United States District Court, N.D. California
17-cv-03892-EMC
(Crummie), 18-cv-04379-EMC (Ross) 19-cv-01338-EMC (Jones II)
19-cv-01380-EMC (Jones III) 19-cv-01381-EMC (Jones IV)
19-cv-01427-EMC (East) 19-cv-01428-EMC (Jones V)
ORDER CONDITIONALLY GRANTING PLAINTIFFS' MOTION
FOR PRELIMINARY APPROVAL DOCKET NO. 206
EDWARD
M. CHEN UNITED STATES DISTRICT JUDGE.
Currently
pending before the Court is Plaintiffs' motion for
preliminary approval of a class and collective action
settlement. The Court held a hearing on the motion on January
8, 2020. This order memorializes the Court's oral rulings
and provides additional analysis, as necessary.
Federal
Rule of Civil Procedure 23(e) provides that “[t]he
claims, issues, or defenses of a certified class - or a class
proposed to be certified for purposes of settlement - may be
settled, voluntarily dismissed, or compromised only with the
court's approval.” Fed.R.Civ.P. 23(e). In the
instant case, because the proposed settlement “would
bind class members, the court may approve it . . . only on
finding that it is fair, reasonable, and adequate.”
Fed.R.Civ.P. 23(e). The Court has assessed the parties'
proposed settlement, taking into account the factors
identified in Rule 23(e), the factors identified by the Ninth
Circuit, see Hanlon v. Chrysler Corp., 150 F.3d
1011, 1026 (9th Cir. 1998), and this District's
Procedural Guidance for Class Action Settlements. The Court
finds that, with certain modifications to which the parties
agreed, the proposed settlement is sufficiently fair,
reasonable, and adequate. Plaintiffs undertook adequate
discovery, both formal and informal, into the merits of their
case prior to settling (e.g., interviewing 240
putative class/collective members). Although the settlement
fund represents only 13.3% of the maximum value of the case
(as assessed by Plaintiffs[1]), that “discount” is
reasonable given the not insignificant risk that a
class/collective might not be certified. Defendants would
likely argue against certification because of individualized
issues - e.g., based on the nature of the
off-the-clock time being claimed and based on the various
locations run by each oil refinery. Moreover, a substantial
portion of damages, including liquidated damages and
penalties, hinge on a finding of willfulness, a fact not
easily proven.
The
Court thus grants preliminary approval but on a conditional
basis because (1) there are two modifications to the
settlement to which the parties agreed and which need to be
made and (2) there is a ministerial matter related to the
class notice. With respect to modifications, the parties
agreed that, in light of Roes v. SFBSC Mgmt., LLC,
944 F.3d 1035 (9th Cir. 2019), additional notice shall be
given to class/collective members via text
messaging.[2] Also, the parties agreed that, instead of
having unclaimed checks be sent to each state's Unclaimed
Property Division (or other similar such agency),
[3]
there shall first be a second distribution to the
class/collective and then, if any funds remain, a
distribution to a cy pres beneficiary. The parties'
designation of a cy pres beneficiary must comport with the
Ninth Circuit's guidelines in Nachsin v. AOL,
LLC, 663 F.3d 1034 (9th Cir. 2011). As for the
ministerial matter related to the class notice, for all three
forms, the Court previously instructed that the first
paragraph in the notice should include an estimate as what a
member will be paid if he/she participates. The parties made
an edit in response but not in the correct place. They made
the edit in Question 1. However, the edit should be in the
very first paragraph in the notice (i.e., the text
in BOLD ALLCAPS).
The
parties shall file amended settlement documentation and class
notices, i.e., to reflect the above modifications
and the ministerial matter, within a week of the date of this
order. Thereafter, the Court shall issue an order giving
final approval to the pending motion.
IT
IS SO ORDERED
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Notes:
[1] In assessing the maximum value of the
case, Plaintiffs made at least one assumption that was
slightly more favorable to the putative class/collective than
supported by the evidence collected. More specifically,
Plaintiffs assumed that individuals missed about 80% of their
meal/rest periods when the evidence suggested on average a
lower percentage - about 50 to 60%.
[2] The Court acknowledges that, at the
hearing, CertifiedSafety stated that, although it had phone
numbers for members, it did not know whether those numbers
represented cell phone numbers or landline numbers. The
settlement administrator, however, can still attempt to text
the phone numbers and report back as to whether the texts
were successfully delivered.
[3] The parties did not provide any
concrete evidence as to how often individuals actually make
claims ...