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Osegueda v. Northern California Inalliance

United States District Court, E.D. California

January 15, 2020

JOSEPH OSEGUEDA, individually and on behalf of all similarly situated and/or aggrieved employees of Defendants in the State of California, Plaintiff,
NORTHERN CALIFORNIA INALLIANCE; and DOES 1 through 50, inclusive, Defendants.



         Plaintiff Joseph Osegueda, individually and on behalf of all other similarly situated employees, brought this putative class action against Defendant Northern California InAlliance alleging violations of state and federal wage and hour laws. (First Am. Compl. (“FAC”) (Docket No. 14).) Before the court is plaintiff's unopposed motion for preliminary approval of a class action settlement reached by the parties. (Mot. for Prelim. Approval (Docket No. 23).)

         I. Factual and Procedural Background

         Defendant InAlliance is a non-for-profit that provides independent living services to adults with developmental disabilities. (Decl. of Joseph Osegueda (“Osegueda Decl.”) ¶ 5 (Docket No. 23-3); Decl. of Graham Hollis (“Hollis Decl.”) ¶ 17 (Docket No. 23-2).) These services enable participants to live independently in their own home, instead of living with family or in communal housing. (Osegueda Decl. ¶ 5.) Plaintiff worked for InAlliance as an Independent Living Facilitator (“Living Facilitator”) in Sacramento and Yolo County in 2017. (Osegueda Decl. ¶ 3-4.)

         As a Living Facilitator, plaintiff assisted participants with personal care and tasks around the home. (Osegueda Decl. ¶ 6.) InAlliance classified plaintiff and other Living Facilitators as “personal attendants” and did not pay them for daily overtime. (Osegueda Decl. ¶ 4; Hollis Decl. ¶ 130.) InAlliance also allegedly required Living Facilitators to use their personal cell phones to communicate with their supervisors and did not pay Living Facilitators for “sleep time” during shifts of twenty-four hours or longer. (Osegueda Decl. ¶¶ 8, 11.) Plaintiff brought this action against defendant, alleging: (1) failure to pay minimum and regular wages; (2) failure to pay overtime wages; (3) failure to indemnify necessary business expenses; (4) failure to provide accurate itemized wage statements; (5) failure to timely pay all ages due upon separation of employment; (6) violation of California's Business and Professions Code, Cal. § 17200, et seq.; (7) violation of California's Private Attorneys General Act of 2004 (“PAGA”), Cal. Lab. Code § 2698, et seq.; and (8) violation of the Fair labor Standards Act (“FLSA”), 29 U.S.C. §§ 207, 211(c), 216(b). (FAC ¶¶ 67-158.)

         Defendant removed the action to this court in April 2018 (Docket No. 1) and denied any liability or wrongdoing of any kind. (See generally Def.'s Answer (Docket No. 16).) After exchanging initial disclosures and completing an independent investigation, the parties participated in a private mediation and eventually reached a settlement agreement. (Memo. Supp. Prelim. Approval (Docket No. 23-1) at 5.)

         Under the terms of the agreement, InAlliance will pay a non-reversionary sum of $225, 000. (Joint Stipulation of Settlement (“Settlement Agreement”) ¶ 1.19 (Docket No. 23-2, Ex. 1).) The total settlement amount would be distributed as follows: (1) a maximum of $75, 000 to class counsel for attorney's fees; (2) a maximum of $9, 000 to class counsel for reimbursement of out-of-pocket expenses; (3) an award of $5, 000 to plaintiff for serving as the class representative; (4) $11, 250 to the California Labor & Workforce Development Agency (“LWDA”) to cover the cost of penalties, with 75 percent of the award going to LWDA and the remaining 25 percent to the PAGA Aggrieved Employees[1]; (5) a maximum of $10, 500 to the settlement administrator, ILYM Group, Inc., (“ILYM Group”) for reimbursement of settlement administration costs; and (7) the remaining amount, approximately $122, 526.50 (“class fund”) to the participating class members. (Memo. Supp. Prelim. Approval at 6.)

         The parties now seek the court's preliminary approval of the proposed settlement agreement.

         II. Discussion

         Federal Rule of Civil Procedure 23(e) provides that “[t]he claims, issues, or defenses of a certified class may be settled . . . only with the court's approval.” Fed.R.Civ.P. 23(e). “To vindicate the settlement of such serious claims, however, judges have the responsibility of ensuring fairness to all members of the class presented for certification.” Staton v. Boeing Co., 327 F.3d 938, 952 (9th Cir. 2003). “Where [] the parties negotiate a settlement agreement before the class has been certified, settlement approval requires a higher standard of fairness and a more probing inquiry than may normally be required under Rule 23(e).” Roes, 1-2 v. SFBSC Mgmt., LLC, --- F.3d ---, 2019 WL 6721190, at *10 (9th Cir. 2019).

         The approval of a class action settlement takes place in two stages. In the first stage, “the court preliminarily approves the settlement pending a fairness hearing, temporarily certifies a settlement class, and authorizes notice to the class.” Ontiveros v. Zamora, No. 2:08-567 WBS DAD, 2014 WL 3057506, at *2 (E.D. Cal. July 7, 2014). In the second, the court will entertain class members' objections to (1) treating the litigation as a class action and/or (2) the terms of the settlement agreement at the fairness hearing. Id. The court will then reach a final determination as to whether the parties should be allowed to settle the class action following the fairness hearing. Id. Consequently, this order “will only determine whether the proposed class action settlement deserves preliminary approval and lay the ground work for a future fairness hearing.” See Id. (citations omitted).

