Wakefield v. Wells Fargo & Company et al, No. 3:2013cv05053 - Document 74 (N.D. Cal. 2014)

Court Description: ORDER GRANTING 67 PLAINTIFFS' UNOPPOSED MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT. Signed by Magistrate Judge Laurel Beeler on 12/18/2014.(lblc2, COURT STAFF) (Filed on 12/18/2014)

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Wakefield v. Wells Fargo & Company et al Doc. 74 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 Northern District of California 10 San Francisco Division KENNISON WAKEFIELD, et al., 12 For the Northern District of California UNITED STATES DISTRICT COURT 11 No. C 13-05053 LB Plaintiffs, v. 13 WELLS FARGO & COMPANY, et al., ORDER GRANTING PLAINTIFFS’ UNOPPOSED MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT 14 15 Defendants. _____________________________________/ 16 17 [Re: ECF No. 67] INTRODUCTION In this putative class action, Plaintiffs Kennison Wakefield and William Stonhaus, who are 18 financial advisors (“FAs”) who left Wells Fargo to work for competing financial services firms, sued 19 Wells Fargo on behalf of themselves and similarly-situated FAs who worked in California or North 20 Dakota, alleging that Wells Fargo’s forfeiture of their unvested deferred compensation violates 21 California and North Dakota statutes that prohibit unlawful restraints of competition. (See Second 22 Amended Complaint (“SAC”), ECF No. 44 at 181; Cal. Bus. & Prof. Code § 16600; North Dakota 23 Century Code § 9-08-06.) The parties settled their case, and now Plaintiffs move for preliminary 24 approval of the proposed class action settlement. (See Motion, ECF No. 67.) Upon consideration of 25 the papers submitted and the applicable law, the court grants the motion. 26 27 28 1 Record citations are to documents in the Electronic Case File (“ECF”); pinpoint citations are to the ECF-generated page numbers at the top of the documents. C 13-05053 LB ORDER Dockets.Justia.com 1 2 3 STATEMENT I. THE LAWSUIT TO DATE Plaintiffs are former California and North Dakota FAs who allege that during their employment, Advisors, LLC Performance Award Contribution Plan (Effective as of January 1, 2005) Amended 6 and Restated as of January 1, 2012 and (2) Wells Fargo Advisors, LLC Performance Award 7 Contribution and Deferral Plan (Effective as of January 1, 2005) Amended and Restated as of 8 January 1, 2012 (the “Plans”). Plaintiffs allege that the Plans contain provisions that wrongfully 9 forfeit Plan awards if an FA leaves employment to work for a competitor in the financial services 10 industry. Plaintiffs and the members of the putative class left Wells Fargo and went to work for 11 competitors. Plaintiffs allege that at the time of their terminations, these FAs were eligible for 12 For the Northern District of California they received awards under Wells Fargo2 compensation plans, presently titled (1) Wells Fargo 5 UNITED STATES DISTRICT COURT 4 retirement treatment under the terms of the Plans, and this should have prevented forfeiture of their 13 awards. Plaintiffs allege that Wells Fargo nevertheless wrongfully forfeited their awards under the 14 Plans’ forfeiture-for-competition provisions in violation of the laws of California and North Dakota. 15 On September 26, 2013, Mr. Wakefield filed the original Complaint in Alameda County 16 Superior Court. (See Original Complaint, ECF No. 1-1; Wakefield Decl., ECF No. 50 ¶ 18.) He 17 alleged nine claims: (1) violation of California Business & Professions Code § 16600; (2) violation 18 of California Civil Code § 52.1; (3) violation of California Labor Code § 206.5; (4) interference with 19 prospective economic advantage; (5) book account; (6) constructive trust; (7) fraud; (8) breach of 20 contract; and (9) conversion. (See Original Complaint, ECF No. 1-1 ¶¶ 49-98.) On October 17, 21 2013, he filed a First Amended Complaint that amended his first claim to include a violation of 22 North Dakota Century Code § 9-08-06 in addition to the violation of California Business & 23 Professions Code § 16600. See First Amended Complaint (“FAC”), ECF No. 1-2 at ¶¶ 49-55. 24 On October 29, 2013, Wells Fargo removed the action to this court, asserting that Mr. 25 Wakefield’s claims are completely preempted by ERISA, 29 U.S.C. §§ 1001-1461, and that the 26 27 28 2 The named defendants to this action are Wells Fargo & Company and its wholly owned subsidiaries Wells Fargo Advisor, LLC, and Wells Fargo Advisors Financial Network, LLC. As it has throughout this action, the court refers to them collectively as “Wells Fargo.” C 13-05053 LB ORDER 2 1 court has federal question jurisdiction for this reason. (See Notice of Removal, ECF No. 1 at 2-4.) 