Haro et al v. Walmart Inc., No. 1:2021cv00239 - Document 135 (E.D. Cal. 2024)
Court Description: ORDER GRANTING UNOPPOSED MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT AND CONDITIONAL CERTIFICATION OF SETTLEMENT CLASS. Order signed by Magistrate Judge Sheila K. Oberto on 3/18/2024. (Kusamura, W)
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1 2 3 UNITED STATES DISTRICT COURT 4 FOR THE EASTERN DISTRICT OF CALIFORNIA 5 6 7 AMADO HARO and ROCHELLE ORTEGA, On Behalf of Themselves and All Others Similarly Situated, 8 Plaintiff, 9 10 v. WALMART, INC., 11 Defendant. No. 1:21-cv-00239-NODJ-SKO ORDER GRANTING UNOPPOSED MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT AND CONDITIONAL CERTIFICATION OF SETTLEMENT CLASS (Doc. 127) 12 13 14 This matter is before the Court on the unopposed motion for preliminary approval of a 15 class action settlement filed on December 15, 2023, by Plaintiffs Amado Haro and Rochelle 16 17 Ortego (“Plaintiffs”) (Doc. 127).1 For the reasons set forth below, the Court grants preliminary approval of the proposed class action settlement.2 18 19 I. 20 A. 21 22 23 24 BACKGROUND Factual Background In 2020, Defendant Walmart, Inc. (“Walmart”) implemented a company-wide policy requiring all hourly paid employees to pass a COVID-19 health screening (the “screening”) before clocking in for a shift. (Doc. 127 at 6). The policy applied in every Walmart store in California, and if employees refused the screening, they were sent home on Level 1 unpaid leave. 25 Under the Class Action Fairness Act (CAFA), 28 U.S.C. § 1715, “[n]ot later than 10 days after a proposed settlement of a class action is filed in court, each defendant that is participating in the proposed settlement shall serve upon the appropriate State official of each State in which a class member resides and the appropriate Federal official, a notice of the proposed settlement[.]” Defendant indicates it intended to file the notice by December 26, 2023. (Doc. 127 at 20-21). 2 On January 4, 2024, the parties consented to the jurisdiction of the U.S. Magistrate Judge. (See Docs. 129-131). 1 26 27 28 1 1 (Id.). The policy required all hourly employees to “(1) report to a designated location at a 2 Walmart store, (2) possibly wait in line standing six feet apart from other employees, (3) answer 3 the same questions about whether they had any signs or symptoms of the Coronavirus, (4) have 4 their temperature taken, (5) wear a Walmart approved mask, and (6) pass the health examination 5 before clocking-in for the day.” (Doc. 127 at 7). Walmart expected employees to clock in as 6 normal after completing the screening. (Id.). Time clocks were located at varying distances from 7 the screening area, with some sitting “hundreds of feet away.” (Doc. 127 at 7 (citing Doc. 42)). 8 Walmart paid employees an additional five minutes per shift to compensate for the time spent 9 waiting in line and undergoing the screening. In this lawsuit, Plaintiff contends that five minutes’ worth of pay was insufficient to 10 11 compensate employees for time spent on the screening process because it did not account for the 12 time spent walking from the testing area to the time clocks. (Doc. 127 at 7). Walmart counters 13 that this time was not compensable, or if it was, the five minutes Walmart automatically paid was 14 sufficient, and any employee could have reported the additional time to Walmart and received 15 payment. (Doc. 127 at 7). 16 B. Procedural Background 17 Plaintiffs filed this lawsuit on behalf of themselves and a class of similarly situated 18 consumers, alleging a (1) failure to pay all wages, (2) failure to pay overtime, (3) failure to 19 provide itemized wage statements, and a (4) failure to provide wages upon separation of 20 employment, all in violation of the California Labor Code, as well as unfair competition under the 21 California Business and Professions Code. (Doc. 1). Plaintiffs filed this lawsuit as a collective 22 action under the Fair Labor Standards Act (29 U.S.C. § 201) and as a Rule 23 class action under 23 the California Labor Code. (Id.). In the related case Haro v. Walmart Inc., Alameda County 24 Super. Ct. Case No. 22cv008823 (the “State Court Action”), Haro seeks civil penalties under the 25 Private Attorneys General Act (“PAGA”) based on the same alleged violations on behalf of all 26 nonexempt employees who went through at least one COVID-19 screening in California since 27 January 17, 2021. (Doc. 127-1 at 2-3). 28 2 1 The parties engaged in a substantive discovery process, including 31 depositions, six 2 expert reports, and thousands of pages of traditional and electronic discovery. (Doc. 127 at 8 3 (citing Doc. 127-2 at 5). Walmart filed a motion for summary judgment on August 2, 2022. 4 (Doc. 31.) Plaintiffs filed a response (Doc. 36), and a motion to continue the motion for summary 5 judgment (Doc. 34). On August 15, 2022, Plaintiffs filed a motion to certify a class under Rule 6 23 (Doc. 43) and a motion for conditional certification under the Fair Labor Standards Act (Doc. 7 41). 8 certification of the FLSA collective on February 27, 2023. (Doc. 90). Defendant filed objections 9 which remain pending under this Court’s order (Doc. 117) staying the case pending the parties’ 10 Defendant opposed both motions (Docs. 58, 59). This Court granted conditional mediation. 11 Plaintiffs’ counsel also moved to be appointed interim class counsel. (Doc. 72). The 12 Court issued findings and recommendations (Doc. 91) that Plaintiffs’ motion be granted. 13 Defendant moved to strike the expert declaration of Dr. Drogin (Doc. 60), and Plaintiffs moved to 14 strike the expert declarations of Dr. Woods (Doc. 99) and the declarations submitted by 15 Defendant in opposition to Plaintiffs’ motion for class certification (Doc. 109). 16 The parties attended a full-day mediation led by mediator Antonio Piazza on September 17 11, 2023. (Doc. 127 at 9). The process culminated in Mr. Piazza creating a mediator’s proposal, 18 which both sides accepted. (Id.). 19 II. 20 21 A. THE PROPOSED SETTLEMENT Settlement Fund 22 The parties have agreed to a Gross Settlement Amount totaling $5,200,000, to be paid 23 according to the terms of the Settlement Agreement. (Doc. 127-1 at 4-5). This amount includes 24 (1) all individual settlement payments to participating class members, (2) PAGA penalties, (3) 25 general release payments, (4) attorneys’ fees and costs to class counsel and (5) settlement 26 administration costs to the settlement administrator. (Doc. 127-1 at 4-5). No part of the Gross 27 Settlement Amount will revert to the Defendant. (Doc. 127-1 at 4-5). The parties propose 28 $50,000 will be paid to settle all individual and representative claims brought under PAGA. 3 1 (Doc. 127-1 at 14). Pursuant to PAGA, 75% of this amount (totaling $37,500) will be paid to the 2 Labor and Workforce Development Agency and 25% (totaling $12,500) will remain in the 3 Settlement Fund. 4 reasonable costs of administering the Settlement Agreement, which is not to exceed $432,522, 5 and these funds will be deducted from the Settlement Fund. (Doc. 127-1 at 14). 6 B. (Doc. 127-1 at 14). The Settlement Administrator will be paid for the The Class and Settlement Period 7 For settlement purposes, there are three types of class members: (1) the California Class 8 Members, (2) the FLSA Class Members, and (3) the Dual Class Members, who are a member of 9 both the California Class and the FLSA Class.3 (See Doc. 127-1 at 12-13). Collectively, these 10 are the “Class Members.” The California Class Members are all individuals who worked at a 11 Walmart retail store in California as a nonexempt store employee at any point between April 10, 12 2020, and February 6, 2023, who do not submit a valid Request for Exclusion from the California 13 Class. (Id.). The FLSA Class Members are any Class Members who submit an FLSA opt-in 14 form by the Response Deadline4 and every Class Member who previously submitted an opt-in 15 form and who does not submit a valid Request for Exclusion from the FLSA Class. (Id.). The 16 FLSA Class does not include any employee who worked solely outside of California who did not 17 previously opt-in to the FLSA Class. (Doc. 127-1 at 5-6). 