“Federal courts, in any case, lack authority to 15 substitute for Rule 23’s certification criteria a standard never 16 adopted -- that if a settlement is ‘fair,’ then certification is 17 proper.”
How later courts described this case
- “Federal courts, in any case, lack authority to 15 substitute for Rule 23’s certification criteria a standard never 16 adopted -- that if a settlement is ‘fair,’ then certification is 17 proper.”
Written by the judges who cited it.
The opinion
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8 UNITED STATES DISTRICT COURT
9 EASTERN DISTRICT OF CALIFORNIA
10 ----oo0oo----
11
12 JOSE ARELLANO, individually, and No. 2:23-cv-1540 WBS
DMC
on behalf of all others similarly
13 situated,
14 Plaintiff, MEMORANDUM AND ORDER RE:
PLAINTIFF’S MOTION FOR
15 v. PRELIMINARY APPROVAL OF
CLASS ACTION
16 THE J.M. SMUCKER COMPANY, a
corporation; SMUCKER NATURAL
17 FOODS, INC., a corporation;
SMUCKER NATURAL FOODS, LLC, a
18 limited liability company; SMUCKER
FOODSERVICE, INC., a corporation;
19 SMUCKER FRUIT PROCESSING CO., a
corporation; SMUCKER RETAIL FOODS,
20 INC., a corporation; SMUCKER SALES
AND DISTRIBUTION COMPANY, a
21 corporation; FIDELITY INVESTMENTS
INSTITUTIONAL OPERATIONS COMPANY
22 LLC, a limited liability company;
FIDELITY INVESTMENTS INSTITUTIONAL
23 OPERATIONS COMPANY, INC., a
corporation; SMUCKER FRUIT
24 PROCESSING COMPANY, a corporation;
TRUROOTS, LLC, a limited liability
25 company; and DOES 1 through 10,
inclusive,
26
Defendants.
27
28
1 ----oo0oo----
2 Plaintiff Jose Arellano (“plaintiff”), individually and
3 on behalf of similarly situated individuals, brought this
4 putative class action against defendants The J.M. Smucker
5 Company; Smucker Natural Foods, Inc.; Smucker Natural Foods, LLC;
6 Smucker Foodservice, Inc.; Smucker Fruit Processing Co.; Smucker
7 Retail Foods, Inc.; Smucker Sales and Distribution Co.; Fidelity
8 Investments Institutional Operations Co., LLC; Fidelity
9 Investments Institutional Operations Co., Inc.; and TruRoots,
10 LLC, alleging violations of California wage and hour laws. (See
11 Docket No. 1-4 Ex. A.) Before the court is plaintiff’s unopposed
12 motion for preliminary approval of a class action settlement.
13 (See Docket No. 44; see also Docket No. 47.)
14 I. Background and Proposed Settlement
15 On April 27, 2023, plaintiff filed suit in Butte County
16 Superior Court. (See Docket No. 1-4 Ex. A at 6-32.) Plaintiff
17 amended the complaint on May 15, 2023. (Docket No. 1-4 Ex. A at
18 41-67.) On July 25, 2023, plaintiff voluntarily dismissed
19 Fidelity Investments Institutional Operations Co., LLC, and
20 Fidelity Investments Institutional Operations Co., Inc. (Docket
21 No. 1-4 at ¶ 7.)
22 On July 27, 2023, defendants removed the action to this
23 court on the basis of diversity jurisdiction under the Class
24 Action Fairness Act (“CAFA”). (See Docket No. 1 at ¶¶ 1, 15-86
25 (citing 28 U.S.C. § 1332(d)).) On November 18, 2023, the parties
26 stipulated to voluntarily dismiss defendants The J.M. Smucker
27 Company; Smucker Natural Foods, Inc.; Smucker Natural Foods, LLC;
28 Smucker Foodservice, Inc.; Smucker Fruit Processing Co.; Smucker
1 Retail Foods, Inc.; and Smucker Sales and Distribution Co. (See
2 Docket No. 34.) Thus, defendant TruRoots, LLC (“defendant” or
3 “TruRoots”) is the only defendant remaining. (Cf. Docket No. 1-1
4 at ¶¶ 3-4 & n.1 (explaining defendant’s corporate structure).)