2 Mr. Wakefield moved to remand, arguing that the claims are not subject to ERISA preemption and 3 therefore the court lacks federal question jurisdiction. (See Motion to Remand, ECF No. 12.) 4 By stipulation, the parties deferred proceeding on the motion to remand and engaged in 5 settlement negotiations with a private mediator. On June 19, 2014, they notified the court that Mr. 6 Wakefield would withdraw the motion because the parties had entered into a memorandum of 7 understanding (“MOU”) that conditionally settled the case except for the issue of whether the 8 four-year statute of limitations for breach of contract claims bars recovery of the forfeited awards for 9 putative class members who left Wells Fargo to work for competitors before September 26, 2009. judgment motion “concerning the statute of limitations and its applicability to a portion of the 12 For the Northern District of California (See 6/18/2014 Stipulation, ECF No. 37.) The parties agreed that Wells Fargo would file a summary 11 UNITED STATES DISTRICT COURT 10 members of the putative class.” (Id. at 2.) To queue up the motion, the MOU provided that Mr. 13 Wakefield would submit by stipulation a second amended complaint to add a representative plaintiff 14 who was a Wells Fargo FA with an award that allegedly was illegally forfeited before September 26, 15 2009 because the FA took a job with a competing firm. On July 11, 2104, and as the parties agreed 16 in the MOU, Mr. Wakefield filed the operative Second Amended Complaint. (See SAC, ECF No. 17 44.) The Second Amended Complaint adds Mr. Stonhaus as a Plaintiff because he left Wells Fargo 18 outside the four-year statute of limitations period but otherwise does not add or delete any claims. It 19 also alleges that the court has jurisdiction over this action under the Class Action Fairness Act 20 (“CAFA”), 28 U.S.C. § 1332(d). (Id. ¶ 29.) 21 On July 22, 2014, Wells Fargo filed its motion for partial summary judgment, asking for 22 judgment on “Plaintiff William Stonhaus’s Eighth Claim for Relief for Breach of Contract.” (See 23 Motion, ECF No. 46; Proposed Order, ECF No. 46-14.) The court held a hearing on the matter on 24 October 2, 2014. (See 10/2/2014 Minute Order, ECF No. 60.) On October 9, 2014, the court 25 granted Wells Fargo’s motion, ruling that Mr. Stonhaus’s eighth claim for relief is time barred under 26 California Civil Code § 3426.4 because Wells Fargo forfeited his deferred compensation before 27 September 26, 2009. (See 10/9/2014 Order, ECF No. 63.) 28 With the statute of limitations issue resolved, Plaintiffs now have filed the instant motion for C 13-05053 LB ORDER 3 1 preliminary approval of the proposed class action settlement. See Motion, ECF No. 67. The final 2 settlement agreement (the “Agreement”) is attached as Exhibit A to the Declaration of William I. 3 Edlund. (See Edlund Decl., Ex. A, ECF No. 68-1.) Wells Fargo does not oppose the motion. (See 4 Statement of Non-Opposition, ECF No. 69.) The court held a hearing on the matter on December 5 18, 2014. (See 12/18/2014, ECF No. 73.) 6 II. THE PROPOSED SETTLEMENT 7 Under the Agreement, Wells Fargo will pay a total of $7,420,000 (the “Settlement Amount”) Class who do not opt out of the Settlement Class by filing opt-out forms and submitting a claim 10 form) for the forfeited amounts; and (2) Class Counsel’s claims for attorneys’ fees and litigation 11 expenses, up to $1,855,000 (subject to court approval). (See Agreement, ECF No. 68-1.) 12 For the Northern District of California into a common fund, to settle: (1) the claims of Settlement Class Members (i.e., members of the 9 UNITED STATES DISTRICT COURT 8 Additionally, Wells Fargo has agreed to pay the following additional amounts: (1) the fees and costs 13 of claims administration, estimated to be $15,000; (2) the payment to the California Workforce 14 Development Agency in connection with the release of claims under the California Private 15 Attorneys General Act, in the amount of $7,500; and (3) Class Representatives’ claims for plaintiff 16 enhancements, estimated to be, but not to exceed, $10,000 per Class Representative (subject to court 17 approval). (See id.) 18 California and North Dakota FAs who are still employed by Wells Fargo, as well as FAs who are 19 employed by Wells Fargo in the future, will also benefit from this settlement, because Wells Fargo is 20 committing by declaration that for FAs terminating from Wells Fargo since October 2012, it has not 21 and will not forfeit any award of the Plans because an FA is or becomes employed or affiliated with 22 a competitor of Wells Fargo, absent a change in California or North Dakota law permitting such 23 enforcement. (Agreement, Ex. 2 (Paragraph 3 under the heading “The Terms of the Conditional 24 Settlement”).) 