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Smothers v. Northstar Alarm Services, LLC

United States District Court, E.D. California

July 12, 2019

JULIAN SMOTHERS, et al., Plaintiffs,


         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.


         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.


         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 ...

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