United States District Court, E.D. California
ERIC FELIX, an individual, on behalf of himself and others similarly situated, Plaintiff,
v.
WM. BOLTHOUSE FARMS, INC., Defendant.
ORDER GRANTING PLAINTIFF'S MOTION FOR PRELIMINARY
APPROVAL OF CLASS ACTION SETTLEMENT (DOC. 25)
JENNIFER L. THURSTON, UNITED STATES MAGISTRATE JUDGE
Eric
Felix seeks preliminary approval of a class action settlement
reached with WM. Bolthouse Farms, Inc. (Doc. 25.) Plaintiff
requests: (1) preliminary approval of the settlement, (2)
approval of the remaining settlement provisions, (3) approval
of the proposed class notice, (4) setting the settlement
administration deadlines, (5) appointment of JND Legal as the
settlement administrator, and (6) a final approval hearing.
(Doc. 25 at 8.) The Court has considered the proposed
settlement between the parties, and the proposed class notice
and documents. For the following reasons, Plaintiff's
motion for preliminary approval of class settlement is
GRANTED.
BACKGROUND
Felix
filed this action against Defendant on March 7, 2019. (Doc.
1.) In the complaint, Plaintiff alleged that Defendant
violated the Fair Credit Reporting Act, 15 U.S.C. § 1681
b(b)(2)(A)(i), by requiring Plaintiff and the FCRA Class
Members' to execute a "Consent to Request Consumer
Report & Investigative Consumer Report Information"
form to permit Sterling Infosystems Inc. to obtain and use
consumer report information for employment purposes for
Plaintiff and all the FCRA Class Members, and Defendant
therefore obtained consumer reports regarding Plaintiff and
the Class Members without proper authorization in violation
of 15 U.S.C. § 1681 b(b)(2)(A)(ii). The complaint
further alleged Defendant failed to provide lawful meal and
rest breaks to the proposed California Class Members.
On May
3, 2019, Defendant filed a motion to dismiss the complaint in
part and to strike Plaintiff's third and fourth causes of
action. (Doc. 10.) Subsequently, on May 20, 2019, Plaintiff
filed his first amended complaint removing his third and
fourth cause of action. (Doc. 12.) The first amended
complaint alleges claims for (1) violation of the Fair Credit
Reporting Act for failure to make proper disclosures, 15
U.S.C. § 1681 b(b)(2)(A)(i); and (2) violation of the
Fair Credit Reporting Act for failure to obtain proper
authorization, 15 U.S.C. § 1681 b(b)(2)(A)(ii).
The
parties exchanged initial discovery disclosures, and engaged
in extensive discussions about their respective positions and
the information and data needed to properly evaluate the
merits of the claims alleged. The parties reached a proposed
class action settlement on September 6, 2019 through
arms-length direct negotiations, now submitted to this Court
for preliminary approval.
The
first amended complaint defined the class as: “All
applicants in the United States who filled out WM. BOLTHOUSE
FARMS, INC.'s standard "Consent to Request Consumer
Report & Investigative Consumer Report Information"
form at any time during the period beginning five (5) years
prior to the filing of this action to the present.”
(Doc. 12 at 3.) The Settlement Class, which includes
approximately 1, 245 individuals, is defined as: “all
applicants in the United States who filled out WM. BOLTHOUSE
FARMS, INC.'s standard 'Consent to Request Consumer
Report & Investigative Consumer Report Information'
form as administered by Sterling Infosystems Inc. during the
Class Period.” (Doc. 25-1 at 3.) The "Class
Period" is March 17, 2017 to July 31, 2018. (Doc. 25 at
10.)
Plaintiff
filed the motion for preliminary approval of the settlement
now pending before the Court on November 8, 2019. (Doc. 25.)
THE
PROPOSED SETTLEMENT
Pursuant
to the proposed settlement (the “Settlement”),
the parties agree to a gross settlement amount not to exceed
$118, 275.00. (Doc. 25 at 10; Doc. 25-2 at 6.)