25 Class Counsel also will move the court for an award of attorney’s fees and costs of up to 26 $1,855,000, which is consistent with the Ninth Circuit’s 25% benchmark on common fund litigation. 27 (Agreement, ¶ 1.14); see Six (6) Mexican Workers v. Arizona Citrus Growers, 904 F.2d 1301, 1311 28 (9th Cir. 1990) (benchmark fee award in common fund cases in the Ninth Circuit is 25% of the C 13-05053 LB ORDER 4 1 fund). Wells Fargo will not oppose any request for attorney’s fees and costs up to this amount. 2 (Agreement, ¶ 2.8.1.) In the event that the court (or appellate court) awards less than the maximum 3 attorney’s fees and costs allowed under the Agreement, the unawarded remainder will revert to 4 Wells Fargo. (Id.) 5 Class Counsel are also entitled to apply to the court for enhanced awards for the Class 6 Representatives in the estimated amount (but not to exceed) of $10,000 each to compensate them for 7 the time they spent, and substantial risk they undertook, in bringing this litigation. (Id. at ¶ 2.8.2.) 8 9 10 I. JURISDICTION This court has jurisdiction under CAFA, 28 U.S.C. § 1332(d)(2). II. CONDITIONAL CERTIFICATION OF THE CLASS 12 For the Northern District of California UNITED STATES DISTRICT COURT 11 ANALYSIS The parties propose conditional certification of a class that consists of “the collective group of all 13 persons formerly employed as Financial Advisors and/or in similar positions in California and North 14 Dakota by Wells Fargo Advisors, LLC, whose employment with Wells Fargo terminated during the 15 Class Period and (a) who, at the time of the termination of their employment, were (i) subject to the 16 Compensation Plans pertinent to the Litigation and (ii) qualified for retirement under those Plans, 17 such that otherwise unvested compensation amounts could continue to vest upon termination subject 18 to other restrictions; (b) who voluntarily left Wells Fargo or a predecessor corporation and either (i) 19 did not sign a valid release or transition agreement, (ii) did not sign a contract to not work for a 20 competitor in the financial services industry, or (iii) within three years after leaving Wells Fargo, 21 started work in the financial services industry with a competitor; and (c) whose unvested deferred 22 compensation account balances were deemed forfeited by Wells Fargo and not paid because they 23 either (i) did not sign a valid release or transition agreement, or (ii) within three years after leaving 24 Wells Fargo, started work in the financial services industry with a competitor.” (Agreement, ¶ 1.2.) 25 “The parties understand and agree that the number of Class Members will consist of approximately 26 135 persons, and that the Class does not include three (3) Financial Advisors whom the parties agree 27 executed valid releases of the claims encompassed in this litigation.” (Id.) 28 The court reviews the propriety of class certification under Federal Rule of Civil Procedure 23(a) C 13-05053 LB ORDER 5 1 and (b). In a settlement context, the court must pay “undiluted, even heightened, attention” to class 2 certification requirements because the court will not have the opportunity to adjust the class based 3 on information revealed at trial. See Staton v. Boeing, 327 F.3d 938, 952-53 (9th Cir. 2003) (quoting 4 Amchem Products, Inc. v. Windsor, 521 U.S. 591, 620 (1997)); Hanlon v. Chrysler Corp., 150 F.3d 5 1011, 1019 (9th Cir. 1998) (same). The court finds that the proposed settlement class here meets the 6 requirements of Federal Rule of Civil Procedure 23(a) and (b). Class certification requires the following: (1) the class must be so numerous that joinder of all 9 members individually is “impracticable”; (2) there are questions of law or fact common to the class; 10 (3) the claims or defenses of the class representatives must be typical of the claims or defenses of the 11 class; and (4) the person representing the class must be able to fairly and adequately protect the 12 For the Northern District of California A. Rule 23(a) 8 UNITED STATES DISTRICT COURT 7 interests of all class members. See Fed. R. Civ. P. 23(a); Staton, 327 F.3d at 953. 