         A. Class Certification

         To be certified, the putative class must satisfy both the requirements of Federal rule of Civil Procedure 23(a) and (b). Leyva v. Medline Indus. Inc., 716 F.3d 510, 512 (9th Cir. 2013). Each will be discussed in turn.

         1. Rule 23(a)

         In order to certify a class, Rule 23(a)'s four threshold requirements must be met: numerosity, commonality, typicality, and adequacy of representation. Fed.R.Civ.P. 23(a). “Class certification is proper only if the trial court has concluded, after a ‘rigorous analysis,' that Rule 23(a) has been satisfied.” Wang v. Chinese Daily News, Inc., 737 F.3d 538, 542-43 (9th Cir. 2013) (quoting Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 351 (2011)).

         i. Numerosity

         While Rule 23(a)(1) requires that the class be “so numerous that joinder of all members is impracticable, ” Fed.R.Civ.P. 23(a)(1), it does not require “a strict numerical cutoff.” McCurley v. Royal Seas Cruises, Inc., 331 F.R.D. 142, 167 (S.D. Cal. 2019) (Bashant, J.) (citations omitted). Generally, “the numerosity factor is satisfied if the class compromises 40 or more members.” Id. (quoting Celano v. Marriott Int'l, Inc., 242 F.R.D. 544, 549 (N.D. Cal. 2007).) Here, defendant has already identified over 350 potential class members that worked for InAlliance from 2015 to 2018. (Hollis Decl. ¶ 128.) Accordingly, the numerosity element is satisfied.

         ii. Commonality

         Next, Rule 23(a) requires that there be “questions of law or fact common to the class.” Fed.R.Civ.P. 23(a)(2). Rule 23(a)(2) is satisfied when there is a “common contention . . . 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.” Wal-Mart Stores, 564 U.S. at 350. “Plaintiffs need not show that every question in the case, or even a preponderance of questions, is capable of classwide resolution. So long as there is ‘even a single common question,' a would-be class can satisfy the commonality requirement of Rule 23(a)(2).” Wang, 737 F.3d at 544 (citing Wal-Mart Stores, 564 U.S. at 350).

         Here, the “class” is defined as members of the Independent Living Facilitator Class and the Waiting Time Penalties Subclass. (Settlement Agreement ¶ 1.1.) “Independent Living Facilitator Class Member” means “all current or former employees of InAlliance who worked in the State of California in the position of Independent Living Facilitator (“ILF”) at any time from February 22, 2014 through the Preliminary Approval Date.” (Id. ¶ 1.16.) Additionally, members of the “Waiting Time Penalties Subclass” includes “any members of the Independent Living Facilitator Class whose employment ended, according to InAlliance records, between February 22, 2015 and the Preliminary Approval Date and who does not timely opt-out of the Settlement Class.” (Id. ¶ 1.42.)

         Plaintiff contends that each class member was subjected to the same overtime policy that resulted in their underpayment and each class member was not informed that they were entitled to reimbursement for the work-related use of their cell phones. (Hollis Decl. ¶¶ 18-23.) Generally, “the fact that an employee challenges a policy common to the class as a whole creates a common question whose answer is apt to drive the resolution of the litigation.” Ontiveros, 2014 WL 3057506, at *5. While calculations of wages due might vary based on the individual, [2]“the presence of individual damages cannot, by itself, defeat class certification.” Leyva, 716 F.3d at 514 (quoting Wal-Mart Stores, 564 U.S. at 362). Here, the claims implicate common questions of law and fact because they are premised on a common policy. Additionally, the claims can be substantiated by examining common methods of proof, which weighs in favor of finding commonality. See Ontiveros, 2014 WL 3057506, at *6 (collecting cases). Accordingly, the putative class satisfies the commonality requirement.

         iii. Typicality

         Rule 23(a) further requires that the “claims or defenses of the representative parties [be] typical of the claims or defenses of the class.” Fed.R.Civ.P. 23(a)(3). The test for typicality is “whether other members have the same or similar injury, whether the action is based on conduct which is not unique to the named plaintiffs, and whether other class members have been injured by the same course of conduct.” Sali v. Corona Reg'l Medical Ctr., 909 F.3d 996, 1006 (9th Cir. 2018) (quoting Hanon v. Dataproducts Corp., 976 F.2d 497, 508 (9th Cir. 1992)).

         As discussed above, all of the Living Facilitators were classified as non-exempt and all allegedly suffered the same or similar overtime violations and failures to reimburse for their business expenses. (Osegueda Decl. ¶ 4; Hollis Decl. ¶¶ 18-23.) Similarly, plaintiff's waiting time penalties claim is typical of the Waiting Time Penalties Subclass because they are derivative of the same alleged failure to properly pay for all overtime hours worked. (See FAC ¶¶ 103-110.) Furthermore, the claims of plaintiff and the putative class are based on identical legal theories. (See generally ...

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