United States District Court, E.D. California
MARIO CORTEZ, MARIA CISNEROS, ANTONIO TOSCANO, FRANCISCO JAVIER GONZALEZ, JESUS RODRIGUEZ, CECILIA GARCIA, JOSE LUIS RAYGOZA, and JOSE GUZMAN, on behalf of themselves and all others similarly situated, Plaintiffs,
VIEIRA CUSTOM CHOPPING, INC., a California Corporation; V. & S COMMODITY, INC., a California Corporation; CHRISTINA VIEIRA; and MATTHEW SEPEDA, Defendants.
ORDER GRANTING PLAINTIFFS’ MOTION FOR
PRELIMINARY APPROVAL OF CLASS ACTION AND COLLECTIVE ACTION
SETTLEMENT (DOC. NO. 23)
matter came before the court on September 17, 2019, for
hearing on plaintiffs’ unopposed motion for preliminary
approval of a class action and collective action settlement.
(Doc. No. 23.) Attorney Enrique Martínez appeared
telephonically on behalf of plaintiffs, and attorney Steven
Wainess appeared telephonically on behalf of defendants. For
the reasons set forth below, plaintiffs’ motion will be
Vieira Custom Chopping, Inc., V & S Commodity, Inc.,
Christina Vieira, and Matthew Sepeda (collectively
“defendants”) provide commercial services to
dairy farms. (Doc. No. 23-1 at 3.) Defendants employed Mario
Cortez, Maria Cisneros, Antonio Toscano, Francisco Javier
Gonzalez, Jesus Rodriguez, Cecilia Garcia, Jose Luis Raygoza,
and Jose Guzman (collectively “plaintiffs”) in
their shop in Tulare and other areas of the Central Valley of
California. (Id.) Defendants employ four groups of
employees: shop workers, farm equipment operators, truck
drivers, and weighers. (Id.) Defendants classified
all employees as exempt “agricultural” employees
under state and federal law, necessitating overtime
compensation only when employees worked 10 hours per day or
60 hours per week. (Id. at 3-4.)
worked for defendants in different positions for varying
lengths of time. (Id. at 3.) During the corn and
wheat season, plaintiffs were required to work over 12 hours
per day for at least 6 days per week. (Id.)
Plaintiffs allege that because the duties of shop workers,
truck drivers, and weighers did not fall within the Fair
Labor Standards Act (FLS A) agricultural exemption, they were
misclassified as agricultural employees and are therefore
entitled to overtime compensation. (Id. at 3-4.)
Plaintiffs further allege that all employees are owed meal
and rest period premiums because they were provided either
insufficient amounts of meal periods or late meal periods.
(Id. at 4.) Plaintiffs also allege that operators,
truck drivers, and weighers were not provided enough rest
periods. (Id. at 4-5.) Defendants maintain that
plaintiffs were provided legally sufficient meal and rest
periods but chose not to take them. (Id. at 4-5.)
December 7, 2017, plaintiffs filed this class and collective
action alleging the following causes of action: (1) violation
of the FLSA, 29 U.S.C. § 201 et seq.; (2) failure to
provide meal and rest periods, in violation of California
Labor Code §§ 226.7, 512, and California Industrial
Welfare Commission (IWC) Wage Orders; (3) failure to provide
accurate itemized wage statements, in violation of Labor Code
§ 226(e); (4) failure to pay all wages due upon
termination, in violation of Labor Code §§ 201,
202, and 203; (5) violation of Business and Professions Code
§ 17200 et seq.; and (6) violations of the Private
Attorneys General Act (PAGA), Labor Code § 2698 et seq.
(Id. at 5.)
30, 2018, the parties participated in an unsuccessful
mediation before Justice Steven Vartabedian. (Id.)
On May 3, 2019, the parties attended a second unsuccessful
mediation before James M. Phillips. (Id. at
5–6.) Several weeks later, the parties reached an
agreement through a mediator’s proposal. (Id.
30, 2019, plaintiffs filed the present unopposed motion for
conditional certification and for preliminary approval of the
class action and collective action settlement. (See
id.) Pursuant to the settlement agreement, plaintiffs
seek to certify a settlement class defined as follows:
all persons who are or were employed in California by
Defendants as non-exempt (i) shop workers, (ii) farm
equipment operators, (iii) truck drivers, and (iv) weighers
at any point during the Class Period [December 7, 2013
through May 3, 2019] and who do not properly and timely opt
out of the Settlement Class by having requested exclusion.