13 Here, the factors support class certification for purposes of settlement. First, there are likely to 14 be approximately 135 class members, which makes joinder impracticable. See Jordan v. County of 15 L.A., 669 F.2d 1311, 1319 (9th Cir.), vacated on other grounds, County of L.A. v. Jordan, 459 U.S. 16 810 (1982). Second, there exist common issues, including the following: (1) whether the Plans 17 unlawfully forfeit Plan awards from a qualified FA if the FA works for a competitor after leaving 18 Wells Fargo; (2) whether the forfeitures were a restraint on competition violating California 19 Business and Professions Code § 16600 and North Dakota Century Code § 9-08-06; (3) whether 20 Wells Fargo violated California Civil Code § 52.1 by economically coercing FAs and concealing its 21 knowledge that Plan provisions were void, and forfeiting the awards; and (4) whether Wells Fargo’s 22 incorporation of the forfeiture provisions in the Plans violates California Labor Code §§ 206.5. 23 Third, the typicality requirement is met because all Wells Fargo FAs, including Plaintiffs, have been 24 and were subject to the provisions in the Plans and Wells Fargo’s uniform policies, practices and 25 alleged concealment about the Plans’ forfeiture provisions. See Hanlon, 150 F.3d at 1019-20 26 (claims are typical if they are reasonably coextensive with that of absent class members; they need 27 not be substantially identical). Fourth, the named Plaintiffs are able to fairly and adequately protect 28 the interests of all class members. The factors relevant to a determination of adequacy are as C 13-05053 LB ORDER 6 1 follows: (1) the absence of potential conflict between the named plaintiff and the class members; and 2 (2) counsel chosen by the representative parties who are qualified, experienced and able to 3 vigorously conduct the proposed litigation. Id. at 1020. The court is satisfied that those factors exist 4 here. The named Plaintiffs have shared claims and interests with the class. Also, Plaintiffs have 5 retained qualified and competent counsel. (See Edlund Decl., ECF No. 68 at ¶¶ 2-4); see also Local 6 Joint Executive Bd. of Culinary/Bartender Trust Fund v. Las Vegas Sands, Inc., 244 F.3d 1152, 1162 7 (9th Cir. 2001); Brown v. Ticor Title Ins. Co., 982 F.2d 386, 390 (9th Cir. 1992). 8 B. Rule 23(b)(3) 9 In addition to meeting the prerequisites of Rule 23(a), a proposed class must be appropriate for at 1022. The court finds that certification of the settlement class is appropriate under Rule 23(b)(3). 12 For the Northern District of California certification under one of the categories in Rule 23(b). See Fed. R. Civ. P. 23(b); Hanlon, 150 F.3d 11 UNITED STATES DISTRICT COURT 10 Questions of law and fact common to class members predominate over any questions affecting only 13 individual members. See Fed. R. Civ. P. 23(b)(3). This case features multiple common questions of 14 law and fact that are “a significant aspect of this case and they can be resolved for all members of 15 the [C]lass in a single adjudication.” Hanlon, 150 F.3d at 1022; cf. Sullivan v. DB Invs., 667 F.3d 16 273, 303-04 & n.28 (3d Cir. 2011) (“In light of the Supreme Court's guidance that a district court 17 ‘[c]onfronted with a request for settlement-only class certification’ need not inquire whether the case 18 ‘would present intractable management problems,’ Amchem, 521 U.S. at 620 . . . state law variations 19 are largely ‘irrelevant to certification of a settlement class.’”). 20 C. Conclusion: Provisional Certification Is Appropriate 21 Pursuant to Federal Rule of Civil Procedure 23(a) and (b)(3), the court conditionally certifies the 22 class set forth above for the purpose of giving the class notice of the proposed settlement in this 23 matter and conducting a fairness hearing. The court has examined the propriety of certification only 24 for settlement purposes. If the Effective Date as defined in the Agreement fails to occur, then the 25 settlement class will be decertified and the findings and conclusions in this Part II of the Order will 26 be deemed withdrawn. 