Martin v. Fedex Ground Package System Inc., No. 3:2006cv06883 - Document 72 (N.D. Cal. 2008)

Court Description: ORDER granting preliminary settlement approval. (vrwlc1, COURT STAFF) (Filed on 12/31/2008)
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Martin v. Fedex Ground Package System Inc. Doc. 72 1 2 3 4 5 6 7 8 9 United States District Court For the Northern District of California 10 11 IN THE UNITED STATES DISTRICT COURT 12 FOR THE NORTHERN DISTRICT OF CALIFORNIA 13 14 15 16 17 18 19 C 06-6883 VRW ORDER Plaintiffs, v FEDEX GROUND PACKAGE SYSTEM, INC, and DOES 1-10, inclusive, Defendants. / 20 21 No FAITH D MARTIN, et al, This wage and hour class action lawsuit involves claims 22 that defendant FedEx Ground Package System, Inc (“FedEx Ground”) 23 failed to provide meal and rest periods to its hourly employees in 24 violation of California law. 25 October 12, 2007, Doc #35, and the court now considers whether to 26 grant preliminary approval of the settlement. 27 28 The parties reached a settlement on On April 22, 2008, plaintiffs moved for: (1) leave to file an amended complaint, (2) preliminary approval of the class United States District Court For the Northern District of California 1 action settlement, (3) conditional certification of the class for 2 settlement purposes, (4) approval of the proposed form of notice, 3 (5) establishment of an opt-out, objection and claim procedure and 4 (6) scheduling of a hearing on final approval of the proposed 5 settlement. 6 file an amended complaint but denied preliminary approval based on 7 its concerns with the proposed notice and the vague description of 8 how class counsel calculated the settlement value. 9 counsel filed a revised proposed notice, Doc #71 Exh 1, and further Doc #47. On July 8, 2008, the court granted leave to Doc #62. Class 10 explanation of its calculations, Docs ##67-1,8; 71. 11 18, 2008, the court held a hearing to determine whether the court’s 12 initial concerns were sufficiently satisfied to allow the court to 13 grant preliminary approval. 14 On December The proposed settlement appears to have been heavily 15 negotiated, the product of an extensive mediation that proved 16 satisfactory to the parties. 17 although a necessary condition to settlement of a class action, is 18 not sufficient. 19 settlement is fundamentally fair. 20 ERISA Litigation, 516 F3d 1095, 1100 (9th Cir 2008). 21 noted on July 8 that the proposed settlement had three major 22 shortcomings: (1) the settlement appeared to be premised on certain 23 assumptions about the class’s missed meal and rest breaks, 24 assumptions that may very well be reasonable, but assumptions the 25 parties have failed to show are rooted in the evidence; (2) 26 although the attorney fees requested appeared reasonable in 27 relation to the amount of work counsel put into the case, the 28 failure to substantiate the damages the class was likely to recover But satisfaction of the parties, Court approval hinges on a demonstration that the See FRCP 23(e)(2); In re Syncor 2 The court 1 made it impossible to conclude that the proposed attorney fee award 2 was reasonable in relation to the benefit conferred on the class; 3 and (3) the proposed form of notice omitted a material term of the 4 settlement, the number of opt-outs that triggered the defendant’s 5 right to withdraw from the settlement. 6 In response to the court’s concerns, counsel submitted 7 briefings and an affidavit describing how they had calculated the 8 value of missed breaks. 9 the proposed notice to incorporate the court’s recommended 10 United States District Court For the Northern District of California Doc #62 at 2. modifications. Docs ##67-1,8; 71. Counsel also revised Doc #71 Exh 1. 11 12 I 13 A 14 The parties’ proposed settlement would terminate two 15 actions, the above-captioned case and a separate case pending in 16 the Orange County superior court, Olguin v FedEx Ground Package 17 System, No OCSC 02CC0020. Both cases are described below. 18 19 1 20 Plaintiff Faith Martin filed this action in the San 21 Francisco superior court on September 20, 2006, against FedEx 22 Ground, a large package delivery company with numerous distribution 23 centers in California and throughout the United States. 24 Exh A. 25 this court based on diversity jurisdiction. 26 assigned to former Judge Martin J Jenkins. 