United States District Court, S.D. California
ORDER DENYING WITHOUT PREJUDICE PLAINTIFF'S
MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION
SETTLEMENT
M.
JAMES LORENZ, UNITED STATES DISTRICT JUDGE
In this
putative class action alleging wage and hour violations on
behalf of non-exempt fixed-route bus drivers at
Defendant's Orange County Transportation Authority
locations in Santa Ana and Irvine, Plaintiff filed an
unopposed motion for preliminary approval of class action
settlement. The motion is denied without prejudice for the
following reasons:
1.
Although the operative complaint (doc. no. 9) alleges a
number of wage and hour violations, Plaintiff sought to
certify a class only with respect to the alleged rest break
violations and derivative claims for failure to provide
accurate wage statements, failure to timely pay wages upon
termination, unfair competition and claims for penalties
under Labor Code California Private Attorney General Act.
(Doc. no. 43 at 7-8, 16-17; doc. no. 61-1 at 10, 14.) The
scope of the proposed settlement is the same. (See
doc. no. 61-1 at 10.) Nevertheless, the class proposed in
Plaintiff's motion for class certification (doc. no. 43
at 16-17) differs significantly from the definition in the
proposed settlement (doc. no. 61-3 ("Settlement")
§ I(d)). Unlike the class certification motion, the
motion to approve settlement proposes a class which subsumes
the wage statement and waiting time subclasses. The failure
to create a waiting time subclass for settlement purposes is
troubling. The claim for waiting time penalties,
i.e., claim for failure to timely pay all
compensation due upon separation from employment, is unique
to former employees. See Cal. Lab. Code §§
201-203. The proposed settlement, although purporting to
settle the waiting time claim, does not appear to provide any
relief specific to former employees. Furthermore, no
information is provided to determine whether Plaintiff is a
former employee, so as to be able to adequately and fairly
represent the interests of the former employees. See
Fed. R. Civ. Proc. 23(a)(3), (4); see also Id.
(e)(2)(A), (D).
2. The
release provision includes class members' claim for
waiting time penalties; however, the settlement provides no
relief for this claim. (See Settlement §
I(c)(3)). Although a settlement does not necessarily have to
provide relief for all the released claims, the Court is not
inclined to approve the settlement without an adequate
explanation why no relief is provided. Finally, subsections
(2) and (3) of the Released Claims should include the same
limiting language as subsection (4) to specify that they are
released only insofar as they relate to the alleged rest
break violations. (See Id. § I(c).)
3. The
Settlement provides for "California Rural Legal
Assistance" as the cy pres recipient. Neither
the settlement (Settlement §§ 4.06, 4.11(g)) nor
the motion (doc. no. 61-1 at 11) specifies whether reference
is to California Rural Legal Assistance, Inc. or the
California Rural Legal Assistance Foundation. Either
organization lacks the close nexus required to ensure that
the class members would ultimately benefit from the award.
See Dennis v. Kellogg Co., 697 F.3d 858, 865 (9th
Cir. 2012). "Not just any worthy recipient can qualify
as an appropriate cy pres beneficiary."
Id. What is required is assurance that the funds
will be "distributed in accordance with the goals of the
remedy" and that class members will in fact benefit.
Id. (discussing and quoting Six Mexican Workers
v. Ariz. Citrus Growers, 904 F.2d 1301, 1309 (9th Cir.
1990)).
4.
Federal Rule of Civil Procedure 23(e)(5) provides that
"[a]ny class member may object" to the proposed
settlement and does not require written objections. Although
the parties may encourage class members to provide written
objections by a date certain, the Court is not inclined to
approve a settlement or notice of settlement suggesting that
a class member who does not timely file written objections is
barred from objecting. (See Settlement §
4.09(d); doc. no. 61-3 at 47 et seq.)
5. The
Court will not approve any settlement appointing the
Settlement Administrator as a "final arbiter" of
any class member substantive rights, for example, a dispute
over the number of work weeks used to calculate a class
member's distribution from the settlement. (See,
e.g., Settlement § 4.09(b).)
6. The
proposed settlement notice is confusing and verbose.
(See doc. no. 61-3 at 47 et seq.) The
notice should be complete, clear, concise and user-friendly,
especially in the areas where a class member may be required
to make a decision or take action, such as, disputing the
proposed claim calculation, ir excluding oneself from or
objecting to the settlement. For an example of a settlement
notice approved by this Court in a similar context, the
parties may refer to Crane v. Jeld-Wen, Inc., U.S.
Dist. Ct. S. Dist. Cal. case no.3:17-cv-455-L-WVG doc. 39.
7.
Insufficient information is provided for the Court to
determine whether ILYM, Inc. is qualified to serve as the
Settlement Administrator.
8.
Plaintiff has not indicated whether any responses have been
received to the notices of settlement pursuant to the Labor
Code California Private Attorney General Act or the Class
Action Fairness Act.
IT
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