27 28 C 13-05053 LB ORDER 7 1 III. APPOINTMENT OF CLASS REPRESENTATIVES, CLASS COUNSEL, AND CLAIM 2 ADMINISTRATOR 3 For the reasons set forth in the previous section, the court appoints Plaintiffs Kennison 4 Wakefield and William Stonhaus as the Class Representatives. The court finds that they have claims 5 that are typical of the claims of Class Members generally and that they are adequate representatives 6 of the other members of the proposed Class. The court also finds that Bartko, Zankel, Bunzel & 7 Miller (“Bartko Zankel”) and Shumaker, Loop & Kendrick, LLP (“Shumaker”) have sufficient 8 qualifications, experience, and expertise in prosecuting class action cases and appoints those firms as 9 co-lead Class Counsel for settlement purposes only. administer the settlement, including, but not limited to, notice and related procedures, subject to the 12 For the Northern District of California The court designates, and approves, Rust Consulting to serve as Claim Administrator. It will 11 UNITED STATES DISTRICT COURT 10 oversight of the parties and this court as described in the Agreement. 13 IV. PRELIMINARY APPROVAL OF SETTLEMENT AGREEMENT 14 The approval of a class action settlement has two stages: (1) the preliminary approval, which 15 authorizes notice to the class; and (2) a final fairness hearing, where the court determines whether 16 the parties should be allowed to settle the class action on the agreed-upon terms. In reviewing the 17 proposed settlement, the court need not address whether the settlement is ideal or the best outcome, 18 but determines only whether the settlement is fair, free of collusion, and consistent with Plaintiffs’ 19 fiduciary obligations to the class. See Hanlon, 150 F.3d at 1027. The Hanlon court identified 20 factors relevant to assessing a settlement proposal: (1) the strength of the plaintiff's case; (2) the risk, 21 expense, complexity, and likely duration of further litigation; (3) the risk of maintaining class action 22 status throughout the trial; (4) the amount offered in settlement; (5) the extent of discovery 23 completed and the stage of the proceeding; (6) the experience and views of counsel; (7) the presence 24 of a government participant; and (8) the reaction of class members to the proposed settlement. Id. at 25 1026 (citation omitted). 26 27 28 The court has evaluated the proposed settlement agreement for overall fairness under the Hanlon factors and concludes that preliminary settlement is appropriate. First, litigation poses risks, and an evaluation of the strengths and weaknesses of Plaintiffs’ case C 13-05053 LB ORDER 8 1 militates in favor of settlement. While Plaintiffs believe they would prevail at trial and that Wells 2 Fargo faces considerable exposure, Wells Fargo has raised several potential defenses, including the 3 following: (1) all of Plaintiffs’ claims fail as class claims due to arbitration provisions in the Plans; 4 (2) some of the Class Members received forgivable loans or other remuneration from their new 5 employers to compensate them for the forfeiture when they entered new employment, and therefore 6 those Class Members either suffered no damages as a result of Wells Fargo’s conduct or that their 7 damages were mitigated; (3) the Class Members’ claims under the Plans are preempted by ERISA 8 and, therefore, that California and North Dakota law do not apply; (4) the Plans, which apply to 9 Wells Fargo’s FAs throughout the country, provide that the law of North Carolina governs their its practices in 2012 to suspend forfeitures of the Plan awards in California and North Dakota where 12 For the Northern District of California terms; (5) California Civil Code § 52.1 cannot apply to economic coercion; (6) Wells Fargo changed 11 UNITED STATES DISTRICT COURT 10 working for a competitor is the basis for forfeiture, so Plaintiffs’ claim for injunctive relief is moot; 13 (7) Plaintiffs’ interference allegations fail as a matter of law to meet the required elements and that 14 individualized issues regarding those elements (such as establishing an existing relationship for each 15 FA as well as interference with that relationship) would predominate and preclude class treatment of 16 the interference claims; (8) even if FAs’ Account Balances are considered book accounts, the 17 four-year statute of limitations on a book-account claim began to run when each FA terminated his 18 or her employment; (9) Plaintiffs cannot state a claim for fraud (or rely on statute of limitations 19 defenses alleging fraudulent