I.
Payment Terms
The
Settlement provides a maximum recovery of $118, 275.00. (Doc.
25 at 10; Doc. 25-2 at 6.) If the Court approves the
Settlement, the following estimates the breakdown of payments
from this amount:
• $54, 350.00 for estimated settlement funds to the
Settlement Class (the "Net Settlement Amount");
• $18, 500 for administration costs regarding the
Settlement;
• $5, 000 for a Service Award to Plaintiff; and
• $39, 425.00 for attorneys' fees and $1, 000.00 in
litigation costs.
(Doc. 25 at 10-11.)
Plaintiff
asserts that the amount each Class Member receives from the
Net Settlement Amount is contingent on the number of consumer
reports obtained on individuals who remain in the Settlement
Class. (Doc. 25 at 11.) The number of consumer reports
obtained for each Class Member may differ, and thus Class
Members may be entitled to more, or less, than others, based
on the number of consumer reports obtained for each of them.
(Doc. 25 at 11.) During the Class Period, Defendant estimated
there to be approximately 1, 245 members of the Settlement
Class. (Doc. 25 at 11.) Based on this data, the parties
anticipate the approximate gross payment per class member on
average will be $95.00 with an approximate net payment on
average of $43.65. (Doc. 25 at 11.) According to Plaintiff,
this is a non-reversionary, total payout Settlement. (Doc. 25
at 11.) Any funds remaining in the Gross Settlement Amount
due to uncashed Settlement checks (after a 180-day
negotiability period) will be remitted to the California
Legal Aid Fund. (Doc. 25 at 11.)
II.
Releases
Class
Members will release Defendant and others "from any and
all claims of any kind whatsoever, whether known or unknown,
whether based on common law, regulations, statute, or a
constitutional provision, under state, federal or local law,
arising out of the allegations made in the First Amended
Complaint and that reasonably arise, or could have arisen,
out of the facts alleged in the First Amended Complaint as to
the Class Members, including, but not limited to, claims
arising from the procurement of a consumer report on them by
any of the Released Parties, and any other claims for
violations of the Fair Credit Reporting Act, 15 U.S.C.
§16816, et seq., whether willful, or otherwise,
for declaratory relief, statutory damages, punitive damages,
costs, and attorneys' fees. Notwithstanding the
foregoing, nothing in the Settlement releases any claims that
cannot be released as a matter of law." (Doc. 25 at 12,
Doc. 25-2 at 21-22.) According to Plaintiff, the release is
narrowed to the facts and claims arising out of the operative
complaint.
III.
Objections and Opt-Out Procedure
Any
class member who wishes may file objections or elect not to
participate in the Settlement. The Notice of Class Action
Settlement explains the claims that are released as part of
the Settlement. (Doc. 25-2 at 43.) In addition, it explains
the procedures to claim a share of the settlement, object to
the settlement, or elect not to participate in the
Settlement. (Doc. 25-2 at 40-46.)
PRELIMINARY
APPROVAL OF A CLASS SETTLEMENT
When
parties settle the action prior to class certification, the
Court has an obligation to “peruse the proposed
compromise to ratify both the propriety of the certification
and the fairness of the settlement.” Staton v.
Boeing Co., 327 F.3d 938, 952 (9th Cir. 2003).
Preliminary approval of a class settlement is generally a
two-step process. First, the Court must assess whether a
class exists. Id. (citing Amchem Prods., Inc. v.
Windsor, 521 U.S. 591, 620 (1997)). Second, the Court
must “determine whether the proposed settlement is
fundamentally fair, adequate, and reasonable.”
Id. (citing Hanlon v. Chrysler Corp., 150
F.3d 1011, 1026 (9th Cir. 2998)). The decision to approve or
reject a settlement is within the Court's discretion.
Hanlon, 150 F.3d at 1026.
I.
