of Seattle, 955 F.2d 1268, 1276 (9th Cir. 1992); Officers for Justice v. Civil Serv. Comm'n, 688 F.2d 615, 625 (9th Cir. 1982). Ultimately, “the decision to approve or reject a settlement is committed to the sound discretion of the trial judge because he [or she] is exposed to the litigants and their strategies, positions, and proof.” Staton v. Boeing Co., 327 F.3d 938, 953 (9th Cir. 2003) (quoting Hanlon, 150 F.3d at 1026).

         To determine whether a settlement is “fair, reasonable, and adequate” under Federal Civil Procedure Rule 23(e), the court is to consider a number of factors, including (i) the strength of the plaintiffs' case; (ii) the risk, expense, complexity, and likely duration of further litigation; (iii) the risk of maintaining class action status throughout the trial; (iv) the amount offered in settlement; (v) the extent of discovery completed and the stage of the proceedings; (vi) the experience and views of counsel; (vii) the presence of a governmental participant; and (viii) the reaction of class members to the proposed settlement. See Churchill Vill. v. Gen. Elec, 361 F.3d 566, 575 (9th Cir. 2004) (citing Hanlon, 150 F.3d at 1026); see also Torrisi v. Tucson Elec. Power Co., 8 F.3d 1370, 1376 (9th Cir. 1993) (noting that not all factors will apply to every class action settlement, and that certain factors may predominate depending on the nature of the case). The court will also consider the procedure by which the parties arrived at the settlement. See Manual for Complex Litigation (Fourth) § 21.6 (2004); see also In re Tableware Antitrust Litig, No. C-04-3514 VRW, 2007 WL 4219394, at *2 (N.D. Cal. Nov. 28, 2007).

         1. Strength of ...


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