1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
4816-3065-4776.1
Shaun Setareh (SBN 204514)
Thomas Segal (SBN 222791)
SETAREH LAW GROUP
9454 Wilshire Boulevard, Suite 907
Beverly Hills, California 90212
Telephone: (310) 888-7771
Facsimile: (310) 888-0109 Attorneys for Plaintiff,
ADAN ORTIZ
UNTITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
ADAN ORTIZ, on behalf of himself and
all others similarly situated,
Plaintiff,
vs.
RANDSTAD NORTH AMERICA, L.P.,
a Delaware Corporation; and DOES 1-50,
inclusive,
Defendants.
Case No. Case No. 13-cv-05050-MMC NOTICE OF MOTION AND
MOTION FOR FINAL APPROVAL
OF CLASS ACTION
SETTLEMENT; MEMORANDUM
OF POINTS AND AUTHORITIES
IN SUPPORT THEREOF
SUBMITTED UNDER SEPARATE
COVER:
1. DECLARATION OF SHAUN
SETAREH;
2. DECLARATION OF ANI
SHIRINIAN;
3. [PROPOSED] ORDER
Hearing Date: September 23, 2016
Time: 9:00 a.m.
Courtroom: 7 (19th Floor)
Judge: Hon. Maxine M.
Chesney
Case 3:13-cv-05050-MMC Document 92 Filed 09/09/16 Page 1 of 23
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
4816-3065-4776.1
NOTICE OF MOTION AND MOTION
TO THE COURT, ALL PARTIES, AND THEIR ATTORNEYS OF RECORD:
PLEASE TAKE NOTICE that, on September 23, 2016 at 9:00 a.m., or as soon
thereafter as may be heard, in Courtroom 7 of the San Francisco Courthouse of the U.S.
District Court for the Northern District of California, located at 450 Golden Gate Avenue,
19th Floor, San Francisco, California 94102, Plaintiff Adan Ortiz (“Plaintiff”) will and
hereby does move this Court for an order:
1. Confirming the conditional certification of the the Settlement Class, defined
as “all non-exempt, hourly persons employed by Randstad in California who supply
services to third party clients (as temporary placement employees and external talents)
between October 29, 2009 and May 20, 2016,” for settlement purposes only;
2. Finally approving the Stipulation for Class Action Settlement (the
“Settlement”) previously submitted in connection with the Parties’ Joint Motion for
Preliminary Approval;
3. Confirming the appointments of Plaintiff as the Class Representative for the
Settlement Class; and
4. Confirming the appointment of Shaun Setareh, of Setareh Law Group, as
Class Counsel for the Settlement Class;
5. Awarding settlement administrator CPT Group $82,000 in settlement
administration costs.
This Motion is made on the grounds that:
1. The Settlement Class continues to meet all of the requirements for class
certification for purposes of settlement only pursuant to Rule 23(a) and (b)(3) of the
Federal Rules of Civil Procedure;
2. The Settlement is fair, adequate, and reasonable as required under Rule 23(e)
of the Federal Rules of Civil Procedure;
3. Plaintiff and his counsel are adequate to represent the Settlement Class as
Case 3:13-cv-05050-MMC Document 92 Filed 09/09/16 Page 2 of 23
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
4816-3065-4776.1
required by Rule 23(a)(4) and (g) of the Federal Rules of Civil Procedure;
4. The notice procedures and related forms have fully comported with all
relevant due process requirements and requirements of Rule 23(c)(2)(B) of the Federal
Rules of Civil Procedure; and
5. Based on the foregoing, final approval of the Settlement is warranted and the
[Proposed] Order submitted herewith should be adopted so as to give finality to the
Settlement.
This Motion is based on this Notice of Motion and Motion, the Memorandum of
Points and Authorities in support thereof, the Declarations of Shaun Setareh, and Ani
Shirinian in support thereof, all accompanying exhibits, all papers on currently on file
with this Court, and such further evidence and arguments as may be presented at hearing
on the Motion.
Respectfully submitted,
SETAREH LAW GROUP
Dated: September 9, 2016 BY /s/ Shaun Setareh
SHAUN SETAREH
Attorneys for Plaintiff
ADAN ORTIZ
Case 3:13-cv-05050-MMC Document 92 Filed 09/09/16 Page 3 of 23
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
4816-3065-4776.1
TABLE OF CONTENTS
I. INTRODUCTION .................................................................................................... 1
II. OVERVIEW OF THE LITIGATION ...................................................................... 2
A. Procedural History ............................................................................................. 2
B. Relevant Factual Allegations ............................................................................. 4
C. Formal and Informal Discovery Conducted ...................................................... 4
III. SUMMARY OF THE SETTLEMENT .................................................................... 5
A. Net Settlement Fund Allocation ....................................................................... 5
B. Calculation of Individual Settlement Payments ............................................... 5
IV. SUMMARY OF THE NOTICE AND CLAIMS PROCESS ................................... 6
V. POSTING OF MOTION FOR ATTORNEY FEES ................................................ 7
VI. ARGUMENT ............................................................................................................ 8
A. Overview of Class Action Settlement Approval Process. ............................. 8
B. This Court Should Confirm Its Conditional Certification of the Settlement
Class for Settlement Purposes Only Because It Continues to Meet the
Requirements of Rules 23(a) and 23(b)(3). .................................................... 9
C. This Court Should Finally Approve the Settlement Because It Is a Fair,
Adequate, and Reasonable Compromise of Disputed Wage and Hour
Claims. .......................................................................................................... 10
1. The Settlement was negotiated at arms’ length and reflects a fair,
adequate, and reasonable compromise based on Defendant’s
estimated liability exposure compared against the risks of continued
litigation. ............................................................................................ 11
2. The Settlement provides for a fair, adequate, and reasonable
distribution of the Net Fund Value to participating Settlement Class
members. ............................................................................................ 13
Case 3:13-cv-05050-MMC Document 92 Filed 09/09/16 Page 4 of 23
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
4816-3065-4776.1
3. The absence of objections, and extremely low number of requests for
exclusion, confirm that the Settlement is a fair, adequate, and
reasonable compromise of the disputed claims at issue and warrants
final approval. .................................................................................... 13
VII. THE COURT SHOULD AWARD THE SETTLEMENT ADMINISTRATOR’S
COSTS .................................................................................................................... 15
VIII. CONCLUSION ....................................................................................................... 15
Case 3:13-cv-05050-MMC Document 92 Filed 09/09/16 Page 5 of 23
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
4816-3065-4776.1
TABLE OF AUTHORITIES
CASES
7-Eleven Owners for Fair Franchising v. Southland Corp.
