United States District Court, N.D. California
ORDER RE SUPPLEMENTAL BRIEFING ON MOTION FOR
PRELIMINARY APPROVAL RE: DKT. NO. 62
A. WESTMORE, UNITED STATES MAGISTRATE JUDGE.
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
Range of Reasonableness
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.
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.
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
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.
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.
Class Action Fairness Act ("CAFA") Notice
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.
Class Notice (Exhibit A of Settlement Agreement)