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Flores v. ADT LLC

United States District Court, E.D. California

February 27, 2018

EDHER FLORES, individually and on behalf of other members of the general public similarly situated, Plaintiff,
v.
ADT LLC, Defendant.

          FINDINGS AND RECOMMENDATIONS GRANTING PLAINTIFF'S MOTION FOR FINAL APPROVAL OF THE CLASS ACTION SETTLEMENT (Doc. 38) AND GRANTING IN PART PLAINTIFF'S MOTIONS FOR FEES AND CLASS REPRESENTATIVE INCENTIVE PAYMENT (Doc. 37)

          JENNIFER L. THURSTON UNITED STATES MAGISTRATE JUDGE

         Edher Flores seeks final approval of the class action settlement reached with Defendant ADT LLC. (Doc. 38) In addition, Plaintiff seeks an award of attorney's fees and costs from the Settlement fund; costs for settlement administration; and a class representative enhancement. (Doc. 37) Defendant does not oppose these requests, and no objections were filed by class members.

         Because Plaintiff carries his burden to demonstrate certification of the Settlement Class is appropriate under Rule 23 of the Federal Rules of Civil Procedure and that the terms of the settlement are fair, reasonable, and adequate, the Court recommends Plaintiff's request for final approval of the Settlement be GRANTED. In addition, the Court recommends Plaintiff's request for attorney fees be GRANTED in the amount of $103, 333.00; costs be awarded in the amount of $17, 760.72; settlement administration costs be granted in the amount of $8, 500.00; and Plaintiff's request for an incentive payment be GRANTED in the modified amount of $3, 000.

         BACKGROUND

         Plaintiff alleges he was employed by ADT LLC “as an hourly-paid, non-exempt Service Technician from approximately August 2012 to March 2015.” (Doc. 1 at 14, ¶ 4) Plaintiff reports that “[a]s a Service Technician, [he] typically worked eleven (11) hours or more per day, five (5) days per week.” (Id.)

         According to Plaintiff, he and other Service Technicians “were not paid for all hours worked, because all hours worked were not recorded.” (Doc. 1 at 20, ¶ 28) He contends, “Service Technician class members were entitled to receive certain wages for overtime compensation and that they were not receiving certain wages for overtime compensation.” (Id., ¶ 29) Plaintiff also alleges “Service Technician class members were entitled to be paid at a regular rate of pay, and corresponding overtime rate of pay, that included as eligible income all income derived from shift differential pay, standby bonus pay and/or holiday bonus pay.” (Id., ¶ 30) Further, he contends his employer failed to pay “at least minimum wages for work that [ADT LLC] knew or should have known was performed off-the-clock.” (Id., ¶ 31)

         Plaintiff also alleges Defendant failed to provide proper meal and rest breaks under California law, asserting that he and other class members “were not provided with all meal periods or payment of one (1) additional hour of pay at their regular rates of pay when they did not receive a timely, uninterrupted, thirty (30) minute meal period.” (Doc. 1 at 20, ¶ 32) Likewise, Plaintiff contends they “were not provided compliant rest periods or payment of one (1) additional hour of pay at their regular rates of pay when they were not provided a compliant rest period.” (Id. at 21, ¶ 33)

         Further, Plaintiff asserts Defendant failed “to provide complete and accurate wage statements, ” “maintain accurate payroll records, ” and to “pay Service Technician class members all wages due.” (Doc. 1 at 21, ¶¶ 34-35) For example, Plaintiff contends Defendant knew its employees “were entitled to timely payment of wages upon termination of employment, ” yet failed to pay “all wages due, including, but not limited to, overtime wages, minimum wages, and meal and rest period premium wages, within permissible time periods.” (Id., ¶ 35)