85 Cal.App.4th 1135 (2000) ......................................................................................... 14
Acosta v. Trans Union LLC
243 F.R.D. 377 (C.D. Cal. 2007) .................................................................................... 8
Armstrong v. Bd. of Sch. Dirs. of Milwaukee
616 F.2d 305 (6th Cir. 1980) ...................................................................................... 8, 9
Baldwin & Flynn v. Nat’l Safety Assoc.
149 F.R.D. 598 (N.D. Cal. 1993) .................................................................................... 9
Blackie v. Barrack
524 F.2d 891 (9th Cir. 1975) .......................................................................................... 9
Cf Sees Candy Shop Inc. v. Superior Court
210 Cal.App.4th 889 (2012) ......................................................................................... 12
Churchill Vill. LLC v. Gen. Elec.
361 F.3d 566, 577 (9th Cir. 2014) ................................................................................ 13
Eisen v. Carlisle & Jacquelin
87 F.R.D. 15, 20 (N.D. Cal. 1980) ................................................................................ 14
Ellis v. Naval Air Work Facility
417 U.S. 156 (1974) ........................................................................................................ 9
Hanlon v. Chrysler Corp.
150 F.3d 1011 (9th Cir. 2003) .................................................................................. 8, 10
In re Cendant Corp., Derivative Action Litig.
232 F.Supp.2d 327 (D. N.J. 2002) ................................................................................ 12
In re Immune Response Sec. Litig.
497 F.Supp.2d 1166 (S.D. Cal. 2007)........................................................................... 10
In re Rite Aid Corp. Sec. Litig.
396 F.3d 294 (3d Cir. 2005) ......................................................................................... 13
Case 3:13-cv-05050-MMC Document 92 Filed 09/09/16 Page 6 of 23
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
4816-3065-4776.1
In re Taco Bell Wage & Hour Action
2012 WL 5923833 *10 (N.D. Cal. 2012) ..................................................................... 12
Linney v. Cellular Ala. P’Ship
1997 WL 450064 (N.D. Cal. 1997) ........................................................................ 10, 12
Nwabueze v. AT&T Inc.
2013 WL 6199596 *8 (N.D. Cal. 2013) ....................................................................... 13
Nordstrom Commission Cases
186 Cal.App.4th 576 (2010) ......................................................................................... 13
Officers for Justice v. Civil Serv. Comm’n
688 F.2d 615 (9th Cir. 1982) .................................................................................. 10, 11
Perkins v. Linked In Corp.
2016 WL 613255 *3 (N.D. Cal. 2016) ......................................................................... 12
Pryor v. Aeroteck Sci.,
278 F.R.D. 516, 520 (C.D. Cal. 2011) .......................................................................... 12
Rodriguez v. West Publ’g Corp.
2007 WL 2827379 (C.D. Cal. 2007) ............................................................................ 12
Smith v. CRST Van Expedited, Inc.
2012 WL 5873701 *2 (S.D. Cal 2012) ......................................................................... 14
Staton v. Boeing Co.
327 F.3d 938 (9th Cir. 2003) .............................................................................. 8, 10, 11
Stovall-Gusman v. W.W. Granger, Inc.
2015 U.S.Dist.LEXIS 78671, *12-13 (N.D. Cal. 2015) ..................................... 8, 10, 11
Syed v. M-I LLC
2016 U.S.Dist.LEXIS 9022, *18-19 (E.D. Cal. 2016) ................................................... 9
Van Bronkhorst v. Safeco Corp.
