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Singh v. Roadrunner Intermodal Services, LLC

United States District Court, E.D. California

May 25, 2018

JABIR SINGH, et al., Plaintiffs,


         This action came before the court on May 1, 2018, for hearing of plaintiffs' motion for preliminary approval of class certification. (Doc. No. 111.) The motion is unopposed. Attorneys Nicholas Wagner, Brian Kabateck, and Andrew Jones appeared at the hearing, and attorney Cheryl Kenner appeared telephonically, all on behalf of plaintiffs. (Doc. No. 117.) Attorney Megan Ross appeared at the hearing and attorney Adam Smedstad appeared telephonically, both on behalf of defendants. (Id.) Oral argument was heard, and the court requested supplemental briefing to be submitted by May 4, 2018. (Id.) After the filing of plaintiffs' supplemental briefing, the motion was taken under submission. Based on the court's review of the pending motion, plaintiffs' supplemental submission, and the information presented by counsel at the hearing, the court will grant the motion for preliminary approval of the class action settlement.


         On February 9, 2015, plaintiffs Jasbir Singh, Bany Lopez, Julio Vidrio, James Sliger, Derrick Lewis, Jerry Leininger, Kristopher Spring, Jerry Wood, Cappelli Burless, Robert Haskins, and Douglas Luis (the “Singh plaintiffs”) filed a class action entitled Singh et al. v. Roadrunner Intermodal Services, LLC et al., Case No. CGC-15-544563 on behalf of all similarly situated current and former truck drivers employed by Roadrunner Intermodal Services, LLC; Central Cal Transportation, LLC; and Morgan Southern, Inc. (“defendants”) in the San Francisco County Superior Court (the “Singh action”). (See Doc. No. 111 at 8.) On April 15, 2015, defendants removed the action to the United States District Court of the Northern District of California. (Doc. No. 1.) On October 2, 2015, the action was transferred to the Sacramento Division of the United States District Court of the Eastern District of California. (Doc. No. 30.) On February 18, 2016, the action was reassigned to the undersigned, sitting in the Fresno Division of this court. (Doc. No. 42.)

         On September 18, 2015, plaintiffs Paul Bonner, Christopher Cross, Leo Lewis, Richard Love, Wilfred McGirt, and Nicholas Rich (the “Rich plaintiffs”) filed a class action entitled Rich v. Roadrunner Intermodal Services, LLC et al, Case No. 2:15-cv-07330-DMG-JPR.on behalf of all similarly situated current and former truck drivers employed by defendants in the United States District Court for the Central District of California (the “Rich action”). (See Doc. 111 at 9.)

         On January 8, 2016, plaintiff Latrina Phillips filed the class action entitled Latrina Phillips v. Roadrunner Intermodal Services, LLC et al, Case No. 2:16-CV-01072-SVW-MRWx on behalf of all similarly situated current and former truck drivers employed by defendants in the United States District Court for the Central District of California (the “Phillips Action”). (See id.)

         On December 16, 2016, the Rich plaintiffs filed their motion for class certification. See 2:15-cv-07330-DMG-JPR, Doc. No. 53. On December 22, 2016, before that motion was fully briefed, District Judge Dolly M. Gee transferred the Rich action to the Eastern District California under the first-to-file rule. See 2:15-cv-07330-DMG-JPR, Doc. No. 60. On February 9, 2017, the undersigned issued an order relating the Singh, Rich, and Phillips actions. (Doc. No. 71.) On March 28, 2017, the undersigned consolidated the Singh and Rich actions (Doc. No. 78) and on June 15, 2017, consolidated the Phillips action with the two previously consolidated actions. (Doc. No. 92.)

         In their respective operative complaints, the plaintiffs in Singh, Rich, and Phillips, on behalf of themselves and all others similarly situated and similarly aggrieved, seek damages, restitution, penalties, pre- and post-judgment interest, costs, attorneys' fees, and any other relief deemed appropriate by the court based on their claims for: (1) misclassification of employees in violation of Labor Code § 226(a)(1); (2) failure to provide meal periods; (3) failure to provide rest breaks; (4) failure to pay overtime wages; (5) failure to pay minimum wages; (6) failure to pay all wages upon separation; (7) failure to furnish timely and accurate wage statements; (8) failure to pay all wages owed every pay period; (9) failure to reimburse business expenses; (10) unlawful deductions from wages; (11) penalties under California's Private Attorneys General Act (“PAGA”); and (12) violation of California's Unfair Competition Law under California Business & Professions Code § 17200, premised on their wage-and-hour claims. (Doc. No. 112-2 at 4, ¶ 4.)

