United States District Court, E.D. California
ORDER
On
January 22, 2019, the court granted in part and denied in
part several unopposed motions brought by plaintiffs Julian
Smothers and Asa Dhadda in connection with their proposed
class action settlement with defendant NorthStar Alarm
Services, LLC. Prior Order, ECF No. 55. Specifically, the
court granted plaintiffs' motion for preliminary
certification of the California Class, id. at 6-12,
granted plaintiffs' request for appointment of class
counsel, id. at 13, granted plaintiffs' motion
to preliminarily certify the Fair Labor Standards Act
(“FLSA”) group, id. at 13-15, and denied
plaintiffs' request for preliminary settlement approval
under Federal Rule of Civil Procedure 23 and the FLSA,
id. at 15-23. The parties then renewed their
negotiations and reached a modified settlement agreement to
address the court's concerns. Plaintiffs now seek
preliminary approval of their modified settlement agreement,
Mot., ECF No. 60, which NorthStar does not oppose. The court
incorporates the factual background and legal analysis
provided in its prior order here and, as explained below,
GRANTS the motion for preliminary settlement approval. The
court also identifies several necessary changes to
plaintiffs' proposed class notice, as discussed with
counsel at hearing.
I.
PRELIMINARY SETTLEMENT APPROVAL
Compared
to their initial proposed settlement agreement, the
parties' revised proposed settlement agreement includes
the following modifications: class counsel's request for
attorneys' fees will not exceed 25 percent of the gross
settlement amount, which will be subject to a lodestar
cross-check, as opposed to the 33.33 percent previously
sought, id. at 4, [1] 7-9, Settlement, ECF No. 60-1 at
4-46, §§ I.11, I.26, IV.7; settlement
administration costs will not exceed $50, 000, as opposed to
the $40, 000 previously sought, [2] Mot. at 4, Settlement §
VI.7; and the proposed notice and opt-in procedures for the
FLSA group now comply with 29 U.S.C. § 216(b)'s
opt-in requirement rather than having group members opt-in by
cashing a settlement check. Mot. at 5-6. The parties have
largely eliminated provisions permitting funds to revert to
NorthStar depending on the proportion of class members who
opt-out or opt-in, depending on the class and have explained
the basis for their proposed distribution. Id. at
9-11, Settlement § VII.1 (“The entirety of the
final California Class Net Settlement Amount shall be
distributed to the participating class members, with no
reversion to Defendant.”); Settlement § VII.5
(calculating FLSA gross settlement amount based on number of
members who opt-in).
With
these changes, the parties have addressed the court's
concerns expressed in its earlier order, and the court
therefore GRANTS plaintiffs' motion for preliminary
approval of the settlement under Rule 23 and the FLSA.
II.
ADMINISTRATOR APPOINTMENT & NOTICE APPROVAL
Plaintiffs
also request the court approve their proposed class
administrator, notices, opt-in form and notice schedule. Mot.
at 11-13.
A.
Third-Party Administrator
Plaintiffs
propose Phoenix Settlement Administrators (“PSA”)
serve as third-party administrator for purposes of this
settlement. Mot. at 12. PSA's president and managing
partner, Michael E. Moore, submits a declaration in support
of plaintiffs' motion, which describes PSA's
experience administering class actions. Moore Decl., ECF No.
61. Under the parties' agreement, PSA will mail class
notices to potential class members; determine individual
settlement amounts; conduct telephonic and online outreach
campaigns; establish a website with documents filed in this
action; prepare, administer and distribute class members'
settlement amounts; and issue a final report to class
counsel. Settlement § VI.1. PSA also will provide weekly
reports on requests for exclusion and inclusion in the
settlement to class counsel. Id.
The
court is satisfied that PSA is a capable administrator and
GRANTS plaintiffs' motion to appoint PSA as the class
administrator.
B.
Notice
For any
class certified under Rule 23(b)(3), “the court must
direct to class members the best notice that is practicable
under the circumstances, including individual notice to all
members who can be identified through reasonable
effort.” Fed.R.Civ.P. 23(c)(2)(B). Under Rule 23,
The notice must clearly and concisely state in plain, easily
understood language: (i) the nature of the action; (ii) the
definition of the class certified; (iii) the class claims,
issues, or defenses; (iv) that a class member may enter an
appearance through an attorney if the member so desires; (v)
that the court will exclude from the class any member who
requests exclusion; (vi) the time and manner for requesting
exclusion; and (vii) the binding effect of a class judgment
on members under Rule 23(c)(3).
Fed. R. Civ. P. 23(c)(2)(B).
The
FLSA also requires timely notice to potential plaintiffs,
allowing plaintiffs to “make informed decisions about
whether or not to participate.” See Hoffmann-La
Roche, Inc. v. Sperling, 493 U.S. 165, 170 (1989)); 29
U.S.C. § 216(b) (“No employee shall be a party
plaintiff to any such action unless he gives his consent in
writing to become such a party and such consent is filed in
the court in which such action is brought.”).
