United States District Court, N.D. California
ORDER RE MOTION FOR PRELIMINARY APPROVAL OF CLASS
ACTION SETTLEMENT RE: DKT. NO. 35
PHYLLIS J. HAMILTON United States District Judge.
court assumes that the parties are familiar with the facts
and procedural history of both this action (the
“Sandoval Action”) and Rodriguez et al. v.
AT&T Mobility Services et al., 3:16-cv-4567 WHO (the
“Rodriguez Action”). On February 7, 2018,
plaintiffs from both the Sandoval Action and the Rodriguez
Action (herein, “plaintiffs”) jointly filed in
this court an unopposed motion for preliminary approval of
class action settlement (the “motion”). That
motion also requests the court grant plaintiffs leave to file
an amended complaint that adds the Rodriguez Action's
plaintiffs and causes of action.
court has had the opportunity to review plaintiffs'
motion and the supporting documents. For at least the three
reasons set forth below, the court believes there are serious
impediments to granting plaintiffs' motion.
plaintiffs' motion is premature under the parties'
own settlement agreement. Paragraph 70 of the parties
“Joint Stipulation of Class Action Settlement and
Release” (the “Settlement Agreement”)
Prior to filing a motion for preliminary approval, Plaintiffs
shall obtain dismissal of the Rodriguez Action
without prejudice, and will file an amended complaint in
the Sandoval Action by stipulation that include[s]
Plaintiffs Rodriguez and Khadadoorian as named Plaintiffs,
and that include[s] the claims originally raised in the
Agreement ¶ 70 (emphasis added). Because the parties
have completed neither of these prerequisites,
plaintiffs' motion, as it currently stands, would be
parties to the Rodriguez Action have made representations to
Judge Orrick that directly contradict Paragraph 70 of the
Settlement Agreement. Specifically, on February 13, 2018, the
parties in that action requested that Judge Orrick continue a
February 20, 2018 case management conference to June 26,
2018, because “if the settlement [in the Sandoval
Action] is approved, [the Rodriguez Action] will be
consolidated with Sandoval for settlement purposes and then
dismissed.” Rodriguez Action, Dkt. 32 ¶¶ 1-3.
As noted above, under the Settlement Agreement, plaintiffs
were required to do the opposite-dismiss the Rodriguez Action
and amend the complaint by stipulation to add the Rodriguez
plaintiffs before filing the pending motion.
makes sense. The court cannot consider, order notice, and
approve a class action settlement for a matter pending before
a different court. If the parties want this court to consider
and approve a settlement involving parties and claims from
both actions, the parties must follow proper procedure to
incorporate the Rodriguez causes of action and named
plaintiffs into this action first. Otherwise the two cases
will have to be resolved individually.
plaintiffs' motion and the Settlement Agreement
contemplate that $125, 000 of the settlement fund will be
used to pay separate consideration to certain class members
who release claims that could have been brought under the
Fair Labor Standards Act (the “FLSA”). However,
there is no FLSA cause of action alleged in the Sandoval
Action, in the Rodriguez Action, or in the proposed amended
complaint. Further, because the motion provides no argument
on the matter, it is at best unclear if the Settlement
Agreement complies with notice and collective action
certification procedures required by the FLSA. Nor is it
clear whether the parties believe they do not have to comply
with the notice requirements of the FLSA. Without additional
information on these points, including the scope of the
proposed FLSA collective action, the court would be unable to
approve this aspect of the settlement.
the parties' supporting papers are sometimes
substantively inconsistent. For example, the Settlement
Agreement and proposed class notice set forth contradictory
payment calculations. The Settlement Agreement defines the
“non-Ly Settlement Subclass” as
“all Class Members who were not also Ly
Settlement Class Members” and provides that each member
of that subclass “shall be assigned an additional 1
point for each of that individual's workweeks during the
Class Period.” See Settlement Agreement
¶¶ 6, 43(b), 44(b). The proposed class notice
states the opposite: “[E]ach Class Member who was also
a class member in the Ly Action and did not opt-out of the Ly
Action will receive an additional point.” Dkt. 37-1,
Ex. A at 4-5. The court will not approve a class notice that
does not accurately reflect the parties' agreement.
addition to substantive inconsistencies, the supporting
papers contain a number of drafting errors. For example, the
Settlement Agreement states “All Individual Settlement
Payments will be allocated as follows: . . . (ii) seven
five percent (90%) will be allocated toward non-wages
for which IRS Forms 1099-MISC will be issued.”
Settlement Agreement ¶ 65 (emphasis added). The proposed
class notice contains similar errors. See, e.g.,
Dkt. 37-1, Ex. A at 4 (“the Net Settlement Amount has
be allocated to resolve” (emphasis added));
Ex. A at 5 (same).
the court has continued the hearing on plaintiffs' motion
to March 28, 2018, the court will provide the parties an
opportunity to address the above issues by March 14, 2018. At
minimum, if the parties wish the court to consider the
pending motion, the parties must cure the Paragraph 70 issue,
explain the FLSA issues in a jointly filed supplemental brief
of no more than ten pages, and ensure the class notice
accurately reflects the parties' agreement. The parties
must file any amended supporting documents and a PDF redline
showing what changes were made.