concealment) because, among other things, it made no 20 misrepresentations, an alleged misrepresentation of law does not constitute fraud, and, should this 21 case be litigated, the predominance of individualized issues would preclude class treatment; (10) 22 Plaintiffs, who claim to be mere general creditors of Wells Fargo, cannot state a claim for 23 conversion; and (11) requiring a release in exchange for compensation and/or benefits that would 24 otherwise be forfeit pursuant to the terms of its Plans is lawful and enforceable. (See Motion, ECF 25 No. 67 at 12-18.) The court finds that, given the risks posed by these possible defenses, the 26 settlement is thus reasonable and within the range of possible approval. 27 Second, the settlement appears to treat all Class Members fairly. Here, the proposed settlement 28 was the product of arm’s-length, non-collusive negotiations, which had initially been mediated and C 13-05053 LB ORDER 9 1 issues narrowed by a well-respected former judge. (See Edlund Decl., ECF No. 68 at ¶ 5.) In 2 addition, Plaintiffs are represented by experienced and informed counsel. (See id. at ¶¶ 2-3.) 3 Third, the parties’ settlement was keyed to the critical statute of limitations issue and was fully 4 briefed and argued in Wells Fargo’s motion for summary adjudication. The exhibits in that motion 5 were over 1,000 pages with several lengthy declarations by Plaintiffs and other witnesses. (See 6 ECF Nos. 47-55.) The parties and their counsel are familiar with the underlying facts and were 7 sufficiently familiar with those facts and the legal issues to reach a settlement that was conditioned 8 on the court’s statute of limitations ruling. light of Wells Fargo’s several potential defenses described above. (See Edlund Decl., ECF No. 68 at 11 ¶¶ 9, 17.) Despite these potential defenses, under the Agreement, the plaintiff FAs who left Wells 12 For the Northern District of California Fourth, the proposed settlement also is substantively within the range of possible approval in 10 UNITED STATES DISTRICT COURT 9 Fargo during the period four years prior to the filing of the Original Complaint should receive over 13 100% of their forfeited Account Balances. (Id. at ¶ 15.) And even after the court’s ruling on the 14 statute of limitations, the FAs who left Wells Fargo during the period prior to September 26, 2009 15 and after 2005, will receive a total of $810,000 (with $10,000 for each FA). (Id.) 16 In sum, the court finds that viewed as a whole, the proposed settlement is sufficiently “fair, 17 adequate, and reasonable” such that preliminary approval of the settlement is warranted. See 18 Officers for Justice v. Civil Serv. Comm’n of the City and County of San Francisco, 688 F.2d 615, 19 625 (9th Cir. 1982). The court thus approves the settlement agreement preliminarily. 20 V. APPROVAL OF CLASS NOTICE 21 The court approves the proposed notice (as amended by the parties via letter filed on December 22 10, 2014). (See Agreement, Ex. 2; 12/10/2014 Letter, ECF No. 71.) The professional claims 23 administration firm of Rust Consulting, Inc. (the “Claims Administrator”) will administer the 24 settlement. (Agreement, ¶ 1.1.) Wells Fargo, through the Claims Administrator, will pay Settlement 25 Class Members a sum not to exceed the Net Settlement Fund amount of $5,565,000 no later than 14 26 days following the date the Judgment becomes Final (as defined in the Agreement). (Id. at ¶¶ 1.14, 27 2.1.1 & 2.6.1.) 28 Each Class Member will receive a “Notice to Class Members Re Pendency of a Class Action and C 13-05053 LB ORDER 10 1 Notice of Hearing on Proposed Settlement,” and a Settlement Claim Certification Form (“Claim 2 Form”) (collectively, the “Class Documents”) in the forms attached as Exhibit 2 to the Agreement. 3 (Id. at ¶ 1.19.) The Claims Administrator will mail the Class Documents and perform other required 4 claims administration services. (Id. at ¶¶ 2.4.1-2.4.8.) The Class Notice will describe the litigation, 5 the terms of the settlement, each Class Member’s settlement payment, and each Class Member’s 6 options with regard to the settlement. (See id., Ex. 2.) The Class Notices will be sent via first-class 7 mail, postage pre-paid, to the last known address of each Class member. (Id. at ¶ 2.4.1.) Before 8 mailing the Class Notices, the Class Administrator will run the Class Members’ last known 9 addresses, as provided by Wells Fargo, through the U.S. Postal Service’s National Change of Documents are returned to the Class Administrator as undeliverable, the Claims Administrator, shall 12 For the Northern District of California Address Database and update the Class Database as appropriate. (Id. at ¶ 2.4.4.) If any of the Class 11 UNITED STATES DISTRICT COURT 10 undertake another Reasonable Address Verification Measure to ascertain the current address of the 13 Class Member, and if a new address is obtained, re-mail the Class Documents. (Id. at ¶ 2.4.7.) 