Juan Saravia v. Dynamex, Inc. et al, No. 3:2014cv05003 - Document 274 (N.D. Cal. 2017)
Court Description: ORDER GRANTING FINAL APPROVAL OF COLLECTIVE SETTLEMENT AND APPROVING SERVICE AWARD by Judge Alsup granting 260 Motion for Settlement; granting in part and denying in part 261 Motion. (whalc1, COURT STAFF) (Filed on 4/7/2017)
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Juan Saravia v. Dynamex, Inc. et al Doc. 274 1 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE NORTHERN DISTRICT OF CALIFORNIA 8 9 11 For the Northern District of California United States District Court 10 JUAN SARAVIA, individually and on behalf of himself and all others similarly situated, Plaintiffs, 12 13 14 No. C 14-05003 WHA ORDER GRANTING FINAL APPROVAL OF COLLECTIVE SETTLEMENT AND APPROVING SERVICE AWARD v. DYNAMEX OPERATIONS WEST, LLC, Defendant. 15 / 16 INTRODUCTION 17 18 In this wage-and-hour collective action under the Fair Labor Standards Act, both sides 19 seek final approval of a collective-wide settlement, and the named plaintiff seeks a service 20 award. Several objections were filed. For the reasons stated below, the objections are 21 OVERRULED, and final approval is GRANTED. The service award is also APPROVED, though 22 reduced. STATEMENT 23 24 Plaintiff Juan Saravia represents a certified collective of drivers who contracted with 25 defendant Dynamex Operations West, LLC. Plaintiffs contend Dynamex improperly classified 26 them as independent contractors rather than as employees and failed to pay them minimum 27 wages and overtime premiums. 28 After a full and hard-fought discovery period, an order denied defendants’ motion to decertify the collective action but invited plaintiffs to identify the individual with the easiest Dockets.Justia.com 1 case for misclassification and further invited both sides to move for summary judgment as to 2 that plaintiff (rather than as to the named plaintiff). Summary judgment was denied for both 3 sides. Shortly before trial, the parties reached a settlement agreement, and an order granted 4 preliminary approval of that agreement. 5 After several drafts and resolution of a contested term of the settlement agreement, the 6 parties notified the members of the collective of the settlement and the procedure for opting out, 7 objecting, or offering a conditional challenge to the settlement. 8 9 More than 140 individuals initially opted in as plaintiffs. After various motions to dismiss certain individuals and the narrowing of the case before summary judgment, 107 plaintiffs (including 106 opt-ins and our named plaintiff) remained members of the collective. 11 For the Northern District of California United States District Court 10 After notice of the settlement was disseminated, one plaintiff opted out of the settlement. 12 Another challenged the settlement agreement, but did not withdraw. A third attempted to 13 challenge the settlement agreement, but failed to do so according to the proper procedure. 14 Accordingly, the proposed settlement affects a total of 106 plaintiffs. 15 16 This order follows plaintiffs’ counsel’s brief on the merits of the settlement, briefs from both sides addressing objections, and a fairness hearing. ANALYSIS 17 18 “A settlement should be approved if it is fundamentally fair, adequate and reasonable.” 19 Torrisi v. Tucson Elec. Power Co., 8 F.3d 1370, 1375 (9th Cir. 1993) (internal quotations 20 omitted). 21 1. 22 23 PROPOSED SETTLEMENT. A. Settlement Fund. Dynamex will pay a total of $500 thousand to settle claims herein. This amount is 24 exclusive of attorney’s fees and costs, settlement administration costs, and the service award to 25 Saravia. Fees and costs are addressed in a separate order on plaintiffs’ counsel’s disputed 26 motion. Dynamex is paying administrative costs. The service award is addressed below. There 27 is no possibility that any of the settlement fund will revert to Dynamex. 28 2 1 2 The plaintiffs who remain part of the collective will receive a direct monetary distribution. There will be no claims procedure. 3 The amount disbursed to each plaintiff will be a minimum payment of two hundred 4 dollars, plus a proportion of the total settlement fund after the minimum payment is disbursed, 5 which proportion will be based on each plaintiff’s pro rata share of the total number of 6 overtime hours worked. The calculation of overtime hours is based on plaintiff’s driver activity 7 reports (“DARs”), produced and analyzed by Dynamex. Those reports captured the times each 8 driver made pick-ups and drop-offs. Individual members of the collective were allowed, before the opt-out period closed, to 9 challenge the calculated amount of their overtime hours with written documentation of a 11 For the Northern District of California United States District Court 10 different calculation. (No plaintiff exercised that option, though one plaintiff objected to the 12 formula for the initial calculation, as discussed below.) The result is an average distribution of approximately $4500 per plaintiff. 