18 To determine each Class Member’s individual settlement amount, the Settlement 19 Administrator will aggregate the number of Pay Period Units for each Class Member and the total 20 number of Pay Period Units for all Class Members. Pay Period Units are assigned as follows: (1) 21 California Class Members will be assigned 0.75 Pay Period Units for each pay period, (2) FLSA 22 Class Members will be assigned 0.50 Pay Period Units for each pay period, and (3) Dual Class 23 3 24 25 26 27 28 In Plaintiffs’ Motion for Class Certification under Rule 23 (Doc. 43), Plaintiffs define the class as “all hourly paid employees of Walmart who worked in a Walmart retail store in California at any time since April 10, 2020.” Proposed subclasses include (1) the April 10 Class (all hourly Walmart employees who worked in a California Walmart retail store on April 10, 2020); (2) April 11 Class (all hourly Walmart employees who worked in a California Walmart retail store since April 11, 2020; (3) the Wage Statement Class (all hourly Walmart employees who worked in a California Walmart retail store at any time from April 10, 2020, to the present and received at least one wage statement from Walmart; and (4) the Final Paycheck Class (all hourly Walmart Employees who worked in a California Walmart retail store at any time from April 10, 2020, to the present and are no longer employed by Walmart). (Doc. 43 at 2). 4 The Response Deadline is sixty days from the initial mailing of the Notice of Class Action Settlement by the Settlement Administrator. (Doc. 127-1 at 6). 4 1 Members will be assigned 1.00 Pay Period Units for each pay period. (Doc. 127-1 at 12-13). The 2 Settlement Administrator will use the following formula: The Net Settlement Amount will be divided by the aggregate total number of pay Period Units, resulting in the “Pay Period Unit Value.” Each Participating Class Member’s “Individual Settlement Payment” will be calculated by: multiplying the Pay Period Unit Value by the Participating Class Member’s total number of Pay Period Units. The Individual Settlement Payments will be reduced by appropriate tax withholdings or deductions. The Parties agree that the formula described herein is reasonable and that the payments are designed to provide a fair settlement to each Participating Class Member in light of the uncertainties regarding the compensation alleged to be owed and the calculation of such amounts. In particular, the Parties agree that assigning a greater Pay Period Unit value to the Released Class claims than the Released FLSA Claims is fair and reasonable, because the Released Class claims seek recovery that is not available under the FLSA (e.g., statutory penalties). 3 4 5 6 7 8 9 10 11 (Doc. 127-1 at 13). 12 To distribute settlements, Defendants will provide a class list (a complete list of all Class 13 Members) to the Settlement Administrator within 30 days of preliminary approval. (Doc. 127-1 14 at 16). Defendant agrees to pay its share of the applicable payroll taxes in addition to the Gross 15 Settlement Amount. (Doc. 127-2 at 6). The settlement also allows for the two named Plaintiffs 16 to apply to the Court for an “enhancement award” of $10,000 each to compensate for their time, 17 expense, and risks incurred with litigation the action on behalf of the Class Members. (Doc. 127- 18 1 at 14). 19 C. Attorney’s Fees 20 The Settlement Agreement provides for class counsel to seek an award of attorneys’ fees 21 and costs of 33.33% of the Gross Settlement Amount, or $1,733,160, plus reasonable litigation 22 costs not to exceed $261,751.87. (Doc. 127-1 at 13). These fees will be paid from the Gross 23 Settlement Amount. 24 D. The Release of Claims 25 The Settlement Agreement defines the Released Parties as “Walmart Inc., Wal-Mart 26 Associates, Inc., and all of their present and former parents, subsidiaries, affiliates, and joint 27 ventures, and all of their shareholders, members, managers, officers, officials, directors, 28 employees, agents, servants, registered representatives, attorneys, insurers, successor, and assigns, 5 1 and any other persons acting by, though, or under or in concert with any of them.” (Doc. 127-1 at 2 6). The Settlement Agreement releases these parties from three types of claims: (1) the Class 3 Claims, the (2) FLSA Claims and (3) the PAGA claims. (Doc. 127 at 9-10). The Class Claims 4 are defined as any and all claims based on facts that “(i) were asserted in this Action under 5 California law on behalf of the California Class, including in the Complaint filed on February 23, 6 2021, or (ii) arising from, reasonably related to, or derivative of, the factual allegations asserted in 7 this Action regarding Walmart’s alleged failure to pay minimum and overtime wages, provide 8 accurate wage statements, or timely pay final wages in violation of California Labor Code §§ 201, 9 202, 203, 204, 226, 510, 558, 1194, 1194.2, 1197, 1197.1, or 1198.” (Doc. 127-1 at 9). The 10 FLSA Claims include “any and all claims (i) asserted in this Action under the FLSA on behalf of 11 the FLSA Class, including in the complaint filed on February 23, 2021, or (ii) arising from, or 12 derivative of, the claims or factual allegations asserted in this Action regarding Walmart’s alleged 13 failure to pay minimum and overtime wages under the FLSA.” (Doc. 127-1 at 9-10). The PAGA 14 claims include “any and all actual or potential claims, rights or causes of actions for civil 15 penalties (and for all resulting penalties, attorneys’ fees, litigation costs, interest and any other 16 relief) under California Labor Code Sections 2698 et.seq., (i) asserted in this Action or the State 17 Court Action or (ii) arising from, reasonably related to, or derivative of, the claims or faction 18 allegations asserted in this Action or the State Court Action regarding Walmart’s alleged failure 19 to: pay minimum and overtime wages, provide accurate wage statements, or timely pay final 20 wages in violation of California Labor Code §§ 201, 202, 203, 204, 226, 510, 558, 1194, 1194.2, 21 1197, 1197.1, or 1198.” (Doc. 127-1 at 10). 22 The Settlement Agreement also provides for General Release Payments. Plaintiffs will 23 apply to the Court for these General Release payments of not more than $10,000 for each Plaintiff 24 as consideration for the release of any additional claims. (Doc. 127-1 at 14). These payments 25 will be paid from the Gross Settlement Amount in addition to Plaintiffs’ rights to individual 26 Settlement Payments. (Id.). 