Fronda v. Staffmark Holdings, Inc. et al

ORDER by Judge Maria-Elena James granting {{86}} Motion for Settlement; granting {{86}} Motion to Certify Class. Final Approval Motion and Motion for Attorneys' Fees, Costs, and Service Award due by 3/22/2018. Final Fairness Hearing set for 5/31/2018 10:00 AM. (mejlc2S, COURT STAFF)

Northern District of California, cand-4:2015-cv-02315

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7 1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 EARL FRONDA, Case No. 15-cv-02315-MEJ 8 Plaintiff, ORDER RE: MOTION FOR PRELIMINARY APPROVAL OF 9 v. SETTLEMENT 10 STAFFMARK HOLDINGS, INC., et al., Re: Dkt. No. 86 11 Defendants. 12 Northern District of California United States District Court 13 INTRODUCTION 14 Plaintiff Earl Fronda and Defendants CBS Personnel Services, LLC and Staffmark 15 Holdings (together, the ―CBS Defendants‖) have reached a tentative settlement in this wage and 16 hour putative class action. Pending before the Court is Plaintiff's Motion for Preliminary 17 Approval. Mot., Dkt. No. 86. Plaintiff asks the Court to (1) preliminarily approve the proposed 18 settlement, (2) certify for settlement purposes a settlement class, (3) appoint Plaintiff as class 19 representative, (4) appoint class counsel and settlement administrator, (5) direct the dissemination 20 of the notice of settlement to the class, and (6) schedule a final approval hearing and hearing on 21 class counsel's motion for attorneys' fees and incentive award. The CBS Defendants do not 22 oppose theses requests. See Statement of Non-Opposition, Dkt. No. 87. The Court held a hearing 23 on the matter on November 16, 2017. 24 Having considered the parties' arguments, the relevant legal authority, and the record in 25 this case, the Court GRANTS Plaintiff's Motion for the following reasons. 26 BACKGROUND 27 Plaintiff was jointly employed by Staffmark, CBS Personnel, and CEVA Logistics U.S., 28 Inc. Third Am. Compl. (―TAC‖) ¶ 3, Dkt. No. 57; see id. ¶ 13. On April 17, 2015, Plaintiff 7 1 initiated this litigation in Alameda County Superior Court, naming as Defendants Staffmark, 2 CEVA, and LLC. See Notice of Removal, Ex. A (Compl.), Dkt. No. 1; see also id., 3 Ex. B (First Am. Compl.). CEVA removed the action to this Court on May 22, 2015. See Notice 4 of Removal. was dismissed on June 12, 2015. Dkt. No. 28. Plaintiff filed his 5 Second Amended Complaint on July 13, 2015. Second Am. Compl., Dkt. No. 34. On October 9, 6 2015, CBS Personnel was added as a Defendant. Dkt. No. 52. 7 Plaintiff filed the operative TAC on December 27, 2015. See TAC. Plaintiff asserts eight 8 claims based on California state law: (1) Failure to Provide Meal Periods, (2) Failure to Provide 9 Rest Periods, (3) Failure to Pay Hourly Wages, (4) Failure to Provide Accurate Written Wage 10 Statements, (5) Failure to Timely Pay All Final Wages, (6) Failure to Pay Wages without 11 Discount, (7) Unfair Competition, and (8) Civil Penalties under the Private Attorneys General Act 12 (―PAGA‖). Id. ¶¶ 23-124. The Court has jurisdiction over the matter pursuant to the Class Action Northern District of California United States District Court 13 Fairness Act of 2005, 28 U.S.C. § 1332(d). Id. ¶ 2. 14 Plaintiff and the CBS Defendants participated in private mediation on January 4, 2017 and 15 April 26, 2017. Leviant Decl. ¶ 8, Dkt. No. 86-1. This proposed Settlement is the result; 16 however, it 17 does not resolve the matter as to Defendant CEVA LOGISTICS, U.S., INC., though it does resolve claims by the settlement Class 18 against any joint employers of the CBS Defendants, including CEVA Freight, LLC and CEVA Logistics U.S., Inc., to the extent 19 that any of the claims settled as to the CBS Defendants would apply to any CEVA defendant. 20 21 Mot. at 3.1 22 SETTLEMENT TERMS 23 The Court summarizes the key terms of the Settlement below. 