529 F.2d 943 (9th Cir. 1976) .......................................................................................... 8
Case 3:13-cv-05050-MMC Document 92 Filed 09/09/16 Page 7 of 23
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
4816-3065-4776.1
STATUTES
Bus. & Prof. Code §§ 17200 ................................................................................................ 2
Cal. Lab. Code § 201 ........................................................................................................... 8
Cal. Lab. Code § 202 ........................................................................................................... 8
Cal. Lab. Code § 203 ........................................................................................................... 8
Cal. Lab. Code § 204 ........................................................................................................... 8
Cal. Lab. Code § 223 ........................................................................................................... 8
Cal. Lab. Code § 226 ........................................................................................................... 8
Cal. Lab. Code § 512 ........................................................................................................... 8
Cal. Lab. Code § 1197 ......................................................................................................... 8
Cal. Lab. Code § 1198 ......................................................................................................... 8
Cal. Lab. Code § 1997 ......................................................................................................... 8
Cal. Lab. Code § 2698. ........................................................................................................ 7
FEDERAL RULES OF CIVIL PROCEDURE
Fed. R. Civ. P. 23 ............................................................................................. 2, 8, 9, 10, 11
OTHER AUTHORITIES
Manual for Complex Litigation § 1.46 (West 1977) .......................................................... 8
Schwarzer, Tashima & Wagstaffe
Cal. Prac. Guide: Fed. Civ. Pro. Before Trial § 10:573 (Rutter Group 2006) .............. 9
Case 3:13-cv-05050-MMC Document 92 Filed 09/09/16 Page 8 of 23
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
4816-3065-4776.1
MEMORANDUM OF POINTS AND AUTHORITIES
I. INTRODUCTION
Plaintiff Adan Ortiz (“Plaintiff” or “Class Representative”) respectfully requests
that this Court finally approve the proposed class action settlement set forth in the
Settlement Agreement (the “Settlement”)1 with Defendant Randstad InHouse Services,
L.P. (“Randstad” or “Defendant”). Under the Settlement, Randstad has agreed to pay a
non-reversionary gross settlement fund of $6,400,000.00 (Six Million Four Hundred
Thousand Dollars) to compromise disputed claims for alleged wage and hour violations
including alleged improper rounding of employee time to the nearest quarter hour and
allegedly defective meal and rest break policies.2 Class members will not have to make a
claim in order to receive money from the settlement. Instead, if final approval is granted,
class members will be mailed checks with their share of the settlement proceeds.
Accordingly, 99.95% of the class will receive monetary benefits from the
settlement with an average payment of $166.46 and the highest estimated payment being
$2,719.77.3 Only persons who opted out or for whom the settlement administrator could
not find a valid address will not participate in the settlement. This Court granted
preliminary approval of the Settlement on May 20, 2016.
The reaction from Settlement Class members to the Settlement has been extremely
positive. Of the 27,924 Settlement Class members who were provided notice, only
fourteen (14) have requested exclusion from the Settlement, and there are no valid
objections. There are no valid objections only a lone procedurally improper purported
objection from one class member who asserts in conclusory fashion that the settlement
amount should be higher, and who also erroneously believes that claims for age and
1 The Settlement Agreement is attached to the Declaration of Shaun Setareh in Support of
Motion for Final Approval as Exhibit A. 2 Checks which are mailed to class members but not cashed within six months will
revert to Defendant. 3 The class members in this case are temporary workers who in many cases worked on
short term assignments.
Case 3:13-cv-05050-MMC Document 92 Filed 09/09/16 Page 9 of 23
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
4816-3065-4776.1
racial discrimination are affected by the Settlement. 99.95% of the Settlement Class have
reacted favorably to the Settlement. This overwhelmingly positive response is reflective
of the fairness, adequacy, and reasonableness of the Settlement.
Further, the amount offered in settlement is fair given that it represents 38% of the
potential recovery at trial and in light of the risks and anticipated expense of continued
litigation. Finally, the settlement was entered into after arm’s length negotiations with
the assistance of an experience mediator and with the guidance of experienced counsel.
The Settlement warrants this Court’s final approval because: (1) the Settlement
meets all the requirements for class certification for settlement purposes only under Rule
23(a) and (b)(3) of the Federal Rules of Civil Procedure; (2) Plaintiff and Class Counsel
have adequately represented the Settlement Class; (3) the Settlement bears all requisite
indicia of fairness, reasonableness, and adequacy as required by Rule 23(e)(2); (4) the
notice procedure and related forms fully comported with all Rule 23 and due process
requirements; and (5) in view of the foregoing, final approval of the Settlement is
warranted. Thus, this Court should grant Plaintiff’s motion in its entirety and adopt the
[Proposed] Order submitted herewith.
II. OVERVIEW OF THE LITIGATION
A. Procedural History
On October 29, 2013, Plaintiff filed a lawsuit against Randstad North America L.P.
and Does 1-10, in the United States District Court, Northern District of California, Case
No. 13-cv-05050 (MMC), alleging causes of action for (1) Failure to Provide Meal
Periods (Lab. Code §§ 204, 223, 226.7, 512, and 1198); (2) Failure to Provide Rest
Periods (Lab. Code §§ 204, 223, 226.7, and 1198); (3) Failure to Pay Hourly Wages
(Lab. Code §§ 223, 510, 1194, 1194.2, 1197, 1997.1, and 1198); (4) Failure to Provide
Accurate Written Wage Statements (Lab. Code § 226(a)); (5) Failure to Timely Pay All
Final Wages (Lab. Code §§ 201-203); (6) Unfair Competition (Bus. & Prof. Code §§
17200, et seq.); and (7) Civil Penalties (Lab. Code §§ 2698, et seq.). [ECF No. 1].
Plaintiff subsequently filed a First Amended Complaint which addressed certain
Case 3:13-cv-05050-MMC Document 92 Filed 09/09/16 Page 10 of 23
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
4816-3065-4776.1
deficiencies in the initial Complaint. [ECF No. 4]. Plaintiff subsequently filed a Second
Amended Complaint [ECF No. 28], which corrected the name of the defendant to
Randstad InHouse Services, L.P. and narrowed the scope of the class. Plaintiff
subsequently filed a Third Amended Complaint clarifying one of the causes of action.
