United States District Court, E.D. California
WILLIAM L. MILBURN, individually and on behalf of all other current and former similarly situated and aggrieved employees of defendants
PETSMART, INC.; and DOES 1 through 50, inclusive, Defendants. in the State of California, Plaintiff,
ORDER GRANTING MOTIONS FOR FINAL APPROVAL OF CLASS
AND COLLECTIVE ACTION SETTLEMENT AND AWARD OF ATTORNEYS'
FEES (DOC. NOS. 16, 17)
matter came before the court on October 1, 2019, for hearing
on plaintiff's motion for final approval of a class
action settlement and motion for attorneys' fees. (Doc.
Nos. 16, 17.) Attorney Nathan Reese appeared telephonically
for plaintiff and the class, and attorney Carrie Gonell
appeared telephonically for defendants. For the reasons that
follow, the court will grant final approval of the class
action settlement and will award attorneys' fees and
costs as requested.
court previously granted preliminary approval of a class
action settlement in this action on April 18, 2019. (Doc. No.
15.) Pertinent factual details may be found in that order.
Following the granting of preliminary approval, on May 17,
2019, Rust Consulting, the settlement administrator, mailed
the notice packets to 2, 987 class members. (Doc. 17-1 at 6.)
Of those mailed notices, eighty-seven were returned
undeliverable. (Id. at 16-17.) Thus far, no member
has filed an objection to the settlement, three members of
the class have requested exclusion, and fifty-one FLSA opt-in
forms have been received. (Id. at 13, 17.) Plaintiff
declares that this represents 60.7 percent of the class
members eligible to participate in the FLSA collective action
and 99.9 percent overall participation. No class members
appeared at the final approval hearing.
CERTIFICATION OF CLASS ACTION
court conducted an examination of the class action factors in
the order granting preliminary approval of the settlement and
found certification warranted. (See Doc. No. 15 at
11- 16.) Since no additional issues concerning whether
certification is warranted have been raised, the court will
not repeat its prior analysis here, but instead reaffirms it
and finds final certification appropriate. The following
class is certified: all persons who are members of the
PetsHotel Manager Class, PetsHotel Leader Class, PetsHotel
Seating Class, and Waiting Time Penalties Subclass.
(Id. at 3-4.) Each of those classes are defined as
(1) PetsHotel Manager Class: any individual employed by
PetSmart in an exempt PetsHotel Manager position in
California during the period four years back from the date
the original complaint was filed, October 27, 2012, through
April 13, 2015.
(2) PetsHotel Leader Class: any individual employed by
PetSmart in a non-exempt PetsHotel Leader position in
California at any time from and after April 13, 2015 through
the date of preliminary approval.
(3) PetsHotel Seating Class: all members of the PetsHotel
Manager Class and PetsHotel Leader Class, as well as any
individual employed in a PetsHotel in California from October
27, 2015 through the date of preliminary approval as an
Assistant Manager and/or Assistant Leader, Store Lead and/or
Seniors, Overnight PetCare Specialist, or Guest Services
(4) Waiting Time Penalties Subclass: all members of the
PetsHotel Manager Class and/or PetsHotel Leader Class whose
employment with PetSmart ended at any time from and after
October 27, 2013 through the date of preliminary approval.
(Id.) In addition, and for the reasons stated in the
order granting preliminary approval, plaintiff William L.
Milburn is confirmed as class representative, attorneys
Graham Hollis, Vilmarie Cordero, and Nathan Reese are
confirmed as class counsel, and Rust Consulting is confirmed
as the settlement administrator.
APPROVAL OF CLASS ACTION SETTLEMENT
actions require the approval of the district court prior to
settlement. Fed.R.Civ.P. 23(e) (“The claims, issues, or
defenses of a certified class may be settled, voluntarily
dismissed, or compromised only with the court's
approval.”). This requires that: (i) notice be sent to
all class members; (ii) the court hold a hearing and make a
finding that the settlement is fair, reasonable, and
adequate; (iii) the parties seeking approval file a statement
identifying the settlement agreement; and (iv) class members
be given an opportunity to object. Fed.R.Civ.P. 23(e)(1)-(5).
