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Melgar v. CSK Auto, Inc.

United States District Court, N.D. California

May 25, 2018

OSMIN MELGAR, et al., Plaintiffs,
v.
CSK AUTO, INC., Defendant.

          ORDER RE SUPPLEMENTAL BRIEFING FOR PLAINTIFFS' MOTION FOR PRELIMINARY APPROVAL DOCKET NO. 149

          EDWARD M. CHEN UNITED STATES DISTRICT JUDGE.

         Plaintiffs have moved for preliminary approval of a class action settlement. Having reviewed the motion and supporting documents, the Court hereby orders that the parties provide a joint supplemental brief addressing the following.

         A. Maximum Value of Plaintiffs' Claims

         Plaintiffs claim that the maximum value of their § 2802 and § 17200 claims is $1, 275, 723.83. See Mot. at 6. Plaintiffs shall explain how they arrived at this figure. To the extent Plaintiffs arrived at this figure based on certain assumptions (e.g., 1, 193, 694 bank days and 2, 338, 672.9 miles), they shall explain how they arrived at these supporting assumptions. It will also be helpful for the Court to be given information about how many California stores are at issue and, in general, how close the relevant banks were to the stores.

         In addition to the above, Plaintiffs shall identify what the maximum value of their PAGA claim is and how they arrived at that figure.

         B. Litigation Risks

         Although Plaintiffs have identified litigation risks in their papers, see Mot. at 3, 6, 14-15, they have not addressed how they evaluated those risks - i.e., how significant those risks were. For example, Plaintiffs take note of OR's claim that “it would not know or have reason to know that . . . expenses were being incurred, ” Mot. at 3, but this defense is arguably of questionable merit based on the evidence that was provided to the Court during class certification proceedings. See Docket No. 98 (Order at 3) (taking note of testimony from OR's 30(b)(6) witness that district managers (i.e., the managers above the Store Managers) are aware that employees are expected to make daily bank deposits). Plaintiffs also represent that OR provided evidence showing that many class members were reimbursed for mileage expenses but they have not explained whether that is consistent with the evidence that they acquired from class members (e.g., through surveys). In addition, Plaintiffs indicate that some class members could walk to banks but it is not clear how often that was the case (e.g., on average, were banks within walking distance from the stores?). To the extent OR maintains that class members could use company vehicles to make deposits, Plaintiffs have not addressed whether that comports with the evidence that they acquired from class members.

         Both parties shall address the significance of the litigation risks identified in Plaintiffs' motion. The Court underscores that the significance of the litigation risks is an important factor in assessing whether it was reasonable for Plaintiffs to settle the case for (allegedly) 30% of the maximum value of the case.

         C. PAGA Claim

         The parties shall address the adequacy of the settlement with respect to the PAGA claim. See generally Viceral v. Mistras Grp., Inc., No. 15-cv-02198-EMC, 2016 U.S. Dist. LEXIS 140759, at *28 (N.D. Cal. Oct. 11, 2016) (stating that, “in evaluating the adequacy of a settlement of a PAGA claim, courts may employ a sliding scale, taking into account the value of the settlement as a whole[;] [t]hus, where a settlement for a Rule 23 class is robust, the statutory purposes of PAGA may be fulfilled even with a relatively small award on the PAGA claim itself, because such 'a settlement not only vindicates the rights of the class members as employees, but may have a deterrent effect upon the defendant employer and other employers, an objective of PAGA'”).

         D. Plan of Distribution

         The plan of distribution gives greater weight to the interests of the Store Managers over those of the Assistant Store Managers and Retail Service Specialists in recognition of the fact that Store Managers were usually the employees responsible for doing bank deposits. However, as the Court noted in its certification order, the status of a Store Manager is somewhat complicated to the extent that his or her knowledge of whether expenses were incurred could be imputed to OR.

         Plaintiffs shall address whether and how the potential conflict and risk with respect to Store Managers were taken into account in the plan of distribution.

         E. Attorn ...


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