United States District Court, S.D. California
DOUGLAS THOMPSON on behalf of himself, others similarly situated, and the general public, Plaintiff,
COSTCO WHOLESALE CORPORATION and DOES 1 through 100, Defendant.
FINAL APPROVAL OF CLASS SETTLEMENT [DOC. NO.
Cathy Ann Bencivengo United States District Judge.
matter is before the Court on Plaintiff's unopposed
motion for Final Approval of Class/Collective Action
Settlement; Award of Attorneys' Fees, Costs,
Class/Collective Representative Service Award, Claims
Administration Expenses, LWDA Payment; and Entering Judgment.
[Doc. No. 70.] The Court held a hearing on this motion on
September 1, 2017. As discussed below, the motion for final
approval is granted, the motion for attorneys' fees,
costs and class representative enhancement awards and LWDA
payment is granted in part, and judgment is entered.
a former truck driver for Defendant Costco
(“Costco”), initiated this class action lawsuit
in the Superior Court of San Diego County on October 17,
2014, asserting eleven claims under California's Labor
Code and unfair competition laws. Plaintiff alleged that
Costco failed to provide meal and rest periods and to
properly compensate its truck drivers. Defendant removed the
case to this Court on November 20, 2014.
27, 2016, the parties entered in a settlement agreement.
[Doc. No. 59-2.] Following the terms of the Settlement
Agreement, Plaintiff's counsel sought and was granted
leave to file a third amended complaint (“TAC”)
to added claims for unpaid wages and liquidated damages under
the Fair Labor Standards Act (“FLSA”), a claim
for penalties under California Labor Code section 226, and a
claim under the Private Attorney General Act of 2004
(“PAGA”). [Doc. Nos. 55, 57.]
December 2, 2016, Plaintiff filed a motion for preliminary
approval of June 27, 2016 settlement agreement. [Doc. No.
59.] On February 22, 2017, the Court issued an order that
held that all of the requirements for certification of a Rule
23 class and FLSA collective for settlement purposes, except
for the adequacy of Plaintiff's counsel, had been
satisfied but denied Plaintiff's motion for preliminary
approve of the first settlement because of a number of
deficiencies. [Doc. No. 60.] The Court required that
each of the deficiencies be remedied in any renewed motion
for preliminary approval.
March 30, 2017, Plaintiff filed a renewed motion for
preliminary approval of a new settlement agreement signed on
or about March 23, 2017, that according to Class/Collective
Counsel (“Counsel”), fixed the deficiencies noted
by the Court. [Doc. No. 64.] On April 26, 2017, the Court
denied the renewed motion, noting that although the revised
settlement agreement corrected some of the deficiencies
reported by the Court, the release language remained
inadequate. [Doc. No. 66.]
10, 2017, Plaintiff filed his third motion for preliminary
approval of settlement. [Doc. No. 67.] The Court found that
the settlement agreement signed on or about May 8, 2017,
remedied all of the deficiencies it had identified in
previous orders and therefore granted preliminary approval.
[Doc. No. 68.]
agreement provides for settlement of claims for meal periods
under the FLSA, California Labor Code, the Unfair Competition
Law (UCL) and derivative claims for wage statement and
waiting time penalties. It authorizes: (1) a gross settlement
fund in the amount of $2, 000, 000; (2) a class
representative award of $5, 000 to Thompson; (3) $10, 000 to
settlement of PAGA claims; (4) $21, 000 in class
administrator fees; (5) $500, 000 to Counsel for fees and
$20, 000 in costs; 90% of the remainder, after the
aforementioned payments, as the net Rule 23 class settlement
fund (estimated to be $1, 320, 750); and 10% of the remainder
as the net FLSA collective settlement fund (estimated to be
$146, 750). [Doc. No. 64-1 at 5-7.] Additionally, Counsel
estimates that 924 participating class members will receive
an average payment of $1, 397.73, and the 459 class members
who have opted-in to the FLSA collective will receive a
settlement payment of $312.64 based on the agreed upon
settlement defines the Rule 23 class as “all current
and former fleet drivers employed at a Costco business center
or depot in California at any time during the period of
October 17, 2010, through October 4, 2016. The settlement
also seeks certification of the FLSA collective comprised of
“all current and former drivers employed at a Costco
business center or depot in California at any time during the
period of October 17, 2011 and October 4, 2016. [Doc. No. 373
preliminary approval order set a final approval hearing for
September 1, 2017. The final approval hearing took place as
scheduled. Both parties were represented by counsel. No class
members filed objections to the settlement, and no class
members attended the hearing. However, one class member
requested exclusion from the settlement.