5 Defendant employed plaintiff as an hourly-paid or non-
6 exempt employees at its distribution facility in Chico,
7 California. (See Docket No. 44 at ¶¶ 2-3; see also Docket No. 1-
8 1 at ¶¶ 2-6.) Plaintiff brought this action on behalf of himself
9 and similarly situated individuals for (1) failure to pay minimum
10 wages, (2) failure to pay overtime wages, (3) failure to provide
11 meal breaks, (4) failure to provide rest breaks, (5) failure to
12 pay wages due at end of employment, (6) failure to furnish
13 accurate itemized wage statements, (7) failure to produce
14 requested employment records, and (8) violations of California’s
15 Unfair Competition Law. (See Docket No. 1-4 Ex. A at 6-32.)
16 The putative class consists of all current and former
17 hourly-paid or non-exempt employees who worked for defendant in
18 California between October 31, 2018, and April 14, 2025.
19 (See Docket No. 44-2 at §§ 1.4, 1.11, 1.15.) The putative class
20 has 152 individuals. (See Docket No. 44-1 at ¶¶ 16-17.)
21 The parties proposed a gross settlement amount of
22 $350,000.00. (Docket No. 44-2 at §§ 1.21, 3.1.) This includes
23 the following: (1) a $5,000 incentive award for plaintiff; (2) an
24 estimated $116,666.67 in attorneys’ fees for plaintiff’s counsel;
25 (3) a maximum of $17,000.00 in litigation expenses for
26 plaintiff’s counsel; (4) $7,000 in payment for the expenses of
27 the settlement administrator; and (5) a net settlement amount of
28 $204,333.33 for the 152 class members. (See, e.g., Docket No.
1 44-1 at ¶¶ 12, 16, 22-23, 29 & n.1; Docket No. 44-2 Ex. 1 at
2 §§ 1.21, 3.1-3.2, 3.2.1-3.2.4.)
3 Since the class has 152 members, the fund would pay
4 each an average of $1,344.40, excluding plaintiff’s incentive
5 award, to be distributed to class members based on their number
6 of workweeks during the class period. (See Docket No. 44-1 at
7 ¶¶ 16, 22 & n.2.)
8 The settlement would release defendant from any and all
9 class claims that were pled or could have been pled based on the
10 factual allegations in the operative or prior complaints.
11 (See Docket No. 44-2 at §§ 5.1, 5.1.1, 5.2.)
12 II. Discussion
13 Federal Rule of Civil Procedure 23(e) provides that
14 “the claims, issues, or defenses of a certified class may be
15 settled . . . only with the court’s approval.” Fed. R. Civ. P.
16 23(e) (cleaned up). This Order is the first step in that process
17 and analyzes only whether the proposed class action settlement
18 deserves preliminary approval. See Murillo v. Pac. Gas & Elec.
19 Co., 266 F.R.D. 468, 473 (E.D. Cal. 2010) (Shubb, J.).
20 Preliminary approval authorizes the parties to give
21 notice to putative class members of the settlement agreement and
22 lays the groundwork for a future fairness hearing, at which the
23 court will hear objections to (1) the treatment of this
24 litigation as a class action and (2) the terms of the settlement.
25 See id.; see also Diaz v. Tr. Territory of Pac. Islands, 876 F.2d
26 1401, 1408 (9th Cir. 1989) (same). The court will reach a final
27 determination as to whether the parties should be allowed to
28 settle the class action on their proposed terms after that
1 hearing.
2 Where the parties reach a settlement agreement prior to
3 class certification, the court must first assess whether a class
4 exists. Staton v. Boeing Co., 327 F.3d 938, 952-53 (9th Cir.
