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Greer v. Pacific Gas and Electric Co.

United States District Court, E.D. California

May 3, 2018

BECKY GREER, TIMOTHY C. BUDNIK, ROSARIO SAENZ, IAN CARTY, HALEY MARKWITH, and MARCIA GARCIA PESINA, individually and as class representatives, Plaintiffs,
PACIFIC GAS AND ELECTRIC COMPANY, IBEW LOCAL 1245, and DOES 1 through 10, inclusive, Defendants.



         This matter came before the Court on March 23, 2018 for a motion hearing on Plaintiffs' motion for an order (1) conditionally certifying the proposed Settlement Class; (2) preliminarily approving the Joint Stipulation of Class Settlement; (3) appointing Plaintiffs as Class Representatives and Plaintiffs' Counsel as Class Counsel; (4) approving and directing the mailing of Settlement Notices pursuant to the proposed notice plan; and (5) scheduling a fairness hearing for final approval of the Settlement. (ECF No. 238.) Attorneys Patrick Toole, Erin Huntington, and Charles Swanston appeared on behalf of Plaintiffs, attorney Aurelio Perez appeared on behalf of Defendant Pacific Gas and Electric Company (“PG&E”), and attorney Philip Monrad appeared on behalf Defendant IBEW Local 1245 (“IBEW”). Following the hearing, the court directed the parties to submit supplemental briefing on the pending motion by April 6, 2018, and the matter was taken under submission. (ECF No. 242.) The parties submitted a supplemental briefing on April 5-6, 2018. (ECF Nos. 248-50.)

         For the reasons set forth below, the Court will grant Plaintiffs' unopposed motion for preliminary approval of class action settlement. However, for the reasons described below, the Court will require additional disclosures in the notice packet given to proposed class members.


         On July 10, 2015, Plaintiffs Becky Greer, Timothy C. Budnik, Rosario Saenz and Ian Carty, as individuals and on behalf of themselves and all others similarly situated, filed suit against PG&E alleging various claims based on underpayment of wages for a purported class. (ECF No. 1). The case is now proceeding on the Third Amended Complaint (“3AC”) on behalf of Plaintiff class representatives Timothy C. Budnik, Ian Carty, Becky Greer, Haley Markwith, Maria Garcia Pesina, and Rosario Saenz and the proposed class. (3AC, ECF No. 105). At the time of filing on November 2, 2016, the 3AC consisted of seven causes of action (Counts 1-7) against PG&E, and one claim (Count 8) against IBEW, as follows:

1. Count 1: Breach of Contract;
2. Count 2: Violation of California Labor Code § 216;
3. Count 3: Knowing and Intentional Failure to Comply with Itemized Employee Wage Statement Provisions in Violation of California Labor Code §§ 226(a), 1174, and 1175;
4. Count 4: Promissory Fraud in Violation of California Civil Code § 1572(4);
5. Count 5: Promissory Estoppel;
6. Count 6: Violation of California Business and Professions Code § 17200 et seq.
7. Count 7: Violation of California Business and Professions Code § 17500 et seq.
8. Count 8: (in the alternative) Breach of Duty of Fair Representation, 29 U.S.C. § 185.

(Id.) The parties stipulated on December 21, 2016 to dismiss the individual claims of Monica Muldrow against PG&E and IBEW. (ECF No. 121). In the same stipulation, the parties agreed to dismiss Count 7, violation of California Business and Professions Code § 17500 et seq. against Defendant PG&E. (Id.) Thus, the case now proceeds on Counts 1-6 against PG&E and Count 8 against IBEW.

         The parties briefed and participated in four settlement conferences, in person and telephonically, with Eastern District of California Magistrate Judge Barbara A. McAuliffe on November 9, 2017, December 7, 2017, December 21, 2017 and January 18, 2018. (ECF Nos. 216, 219, 220, 225-26.) The final settlement conference concluded with Judge McAuliffe making a mediator's proposal with a deadline of January 25, 2018, which both parties accepted on the final day.