13 B. 14 The settlement agreement defines the claims to be released as follows (Konecky Decl., 15 16 Scope of Release. Exh. A § 1) (errors in original): [F]or the duration of the Class Period, all claims that were pled in this action, including claims for failure to pay all minimum wages (as pled under Fair Labor Standards Act, 29 U.S.C. § 201 et. seq.); failure to pay all over (as pled under Fair Labor Standards Act, 29 U.S.C. § 201 et. seq.); failure to compensate for all hours worked (as pled under Fair Labor Standards Act, 29 U.S.C. § 201 et. seq.), liquidated damages under 29 U.S.C. § 216(b), and any claims under state or federal law seeking substantially the same recovery (i.e., lost wages penalties) as secured by the above-referenced statutory claims. The Class Member Released Claims shall be released to the maximum extent that such claims can be released at law, irrespective of the forum, public or private, in which such claims could have been or be brought. 17 18 19 20 21 22 23 24 In other words, plaintiffs will release only the claims pled in the complaint and other claims 25 seeking substantially the same lost wages. No release will extend prospectively or predate the 26 period for which plaintiffs will be compensated (i.e., it does not extend before November 12, 27 2011). 28 3 1 Additionally, as a resolution of an earlier dispute, plaintiffs who do not timely cash their 2 checks will still release their claims, though it is Dynamex’s burden to prove a plaintiff 3 challenging that release received his or her check. Dynamex, however, will be entitled to a 4 rebuttable presumption that the plaintiff in question received the check if it Dynamex shows it 5 was sent to an address provided by the plaintiff in question (see Dkt. Nos. 255–58). 6 Defense counsel will deliver a report of uncashed checks thirty days and sixty days after 7 checks are disseminated so that plaintiffs’ counsel can ensure plaintiffs timely cash their checks. C. 8 9 Dynamex will pay all costs of administering the collective settlement. D. For the Northern District of California United States District Court 10 11 Administration Costs. Notice. The notice distributed to the class underwent several rounds of edits by the Court to 12 ensure it accurately and clearly explained the terms of the settlement agreement and the 13 procedures surrounding the motion for final approval. This order finds the notice was adequate. 14 2. 15 The instant settlement is the product of negotiations following three settlement 16 conferences between the parties, following bitterly-fought discovery. It further follows several 17 orders on motions that addressed the merits of the case, including an order denying summary 18 judgment for both sides as to an opt-in plaintiff handpicked by plaintiffs’ counsel as the easiest 19 case for misclassification. 20 COST/BENEFIT TO PLAINTIFFS. The recovery represents a significant discount on the total recovery for the collective if 21 it had won at trial, but, given that the easiest case could not win at summary judgment, there 22 remained a very real risk that the collective, or the bulk of it, would have received zero. Indeed, 23 no plaintiff would have been able to recover anything unless that easiest case succeeded at trial 24 and then each plaintiff could successfully rely on collateral estoppel from that result as a basis 25 for their own successful motion. (Failing that, the collective would likely have been 26 decertified.) We arrive here after a fierce uphill battle, with several difficult stretches still 27 ahead and success no sure thing at the end. 28 4 1 2 3 4 5 6 In light of those risks, this order finds the recovery, while modest, constitutes fair, reasonable, and adequate consideration for the release herein. This order now turns to two objections and one statement made in connection with an opt-out filed by members of the collective. This order finds each unavailing. A. Brian Barbaro. Brian Barbaro objected to the formula for distribution of funds. Specifically, he 7 contends that Dynamex’s DARs serve as poor proxies for hours worked, and so they do not 8 account for all the time he spent waiting for new assignments. 9 In fact, all agree that DARs are imperfect measurements of hours worked; however, they can be both under- and over-inclusive. That is, they might fail to account for time spent on call 11 For the Northern District of California United States District Court 10 between deliveries or loading and unloading time, but they might also count time spent taking a 12 break between picking up cargo and dropping it off. 13 Nevertheless, DARs provide a decent objective measurement. Any other methodology, 14 besides reliance on an individual plaintiff’s actual records, would likely be arbitrary. The 15 settlement agreement allowed plaintiffs to submit such records to prove up a different 16 calculation of actual overtime hours, so Barbaro had the opportunity to make his best case for a 17 greater disbursement. He chose not to do so. 18 Barbaro’s alternative methodology — a per capita even distribution of settlement 19 funds — is untenable and divorced from the distribution of alleged wrongs suffered by each 20 plaintiff. Indeed, that would assure that disbursement was arbitrary. Notwithstanding the 21 imperfect measurement of overtime hours worked, this order finds the settlement is fair, 22 reasonable, and adequate. Accordingly, Barbaro’s objection is OVERRULED. 