27 Judge Jenkins’s resignation from office, on February 15, 2008, the 28 case was reassigned to the undersigned. Doc #1, On November 2, 2006, FedEx Ground removed the action to 3 Doc #1. The case was In anticipation of Doc #39. United States District Court For the Northern District of California 1 Martin worked for FedEx Ground from December 2005 until 2 April 2006 as a non-exempt employee in a non-driver position at 3 FedEx Ground’s Benicia/Vallejo terminal. 4 complaint, as originally filed, stated claims for compensation due, 5 failure to provide meal and rest periods in violation of Cal Lab 6 Code §§ 226.7, 512 and applicable wage orders, conversion, failure 7 to comply with itemized wage statement provisions under Cal Lab 8 Code § 226, penalties under Cal Lab Code § 203 and violations of 9 the unfair competition act, Cal Bus & Prof Code §17200, et seq. Doc #48 at ¶3. Martin’s 10 Doc #1, Exh A at ¶¶16-49. 11 all individuals who were non-exempt California employees of FedEx 12 Ground from September 20, 2002 until the date of trial. 13 Exh A at ¶12. 14 on January 9, 2007. 15 Martin’s action was brought on behalf of Doc #1, The conversion claim was dismissed by Judge Jenkins Doc #12. Martin has been represented at all times by Michael L 16 Carver and attorneys from his firm, the Law Offices of Michael L 17 Carver. See Doc #58, Exh 4. 18 19 20 2 Plaintiffs Javier Olguin, Miguel Vargas and Kelly Freeman 21 filed their case in the Orange County superior court on July 18, 22 2002, and subsequently filed an amended complaint stating causes of 23 action for wages due, penalties under Cal Lab Code § 203, unfair 24 competition, accounting, injunctive relief and declaratory relief. 25 Doc #49 at ¶8. 26 that action indicates it was brought on behalf of all individuals 27 who were non-exempt California package handlers of FedEx Ground 28 from October 1, 2000 until the date of trial. The motion for class certification submitted in 4 Doc #67-2 at Exh 1. 1 2 represented by Matthew Righetti and other attorneys from the 3 Righetti Law Firm and Geoffrey Gega and other attorneys from the 4 Cook Brown law firm. 5 The Orange County plaintiffs’ attorneys first appeared as counsel 6 in the Martin action on April 16 and 21, 2008. 7 United States District Court For the Northern District of California Plaintiffs in the Orange County litigation are See Doc #58 at ¶20; Doc #58, Exh 5 at ¶3. Doc ##43, 44. Plaintiffs’ counsel represents that the Orange County 8 litigation was stayed on October 10, 2007. 9 that time, all pre-certification discovery in the Orange County Doc #49 at ¶16. By 10 litigation had been completed and a motion for class certification 11 was about to be filed. 12 counsel, the judge in the Orange County litigation stated that he 13 is amenable to having the settlement resolved in the district court 14 and that he will dismiss the Orange County case without prejudice 15 upon preliminary approval of the proposed settlement in this case. 16 Doc #49 at ¶16. Doc #49 at ¶13. According to plaintiffs’ 17 18 19 B Although the class periods are different and the Orange 20 County action was brought on behalf of just California package 21 handlers (as opposed to all non-exempt employees in California), 22 the claims in both this action and the Orange County action present 23 the same factual and legal issues. 24 In California, employees who work more than five hours 25 per day are entitled to a meal period of “not less than 30 minutes, 26 except that if the total work period per day of the employee is no 27 more than six hours, the meal period may be waived by mutual 28 consent of both the employer and employee.” 5 Cal Lab Code § 512(a). 1 In addition, employees who work over 3.5 hours per day must receive 2 a minimum of a ten-minute rest break for each four-hour work 3 period, or major fraction thereof. 4 Wage Order 9-2001 at §§ 11-12, available at 5 (visited December 6 17, 2008). 7 period, the employer shall pay the employee one additional hour of 8 pay at the employee’s regular rate of compensation for each work 9 day that the meal or rest period is not provided. United States District Court For the Northern District of California 10 Industrial Welfare Commission If an employer fails to provide a required meal or rest Cal Lab Code § 226.7. 11 Plaintiffs in both actions allege that FedEx Ground did 12 not provide its employees with meal and rest periods as required by 13 law. 14 processing packages through terminals and hubs; they were expected 15 to be at work stations along conveyor belts at all times the belts 16 were moving. 