5 2003). “Such attention is of vital importance, for a court asked
6 to certify a settlement class will lack the opportunity, present
7 when a case is litigated, to adjust the class, informed by the
8 proceedings as they unfold.” Id. (cleaned up). The parties
9 cannot “agree to certify a class that clearly leaves any one
10 requirement unfulfilled.” Murillo, 266 F.R.D. at 473.
11 Consequently, the court cannot blindly rely on the fact
12 that the parties have stipulated that a class exists for purposes
13 of settlement. See Amchem Prods. Inc. v. Windsor, 521 U.S. 591,
14 621-22 (1997) (“Federal courts, in any case, lack authority to
15 substitute for Rule 23’s certification criteria a standard never
16 adopted -- that if a settlement is ‘fair,’ then certification is
17 proper.”).
18 “Second, the district court must carefully consider
19 ‘whether a proposed settlement is fundamentally fair, adequate,
20 and reasonable,’ recognizing that ‘it is the settlement taken as
21 a whole, rather than the individual component parts, that must be
22 examined for overall fairness . . . .’” Staton, 327 F.3d at 952
23 (quoting Hanlon v. Chrysler Corp., 150 F.3d 1011, 1026 (9th Cir.
24 1998), abrogated on other grounds by Wal-Mart Stores, Inc. v.
25 Dukes, 564 U.S. 338 (2011)) (cleaned up).
26 A. Class Certification
27 The putative class consists of “all persons employed by
28 defendant in California and classified as hourly-paid or non-
1 exempt employees who worked for defendant or its predecessor
2 during the class period,” where “the class period” is October 31,
3 2018, to April 14, 2025. (See Docket No. 44-2 at §§ 1.4, 1.11,
4 1.15 (cleaned up).) To be certified, the putative class must
5 satisfy the requirements of Federal Rules of Civil Procedure
6 23(a) and 23(b). Leyva v. Medline Indus. Inc., 716 F.3d 510, 512
7 (9th Cir. 2013).
8 1. Rule 23(a)
9 Rule 23(a) restricts class actions to cases where: “(1)
10 the class is so numerous that joinder of all members is
11 impracticable; (2) there are questions of law or fact common to
12 the class; (3) the claims or defenses of the representative
13 parties are typical of the claims or defenses of the class; and
14 (4) the representative parties will fairly and adequately protect
15 the interests of the class.” See Fed. R. Civ. P. 23(a).
16 a. Numerosity
17 “Courts have routinely found the numerosity requirement
18 satisfied when the class comprises 40 or more members.” Collins
19 v. Cargill Meat Sols. Corp., 274 F.R.D. 294, 300 (E.D. Cal. 2011)
20 (Wanger, J.). Here, the proposed class of 152 members more than
21 satisfies the numerosity requirement.
22 b. Commonality
23 Commonality requires that the class members’ claims
24 “depend upon a common contention” that is “capable of classwide
25 resolution -- which means that determination of its truth or
26 falsity will resolve an issue that is central to the validity of
27 each one of the claims in one stroke.” Wal-Mart Stores, 564 U.S.
28 at 350. “All questions of fact and law need not be common to
1 satisfy the rule. The existence of shared legal issues with
2 divergent factual predicates is sufficient, as is a common core
3 of salient facts coupled with disparate legal remedies within the
4 class.” Hanlon, 150 F.3d at 1019-20. “So long as there is ‘even
5 a single common question,’ a would-be class can satisfy the
6 commonality requirement of Rule 23(a)(2).” Wang v. Chinese Daily
7 News, Inc., 737 F.3d 538, 544 (9th Cir. 2013) (quoting Wal-Mart
8 Stores, 564 U.S. at 358-59).
9 Here, the claims implicate common questions of law and
10 fact because they are premised on policies and practices that
11 allegedly applied to all class members equally. All class
12 members worked for the same entity or its predecessor during the
13 same time period. (See Docket No. 44-2 at §§ 1.4, 1.11, 1.15.)
