Hernandez v. Arthur J. Gallagher Service Company, LLC

[5] UNITED STATES DISTRICT COURT [6] SOUTHERN DISTRICT OF CALIFORNIA [8] ITXAMAR HERNANDEZ, on behalf of Case No.: 22-cv-01910-H-DEB [9] herself and all other similarly situated, 10 ORDER: Plaintiff, [11] v. (1) GRANTING JOINT MOTION 12 FOR ADDENDUM TO CLASS ARTHUR J. GALLAGHER SERVICE ACTION SETTLEMENT AND 13 COMPANY, LLC, a Delaware limited RELEASE; liability company; PRONTO [14] CALIFORNIA AGENCY LLC, a (2) CERTIFYING CLASS FOR 15 California limited liability company; SETTLEMENT PURPOSES; PRONTO CALIFORNIA GENERAL [16] AGENCY, LLC, a California limited (3) PRELIMINARILY APPROVING 17 liability company; and DOES 1-50, CLASS ACTION SETTLEMENT; 18 Defendants. (4) APPOINTING CLASS [19] REPRESENTATIVE, CLASS 20 COUNSEL, AND SETTLEMENT ADMINISTRATOR; [21] 22 (5) APPROVING CLASS NOTICE; AND [23] 24 (6) SCHEDULING FINAL APPROVAL HEARING [25] 26 [Doc. Nos. 49, 52.] [28] 1 On February 29, 2024, Plaintiff Itxamar Hernandez filed an unopposed motion for 2 preliminary approval of class action settlement. (Doc. No. 49.) On April 8, 2024, the 3 parties filed a joint motion to add a second addendum to their joint stipulation of class and 4 representative action settlement and release. (Doc. No. 52.) 5 The Court held a hearing on Plaintiff’s motion for preliminary approval on April 8, 6 2024. Martha Michiko Vartanian appeared for Plaintiff. Joan B. Fife and Emilie C. 7 Woodhead appeared for Defendants Arthur J. Gallagher Service Company (“Arthur J. 8 Gallagher”) and Pronto Auto Insurance Services, Inc., Pronto California Agency LLC, and 9 Pronto California General Agency LLC (collectively “Pronto”). For the reasons below, 10 the Court grants the parties’ joint motion to add a second addendum to their joint stipulation 11 of class and representative action settlement and release, and the Court grants Plaintiff’s 12 motion for preliminary approval and sets a schedule for further proceedings. 13 Background 14 I. Factual and Procedural Background 15 This is a wage and hour class action. Defendant Arthur J. Gallagher is a global 16 insurance brokerage and risk management services firm operating throughout California, 17 with its headquarters in Illinois. (Doc. No. 49-2, Melmed Decl. ¶ 14.) Plaintiff asserts that 18 Defendant Arthur J. Gallagher is the owner of Defendant Pronto. (Id.) 19 Plaintiff is a citizen of California and at all relevant times worked for Defendants in 20 California as a non-exempt sales agent from around January 2020 through October 2023. 21 (Id. ¶ 15.) Plaintiff alleges that Defendants’ non-exempt California employees experienced 22 various violations of California’s wage-and-hour laws due to Defendants’ policies and 23 practices. (Id. ¶¶ 15, 26-38.) 24 On October 28, 2022, Plaintiff filed a class action complaint against Defendants in 25 the Superior Court of California, County of San Diego.1 (Doc. No. 1-2, Compl.) On [27] 1 In the original complaint, Defendant Pronto was initially named as “Pronto Auto 28 Insurance Services, Inc.” (Doc. No. 1-2, Compl. at 1.) 1 December 2, 2022, Defendant Arthur J. Gallagher removed the action to the United States 2 District Court for the Southern District of California pursuant to 28 U.S.C. §§ 1441 and 3 1446 on the basis of jurisdiction under the Class Action Fairness Act (“CAFA”), 28 U.S.C. 4 § 1332(d).2 (Doc. No. 1, Notice of Removal.) 5 On April 4, 2023, Plaintiff filed a first amended complaint against Defendants. 6 (Doc. No. 21.) On June 7, 2023, Plaintiff filed a second amended complaint (“SAC”) 7 against Defendants, alleging claims for: (1) failure to pay all minimum wages; (2) failure 8 to pay all overtime wages; (3) failure to provide rest periods and pay missed rest period 9 premiums; (4) failure to provide meal periods and pay missed meal period premiums; (5) 10 failure to maintain accurate employment records; (6) failure to pay wages timely during 11 employment; (7) failure to pay all wages earned and unpaid at separation; failure to 12 indemnify all necessary business expenditures; failure to furnish accurate itemized wage 13 statements; (10) violation of California’s Unfair Competition Law (“UCL”), California 14 Business & Professions Code §§ 17200-17210; and (11) penalties under California’s 15 Private Attorneys General Act (“PAGA”), California Labor Code § 2699 et seq.3 (Doc. 16 No. 35, SAC ¶¶ 82-135.) On June 30, 2023, Defendants filed an answer to Plaintiff’s SAC. 17 (Doc. No. 39.) 