17 Ground did not shut down the conveyors to allow employees an 18 opportunity to take their meal or rest periods. 19 Plaintiffs also allege that in 2004, after this lawsuit was filed, 20 FedEx Ground began stopping the conveyor belts at certain times to 21 facilitate employees’ breaks. 22 variety of defenses and denies all wrongdoing. According to plaintiffs, their primary duties were related to The plaintiffs allege that in many instances, FedEx Id. Doc #67 at 6. FedEx Ground has asserted a Doc #49 at ¶11. 23 24 II 25 A 26 27 28 Under the proposed settlement, the class is defined as: (1) Class No 1: All California FedEx Ground package handlers who held their positions at FedEx Ground anytime between October 1, 2000 and the date preliminary approval 6 1 2 3 4 of this Settlement is granted, and (2) Class No 2: all California FedEx Ground non-package handler non-exempt employees who held their positions at FedEx Ground anytime between September 20, 2002 and the date preliminary approval of this Settlement is granted. Doc #50, Exh A at 2:11-16. United States District Court For the Northern District of California 5 FedEx Ground agrees to pay a maximum settlement sum of 6 $8,125,000 to settle all claims of the class, although the maximum 7 settlement may increase under certain circumstances described 8 below. 9 settlement, the payout fund will be reduced by plaintiffs’ Doc #50, Exh A at 10:22-24. According to the proposed 10 requested attorney fees of $2,681,250 (33 percent of the maximum 11 settlement sum), litigation costs not to exceed $75,000, 12 administration costs estimated at $250,000 and plaintiffs’ 13 incentive awards estimated at $40,000. 14 At the June 19, 2008 hearing on the proposed settlement, the 15 parties informed the court that Gilardi & Co has been selected as 16 the claims administrator and that administration costs are now 17 estimated at $180,000. 18 Doc #50, Exh A at 12:8-14. Doc #61 at 13:19-14:5. After deduction of estimated costs, the maximum payout 19 available to class members under the proposed settlement is 20 $5,148,750. 21 will be divided by the number of workweeks actually worked by all 22 class members during the class period to determine a “workweek 23 rate.” 24 valid claim form will become a “settlement class member” and will 25 be entitled to a share of the payout funds. 26 13:6-8. 27 to the workweek rate times the number of workweeks that he or she 28 was a class member. Under the proposed plan of allocation, the payout fund Doc #50, Exh A at 12:24-27. Each plaintiff who returns a Doc #50, Exh A at Each settlement class member will receive a payment equal If 48 percent of the maximum payout funds are 7 1 not claimed by settlement class members, then settlement class 2 members will receive the difference between the amount claimed and 3 48 percent of the maximum payout funds on a proportional basis. 4 Doc #50, Exh A at 13:8-11. 5 estimates above are correct, FedEx Ground will pay at least 6 $2,471,400 (48 percent of $5,148,750) to class members regardless 7 how many claims are submitted. 8 settlement class members revert to FedEx Ground. 9 13:21-22. United States District Court For the Northern District of California 10 In other words, assuming the cost Any payout funds not paid to Doc #50, Exh A at In reaching the settlement, FedEx Ground estimated that 11 the number of workweeks worked by class members during the class 12 period up until October 31, 2007 is 1,049,174. 13 that 5,600 additional workweeks would be worked by class members 14 each week after October 31, 2007. 15 If the actual number of workweeks during the class period exceeds 16 the estimate by more than ten percent, then the maximum payout 17 figure will be divided by the estimated number of workweeks, rather 18 than the actual figure, to determine the workweek rate. 19 to settlement class members will be calculated by multiplying the 20 workweek rate by the number of workweeks actually worked by the 21 settlement class member. 22 circumstances, if enough class members submit valid claims, the 23 maximum settlement sum could exceed $8,125,000. 24 counsel estimate that settlement class members will receive 25 approximately $200 per year worked. 26 at 3. FedEx estimated Doc #50, Exh A at 13:27-14:5. Doc #50, Exh A at 14:19-24. 