14 As a result, the class members share several common factual
15 questions surrounding the circumstances of their employment as
16 well as several common legal questions concerning whether
17 defendant’s policies and practices violated California law.
18 Generally, “challenging a policy common to the class as
19 a whole creates a common question whose answer is apt to drive
20 the resolution of the litigation.” Ontiveros v. Zamora,
21 No. 2:08-cv-567 WBS DAD, 2014 WL 3057506, at *5 (E.D. Cal. July
22 7, 2014) (cleaned up). Even if individual members of the class
23 will be entitled to different amounts of damages because, for
24 instance, defendant employed them for different amounts of time,
25 “the presence of individual damages cannot, by itself, defeat
26 class certification.” Leyva, 716 F.3d at 514. Accordingly,
27 these common questions of law and fact satisfy the commonality
28 requirement.
1 c. Typicality
2 Typicality requires that plaintiff have claims
3 “reasonably co-extensive with those of absent class members,” but
4 their claims do not have to be “substantially identical.”
5 Hanlon, 150 F.3d at 1019-20. The test for typicality “is whether
6 other members have the same or similar injury, whether the action
7 is based on conduct which is not unique to plaintiff, and whether
8 other class members have been injured by the same course of
9 conduct.” Hanon v. Dataproducts Corp., 976 F.2d 497, 508 (9th
10 Cir. 1992).
11 Plaintiff and other class members have all worked for
12 defendant and were allegedly subject to the same policies and
13 practices in question, such as underpayment of wages. Although
14 the facts might differ for individual class members, the basis
15 for their alleged injuries and the parties purportedly
16 responsible for those injuries are the same. The proposed class
17 therefore meets the typicality requirement.
18 d. Adequacy of Representation
19 To resolve the question of adequacy, the court must
20 consider two factors: (1) whether plaintiff and his counsel have
21 any conflicts of interest with other class members, and (2)
22 whether plaintiff and his counsel will vigorously prosecute the
23 action on behalf of the class. In re Hyundai & Kia Fuel Econ.
24 Litig., 926 F.3d 539, 566-67 (9th Cir. 2019).
25 i. Conflicts of Interest
26 There do not appear to be any conflicts of interest for
27 purposes of preliminary approval. (See Docket No. 44 at 14-15.)
28 Plaintiff’s interests are generally aligned with those of the
1 putative class members, who suffered injuries similar to those
2 suffered by plaintiff. See Amchem, 521 U.S. at 625–26.
3 The settlement provides for a $5,000 incentive award
4 for plaintiff. (See Docket No. 44-2 at §§ 1.13, 3.2.1.) While
5 the provision of an incentive award raises the possibility that
6 plaintiff’s interest in receiving that award will cause his
7 interests to diverge from the class’s interest in a fair
8 settlement, the Ninth Circuit has specifically approved the award
9 of “reasonable incentive payments.” Staton, 327 F.3d at 977–78.
10 The court, however, must “scrutinize carefully the awards so that
11 they do not undermine the adequacy of the class representatives.”
12 Radcliffe v. Experian Info. Sys., Inc., 715 F.3d 1157, 1163 (9th
13 Cir. 2013).
14 Incentive awards “are intended to compensate class
15 representatives for work done on behalf of the class,” and “to
16 make up for financial or reputational risk undertaken in bringing
17 the action.” Rodriguez v. W. Publ’g Corp., 563 F.3d 948, 958-59
18 (9th Cir. 2009). Indeed, the Ninth Circuit has consistently
19 recognized incentive awards are “fairly typical.” Id. In
20 particular, courts have found that “a $5,000 incentive award is
21 ‘presumptively reasonable’ in the Ninth Circuit.” See Roe v.
22 Frito-Lay, Inc., No. 14-cv-00751, 2017 WL 1315626, at *7-8 (N.D.
23 Cal. Apr. 7, 2017) (quoting Smith v. Am. Greetings Corp., No. 14-
24 cv-02577, 2016 WL 362395, at *10 (N.D. Cal. Jan. 29, 2016)).