         Following three mediation sessions, the parties reached a settlement. (Doc. No. 111 at 10.) The first two mediation sessions occurred on July 12, 2016 and September 14, 2016 before the Honorable Peter D. Lichtman (Ret.) and did not result in a settlement. (Id.) Following those mediation sessions, both parties proceeded with depositions of the plaintiffs, witnesses, defendants' current and former employees, and persons most knowledgeable (“PMK”) in California and Georgia. (Id.) The third mediation session involved co-class counsel in the Singh, Rich, and Phillips actions, defendants and their counsel, and mediator Mark S. Ruby and resulted in a mediator's proposal, which the parties accepted. (Id.)

         Under the settlement agreement, defendants have agreed to pay $9, 250, 000, which includes (i) the total value of all individual settlement payments; (ii) attorneys' fees ($3, 083, 333.33) and costs ($90, 000) that class counsel will request the court to award; (iii) settlement administration costs ($12, 000); (iv) $7, 500 enhancement payments awarded by the court to each of the eighteen named plaintiffs, totaling $135, 000; and (v) civil penalties of $100, 000 recoverable under PAGA, of which 75% ($75, 000) will be paid to the Labor Workforce and Development Agency (“LWDA”) and 25% ($25, 000) will be paid to class members. (Doc. No. 111 at 11, 15.)

         On April 13, 2018, plaintiffs filed the pending motion for preliminary approval of the class action settlement. (Doc. No. 111.) Plaintiffs seek an order: (i) preliminarily approving the proposed class action settlement; (ii) confirming CPT Group Inc. as the settlement administrator; (iii) approving and directing distribution of the class notice packet to be mailed to class members; (iv) approving the proposed class representatives and co-class counsel; and (v) scheduling a final fairness hearing with respect to the settlement agreement. (Doc. No. 111-2 at 3-4.)


         “Courts have long recognized that settlement class actions present unique due process concerns for absent class members.” In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935, 946 (9th Cir. 2011) (citation and internal quotations omitted). To protect the rights of absent class members, Rule 23(e) of the Federal Rules of Civil Procedure requires that the court approve all class action settlements “only after a hearing and on finding that it is fair, reasonable, and adequate.” Fed.R.Civ.P. 23(e)(2); Bluetooth, 654 F.3d at 946. Moreover, it has been recognized that when parties seek approval of a settlement agreement negotiated prior to formal class certification, “there is an even greater potential for a breach of fiduciary duty owed the class during settlement.” Bluetooth, 654 F.3d at 946. Thus, the court must review such agreements with “a more probing inquiry” for evidence of collusion or other conflicts of interest than what is normally required under the Federal Rules. Hanlon v. Chrysler Corp., 150 F.3d 1011, 1026 (9th Cir. 1998); see also Lane v. Facebook, Inc., 696 F.3d 811, 819 (9th Cir. 2012).

         When parties seek class certification only for purposes of settlement, Rule 23 “demand[s] undiluted, even heightened, attention” to the certification requirements. Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 620 (1997). The district court must examine the propriety of certification under Rule 23 both at this preliminary stage and at a later fairness hearing. See, e.g., Ogbuehi v. Comcast, 303 F.R.D. 337, 344 (E.D. Cal. Oct. 2, 2014); West v. Circle K Stores, Inc., No. 04-cv-0438 WBS GGH, 2006 WL 1652598, at *2 (E.D. Cal. June 13, 2006).