27 E. 28 Notice The proposed notice plan provides for direct, individual notice to Class Members by email 6 1 and regular mail. (Doc. 127-1 at 16). The plan proposes that the Settlement Administrator email 2 a Notice of Class Action and FLSA Settlement to all Class Members for whom a personal email 3 address is identified, and if no email address is identified, the Settlement Administrator will mail 4 a notice to the remaining Class Members via U.S. mail. (Doc. 127-1 at 16). The purpose of 5 seeking to notify class members via email is to “reduc[e] Administrative Costs and preserve 6 settlement funds for Participating Class Members.” (Doc. 127-1 at 16). The notice will include 7 the following: 16 information regarding the nature of the substance of the Settlement, including Walmart's denial of liability; the Class Member's dates of employment and total number of Pay Periods; the aggregate number of Pay Periods worked by all Class Members during the Class Period; the formula for calculating the Class Member's Individual Settlement Payment; the estimated ranges for the Class Member's Individual Settlement Payment if the Class Member (i) does and (ii) does not opt into the FLSA Class (based on the range of possible opt-in rates to the FLSA Class); an FLSA Opt-In Form (for notice by U.S. Mail) or a link to an FLSA OptIn Form (for notice by email); the procedure and time period for objecting to the Settlement and participating in the Final Approval hearing; a statement that the Court has preliminarily approved the Settlement; a statement that California Putative Class Members will release the Released Class Claims unless they opt out of the California Class; a statement that Prior FLSA Opt-Ins will release the Released FLSA Claims unless they opt out of the FLSA Class; and information regarding the opt-out procedure. 17 (Doc. 127-1 at 17). The Settlement Administrator will also provide notice of this Settlement to 18 the Office of the Attorneys General of the United States and of all states where Class Members 19 currently reside. (Doc. 127-1 at 17). 20 F. 8 9 10 11 12 13 14 15 21 Objections/Exclusions The proposed plan requires Class Members who wish to be excluded from the settlement 22 submit a Request for Exclusion to the Settlement Administrator on or before the Response 23 Deadline. (Doc. 127-1 at 6). 24 25 III. A. LEGAL STANDARD Rule 23 Settlements 26 Class actions require the approval of the district court before settlement. Fed. R. Civ. P. 27 23(e) (“The claims, issues, or defenses of a certified class—or a class proposed to be certified for 28 7 1 purposes of settlement—may be settled, voluntarily dismissed, or compromised only with the 2 court’s approval.”). “Approval under 23(e) involves a two-step process in which the Court first 3 determines whether a proposed class action settlement deserves preliminary approval and then, 4 after notice is given to class members, whether final approval is warranted.” 5 Telecomms. Coop. v. DIRECTV, Inc., 221 F.R.D. 523, 525 (C.D. Cal. 2004). 6 The first step in the two-step process is preliminary approval. Nat’l Rural During preliminary 7 approval, the court conducts a preliminary fairness evaluation to determine if notice of the class 8 action settlement should issue to class members and, if applicable, whether the proposed 9 settlement class should be certified. See David F. Herr, Ann. Manual Complex Lit. § 21.632 (4th 10 ed.). Under Rule 23(e)(1), the court must direct notice to all class members who would be bound 11 by the settlement proposal if the parties show that “the court will likely be able to:” (i) approve 12 the proposal under Rule 23(e)(2)’s fair, reasonable, and adequate standard; and (ii) certify the 13 proposed settlement class. Fed. R. Civ. P. 23(e)(1); see also Lounibos v. Keypoint Gov’t Sols. 14 Inc., No. 12-cv-00636-JST, 2014 WL 558675, at *5 (N.D. Cal. Feb. 10, 2014) (quoting In re 15 Tableware Antitrust Litig., 484 F. Supp. 2d 1078, 1079 (N.D. Cal. 2007)) (noting that federal 16 courts generally grant preliminary approval if “the proposed settlement appears to be the product 17 of serious, informed, non-collusive negotiations, has no obvious deficiencies, does not improperly 18 grant preferential treatment to class representatives or segments of the class, and falls within the 19 range of possible approval”). 20 The second step is the final approval. During final approval, “[i]f the proposal would bind 21 class members, the court may approve it only after a hearing and only on finding that it is fair, 22 reasonable, and adequate.” Fed. R. Civ. P. 23(e)(2). In doing so, the court must consider several 23 factors, including whether: “the class representatives and class counsel have adequately 24 represented the class”; “the proposal was negotiated at arm’s length”; “the proposal treats class 25 members equitably relative to each other”; and “the relief provided for the class is adequate.” Id. 26 When considering whether “the relief provided for the class is adequate,” the court should also 27 take into account: (i) the costs, risks, and delay of trial and appeal; 28 8 1 (ii) 2 (iii) 3 4 5 6 7 8 (iv) Id. the effectiveness of any proposed method of distributing relief to the class, including the method of processing class-member claims; the terms of any proposed award of attorney’s fees, including timing of payment; and any agreement required to be identified under Rule 23(e)(3). In addition to the two-step review process, Rule 23(e) also requires that: (i) the parties seeking approval file a statement identifying the settlement agreement; (ii) class members be given an opportunity to object; and (iii) no payment be made in connection with forgoing or withdrawing an objection, or forgoing, dismissing, or abandoning an appeal. Fed. R. Civ. P. 23(e)(3), (5). 9 “Courts have long recognized that settlement class actions present unique due process 10 concerns for absent class members.” In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935, 11 946 (9th Cir. 2011) (internal quotation marks and citations omitted). To protect the rights of 12 absent class members, Rule 23(e) requires that the court approve such settlements “only after a 13 fairness hearing and a determination that the settlement is fair, reasonable, and adequate.” Id. at 14 946. When approval is sought of a settlement negotiated before formal class certification, “there 15 is an even greater potential for a breach of fiduciary duty owed the class during settlement.” Id. 16 In such circumstances, the “settlement approval requires a higher standard of fairness” and a 17 “more exacting review” so as “to ensure that class representatives and their counsel do not secure 18 a disproportionate benefit at the expense of the unnamed plaintiffs who class counsel had a duty 19 to represent.” Lane v. Facebook, Inc., 696 F.3d 811, 819 (9th Cir. 2012) (internal quotation 20 marks and citations omitted). Rule 23 also “demand[s] undiluted, even heightened, attention” to 21 22 23 24 the certification requirements when class certification is sought only for purposes of settlement. Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 620 (1997). Accordingly, the district court must examine the propriety of certification under Rule 23 both at this preliminary stage and at a later fairness hearing. See, e.g., Ogbuehi v. Comcast, 303 F.R.D. 337, 344 (E.D. Cal. Oct. 2, 2014). 25 26 27 28 9 1 2 IV. A. ANALYSIS Preliminary Class Certification 3 The approval of a settlement is a multi-step process. At the preliminary approval stage, 4 the court should grant such approval only if it is justified by the parties’ showing that the court 5 will likely be able to (1) “certify the class for purposes of judgment on the proposal” and (2) 6 “approve the proposal under Rule 23(e)(2).” Fed. R. Civ P. 23(e)(B). If the court preliminarily 7 certifies the class and finds the settlement appropriate after “a preliminary fairness evaluation,” 8 then the class will be notified, and a final fairness hearing scheduled to determine if the settlement 9 is fair, adequate, and reasonable pursuant to Rule 23. Villegas v. J.P. Morgan Chase & Co., No. 10 CV 09-00261 SBA (EMC), 2012 WL 5878390, at *5 (N.D. Cal. Nov. 21, 2012). See Fed. R. Civ. 11 P. 23(e)(2), (3), (5). 