25 Here, the incentive award is $5,000, placing it just
26 within the upper limit typically deemed reasonable within the
27 Ninth Circuit. Moreover, plaintiff’s counsel represents that
28 plaintiff has expended significant time participating in this
1 case. (See Docket No. 44-1 at ¶¶ 24-28.) The incentive payment
2 thus appears appropriate at this stage. However, counsel should
3 present further evidence of plaintiff’s efforts towards receiving
4 an incentive award at final approval.
5 ii. Vigorous Prosecution
6 The second portion of the adequacy inquiry examines the
7 vigor with which plaintiff and his counsel have pursued the class
8 claims. “Although there are no fixed standards by which ‘vigor’
9 can be assayed, considerations include competency of counsel and,
10 in the context of a settlement-only class, an assessment of the
11 rationale for not pursuing further litigation.” Hanlon, 150 F.3d
12 at 1021.
13 Here, plaintiff’s counsel appear to be experienced
14 employment litigators with class action experience which
15 qualifies them to pursue the interests of the class. (See Docket
16 No. 44-1 at ¶¶ 34-42.) This background, coupled with the work
17 performed thus far, suggest that plaintiff’s counsel is well-
18 equipped to handle this case. (See id.) Further, plaintiff’s
19 counsel appear to have conducted a thorough factual investigation
20 and thorough legal research and appears to have fully considered
21 the strengths and weaknesses of this case in deciding to accept
22 the terms of the proposed settlement agreement. (See id. at
23 ¶¶ 5-23.) The court finds no reason to doubt that plaintiff’s
24 counsel is well qualified to conduct the proposed litigation and
25 assess the value of the settlement. Accordingly, the court
26 concludes that Rule 23(a)’s adequacy requirement is satisfied for
27 the purpose of preliminary approval.
28 2. Rule 23(b)
1 After fulfilling the threshold requirements of Rule
2 23(a), the proposed class must satisfy the requirements of one of
3 the three subdivisions of Rule 23(b). Leyva, 716 F.3d at 512.
4 Plaintiff seeks class certification under Rule 23(b)(3), which
5 provides that a class action may be maintained only if (1) “the
6 court finds that questions of law or fact common to class members
7 predominate over questions affecting only individual members” and
8 (2) “that a class action is superior to other available methods
9 for fairly and efficiently adjudicating the controversy.” Fed.
10 R. Civ. P. 23(b)(3).
11 a. Predominance
12 “The predominance analysis under Rule 23(b)(3) focuses
13 on ‘the relationship between the common and individual issues’ in
14 the case and ‘tests whether proposed classes are sufficiently
15 cohesive to warrant adjudication by representation.’” Wang, 737
16 F.3d at 545 (quoting Hanlon, 150 F.3d at 1022).
17 Here, the claims brought by the proposed settlement
18 class all arise from defendant’s alleged practices and policies
19 with respect to their employment. The class claims thus
20 demonstrate a “common nucleus of facts and potential legal
21 remedies” that can properly be resolved “in a single
22 adjudication.” See Hanlon, 150 F.3d at 1022-23. Although there
23 are differences in the facts pertaining to individual class
24 members and the amount of injury sustained, such as how long each
25 worked for defendant, there is no indication that those
26 variations are “sufficiently substantive to predominate over the
27 shared claims.” See Murillo, 266 F.R.D. at 476-77 (quoting
28 Hanlon, 150 F.3d at 1022-23). Accordingly, the court finds
1 common questions of law and fact predominate over questions
2 affecting only individual class members.
3 b. Superiority
4 Rule 23(b)(3) sets forth four non-exhaustive factors
5 that courts should consider when examining whether “a class
6 action is superior to other available methods for fairly and
7 efficiently adjudicating the controversy.” Fed. R. Civ. P.