27 28 8 The payout Under these Plaintiffs’ Doc #49 at ¶19; Doc #68 Exh 1 1 B United States District Court For the Northern District of California 2 In this case, the court finds that the procedure for 3 reaching this settlement was fair and reasonable and that the 4 settlement was the product of arms-length negotiations. 5 the three groups of lawyers representing plaintiffs are led by 6 attorneys with substantial experience in wage and hour class 7 actions. 8 Ground was represented during negotiations by experienced counsel 9 as well. Each of Doc #49 at ¶3, Doc #48 at ¶8, Doc #52 at ¶¶15-16. Doc #49 at ¶10. FedEx Settlement occurred after extensive 10 discovery in the Orange County litigation, and discovery was 11 conducted in the Martin case as well. 12 session was held before a retired judge, followed by months of 13 subsequent negotiations. A day-long JAMS mediation Doc #49 at ¶15. 14 Perhaps because of the highly negotiated nature of the 15 settlement, the court on July 8 noted that the settlement itself 16 failed to spell out some of the settlement’s underlying 17 assumptions, including how counsel arrived at the estimated value 18 of plaintiffs’ claims. 19 further submissions explaining those underlying assumptions, Docs 20 ## 67;71, the court is now satisfied that it understands the value 21 of the settlement for the class members. 22 Doc #62 at 9. Having reviewed counsel’s Extensive discovery was conducted in the Orange County 23 litigation. 24 interrogatories, twelve sets of document requests and nine sets of 25 requests for admission. 26 Doc #49 at ¶12. 27 well, including three on-site facilities inspections and review by 28 the plaintiff’s counsel of tens of thousands of pages of discovery The parties served and answered ten sets of Approximately 46 depositions were taken. Discovery was conducted in the Martin case as 9 1 United States District Court For the Northern District of California 2 material provided by FedEx Ground. Doc #49 at ¶12. Based on this discovery, plaintiffs’ counsel have 3 estimated potential damages in this case. 4 estimated that approximately 77 percent of total shifts worked were 5 3.5 hours or longer, making them eligible for rest breaks, and that 6 5 percent of shifts were over six hours, making them eligible for 7 meal periods. Doc #67-8 at ¶3. 8 class members, counsel estimated a rest period compliance rate at 9 50 percent for shifts worked through 2002 and an increasing rate of Specifically, counsel Further, based on interviews with 10 compliance to approximately 95 percent in 2004. 11 data provided by FedEx Ground, counsel determined that the 12 compliance rate for meal breaks was approximately 45 percent 13 throughout the class period. 14 and the number of workweeks during the class period, counsel 15 estimates the value of missed rest periods at $4,920,496 and missed 16 meal periods at $1,086,384 for both classes for a total of 17 $6,006,844. 18 to an additional $2.2 million. 19 total potential damages for both classes to be $8,206,844. 20 court is satisfied that these numbers represent a reasonable 21 damages calculation based on the evidence available to counsel. Doc #71 at ¶15. Id at ¶10. Id at ¶5. Using With these percentages The potential interest value amounts Id. Thus, counsel estimate the The 22 23 24 C Plaintiffs’ counsel seek an award of attorney fees in an 25 amount not to exceed $2,681,250, plus litigation costs not to 26 exceed $75,000. 27 settlement of $8,125,000 is paid, the requested fee award 28 represents 33 percent of the settlement. Doc #50, Exh A at 11:2-5. 10 If the entire maximum 1 2 action settlement agreements are, like every other aspect of such 3 agreements, subject to the determination whether the settlement is 4 ‘fundamentally fair, adequate, and reasonable.’” 5 Co, 327 F3d 938, 963 (9th Cir 2003), quoting FRCP 23(e). 6 is obligated to conduct an independent inquiry into the 7 reasonableness of any attorney fee provisions of a class action 8 settlement even in the face of an agreement between the parties 9 regarding the payment and amount of attorney fees and costs. 10 United States District Court For the Northern District of California “Attorneys’ fees provisions included in proposed class Staton v Boeing The court Common fund cases create a situation in which normal 11 reliance on the adversary process to police the appropriateness of 12 a fee award is unavailing. 