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Caudle v. Sprint/United Management Co.

United States District Court, N.D. California

December 16, 2019

JOSHUA CAUDLE and KRYSTLE WHITE, individually and on behalf of all others similarly situated, Plaintiffs,
v.
SPRINT/UNITED MANAGEMENT COMPANY, a Kansas corporation; and DOES 1 through 100, Defendant.

          ORDER GRANTING FINAL APPROVAL OF CLASS SETTLEMENT AND GRANTING IN PART MOTION FOR ATTORNEY'S FEES

          WILLIAM ALSUP UNITED STATES DISTRICT JUDGE

         INTRODUCTION

         In this wage-and-hour class action, plaintiffs move for final approval of a proposed settlement agreement and for attorney's fees and expenses. Defendant does not oppose, but there is one objection. For the reasons stated below, the objection is Overruled. To the extent stated below, the motion for final approval of the class settlement is Granted. The motion for attorney's fees and expenses is Granted in part.

         STATEMENT

         Prior orders set forth the detailed background of this case (see Dkt. No. 45). In brief, defendant Sprint/United Management Company sells mobile phone devices and services to retail customers. In February 2016, Sprint instituted a redesigned incentive compensation plan called the Sprint Promoter Score Adjustment program, which remained in effect until March 2017. This program allegedly made an unlawful 10% “across-the-board deduction” from employees' individually earned commission based on factors outside the individual employees' control and unrelated to the individual employees' efforts regarding a particular sale or transaction.

         Plaintiffs Joshua Caudle and Krystle White - a former store manager and former lead retail consultant, respectively - worked in various northern California Sprint retail store locations. They brought the instant action in November 2017, asserting various claims arising from the Sprint Promoter Score Adjustment program for alleged unlawful deductions from employees' wages under California Labor Code Sections 221-23.

         An order dated December 18, 2018, certified three classes relating to the deductions made under the Sprint Promoter Score Adjustment program (Dkt. No. 45 at 11-12). The first class addressed Sprint's policy at issue (i.e., the Sprint Promoter Score Adjustment program). The other two certified classes - the wage statement and waiting time classes - derived from the first class. Both Joshua Caudle and Krystle White became class representatives (id. at 12). Following certification, the parties reached a class settlement (Dkt. No. 63-1 ¶ 9).

         A June 2019 order granted plaintiffs' motion for preliminary approval of a proposed class settlement (Dkt. No. 68). That order also advised that both the requested attorney's fees and incentive award would be subject to reduction at the final approval stage. The order also approved, as to form and content, a class notice by mail and website.

         The settlement administrator mailed the approved notice packets via first class mail on July 26, 2019, but several names and addresses in the class list were transposed. The settlement administrator then mailed corrected notice packets, with extended response dates for class members, on August 23, 2019. As of the hearing, 129 packets were returned. The settlement administrator re-mailed 103 notice packets to forwarding addresses obtained from either the Post Office, the Class, or from reputable third-party search tools. Ultimately, out of 2, 288 class members, 31 notice packets were undeliverable because the settlement administrator could not find the class member (Dkt. 81-1 ¶¶ 6-11).

         Plaintiffs now move for final approval of the proposed settlement of $4, 000, 000 and for attorney's fees, expenses, and name-plaintiffs' incentive awards. Class counsel seek $1, 000, 000 in attorney's fees (comprising 25% of the fund), litigation expenses of $34, 687.80, $5, 000 in incentive payment to Plaintiff Caudle, and $3, 000 in incentive payment to Plaintiff White. Defendant does not oppose. This order follows full briefing and oral argument (Dkt. Nos. 73, 81).

         ANALYSIS

         1. Final Approval of Class Settlement.

         Under FRCP 23(e), court approval is required for any settlement agreement that will bind absent class members. When a proposed settlement agreement is presented, the district court must perform two tasks: (1) direct notice in a reasonable manner to all class members who would be bound by the proposal; and (2) approve the settlement only after a hearing and on finding that the terms of the agreement are fair, reasonable, and adequate. FRCP 23(e)(1)-(2).

         A. Adequacy of Notice.

         The notice must be “reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.” Mullane v. Central Hanover Bank & Tr. Co., 339 U.S. 306, 314 (1950) (citations omitted). It must also describe “the terms of the settlement in sufficient detail to alert those with adverse viewpoints to investigate and to come forward and be heard.” Mendoza v. Tucson Sch. Dist. No. 1, 623 F.2d 1338, 1352 (9th Cir. 1980). The undersigned judge previously approved the form, content, and planned distribution of the class notice (Dkt. No. 68).

         The failure of notice to 31 class members is concerning (Dkt. No. 81-1 at ¶ 11). The undersigned judge was inclined to exclude these members from the class as they have not had the opportunity to opt out or object to this proposed settlement. Realistically, however, litigation costs are likely to inhibit later suit against Sprint by the 31. Upon due reflection, the better course in this case is to keep the 31 in the class and bind them to the settlement because their portion of the settlement fund will be kept safe in their names with the Controller of California. Class members need not file a claim with the administrator - checks will be sent automatically. The settlement provides:

After the 180-day check cashing period, funds from any settlement checks that remain uncashed will escheat to the California State Controller for deposit in the State of California Unclaimed Property Fund in the name of the Participating Class Member whose check was not cashed, where the Participating Class Member can later claim the funds.

         This is the best course to ensure the 31 class members who did not receive notice will, nonetheless, obtain some settlement from Sprint (Dkt. No. 81-1 at ¶¶ 3, 4). This order ...


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