         The proposed settlement resolves all class claims alleged against PG&E and IBEW. The Settlement in this case will establish three groups: SR Is who received settlement payments from PG&E prior to this lawsuit, but who have wage statement claims under Labor Code § 226; SR Is whose experience does not qualify them for an increased wage rate under PRC 21052; and SR Is whose experience does qualify them for an increased wage rate under PRC 21052. (ECF No. 238-1 at 12.)

         The proposed settlement contemplates a process whereby all SR Is have an opportunity to provide information relating to their work history to demonstrate satisfaction of PRC 21052's requirements. All SR Is will be provided a notice of settlement, which will include a questionnaire soliciting information concerning their work history. Counsel for Plaintiffs will review that information, along with resumes and other information that was submitted with their initial employment application, and place each SR I into the appropriate category. Those who have not met the requirements of PRC 21052 will receive a settlement payout of $250.00. The remaining settlement funds will be distributed pro-rata among the group of SR Is who do meet the requirements of PRC 21052, at this point an anticipated 175 individuals. If that estimate turns out to be correct, then these SR Is will receive an average payment of $19, 849.71. (Id.)

         Under the settlement agreement, Defendants PG&E and IBEW[1] will, collectively, make a gross payment of $6, 000, 000 into a settlement fund administered by the proposed settlement administrator. (Id. at 12-13.) This amount is inclusive of payments to the proposed class, Plaintiffs' and class counsels' attorneys' fees and costs, Plaintiffs' proposed Service Payments, and costs of settlement administration. (Id. at 13.) The settlement agreement provides that Plaintiffs' counsel will file a separate application for attorneys' fees and costs prior to the opt-out/objection deadline, and Defendants will not oppose the application so long as it does not exceed 33.33% of the settlement fund and their requested costs do not exceed $275, 000. (Id. at 17.) The six class representatives, Timothy C. Budnik, Ian Carty, Becky Greer, Haley Markwith, Maria Garcia Pesina, and Rosario Saenz, will apply to the Court for service payments in an amount not to exceed $35, 000.00, collectively, in addition to whatever payment, if any, each may be otherwise entitled to from the settlement fund as a settlement class member. (Id.) The costs of claims administration are estimated at approximately $29, 000.00. (Id. at 16.) The settlement is non-reversionary. (Id. at 13)

         On March 2, 2018, Plaintiffs filed the instant unopposed motion for preliminary approval of the settlement. (ECF No. 238.) Plaintiffs seek an Order: (1) conditionally certifying the proposed Settlement Class; (2) preliminarily approving the joint stipulation of class settlement; (3) appointing Plaintiffs as class representatives and Plaintiffs' counsel as class counsel; (4) approving and directing the mailing of settlement notices pursuant to the proposed notice plan; and (5) scheduling a fairness hearing for final approval of the settlement. (Id.)


         “A difficult balancing act almost always confronts a district court tasked with approving a class action settlement.” Allen v. Bedolla, 787 F.3d 1218, 1223 (9th Cir. 2015). “On the one hand, … ‘there is a strong judicial policy that favors settlements, particularly where complex class action litigation is concerned.'” Id. (quoting In re Syncor ERISA Litig., 516 F.3d 1095, 1101 (9th Cir. 2008) (citing Class Plaintiffs v. City of Seattle, 955 F.2d 1268, 1276 (9th Cir. 1992)). “But on the other hand, ‘settlement class actions present unique due process concerns for absent class members, ' Hanlon v. Chrysler Corp., 150 F.3d 1011, 1026 (9th Cir. 1998), and the district court has a fiduciary duty to look after the interests of those absent class members.” Id. (citations omitted). “The dangers of collusion between class counsel and the defendant, as well as the need for additional protections when the settlement is not negotiated by a court-designated class representative, weigh in favor of a more probing inquiry than may normally be required under Rule 23(e).” Hanlon, 150 F.3d at 1026.