13 Court Awarded Attorney Fees (Task Force Report), 108 FRD 237, 251 14 (3rd Cir 1985). 15 drive a wedge between the class and class counsel, the former 16 interested in the largest settlement obtainable for the class and 17 the latter in the largest fee award obtainable. 18 class action defendant has little or no incentive to contest the 19 amount allocated to attorney fees in a proposed settlement, 20 provided the total amount of the settlement is acceptable. 21 the defendant is interested only in the total size of its 22 liability, so long as the settlement is accepted, it will often be 23 indifferent as to the division of the fund between the plaintiffs’ 24 recovery and the attorneys’ fees.” 25 Report of the Third Circuit Task Force, The prospect of a sizeable attorney fee award can Unsurprisingly, a “Since Task Force Report at 266. “[T]o avoid abdicating its responsibility to review the 26 agreement for the protection of the class, the Ninth Circuit 27 requires that a district court must carefully assess the 28 reasonableness of a fee amount spelled out in a class action 11 1 settlement agreement.” United States District Court For the Northern District of California 2 Staton, 327 F3d at 963 (citations omitted). “In ‘common fund’ cases where the settlement or award 3 creates a large fund for distribution to the class, the district 4 court has discretion to use either a percentage or lodestar 5 method.” 6 1998). 7 method, the court notes that the requested fee of $2,681,250 8 represents at least 33 percent of the total settlement and possibly 9 more; in other words, it is well above the 25 percent benchmark Hanlon v Chrysler Corp, 150 F3d 1011, 1029 (9th Cir Although this court’s practice is to use the lodestar 10 that the Ninth Circuit uses in common fund cases. 11 F3d at 1029. 12 multiplier implied by counsel’s lodestar figure is reasonable. 13 Plaintiffs’ counsel have submitted data on their own See Hanlon, 150 This may inform the court’s analysis of whether the 14 stated hourly rates, but the court prefers to calculate the 15 lodestar figure using published data on hourly rates. 16 hourly rates result in a meaningful comparison among multipliers in 17 various cases. 18 rates billed by attorneys, then a comparison of multipliers in many 19 cases will indicate a higher standard multiplier. 20 need not worry whether the standardized rates reflect their actual 21 billing practices; the court seeks only to compare lodestar 22 multipliers calculated at the same standardized hourly rates across 23 many common fund cases. 24 Standardized If the standardized rates are lower than actual Thus, counsel A widely recognized compilation of attorney and paralegal 25 rate data is the Laffey matrix, so named because of the case that 26 generated the index. 27 Supp 354 (DDC 1983), aff’d in part, rev’d in part on other grounds, 28 746 F2d 4 (DC Cir 1984), the court employed a variety of hourly In Laffey v Northwest Airlines, Inc, 572 F 12 1 billing rates to account for the various attorneys’ different 2 levels of experience. 3 prepared and updated by the Civil Division of the United States 4 Attorney’s Office for the District of Columbia and used in fee 5 shifting cases, among others. 6 7 _3.html, visited December 17, 2008. 8 especially useful when the work to be evaluated was performed by a 9 mix of senior, junior and mid-level attorneys, as well as United States District Court For the Northern District of California 10 See The Laffey matrix is paralegals, as is typically the case in class action litigation. 11 12 The Laffey matrix has been regularly Under the 2007-2008 Laffey matrix, attorneys bill at the following rates according to experience: 13 Experience Rate Per Hour 14 20+ Years $440 15 11-19 Years $390 16 8-10 Years $315 17 4-7 Years $255 18 1-3 Years $215 Paralegals & Law Clerks $125 19 20 These figures are, however, tailored for the District of 21 Columbia, which has a different cost of living than San Francisco, 22 Chico and Santa Ana, California (the cities in which plaintiffs’ 23 counsel operate). 24 here. 25 locality pay differentials based on federally compiled cost of 26 living data. 27 re HPL, 366 F Supp 2d 912, 921 (ND Cal 2005)(Walker, J)(adjusting 28 locality pay differentials based on the geographical region in Accordingly, some adjustment appears appropriate To make the adjustment, the court will use the federal See; In 13 1 which lead counsel’s firm operated). 