18 On November 9, 2023, the parties notified the Court that they had reached a 19 settlement in principle. (Doc. No. 45.) By the present motion, Plaintiff moves for an order: [21] 2 On December 29, 2022, Plaintiff filed a motion to remand the action back to state 22 court. (Doc. No. 8.) On January 23, 2023, Plaintiff withdrew her motion to remand. (Doc. No. 12.) [23] 3 On April 4, 2024, pursuant to the parties’ joint motion, the Court granted Plaintiff [24] leave to file a Third Amended Complaint. (Doc. No. 51.) Plaintiff’s third amended 25 complaint, including the modifications discussed at the April 8, 2024 hearing, is due by April 11, 2024. (Id. at 2.) The filing of this third amended complaint is part of the parties’ [26] settlement agreement. (See Doc. No. 49-2, Melmed Decl. ¶ 25, Ex. A, Settlement § 12.1.) 27 In addition, at the April 8, 2024 hearing, the parties agreed and represented that Plaintiff’s filing of her third amended complaint should not affect the Court’s approval of Plaintiff’s [28] 1 (1) preliminarily approving the settlement; (2) approving the class notice; (3) appointing 2 ILYM Group, Inc. to administer the settlement and notice process; and (4) scheduling a 3 final approval hearing. (Doc. No. 49-1 at 5-7.) 4 II. The Proposed Settlement 5 The settlement agreement defines the settlement class as: “all individuals who are or 6 were employed by the Gallagher Entities as non-exempt employees in California during 7 the Class Period.”4 (Doc. No. 49-2, Melmed Decl. Ex. A, Settlement § 1.5.) “Class Period” 8 is defined as “the period from October 28, 2018 until the date the Court grants Preliminary 9 Approval.” (Id. § 1.12.) 10 Under the settlement agreement, Defendant will pay a gross settlement amount of 11 $4,000,000. (Id. § 3.1.) Each settlement class member will receive an individual class 12 payment calculated by “(a) dividing the Net Settlement Amount by the total number of 13 Workweeks worked by all Participating Class Members during the Class Period and (b) 14 multiplying the result by each Participating Class Member’s Workweeks.” (Id. § 3.2.4.) 15 Under the settlement agreement, upon the funding of the gross settlement amount by 16 Defendants, every participating class member will release Defendants from the “Released 17 Class Claims,” which is defined as “any and all claims, known or unknown, that were 18 asserted in any complaint in the Action and/or Plaintiff’s PAGA Notices; as well as any 19 and all claims, known or unknown, that could have been asserted against Defendants and/or 20 any of the Gallagher Entities in any complaint in the Action or Plaintiff’s PAGA Notices [22] 4 The parties’ settlement agreement defines “Gallagher Entities” as “any and all 23 entities that are encompassed within the corporate umbrella of Arthur J. Gallagher & Co., including but not limited to Arthur J. Gallagher & Co.; Arthur J. Gallagher Service [24] Company, LLC; Arthur J. Gallagher Service Company, Inc.; Pronto California Agency 25 LLC; Pronto California General Agency LLC; Arthur J. Gallagher & Co. Insurance Brokers of California, Inc.; Arthur J. Gallagher Risk Management Services, Inc.; Gallagher [26] Basset Services, Inc.; Risk Placement Services, Inc.; Gallagher Benefit Services, Inc.; 27 Arthur J. Gallagher Brokerage & Risk Management Services, LLC; Arthur J. Gallagher (U.S.) LLC; and Premier Insurance Services, Inc.” (Doc. No. 49-2, Melmed Decl. Ex. A, [28] 1 based on the facts and allegations alleged in any complaint in the Action and/or Plaintiff’s 2 PAGA Notices.” (Id. §§ 1.42, 5.2.) In addition, Defendant will be released from the 3 Released PAGA Claims, which is defined as “any and all claims, known or unknown for 4 civil penalties under California Labor Code section 2698 et seq. (PAGA) that: were 5 asserted in any complaint in the Action and/or Plaintiff’s PAGA Notices; as well as any 6 and all claims, known or unknown, that could have been asserted against Defendants and/or 7 any of the Gallagher Entities in any complaint in the Action or Plaintiff’s PAGA Notices 8 based on the facts and allegations alleged in any complaint in the Action and/or Plaintiff’s 9 PAGA Notices.” (Id. §§ 1.43, 5.3.) 10 Plaintiff has indicated that she intends to seek a class representative’s service 11 payment of up to $7,500.00 from the settlement fund. (Id. § 3.2.1.) Class counsel also 12 intends to request an attorneys’ fee award of $1,333,333.33, or one-third of the gross 13 settlement fund, as well as litigation expenses of up to $20,000. (Id. § 3.2.2.) 14 The parties selected ILYM Group, Inc. be appointed to serve as the settlement 15 administrator. (Id. § 7.1.) The settlement administrator will mail the class notice to the 16 class via First Class USPS mail. (Id. § 7.4.2.) The settlement administrator will also issue 17 checks for the individual class payments and/or individual PAGA payments and send them 18 to the class members via First Class USPS mail. (Id. § 4.4.1.) Settlement class members 19 reserve the right to object or opt out of the settlement, except that they may not opt out of 20 the settlement of the Released PAGA claims. (Id. §§ 5.3, 5.3.1, 7.5; Doc. No. 49-1 at 21.) 