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Dulberg v. UBER Technologies, Inc.

United States District Court, N.D. California

November 19, 2019

MARTIN DULBERG, individually and on behalf of all others similarly situated, Plaintiff,
v.
UBER TECHNOLOGIES, INC., and RASIER, LLC, Defendants.

          ORDER RE MOTION FOR FINAL APPROVAL OF CLASS SETTLEMENT AND REQUEST FOR EXPENSES AND ATTORNEY'S FEES

          WILLIAM ALSUP UNITED STATES DISTRICT JUDGE

         INTRODUCTION

         In this breach-of-contract class action, plaintiff moves for final approval of a proposed settlement agreement. Defendants do not oppose. To the extent stated below, final approval of class settlement is Granted. The motion for attorney's fees and expenses is Granted in part.

         STATEMENT

         The background of this action is set forth in prior orders (see, e.g., Dkt. No. 52). In short, plaintiff Martin Dulberg brought this class action on behalf of Uber drivers against defendants Uber Technologies and Rasier, LLC (collectively, “Uber”), asserting Uber breached its contract with Uber drivers. Uber's policy changed in late 2016. Plaintiff alleged the new policy violated his contract with Uber because Uber calculated costs to passengers by estimating time and distance amounts before the ride and then compensated drivers based on actual time and distance amounts - keeping the difference for itself. In February 2018, an order certified the following class (Dkt. No. 80):

All natural persons nationwide who (1) drove for UberX or UberSELECT; (2) opted out of arbitration; (3) transported a passenger who was charged an upfront Fare before May 22, 2017, when Uber issued its updated fee addendum; and (4) made less money overall on rides where they transported passengers who were charged an upfront Fare because they were paid on a Fare calculated based on actual time and distance values instead of the upfront Fare calculated based on estimated time and distance values.

         In August 2018, plaintiff originally moved for preliminary approval of a proposed class settlement in the amount of $345, 622 (Dkt. No. 107). Defendants did not oppose. The settlement amount represented 46 percent of the maximum recovery plaintiff's expert opined the class could recover and the maximum Uber's expert opined the class could recover.

         After some court-ordered changes to the settlement agreement, including direction to alter the “released claims” section, an order preliminarily approved the settlement agreement (Dkt. No. 121). Thereafter, an order approved, as to form and content, the notice of class action settlement and a schedule governing the remaining proceedings in the action (Dkt. No. 123).

         In February 2019, plaintiff moved for final approval of the proposed class settlement of $345, 622 and requested attorney's fees and reimbursement for expenses (Dkt. No. 130). Specifically, class counsel sought $40, 430.01 in expenses (including settlement administrator expenses), $103, 687 in attorney's fees (comprising 30 percent of the gross settlement fund and 33.97 percent of the net settlement fund), and an incentive award for the lead plaintiff in the amount of up to $5, 000.

         One class member informally objected to the settlement as too low. The objector's complaint - that class members will receive chump change in this settlement - rang true. According to data presented at the final approval hearing, fourteen class members would receive one cent from this settlement, 1, 300 class members would receive less than $1.75, 2, 059 class members would receive less than $5, and 3, 383 class members would receive less than $20. All will be asked to release claims against Uber in exchange for these amounts. On the other side of the ledger, only 401 class members would receive over $100. The total class comprised of 4, 594 members.

         After a hearing on final approval and two separate requests for further information, an order rejected the settlement (Dkt. Nos. 149, 151, 153). This low-end settlement could not justify any potential benefit of the settlement to the class as a whole.

         In June 2019, the parties reworked the terms of the settlement as follows. First, the minimum payment each class member would receive would be $20.00. That is, class members who previously would have received less than $20, would now receive $20; class members who previously would have received more than $20, would still receive the same amount as before. This change increased the total settlement amount from $345, 622 to as much as $395, 000. Second, counsel agreed to limit its request for attorney's fees to 25 percent of the net settlement amount. Third, Uber agreed to pay administrative costs for any revised class notice. Any new costs would not be paid out of the settlement fund.

         In July 2019, after oral argument, an order preliminarily approved the re-worked settlement, provided the notice would be sent via first-class mail. In addition, the order required two modifications to the notice to more specifically inform class members the precise amounts class counsel will seek, in addition to the specific amounts that class member would receive under the settlement. After the parties made those modifications, in August 2019, an order granted preliminary approval of the revised settlement and approved the class notice.

         Turning to class notice, in August 2019, the settlement administrator sent notice to 4, 521 class members. As an aside, this deviated from the prior proposed settlement, whereby notice had been sent to 4, 584 class members (ten class members had previously requested to be excluded). Perhaps this difference materialized as a result of the settlement administrator's whittling of the class list after a “review[ of] the file for duplicate entries” (Dkt. No. 166 ¶ 5). Why only now these records were identified as duplicates remains a mystery.

         In any event, of the 4, 521 notices sent, the settlement administrator calculated that 34 class notices did not deliver. In truth, however, 133 notices did not deliver.

         More specifically, the math is as follows. Of the 4, 521 notices sent, the administrator sent sixteen notices via e-mail and 4, 505 notices via postal mail. All of the e-mailed notices delivered. Of the 4, 505 notices sent via postal mail, 575 did not initially deliver - 526 returned without a forwarding address and 49 returned with a forwarding address. As to the 526 notices which returned without a forwarding address, an updated address could be found for 428 notices. The administrator then mailed these 428 notices a second time. After this second mailing, 33 of the 428 notices did not deliver. This group therefore resulted in 131 notices which did not deliver. As to the 49 notices which returned with a forwarding address, the administrator forwarded all 49 notices. Six notices did not deliver a second time. After utilizing address verification searches, five new addresses became available. Only one of those five returned a third time. As such, this group resulted in two notices which did not deliver. In sum, as of October 30, 2019, 133 of the 4, 521 notices sent did not deliver.

         Thirteen class members requested to be excluded from the revised settlement. The rejected settlement had previously yielded eight requests for exclusion. Three class members ...


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