The settlement agreement was previously filed on the court
docket (Doc. No. 9-2, Ex. 1), and class members have been
given an opportunity to object. The court now turns to the
adequacy of notice and its review of the settlement following
the final fairness hearing.
notice is critical to court approval of a class settlement
under Rule 23(e).” Hanlon v. Chrysler Corp.,
150 F.3d 1011, 1025 (9th Cir. 1998). “Notice is
satisfactory if it ‘generally describes the terms of
the settlement in sufficient detail to alert those with
adverse viewpoints to investigate and to come forward and be
heard.'” Churchill Vill., L.L.C. v. Gen.
Elec., 361 F.3d 566, 575 (9th Cir. 2004) (quoting
Mendoza v. Tucson Sch. Dist. No. 1, 623 F.2d 1338,
1352 (9th Cir. 1980)). Any notice of the settlement sent to
the class should alert class members of “the
opportunity to opt-out and individually pursue any state law
remedies that might provide a better opportunity for
recovery.” Hanlon, 150 F.3d at 1025. It is
important for class notice to include information concerning
the attorneys' fees to be awarded from the settlement,
because it serves as “adequate notice of class
counsel's interest in the settlement.” Staton
v. Boeing Co., 327 F.3d 938, 963 n.15 (9th Cir. 2003)
(quoting Torrisi v. Tucson Elec. Power Co., 8 F.3d
1370, 1375 (9th Cir. 1993)) (noting that where notice
references attorneys' fees only indirectly, “the
courts must be all the more vigilant in protecting the
interests of class members with regard to the fee
the court reviewed the class notice that was proposed when
the parties sought preliminary approval of the settlement and
found it to be sufficient. (Doc. No. 15 at 21-25.) Notice was
sent by the settlement administrator to 2, 987 class members
on May 17, 2019 via first-class mail. (Doc. No. 16-3 at
¶ 9.) Of those notices, Rust performed 256 address
traces on notices returned as undeliverable, obtained 224
more current addresses, and re-mailed to those class members.
(Doc. 17-3 at ¶ 4.) Fifty-five class notices were
returned a second time. (Id.) Thus, eighty-seven
class notices remain undeliverable. (Id.) It
therefore appears that approximately 97 percent of the class
members received notice of this settlement. Rust also
received fifty-one FLSA opt-in forms. (Id. at ¶
6.) Although one opt-in form was untimely, the individual
provided a letter informing Rust that it was timely but never
received, and counsel for the parties directed Rust to
consider the opt-in form timely. (Id. at ¶ 6.)
Since there are eighty-four individuals who are eligible to
submit a claim under the FLSA settlement fund, this
represents 60.7 percent participation in the FLSA settlement.
class members receiving notice of the settlement, the
settlement administrator reports that no written objections
were filed and only three requests for exclusion were
received. (Id. at ¶¶ 8-9.) One class
member disputed working in a covered job title. (Id.
at ¶ 7.) Defense counsel verified that the class member
worked in a covered position and provided instructions on how
to opt out of the settlement if the class member chose to do
so. (Id.) The class member has not submitted a
request for exclusion. In total, there are 2, 984 class
members in this settlement, representing a 99.9 percent
participation rate. (Id. at ¶ 8.) No class
members or their representatives appeared at the final
fairness hearing to object to the settlement.
the above, the court concludes adequate notice was provided
to the vast majority of the class here. Silber v.
Mabon, 18 F.3d 1449, 1453-54 (9th Cir. 1994) (noting the
court need not ensure all class members receive actual
notice, only that “best practicable notice” is
given); Winans v. Emeritus Corp., No.