8 23(b)(3). They are: “(A) the class members’ interests in
9 individually controlling the prosecution or defense of separate
10 actions; (B) the extent and nature of any litigation concerning
11 the controversy already begun by or against class members; (C)
12 the desirability or undesirability of concentrating the
13 litigation of the claims in the particular forum; and (D) the
14 likely difficulties in managing a class action.” Id. The
15 parties settled this action prior to certification, making
16 factors (C) and (D) inapplicable. See Murillo, 266 F.R.D. at
17 477.
18 Rule 23(b)(3) is concerned with the “vindication of the
19 rights of groups of people who individually would be without
20 effective strength to bring their opponents into court.” Amchem,
21 521 U.S. at 616-17. When, as here, class members’ individual
22 recovery is relatively modest, the class members’ interests
23 generally favor certification. Zinser v. Accufix Res. Inst.,
24 Inc., 253 F.3d 1180, 1190-91 (9th Cir. 2001). Accordingly, the
25 class action device appears to be the superior method for
26 adjudicating this controversy.
27 3. Rule 23(c)(2) Notice Requirements
28 If the court certifies a class under Rule 23(b)(3), it
1 “must direct to class members the best notice that is practicable
2 under the circumstances, including individual notice to all
3 members who can be identified through reasonable effort.” Fed.
4 R. Civ. P. 23(c)(2)(B). Rule 23(c)(2) governs both the form and
5 content of a proposed notice. See Ravens v. Iftikar, 174 F.R.D.
6 651, 657-58 (N.D. Cal. 1997) (citing Eisen v. Carlisle &
7 Jacquelin, 417 U.S. 156, 172–77 (1974)). Although that notice
8 must be “reasonably certain to inform the absent members of the
9 plaintiff class,” actual notice is not required. Silber v.
10 Mabon, 18 F.3d 1449, 1454-55 (9th Cir. 1994).
11 Plaintiff’s counsel has provided the court with a
12 proposed notice to class members. (See Docket No. 44-2 at 21-
13 28.) It explains the proceedings, defines the scope of the
14 class, and explains what the settlement provides and how much
15 each class member can expect to receive in compensation. (See
16 id. at 21-25.) The notice further explains the opt-out
17 procedure, the procedure for objecting to the settlement, and the
18 date and location of the final approval hearing. (See id. at 25-
19 26.)
20 The content of the proposed notice therefore satisfies
21 Rule 23(c)(2)(B). See Churchill Vill., L.L.C. v. Gen. Elec., 361
22 F.3d 566, 575 (9th Cir. 2004) (“Notice is satisfactory if it
23 ‘generally describes the terms of the settlement in sufficient
24 detail to alert those with adverse viewpoints to investigate and
25 to come forward and be heard.’” (quoting Mendoza v. Tucson Sch.
26 Dist. No. 1, 623 F.2d 1338, 1352 (9th Cir. 1980), abrogated on
27 other grounds by Evans v. Jeff D., 475 U.S. 717, 725-26 n.10
28 (1986))).
1 The parties have selected Phoenix Settlement
2 Administrators to serve as the settlement administrator. (Docket
3 No. 44-2 at §§ 1.2, 7.1.) Pursuant to the notice plan,
4 plaintiff’s counsel provides that “using last known addresses
5 provided by defendant, the settlement administrator will send the
6 notice via first class U.S. mail to all settlement class
7 members.” (Docket No. 44 at 23 (cleaned up); see also Docket No.
8 44-2 at §§ 7.4.2-7.4.5 (same).) Plaintiff’s counsel adds that
9 “the settlement administrator will perform skip traces to obtain
10 the correct address of any settlement class members for whom the
11 notice is returned as undeliverable and shall attempt re-mailings
12 where new addresses are ascertained.” (Docket No. 44 at 23
13 (cleaned up).)
14 The court cautions counsel that a single mailed notice
15 is unlikely to suffice. See Roes 1-2 v. SFBSC Mgmt., LLC, 944
16 F.3d 1035, 1045–46 (9th Cir. 2019). The court thus advises that
17 class counsel undertake additional measures “reasonably
18 calculated, under all the circumstances,” to apprise all class
19 members of the proposed settlement. See id. at 1046-47.