(Id. at 6.) In contrast to the class action, the
FLSA collective excludes operators and the limitations period
is December 7, 2014 through May 3, 2019. (Id.)
the proposed settlement agreement, defendants would pay a
maximum settlement amount of $450, 000 in installments.
(Id.) The agreement provides for the following
allocation of that payment: (i) up to $18, 500 from the
settlement amount to the claims administrator; (ii) $10, 000
from the net settlement fund to the settlement of PAGA
claims, 75 percent of which will be paid to the California
Labor and Workforce Development Agency (LWDA) pursuant to
PAGA; (iii) $7, 500 to each named plaintiff as an incentive
payment; (iv) 25 percent, or $112, 500, to be paid to class
counsel in attorney’s fees; and (v) estimated
litigation costs of up to $8, 900. (Id. 6–7.)
After these deductions, each member of the settlement class
and the FLSA collective action will be entitled to a pro rata
share of the settlement proceeds in installment payments.
(Id. at 7, 19.) Thirty-two percent of the remaining
amount, or $78, 335, will be distributed to the FLSA class
only. (Id. at 7.) Unclaimed FLSA wages will be
redistributed among members of the collective action.
(Id.) All further remaining unclaimed funds will be
paid to Centro de los Derechos del Migrante, Inc., a
nonprofit organization, as cy pres beneficiary.
seek an order from this court: (i) preliminarily approving
the proposed settlement reached with defendants; (ii)
preliminarily certifying the settlement class and appointing
the named plaintiffs to represent the settlement class; (iii)
conditionally certifying the collective action; (iv)
approving the proposed method and form of notice to the
members of the class and collective action, including the
opt-in procedures for the collection action; (v) approving
the implementation schedule; (vi) approving CPT Group Class
Action Administrators as the claims administrator; and (vii)
scheduling a final fairness hearing. (Id at 1.)
Rule 23 Settlements
Rule of Civil Procedure 23(e) provides that “[t]he
claims, issues, or defenses of a certified class-or a class
proposed to be certified for purposes of settlement-may be
settled, voluntarily dismissed, or compromised only with the
court’s approval.” “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) (internal quotation marks and citations
omitted). To protect the rights of absent class members, Rule
23(e) 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); see also Bluetooth, 654 F.3d at 946. But
when parties seek approval of a settlement agreement
negotiated before 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)
overruled on other grounds by Wal-Mart Stores, Inc. v.
Dukes, 564 U.S. 338 (2011); see also Lane v.
Facebook, Inc., 696 F.3d 811, 819 (9th Cir. 2012).
of a proposed class action settlement ordinarily proceeds in
three stages. See Manual for Complex Litigation
(4th) § 21.632. First, the court conducts a preliminary
fairness evaluation and, if applicable, considers class
certification. 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, 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. Third, the
court holds a final fairness hearing to determine whether to
approve the settlement. Id; see also Narouz v. Charter
Commc ’ns, LLC, 591 F.3d 1261, 1267 (9th Cir.
Rule 23 does not explicitly provide for such a procedure,
federal courts generally find preliminary approval of the
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 within the range of possible approval.”
Lounibos v. Keypoint Gov’t Sols. Inc., No.
12-cv-00636-JST, 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)); see also
Newberg on Class Actions § 13:13 (5th ed. 2011);
Dearaujo 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].”). “The court need not ‘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) (quoting Officers for Justice v. Civil
Serv. Comm ’n of City & Cty. of S.F., 688 F.2d
615, 625 (9th Cir. 1982)). Rather, the court should weigh,
among other factors, the strength of a plaintiff s case; the
risk, expense, complexity, and likely duration of further
litigation; the extent of discovery completed; and the value
of the settlement offer. Id.
the FLSA, an employee may file a civil action against an
employer that fails to adhere to the FLSA’s guarantees.
29 U.S.C. § 216(b); see also Genesis Healthcare
Corp. v. Symczyk, 569 U.S. 66, 69 (2013) (“The
FLSA establishes federal minimum-wage, maximum-hour, and
overtime guarantees that cannot be modified by
contract.”). Employees may bring collective actions
under the FLSA, representing all “similarly
situated” employees, but “each employee [must]
opt-in to the suit by filing a consent to sue with the
district court.” Does I thru XXIII v. Advanced
Textile Corp., 214 F.3d 1058, 1064 (9th Cir. 2000);
see also Jones v. Agilysys, Inc., No. C 12-03516
SBA, 2014 WL 108420, at *2 (N.D. Cal. Jan. 10, 2014). Because
an employee cannot waive claims under the FLSA, the claims
may not be settled without supervision of either the
Secretary of Labor or a district court. See Barrentine v.