12 1. Rule 23(a) Requirements 13 The class action is a procedural mechanism whereby the “usual rule that litigation be 14 conducted by and on behalf of the named parties only” is swept aside so that multiple parties— 15 unwieldy in number but possessing similar or identical claims—may pursue common redress in 16 an efficient and economical manner. Comcast v. Behrend, 569 U.S. 27, 33 (2013) (citation 17 omitted). Here, the parties seek preliminary certification of the proposed class under Federal Rule 18 of Civil Procedure 23, which controls class certification and imposes a two-step process in 19 deciding whether a class may be certified.5 20 Rule 23(a) requires the moving party to demonstrate the existence of four prerequisites: 21 (1) numerosity, (2) commonality, (3) typicality, and (4) adequacy. See Lozano v. AT&T Wireless 22 Services, Inc., 504 F.3d 718, 730 (9th Cir. 2007). Only if, a putative class satisfies these four 23 requirements may it then proceed to show it also satisfies the requirements of Rule 23(b). The 24 party seeking class certification bears the burden of establishing conformity with these two rules 25 and must do so by producing facts “affirmatively demonstrat[ing]” that certification is warranted. 26 Comcast, 569 U.S. at 33. 27 5 28 Only after conducting a “rigorous analysis” of these facts and The undersigned previously recommended Plaintiffs' Motion for Conditional Certification of FLSA Collective Action be granted (Doc. 90), and so the Court will not revisit its analysis in this regard because the parties’ proposed settlement class is identical to the classes that were previously certified (compare Doc. 44 with Doc. 127). 10 1 determining they show “actual, [and] not presumed, conformance” with Rule 23(a) and (b), may a 2 district court certify a class. Ellis v. Costco Wholesale Corp., 657 F.3d 970, 981 (9th Cir. 2011) 3 (citation omitted); see also Patel v. Nike Retail Servs., Inc., Case No. 14-cv-4781-RS, 2016 WL 4 1241777, at *3 (N.D. Cal. Mar. 29, 2016) (“This ‘rigorous’ analysis applies both to Rule 23(a) 5 and Rule 23(b).”). 6 a. Numerosity 7 A proposed class must be “so numerous that joinder of all members is impracticable.” 8 Fed. R. Civ. P. 23(a)(1). The numerosity requirement demands “examination of the specific facts 9 of each case and imposes no absolute limitations.” Gen. Tel. Co. of Nw., Inc. v. EEOC, 446 U.S. 10 318, 330 (1980). Although courts have found that a class of 40 individuals is sufficient 11 under Rule 23, this metric is not a bright line requirement. Rannis v. Recchia, 380 Fed. App’x. 12 646, 651 (9th Cir. 2010) (“The numerosity requirement is not tied to any fixed numerical 13 threshold . . . . In general, courts find the numerosity requirement satisfied when a class includes 14 at least 40 members.”). Courts have found the numerosity requirement satisfied when the class is 15 comprised of as few as thirty-nine members or where joining all class members would serve only 16 to impose financial burdens and clog the court’s docket. See Murillo v. Pac. Gas & Elec. Co., 17 266 F.R.D. 468, 474 (E.D. Cal. 2010) (citation omitted) (discussing Ninth Circuit thresholds for 18 numerosity and listing cases). 19 Members. (Doc. 43 at 24 (citing Doc. 42-46 at 3)). This showing is adequate to meet the 20 requirements of Rule 23(a)(1). 21 b. Plaintiffs estimate there are approximately 183,750 Class Commonality 22 Rule 23(a) also requires “questions of law or fact common to the class.” Fed. R. Civ. P. 23 23(a)(2). To satisfy the commonality requirement, the class representatives must demonstrate 24 that common points of facts and law will drive or resolve the litigation. See Wal-Mart Stores, 25 Inc. v. Dukes, 564 U.S. 338, 350 (2011). “[C]ommonality requires that the class members’ claims 26 depend upon a common contention such that determination of its truth or falsity will resolve an 27 issue that is central to the validity of each claim in one stroke,” and the “plaintiff must 28 demonstrate the capacity of classwide proceedings to generate common answers to common 11 1 questions of law or fact that are apt to drive the resolution of the litigation.” Mazza v. Am. Honda 2 Motor Co., 666 F.3d 581, 588 (9th Cir. 2012) (quoting Wal-Mart, 564 U.S. at 350). For example, 3 “[c]ommonality is generally satisfied where the lawsuit challenges a system-wide practice or 4 policy that affects all of the putative class members.” Benitez v. W. Milling, LLC, No. 1:18-cv- 5 01484-SKO, 2020 WL 309200, at *5 (E.D. Cal. Jan. 21, 2020) (internal quotation marks and 6 citations omitted). 7 The rule does not require all questions of law or fact to be common to every single class 8 member and “[d]issimilarities among class members do not [necessarily] impede the generation 9 of common answers to those questions[.]” Parsons v. Ryan, 754 F.3d 657, 684 (9th Cir. 2014). 10 However, raising any common question does not suffice. See Wal-Mart, 564 U.S. at 349 (“Any 11 competently crafted class complaint literally raises common ‘questions.’”) (quoting Richard A. 12 Nagareda, Class Certification in the Age of Aggregate Proof, 84 N.Y.U. L. REV. 97, 131–32 13 (2009)). 14 Plaintiffs satisfy the commonality requirement in several respects. First, Plaintiffs’ claims 15 are all premised on the implications of Walmart’s screening policy, and common questions 16 related to the application of a uniform policy generally satisfy Rule 23(a)(2). Pryor v. Aerotek 17 Scientific, LLC, 278 F.R.D. 516, 525 (C.D. Cal. 2011) (“[T]he fact that an employee challenges a 18 policy common to the class as a whole creates a common question whose answer is apt to drive 19 the resolution of the litigation.”); see also Wren v. RGIS Inventory Specialists, 256 F.R.D. 180, 20 205 (N.D. Cal. 2009) (finding commonality where plaintiff proffered evidence of a company- 21 wide policy regarding donning and waiting time). While the Plaintiffs may have spent varying 22 amounts of time of the clock, commonality may be found through “[t]he existence of shared legal 23 issues with divergent factual predicates.” Hanlon v. Chrysler Corp., 150 F.3d 1011, 1019 (9th 24 Cir. 1998). As Plaintiffs note, the Plaintiffs’ claims will all hinge on common questions of law, 25 such as (1) whether Walmart’s policy to perform the screenings off-the-clock violated California 26 Labor Code §§ 204, 1194, 1197; (2) whether Walmart’s policy to classify the time spent walking 27 to the time clocks after completing the screening as non-compensable time violated California 28 Labor Code §§ 204, 1194, 1197, and (3) whether the format and information on Walmart’s wage 12 1 statements violated California Labor Code § 226(a). This showing is adequate to meet the 2 requirements of Rule 23(a)(1). 3 c. Typicality 4 “The typicality requirement looks to whether the claims of the class representatives are 5 typical of those of the class and is satisfied when each class member’s claim arises from the same 6 course of events, and each class member makes similar legal arguments to prove the defendant’s 7 liability.” Rodriguez v. Hayes, 591 F.3d 1105, 1124 (9th Cir. 2010) (citations and internal 8 quotation marks omitted); Fed. R. Civ. P. 23(a)(3). 9 “reasonably co-extensive with those of absent class members,” they “need not be substantially 10 identical.” Hanlon, 150 F.3d at 1020; see also Hanon v. Dataproducts Corp., 976 F.2d 497, 508 11 (9th Cir. 1992). While representative claims must be 12 Here, Plaintiffs state that they and all other Class Members were “(1) hourly paid 13 employees of Walmart (non-exempt), (2) who were required to report a designated location at 14 Walmart stores to complete the screenings, (3) were subject to the same screening policies and 15 procedures, (4) performed the screening off-the-clock pursuant to Walmart’s policy, (5) were 16 required to clock-in on time on Walmart’s premises after completing the screening, and (6) are 17 alleging that they were not paid for all of the time spent working off-the-clock as a result of the 18 screening,” (Doc. 43 at 25-26). Plaintiff Ortega worked on April 10, 2020, and was not paid for 19 the time spent screening that day like all other Class Members who worked that day. (Id.). 