21 See O’Connor v. Uber Techs., Inc., 201 F. Supp. 3d 1110, 1133 (N.D. Cal. 2016) 22 (explaining that “in a lawsuit which asserts a PAGA claims and seeks class certification 23 for labor/wage claims, even class members who opt out of the class [are] bound by an 24 adverse PAGA judgment or settlement” (citing Arias v. Superior Ct., 46 Cal. 4th 969 , 986 25 (2009)). 26 / / / 27 / / / 28 / / / 1 Discussion 2 I. Class Certification 3 Plaintiff seeks to certify a class pursuant to Federal Rule of Civil Procedure 23(a) 4 and (b)(3) for the purposes of settlement. (Doc. No. 49-1 at 23-27.) The proposed 5 settlement class is defined as “all individuals who are or were employed by the Gallagher 6 Entities as non-exempt employees in California during the Class Period.” (Doc. No. 49-2 7 at p.1 § 1.5.) 8 A plaintiff seeking to certify a class under Rule 23(b)(3) must first satisfy the 9 requirements of Rule 23(a). Fed. R. Civ. P. 23(b); see Wal-Mart Stores, Inc. v. Dukes, 564 10 U.S. 338, 345 (2011). Once subsection (a) is satisfied, the purported class must then fulfill 11 the requirements of Rule 23(b)(3). Id. 12 A. Rule 23(a) Requirements 13 Rule 23(a) establishes that one or more plaintiffs may sue on behalf of class members 14 if all of the following prerequisites are met: (1) numerosity; (2) commonality; 15 (3) typicality; and (4) adequacy of representation. Fed. R. Civ. P. 23(a). 16 The numerosity prerequisite is met if “the class is so numerous that joinder of all 17 members is impracticable.” Fed. R. Civ. P. 23(a)(1). “In general, courts find the 18 numerosity requirement satisfied when a class includes at least 40 members.” Rannis v. 19 Recchia, 380 F. App’x 646, 651 (9th Cir. 2010); see also Hilsley v. Ocean Spray 20 Cranberries, Inc., No. 17-cv-02355-GPC-MDD, 2018 WL 6300479 , *3 (S.D. Cal. Nov. 29, 21 2018) (“As a general rule, . . . classes of 40 or more are numerous enough.” (quoting Ikonen 22 v. Hartz Mtn. Corp., 122 F.R.D. 258, 262 (S.D. Cal. 1988))); West v. Cal. Servs. Bureau, 23 Inc., 323 F.R.D. 295 , 303 (N.D. Cal. 2017) (a class of more than 40 “raises a presumption 24 of impracticability of joinder”). 25 Plaintiff represents that there are approximately 2,169 members in the settlement 26 class. (Doc. No. 49-1 at 24; Doc. No. 49-2, Melmed Decl. ¶ 4.) As such, the numerosity 27 prerequisite is met here. See Rannis, 380 F. App’x at 651 ; Hilsley, 2018 WL 6300479 , at 28 *3; West, 323 F.R.D. at 303. 1 The commonality prerequisite is met if there are “questions of law or fact common 2 to the class.” Fed. R. Civ. P. 23(a)(2). “A common question ‘must be of such a nature that 3 it is capable of classwide resolution—which means that determination of its truth or falsity 4 will resolve an issue that is central to the validity of each one of the claims in one stroke.’” 5 Olean Wholesale Grocery Coop., Inc. v. Bumble Bee Foods LLC, 31 F.4th 651 , 663 (9th 6 Cir. 2022) (quoting Wal-Mart, 564 U.S. at 350). “By contrast, an individual question is 7 one where members of a proposed class will need to present evidence that varies from 8 member to member.” Id. “[T]he key inquiry is not whether the plaintiffs have raised 9 common questions, ‘even in droves,’ but rather, whether class treatment will ‘generate 10 common answers apt to drive the resolution of the litigation.’” Abdullah v. U.S. Sec. 11 Assoc., Inc., 731 F.3d 952, 957 (9th Cir. 2013) (quoting Wal-Mart, 564 U.S. at 350) 12 (emphasis removed). 13 Plaintiff argues that the proposed settlement class satisfies the commonality 14 requirement because all class member share the following legal and factual questions: (1) 15 whether Defendants failed to accurately calculate the class members’ wages owed; (2) 16 whether Defendants failed to provide compliant wage statements in violation of California 17 Labor Code § 226; (3) whether Defendant failed to provide class members with compliant, 18 duty-free rest and meal periods; and (4) whether Defendants failed to reimburse the class 19 members for reasonable and necessary business expenses incurred. (Doc. No. 49-1 at 2420 25.) These common questions raised by Plaintiff are sufficient to satisfy the commonality 21 requirement. 22 Typicality requires that “the claims or defenses of the representative parties [be] 23 typical of the claims or defenses of the class.” Fed. R. Civ. P. 23(a)(3). When determining 24 whether the typicality prerequisite is met, courts will look at “whether other members have 25 the same or similar injury, whether the action is based on conduct which is not unique to 26 the named plaintiffs, and whether other class members have been injured by the same 27 course of conduct.” Hanon v. Dataproducts Corp., 976 F.2d 497, 508 (9th Cir. 1992) 28 (citation omitted). Importantly, the typicality inquiry focuses on “the nature of the 1 claim . . . of the class representative, and not . . . the specific facts from which it arose.” 