14 As explained in the Class Notice, Class Members who do not wish to be subject to the settlement 15 may opt out of the settlement by submitting a letter to that effect. (Id. at ¶ 2.5.4.) Those Class 16 Members who timely opt out will not receive a settlement payment, and will not be subject to the 17 release of claims set forth in the Agreement. (Id. at ¶ 2.5.4; see id., Ex. 2, § G.) All members of the 18 Class who do not submit such a letter will become members of the “Settlement Class” and will be 19 subject to the terms of the Agreement, including the release of claims. (Id. at ¶¶ 1.34, 2.5.4.) The 20 Released Claims are defined in the Agreement as: “all claims, including without limitations 21 ‘Unknown Claims’ as defined in Paragraph 1.32 hereof, demands, rights, liabilities and causes of 22 action of every nature and description whatsoever including without limitation statutory, 23 constitutional, contractual or common law claims, whether known or unknown, whether or not 24 concealed or hidden, against the Wells Fargo Releasees, or any of them, for any type of relief 25 relating to compensation and/or awards that were lost or deemed forfeited or did not vest, during the 26 Class Period including without limitation, claims for alleged or actual (a) violations of California 27 Business & Professions Code § 16600 and North Dakota Century Code § 9-08-06; (b) violations of 28 California Civil Code § 52.1; (c) violations of California Labor Code § 206.5; (d) violations of the C 13-05053 LB ORDER 11 1 California Private Attorney General Act, California Labor Code § 2698 et seq.; (e) any and all 2 associated claims for interest, costs, or attorneys’ fees, including without limitation claims under 3 Code of Civil Procedure section 1021.5; and (f) to the extent not covered above, any and all claims 4 pled in the Litigation.” Id. ¶ 1.42. The Released Claims do not include claims not subject to 5 Paragraph 1.42 of the Agreement. 6 Settlement Class Members may object to the Agreement by filing a written objection with the 7 court. (Id. at ¶ 2.4.1; see id., Ex. 2 (the third option presented under the heading “Rights and 8 Options of Class Members”).) 9 Settlement Class Members will receive their individual settlement payments (less withholding) return their Claims Form will revert to Wells Fargo, subject to a seventy percent (70%) payment 12 For the Northern District of California only if they return their Claims Form. (Id. at ¶ 2.5.5.) Sums payable to Class Members who do not 11 UNITED STATES DISTRICT COURT 10 floor. (Id. at ¶ 2.11.9.) 13 VI. COMPLIANCE WITH CLASS ACTION FAIRNESS ACT 14 On December 5, 2014, Plaintiffs filed a declaration showing compliance with CAFA, 28 U.S.C. 15 § 1715. See Roe Decl., ECF No. 70. That declaration establishes that on November 21, 2014, Rust 16 Consulting mailed notice of the Agreement to the Attorney General of the United States and the 17 appropriate California state official. See id. Any final settlement approval will be more than 90 18 days after service as required by 28 U.S.C. § 1715. 19 VII. PROCEDURES FOR FINAL APPROVAL OF SETTLEMENT 20 The schedule for dates and deadlines is set forth in the table below and discussed in the sections 21 that follow. 22 Event Date 23 Last Day for Class Notices to be distributed to Class members January 20, 2015 Deadline for return of Settlement Claim and and Exclusion Forms (60 days after the Class Notices are mailed) Deadline to file objections to settlement (60 days after the Class Notices are mailed) March 17, 2015 24 25 26 March 17, 2015 27 28 Deadline for Plaintiffs to file their motion for final approval of the settlement, and for awards of attorneys’ fees, costs, and C 13-05053 LB ORDER April 20, 2015 12 1 plaintiff enhancements (35 days before the Fairness Hearing) 2 Fairness Hearing May 28, 2015, 9:30 a.m. 3 4 A. Fairness Hearing 5 At the hearing, the court will determine whether to grant final certification of the Settlement 