20 Plaintiff Ortega’s employment with Walmart has ended and like other Class Members, she has 21 not received her unpaid wages from Walmart as required under the California Labor Code. (Id.). 22 Both named Plaintiffs received the same wage statements other Class Members received that 23 Plaintiffs claim were deficient. (Id.). The Court finds that Plaintiffs’ claims are “reasonably co- 24 extensive with those of absent class members.” Hanlon, 150 F.3d at 1020. Typicality is therefore 25 satisfied here. 26 d. Adequacy of Representation 27 The final Rule 23(a) prerequisite is satisfied if “the representative parties will fairly and 28 adequately protect the interests of the class.” Fed. R. Civ. P. 23(a)(4). Resolution of this issue 13 1 requires the court to address the following questions: “(a) do the named plaintiffs and their 2 counsel have any conflicts of interest with other class members and (b) will the named plaintiffs 3 and their counsel prosecute the action vigorously on behalf of the class?” Sali v. Corona Reg’l 4 Med. Ctr., 909 F.3d 996, 1007 (9th Cir. 2018); see also Pierce v. Cty. of Orange, 526 F.3d 1190, 5 1202 (9th Cir. 2008). 6 counsel.” Sali, 909 F.3d at 1007 (citation omitted). “Adequacy of representation also depends on the qualifications of 7 Plaintiffs contends that the adequacy of representation requirement is met here because 8 there is no evidence of any conflict of interest and both Plaintiffs have fully participated in 9 discovery, provided answers to interrogatories and responses to requests for productions, and they 10 appeared for depositions. (Doc. 42 at 26 (citing Sepulveda v. Wal–Mart Stores, Inc., 237 F.R.D. 11 229, 244 (C.D. Cal. 2006) (participation in discovery supports a finding of adequacy)). Based on 12 these assertions, the Court concludes that Plaintiffs’ interests align with those of the proposed 13 Class Members and that Plaintiff would vigorously prosecute the action on behalf of the class. 14 Plaintiffs’ counsel also submitted a declaration to establish their adequacy as class 15 counsel. (Docs. 42-1, 42-2, 42-3). Plaintiffs’ counsels’ declaration establishes that the attorneys 16 working on this matter have significant experience in similar litigation. (See id.) Because 17 Plaintiff and class counsel represent that there are no conflicts of interest with the Class Members 18 and attorneys at Hodges & Foty, LLP, Don J. Foty, David W. Hodges, and William Hogg, appear 19 to be experienced in class action litigation, the Court finds that the adequacy of representation 20 requirement has been preliminarily satisfied. 21 2. Rule 23(b)(3) Requirements 22 The parties seek class certification under Rule 23(b)(3), which requires that: (1) the 23 questions of law or fact common to class members predominate over any questions affecting only 24 individual members; and (2) a class action be superior to other available methods for fairly and 25 efficiently adjudicating the controversy. See Amchem, 521 U.S. at 615; In re Hyundai and Kia 26 Fuel Econ. Litig., 926 F.3d 539, 556 (9th Cir. 2019) (en banc). The test of Rule 23(b)(3) is “far 27 more demanding” than that of Rule 23(a). Wolin v. Jaguar Land Rover N. Am., LLC, 617 F.3d 28 1168, 1172 (9th Cir. 2010) (quoting Amchem, 521 U.S. at 623–24). 14 1 a. Predominance 2 First, common questions must “predominate” over any individual questions. While this 3 requirement is similar to the Rule 23(a)(2) commonality requirement, the standard is higher at this 4 stage of analysis. Wal-Mart, 564 U.S. at 359. While Rule 23(a)(2) can be satisfied by even a 5 single question, Rule 23(b)(3) requires convincing proof that common questions “predominate” 6 over individual questions. Amchem, 521 U.S. at 623–24. “An individual question is one where 7 ‘members of a proposed class will need to present evidence that varies from member to member,’ 8 while a common question is one where ‘the same evidence will suffice for each member to make 9 a prima facie showing [or] the issue is susceptible to generalized, class-wide proof.’” Tyson 10 Foods, Inc. v. Bouaphakeo, 577 U.S. 442, 453 (2016) (quoting W. Rubenstein, Newberg on Class 11 Actions § 4:50, pp. 196–197 (5th ed. 2012)). “When common questions present a significant 12 aspect of the case and can be resolved for all members of the class in a single adjudication, there 13 is clear justification for handling the dispute on a representative rather than on an individual 14 basis.” Hanlon, 150 F.3d at 1022. 15 As discussed above, Plaintiffs challenge Walmart’s screening policy, claiming it 16 amounted to uncompensated labor in violation of California law. (Doc. 18-1 at 18). Class actions 17 in which a defendant’s uniform policies are challenged generally satisfy the predominance 18 requirement of Rule 23(b)(3). See, e.g., Castro, 2020 WL 1984240, at *6; Palacios v. Penny 19 Newman Grain, Inc., No. 1:14-cv-01804-KJM-SAB, 2015 WL 4078135, at *5–6 (E.D. Cal. July 20 6, 2015); Clesceri v. Beach City Investigations & Protective Servs., Inc., No. 10-cv-03873-JLS- 21 RZ, 2011 WL 320998, at *7 (C.D. Cal. Jan. 27, 2011). The Court therefore concludes that the 22 predominance requirement has been met in this case. 23 b. Superiority 24 Rule 23(b)(3) also requires that a court find that “a class action is superior to other 25 available methods for the fair adjudication of the controversy.” Fed. R. Civ. P. 23(b)(3). To 26 resolve the Rule 23(b)(3) superiority inquiry, “the court should consider class members’ interests 27 in pursuing separate actions individually, any litigation already in progress involving the same 28 controversy, the desirability of concentrating in one forum, and potential difficulties in managing 15 1 the class action—although the last two considerations are not relevant in the settlement context.” 2 See Palacios, 2015 WL 4078135, at *6 (citing Schiller v. David’s Bridal Inc., No. 10-cv-00616- 3 AWI-SKO, 2012 WL 2117001, at *10 (E.D. Cal. June 11, 2012)). 4 Here, Plaintiff asserts that the superiority requirement is satisfied because “[t]he class 5 action procedure was specifically designed for cases just like the present case where there are a 6 large number of Class Members (nearly 200,000) with very modest individual claims.” (Doc. 43 7 at 35). Plaintiffs provide that “[g]iven the small size of each class member’s claim, class 8 treatment is not merely superior, but the only manner in which to ensure fair and efficient 9 adjudication of the present action.” (Doc. 43 at 35 (quoting Bruno v. Quten Research Inst., LLC, 10 280 F.R.D. 524, 537 (C.D. Cal. 2011)). 11 Given that “[a] common nucleus of facts and potential legal remedies” predominate, the 12 Court finds that these questions can be resolved for all members more efficiently and 13 expeditiously in a single action. Hanlon, 150 F.3d at 1022. The Court also finds that class 14 resolution is superior to other available methods for adjudication of the controversy as each 15 member’s individual pursuit of the same claims would burden the judiciary. See Carlino, 2019 16 WL 1005070, at *5. Therefore, the Court is satisfied that the superiority requirement has been 17 met here. 18 For the forgoing reasons, the requirements for preliminary certification under Rule 23 19 have been satisfied, and the Court finds that conditional certification of the class is appropriate. 