         “To guard against this potential for class action abuse, Rule 23(e) of the Federal Rules of Civil Procedure requires court approval of all class action settlements, which may be granted only after a fairness hearing and a determination that the settlement taken as a whole is fair, reasonable, and adequate.” In re Bluetooth Headset Prod. Liab. Litig., 654 F.3d 935, 946 (9th Cir. 2011) (citing Fed.R.Civ.P. 23(e)(2); Staton v. Boeing Co., 327 F.3d 938, 972 n.22 (9th Cir. 2003) (court's role is to police the “inherent tensions among class representation, defendant's interests in minimizing the cost of the total settlement package, and class counsel's interest in fees”); Hanlon, 150 F.3d at 1026).

         The Rule 23 class settlement process generally proceeds in two phases. In the first phase, the court conditionally certifies the class, conducts a preliminary determination of the fairness of the settlement (subject to a more stringent final review), and approves the notice to be imparted upon the class. Ontiveros v. Zamora, 303 F.R.D. 356, 363 (E.D. Cal. 2014). The purpose of the initial review is to ensure that an appropriate class exists and that the agreement is non-collusive, without obvious deficiencies, and within the range of possible approval as to that class. See True v. Am. Honda Motor Co., 749 F.Supp.2d 1052, 1062 (C.D. Cal. 2010); Newberg on Class Actions § 13:13 (5th ed. 2014).

         In the second phase, the court holds a full fairness hearing where class members may present objections to class certification, or to the fairness of the settlement agreement. Ontiveros, 303 F.R.D. at 363 (citing Diaz v. Trust Territory of Pac. Islands, 876 F.2d 1401, 1408 (9th Cir. 1989). Following the fairness hearing, taking into account all of the information before the court, the court must confirm that class certification is appropriate, and the settlement is fair, reasonable, and adequate. See Valdez v. Neil Jones Food Co., 2015 WL 6697926 * 8 (E.D. Cal. Nov. 2, 2015); Miller v. CEVA Logistics USA, Inc., 2015 WL 4730176, *3 (E.D. Cal. Aug. 10, 2015).


         When the parties have entered into a settlement agreement before the district court certifies the class, the court “must pay ‘undiluted, even heightened, attention' to class certification requirements....” Staton, 327 F.3d at 952-53 (quoting Hanlon, 150 F.3d at 1019 (quoting Amchem, 521 U.S. at 620, 117 S.Ct. 2231)). For class certification, the classes and sub-classes “must meet the four threshold requirements of Federal Rule of Civil Procedure 23(a): numerosity, commonality, typicality, and adequacy of representation.” Leyva v. Medline Indus. Inc., 716 F.3d 510, 512 (9th Cir. 2013) (citing Fed.R.Civ.P. 23(a); Hanlon, 150 F.3d at 1019). “Moreover, the proposed class must satisfy the requirements of Rule 23(b), which defines three different types of classes.” Id.

         The plaintiff bears the burden of persuasion that the requirements of Rule 23 have been satisfied as to the proposed class. “A court that is not satisfied that the requirements of Rule 23 have been met should refuse certification until they have been met.” Advisory Committee 2003 Note on Fed.R.Civ.P. 23(c)(1).

         As discussed below, the requirements for class certification in Rule 23(a) and (b) are satisfied here. See Leyva, 716 F.3d at 512.

         A. Rule 23(a) Requirements

         1. Numerosity

         A proposed class must be “so numerous that joinder of all members is impracticable.” Fed.R.Civ.P. 23(a)(1). “The numerosity requirement requires examination of the specific facts of each case and imposes no absolute limitations.” Gen. Tel. Co. of the Nw. v. Equal Employment Opportunity Comm'n, 446 U.S. 318, 330, 100 S.Ct. 1698, 1706, 64 L.Ed.2d 319 (1980). Courts in the Ninth Circuit have found the requirement satisfied when the class comprises of as few as thirty-nine members. See Murillo v. Pac. Gas & Elec. Co., 266 F.R.D. 468, 474 (E.D. Cal. 2010) (citing Jordan v. L.A. County, 669 F.2d 1311, 1319 (9th Cir. 1982) (finding class sizes of thirty-nine, sixty-four, and seventy-one sufficient to satisfy the numerosity requirement), vacated on other grounds, 459 U.S. 810, 103 S.Ct. 35, 74 L.Ed.2d 48 (1982)).