[ECF No. 69]. On February 15, 2016, Defendant answered the Third Amended
Complaint. [ECF No. 72].
Plaintiff was employed by Randstad as a non-exempt employee. The operative
Third Amended Complaint alleges claims on behalf of several putative classes, which
collectively include all non-exempt employees employed by Randstad in California from
October 29, 2009 to the present. Third Amended Complaint, ¶ 9-12.
After conducting both formal and informal discovery, the parties determined that
private mediation may be beneficial to resolve the issues alleged in the case. [Setareh
Decl. at ¶ 11.] During the course of the litigation, Defendant produced thousands of
pages of documents which were reviewed in relation to the prosecution and possible
resolution of the case. [Id at ¶ 17.].
On October 16, 2015 the Court continued the class certification deadline of
November 2015 to March 2016 in light of the parties’ efforts to mediate the case. ECF
No. 66.
On November 12, 2015, Plaintiff and Randstad participated in a full day mediation
in Los Angeles with Steve Rottman, Esq., a highly-respected mediator with extensive
experience in wage and hour class action matters. Both parties prepared detailed
mediation briefs and retained experts to develop models for estimating Defendant's
potential exposure in this action on a class-wide basis under various assumptions. [Id. at
¶ 12.]
The parties reached a proposed settlement and Plaintiff filed a motion for
preliminary approval. ECF No. 76. The Court granted preliminary approval on May 20,
2016. ECF No. 86.
Case 3:13-cv-05050-MMC Document 92 Filed 09/09/16 Page 11 of 23
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
4816-3065-4776.1
B. Relevant Factual Allegations4
Defendant Randstad InHouse Services, L.P. is a staffing agency with more than
900 branches and client dedicated locations. During the class period, Randstad had a
policy of requiring non-exempt hourly employees to round their time to the nearest 15
minutes. As a result, employees were underpaid if they clocked in a few minutes before,
or a few minutes after their shift. [Setareh Decl. ¶ 15.]
Defendant also had no written meal or rest break policies prior to 2013. After
2013, Defendant had 12 different Guidebooks containing their meal and rest break
policies. The Guidebooks failed to inform class members of one or more of the following
facts: 1) That a first meal period must be provided before the end of the fifth hour of
work; 2) that a second meal period must be provided before the 10th hour of work if the
employee works more than 10 hours; 3) that meal periods must be uninterrupted; 4) that
employees can leave the premises for their meal periods; 5) that a meal period which is
interrupted must be paid as time worked; 6) that employees who are not provided a meal
break must be paid a meal period premium; 7) that a 10-minute rest period will be
provided for every four hour work period or major fraction thereof; 8) that rest breaks
must be uninterrupted; 9) that rest breaks must be duty free; and 10) that an employee is
entitled to a third rest break after 10 hours of work. [Setareh Decl. ¶ 16.]
C. Formal and Informal Discovery Conducted
The parties conducted significant formal and informal discovery including: 1)
Plaintiff’s counsel analyzing Plaintiff’s paystubs and other documents produced in
response to a personnel file request; 2) conducting formal written discovery; 3) Plaintiff’s
deposition; 4) Plaintiff’s counsel interviewing absent class members about their
experiences with Randstad in preparation for filing a motion for class certification; 5)
Plaintiff’s counsel reviewing and analyzing policy documents, employee handbooks and
payroll and time records; and 6) analyzing a sample of payroll and time records (12.5%
4 Plaintiff notes that Defendant may dispute some of the facts set forth herein. The above
summary is based on Plaintiff’s counsel’s investigation and review of documents.
Case 3:13-cv-05050-MMC Document 92 Filed 09/09/16 Page 12 of 23
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
4816-3065-4776.1
of the class.) [Setareh Decl. ¶ 17.]
III. SUMMARY OF THE SETTLEMENT
The Agreement provides for (1) modest enhancement awards to Plaintiff, (2)
reasonable attorney fees and actual litigation costs, (3) administrative expenses, (4) a
payment to the Labor Workforce and Development Agency (“LWDA”), and (5) the
remaining funds are then distributed to class members. The Agreement also provides for
a release of claims for those class members who do not exclude themselves from the
settlement, and a reasonable notice and payment procedure. Importantly, the Agreement
is not a claims made settlement. Instead, all class members will be mailed checks
directly. All class members who do not affirmatively opt-out will receive a payment
from the Settlement.
A. Net Settlement Fund Allocation
The Agreement provides for a Maximum Settlement Amount of $6,400,000 (six
million four hundred thousand dollars) (“MSA”). [Agreement at ¶ IX(A)]. The Net
Settlement Fund (“NSF”) is the portion of the MSA remaining after deductions for
attorney fees (25% of the MSA); actual litigation costs (up to $35,000); up to $5,000 in
an enhancement award to Plaintiff; claims administration expenses, and payment of civil
penalties to the LWDA ($25,000). [Id., ¶ IX(A),(B)(2)(a).] As such any amounts not
awarded as attorney fees and costs, or as an enhancement award, or as claims
administration expenses will be added to the amount payable to the class.