20 B. 21 22 Preliminary Settlement Approval In determining whether a class action settlement agreement is fair, adequate, and reasonable to all concerned, courts generally consider the following factors: 26 (1) the strength of the plaintiff’s case; (2) the risk, expense, complexity, and likely duration of further litigation; (3) the risk of maintaining class action status throughout the trial; (4) the amount offered in settlement; (5) the extent of discovery completed and the stage of the proceedings; (6) the experience and views of counsel; (7) the presence of a governmental participant; and (8) the reaction of the class members of the proposed settlement. 27 In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935, 946 (9th Cir. 2011) (quoting Churchill 28 Vill., LLC v. Gen. Elec., 361 F.3d 566, 575 (9th Cir. 2004)). Whether a settlement agreement has 23 24 25 16 1 been negotiated before a class has been certified or after, the court must also undertake an 2 additional search for more “subtle signs that class counsel have allowed pursuit of their own self- 3 interests and that of certain class members to infect the negotiations.’” Briseño v. Henderson, 4 998 F.3d 1014, 1023 (9th Cir. 2021) (applying Bluetooth red-flag factors to post-class 5 certification settlement approvals). The Bluetooth court identified three such signs: 6 1) when counsel receive a disproportionate distribution of the settlement, or when the class receives no monetary distribution but class counsel are amply rewarded; 7 8 9 10 11 12 2) when the parties negotiate a “clear sailing” arrangement providing for the payment of attorneys’ fees separate and apart from class funds, which carries the potential of enabling a defendant to pay class counsel excessive fees and costs in exchange for counsel accepting an unfair settlement on behalf of the class; and 3) when the parties arrange for fees not awarded to revert to defendants rather than be added to the class fund. Bluetooth, 654 F.3d at 947 (internal quotation marks and citations omitted). 13 The Court cannot, however, fully assess such factors until the final approval hearing; thus, 14 “a full fairness analysis is unnecessary at this stage.” See Alberto v. GMRI, Inc., 252 F.R.D. 652, 15 665 (E.D. Cal. 2008) (internal quotation marks and citation omitted). At the preliminary approval 16 stage, “the settlement need only be potentially fair.” Acosta v. Trans Union, LLC, 243 F.R.D. 17 377, 386 (C.D. Cal. May 31, 2007). 18 proposed settlement appears to be the product of serious, informed, non-collusive negotiations, 19 has no obvious deficiencies, does not improperly grant preferential treatment to class 20 representatives or segments of the class, and falls within the range of possible approval.” In re 21 Tableware Antitrust Litig., 484 F. Supp. 2d 1078, 1079 (N.D. Cal. 2007) (internal quotation 22 marks and citation omitted). 23 24 1. Preliminary approval is thus appropriate where “the Fairness Factors a. Settlement Process 25 The first factor concerns “the means by which the parties arrived at settlement.” Harris v. 26 Vector Mktg. Corp., No. C-08-5198 EMC, 2011 WL 1627973, at *8 (N.D. Cal. Apr. 29, 2011). 27 To approve a proposed settlement, a court must be satisfied that the parties “have engaged in 28 17 1 sufficient investigation of the facts to enable the court to intelligently make . . . an appraisal of the 2 settlement.” Acosta, 243 F.R.D. at 396. Courts thus have “an obligation to evaluate the scope 3 and effectiveness of the investigation plaintiffs’ counsel conducted prior to reaching an 4 agreement.” Id. 5 The parties in this case attended mediation after significant discovery and motion practice. 6 The mediation occurred after the parties briefed issues on class certification, conditional 7 certification, and expert challenges. (See Docket). (Id. at 26). Parties then attended an all-day 8 mediation session with a private mediator experienced in class action matters. These negotiations 9 were seemingly informed by knowledge gleaned through discovery. (Doc. 127 at 13). When the 10 parties could not reach an agreement, Mr. Piazza made a mediator’s proposal, which the parties 11 have accepted and weighs in favor of preliminary approval. 12 Litigation, No. 12-cv-04007-JSC, 2015 WL 6471171, at *9 (N.D. Cal. Oct. 27, 2015) (“The use 13 of a mediator and the presence of discovery ‘support the conclusion that the Plaintiff was 14 appropriately informed in negotiating a settlement.’”) (quoting Villegas v. J.P. Morgan Chase & 15 Co., No. CV 09-00261 SBA, 2012 WL 5878390, at *6 (N.D. Cal. Nov. 21, 2012). In view of the 16 foregoing, the Settlement Agreement appears to be the product of serious, informed, non- 17 collusive negotiations. This factor thus weighs in favor of preliminary approval. 18 b. In re Zynga Inc. Securities Obvious Deficiencies 19 The Court must next consider “whether there are obvious deficiencies in the Settlement 20 Agreement.” See Harris, 2011 WL 1627973, at *8. The Court finds no obvious deficiencies on 21 the face of the Settlement Agreement that would preclude preliminary approval. 22 c. Lack of Preferential Treatment 23 The Court must next examine whether the Settlement Agreement “provides preferential 24 treatment to any class member.” See Villegas, 2012 WL 5878390, at *7. Under the Agreement, 25 all Class Members are treated equitably. Class Members’ awards will be based on the number of 26 pay periods they worked during the relevant time using actual data from Defendant. (Doc. 127-1 27 at 13). 28 18 1 The Settlement Agreement also provides for a “Service Award” of up to $10,000 for the 2 named Plaintiffs. (Doc. 127 at 15). “Incentive awards are fairly typical in class action cases.” 3 Rodriguez v. W. Publ’g Corp., 563 F.3d 948, 958 (9th Cir. 2009) (distinguishing incentive awards 4 from incentive agreements, the latter of which are “entered into as part of the initial retention of 5 counsel” and “put class counsel and the contracting class representatives into a conflict position 6 from day one”). Service awards “are intended to compensate class representatives for work done 7 on behalf of the class, to make up for financial or reputation risk undertaken in bringing the 8 action, and, sometimes to recognize their willingness to act as a private attorney general.” Id. at 9 958–59. Although service awards are viewed more favorably than incentive agreements, 10 excessive awards “may put the class representative in a conflict with the class and present a 11 considerable danger of individuals bringing cases as class actions principally to increase their 12 own leverage to attain a remunerative settlement for themselves and then trading on that leverage 13 in the course of negotiations.” Id. at 960 (internal quotation marks and citation omitted). 