20 Given these considerations, the court will grant the
21 parties’ notice plan preliminary approval, notwithstanding its
22 concern about the parties’ notice plan as set forth above.
23 B. Preliminary Settlement Approval
24 After determining that the proposed class satisfies the
25 requirements of Rule 23(a) and (b), the court must determine
26 whether the terms of the parties’ settlement appear “fair,
27 adequate, and reasonable.” See Hanlon, 150 F.3d at 1025-26
28 (citing Fed. R. Civ. P. 23(e)(2)). This process requires the
1 court to “balance a number of factors,” including “the strength
2 of the plaintiff’s case; the risk, expense, complexity, and
3 likely duration of further litigation; the risk of maintaining
4 class action status throughout the trial; the amount offered in
5 settlement; the extent of discovery completed and the stage of
6 the proceedings; the experience and views of counsel; the
7 presence of a governmental participant; and the reaction of the
8 class members to the proposed settlement.” Id. at 1026 (cleaned
9 up).
10 Because some of these factors cannot be considered
11 until the final fairness hearing, at the preliminary approval
12 stage, “the court need only determine whether the proposed
13 settlement is within the range of possible approval.” See
14 Murillo, 266 F.R.D. at 479. In other words, the court must
15 resolve any “glaring deficiencies” in the settlement agreement
16 before authorizing notice to class members. See Ontiveros, 2014
17 WL 3057506, at *11-12. This analysis requires consideration of
18 “whether the proposed settlement discloses grounds to doubt its
19 fairness or other obvious deficiencies, such as unduly
20 preferential treatment of class representatives or segments of
21 the class, or excessive compensation of attorneys.” Murillo, 266
22 F.R.D. at 479. Courts often begin by examining the process that
23 led to the settlement’s terms to ensure that those terms are “the
24 result of vigorous, arms-length bargaining” and then turn to the
25 substantive terms of the agreement. See id. at 479-80.
26 1. Negotiation of the Settlement Agreement
27 On January 23, 2024, the parties stipulated to stay the
28 case pending mediation, which the court approved within two days.
1 (See Docket Nos. 35-38.) The mediation with Phillip K. Cha
2 occurred on May 21, 2024. (Docket No. 44-1 at ¶¶ 2, 5.) In that
3 time, the parties began extensive “negotiation and discussions
4 regarding the strengths and weaknesses of plaintiff’s claims and
5 defendants’ defenses.” (Id. at ¶ 6.) Plaintiff’s counsel
6 represents that the parties’ settlement negotiations were
7 “adversarial” and conducted “at arms-length.” (See Docket No.
8 44-1 at ¶¶ 5-6.)
9 Given the parties’ representation that the settlement
10 reached was the product of arms-length bargaining following
11 thorough informal discovery, the court at this stage does not
12 question that the proposed settlement is the result of informed
13 and non-collusive negotiations between the parties. See La Fleur
14 v. Med. Mgmt. Int’l, Inc., No. 13-cv-00398, 2014 WL 2967475, at
15 *4-5 (C.D. Cal. June 25, 2014).
16 2. Amount Recovered and Distribution
17 In determining whether a settlement agreement is
18 substantively fair to the class, the court must balance the value
19 of expected recovery against the value of the settlement offer.
20 See Ontiveros, 2014 WL 3057506, at *14. This inquiry may involve
21 consideration of the uncertainty class members would face if the
22 case were litigated to trial.
23 “In determining whether the amount offered in
24 settlement is fair, the Ninth Circuit has suggested that the
25 Court compare the settlement amount to the parties’ ‘estimates of
26 the maximum amount of damages recoverable in a successful
27 litigation.’” Litty v. Merrill Lynch & Co., No. CV 14-0425, 2015
28 WL 4698475, at *8-9 (C.D. Cal. Apr. 27, 2015) (quoting Glass v.
1 UBS Fin. Servs., Inc., No. C-06-4068, 2007 WL 221862, at *4 (N.D.
2 Cal. Jan. 26, 2007), aff’d, 331 F. App’x 452, 455-56 (9th Cir.
3 2009)).