6 Class, confirm the appointment of Bartko Zankel and Shumaker as co-lead Class Counsel and the 7 named Plaintiffs as Class Representatives, finally approve the Agreement, and award the requested 8 incentive awards to the Class Representatives and attorneys’ fees and costs to Class Counsel. The 9 court may, for good cause, extend any of the deadlines in this order or continue the fairness hearing 10 without further notice to the Settlement Class Members. B. Initiation of Notice by No Later than 14 Days from Today 12 For the Northern District of California UNITED STATES DISTRICT COURT 11 The court orders the parties (through the Claim Administrator) to send the notice in the form 13 approved by this order by January 20, 2015. 14 Class Counsel must file proof of distribution of notice at or before the fairness hearing. 15 C. Requests for Exclusion from the Settlement 16 Class Members may exclude themselves from the Class Settlement, and that request for 17 exclusion must be made in the following manner: any member of the Settlement Class who wants to 18 be excluded from the Settlement Class, and therefore not be bound by the terms of the Agreement, 19 must submit a letter to that effect, by March 17, 2015, as discussed in Section V. 20 D. Objections to the Settlement 21 Any Class Member who wishes to object to the settlement and/or to be heard at the fairness 22 hearing must electronically file with or deliver to the Clerk of the Court a written notice of objection 23 by March 17, 2015. Each such objection must include the following: (1) the name, address, and 24 telephone number of the Settlement Class Member; (2) documents or testimony sufficient to 25 establish membership in the Settlement Class; and (3) a detailed statement of any objection asserted, 26 including the grounds therefor and reasons, if any, and for requesting the opportunity to appear and 27 be heard at the fairness hearing. Failure to include the foregoing information will constitute grounds 28 for striking an objection. C 13-05053 LB ORDER 13 1 E. Deadline for Submitting Motion for Final Approval and Petition for Attorney’s Fees, 2 Costs, and Expenses 3 Plaintiffs must file a motion for final approval of the settlement and Agreement by April 20, 4 2015. Pursuant to In re Mercury Interactive Corp. Sec. Litig., 618 F.3d 988, 994-95 (9th Cir. 2010), 5 Class Counsel must file with this court their petition for an award of attorneys’ fees and 6 reimbursement of costs at the same time. Both motions will be heard at the time of the fairness 7 hearing. 8 F. Plaintiffs’ Claims Members’ Release 9 If, at the fairness hearing, this court grants final approval to the settlement and the Agreement, release claims, as set forth in the Agreement, by operation of this court’s entry of the judgment and 12 For the Northern District of California the named Plaintiffs and each individual Settlement Class Member who does not timely opt out will 11 UNITED STATES DISTRICT COURT 10 final approval. 13 VIII. EFFECT OF THIS ORDER 14 15 This Preliminary Approval Order will not be construed as an admission or concession by Wells Fargo of the truth of any allegations made by the Plaintiffs or of liability or fault of any kind. 16 In the event that the proposed settlement is not finally approved by the court, or in the event that 17 the Agreement becomes null and void pursuant to its terms, this Preliminary Approval Order and all 18 orders entered in connection herewith will become null and void, will be of no further force and 19 effect, and will not be used or referred to for any purposes whatsoever in this action or in any other 20 case or controversy. In such an event, the Agreement and all negotiations and proceedings directly 21 related thereto will be deemed to be without prejudice to the rights of any and all of the parties, who 22 will be restored to their respective positions as of the date and time immediately preceding the 23 execution of the Agreement. 24 CONCLUSION 25 For the foregoing reasons, the court GRANTS Plaintiffs’ motion. 26 This disposes of ECF No. 67. 27 28 C 13-05053 LB ORDER 14 1 IT IS SO ORDERED. 2 Dated: December 18, 2014 _______________________________ LAUREL BEELER United States Magistrate Judge 3 4 5 6 7 8 9 10 12 For the Northern District of California UNITED STATES DISTRICT COURT 11 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 C 13-05053 LB ORDER 15

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