2 Ellis v. Costco Wholesale Corp., 657 F.3d 970, 984 (9th Cir. 2011) (quoting Hanon, 976 3 F.2d at 508). 4 Here, Plaintiff argues that typicality is satisfied because Plaintiff was subject to the 5 same allegedly uniform policies and practices as the class members, and Plaintiff’s claims 6 are the same as the claims that could be brought by the class members. (Doc. No. 49-1 at 7 25; Doc. No. 49-, Hernandez Decl. ¶ 4.) Plaintiff has sufficiently demonstrated that her 8 claims are typical of the claims of the class, and, thus, the typicality requirement has been 9 satisfied. 10 The adequacy of representation prerequisite requires that the class representative be 11 able to “fairly and adequately protect the interests of the class.” Fed. R. Civ. P. 23(a)(4). 12 Representation is adequate if the plaintiff and class counsel (1) do not have any conflicts 13 of interest with any other class members and (2) will “prosecute the action vigorously” on 14 behalf of the class. Lerwill v. Inflight Motion Pictures, Inc., 582 F.2d 507, 512 (9th 15 Cir. 1978) (citation omitted); see Staton v. Boeing Co., 327 F.3d 938, 957 (9th Cir. 2003). 16 Plaintiff contends that her claims and the claims of the rest of the class are virtually 17 coextensive, and Plaintiff represents that there are no conflicts between herself and any 18 other class member. (Doc. No. 49-1 at 25; Doc. No. 49-3, Hernandez Decl. ¶ 5.) Plaintiff’s 19 counsel also represents that it has no conflicts of interest. (Doc. No. 49-1 at 25; Doc. No. 20 49-2, Melmed Decl. ¶ 7.) In addition, Plaintiff’s counsel has significant experience 21 litigating class actions and has prosecuted this case vigorously. (See Doc. No. 49-1 at 25; 22 Doc. No. 49-2, Melmed Decl. ¶¶ 8-13.) As such, the adequacy of representation 23 requirement has been met. 24 In sum, all of the prerequisites of Rule 23(a) are satisfied here. 25 B. Rule 23(b)(3) Requirements 26 Federal Rule of Civil Procedure 23(b)(3) requires a court to find that: (1) “the 27 questions of law or fact common to class members predominate over any questions 28 affecting only individual members”; and (2) “that a class action is superior to other 1 available methods for fairly and efficiently adjudicating the controversy.” Fed. R. Civ. P. 2 23(b)(3). Rule 23(b)(3)’s requirements are designed “to cover cases ‘in which a class 3 action would achieve economies of time, effort, and expenses, and promote . . . uniformity 4 of decision as to persons similarly situated, without sacrificing procedural fairness or 5 bringing about other undesirable results.’” Amchem Prods., Inc. v. Windsor, 521 U.S. 591 , 6 615 (1997) (citation omitted). If the parties seek to certify a class for settlement purposes, 7 “a district court need not inquire whether the case, if tried, would present intractable 8 management problems for the proposal is that there be no trial.” Id. at 620 (citing Fed. R. 9 Civ. P. 23(b)(3)(D)). 10 i. Predominance 11 A plaintiff must show “that the questions of law or fact common to class members 12 predominate over any questions affecting only individual members.” Fed. R. Civ. 13 P. 23 (b)(3). The predominance inquiry focuses on whether the proposed class is 14 “sufficiently cohesive to warrant adjudication by representation.” Amchem, 521 U.S. 15 at 623 (citation omitted). It “asks whether the common, aggregation-enabling, issues in 16 the case are more prevalent or important than the noncommon, aggregation-defeating, 17 individual issues.” Tyson Foods, Inc. v. Bouaphakeo, 577 U.S. 442 , 453 (2016) (citation 18 omitted). 19 Here, Plaintiff contends that the common issues here concerning the uniform 20 deficiencies to Defendants’ minimum wage and overtime payment practices, 21 reimbursement practices, rest breaks, meal periods, and wage statement policies raise 22 predominating factual and legal issues. (Doc. No. 49-1 at 26.) The Court agrees. As such, 23 common questions of law and fact predominate here. 24 ii. Superiority 25 A plaintiff must also demonstrate the superiority of maintaining a class action. Fed. 26 R. Civ. P. 23(b)(3). In considering whether a class action is superior, a court may consider: 27 (A) the class members’ interests in individually controlling the prosecution or defense of separate actions; [28] 1 (B) the extent and nature of any litigation concerning the controversy already begun by or against class members; [2] (C) the desirability or undesirability of concentrating the litigation of the [3] claims in the particular forum; and [4] (D) the likely difficulties in managing a class action. [5] Id. The class