         Review of a proposed class action settlement ordinarily involves two hearings. See Manual for Complex Litigation (4th) § 21.632. First, the court conducts a preliminary fairness evaluation and, if applicable, considers class certification. If the court makes a preliminary determination on the fairness, reasonableness, and adequacy of the settlement terms, the parties are directed to prepare the notice of certification and proposed settlement to the class members. Id. (noting that if the parties move for both class certification and preliminary approval, the certification hearing and preliminary fairness evaluation can usually be combined). Second, the court holds a final fairness hearing to determine whether to approve the settlement. Id.; see also Narouz v. Charter Commc'ns, Inc., 591 F.3d 1261, 1266-67 (9th Cir. 2010).

         Here, the parties move for preliminary approval of a class settlement and preliminary class certification. Though Rule 23 does not explicitly provide for such a procedure, federal courts generally find preliminary approval of settlement and notice to the proposed class appropriate if the proposed settlement “appears to be the product of serious, informed, non-collusive negotiations, has no obvious deficiencies, does not improperly grant preferential treatment to class representatives or segments of the class, and falls with the range of possible approval.” Lounibos v. Keypoint Gov't Solutions Inc., No. 12-00636, 2014 WL 558675, at *5 (N.D. Cal. Feb. 10, 2014) (quoting In re Tableware Antitrust Litig., 484 F.Supp.2d 1078, 1079 (N.D. Cal. 2007)); Newberg on Class Actions § 13:13 (5th ed. 2011); see also Dearauju v. Regis Corp., Nos. 2:14-cv-01408-KJM-AC, 2:14-cv-01411-KJM-AC, 2016 WL 3549473 (E.D. Cal. June 30, 2016) (“Rule 23 provides no guidance, and actually foresees no procedure, but federal courts have generally adopted [the process of preliminarily certifying a settlement class].”).


         A. Preliminary Evaluation of Fairness of Proposed Class Action Settlement

         Plaintiff seeks approval of their proposed settlement agreement. (See Doc. No. 112-3.) As noted, under Rule 23(e), a court may approve a class action settlement only if the settlement is fair, reasonable, and adequate. Bluetooth, 654 F.3d at 946. “[P]reliminary approval of a settlement has both a procedural and substantive component.” See, e.g., In re Tableware Antitrust Litigation, 484 F.Supp.2d at 1079 (citing Schwartz v. Dallas Cowboys Football Club, Ltd., 157 F.Supp.2d 561, 570 n.12 (E.D. Pa. 2001)). In particular, preliminary approval of a settlement and notice to the proposed class is appropriate if: (i) the proposed settlement appears to be the product of serious, informed, non-collusive negotiations; and (ii) the settlement falls within the range of possible approval, has no obvious deficiencies, and does not improperly grant preferential treatment to class representatives or segments of the class. Id.; see also Ross v. Bar None Enterprises, Inc., No. 2:13-cv-00234-KJM-KJN, 2014 WL 4109592, at *9 (E.D. Cal. Aug. 19, 2014). However, a district court reviewing a proposed settlement is not to “reach any ultimate conclusions on the contested issues of fact and law which underlie the merits of the dispute.” Chem. Bank v. City of Seattle, 955 F.2d 1268, 1291 (9th Cir. 1992).

         1. Negotiations

         The court must first consider whether the process by which the parties arrived at their settlement is truly the product of arm's length bargaining, rather than collusion or fraud. Millan v. Cascade Water Servs., Inc., 310 F.R.D. 593, 613 (E.D. Cal. 2015). A settlement is presumed fair if it “follow[s] sufficient discovery and genuine arms-length negotiation.” Adoma v. Univ. of Phx., Inc., 913 F.Supp.2d 964, 977 (E.D. Cal. 2012) (quoting Nat'l Rural Telecomms. Coop. v. DIRECTV, Inc., 221 F.R.D. 523, 528 (C.D. Cal. 2004)). In addition, participation in mediation “tends to support the conclusion that the settlement process was not collusive.” Palacios v. Penny Newman Grain, Inc., No. 1:14-cv-01804-KJM, 2015 WL 4078135, at *8 (E.D. Cal. July 6, 2015) (citation omitted).