14 Plaintiffs maintain that a possible $10,000 “enhancement award” award is appropriate “to 15 compensate the Plaintiffs for the time, expense, and risks they incurred in litigating this action on 16 behalf of the Class Members.” (Doc. 127-2 at 7). The Court will defer ruling on the propriety of 17 the amount of the requested settlement and service award until final approval.6 However, at this 18 6 19 20 21 22 23 24 25 26 27 28 Here, the proposed $10,000 may be appropriate under the circumstances of the case. The total enhancement awards represent 0.38% of the total settlement fund. District courts have declined to approve service awards that represent an unreasonably high proportion of the overall settlement amount or are disproportionate relative to the recovery of other class members, but those awards typically constituted a higher percentage of the total settlement fund than seen here. See Ontiveros v. Zamora, 303 F.R.D. 356, 365–66 (E.D. Cal. 2014) (finding an incentive award of $20,000, comprising 1% of the common fund, to be excessive under the circumstances, and reducing the award to $15,000, where class representative spent 271 hours on the litigation and relinquished the opportunity to bring several of his own claims in order to act as class representative); see also Ko v. Natura Pet Prods., Inc., No. C 09–2619 SBA, 2012 WL 3945541, at *15 (N.D. Cal. Sept. 10, 2012) (holding that an incentive award of $20,000, comprising one percent of the approximately $2 million common fund was “excessive under the circumstances” and reducing the award to $5,000); Wolph v. Acer Am. Corp., No. C 09–01314 JSW, 2013 WL 5718440, at *6 (N.D. Cal. Oct. 21, 2013) (reducing the incentive award to $2,000 where the class representatives did not demonstrate great risk to finances or reputation in bringing the class action). In reducing the award, courts have noted that overcompensation of class representatives could encourage collusion at the settlement stage of class actions by causing a divergence between the interests of the named plaintiff and the absent class members, destroying the adequacy of class representatives. See Staton v. Boeing Co., 327 F.3d 938, 977–78 (9th Cir. 2003); see also Radcliffe v. Experian Info. Sols., Inc., 715 F.3d 1157, 1165 (9th Cir. 2013). It is unclear, however, how this award will compare to the awards of other Class Members, whose settlements will be based on their number of relevant pay periods. The Ninth Circuit Court of Appeals has approved incentive awards that were up to 417 times larger than the individual awards of other Class Members when the incentive award made 19 1 stage, there is no indication that a service award of “up to” $10,000 constitutes preferential 2 treatment such that it would defeat preliminary approval. Vigil v. Hyatt Corporation, No 22-cv- 3 00693-HSG, 2023 WL 662918, at *6 (N.D. Cal Oct. 10, 2023) (noting that a $10,000 incentive 4 award is not “per se” unreasonable at the preliminary approval stage); see also In re Ring LLC, 5 No. CV 19-10899-MWF (RAOx), 2023 WL 9687346 (C.D. Cal. Dec. 20, 2023) (noting incentive 6 awards typically range from $2,000 and $10,000) (citing Bellinghausen v. Tractor Supply Co., 7 306 F.R.D. 245, 267 (N.D. Cal. 2015) (collecting cases)). 8 d. Range of Possible Approval 9 In determining whether the Settlement Agreement “falls within the range of possible 10 approval,” the Court must focus on “substantive fairness and adequacy” and consider the 11 plaintiff’s “expected recovery balanced against the value of the settlement offer.” See Tableware, 12 484 F. Supp. 2d at 1080; see also Harris, 2011 WL 1627973, at *11 (noting that courts “must 13 estimate the maximum amount of damages recoverable in a successful litigation and compare that 14 with the settlement amount” in determining “the value of the settlement against the expected 15 recovery at trial”) (internal quotation marks and citation omitted). “[I]t is well-settled law that a 16 proposed settlement may be acceptable even though it amounts only to a fraction of the potential 17 recovery that might be available to class members at trial.” Nat’l Rural Telecomms. Coop. v. 18 DIRECTV, Inc., 221 F.R.D. 523, 527 (C.D. Cal. 2004). 19 The Settlement Agreement provides that Class Members will receive a payment based on 20 the number of pay periods worked during the relevant time. Plaintiffs estimate Class Members 21 will recover 98 percent of their unpaid wages. (Doc. 127 at 4). Plaintiffs state the proposed 22 settlement is fair and reasonable because the parties heavily dispute the amount of time Class 23 Members spent waiting in line and completing the screening. For example, Walmart expert 24 Robert Crandall reviewed hundreds of hours of video footage of the relevant screenings and 25 concluded the average time spent waiting in line and completing the screening was 29.1 seconds 26 (Doc. 127-2 at 7), while Plaintiffs estimate the uncompensated time to complete the screening 27 28 up a smaller portion of the settlement fund. In re Online DVD-Rental Antitrust Litig. 779 F.3d 934 (9th Cir. 2015). . 20 1 process was between 5.18 and 6.22 minutes. (Doc. 127-2 at 7). The settlement “provides a 2 recovery of approximately 5.46 minutes of screening time, when factoring in the 5 minutes that 3 Walmart previously paid.” (Doc. 127-2 at 7). 4 Considering Plaintiffs’ expected recovery, the Court concludes that the settlement falls 5 within the range of possible approval. Walmart has already compensated Class Members for five 6 minutes of time per shift, which its expert estimates easily compensated Class Members for their 7 time. Plaintiffs’ expert estimates Plaintiffs must be compensated for an additional 0.18 to 1.22 8 minutes of time above the five minutes Walmart previously paid. Plaintiffs estimate Class 9 Members will receive 98 percent of their wages owed, which is significantly higher than the 10 minimum district courts have accepted. See, e.g., Viceral v. Mistras Grp., Inc., No. 15-cv-02198, 11 2016 WL 5907869, at *7–8 (N.D. Cal. Oct. 11, 2016) (preliminarily approving settlement worth 12 8.1% of the full verdict value) 13 On balance, the risks and costs of continued litigation balanced against the relief 14 recovered here, warrant preliminary approval and comment from Class Members. “[I]t is well- 15 settled law that a proposed settlement may be acceptable even though it amounts only to a 16 fraction of the potential recovery that might be available to class members at trial.” Nat'l Rural 17 Telecomms. Coop. v. DIRECTV, Inc., 221 F.R.D. 523, 527 (C.D. Cal. 2004). Plaintiffs estimate 18 Class members will receive a high percentage of their wages owed, and they continue to face the 19 question of whether some of the time they allege Walmart failed to compensate them for is indeed 20 compensable under California law. Accordingly, consideration of the fairness factors warrants 21 preliminary approval of the Settlement Agreement. Uschold v. NSMG Shared Services, 333 22 F.R.D. 157, 172 (N.D. Cal. Oct. 9, 2019) (finding where continuing litigation “presents risks to 23 Plaintiffs regarding any recovery, much less recovery of less than the high-end estimate . . . the 24 risks and costs of continued litigation at least balance the benefit of the estimated payout to class 25 members, warranting preliminary approval and comment from the class members.”). 26 2. Class Notice 27 For proposed settlements under Rule 23, “the court must direct notice in a reasonable 28 manner to all class members who would be bound by the proposal.” Fed. R. Civ. P. 23(e)(1); see 21 1 also Hanlon, 150 F.3d at 1025 (“Adequate notice is critical to court approval of a class settlement 2 under Rule 23(e).”). Due process also requires that any class member bound by a class action 3 settlement, at a minimum, be afforded the opportunity “to remove himself from the class.” Ortiz 4 v. Fibreboard Corp., 527 U.S. 815, 848 (1999) (citation and internal quotation marks omitted). 5 For a class certified under Federal Rule of Civil Procedure 23(b)(3), the notice must 6 contain, in plain and clear language: (1) the nature of the action; (2) the definition of the class 7 certified; (3) the class claims, issues, or defenses; (4) the right of a class member to appear 8 through an attorney, if desired; (5) the right to be excluded from the settlement; (6) the time and 9 manner for requesting an exclusion; and (7) the binding effect of a class judgment on members of 10 the class. Fed. R. Civ. P. 23(c)(2)(B). A class action settlement notice “is satisfactory if it 11 generally describes the terms of the settlement in sufficient detail to alert those with adverse 12 viewpoints to investigate and to come forward and be heard.” Churchill Vill., 361 F.3d at 575 13 (internal quotation marks and citations omitted). 