2 shows the Washington-Baltimore area has a +20.89 percent locality 3 pay differential; the San Francisco area (“SF”) has a +32.53 4 percent locality pay differential; the Sacramento (Chico)(“CH”) 5 area has a +20.25 percent locality pay differential; and the Los 6 Angeles (Santa Ana)(“SA”) area has a +25.26 percent locality pay 7 differential. 8 yield appropriate rates for the respective geographical regions: 9 +9.6 percent for San Francisco, -0.5 percent for Chico and +3.6 United States District Court For the Northern District of California 10 Adjusting the Laffey matrix figures accordingly will percent for Santa Ana. 11 12 Applying these adjustments the court obtains the following rates: 13 Experience San Francisco Hourly Rate Chico Hourly Rate Santa Ana Hourly Rate 20+ Years $482.24 $437.80 $455.84 11-19 Years $427.44 $388.05 $404.04 8-10 Years $345.24 $313.43 $326.34 4-7 Years $279.48 $253.73 $264.18 1-3 Years $235.64 $213.93 $222.74 Paralegals & Law Clerks $137.00 $124.38 $129.50 14 15 16 17 18 19 20 A review of the pay tables The following table reflects the court’s adjusted 21 22 lodestar calculations for attorneys and paralegals working on the 23 case. See Doc #58 at Exh 2, 4 and 5. 24 25 26 27 28 14 1 Location Years Experience 20072008 Laffey Rate Total Hours Total Lodestar Carver, M CH 14 $388.05 289.9 $112,495.70 Gega, G SA 28 $455.84 483 $220,170.72 Glugoski, J SF 11 $404.04 738 $298,181.52 Johnson, K SA 7 $264.18 10.05 $2,655.01 7 Jose, A SA 10 $326.34 2.9 $946.39 8 Lamb, E CH 1 $213.93 24.4 $5,219.89 9 Lunde, M CH Paralegal $124.38 22.2 $2,761.24 Maechtlen, L SA 5 $264.18 116.9 $30,882.64 McCabe, T SA Paralegal $129.50 53.2 $6,889.40 McGeorge, J SA 6 $264.18 23.4 $6,181.81 Mesnier, J SA 27 $455.84 1 $455.84 Patko, L SA 3 $222.74 152.75 $34,023.54 14 Payne, S SA 9 $326.34 7.6 $2,480.18 15 Righetti, M SF 23 $482.24 1,112 $536,250.88 Sakai, K SA 8 $326.34 244.6 $79,822.76 Savage, P CH 4 $253.73 87.7 $22,252.12 Silva, R SA 14 $404.04 1102.95 $445,635.92 4,473 $1,807,306 2 Attorney/ Paralegal 3 4 5 6 United States District Court For the Northern District of California 10 11 12 13 16 17 18 19 Totals 20 21 First, it appears that, given the extensive discovery 22 conducted in this case and the fact that the figures above reflect 23 the labor of attorneys in two separate lawsuits – one pending in 24 this court since September 2006 and the other pending in the Orange 25 County superior court since July 2002 – it is reasonable that the 26 attorneys in this case have spent 4,473 hours working on it. 27 28 The court now turns to the lodestar cross-check, which entails evaluation of the multiplier implied by lead counsel’s 15 1 requested fee ($2,681,250) and lead counsel’s lodestar fee 2 (computed above as $1,807,306). 3 Laffey methodology results in a multiplier of 1.48 4 (2,681,250/1,807,306 = 1.48). 5 range the court has, in its experience, encountered and observed in 6 other common fund class actions. 7 Richfield Co, 901 F Supp 294, 298 (ND Cal 1995)(Williams, 8 J)(“Multipliers in the 3-4 range are common in lodestar awards for 9 lengthy and complex class action litigation.”). United States District Court For the Northern District of California 10 The lodestar calculation under the This multiplier falls below the See, e g, Van Vranken v Atlantic By the lodestar cross-check, the requested fee award 11 looks reasonable, indeed on the low side. 12 Circuit’s benchmark, the proposed fee award looks high. 13 is satisfied, however, that the award is not unfair. 14 was able to obtain a settlement value ($8,125,000) that closely 15 resembles the total estimated damages, including interest 16 ($8,206,844). 17 risk of non-recovery at the outset of the litigation, as class 18 certification is sometimes difficult to obtain in wage and hour 19 cases. 20 Cal, 2007)(Walker, J). 21 relatively low multiplier of 1.48, the court is satisfied that 22 counsel’s requested fee award is not unreasonable. Doc #71 Exh 1 at 2. See White v Starbucks Corp, Measured by the Ninth The court Lead counsel Further, class counsel faced a 497 F Supp 2d 1080, 1081 (ND Because the lodestar cross check revealed a 23 24 25 D The court must ensure that the notice sent to class 26 members is the best practicable under the circumstances. 27 23(c)(2)(B). 