B. Calculation of Individual Settlement Payments
Each member of the Final Settlement Class who does not submit a valid and timely
request for exclusion will be paid based on his or her total actual workweeks worked
during the Class Period. This amount will be determined by the following formula:
First, the Claims Administrator shall reduce the Settlement Amount of $6,400,000.00 by
deducting (a) all attorneys’ fees and litigation costs approved by the Court and awarded
to Class Counsel, (b) all fees to be paid to the Claims Administrator associated with
settlement administration, (c) the enhanced payment to the Named Plaintiff approved by
Case 3:13-cv-05050-MMC Document 92 Filed 09/09/16 Page 13 of 23
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
4816-3065-4776.1
the Court and awarded to the Named Plaintiff, (d) payment to the LWDA, and (e)
Defendant’s share of payroll taxes. The Settlement Share for each Settlement Class
member will be based on a ratio of his or her individual actual workweeks worked during
the Class Period to the total actual workweeks worked by all Settlement Class members
who do not request exclusion. The individual settlement payment to each Settlement
Class member will be calculated by dividing the Settlement Class member’s individual
actual workweeks by the total actual workweeks of all Settlement Class members and
multiplying by the Maximum Distributable Amount. The maximum amount paid in
settlement, including all reasonable attorneys’ fees and litigation costs to be paid to Class
Counsel, the amount paid to the Claims Administrator for settlement administration
expenses, the enhancement award to the Named Plaintiff, payment to the LWDA and
payment of Defendant’s share of payroll taxes shall not exceed $6,400,000.00.
All checks to non-objecting class members not cashed within 180 days of mailing
will be returned to Defendant. [Agreement, ¶ IX(A)(7.)]
IV. SUMMARY OF THE NOTICE AND CLAIMS PROCESS
After this Court granted preliminary approval, on or about June 16, 2016,
Defendant provided the Settlement Administrator with a mailing list identifying each
putative class member, his or her social security number, his/her last known address,
his/her last known email address (if any), telephone number and number of workweeks
(the “Class List”). [Declaration of Ani Shirinian (“Shirinian Decl.”), ¶ 4.] The class list
had 27,923 names on it. [Id.]5
On July 2, 2016 the Settlement Administrator performed a National Change of
Address Search and, where necessary, updated the addresses on the Class List. [Id ¶ 5.]
On July 12, 2016, the Settlement Administrator mailed Class Notices by First
5 Eleven people not on the class list contacted the Settlement Administrator and claimed
to be settlement class members. The Settlement Administrator confirmed that one of the individuals was a settlement class member and added them to the class list. Therefore, the total class size is 27,924.The remaining individuals were employed by Randstad divisions which are not part of this case, and therefore are not part of the settlement. Shirinian Decl. ¶ 13.
Case 3:13-cv-05050-MMC Document 92 Filed 09/09/16 Page 14 of 23
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
4816-3065-4776.1
Class Mail to all 27,923 Settlement Class members contained in the Class List. [Id., ¶ 6.]
As of September 1, 2016, 3,105 Class Notices have been returned to the
Settlement Administrator as undeliverable. [Id., ¶ 8.] The Settlement Administrator
performed “skip traces” to obtain updated addresses for these class members. [Id., ¶ 8.]
As a result of the skip traces in combination with class members contacting Class
Counsel with updated addresses, the Settlement Administrator remailed notice to 2,748
Settlement Class members. [Id.,¶ 9.] There are 683 Class members for whom the
Settlement Administrator was unable to find a better address. [Id. ¶10.]
As of September 1, 2016, only 15 Settlement Class members submitted requests
for exclusion and no Settlement Class members submitted objections. [Id., ¶¶ 11-12, 17.]
One of the requests for exclusion was untimely. The Settlement Administrator received
one purported objection which did not comply with the objection requirements in the
Order Granting Preliminary Approval. [Id. ¶ 15 Exh. B.] This purported objection
alleges that a manager and supervisor made derogatory comments about the class
member’s race and age, that the class member was terminated for discriminatory reasons
and also that the class member’s final check was delayed. [Id.]6
The average estimated payment to Settlement Class members is approximately
$166.46 and the highest estimated payment is approximately $2,719.77, prior to
deducting employee and employer taxes. [Id. ¶ 17.]
As of September 1, 2016 there are 27,910 Class Members who will participate in
the settlement which is a 99.95% participation rate. [Shirinian Decl. ¶ 16.]
V. POSTING OF MOTION FOR ATTORNEY FEES
On July 29, 2016 Plaintiff’s Motion for Attorney Fees was posted by the
Settlement Administrator on the settlement website. [Shirinian Decl. ¶ 7.] No class
members have objected to the requested fees, costs, or incentive award.
6 The purported objection was also sent to the Court. [ECF No. 87.]
Case 3:13-cv-05050-MMC Document 92 Filed 09/09/16 Page 15 of 23
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
4816-3065-4776.1
VI. ARGUMENT
A. Overview of Class Action Settlement Approval Process
The law favors settlement, particularly in class actions and other complex cases
where substantial resources can be conserved by avoiding the time, cost, and rigors of
formal litigation. See Van Bronkhorst v. Safeco Corp., 529 F.2d 943, 950 (9th Cir.
1976). These concerns apply with particular force in a case such as this where allegedly
illegal practices affected hundreds of employees. However, Rule 23(e)(C)(1) provides
that a court may approve a settlement of a class action only when it finds after a hearing
that the settlement is “fair, reasonable, and adequate,” and Rule 23(e)(C)(4) provides that
any class member may object to a proposed settlement.