action method is generally considered to be superior if “classwide litigation [6] of common issues will reduce litigation costs and promote greater efficiency.” Valentino [7] v. Carter-Wallace, Inc., 97 F.3d 1227, 1234 (9th Cir. 1996) (citation omitted). [8] Here, the parties estimate that the settlement class consists of approximately 2,169 [9] members and all their claims are based on the same allegedly unlawful policies and [10] practices and the same legal theories. (See Doc. No. 49-2, Melmed Decl. ¶¶ 4, 26-38.) [11] Resolving these disputes in a single class action rather than individually would promote [12] greater efficiency and reduce litigation costs. See Johnson v. Serenity Transportation, Inc., [13] No. 15-CV-02004-JSC, 2018 WL 3646540 , at *15 (N.D. Cal. Aug. 1, 2018) (“[A] class [14] action is more manageable because several claims turn on [defendant]’s common policies [15] or lack thereof, which can be proven through evidence that will be applicable to the entire [16] class.”). As such, a class action is the superior method of adjudicating this matter. [17] In sum, the requirements of Rule 23(b)(3) are satisfied. As a result, the Court grants [18] preliminary certification of the proposed class. The Court may review this finding at the [19] final approval hearing. [20] C. Appointment of Class Representative and Class Counsel [21] Plaintiff meets the commonality, typicality, and adequacy requirements of [22] Rule 23(a). As such, Plaintiff is appointed as class representative. See Coleman v. United [23] Servs. Auto. Ass’n, No. 21-CV-217-RSH-KSC, 2023 WL 9110926 , at *28 (S.D. Cal. Dec. [24] 22, 2023) (“Rule 23 governs whether a plaintiff should be appointed as class [25] representative” (citing In re Bridgepoint Educ. Inc. Secs. Litig., No. 12-cv-1737-JM-JLB, [26] 2015 WL 224631 , *8 (S.D. Cal. Jan. 15, 2015)). [27] Under Rule 23(g), a court that certifies a class must appoint class counsel. Fed. R. [28] Civ. P. 23(g)(1). A court must consider the following factors when appointing class 1 counsel: “(i) the work counsel has done in identifying or investigating potential clams in 2 the action; (ii) counsel’s experience in handling class actions, other complex litigation, and 3 the types of claims asserted in the action; (iii) counsels’ knowledge of the applicable law; 4 and (iv) the resources that counsel will commit to represent the class.” Fed. R. Civ. 5 P. 23 (g)(1)(A). The court may also “consider any other matter pertinent to counsel’s ability 6 to fairly and adequately represent the interest of the class.” Fed. R. Civ. P. 23(g)(1)(B). 7 Here, Melmed Law Group P.C. has significant experience litigating California-wide 8 class actions, including a variety of wage and hour class actions. (See Doc. No. 49-2, 9 Melmed Decl. ¶¶ 8-13.) As such, Melmed Law Group P.C. is appointed as class counsel 10 pursuant to Federal Rule of Civil Procedure 23(g). 11 II. The Settlement 12 Federal Rule of Civil Procedure 23(e) requires the Court to determine whether a 13 proposed settlement is “fundamentally fair, adequate, and reasonable.” Staton, 327 F.3d 14 at 959 (citation omitted). To make this determination, the Court must consider a number 15 of factors, including: (1) the strength of the plaintiff’s case; (2) the risk, expense, 16 complexity, and likely duration of further litigation; (3) the risk of maintaining class action 17 status throughout the trial; (4) the amount offered in settlement; (5) the extent of discovery 18 completed, and the stage of proceedings; (6) the experience and views of counsel; (7) the 19 presence of a governmental participant; and (8) the reaction of class members to the 20 proposed settlement. Id. 21 “In addition, the settlement may not be the product of collusion among the 22 negotiating parties.” In re Mego Fin. Corp. Sec. Litig., 213 F.3d 454, 458 (9th Cir. 2000) 23 (citing Class Plaintiffs v. City of Seattle, 955 F.2d 1268, 1290 (9th Cir. 1992)). “Prior to 24 formal class certification, there is an even greater potential for a breach of fiduciary duty 25 owed the class during settlement. Accordingly, such agreements must withstand an even 26 higher level of scrutiny of collusion or other conflicts of interest than is ordinarily required 27 under Rule 23(e) before securing the court’s approval as fair.” In re Bluetooth Headset 28 Prods. Liab. Litig., 654 F.3d 935, 946 (9th Cir. 2011) (citation omitted). “Signs of 1 collusion include: (1) a disproportionate distribution of the settlement fund to counsel; 2 (2) negotiation of a ‘clear sailing provision’; and (3) an arrangement for funds not awarded 3 to revert to defendant rather than to be added to the settlement fund.” Hefler v. Wells Fargo 4 & Company, No. 16-cv-05479-JST, 2018 WL 4207245 , *8 (N.D. Cal. Sept. 4, 2018) 5 (quoting Bluetooth, 654 F.3d at 947 ). 