         The settlement which is the subject of the pending motion appears to be the product of serious, substantial, and arms-length negotiations. As discussed above, the parties reached the settlement after three mediations sessions, which were held several months apart and which were separated by nearly thirty depositions and extensive discovery by the parties. (Doc. No. 111 at 10.) The first mediation occurred on September 14, 2016, and plaintiffs accepted the mediator's proposal following the third mediation held on February 14, 2018. (Id.) Some dispositive motions were filed in the consolidated actions prior to their transfer to this court.[1] Based upon this history, the court is convinced that the parties' negotiations were extensive, involved, and non-collusive, lending credence to the fairness of the settlement and supporting plaintiffs' motion for preliminary approval.

         2. Obvious Deficiencies

         A proposed settlement does not meet the test for preliminary fairness if there are any obvious deficiencies in the proposed agreement. In re Tableware Antitrust Litig., 484 F.Supp.2d at 1079. Here, the settlement states that defendants shall pay $9, 250, 000 to settle the Singh, Rich, and Phillips actions. (Doc. No. 111 at 14.) The total settlement amount is based on the assumption that the class comprises 796 drivers with 41, 846 qualifying work weeks (“QWW”). (Id.) This total includes amounts to be paid to class members, awards for attorneys' fees and costs, enhancement payments for named plaintiffs, and the settlement administration expenses. (Id.) No portion of the settlement amount will revert back to defendants. (Id.) At the hearing on the pending motion, counsel for both parties clarified that the settlement is not conditioned on any particular award of attorneys' fees, expenses, or incentive awards. Further, the settlement provides a means for class members to exclude themselves from the settlement. (Id.) The release of liability appears reasonably tailored to the claims presented in the action for class members, with named plaintiffs agreeing to a general release of all claims. (Id. at 34.) The settlement agreement provides for a settlement administrator to coordinate notice to the class, any requests for exclusion, and payments to class members upon final approval. (Id.) Based upon this showing, the court is satisfied there are no obvious deficiencies with the proposed settlement.

         3. Preferential Treatment

         In making a preliminary fairness determination, the court must assure itself that the proposed settlement does not provide preferential treatment to certain members of the class or the named plaintiffs. In re Tableware Antitrust Litig., 484 F.Supp.2d at 1079. As noted above, the settlement terms provide for the settlement amount to be divided among class members in proportion to the number of QWW that they were employed. (Doc. No. 111 at 14.) The court therefore turns to the attorneys' fees provisions and the anticipated incentive awards.

         i. Attorneys' Fees

         When a negotiated class action settlement includes an award of attorneys' fees, the fee award must be evaluated in the overall context of the settlement. Knisley v. Network Assocs., 312 F.3d 1123, 1126 (9th Cir. 2002). Where, as here, fees are to be paid from a common fund, the relationship between the class members and class counsel “turns adversarial.” In re Washington Pub. Power Supply Sys. Sec. Litig, 19 F.3d 1291, 1302 (9th Cir. 1994). Thus, the district court must assume a fiduciary role for the class members in evaluating a request for an award of attorneys' fees from the common fund. Id; Rodriquez v. W. Publ'g Corp., 563 F.3d 948, 968 (9th Cir. 2009). Similarly, while “[i]ncentive awards are fairly typical in class action cases, ” Rodriquez, 563 F.3d at 958-59, “district courts must be vigilant in scrutinizing all incentive awards to determine whether they destroy the adequacy of the class representatives. . . . [C]oncerns over potential conflicts may be especially pressing where . . . the proposed service fees greatly exceed the payments to absent class members.” Radcliffe v. Experian Info. Sols., Inc., 715 F.3d 1157, 1165 (9th Cir. 2013) (internal quotation marks and citations omitted).

         The Ninth Circuit has approved two methods for determining attorneys' fees in such cases where the attorneys' fee award is taken from the common fund set aside for the entire settlement: the “percentage of the fund” method and the “lodestar” method. Vizcaino v. Microsoft Corp.,290 F.3d 1043, 1047 (9th Cir. 2002) (citation omitted). The district court retains discretion in common fund cases to choose either method. Id; Vu v. Fashion Inst. of Design & Merch., No. CV 14-08822 SJO (EX), 2016 WL 6211308, at *5 (CD. Cal. Mar. 22, 2016). Under either approach, “[r]easonableness is the goal, and mechanical or formulaic application of either method, ...

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