In reviewing a class action settlement, a court undertakes two fundamental
inquiries. “First, the district court must assess whether a class exists.” Staton v. Boeing
Co., 327 F.3d 938, 952 (9th Cir. 2003). In other words, the court must determine that the
lawsuit qualifies as a class action under Rule 23. See Hanlon v. Chrysler Corp., 150 F.3d
1011, 1022 (9th Cir. 2003) (reviewing settlement to ensure compliance with
requirements of Rule 23(a) and (b)(3)). Second, the court must determine whether the
settlement is “fair, adequate, and reasonable.” Staton, 327 F.3d at 952. When the parties
reach a settlement agreement before a trial class is formally certified, “courts must
peruse the proposed compromise to ratify both the propriety of the certification and the
fairness of the settlement.” Acosta v. Trans Union LLC, 243 F.R.D. 377, 383 (C.D. Cal.
2007).
Thus, judicial review of a class action settlement entails a two-step process. “The
first step is a preliminary, pre-notification hearing to determine whether the proposed
settlement is ‘within the range of possible approval.’ This hearing is not a fairness
hearing; its purpose, rather, is to ascertain whether there is any reason to notify the class
members of the proposed settlement and to proceed with a fairness hearing.” Armstrong
v. Bd. of Sch. Dirs. of Milwaukee, 616 F.2d 305, 314 (6th Cir. 1980) (quoting Manual for
Complex Litigation § 1.46, at 53-55 (West 1977)). At the second stage, after class
Case 3:13-cv-05050-MMC Document 92 Filed 09/09/16 Page 16 of 23
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
4816-3065-4776.1
members have had an opportunity to object to the settlement, the court makes a final
determination whether the settlement is “fair, reasonable and adequate” under Rule 23(e).
Armstrong, 616 F.2d at 314. Approval of settlements is favored to avoid the expense and
uncertainty of litigation. E.g., Syed v. M-I LLC, 2016 U.S.Dist.LEXIS 9022, *18-19 (E.D.
Cal. 2016) (“'[i]n most situations, unless the settlement is clearly inadequate, its
acceptance and approval are preferable to lengthy and expensive litigation with uncertain
results'”).
B. This Court Should Confirm Its Conditional Certification of the
Settlement Class for Settlement Purposes Only Because It Continues to
Meet the Requirements of Rules 23(a) and 23(b)(3)
Under the first step of the settlement approval analysis, this Court is obliged to
make an initial determination that the Settlement Class meets the requirements of Rule
23. This requires that all four Rule 23(a) prerequisites and that at least one of the three
Rule 23(b) requirements be met. Plaintiff need only make a “prima facie showing” of the
requirements under Rule 23. See Schwarzer, Tashima & Wagstaffe, Cal. Prac. Guide:
Fed. Civ. Pro. Before Trial § 10:573 (Rutter Group 2006). In determining the propriety
of class certification, a court may not delve into the underlying merits of the claims. The
fundamental question “is not whether . . . plaintiff [has] stated a cause of action or will
prevail on the merits, but rather whether the requirements of Rule 23 are met.” Eisen v.
Carlisle & Jacquelin, 417 U.S. 156, 178 (1974). Accordingly, the Ninth Circuit has
established that, when ruling on the propriety of class certification, a district court “is
bound to take the substantive allegations of the complaint as true.” Blackie v. Barrack,
524 F.2d 891, 901 n.17 (9th Cir. 1975). A court “may not require plaintiff[] to make a
preliminary proof of [his] claim; it requires only sufficient information to form a
reasonable judgment.” Baldwin & Flynn v. Nat’l Safety Assoc., 149 F.R.D. 598, 600
(N.D. Cal. 1993).
Here, when this Court granted preliminary approval on May 20, 2016, it
preliminarily found that the Settlement Class meets the requirements for class
Case 3:13-cv-05050-MMC Document 92 Filed 09/09/16 Page 17 of 23
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
4816-3065-4776.1
certification for settlement purposes. [ECF No. 86, p. 4.] No subsequent events have cast
doubt on this determination. [See Setareh Decl., ¶ 8.] Accordingly, this Court should
confirm its conditional grant of class certification for settlement purposes only. C. This Court Should Finally Approve the Settlement Because It Is a Fair,
Adequate, and Reasonable Compromise of Disputed Wage and Hour
Claims
No single criterion is dispositive for whether a class settlement meets the
requirements of Rule 23(e). The Ninth Circuit has directed district courts to consider a
variety of factors without providing an “exhaustive list” or suggesting which factors are
most important. See Staton, supra, 327 F.3d at 959. “The relative degree of importance
to be attached to any particular factor will depend upon and be dictated by the nature of
the claim(s) advanced, the type(s) of relief sought, and the unique facts and
circumstances presented by each individual case.” Officers for Justice v. Civil Serv.
Comm’n, 688 F.2d 615, 625 (9th Cir. 1982). The factors include the strength of the
plaintiff’s case, the risk, expense, complexity of continued litigation, the risk of
maintaining class action status through trial, the amount offered in settlement, the extent
of discovery completed and the stage of proceedings, the experience and views of
counsel, the presence of a governmental participant, and the reaction of class members to
the proposed settlement. Hanlon v. Chrysler Corp., 150 F.3d 1011, 1025 (9th
Cir. 1998.)
Due to the impossibility of predicting any litigation result with certainty, a district
court’s evaluation of a settlement essentially amounts to “nothing more than an amalgam
of delicate balancing, gross approximations and rough justice.” Id. at 625 (internal
citations omitted).
Where a settlement results from arm’s length negotiations after “relevant
discovery” there is “a presumption that the agreement is fair.” Linney v. Cellular Ala.