6 Given that some of these factors cannot be fully assessed until a court conducts the 7 final approval hearing, “a full fairness analysis is unnecessary at this stage.” Alberto v. 8 GMRI, Inc., 252 F.R.D. 652, 665 (E.D. Cal. 2008) (citation omitted); see Uschold v. 9 NSMG Shared Servs., LLC, 333 F.R.D. 157 , 169 (N.D. Cal. 2019). Rather, at the 10 preliminary approval stage, a court need only review the parties’ proposed settlement to 11 determine whether it is within the permissible “range of possible approval” and thus, 12 whether the notice to the class and the scheduling of a fairness hearing is appropriate. 13 Alberto, 252 F.R.D. at 666 (citation omitted); see Uschold, 333 F.R.D. at 169 (“At the 14 preliminary approval stage, ‘the settlement need only be potentially fair.’”). Preliminary 15 approval of a settlement and notice to the class is appropriate if (1) “the proposed settlement 16 appears to be the product of serious, informed, and non-collusive negotiations”; (2) “has 17 no obvious deficiencies”; (3) “does not improperly grant preferential treatment to class 18 representatives or segments of the class”; and (4) “falls within the range of possible 19 approval.” In re Tableware Antitrust Litig., 484 F. Supp. 2d 1078 , 1079–80 (N.D. Cal. 20 Apr. 12, 2007) (citation omitted); see also Beaver v. Tarsadia Hotels, No. 11-cv-0184221 GPC-KSC, 2017 WL 2268853 , *2–*3 (S.D. Cal. May 24, 2007). 22 In determining whether a proposed settlement should be approved, the Ninth Circuit 23 has a “strong judicial policy that favors settlements, particularly where complex class 24 action litigation is concerned.” Seattle, 955 F.2d at 1276 . Additionally, the Ninth Circuit 25 favors deference to the “private consensual decision of the [settling] parties,” particularly 26 where the parties are represented by experienced counsel and negotiation has been 27 facilitated by a neutral party. See Rodriguez v. West Publ’g Corp., 563 F.3d 948, 965 (9th 28 Cir. 2009) (citation omitted). 1 After reviewing the proposed settlement in light of the above factors, the Court 2 concludes that preliminary approval of the settlement is appropriate. The proposed 3 settlement agreement appears to be the result of serious, informed, and non-collusive 4 negotiations. See Tableware Antitrust Litig., 484 F. Supp. 2d at 1079–80. The proposed 5 settlement was the result of contentious negotiations and was reached after the parties 6 participated in a full-day mediation with an experienced mediator who has extensive 7 experience in California wage and hour class action lawsuits. (Doc. No. 49-2, Melmed 8 Decl. ¶ 24.) Prior to that mediation, Plaintiff’s counsel conducted significant informal 9 discovery, including: 10 numerous telephonic conferences with Plaintiff; inspection and analysis of hundreds of pages of documents and other information produced by Plaintiff [11] and Defendant; analysis of work-related data from a sample of Class Members 12 and PAGA Class Members; and an analysis of the legal positions taken by Defendant; investigation into the viability of class treatment of the claims [13] asserted in the action; analysis of potential class-wide damages, including 14 information sufficient to understand Defendant’s potential defenses to Plaintiff’s claims; research of the applicable law with respect to the claims [15] asserted in the amended complaint and the potential defenses thereto; and 16 assembling and analyzing of data for calculating damages. 17 (Id. ¶ 23.) Considering this history, the record indicates the parties “carefully investigated 18 the claims before reaching a resolution,” which weighs in favor of preliminary approval. 19 Ontiveros v. Zamora, 303 F.R.D. 356, 371 (E.D. Cal. 2014) (citation omitted); see also 20 Loreto v. Gen. Dynamics Info. Tech., Inc., No. 19-cv-1366-GPC, 2021 WL 3141208 , *4 21 (S.D. Cal. July 26, 2021) (finding that a settlement “facilitated by an experienced mediator 22 after the exchange of sufficient discovery to allow the parties to ascertain Defendant’s 23 potential exposure,” supported preliminary approval); In re Zynga Inc. Sec. Litig., No. 1224 CV-04007-JSC, 2015 WL 6471171 , at *9 (N.D. Cal. Oct. 27, 2015) (“The use of a mediator 25 and the presence of discovery “support the conclusion that the Plaintiff was appropriately 26 informed in negotiating a settlement.’”). 27 The proposed settlement agreement also does not appear to have any obvious 28 deficiencies, does not improperly grant preferential treatment to the class representative or 1 segments of the class, and falls within the range of possible approval. See Tableware 2 Antitrust Litig., 484 F. Supp. 2d at 1079–80. Further, class counsel is experienced in 3 litigating California-wide class actions, including a variety of wage and hour class actions. 