13-cv-03962-HSG, 2016 WL 107574, at *3 (N.D. Cal. Jan. 11,
2016) (“While Rule 23 requires that ‘reasonable
effort' be made to reach all class members, it does not
require that each individual actually receive
notice.”). The court accepts the reports of the
settlement administrator and finds sufficient notice has been
provided so as to satisfy Federal Rule of Civil Procedure
Final Fairness Hearing
October 1, 2019, the court held a final fairness hearing, at
which class counsel and defense counsel appeared
telephonically. As noted, no class members, objectors, or
counsel representing class members or objectors appeared at
the hearing. Below, the court will determine whether the
settlement is fair, adequate, and reasonable. See
Fed. R. Civ. P. 23(e)(2).
assessing the fairness of a class action settlement, courts
balance the following factors:
(1) the strength of the plaintiffs' 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 views of counsel; (7) the
presence of a governmental participant; and (8) the reaction
of the class members to the proposed settlement.
Churchill Vill., L.L.C., 361 F.3d at 575; see
also In re Online DVD-Rental Antitrust Litig., 779 F.3d
934, 944 (9th Cir. 2015); Rodriguez v. West Publ'g
Corp., 563 F.3d 948, 964-67 (9th Cir. 2009). These
settlement factors are non-exclusive, and each need not be
discussed if they are irrelevant to a particular case.
Churchill Vill., L.L.C., 361 F.3d at 576 n.7. While
the Ninth Circuit has observed that “strong judicial
policy . . . favors settlements, ” id. at 576
(quoting Class Plaintiffs v. City of Seattle, 955
F.2d 1268, 1276 (9th Cir. 1992)), where the parties reached a
settlement agreement prior to class certification, the court
has an independent duty on behalf of absent class members to
be vigilant for any sign of collusion among the negotiating
parties. See In re Bluetooth Headset Prods. Liab.
Litig., 654 F.3d 935, 946 (9th Cir. 2011) (noting
“settlement class actions present unique due process
concerns for absent class members” because the
“inherent risk is that class counsel may collude with
the defendants, tacitly reducing the overall settlement in
return for a higher attorney's fee”) (internal
quotation marks and citations omitted).
particular, where a class action settlement agreement is
reached prior to a class being certified by the court,
“consideration of these eight Churchill
factors alone is not enough to survive appellate
review.” Id. at 946-47. District courts must
be watchful “not only for explicit collusion, but also
for more subtle signs that class counsel have allowed pursuit
of their own self-interests and that of certain class members
to infect the negotiations.” Id. at 947. These
more subtle signs include: (i) “when counsel receive a
disproportionate distribution of the settlement, or when the
class receives no monetary distribution but class counsel are
amply rewarded”; (ii) the existence of a “clear
sailing” arrangement, which provides “for the
payment of attorneys' fees separate and apart from class
funds, ” and therefore carries “the potential of
enabling a defendant to pay class counsel excessive fees and
costs in exchange for counsel accepting an unfair settlement
on behalf of the class”; and (iii) “when the
parties arrange for fees not awarded to revert to defendants
rather than be added to the class fund.” Id.
(internal citations and quotation marks omitted). The Ninth
Circuit has also recognized that a version of a “clear
sailing” arrangement exists when a defendant expressly
agrees not to oppose an award of attorneys' fees up to a
certain amount. Lane v. Facebook, Inc., 696 F.3d
811, 832 (9th Cir. 2012); In re Bluetooth, 654 F.3d
at 947; In re Toys R Us-Delaware, Inc.-Fair and Accurate
Credit Transactions Act (FACTA) Litig., 295 F.R.D. 438,
458 (C.D. Cal. 2014) (“In general, a clear sailing
agreement is one where the party paying the fee agrees not to
contest the amount to be awarded by the fee-setting court so
long as the award falls beneath a negotiated ceiling.”)
(quoting Weinberger v. Great N. Nekoosa Corp., 925
F.2d 518, 520 n.1 (1st Cir. 1991)).
this court has wide latitude to determine whether a
settlement is substantively fair, it is held to a higher
procedural standard and “must show it has explored
comprehensively all factors, and must give a reasoned
response to all non-frivolous objections.” Allen v.
Bedolla, 787 F.3d 1218, 1223-24 (9th Cir. 2015) (quoting
Dennis v. Kellogg Co., 697 F.3d 858, 864 (9th Cir.
2012)). Thus, while the court should examine any relevant
Churchill factors, the failure to review a pre-class
certification settlement for those subtle signs of collusion
identified above may constitute error. Id. at
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