28 concerns with the proposed notice. FRCP In its July 8 order, the court listed some of its 16 Specifically, the court noted 1 that the notice: (1) did not explain the basis for class counsel’s 2 estimate of class damages, state the total damages available if the 3 case went to trial, or give an estimate of a typical class member’s 4 recovery under the proposed settlement; (2) did not notify class 5 members that if eight percent of class members choose to opt out, 6 FedEx Ground has the option to withdraw from the settlement; (3)did 7 not state that the claims administrator will make a final, binding 8 determination of individual award amounts; (4) required class 9 members submit written notice before appearing at the final United States District Court For the Northern District of California 10 settlement hearing. 11 Doc #62 at 20. Class counsel amended its proposed notice to address each 12 of the court’s concerns. 13 description of how class counsel calculated total potential damages 14 as well as a statement that the settlement amount of $8,125,000 is 15 comparable to potential damages of $8,206,844. 16 The revised notice also indicates that a typical class member’s 17 recovery will be approximately $200, but that the claims 18 administrator makes the final determination of all awards. 19 3. 20 members opt out of the settlement, FedEx Ground can decide to 21 terminate the settlement. Id at 4. 22 longer requires class members submit a written notice before being 23 heard at the final settlement approval hearing. 24 The revised notice contains a short Doc #71 Exh 1 at 2. Id at The revised notice states that if eight percent of class Finally, the proposed notice no Doc #68. Because class counsel addressed each of the court’s 25 concerns, the court is satisfied that the revised notice adequately 26 apprises class members of their rights under the settlement. 27 28 17 1 2 Next, the court turns to the parties’ motion to establish 3 an opt-out, objection and claim procedure and schedule a hearing on 4 final approval of the proposed settlement. 5 procedure is described in the settlement agreement, Doc #50, Exh A 6 at 22:22-24:2, 25:12-28:7, and in the proposed notice of 7 settlement, Doc #50, Exh A-1 at 3,6. 8 a timetable with tentative dates to complete the settlement 9 approval process; however, these dates may need to be revised 10 United States District Court For the Northern District of California E The parties’ proposed The parties have established following the court’s preliminary approval. 11 Doc #71 ¶18. Under the proposed procedure, the notice and claim form 12 will be sent to class members in a single mailing. 13 at 21:3-7. 14 submit a written request for exclusion no later than 45 days after 15 the date of the first mailing of the notice or 30 days after the 16 date of re-mailing of the notice, if any. 17 22. 18 serve a written objection or may simply appear at the fairness 19 hearing. 20 Doc #50, Exh A Class members who want to opt out of the class must Doc #50, Exh A at 23:19- Plaintiffs who wish to object to the settlement may file and Doc #50, Exh A at 22:23-23:4; Doc #68. Class members who wish to claim an award must submit the 21 claim form no later than 45 days after the date of the first 22 mailing of the notice or 30 days after the date of re-mailing of 23 the notice, if any. 24 claim form was filed as Doc #68 Exh 2. 25 procedures proposed by the parties are for the most part fair and 26 reasonable. 27 submit a notice before appearing at the fairness hearing, the court 28 now grants the motion to approve the proposed opt-out, objection Doc #50, Exh A at 25:12-22. The proposed The court finds that the Because the parties no longer require class members to 18 1 and claim procedure. 2 3 4 Finally, the court turns to the parties’ request for 5 certification of a settlement class. 6 the class is as follows: 7 8 9 10 United States District Court For the Northern District of California F The proposed definition for (1) Class No 1: All California FedEx Ground package handlers who held their positions at FedEx Ground anytime between October 1, 2000 and the date preliminary approval of this Settlement is granted, and (2) Class No 2: all California FedEx Ground non-package handler non-exempt employees who held their positions at FedEx Ground anytime between September 20, 2002 and the date preliminary approval of this Settlement is granted. 11 12 13 Doc #50, Exh A at 2:11-16. On July 8, the court noted that the putative class meets 14 the numerosity, typicality and adequacy requirements of FRCP 23(a). 