         Based upon these facts, Plaintiff identified the following causes of action in his complaint filed in Kern County Superior Court, Case No. BCV-15-101564: (1) unpaid overtime in violation of Cal. Labor Code §§ 510 and 1198; (2) unpaid minimum wages in violation of Cal. Labor Code §§1194, 1194, and 1197.1; (3) failure to provide proper meal periods in violation of Cal. Labor Code §§ 226.7 and 512(a); (4) failure to provide proper rest breaks in violation of Cal. Labor Code § 226.7; (5) failure to provide complaint wage statements and maintain accurate payroll records in violation of Cal. Labor Code §§ 226(a) and 1174(d); (6) failure to provide timely wages upon termination in violation of Cal. Labor Code §§ 201 and 202; (7) unfair business practices in violation of Cal. Bus. & Prof. Code § 17200; and (8) unlawful business practices in violation of Section 17200. (See Doc. 1 at 22-37)

         Defendant filed a Notice of Removal on January 8, 2017, thereby initiating the action in this Court. (Doc. 1) The Court entered its Scheduling Order on March 18, 2016. (Doc. 9) Plaintiff reports that the parties conducted “extensive written discovery, ” and Defendant produced “more than 13, 000 pages of documents, including hundreds of pages of relevant policy documents, employee wage statements, time and payroll data, and GPS tracking data.” (Doc. 38 at 7) Plaintiff also deposed four individuals regarding “Defendant's payroll, timekeeping, systems operations, and human resources policies.” (Id.) In addition, Defendant deposed Plaintiff on January 17, 2017. (Id.)

         The parties engaged in a private mediation session with Alan Berkowitz in February 2017. (Doc. 38 at 7-8) Plaintiff asserts that although the parties did not settle at that time, Mr. Berkowitz “provided a useful, neutral analysis of the issues and risks to both sides” and “greatly assisted … in narrowing the gap between [the parties'] respective positions.” (Id. at 8) Plaintiff reports the parties “continued arm's-length negotiations” after he filed a motion for class certification on March 31, 2017. (Id.)

         In May 2017, Defendant began contacting putative class members “to seek individual settlements of the … claims against Defendant.” (Doc. 32-1 at 17, Settlement ¶ 7) As a result, Defendant obtained releases from many putative class members, each of whom “received payment in the gross amount of $750.00.”[1] (Id.)

         On June 16, 2017, the parties “reached an agreement on the principal terms of a settlement” on June 16, 2017. (Doc. 28 at 2) The parties finalized their agreement with preparing a written settlement agreement, and Plaintiff sought preliminary approval of the terms. (Doc. 32; Doc. 33)

         The Court granted preliminary approval of the settlement on October 25, 2017. (Doc. 34) The Court appointed Plaintiff Edher Flores as the Class Representative, and authorized him to seek an award enhancement up to $7, 500. (Id. at 18) In addition, the Court appointed GPT Group, Inc. as Class Counsel, and authorized Class Counsel to seek fees that did “not to exceed 33 1/3% of the gross settlement amount and expenses up to $25, 000.” (Id.) On November 1, 2017, the Court approved the Class Notice that conveyed this information to class members. (Docs. 36, 37) In addition, the Class Notice informed class members of the class definition approved by the Court, the claims and issues to be resolved, how class members could appear through an attorney or chose to be excluded from the class, and the binding effect of a class judgment. (See Doc. 36)

         The Settlement Administrator mailed the Class Notice to the 117 class members. (Doc. 38-1 at 2, Morales Decl. ¶ 5) Of those packets, three were returned as undeliverable to the Settlement Administrator, and one had a forwarding address. (Id., ¶ 6) The Settlement Administrator “performed skip traces to locate new mailing addresses, ” and re-mailed the Class Notices. (Id. at 2-3, ¶ 6) Again, one was returned as undeliverable. (Id. at 3, ¶ 6) The Settlement Administrator did not receive any Requests for Exclusion or objections to the settlement terms. (Id., ¶ 7)

         Plaintiff filed the motion now pending before the Court for final approval of the Settlement on January 23, 2018. (Doc. 38) Defendant did not oppose the motion, and the matter was taken under submission pursuant to Local Rule 203(g).