Final Approval of Settlement
Certification of the Settlement Classes.
settlement here envisions certification of the Rule 23 class
as “all current and former fleet drivers employed at a
Costco business center or depot in California at any time
during the period of October 17, 2010, through October 4,
2016.” [Doc. No. 70-8 at 5.] The settlement also seeks
certification of the FLSA collective comprised of “all
current and former drivers employed at a Costco business
center or depot in California at any time during the period
of October 17, 2011 and October 4, 2016.” [Id.
considering a motion for approval of either a Rule 23 class
action or an FLSA collective action the Court must perform
the threshold task of certifying the class or collective.
See generally Millan v. Cascade Water Servs. Inc.,
310 F.R.D. 593, 602-607 (E.D. Cal. 2015). The Court must
“ascertain whether the proposed settlement class
satisfies the requirements of Rule 23(a) of the Federal Rules
of Civil Procedure applicable to all class actions, namely:
(1) numerosity, (2) commonality, (3) typicality, and (4)
adequacy of representation.” Hanlon v. Chrysler
Corp., 150 F.3d 1011, 1019 (9th Cir. 1998).
Additionally, the Court must determine whether class counsel
is adequate and whether “the action is maintainable
under Rule 23(b)(1), (2), or (3).” In re Mego Fin.
Corp. Sec. Litig., 213 F.3d 454, 462 (9th Cir. 2000)
(quoting Amchen Prod. v. Windsor, 521 U.S. 591, 614
(1997)). However, “a Court has a considerably less
stringent obligation to ensure fairness of the settlement in
an FLSA collective action than a Rule 23 action because
parties who do not opt in are not bound the
settlement.” Millan, 310 F.R.D. at 607
(internal quotation marks omitted).
requirement is satisfied if the class is “so numerous
that joinder of all members is impracticable.”
Fed.R.Civ.P. 23(a)(1). “A class greater than forty
members often satisfies this requirement. . . .”
Waller v. Hewlett-Packard Co., 295 F.R.D. 472, 482
(S.D. Cal. 2013) (citing Californians for Disability
Rights, Inc. v. Cal. Dep't of Transp., 249 F.R.D.
334, 346 (N.D. Cal. 2008)). Here, notice packets were mailed
to 925 potential class members. Joinder of all these
potential plaintiffs would be impracticable. Accordingly,
this requirement has been met.
requirement is satisfied if “there are questions of law
or fact common to the class.” Fed.R.Civ.P. 23(a)(2).
“To satisfy this commonality requirement, plaintiffs
need only point to a single issue common to the class.”
Vasquez v. Coast Valley Roofing, Inc., 670 F.Supp.2d
1114, 1121 (E.D. Cal. 2009). Here, the commonality
requirement is satisfied because all of the class claims
involve common questions of law and fact surrounding
Defendant's meal and rest period policies, payment of
overtime, and payment for all time worked.
requirement is satisfied if “the claims or defenses of
the representative parties are typical of the claims or
defenses of the class.” Fed.R.Civ.P. 23(a)(3).
“The test of typicality is whether other members have
the same or similar injury, whether the action is based on
conduct which is not unique to the named plaintiffs, and
whether other class members have been injured by the same
course of conduct.” Hanon v. Dataproducts
Corp., 976 F.2d 497, 508 (9th Cir. 1992) (internal
quotations and citation omitted). Here, the typicality
requirement is satisfied because the claims of named
Plaintiff and the class are the same. The wrongful conduct
alleged in the complaint is not unique to the class
representative, and the damages to the class members, if any,
are similar insofar as they relate to unpaid wages and Labor
Adequacy of Class Representative and Class Counsel
final Rule 23(a) requirement is that “the
representative parties will fairly and adequately protect the
interests of the class.” Fed.R.Civ.P. 23(a)(4). This
requires the Court address two questions: “(a) do the
named plaintiffs and their counsel have any conflicts of
interest with other class members and (b) will the named
plaintiffs and their counsel prosecute the action vigorously
on behalf of the class.” In re Mego Fin. Corp. Sec.
