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Martin v. Sysco Corp.

United States District Court, E.D. California

December 17, 2019

JOHN MARTIN, on behalf of himself and all others similarly situated, Plaintiff,


         This matter came before the court on December 3, 2019, for hearing on plaintiff's unopposed motion for final approval of a class action settlement and motion for attorneys' fees. (Doc. No. 66.) Attorney Jamie Serb appeared telephonically on behalf of plaintiff John Martin (“plaintiff”), and attorney Nicholas D. Poper appeared telephonically on behalf of defendants Sysco Corporation and Sysco Central California, Inc. (“defendants”). For the reasons set forth below, the court will grant plaintiff's motion.


         The court previously granted preliminary approval of a class action settlement in this action on July 19, 2019. (Doc. No. 64.) Pertinent factual details may be found in that order. Following the granting of preliminary approval, the class administrator mailed class notices to all 167 class members on August 12, 2019. (Doc. No. 66-2 at ¶ 6.) Of the fifteen notices that were returned as undeliverable, thirteen were successfully re-mailed as a result of the class administrator's skip tracing efforts and two were unable to be delivered because no updated address was found. (Id. at ¶¶ 7-9.) The deadline to request exclusion from the settlement and to object to the settlement was September 26, 2019. (Id. at ¶¶ 10-11.) As of the filing of plaintiff's motion for final approval on November 5, 2019, no class member has requested exclusion and no objections have been filed. (Doc. No. 66 at 11.) Moreover, no class members appeared at the final approval hearing.


         The court has evaluated the standards for class certification in its prior order granting in part plaintiff's motion for class certification (Doc. No. 44) and finds no basis to revisit any of the analysis contained in that order. Accordingly, the court proceeds directly to consideration of whether the settlement in this case is appropriate under Rule 23(e). See 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: (1) notice be sent to all class members; (2) the court hold a hearing and make a finding that the settlement is fair, reasonable, and adequate; (3) the parties seeking approval file a statement identifying the settlement agreement; and (4) class members be given an opportunity to object. Fed.R.Civ.P. 23(e)(1)-(5).

         A. Legal Standard

         “Approval under 23(e) involves a two-step process in which the Court first determines whether a proposed class action settlement deserves preliminary approval and then, after notice is given to class members, whether final approval is warranted.” Nat'l Rural Telecomms. Coop. v. DIRECTV, Inc., 221 F.R.D. 523, 525 (C.D. Cal. 2004). At the final approval stage, the primary inquiry is whether the proposed settlement “is fundamentally fair, adequate, and reasonable.” Lane v. Facebook, Inc., 696 F.3d 811, 818 (9th Cir. 2012); Hanlon v. Chrysler Corp., 150 F.3d 1011, 1026 (9th Cir. 1998). “It is the settlement taken as a whole, rather than the individual component parts, that must be examined for overall fairness.” Hanlon, 150 F.3d at 1026 (citing Officers for Justice v. Civil Serv. Comm'n of S.F., 688 F.2d 615, 628 (9th Cir. 1982)); see also Lane, 696 F.3d at 818-19. Having already completed a preliminary examination of the agreement, the court reviews it again, mindful that the law favors the compromise and settlement of class action suits. See, e.g., In re Syncor ERISA Litig., 516 F.3d 1095, 1101 (9th Cir. 2008); Churchill Village, LLC. v. Gen. Elec., 361 F.3d 566, 576 (9th Cir. 2004); Class Plaintiffs v. City of Seattle, 955 F.2d 1268, 1276 (9th Cir. 1992); Officers for Justice, 688 F.2d at 625 (9th Cir. 1982). Ultimately, “the decision to approve or reject a settlement is committed to the sound discretion of the trial judge because he [or she] is exposed to the litigants and their strategies, positions, and proof.” Staton v. Boeing Co., 327 F.3d 938, 953 (9th Cir. 2003) (quoting Hanlon, 150 F.3d at 1026).

Assessing a settlement proposal requires the district court to balance a number of factors: the strength of the plaintiffs' case; the risk, expense, complexity, and likely duration of further litigation; the risk of maintaining class action status throughout the trial; the amount offered in settlement; the extent of discovery completed and the stage of the proceedings; the experience and views of counsel; the presence of a governmental participant; and the reaction of the class members to the proposed settlement.

Hanlon, 150 F.3d at 1026 (citing Torrisi v. Tucson Elec. Power Co., 8 F.3d 1370, 1375 (9th Cir. 1993)); see also Lane, 696 F.3d at 819. “To survive appellate review, the district court must show it has explored comprehensively all factors[.]” Allen v. Bedolla, 787 F.3d 1218, 1223 (9th Cir. 2015) (quoting Dennis v. Kellogg Co., 697 F.3d 858, 864 (9th Cir. 2012)); Hanlon, 150 F.3d at 1026.

         Here, the settlement agreement was previously filed on the court docket (Doc. No. 61-2), and class members have been given an opportunity to object (Doc. No. 64 at 10). The court now turns to the adequacy of notice and its review of the settlement following the final fairness hearing.

         B. Notice

         “Adequate notice is critical to court approval of a class settlement under Rule 23(e).” Hanlon, 150 F.3d at 1025. “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., 361 F.3d at 575 (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, 327 F.3d at 963 n.15 (quoting Torrisi, 8 F.3d at 1375) (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 award”).

