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Alabsi v. Savoya, LLC

United States District Court, N.D. California

November 13, 2019

BILLY ALABSI, Plaintiff,
v.
SAVOYA, LLC, Defendant.

          ORDER RE SUPPLEMENTAL BRIEFING ON MOTION FOR PRELIMINARY APPROVAL RE: DKT. NO. 62

          KANDIS A. WESTMORE, UNITED STATES MAGISTRATE JUDGE.

         The Court has reviewed Plaintiffs motion for preliminary approval, and hereby orders the parties to provide a joint supplemental brief regarding the following issues. The supplemental briefing shall be filed no later than December 2, 2019. The hearing on Plaintiffs motion for preliminary approval is CONTINUED to December 19, 2019 at 1:30 p.m.

         A. Range of Reasonableness

         At the preliminary approval stage, courts in this district "have stated that the relevant inquiry is whether the settlement falls within the range of possible approval or within the range of reasonableness." Cotter v. Lyft, 176 F.Supp.3d 930, 935 (N.D. Cal. 2016) (internal quotation omitted). "In determining whether the proposed settlement falls within the range of reasonableness, perhaps the most important factor to consider is plaintiffs expected recovery balanced against the value of the settlement offer." Id; see also O'Connor v. Uber Techs., Inc., 201 F.Supp.3d 1110, 1120-21 (N.D. Cal. 2016). This determination "requires evaluating the relative strengths and weaknesses of the plaintiffs' case; it may be reasonable to settle a weak claim for relatively little, while it is not reasonable to settle a strong claim for the same amount." Cotter, 176 F.Supp. at 936 (citing In re High-Tech Emp. Antitrust Litig., Case No: 11-cv-2509-LHK, 2014 WL 3917126, at *4 (N.D. Cal. Aug. 8, 2014). Furthermore, the Ninth Circuit has recognized that where no class has been formally certified, "there is an even greater potential for a breach of fiduciary duty owed the class during settlement. Accordingly, such agreements must withstand an even higher level of scrutiny for evidence of collusion or other conflicts of interest than is ordinarily required under Rule 23(e) before securing the court's approval as fair." In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935, 947 (9th Cir. 2011). Signs of collusion that the Court must consider include: (1) whether counsel receives a disproportionate distribution of the settlement, (2) where the parties negotiate a "clear sailing" provision for payment of attorneys' fees separate and apart from class funds; and (3) when the parties arrange for fees not awarded to revert to the defendants. Id.

         In the instant case, Plaintiff brings employment misclassification claims, including failure to pay minimum wage and overtime, failure to reimburse drivers for expenses, failure to provide meal and rest periods, failure to provide accurate itemized wage statements, waiting time penalties, and civil penalties pursuant to the Private Attorney Generals Act (“PAGA”). (First Amended Compl. (“FAC”) at 1-2, Dkt. No. 29.) Plaintiff estimates that the unpaid wages (including missed meal and rest breaks) is $639, 000, while the unreimbursed expenses is $637, 000, for a total of $1, 312, 000. (Pl.'s Mot. at 14, Dkt. No. 62.) The Court requires further information on how Plaintiff calculated the estimated value of these claims, as Plaintiff provides no information on his calculations. (See Schwartz Decl. ¶ 24, Dkt. No. 62-2.) Thus, the Court is unable to verify the accuracy of the calculations, and cannot determine if the settlement does, in fact, fall within the range of reasonableness.

         Additionally, Plaintiff provides no estimate for the failure to provide accurate wage statements, waiting time penalties, and civil penalties pursuant to PAGA. While Plaintiff contends that a court may calculate settlement reasonableness without considering penalties, the Court will require such information to determine the reasonableness of the settlement.[1]

         B. Settlement Administration

         The parties must explain what the expected costs of the class action administration will be. The Class Action Notice ¶ 10(a)(i) should also be updated accordingly.

         C. PAGA Penalty

         The parties must clarify if the $7, 500 PAGA penalty goes to the Labor Workforce Development Agency (“LWDA”) alone, or if it is subject to the Labor Code § 2699(i), which distributes civil penalties as 75% to the LWDA and 25% to the aggrieved employees.

         D. Class Action Fairness Act ("CAFA") Notice

         CAFA requires that notice of a settlement be given to the appropriate government officials. 28 U.S.C. § 1715(b). The parties should address whether CAFA notice is required and, if so, when it will be given.

         E. Class Notice (Exhibit A of Settlement Agreement)

         i. ...


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