23 In his statement, Barbaro noted he did not want to be removed from the collective. All 24 agree that he remains a member of the collective and will therefore receive a disbursement and 25 release his claims. 26 27 28 B. De Shaunn Smith. Plaintiff De Shaunn Smith purported to object by emailing the settlement administrator after calling plaintiffs’ counsel. Plaintiffs’ counsel informed Smith his objection did not 5 1 conform to the required procedure for objecting, to which Smith responded by asking counsel to 2 prepare his objection for him. Plaintiffs’ counsel informed Smith they would communicate his 3 objection, but that they could not formally submit it lest they develop a conflict of interest. 4 Smith complains that his disbursement is based only on hours worked in 2011 and 5 forward, though he performed deliveries for Dynamex from 2006 through 2012. The fact that 6 Smith’s recovery does not account for all overtime premiums allegedly incurred throughout his 7 tenure with Dynamex is an artifact of the period covered by the settlement agreement, which 8 covers the period beginning on November 12, 2011 (three years before Saravia filed the action). 9 In fact, but for the settlement agreement, it appears Smith’s claims would all be time-barred inasmuch as his claims all accrued more than three years prior to when he opted into the action 11 For the Northern District of California United States District Court 10 (in early 2016) — beyond the applicable statute of limitations. (For FLSA collective actions, 12 there is no tolling of claims before a plaintiff opts in.) 13 The fact that the bulk of Smith’s work is not compensated is unfortunate, but not a basis 14 for rejecting the settlement agreement. Indeed, to the extent Smith’s claims before 2011 are not 15 time-barred, they survive the release herein. 16 Dynamex did not address Smith’s objection in its brief. At the fairness hearing, both 17 sides agree it did not conform to the proper procedure. The settlement agreement provides, 18 “[a]ny individual who fails to file and serve timely written objections in this manner shall be 19 deemed to have waived any objections and shall be foreclosed from making any objection to the 20 settlement and from filing any appeal from any Final Approval order issued by the Court.” 21 Accordingly, while this order considers the substance of Smith’s objection, which it finds 22 unavailing, by the terms of the agreement, his failure to validly opt out means he remains part of 23 the collective. Accordingly, he will receive his proper disbursement under the agreement, and 24 he will release his claims for the period beginning on November 12, 2011. 25 26 27 28 To the extent it is necessary to rule on the improper objection, it is OVERRULED. C. Jaswinder Singh. One individual, Jaswinder Singh, requested to be excluded from the settlement but did not formally object. Nevertheless, he submitted a statement complaining that he had never been 6 1 paid overtime and had received no reimbursement for mileage. This action did not concern 2 expense reimbursement, though other pending actions against Dynamex, in which Sundhu may 3 be a class member, do pursue such claims. All agree Singh properly excluded himself from the 4 settlement. Accordingly, he will not receive a check and will not release any claims. 5 3. SERVICE AWARD. 6 Plaintiffs seek a service award of $7500 to the named plaintiff, Juan Saravia in addition 7 to his share of the settlement (and separate from the total settlement fund). Such a significant 8 incentive award is not warranted. Saravia did bring this case to fruition and participated in 9 substantial discovery all at the risk of reputational harm. True, he was deposed and produced a substantial amount of written discovery, but so were many of his fellow plaintiffs. His 11 For the Northern District of California United States District Court 10 contribution does not differ meaningfully from that of the other dozens of plaintiffs who 12 responded to discovery requests. There is little reason to allow Saravia to recover substantially 13 more than those plaintiffs. 14 Nevertheless, Saravia’s efforts deserve recognition. He initiated the case, participated in 15 three settlement conferences, and provided assistance to counsel from the outset. Accordingly, 16 a service award of $1000 is appropriate. 17 18 CONCLUSION For the reasons stated above, final approval of the settlement is GRANTED. A service 19 award of $1000 to Juan Saravia is AUTHORIZED. A separate order addresses plaintiffs’ 20 counsel’s request for fees and costs. This order reiterates, however, that Dynamex shall pay the 21 awarded costs and one-half of the awarded fees now, and that the balance of the fee award shall 22 not be paid until all of the work of administering the settlement is done. 23 24 The parties shall please prepare a stipulated judgment identifying each plaintiff who is subject to the release. 25 26 IT IS SO ORDERED. 27 28 Dated: April 7, 2017. WILLIAM ALSUP UNITED STATES DISTRICT JUDGE 7
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