P’Ship, 1997 WL 450064, at *5 (N.D. Cal. 1997). So long as the discovery is sufficient
to give the parties a clear view of the relative strengths and weaknesses of their
respective cases, it need not be exhaustive. See, e.g., In re Immune Response Sec. Litig.,
Case 3:13-cv-05050-MMC Document 92 Filed 09/09/16 Page 18 of 23
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
4816-3065-4776.1
497 F.Supp.2d 1166, 1174 (S.D. Cal. 2007) (approving a settlement where informal
discovery gave the parties a clear view of the strength and weaknesses of their cases).
Notwithstanding any presumptions, the ultimate touchstone is whether “class counsel
adequately pursued the interests of the class as a whole.” Staton, supra, 327 F.3d at 961.
As the Ninth Circuit explained in Officers for Justice, the district court’s role in
evaluating a class action settlement is therefore tailored to meet that narrow objective.
Indeed, Rule 23(e) review “must be limited to the extent necessary to reach a reasoned
judgment that the agreement is not the product of fraud or overreaching by, or collusion
between, the negotiating parties.” Thus, the Ninth Circuit will not reverse a district
court’s approval of a settlement “unless the fees and relief provisions clearly suggest the
possibility that class interests gave way to self-interest.” Staton, 327 F.3d at 961.
1. The Settlement was negotiated at arms’ length and reflects a fair,
adequate, and reasonable compromise based on Defendant’s
estimated liability exposure compared against the risks of
continued litigation
The settlement in this case was negotiated at arm’s length with an experienced
mediator. [Setareh Decl. ¶ 12.] Further, both parties were represented by experienced
counsel. [Id. ¶ 4.]
The settlement represents a fair, adequate, and reasonable compromise. As
explained in more detail in Plaintiff’s Motion for Preliminary Approval, Plaintiff has
estimated that Defendant’s potential liability exposure for the meal, rest break and
rounding claims in this action is $16.7 million, exclusive of attorneys’ fees and costs.
[Motion for Preliminary Approval (ECF No. 76), at p. 15.] Therefore, the settlement
amount is 38% of the class-wide damages. As noted in moving for preliminary approval,
settlements are approved where the class recovery is as low as 5% of the classwide
damages. E.g., Stovall-Gusman v. W.W. Granger, Inc., 2015 U.S.Dist.LEXIS 78671,
*12-13 (N.D. Cal. 2015) (7.3% of the “estimated trial award”); In re Toys R Us-Del.,
Inc.—Fair & Accurate Credit Transactions Act (FACTA) Litig., 295 F.R.D. 438, 453-54
(C.D. Cal. 2014) (3%); In re LDK Solar Secs. Litig., 2010 U.S.Dist.LEXIS 87168, *6
Case 3:13-cv-05050-MMC Document 92 Filed 09/09/16 Page 19 of 23
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
4816-3065-4776.1
(N.D. Cal. 2010) (5% of “plaintiff's expert estimated damages”) See also In re Cendant
Corp., Derivative Action Litig., 232 F.Supp.2d 327 (D. N.J. 2002) (approving settlement
that only provided a 2% recovery based on the estimated liability exposure). As the
Ninth Circuit has explained: “the very essence of a settlement is compromise, a yielding
of absolutes and an abandoning of highest hopes.” Linney v. Cellular Alaska P’ship, 151
F.3d 1234, 1242 (9th Cir. 1998).
While Defendant’s exposure is considerable, there are significant risks that
continued litigation would entail that make the compromise amount fair, adequate, and
reasonable. Randstad would have vigorously opposed any motion for class certification.
While courts have often certified meal and rest breaks and rounding claims of the kind
involved in this case, other courts have denied certification of such claims. E.g., Pryor v.
Aeroteck Sci., LLC, 278 F.R.D. 516, 520 (C.D. Cal. 2011) (denying certification of
rounding claim); In re Taco Bell Wage & Hour Action, 2012 WL 5923833 *10 (N.D.
Cal. 2012) (denying certification of meal break claims.) Further, Randstad might have
been able to convince the Court or a jury that it provided class members with meal and
rest breaks but that some class members chose not to take them. Randstad also might
have been able to convince the Court or a jury that its rounding policy did not result in
systematic underpayment of class members. Cf Sees Candy Shop Inc. v. Superior Court,
210 Cal.App.4th 889 (2012.) There is also a risk that the jury would fail to reach a
unanimous verdict, or that a favorable verdict would be overturned on appeal. [Setareh
Decl. ¶ 22.]
Class Counsel is also of the opinion that the Settlement represents an excellent
bargain for the class, given the inherent risks, hazards, and expenses of carrying the case
through trial. As the Central District has explained, this weighs strongly in favor of
approving the settlement. See Rodriguez v. West Publ’g Corp., 2007 WL 2827379, at *9
(C.D. Cal. 2007) (“The trial court is entitled to, and should, rely upon the judgment of
experienced counsel for the parties.”). Thus, in light of these considerable risks, Plaintiff
has achieved a fair settlement that reflects a meaningful recovery on behalf of class
Case 3:13-cv-05050-MMC Document 92 Filed 09/09/16 Page 20 of 23
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
4816-3065-4776.1
members that merits this Court’s final approval.
2. The Settlement provides for a fair, adequate, and reasonable
distribution of the Net Settlement Consideration to Settlement
Class members
The Settlement fairly, adequately, and reasonably compensates class members
based on the potential extent of their claims. Under the Settlement, all class members
will be entitled to a pro rata share of the settlement based on their individual workweeks
compared to the total workweeks of class members. [Settlement, ¶ IX (B)(2)(a).]
