Felix v. WM. Bolthouse Farms, Inc.

          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 ...