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Greer v. Dick's Sporting Goods, Inc.

United States District Court, E.D. California

August 26, 2019

JIMMY GREER, Plaintiff,
v.
DICK'S SPORTING GOODS, INC., Defendant.

          ORDER

         Following the court's certification of two classes and distribution of class notices, the parties in this class action reached a proposed settlement. Plaintiff now moves for preliminary approval of the parties' settlement agreement. The motion is unopposed. As explained below, the court GRANTS the motion.

         I. BACKGROUND

         Plaintiff Jimmy Greer filed this class action on March 19, 2015, alleging defendant Dick's Sporting Goods, Inc. (“DSG”) violated multiple provisions of the California Labor Code and California Business and Professions Code section 17200. Compl., ECF No. 1-1; ECF No. 1 (May 15, 2015 removal); First Am. Compl., ECF No. 14 (filed Oct. 1, 2015). On April 13, 2017, the court granted Greer's opposed motion for class certification, certifying the following two classes: (1) a “Security Check Class” arising from Greer's allegations that DSG employees were required to wait, while off the clock, for inspection of their personal belongings before exiting the store, and (2) a “Business Reimbursement Class, ” arising from Greer's claim that DSG employees were required to purchase apparel but were not reimbursed for their purchases. Class Cert. Order, ECF No. 45. On July 28, 2017, the Ninth Circuit denied DSG's petition for permission to appeal the court's class certification order. ECF No. 51. This court then denied DSG's motion to stay the case pending the California Supreme Court's resolution of two questions certified to that court by the Ninth Circuit. ECF No. 54 (motion to stay); ECF No. 64 (order). After resolving the parties' disagreements and requiring several changes, on March 15, 2018, the court approved the class notice, exclusion form and notice plan. ECF Nos. 55, 56, 61, 66, 68, 70-72.

         On March 26, 2019, Greer moved for preliminary approval of his settlement with DSG. Mot., ECF No. 73. Under the proposed settlement agreement, DSG would pay a gross settlement amount of $2, 900, 000. Mot. at 8.[1] From this gross settlement amount, Greer seeks an attorneys' fee award of 33 percent of the gross settlement ($966, 667) and $200, 000 in expenses; $65, 000 in settlement administration costs; and a $10, 000 incentive payment for Greer's service as a class representative “and for agreeing to a broader release than those required of other Class Members.” Id. at 8-9. Deducting these amounts from the gross settlement amount leaves a net settlement amount of $1, 658, 333. Id. at 8.

         This net settlement amount would be distributed to participating members of the settlement class, which Greer defines as: “All persons who worked at Defendant's California retail stores in non-exempt positions at any time during the period from: (1) March 18, 2011 to January 31, 2015 (the ‘Security Check Class'); and (2) March 18, 2011 to April 13, 2017 (the ‘Business Reimbursement Class').” Id. at 8. As a non-reversionary settlement, the entirety of this net settlement amount will be distributed to class members, with no portion reverting to DSG. Id. Under this agreement, and assuming the court will grant Greer's requests for attorneys' fees, costs and incentive payments in full, each settlement class member would receive, on average, $155. Id. at 9.

         Greer's motion for settlement approval is unopposed. The court submitted the motion after oral argument, ECF No. 76 (hearing minutes), and resolves it here.

         II. LEGAL STANDARD

         There is a “strong judicial policy” favoring settlement of class actions. Class Plaintiffs v. City of Seattle, 955 F.2d 1268, 1276 (9th Cir. 1992). Nonetheless, to protect absent class members' due process rights, Rule 23(e) of the Federal Rules of Civil Procedure permits the claims of a certified class to be “settled . . . only with the court's approval” and “only after a hearing and only on a finding [that the agreement is] fair, reasonable, and adequate . . . .” Fed.R.Civ.P. 23(e). To determine whether a proposed class action settlement is fair, reasonable and adequate, courts consider several factors, as relevant, including:

(1) [T]he strength of the plaintiff's case; (2) the risk, expense, complexity, and likely duration of further litigation; (3) the risk of maintaining class action status throughout the trial; (4) the amount offered in settlement; (5) the extent of discovery completed and the stage of the proceedings; (6) the experience and view of counsel; (7) the presence of a governmental participant; and (8) the reaction of the class members of the proposed settlement.

In re Online DVD-Rental Antitrust Litig., 779 F.3d 934, 944 (9th Cir. 2015) (quoting Churchill Vill., LLC v. Gen. Elec., 361 F.3d 566, 575 (9th Cir. 2004)); In re Tableware Antitrust Litig., 484 F.Supp.2d 1078, 1080 (N.D. Cal. 2007) (noting, at preliminary approval stage, courts consider whether “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 within the range of possible approval . . . .”) (citations omitted).

         These factors substantively track those provided in 2018 amendments to Rule 23(e)(2), under which the court may approve a settlement only after considering whether:

         (A) the class representatives and class counsel have adequately represented the class;

         (B) the proposal was negotiated at arm's length;

         (C) the relief provided for the class is adequate, taking into account:

         (ii) the effectiveness of any proposed method of distributing relief to the class, including the method of processing class-member claims;

         (iv) any agreement required to be identified under Rule 23(e)(3); and

         (D) the proposal treats class members equitably relative to each other.

         Fed. R. Civ. P. 23(e)(2)(A)-(D). The Rule 23(e)(2) factors took effect on December 1, 2018 and, as an advisory note to the Rule 23(e) amendment recognizes, “each circuit has developed its own vocabulary for expressing [] concerns” regarding whether a proposed settlement is fair, reasonable and adequate. Fed.R.Civ.P. 23(e)(2) advisory committee's note to 2018 amendment. Accordingly, the newly codified factors are not intended “to displace any factor, but rather to focus the court and the lawyers on the core concerns of procedure and substance that should guide the decision whether to approve the proposal.” Id.; see also 4 Newberg on Class Actions § 13:14 (5th ed.) (noting Rule 23(e) “essentially codified [federal courts'] prior practice”). Moreover, the Advisory Committee warned against allowing “[t]he sheer number of factors [to] distract both the court and the parties from the central concerns that bear on review under Rule 23(e)(2).” Fed.R.Civ.P. 23(e)(2) advisory committee's note to 2018 amendment. Accordingly, the court draws on the Ninth Circuit's longstanding guidance and the Rule 23(e)(2) factors as relevant to resolve this motion.

         III. DISCUSSION

         This court has joined others that reject “the idea that district courts should conduct a more lax inquiry at the preliminary approval stage” of the two-step class action settlement approval process. See Cotter v. Lyft, Inc., 193 F.Supp.3d 1030, 1035-36 (N.D. Cal. 2016). In light of the court's duty to absent class members, the court “review[s] class action settlements just as carefully at the initial stage as [it] do[es] at the final stage.” See Id. at 1037. This approach is consistent with Rule 23, which permits the court to provide notice of a proposed settlement to the class only upon “the parties' showing that the court will likely be able to: [¶] [] approve the proposal under Rule 23(e)(2).” Fed.R.Civ.P. 23(e)(1)(B)(i).

         Turning to the relevant factors, the court finds at this preliminary stage that the proposed settlement is fair, reasonable and adequate, but notes certain areas of concern.

         A. Prelim ...


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