15 The court also found, pursuant to FRCP 23(b)(3), that common 16 questions of law and fact predominate over individual questions and 17 that class treatment of this matter is superior to any other 18 available means of adjudication. 19 prepared to certify the class for settlement purposes at the time 20 problems with the settlement and proposed notice were resolved. 21 The court noted that it was On July 22, 2008, however, the California court of 22 appeal issued its opinion in Brinker Restaurant Corp v 23 Hohnbaum, 80 Cal Rptr 3d 781 (4th Dist 2008). 24 Brinker overturned the trial court’s grant of class 25 certification for claims dealing with missed rest breaks, 26 because under California law employers do not need to ensure 27 employees take rest breaks and thus whether an employee 28 decided to waive a rest break amounts to an individualized 19 The court in United States District Court For the Northern District of California 1 inquiry. 2 Court granted review, rendering Brinker not citable in state 3 court. 4 court feels constrained to address whether Brinker’s 5 reasoning should guide the court here. 80 Cal Rptr at 800-01. The California Supreme Cal Rules of Court, Rule 8.1115. Nonetheless, the 6 Brinker dealt with a class of restaurant workers, 7 many of whom relied on tips for their wages and who may not 8 have wanted to take a break in the middle of a lucrative 9 shift. 80 Cal Rptr at 809-10. The Brinker court noted that 10 an individual inquiry into whether an employee had chosen to 11 skip a break or an employer had prevented him from taking a 12 break would be required. 13 court of appeal upheld certification of a class in a case in 14 which the employer had allegedly not provided employees with 15 meal breaks. 16 4th 949 (3rd Dist 2005). 17 of truck drivers to be a class because the drivers alleged 18 their employer had not offered them meal breaks and indeed 19 had encouraged them to make deliveries in a time frame 20 incompatible with taking a break. 21 Brinker distinguished Cicairos as follows: “breaks must be 22 provided, not ensured.” 23 allege common employer action that prevented employees from 24 taking breaks, under Cicairos the employees can be certified 25 as a class. 26 Id. In contrast, the California Cicairos v Summit Logistics, Inc, 133 Cal App The court in Cicairos found a group 133 Cal App 4th at 962-64. 80 Cal Rptr at 809. If employees FedEx employees in this case allege that FedEx kept 27 conveyor belts running at all times during their shifts, 28 which effectively prevented them from taking a break. 20 Doc 1 #67 at 6. 2 that FedEx Ground prevented employees from taking breaks, the 3 court is satisfied that the logic of Brinker does not affect 4 settlement class certification in this case and would not do 5 so if ultimately Brinker’s reasoning is upheld by the 6 California Supreme Court. 7 the settlement class pursuant to FRCP 23. 8 United States District Court For the Northern District of California 9 Because FedEx employees allege facts to suggest Accordingly, the court certifies The court must also determine whether counsel and named plaintiff can adequately serve the interests of the 10 class for settlement purposes. 11 the court looks to whether named plaintiffs and counsel have 12 any conflicts of interest with other class members and 13 whether named plaintiffs and counsel will fairly, vigorously 14 and competently prosecute the action on behalf of the class. 15 Lerwill v InFlight Motion Pictures, Inc, 582 F2d 507, 512 16 (9th Cir 1978). 17 conflicts of interests have been raised and that counsel have 18 vigorously litigated this action from the outset. 19 court certifies plaintiff and counsel as lead plaintiff and 20 class counsel for settlement purposes. To make this determination, The court is satisfied that no potential 21 22 23 24 25 26 27 28 21 Thus, the 1 IV 2 For the reasons discussed above, the court GRANTS 3 the motions for preliminary approval of the settlement, 4 conditional certification of the class for settlement 5 purposes, approval of the proposed form of notice and 6 approval of the proposed opt-out, objection and claim 7 procedure. 8 9 IT IS SO ORDERED. United States District Court For the Northern District of California 10 11 12 VAUGHN R WALKER United States District Chief Judge 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 22