         SETTLEMENT TERMS

         Plaintiff and Defendant “agreed to settle all class claims and representative claims alleged in the Action in exchange for the Class Settlement Amount of up to $310, 000.” (Doc. 32 at 12; see also Doc. 33 at 8, Settlement ¶ 10(h)) Defendant agrees to fund the Settlement for the class defined as follows:

All persons who worked as non-exempt or hourly employees of Defendant in California as “Service Technicians” at any time from August 18, 2013 to the Preliminary Approval Date, and who do not timely opt out of participation in the Action.

(Doc. 33 at 8, Settlement ¶ 10(e)) This class excludes individuals “who previously entered into individual settlement agreements and releases with Defendant, and have received payments from Defendant in connection therewith.” (Doc. 32 at 9)

         I. Payment Terms

         The settlement fund will cover payments to class members and a payment to Plaintiff for his role as a class representative. (Doc. 33 at 14, Settlement ¶ 15) In addition, the Settlement provides for payments to Class Counsel for attorneys' fees and expenses and to the Settlement Administrator. (Id. at 13-14, ¶¶ 14, 16-17) Specifically, the settlement provides for the following payments from the gross settlement amount:

• The class representative will receive $7, 500;
• Class counsel will receive fees not to exceed one-third of the Class Settlement Amount (of $103, 333) and expenses not to exceed $25, 000;
• The settlement administrator will receive reasonable costs of administration.[2]

(Doc. 32 at 9; Doc. 33 at 14-15, Settlement ¶¶ 14-17) In addition, Defendant shall receive “a credit” for the amounts paid individuals who have released their claims (“Released Class Members”), in the amount of $76, 989.00. (Doc. 33 at 13, Settlement ¶ 12)

         After the identified deductions and payments, the remaining funds- the “Net Settlement Amount” - will be distributed to all participating class members. (Doc. 33 at 15, ¶ 18) Shares of the settlement for each class member will be calculated as follows:

a) Defendant will calculate the total number of Workweeks worked by each Class Member during the Class Period and the aggregate total number of Workweeks worked by all Class Members during the Class Period.
b) To determine each Class Member's estimated “Individual Settlement Payment, ” the Settlement Administrator will use the following formula: The Net Settlement Amount will be divided by the aggregate total number of Workweeks, resulting in the “Workweek Value.” Each Class Member's “Individual Settlement Payment” will be calculated by multiplying each individual Class Member's total number of Workweeks by the Workweek Value.

(Doc. 33 at 16, ¶ 20 (a)-(b)) Using this formula, “[a]ll Participating Class Members will receive a minimum payment of $750.” (Id., ¶ 20(d)) Currently, the average net recovery is estimated to be $805 per class member. (Doc. 32 at 14)

         II. Releases

         The Settlement provides that Plaintiff and Class Members, other than those who elect not to participate in the Settlement, shall release Defendant from the claims arising from August 18, 2013 through the date of final approval of the settlement. (Doc. 33 at 11, Settlement ¶ 10(y)) Specifically, the release for class members includes:

All claims, rights, demands, liabilities, and causes of action, whether known or unknown, arising from, or related to, the same set of operative facts as those set forth in the operative complaint in the Action against the Released Parties, including any claims based on the following categories of allegations: (1) all claims for unpaid overtime pursuant to California Labor Code §§ 510 and 1198; (2) all claims for unpaid minimum wages pursuant to California Labor Code §§ 1182.12, 1194, 1197, and 1197.1; (3) all claims for failure to provide meal periods pursuant to California Labor Code §§ 226.7 and 512(a); (4) all claims for failure to provide rest periods pursuant to California Labor Code § 226.7; (5) all claims for non-compliant wage statements and failure to maintain records pursuant to California Labor Code §§ 226(a) and 1174(d); (6) all claims for wages not timely paid upon termination pursuant to California Labor Code §§ 201 and 202; and (7) all claims for unfair and/or unlawful business practices pursuant to California Business & Professions Code §§ 17200 et seq.
Released Class Claims include all claimed or unclaimed compensatory, consequential, incidental, liquidated, punitive and exemplary damages, restitution, interest, costs and fees, injunctive or equitable relief, and any other remedies available at law or equity allegedly owed or available to the Class arising or reasonably flowing from the Class Action Complaint against the Released Parties for the time period from the beginning of each claim's applicable statute of limitations, up to and including the date of Final Approval.