4 (See Doc. No. 49-2, Melmed Decl. ¶¶ 8-13.) See Romero v. Securus Tech., Inc., No. 165 cv-1283-JM, 2020 WL 3250599 , *6 (S.D. Cal. June 16, 2020) (finding that class counsel’s 6 “extensive experience in complex litigation and class actions,” supported preliminary 7 approval). Class counsel represents that although it continues to believe in the merits of 8 Plaintiff’s claims, Defendants have strong defenses to the claims and continued litigation 9 would be costly, time consuming, and uncertain in outcome, particularly given the risk of 10 the class not being certified. (Doc. No. 49-1 at 30-31; Doc. No. 49-2, Melmed Decl. ¶¶ 51, 11 56-57; see also Doc. No. 49-1 at 16-19.) 12 Moreover, the proposed settlement is for $4,000,000 with an expected net settlement 13 amount of at least $2,471,666.67. (Doc. No. 49-1 at 6, 20; Doc. No. 49-2, Settlement § 14 3.1.) And the settlement fund is non-reversionary, meaning that none of the gross 15 settlement amount will revert back to Defendant. (Doc. No. 49-1 at 6, 20; Doc. No. 49-2, 16 Settlement § 3.1.) This amount is a fair and reasonable result given the Defendants’ various 17 defenses and falls within the range of possible approval. (Doc. No. 49-2, Melmed Decl. ¶ 18 51.) See Loeza v. JPMorgan Chase Bank, NA, No. 13-cv-0095-L-BGS, 2015 WL 19 13357592, *8 (S.D. Cal. Aug. 8, 2015) (“In determining whether a settlement agreement 20 is substantively fair to the class, a court must balance the value of plaintiffs’ expected 21 recovery against the value of the settlement offer.” (citing Tableware Antitrust Litig., 484 22 F. Supp. 2d at 1080)); see also Zynga, 2015 WL 6471171 , *10 (“A cash settlement 23 amounting to only a fraction of the potential recovery does not per se render the settlement 24 inadequate or unfair.” (citation omitted)). 25 Class counsel also intends to request an attorneys’ fee award of $1,333,333.33, or 26 one-third of the gross settlement fund, as well as litigation expenses of up to $20,000. (Doc. 27 No. 49-1 at 32-33; Doc. No. 49-2, Settlement § 3.2.2.) The request for attorneys’ fees is 28 within the range of acceptable attorneys’ fees in Ninth Circuit cases. See Vasquez v. Coast 1 Valley Roofing, Inc., 266 F.R.D. 482, 491 (E.D. Cal. Mar. 6, 2010) (“The typical range of 2 acceptable attorneys’ fees in the Ninth Circuit is 20% to 33 1/3% the total settlement value, 3 with 25% considered the benchmark.” (citations omitted)); see also Bluetooth, 654 F.3d at 4 942 (noting that “courts typically calculate 25% of the fund as the ‘benchmark’ for a 5 reasonable fee award” in class action settlements). Additionally, the proposed incentive 6 award of $7,500 for Plaintiff appears to be reasonable. (Doc. No. 49-1 at 33; Doc. No. 497 2, Settlement § 3.2.1.) See Gutierrez v. Amplify Energy Corp., No. 8:21-CV-016288 DOCJDEX, 2023 WL 6370233 , at *8 (C.D. Cal. Sept. 14, 2023) (“Service awards of 9 $7,500 or larger are often awarded in this Circuit.”). 10 For the foregoing reasons, the Court conditionally grants preliminary approval of the 11 proposed settlement. The Court reserves judgment on the reasonableness of the attorneys’ 12 fees for the final approval hearing. 13 III. Class Notice 14 Class notice must be “reasonably calculated, under all the circumstances, to apprise 15 interested parties of the pendency of the action and afford them an opportunity to present 16 their objections.” Roes, 1–2 v. SFBSC Mgmt., LLC, 944 F.3d 1035 , 1045 (9th Cir. 2019) 17 (quoting Eisen v. Carlisle and Jacquelin, 417 U.S. 156, 174 (1974)). In addition, the class 18 notice must satisfy the content requirements of Federal Rule of Civil Procedure 19 23(c)(2)(B), which provides the notice must clearly and concisely state in plain, easily 20 understood language: [21] (i) the nature of the action; (ii) the definition of the class certified; (iii) the class 22 claims, issues, or defenses; (iv) that a class member may enter an appearance through an attorney if the member so desires; (v) that the court will exclude from [23] the class any member who requests exclusion; (vi) the time and manner for 24 requesting exclusion; and (vii) the binding effect of a class judgment on members under Rule 23(c)(3). [25] 26 Fed. R. Civ. P. 23(c)(2)(B). 27 / / / 28 / / / 1 A. Content of Notice 2 The content of the proposed class notice meets the requirements of Rule 23(c)(3). 