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Cifuentes v. CEVA Logistics U.S., Inc.

United States District Court, S.D. California

June 12, 2017

WILLIAM CIFUENTES, individually and on behalf of all others similarly situated, Plaintiff,
v.
CEVA LOGISTICS U.S., INC., Defendant.

          ORDER (1) CERTIFYING CLASS FOR SETTLEMENT PURPOSES; (2) PRELIMINARILY APPROVING CLASS SETTLEMENT; (3) APPROVING CLASS NOTICE; AND (4) SCHEDULING FINAL APPROVAL HEARING [DOC. NO. 16]

          MARILYN L. HUFF, DISTRICT JUDGE UNITED STATES DISTRICT COURT

         On May 5, 2017, Plaintiff William Cifuentes filed an unopposed motion seeking provisional class certification, preliminary approval of a proposed class settlement, approval of a proposed dissemination of class notice, and a final approval schedule. (Doc No. 16.) The Court held a hearing on the matter on June 12, 2017. Joshua Konecky appeared for Plaintiff. Nicole E. Forde appeared for Defendant. For the following reasons the Court grants Plaintiff's motion and sets a schedule for further proceedings.

         Background

         A. Factual and Procedural Background

         This is a wage and hour class action filed on behalf of all individuals who have performed one or more deliveries in California for Defendant CEVA Logistics U.S., Inc., while being classified as an independent contractor, no more than four years prior to the filing of the Complaint. (Doc. No. 1.) Defendant is a delivery company headquartered in Jacksonville, Florida, and engages in delivery services in California. (Id. ¶ 10.) Plaintiff claims that Defendant improperly categorized class members as independent contractors, rather than as employees, and as a result denied them the rights and protections afforded by the California Labor Code. (Id. ¶ 2.) Additionally, Plaintiff claims that Defendant failed to make meal and rest periods available to class members; did not provide accurate, itemized wage statements; and failed to reimburse class members for reasonable business expenses. (Id.) Lastly, Plaintiff claims Defendant failed to compensate class members for all hours worked, overtime, and full wages upon departure from the company as required by California Labor Code §§ 201, 202, and 203. (Id.) Plaintiff seeks compensation, attorneys' fees, and costs. (Id. ¶¶ 3, 5.)

         On August 3, 2016, Plaintiff filed a class action complaint against Defendant. (Doc. No. 1.) On October 5, 2016, the Magistrate Judge held an Early Neutral Evaluation (ENE). (Doc. No. 8.) Although a settlement was not reached at the ENE, parameters were set for a private mediation. (Id.) On February 14, 2017, the parties participated in an in-person mediation, at the conclusion of which a mediator's proposal was issued. (Doc. No. 16-4, Konecky Decl. ¶¶ 12-14.) On March 13, 2017, the mediator confirmed that, after significant deliberation, both sides had accepted the mediator's proposal. (Id. ¶ 15.) By the present motion, Plaintiff now seeks approval of the settlement class; preliminary approval of the settlement agreement and class notice; and a scheduling order for further proceedings. (Doc. No. 16.)

         B. Proposed Settlement

         Under the proposed settlement, Defendant will pay $1, 750, 000 to establish a settlement fund to resolve the litigation. (See Doc. No. 16-5, Konecky Decl. Ex. 1 (“Proposed Settlement”).) That amount does not include the employer's share of payroll taxes on any wage payments. (Id. ¶ 51) The settlement will be divided proportionally according to the number of weeks each class member worked. (Id. ¶ 56.) The class members will receive payment from the settlement fund less administrative costs; payments required under the Private Attorney General Act of 2004 (“PAGA”); a reserve fund; Plaintiff's service award; and attorneys' fees and expenses. (Id. ¶¶ 57-61); Cal. Lab. Code § 2699(i). Class members will not have to file claims to receive their payment. (Proposed Settlement ¶ 53(a)-(b).) The PAGA payment will take $87, 500 from the settlement fund and set aside 75% of it for the California Labor Workforce Development Agency (LWDA). (Id. ¶ 60.) The reserve fund will consist of 2% of the settlement fund, and will pay for any late or unexpected claims. (Id. ¶ 57.) Additionally, any remaining finances in the reserve fund will be donated to the parties' agreed upon cy pres beneficiary, Legal Aid at Work (LAAW). (Id. ¶ 55.) The class representative's service award is $7, 500. (Id. ¶ 58.) The parties agreed to a maximum attorney fee award of $583, 333. (Id. ¶ 59.) Class members need not submit claims to obtain their settlement check, and notice of the plain terms of the settlement will be sent to class members by first class mail. (Id. ¶ 53(a)-(b).) Class members reserve the right to object to the settlement, or to opt out. (Id. ¶ 53(f)-(g).) None of the fund will revert back to Defendant. (Id. ¶ 54.)

         Discussion

         When the parties reach a settlement agreement prior to class certification, the Court is under an obligation to “peruse the proposed compromise to ratify both the propriety of the certification and the fairness of the settlement.” Staton v. Boeing Co., 327 F.3d 938, 952 (9th Cir. 2003). Thus, the Court must first assess whether a class exists, and second, determine whether the proposed settlement is “‘fundamentally fair, adequate, and reasonable.'” Id.

         I. Class Certification

         In the present case, Plaintiff seeks to certify a class pursuant to Federal Rule of Civil Procedure 23(b)(3) for purposes of settlement only (Doc. No. 16-1 at 7.) The class includes all individuals who have made at least one delivery in California for Defendant while being classified as an independent contractor, within four years prior to the filing of the Complaint. (Doc. No. 1 ¶ 1.) A plaintiff seeking to certify a class under Rule 23(b)(3) must first satisfy the requirements of Rule 23(a). Fed.R.Civ.P. 23(b); see Wal-Mart Stores, Inc. v. Dukes, 131 S.Ct. 2541, 2548 (2011). Once subsection (a) is satisfied, the purported class must then fulfill the requirements of Rule 23(b)(3). Id.

         A. Rule 23(a) Requirements

         Rule 23(a) establishes that one or more plaintiffs may sue on behalf of class members if all of the following requirements are met: (1) numerosity; (2) commonality; (3) typicality; ...


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