(Doc. 32 at 14; Doc. 33 at 22, Settlement ¶ 42)

         The release for Plaintiff encompasses more claims than the release of Class Members, and releases any claims “which have been or could have been asserted” in this action. (Doc. 33 at 23, Settlement ¶ 43) Specifically, Plaintiff's general release provides:

Upon the Effective Date, as a condition of receiving any portion of his Class Representative Enhancement Payment, Plaintiff shall hereby agree to the additional following General Release: In consideration of Defendant's promises and agreements as set forth herein, Plaintiff hereby fully releases the Released Parties from any and all Released Claims and also generally releases and discharges the Released Parties from any and all claims, demands, obligations, causes of action, rights, or liabilities of any kind which have been or could have been asserted against the Released Parties arising out of or relating to Plaintiff's employment by Defendant or termination thereof and/or any other event, act, occurrence, or omission taking place on or before the Effective Date, including but not limited to claims for wages, restitution, penalties, retaliation, or wrongful termination of employment, and including any other claims whatsoever, including any interest thereon, including claims based on alleged discrimination on the basis of sex, race, national origin, ancestry, age, religion, disability, handicap, and/or veteran status, and/or any other state or federal or common law, statutory, or other claims arising out of or relating to the Plaintiff's employment by Defendant, and/or any other matters on or before the Effective Date. This release specifically includes any and all claims, demands, obligations and/or causes of action for damages, restitution, penalties, interest, and attorneys' fees, and costs relating to or in any way connected with the matters referred to herein.

(Id., at 23-24). Further, Plaintiff agrees to waive “all rights and benefits afforded by California Civil Code § 1542.” (Id. at 24, ¶ 43)

         III. Objections and Opt-Out Procedure

         Any class member who wished could file objections or elect not to participate in the Settlement. (See Doc. 33 at 18-19, Settlement ¶¶ 27-29) The proposed Notice of Class Action Settlement (“the Notice”) explained the claims that are released as part of the Settlement. (Doc. 32-1 at 45) In addition, the Notice outlined the procedures to claim a share of the settlement, object to the settlement, or elect not to participate in the Settlement. (Id. at 45-47)

         IV. Service of the Class Notice Packets and Responses Received

         On October 25, 2017, the Court ordered the Settlement Administrator, CPT Group, to “mail the approved Class Notice within ten days of receiving the Class List, or no later than November 24, 2017. (Doc. 34 at 18, emphasis omitted) According to Abel Morales, a case manager with CPT Group, the Class Notices were mailed via the United States Postal Service on November 22, 2017. (Doc. 38-1 at 2, Morales Decl. ¶¶ 5-6)

         Mr. Morales reports that CPT Group did not receive any objections to the Settlement or requests for exclusion from the class. (Doc. 38-1 at 3, Morales Decl. ¶¶ 8-9) Likewise, the Court did not receive any objections to the Settlement.

         APPROVAL OF A CLASS SETTLEMENT

         When parties reach a settlement agreement prior to class certification, the Court has 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). Approval of a class settlement is generally a two-step process. First, the Court must assess whether a class exists. Id. (citing Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 620 (1997)). Second, the Court must “determine whether the proposed settlement is fundamentally fair, adequate, and reasonable.” Id. (citing Hanlon v. Chrysler Corp., 150 F.3d 1011, 1026 (9th Cir. 2998)). The decision to approve or reject a settlement is within the Court's discretion. Hanlon, 150 F.3d at 1026.