3 (Doc. No. 49-2, Melmed Decl. Ex. A, Settlement Ex. 1 at ECF pp. 59-70.) In clearly 4 understandable language, the proposed class notice provides the following: a description 5 of the lawsuit; a description of the settlement classes and their claims; an explanation of 6 the material elements of the settlement, including payment estimates; a statement declaring 7 that class members may exclude themselves from or object to the settlement; a description 8 that explains how class members may exclude themselves from the settlement, object to 9 the terms of the settlement, and/or challenge their individual workweeks/pay period 10 calculations; a description of the binding effect of the class judgment on class members 11 who do not opt out; and a description of the fairness hearing and how class members can 12 participate in it. (See id.) 13 B. Method of Notice 14 The proposed method of notice is also reasonable. The parties have requested that 15 ILYM Group, Inc. be appointed to serve as the settlement administrator. (Doc. No. 49-2, 16 Melmed Decl. Ex. A, Settlement § 7.1.) Within 21 days of the Court’s entry of this 17 preliminary approval order, Defendants will provide the settlement administrator with the 18 relevant class data, which includes each class members’ name, last-known mailing address, 19 social security number, and number of class period workweeks and pay periods. (Id. §§ 20 1.8, 4.2.) Within 14 days of receiving the class member data from Defendants, the 21 settlement administrator will mail the class notice to the class members via First Class 22 USPS mail. (Id. § 7.4.2.) Within three business days of the settlement administrator 23 receiving a class notice returned by USPS as undeliverable, the settlement administrator 24 will re-mail the class notice using any forwarding address provided by USPS.5 (Id. § 7.4.3.) [26] 27 5 If USPS does not provide a forwarding address, the settlement administrator will conduct a class member address search, and re-mail the class notice to the most current [28] 1 Within 45 days from the postmark date of the initial mailing of the class notice, class 2 members may make a written object to the settlement, challenge the number of workweeks 3 or PAGA pay periods attributed to them on the class notice, or request exclusion from the 4 class.6 (Id. §§ 1.46, 7.5.1, 7.6, 7.7.2.) Finally, at least 14 days before the deadline for 5 Plaintiff to file its motion for final approval of the settlement, the settlement administrator 6 will provide to class counsel and defense counsel a declaration suitable for filing in Court 7 attesting to its due diligence and compliance with all of its obligations under the settlement 8 agreement. (Id. § 7.8.5.) 9 After reviewing the content and the proposed method of providing notice, the Court 10 determines that the class notice is adequate and sufficient to inform the class members of 11 their rights. Accordingly, the Court approves the form and manner of giving notice to the 12 class of the proposed settlement. 13 IV. Scheduling Final Approval Hearing 14 The Court schedules the final approval hearing for Monday, August 26, 2024, at 15 10:30 a.m. Pacific Time. Defendants must submit a class list to the settlement 16 administrator by Monday, April 29, 2024. The settlement administrator must mail class 17 notice packets to all class members as set forth in the settlement agreement by Monday, 18 May 13, 2024. Monday, June 27, 2024 is the deadline: (1) for class members to postmark 19 share forms with challenges; (2) for class members to postmark request for exclusion; and 20 (3) for class members to submit any objections to settlement. The settlement administrator 21 must provide class counsel with a declaration of due diligence by Monday, July 15, 2024. 22 Plaintiff and class counsel must file all papers in support of final approval, the plan of 23 allocation, and any fee and expense application or compensatory award by Monday, July 24 29, 2024. Any reply papers must be filed by Monday, August 12, 2024. 25 / / / [27] 6 This deadline is extended by 14 days for any class member whose class notice was [28] 1 Conclusion 2 For the reasons above, the Court grants the parties’ joint motion to add a second 3 ||addendum to their joint stipulation of class and representative action settlement and release, 4 the Court grants Plaintiff's motion for preliminary approval of class action settlement. 5 ||The Court certifies the class for purposes of settlement, preliminarily approves the 6 || proposed settlement, appoints class representative and class counsel, and approves the form 7 ||and manner of the notice of the proposed settlement to the settlement class members. The 8 Court also appoints ILYM Group Inc. as the settlement administrator. Further, the Court 9 || schedules the final approval hearing for Monday, August 26, 2024, at 10:30 a.m. Pacific 10 ||Standard Time. Plaintiff must file a motion for final approval of the settlement, and any 11 motions for fee awards and incentive awards on or before Monday, July 29, 2024 12 IT IS SO ORDERED. 13 || DATED: April 8, 2024 | | | ul | | | MARILYN ¥®. HUFF, Distri ge 15 UNITED STATES DISTRICT COURT