Ark-Best Freight Sys., Inc., 450 U.S. 728, 740 (1981);
Beidleman v. City of Modesto, No.
1:16-cv-01100-DAD-SKO, 2018 WL 1305713, at *1 (E.D. Cal. Mar.
13, 2018); Yue Zhou v. Wang’s Rest, No.
05-cv-0279 PVT, 2007 WL 2298046, at *1 n.1 (N.D. Cal. Aug. 8,
2007). The decision to certify an FLSA collective action is
within the discretion of the district court. See Edwards
v. City of Long Beach, 467 F.Supp.2d 986, 989 (CD. Cal.
Ninth Circuit has not established criteria for district
courts to determine whether an FLSA settlement should be
approved. Dunn v. Teachers Ins. & Annuity Ass
’n of Am., No. 13-cv-05456-HSG, 2016 WL 153266, at
*3 (N.D. Cal. Jan. 13, 2016). Rather, district courts in this
circuit routinely apply the Eleventh Circuit standard, which
looks to whether the settlement is a fair and reasonable
resolution of a bona fide dispute. Id; see also
Lynn’s Food Stores, Inc. v. United States, 679
F.2d 1350, 1352-53 (11th Cir. 1982); Milburn v. PetSmart,
Inc., No. 1:18-cv-00535-DAD-SKO, 2019 WL 1746056, at *4
(E.D. Cal. Apr. 18, 2019); Selk v. Pioneers
Mem'l Healthcare Dist, 159 F.Supp.
3d 1164, 1172 (S.D. Cal. 2016); Nen Thio v. Genji,
LLC, 14 F.Supp. 3d 1324, 1333 (N.D. Cal. 2014). “A
bona fide dispute exists when there are legitimate questions
about the existence and extent of Defendant’s FLSA
liability.” Selk, 159 F.Supp. 3d at 1172
(internal quotation marks and citations omitted). A court
will not approve a settlement when there is certainty that
the FLSA entitles plaintiffs to the compensation they seek,
because doing so would shield employers from the full cost of
complying with the statute. Id.
bona fide dispute exists, “[c]ourts often apply the
Rule 23 factors in evaluating the fairness of an FLSA
settlement, while recognizing that some do not apply because
of the inherent differences between class actions and FLSA
actions.” Khanna v. Inter-Con Sec. Sys., Inc.,
No. civ S-09-2214 KJM, 2013 WL 1193485, at *2 (E.D. Cal. Mar.
22, 2013) (internal quotation marks and citations omitted).
The balancing factors include
the strength of the plaintiffs’ case; the risk,
expense, complexity, and likely duration of further
litigation; the risk of maintaining class action status
throughout the trial; the amount offered in settlement; the
extent of discovery completed and the stage of the
proceedings; the experience and views of counsel; the
presence of a governmental participant; and the reaction of
the class members to the proposed settlement.
Khanna v. Intercon Sec. Sys., Inc., No. 2:09-cv-2214
KJM EFB, 2014 WL 1379861, at *6 (E.D. Cal. Apr. 8, 2014),
order corrected, 2015 WL 925707 (E.D. Cal. Mar. 3,
the court will apply these standards in considering the
Preliminary Certification of Class related to California Law
seek preliminary certification of the proposed class under
Rule 23 of the Federal Rules of Civil Procedure.
Rule 23(a) Requirements
23(a) establishes four prerequisites for class action
litigation: (i) numerosity, (ii) commonality, (iii)
typicality, and (iv) adequacy of representation.”
Staton v. Boeing Co., 327 F.3d 938, 953 (9th Cir.
2003). The court will address each requirement below.
proposed class must be “so numerous that joinder of all
members is impracticable.” Fed.R.Civ.P. 23(a)(1). The
numerosity requirement demands “examination of the
specific facts of each case and imposes no absolute
limitations.” Gen. Tel. Co. of Nw., Inc. v.
EEOC,446 U.S. 318, 330 (1980). Courts have found the
requirement satisfied when the class comprises as few as
thirty-nine members, or where joining all class members would
serve only to impose financial burdens and clog the
court’s docket. See Murillo v. Pac. Gas & Elec.
Co.,266 F.R.D. 468, 474 (E.D. Cal. 2010) (citing
Jordan v. Los Angeles County,669 F.2d 1311, 1319