         Here, the proposed class is defined as: “All current and former SR I classification employees who were hired by Defendant PG&E into a Contact Center in California at any time between January 1, 2011 through June 30, 2015, and whose initial wage rate was the starting rate specified in the CBA.” (ECF No. 238-1 at 13.) There are an estimated 925 class members. (Id.) The Court finds that the requirements of Rule 23(a)(1) are satisfied.

         2. Commonality

         Rules 23(a)(2) requires “questions of law or fact common to the class.” Fed.R.Civ.P. 23(a)(2). “The commonality preconditions of Rule 23(a)(2) are less rigorous than the companion requirements of Rule 23(b)(3).” Hanlon, 150 F.3d at 1019. “Indeed, Rule 23(a)(2) has been construed permissively.” Id. “All questions of fact and law need not be common to satisfy the rule.” Id. “The existence of shared legal issues with divergent factual predicates is sufficient, as is a common core of salient facts coupled with disparate legal remedies within the class.” Id. To satisfy commonality, there must be a “common contention … of such a nature that it is capable of classwide resolution-which means that determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke.” Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350, 131 S.Ct. 2541, 2551, 180 L.Ed.2d 374 (2011). A plaintiff can meet this burden by showing “[s]ignificant proof that an employer operated under a general policy” of harmful conduct if the conduct “manifested itself in hiring and promotion practices in the same general fashion...” Id. at 353, 131 S.Ct. at 2553 (quoting Gen. Tel. Co. of Sw. v. Falcon, 457 U.S. 147, 159 n. 15, 102 S.Ct. 2364, 2371, 72 L.Ed.2d 740 (1982)).

         Plaintiffs argue that commonality is satisfied here because “all of Plaintiffs' claims are based on common policies and/or practices of general application - specifically, wage classification for PG&E employees in the position of SR I from January 1, 2011 through June 30, 2015.” (ECF No. 238-1 at 18.) Plaintiffs allege that the general policies adopted by the defendants violated the terms of the applicable collective bargaining agreement and California labor law. Because there is a common contention capable of class-wide resolution “in one stroke, ” Plaintiffs have met the requirements of Rule 23(a)(2). See Wal-Mart, 564 U.S. at 350, 131 S.Ct. at 2551.

         3. Typicality

         Rule 23(a)(3) also requires that “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); Armstrong v. Davis, 275 F.3d 849, 868 (9th Cir. 2001). Typicality is satisfied “when each class member's claim arises from the same course of events, and each class member makes similar legal arguments to prove the defendant's liability.” Armstrong, 275 F.3d at 868; see also Kayes v. Pac. Lumber Co., 51 F.3d 1449, 1463 (9th Cir. 1995) (claims are typical where named plaintiffs have the same claims as other members of the class and are not subject to unique defenses). While representative claims must be “reasonably co-extensive with those of absent class members, ” they “need not be substantially identical.” Hanlon, 150 F.3d at 1020; see also Hanon v. Dataproducts Corp., 976 F.2d 497, 508 (9th Cir. 1992).

         Here, the Plaintiff class representatives and the absent class members were all hired into a PG&E call center between January 1, 2011 and June 30, 2015 as SR Is, had at least 18 months of “directly related clerical job experience, ” and were impacted by policies adopted by the Defendants, which were violative of the terms of the applicable collective bargaining agreement and California labor law. Thus, typicality under Rule 23(a)(3) is satisfied because the claims of the Plaintiff class representatives are reasonably co-extensive with those of the absent class members.

         4. Adequacy ...

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