14 As discussed above, the proposed notice plan provides for direct, individual notice to 15 Class Members by email, and if Class Members cannot be reached by personal email, they will be 16 reached by U.S. mail. (Doc. 127-1 at 16-17). The notice will describe the substance of the 17 settlement, the formula used to calculate individual settlements, and the estimated range of an 18 individual’s settlement (based on the range of possible opt-in rates to the FLSA class). (Doc. 19 127-1 at 17). The notice also provides Class Members the procedure and time period for 20 objecting to the settlement and information on opting out of the procedure. (Id.). The procedures 21 are sufficient to ensure that Class Members receive adequate notice of the settlement and an 22 opportunity to object. Accordingly, the notice and the notice plan support preliminary approval. 23 3. Attorney’s Fees and Costs 24 Reasonable attorneys’ fees and costs are allowed under the FCRA, 15 U.S.C. § 25 1681n(a)(3), and Federal Rule of Civil Procedure 23(h). However, “courts have an independent 26 obligation to ensure that the award, like the settlement itself, is reasonable, even if the parties 27 have already agreed to an amount.” Bluetooth, 654 F.3d at 941; see also Staton, 327 F.3d at 963 28 (“[A] district court must carefully assess the reasonableness of a fee amount spelled out in a class 22 1 action settlement agreement.”). Use of the lodestar method is appropriate to calculate attorneys’ 2 fees under a federal fee-shifting statute like the FCRA. See Tahara v. Matson Terminals, Inc., 3 511 F.3d 950, 955 (9th Cir. 2007); see also Staton, 327 F.3d at 965; Yeagley v. Wells Fargo & 4 Co., 365 F. App’x 886, 887 (9th Cir. 2010) (“Under a fee shifting statute such as the FCRA . . . 5 the lodestar method is generally the correct method for calculating attorneys’ fees.”). 6 Here, the Settlement Agreement allows for class counsel to seek an award of attorneys’ 7 fees and costs of not more than 33.33% of the Gross Settlement Amount, or $1,733,160 in 8 attorneys' fees, plus reasonable litigation costs not to exceed $261,751.87. These amounts will 9 include all time expended by class counsel, including any time spent securing Court approval of 10 this agreement and any appeals. The Settlement Agreement provides that all fees and costs will 11 be paid from the Gross Settlement Amount, and neither Plaintiffs nor class counsel will have the 12 right to revoke this Settlement Agreement in the event the Court does not approve the attorneys’ 13 fees sought by class counsel. (Doc. 12701 at 14). If the Court reduces the requested attorneys’ 14 fees and costs, the reduction will be applied to the net settlement amount. (Id.). 15 A 33.3% attorneys’ fee award falls at the high end of what courts in the Ninth Circuit have 16 deemed appropriate. See Barbosa v. Cargill Meat Sols. Corp., 297 F.R.D. 431, 448 (E.D. Cal. 17 2013) (“The typical range of acceptable attorneys' fees in the Ninth Circuit is 20 percent to 33.3 18 percent of the total settlement value, with 25 percent considered a benchmark percentage.”). As 19 with the enhancement award, the Court will take up the award of attorney’s fees and costs, at the 20 final approval stage. Plaintiffs also request reimbursement of $261,751.87 in costs related to the 21 prosecution of this litigation, though the basis for these costs is unclear. 22 By May 20, 2024, class counsel will file a motion for fees and costs including declarations 23 with detailed billing records and an itemized summary of each category of costs so that the Court 24 may determine an appropriate lodestar figure and whether costs are reasonable expenses incurred 25 for the benefit of the class, and to allow class members the opportunity to object to the requested 26 fees and costs. See In re Mercury Interactive Corp. Sec. Litig., 618 F.3d 988, 995 (9th Cir. 2010) 27 (holding that class members must “have an opportunity to oppose class counsel’s fee motion” 28 before the deadline for filing objections set forth in the class notice). 23 1 V. CONCLUSION AND ORDER 2 For the reasons stated above, IT IS HEREBY ORDERED THAT: 3 1. 4 5 approval of a class action settlement (Doc. 127) is granted; 2. 6 7 Plaintiffs Amado Haro and Rochelle Ortega’s unopposed motion for preliminary The proposed settlement (Doc. 127-1) detailed herein is approved on a preliminary basis as fair and adequate; 3. For settlement purposes, the Court hereby GRANTS class certification under Rule 8 23 on behalf of the following individuals: “all individuals who worked at a 9 Walmart retail store in California as a nonexempt store employee at any point between April 10, 2020, and February 6, 2023” (the “California Class”); 10 11 4. For settlement purposes, the Court hereby GRANTS collective certification under 12 29 U.S.C. § 216(b) of the Fair Labor Standards Act on behalf of the following 13 individuals: “all individuals who worked at a Walmart retail store in California as 14 a nonexempt store employee at any point between April 10, 2020 and February 6, 15 2023 and all individuals who submitted FLSA opt-in forms in this Action on or 16 before September 10, 2023” (the “FLSA Class”); 17 5. Don Foty of Hodges & Foty, LLP is appointed as counsel for the Class; 18 6. Haro and Ortega are appointed as the Class Representatives for settlement 19 20 purposes; 7. The form of “Notice of Class Action and FLSA Settlement” (“Notice”) attached to 21 the Settlement Agreement as Exhibit A, is hereby approved. The form of “FLSA 22 Opt-In Form” (“Opt-In Form”) attached to the Settlement Agreement as Exhibit B, 23 is hereby approved; 24 8. The Court authorizes emailing and mailing of the Notice and Opt-In Form to the 25 California Class and FLSA Class by email and by first-class U.S. mail to their last 26 known email addresses and mailing addresses within 45 days of receipt of the 27 information to send the Notice and Opt-In Form from Defendant. Defendant shall 28 provide the Settlement Administrator with the information necessary to conduct 24 1 this email/mailing as set forth in the Settlement Agreement within 30 days of this 2 order; 3 9. The deadline for the Settlement Administrator to file a declaration attaching a copy 4 of the notices ultimately sent to the classes and describing the notice process is 5 May 20, 2024; 6 10. 7 The deadline for filing the motion for attorney’s fees, costs, and service award is May 20, 2024; 8 11. 9 The deadline for class members to object to the proposed settlement and/or the motion for attorney’s fees, costs, and service award is June 20, 2024; 10 12. 11 Plaintiffs shall file their motion for final approval of the proposed settlement by July 20, 2024; 12 13. The hearing for final approval of the proposed settlement is set for September 4, 13 2024, at 9:30 a.m. in Courtroom 7 (SKO) before Magistrate Judge Sheila K. 14 Oberto. The Court reserves the right to vacate the hearing and take the matter 15 under submission (see E.D. Cal. L.R. 230(g)) in the event no objections to the 16 proposed settlement and/or the motion for attorney’s fees, costs, and service award 17 is received by the Settlement Administrator or filed with the Court, or if the Court 18 does not deem such hearing necessary. 19 20 21 22 IT IS SO ORDERED. Dated: /s/ Sheila K. Oberto March 18, 2024 . UNITED STATES MAGISTRATE JUDGE 23 24 25 26 27 28 25
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