Class Certification
Parties
seeking class certification bear the burden of demonstrating
the elements of Rule 23 are satisfied, and “must
affirmatively demonstrate . . . compliance with the
Rule.” Wal-Mart Stores, Inc. v. Dukes, 131
S.Ct. 2541, 2551 (2011); Doninger v. Pacific Northwest
Bell, Inc., 563 F.2d 1304, 1308 (9th Cir. 1977).
A.
Rule 23(a) Requirements
The
prerequisites of Rule 23(a) “effectively limit the
class claims to those fairly encompassed by the named
plaintiff's claims.” General Telephone Co. of
the Southwest. v. Falcon, 457 U.S. 147, 155-56 (1982).
Certification of a class is proper if:
(1) the class is so numerous that joinder of all members is
impracticable; (2) there are questions of law or fact common
to the class; (3) the claims or defenses of the
representative parties are typical of the claims or defenses
of the class; and (4) the representative parties will fairly
and adequately protect the interests of the class.
Fed. R. Civ. P. 23(a). These prerequisites are generally
referred to as numerosity, commonality, typicality, and
adequacy of representation. Falcon, 457 U.S. at 156.
If an action meets the prerequisites of Rule 23(a), the Court
must consider whether the class is maintainable under one or
more of the three alternatives set forth in Rule 23(b).
Narouz v. Charter Communs., LLC, 591 F.3d 1261, 1266
(9th Cir. 2010).
1.
Numerosity
A class
must be “so numerous that joinder of all members is
impracticable.” Fed.R.Civ.P. 23(a)(1). This requires
the Court to consider “specific facts of each case and
imposes no absolute limitations.” General Telephone
Co. v. EEOC, 446 U.S. 318, 330 (1980). Although there is
not a specific numerical threshold, joining more than one
hundred plaintiffs is impracticable. See Immigrant
Assistance Project of Los Angeles Cnt. Fed'n of Labor v.
INS, 306 F.3d 842, 869 (9th Cir. 2002) (“find[ing]
the numerosity requirement . . . satisfied solely on the
basis of the number of ascertained class members . . . and
listing thirteen cases in which courts certified classes with
fewer than 100 members”). Here, approximately 1, 245
individuals are potential members of the class. (Doc. 25 at
15.) Therefore, the class is sufficiently numerous.
2.
Commonality
Rule
23(a) requires “questions of law or fact common to the
class.” Fed.R.Civ.P. 23(a)(2). The commonality
requirement has been construed permissively; not all
questions of law and fact need to be common. Hanlon v.
Chrysler Corp., 150 F.3d 1011, 1019 (9th Cir. 1998).
“However, it is insufficient to merely allege any
common question.” Ellis v. Costco Wholesale
Corp., 657 F.3d 970, 981 (9th Cir. 2011). Commonality
must be shown by a “common contention” that is
“of such a nature that it is capable of classwide
resolution-which means that determination of its truth or
falsity will resolve an issue that is central to the validity
of each one of the claims in one stroke.”
Dukes, 564 U.S. at 338.
Plaintiff
contends that under the FCRA, an employer, or prospective
employer, cannot "procure, or cause a consumer report to
be procured, for employment purposes with respect to any
consumer unless . . . a clear and conspicuous disclosure has
been made in writing to the consumer at any time before the
report is procured or caused to be procured, in a document
that consists solely of the disclosure, that a consumer
report may be obtained for employment purposes." (Doc.
25 at 16, citing 15 U.S.C. § 1681 b(b)(2)(A)(i)).
Plaintiff asserts that the question of law and fact common to
the proposed class that predominate over questions that may
affect individual class members are: (a) whether
Defendant's standard FCRA disclosure meets 15 U.S.C.
§ 19 § 1681 b(b)(2)(A)(i)' s "clear and
conspicuous disclosure" requirement; (b) whether
Defendant's standard FCRA disclosure is "in a
document that consists solely of the disclosure"; (c)
whether Defendant ...