Guided
by these principles, and exercising its discretion, the court
has reviewed plaintiffs' proposed notices and opt-in form
and requires the following changes. See California
Class Notice, Ex. 1, ECF No. 60-1 at 48-56; FLSA Group
Notice, Ex. 2, ECF No. 60-1 at 58-65; FLSA Opt-In, ECF No.
60-1 at 67.[3]
1.
Global Changes and Clarifications
At
hearing, the court and counsel discussed the following global
changes and clarifications, which the court confirms it
requires:
Any
form or correspondence containing any portion of a class
member's Social Security Number must be redacted before
being filed on the public docket, as required by the Local
Rules. Further, counsel shall include notice language
informing class members that their Social Security Numbers
will remain private.
Notices
and forms shall provide members with “postmarked no
later than” dates rather than merely stating documents
should be “submitted” by certain dates.
Prior
to finalizing the notices, counsel shall determine whether
PSA requires members to send correspondence to different
addresses depending on how the correspondence is sent.
See ECF No. 60-1 at 52. If a single address for all
correspondence sent by class members to PSA can be provided,
the parties are encouraged to do so.
Members
may object to the settlement and motion for attorneys'
fees, costs and incentive award at the final fairness hearing
without first filing a written objection or otherwise
notifying counsel. While the court includes specific
correcting language below, the parties are responsible for
ensuring no portion of the notices suggests a written
objection is required for a class member to appear at the
hearing.
2.
California Class Notice
a.
Page One (ECF No. 60-1 at 48)
The
text reading, “The Court has given preliminary approval
to a settlement of this lawsuit” shall be modified to
read, “The Court has preliminarily approved a
settlement of this lawsuit.” The text reading,
“As a result, the settlement is split into two separate
groups” shall be modified to read, “As a result,
the settlement is split between two separate groups”
The text reading, “For that reason, please pay careful
attention to the below legal rights and options section to
understand what to do to participate in the settlement”
shall be modified to read, “For that reason, please
carefully review this notice, which describes your legal
rights and options in this settlement.”
b.
Page Two (ECF No. 60-1 at 49)
1.
“Option 2”
The
text reading, “SUBMIT AN OPT-OUT REQUEST” shall
be modified to read, “EXCLUDE YOURSELF FROM THE
CLASS”
Strike
“The request must clearly indicate that you desire to
be excluded from the Settlement, must be signed by you, and
must include your name, address, telephone number, and the
last four digits of your Social Security number.”
2.
“Option 3”
Strike
“Submit a written objection to the Court.”
After
“you may submit a written objection” add
“or explain your objection at the court's final
fairness and approval hearing”
Replace
“choose whether to” with “choose to”
3.
“Option 4”
Strike
this section.
c.
Page Three (ECF No. 60-1 at 50)
1.
“What is this lawsuit about?”
The
text provided in this section contains unnecessary legalese
and shall be modified to read as follows:
Plaintiffs Julian Smothers and Asa Dhadda
(“Plaintiffs”) sued Defendant on behalf of
themselves and other Alarm Installation Technicians and/or
Lead Installation Technicians in California and the United
States (“Action”). Plaintiffs assert that
Defendant owes Plaintiffs and other Alarm Installation
Technicians and/or Lead Installation Technicians additional
compensation for meal and rest periods, off the clock work,
overtime hours worked, and unreimbursed business expenses, as
well as penalties for inaccurate itemized wage statements,
waiting time penalties and related other penalties.
Plaintiffs seek damages for lost wages, interest and
penalties. They also seek attorneys' fees and expenses.
Defendant strongly denies plaintiffs' allegations and
admits no wrongdoing. To avoid the costs of litigation,
however, the parties have agreed to settle this matter.
2.
“What is a class action and who is
involved?”
Strike
“(‘Class Representatives')” after the
named plaintiffs' names, as the immediately preceding
section already defines them as “Plaintiffs.” If
this inconsistency exists elsewhere in the notice, plaintiffs
shall correct it.
After
“is called the Defendant, ” insert “, in
this case, Northstar Alarm Services, LLC.”
Modify
the text reading, “In this case, there are two
subgroups of Settlement Class Members:” to read,
“In this case, there are two separate settlement
groups:”
The
third paragraph, beginning “The California Class
Members who do not, ” should instead begin with,
“In a class action, one court resolves the issues for
everyone in the class, except for those people who decide to
exclude themselves from the class.”
Modify
the text reading, “pursuant to the procedure set forth
below” to, “as explained below”
d.
Page Three (ECF No. 60-1 at 51)
1.
“I want to receive my share of the settlement. What
do I do?”
Strike
“You are entitled to receive a portion of the
Settlement as a potential member of the California
Class.”
2.
“What does the ...