Because class members who worked more workweeks would have been subjected to
more of the alleged wage and hour violations than those who worked fewer hours in
view of the theories of recovery advanced, this means of distribution compensates class
members based on the potential extents of their injuries and is thus fair, adequate, and
reasonable. [Setareh Decl., ¶ 25.]
Further, the settlement fund which is 38% of the potential damages at a class trial
provides for meaningful monetary relief for disputed wage and hour claims. Compare
Nordstrom Commission Cases, 186 Cal.App.4th 576, 590 (2010) (affirming final
approval of reversionary wage and hour class action settlement where 20% of the fund
allocated to the class was merchandise vouchers).
3. The absence of objections, and extremely low number of requests
for exclusion, confirm that the Settlement is a fair, adequate, and
reasonable compromise of the disputed claims at issue and
warrants final approval
The absence of objections and an extremely small number of requests for
exclusion show that the Settlement is fair, adequate, and reasonable and support its final
approval. See, e.g.,Churchill Vill. LLC v. Gen. Elec., 361 F.3d 566, 577 (9th Cir. 2014)
(affirming approval of settlement where 45 of 90,000 class members objected); Perkins
v. Linked In Corp., 2016 WL 613255 *3 (N.D. Cal. 2016) (affirming approval of
settlement with 86 objections); In re Rite Aid Corp. Sec. Litig., 396 F.3d 294, 305 (3d
Case 3:13-cv-05050-MMC Document 92 Filed 09/09/16 Page 21 of 23
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
4816-3065-4776.1
Cir. 2005) (explaining that low level of objections is a “rare phenomenon”); 7-Eleven
Owners for Fair Franchising v. Southland Corp., 85 Cal.App.4th 1135, 1152–53 (2000)
(finding 9 objections, and 80 opt-outs, from a class of 5,454, showed a positive response
from class members supporting settlement approval.)
Here, after notice was mailed to all 27,923 class members, no class members
submitted valid objections and only 14 (0.05% or one out of every 1,994 class members)
submitted requests for exclusion. [Shirinian Decl. ¶¶ 10-11, 17]
The one purported objection is from class member Jeri Mason. As the Settlement
Administrator points out, Ms. Mason did not comply with the requirements set forth in
the Notice and Preliminary Approval Order for objections. Specifically, the objection
does not contain Ms. Mason’s telephone number or dates of employment. [Preliminary
Approval Order ¶ 5; Notice ¶ 20.]
Ms. Mason makes allegations that a manager and supervisor made derogatory
comments related to her race and her age, and that she was terminated for discriminatory
reasons. Any claim based on such allegations would not be covered by the release in this
case which is limited to: claim[s] . . . that could have ben asserted based on the facts
alleged in the Action . . . .” [Settlement Agreement ¶ X. A. 1.] As there are no allegations
in the pleadings that would support a claim for racial discrimination or age
discrimination, or for intentional infliction of emotional distress based on the alleged
derogatory comments, any claims based on those allegations are inarguably not released
by the settlement.
Ms. Mason also alleges that her final check was delayed. She also states that the
settlement amount is not high enough. This conclusory assertion is not sufficient to
sustain an objection. E.g., Nwabueze v. AT&T Inc., 2013 WL 6199596 *8 (N.D. Cal.
2013) (rejecting objection that was “conclusory” and failed to provide evidentiary or
legal support); Smith v. CRST Van Expedited, Inc., 2012 WL 5873701 *2 (S.D. Cal
2012): “Whatever the amount, [objector] makes no showing of what would be sufficient
or why. Such unsupported objection cannot justify denial of approval.”; Ellis v. Naval Air
Case 3:13-cv-05050-MMC Document 92 Filed 09/09/16 Page 22 of 23
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
4816-3065-4776.1
Work Facility, 87 F.R.D. 15, 20 (N.D. Cal. 1980): “[Objector] does not specify what
amount would fairly, reasonably, and adequately satisfy his monetary claims. Nor does
he state on what grounds he deserves a larger share of the settlement funds. This Court
thus finds it impossible to respond to his objection . . . other than dismissing it for lack of
support.” Further, Mason’s erroneous belief that the settlement covers discrimination
claims undermines the assertion that the settlement amount is not high enough.
The Court should rule that the lone purported objection is procedurally improper
and substantively meritless and find that the settlement is fair, adequate, and reasonable.
VII. THE COURT SHOULD AWARD THE SETTLEMENT
ADMINISTRATOR’S COSTS.
In connection with preliminary approval, Plaintiff advised the Court that the
Settlement Administrator’s bid stated that the administration costs would not exceed
$73,000. [ECF No. 80 Setareh Decl. ¶ 5.] As set forth in the Declaration of Ani Shirinian,
the Settlement Administrator is requesting that the Court approve $82,000 based on the
class size being higher than the bid was based on and a higher than expected weight for
the notice packet. [Shirinian Decl. ¶ 21.]
VIII. CONCLUSION
For the reasons set forth herein, Plaintiff respectfully requests for this Court to
grant this Motion in its entirety and adopt the [Proposed] Order concurrently submitted
herewith.
Respectfully submitted,
SETAREH LAW GROUP
Dated: September 9, 2016 BY /s/ Shaun Setareh
SHAUN SETAREH
Attorneys for Plaintiff
ADAN ORTIZ
Case 3:13-cv-05050-MMC Document 92 Filed 09/09/16 Page 23 of 23