24 25 1 In advance of the hearing, the Court asked Plaintiff how he intended to proceed against CEVA 26 Logistics in light of this exclusion. Dkt. No. 89 ¶ 6. During the hearing, Counsel for Plaintiff explained he may seek to substitute another plaintiff to pursue claims against CEVA, and 27 represented that CEVA nonetheless was obtaining significant benefits under the proposed Settlement; Counsel for CEVA represented that CEVA does not object to the proposed Settlement. 28 Nov. 16, 2017 Oral Argument at 10:06-10:12. 2 7 1 A. Settlement Class and Class Period 2 The Settlement Class is defined as ―any and all individuals employed by the CBS 3 Defendants at CEVA Freight, LLC, CEVA Logistics U.S., Inc. and/or any other location of 4 CEVA, CEVA's parents or any CEVA-related entity operating in California during the Class 5 Period.‖ Leviant Decl., Ex. 1 § 1.1(b)(4) (Settlement). The Class Period is defined as April 17, 6 2011 through the date the Court preliminarily approves the Settlement. Id. § 1.1(b)(12). 7 B. Distribution of Settlement Payments 8 The Settling Defendants agree to pay a maximum Settlement Sum of $5,600,000. Id. §§ 9 1.1(b)(25), 3.6(a). This figure includes (1) payments to Class Members, (2) Class Counsel's 10 attorneys' fees and costs, (3) administration costs, (4) any enhancement award to Plaintiff, and (5) 11 payment to the California Labor and Workforce Development Agency (―LWDA‖). Id. § 12 1.1(b)(25). Northern District of California United States District Court 13 The Net Settlement Sum represents the Settlement Sum less attorneys' fees and costs, 14 administration costs, an enhancement award, and the LWDA payment. Id. §§ 1.1(b)(27), 15 3.6(b)(1)(A)-(E). Participating Class Members shall be paid a proportionate share of the Net 16 Settlement Sum. Id. § 3.6(b)(2)(A). The Settlement Administrator shall calculate the Individual 17 Class Member Settlement Amount – the amount of the Net Settlement Sum allocated to each 18 participating Class Member – in the following manner: the Net Settlement Sum shall be divided 19 by the total number of weeks worked for the CBS Defendants by all participating Class Members 20 at any CEVA location in California. Id. §§ 1.1(b)(29), 3.6(b)(2)(B). This number will be 21 multiplied by the number of weeks worked by each Class Member. Id. The Settlement 22 Administrator shall determine the number of weeks worked by each Class Member by (1) first 23 multiplying the number of weeks worked at the Carson Location and the Torrance Location by 24 two, then (2) adding this number to the number of weeks worked by the Class Member during the 25 Class Period at all CEVA locations in California other than the Carson and Torrance Locations.2 26 27 2 The Carson Location refers to the CEVA location on Bishop Avenue in Carson, California; the Torrance Location refers to the CEVA location on Western Avenue in Torrance, California. 28 Settlement Agreement §§ 1.1(b)(15)-(16). 3 7 1 Id. § 3.6(b)(2)(B). 2 Class Members may dispute the Settlement Administrator's determination of the number 3 of weeks he or she worked for the CBS Defendants by sending a letter to the Settlement 4 Administrator within 30 days of the initial mailing of class notice. Id. § 3.4(c). The Class 5 Member must state the number of weeks he or she believes are correct and include documentation 6 in support thereof. Id. The Settlement Administrator shall review the relevant records and 7 documentation and make a recommendation to the Court on all disputed claims. Id. The 8 Settlement Administrator shall also send written notice of its decision on the disputed claim to the 9 Class Member, Class Counsel, and the CBS Defendants' counsel no later than 10 days before the 10 final fairness hearing. Id. The Court shall decide any disputed claims at that hearing, and the 11 Court's decision will be final. Id. 12 No later than 45 days following the Effective Date of the Settlement, the Settlement Northern District of California United States District Court 13 Administrator will issue checks made payable to each participating Class Member for each Class 14 Member's Individual Class Member Settlement Amount. Id. §§ 3.6(c)(2)(E), (c)(3). Class 15 Members will receive two checks. Id. § 3.6(c)(2)(E)(i). The first check will be for two-thirds of 16 the Individual Class Member Settlement Amount and will represent payment of penalties and 17 interest. Id. § 3.6(c)(2)(E)(i)(I). The second check will be for the remaining one-third of the 18 Individual Class Member Settlement Amount, representing payment for the alleged unpaid wages. 