Litig., 213 F.3d at 462. A court certifying a class must
consider: “(i) the work counsel has done in identifying
or investigating potential claims in the action; (ii)
counsel's experience in handling class actions, other
complex litigation, and the types of claims asserted in the
action; (iii) counsel's knowledge of the applicable law;
and (iv) the resources that counsel will commit to
representing the class.” Fed.R.Civ.P. 23(g)(1)(A). The
Court may also consider “any other matter pertinent to
counsel's ability to fairly and adequately represent the
interests of the class.” Id. at 23(g)(1)(B).
Ultimately, when only one applicant seeks appointment as
class counsel, the court must determine that “[c]lass
counsel . . . fairly and adequately represent the interests
of the class.” Id. at 23(g)(4).
while there is no obvious conflict between Thompson's
interests and those of the class members, the Court has
expressed its concern that Thompson may have favored his own
interests at the expense of the class members in achieving
the settlement. Similarly, the question of Counsel's
adequacy has been an ongoing concern of the Court's.
While Counsel has provided evidence of his firm's
experience litigating overtime and rest/meal period cases,
along with other wage and hour class cases, the Court has
expressed its concerns regarding their “failure to
recognize this action as a hybrid action raises question as
to counsel's understanding of the procedural rules
applicable to the FLSA claims it proposes that the class
release without compensation.” [Doc. No. 60 at
8:13-16.] Moreover, upon consideration of the revised
settlement the Court noted that it did “little to
satisfy the Court that class counsel have prosecuted the
action vigorously on behalf of the class.” [Doc. No. 68
at 7:21-23.] In the present motion, Counsel admits that they
“did not key in on the cases to which the Court cited
that indicate the need for a separate fund when settling FLSA
claims along with Rule 23 claims” but assert that they
have addressed the Court's concerns “by creating
two net settlement funds out of the gross settlement amount
of $2, 000, 000 and reducing their attorney fee request from
33 1/3 % to 25%.” [Doc. No. 70 at 23:5-11.] But, the
Court does not consider Counsel's reduction of their fee
request in order to fund/finance/subsidize the separate
collective action settlement fund as evidence of them putting
the Collective Members' interests above their own or of
them vigorously prosecuting the case vigorously on their
the Court's concerns, no Class/Collective Member has
filed an objection challenging the adequacy of the
representative parties. Accordingly, the Court finds this
element satisfied for the purposes of certification of the
Predominance and Superiority
addition to meeting the conditions imposed by Rule 23(a), the
parties seeking class certification must show that the action
is maintainable under Fed.R.Civ.P. 23(b)(1), (2) or
(3).” Hanlon, 150 F.3d at 1022. “Rule 23
(b)(3) permits a party to maintain a class action if . . .
the court finds that questions of law or fact common to class
members predominate over any questions affecting only
individual members, and that a class action is superior to
other available methods for fairly and efficiently
adjudicating the controversy. Conn. Ret. Plans &
Trust Funds v. Amgen Inc., 660 F.3d 1170, 1173 (9th Cir.
2011), aff'd, 133 S.Ct. 1184 (2013) (citing
Fed.R.Civ.P. 23(b)(3)). The “predominance inquiry tests
whether proposed classes are sufficiently cohesive to warrant
adjudication by representation.” Hanlon, 150
F.3d at 1022-23 (quoting Amchen Prods, Inc., 521
U.S. at 623). It requires an examination into whether there
are “legal or factual questions that qualify each class
member's case as a genuine controversy.”
Id. The superiority inquiry “requires
determination of whether the objectives of the particular
class action procedure will be achieved in the particular
case. Id. at 123.
all of the class members were allegedly subject to
Defendant's purported illegal labor policies. The legal
and factual questions common to each class member's claim
predominate over any questions affecting individual class
members. The relatively limited potential recovery for the
class members as compared with the costs litigating the
claims also support the conclusion that a class action is
superior to other methods for ...