         Here, 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. 64 at 4.) Notice was mailed by the class administrator to all 167 class members on August 12, 2019. (Doc. No. 66-2 at ¶ 6.) Of the fifteen notices that were returned as undeliverable, thirteen were successfully re-mailed as a result of the class administrator's skip tracing efforts and two were unable to be delivered because no updated address was found. (Id. at ¶¶ 7-9.) It therefore appears that approximately 98 percent of the class members received notice of this settlement. Therefore, the court concludes adequate notice was provided to 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 finds sufficient notice has been provided so as to satisfy Federal Rule of Civil Procedure 23(e)(1).

         C. Final Fairness Hearing

         On December 3, 2019, the court held a final fairness hearing, at which class counsel and defense counsel appeared telephonically. As noted above, no class members appeared at the hearing. For the reasons discussed below with regard to each of the settlement factors, the court determines that the settlement in this action is fair, reasonable, and adequate.

         1. Strength of Plaintiff's Case

         When assessing the strength of plaintiff's case in this context, the court does not reach “any ultimate conclusions regarding the contested issues of fact and law that underlie the merits of this litigation.” In re Wash. Pub. Power Supply Sys. Sec. Litig., 720 F.Supp. 1379, 1388 (D. Ariz. 1989). The court cannot reach such a conclusion, because evidence has not been fully presented. Id. Instead, the court is to “evaluate objectively the strengths and weaknesses inherent in the litigation and the impact of those considerations on the parties' decisions to reach these agreements.” Id.

         As discussed in the court's order granting preliminary approval (Doc. No. 64 at 6), this case turns on whether defendants' policies as to meal and rest periods complied with California law. The parties disagree on whether the policies at issue derive from only the employee handbook and route manifests, which plaintiff contends are facially unlawful, or have multiple sources including standalone forms like the Meal/Break Recording Forms, which defendants contend demonstrate that drivers confirmed in writing that they received meal periods in compliance with California law. (Doc. No. 66 at 17-19.) The parties would present evidence at trial of their conflicting interpretations of these policies, leaving the ultimate decision of which interpretation is most persuasive up to the jury.

         Further, even if the jury were to agree with plaintiff's interpretation of the policies, defendants argue that they may have affirmative defenses to plaintiff's claims based on an order by the Federal Motor Carrier and Safety Administration (“FMCSA”) that purports to preempt California's meal and rest break laws for certain motor carriers.[1] (Doc. No. 66 at 6-15.) That FMCSA order is currently being challenged in the Ninth Circuit. (Id. at 18.) While that challenge is pending, some district courts have granted summary judgment in favor of defendants based on the preemption defense, concluding that district courts are bound by the FMCSA order unless and until the Ninth Circuit invalidates that order. See e.g., Ayala v. U.S Xpress Enterprises, Inc., No. 5:16-cv-00137-GW-KK, 2019 WL 1986760, at *3 (C.D. Cal. May 2, 2019) (“This Court is bound by the FMCSA Order and will apply the Order unless and until it is invalidated by the Ninth Circuit.”); Henry v. Cent. Freight Lines, Inc., No. 2:16-cv-00280-JAM-EFB, 2019 WL 2465330, at *4 (E.D. Cal. June 13, 2019) (“Thus, unless and until the Ninth Circuit determines otherwise, this Court will follow the FMCSA Preemption Order and will not enforce the preempted provisions.”).

         Accordingly, plaintiff's case is weakened both by the uncertainty of which party's interpretation of the policies would be most persuasive to a jury, and the uncertainty of how the Ninth Circuit will rule on the challenge to the FMCSA order that forms the basis of defendants' potential affirmative defense.

         The court cannot say with any degree of certainty that plaintiff would prevail on his claims on behalf of the class. The court finds this factor weighs in favor of granting final approval of the settlement in this action.

         2. Risk, Expense, Complexity, and Likely Duration of Further Litigation

         “[T]here is a strong judicial policy that favors settlements, particularly where complex class action litigation is concerned.” In re Syncor ERISA Litig., 516 F.3d 1095, 1101 (9th Cir. 2008) (citing Class Plaintiffs v. City of Seattle, 955 F.2d 1268, 1276 (9th Cir. 1992)). As a result, “[a]pproval of settlement is preferable to lengthy and expensive litigation with uncertain results.” Johnson v. Shaffer, No. 2:12-cv-1059 KJM AC P, 2016 WL 3027744, at *4 (E.D. Cal. May 27, 2016) (citing Morales v. Stevco, Inc., No. 09-00704, 2011 WL 5511767, at *10 (E.D. Cal. Nov. 10, 2011)). Employment law class actions are, by their nature, time-consuming and expensive to litigate. Hightower v. JPMorgan Chase Bank, N.A., No. CV 11-1802 PSG (PLAx), 2015 WL 9664959, at *6 (C.D. Cal. Aug. 4, 2015).

         Though the parties have been litigating this case for over three years, that timeline would be extended even further by litigating this case to a final resolution through a jury trial. The parties' expenses would increase as litigation costs continue to accrue, and any recovery of a monetary judgment, which is not guaranteed, would be prolonged. Thus, consideration of this factor also weighs in favor of granting final approval.

         3. Risk of Maintaining Class Action Status Throughout Trial

         The court previously certified the class and is unaware of any reason why the class would not be able to maintain class action status throughout this case. The parties did not address this factor in the pending motion for final approval or otherwise point to anything that would call class ...

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