19 Id. § 3.6(c)(2)(E)(i)(II).3 20 If checks remain uncashed after 90 days, the Settlement Administrator shall send a 21 reminder postcard to those Class Members with unpaid checks, advising them to cash the check or 22 to request a replacement. Id. § 3.6(c)(4). A similar postcard will be sent to Class Members who 23 have not cashed their checks after 150 days. Id. Uncashed checks will be voided after 180 days. 24 Id. Funds from uncashed checks will be redistributed as follows: 25% will be paid to the 25 California State Equal Access Fund, 25% will be paid to the California State Treasury for deposit 26 27 3 At the hearing, Plaintiff's Counsel explained that issuing two checks better enables the Settlement Administrator to process the payroll deductions and make the accounting clear to Class 28 Members. 4 7 1 in the Trial Court Improvement and Modernization Fund, and 50% will be paid to Legal Aid at 2 Work as a cy pres recipient. Id. 3 C. Objections and Opt Outs 4 Class Members may request exclusion from or object to the Settlement. Id. §§ 3.4(a)-(b). 5 To be excluded from the Settlement, Class Members must send a request for exclusion to the 6 Settlement Administrator within 30 days of the initial mailing of the Class Notice. Id. § 3.4(a)(1). 7 The request must include the Class Member's name, address, and statement electing to be 8 excluded from the Settlement. Id. § 1.1(b)(21). 9 In addition, the Settlement gives the CBS Defendants the right to rescind the Settlement in 10 the event that more than 10% of Class Members request exclusion from the Settlement. Id. § 6.3. 11 Class Members may also object to the Settlement by sending a written notice of objection 12 that states the basis therefor. Id. § 3.6(b)(2). Class Members must send any objections to the Northern District of California United States District Court 13 Court and the parties within 30 days of the date of the initial mailing of the Class Notice. Id. 14 D. Attorneys' Fees and Costs 15 The Settlement provides for all Class Counsel's attorneys' fees and costs to be paid from 16 the Settlement Sum. Id. § 3.6(e). Class Counsel will seek up to one-third of the Settlement Fund, 17 that is, $1,866,666.67. Id. The CBS Defendants agree not to object to this request. Id. However, 18 the Settlement also provides that ―if the attorneys' fees and costs incurred by Class Counsel are 19 more than [$1,866,666.67], the difference shall come from the Settlement Sum.‖ Id. At the 20 hearing, Plaintiff's Counsel, H. Scott Leviant, confirmed that Counsel would ask for no more than 21 one-third of the Settlement Sum in fees and costs. Nov. 16, 2017 Oral Argument at 9:56-57 (―The 22 intention of all the parties is that Plaintiff's Counsel would ask than no more than one-third of the 23 total settlement in fees and costs. There is no intention and there will be no request for more than 24 one-third.‖); see Proposed Order at 3 (―Class Counsel will not seek an amount greater than 25 $1,866,666.67 for Attorney's Fees and Costs.‖ (citing Settlement § 3.6(e)), Dkt. No. 91; id., Ex. 26 1(Am. Notice) at ECF p.17. 27 E. Enhancement Award 28 Enhancement awards shall be deducted from the Settlement Sum. Settlement § 3.6(f). 5 7 1 Plaintiff shall seek an enhancement award of no more than $10,000. Id. 2 F. LWDA Payment 3 The Settlement provides for $100,000 as payment for the PAGA claims. Id. § 3.6(g). 4 Pursuant to California Labor Code section 2699(i), $75,000 shall be paid to the LWDA. Id. 5 G. Settlement Administrator and Administration Costs 6 The Settlement Administrator shall (1) mail class notices to Class Members; (2) calculate 7 the amounts due to each Class Member; (3) notify the parties and make recommendations to the 8 Court regarding any disputes brought by Class Members; (4) make all payments required by the 9 Settlement; and (5) issue al