         I. Class Certification[3]

         Class certification is governed by Rule 23 of the Federal Rules of Civil Procedure, which provides that “[o]ne or more members of a class may sue or be sued as representative parties on behalf of all.” Fed.R.Civ.P. 23(a). Under the terms of the Settlement, the proposed Settlement Class is comprised of all “all persons who worked for Defendant as non-exempt or hourly employees in California as “Service Technicians” at any time from August 18, 2013 to the Preliminary Approval Date, and who do not timely opt out of participation in the Action.” (Doc. 33 at 8, Settlement ¶10 (e))

         Parties seeking class certification bear the burden of demonstrating the elements of Rule 23(a) are satisfied, and “must affirmatively demonstrate . . . compliance with the Rule.” Wal-Mart Stores, Inc. v. Dukes, 131 S.Ct. 2541, 2551 (2011); Doninger v. Pacific Northwest Bell, Inc., 563 F.2d 1304, 1308 (9th Cir. 1977). If an action meets the prerequisites of Rule 23(a), the Court must consider whether the class is maintainable under one or more of the three alternatives set forth in Rule 23(b). Narouz v. Charter Communs., LLC, 591 F.3d 1261, 1266 (9th Cir. 2010).

         A. Rule 23(a) Requirements

         The prerequisites of Rule 23(a) “effectively limit the class claims to those fairly encompassed by the named plaintiff's claims.” General Telephone Co. of the Southwest. v. Falcon, 457 U.S. 147, 155-56 (1982). Certification of a class is proper if:

(1) the class is so numerous that joinder of all 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). These prerequisites are generally referred to as numerosity, commonality, typicality, and adequacy of representation. Falcon, 457 U.S. at 156.

         1. Numerosity

         A class must be “so numerous that joinder of all members is impracticable.” Fed.R.Civ.P. 23(a)(1). This requires the Court to consider “specific facts of each case and imposes no absolute limitations.” General Telephone Co. v. EEOC, 446 U.S. 318, 330 (1980). Although there is not a specific numerical threshold, joining more than one hundred plaintiffs is impracticable. See Immigrant Assistance Project of Los Angeles Cnt. Fed'n of Labor v. INS, 306 F.3d 842, 869 (9th Cir. 2002) (“find[ing] the numerosity requirement . . . satisfied solely on the basis of the number of ascertained class members . . . and listing thirteen cases in which courts certified classes with fewer than 100 members”). Here, “[t]here are a total of 117 Class Members.” (Doc. 38 at 8) Therefore, the numerosity requirement is satisfied.

         2. Commonality

         Rule 23(a) requires “questions of law or fact common to the class.” Fed.R.Civ.P. 23(a)(2). Commonality “does not mean merely that [class members] have all suffered a violation of the same pro-vision of law, ” but “claims must depend upon a common contention.” Wal-Mart Stores, 131 S.Ct. at 2551. In this case, Plaintiff previously asserted there are common questions of law and facts in this case, because the class members were subjected to the same policies as employees of ADT, LLC. (Doc. 32 at 16-24) For example, Plaintiff reported ADT had “written policies [that] required employees to travel up to 45 minutes to their first job site, and 45 minutes from their last job site, without compensation, ” and common questions include:

• Did ADT control employees during their commutes?
• If ADT controlled employees during their commutes, should ADT have compensated Class Members for commute time from their homes to their first job sites, and from their last job sites back to their homes?
• Did ADT maintain an unlawful policy of requiring employees to travel up to 45 minutes to their first job site, and 45 minutes from their last job site, before they were paid?

(Doc. 32 at 17) Further, Plaintiff asserted other claims against ADT present common questions of law and fact, because the Service Technicians were subjected to uniform policies, such as how the employees were paid for on-call time, and when and how breaks could be taken. (See Id. at 18-24) Accordingly, the Court finds the commonality requirement is satisfied for purposes of settlement.

         3.Typica ...


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