4 Plaintiff faced numerous risks in the litigation,
5 including proving all elements of the claims, obtaining and
6 maintaining class certification, establishing liability, and the
7 cost of litigation on these issues. (See id. at ¶¶ 24-28.)
8 Thus, plaintiff’s counsel represents that the settlement and
9 resulting distribution “compensates settlement class members for
10 plaintiff’s claims while avoiding the risk of continued
11 litigation.” (Id. at ¶¶ 22-23.) Further, the anticipated
12 average recovery amount of $1,344.40 per class member is not
13 insubstantial.
14 In light of the risks associated with further
15 litigation and the relative strength of defendants’ arguments and
16 defenses, the court finds that the projected value of the
17 settlement is within the range of possible approval such that
18 preliminary approval of the settlement is appropriate. The court
19 further finds the method of determining the amount of recovery
20 for each class member claims to be adequate, as each class
21 member’s individual share of the settlement is proportional to
22 how long he or she worked for defendant.
23 Counsel are cautioned that because this settlement was
24 reached prior to class certification, it will be subject to
25 heightened scrutiny before final approval is granted. See In re
26 Apple Inc. Device Performance Litig., 50 F.4th 769, 782-83 (9th
27 Cir. 2022). The recommendations of plaintiff’s counsel will not
28 be given a presumption of reasonableness, but rather will be
1 subject to close review. See id. The court will particularly
2 scrutinize “any subtle signs that class counsel have allowed
3 pursuit of their own self-interests to infect the negotiations.”
4 See id.
5 3. Attorneys’ Fees
6 If a negotiated class action settlement includes an
7 award of attorneys’ fees, that fee award “must be evaluated in
8 the overall context of the settlement.” Monterrubio v. Best Buy
9 Stores, L.P., 291 F.R.D. 443, 455-56 (E.D. Cal. 2013) (England,
10 J.). “Courts have an independent obligation to ensure that the
11 award, like the settlement itself, is reasonable, even if the
12 parties have already agreed to an amount.” In re Bluetooth
13 Headset Prods. Liab. Litig., 654 F.3d 935, 941 (9th Cir. 2011)
14 (cleaned up).
15 The settlement agreement provides that plaintiff’s
16 counsel will seek a fee award not to exceed 33% of the common
17 settlement fund. (See Docket No. 44-1 Ex. 1 at § 3.3.2.) The
18 parties estimate this award to consist of $116,666.67 in
19 attorneys’ fees and $17,000.00 in litigation expenses. (Id.) If
20 the court does not approve the fee award in whole or in part,
21 that will not prevent the settlement agreement from becoming
22 effective or be grounds for termination.
23 In deciding the attorneys’ fees motion, the court will
24 have the opportunity to assess whether the requested fee award is
25 reasonable by multiplying a reasonable hourly rate by the number
26 of hours counsel reasonably expended. See In re Bluetooth
27 Headset, 654 F.3d at 941-42. As part of this lodestar
28 calculation, the court may consider factors such as the “level of
1 success” or “results obtained” by plaintiff’s counsel. See id.
2 If the court, in ruling on the fees motion, finds that the amount
3 of the settlement warrants a fee award at a rate lower than what
4 plaintiff’s counsel requests, then it will reduce the award
5 accordingly. The court will therefore not evaluate the fee award
6 at length here in considering whether the settlement is adequate.
7 IT IS THEREFORE ORDERED that plaintiff’s motion for
8 preliminary certification of a settlement class and preliminary
9 approval of the class action settlement (Docket No. 44) be, and
10 the same hereby is, GRANTED.
11 IT IS FURTHER ORDERED THAT:
12 (1) The court certifies the following class for
13 purposes of settlement only: “all persons employed by defendant
14 in California and classified as hourly-paid or non-exempt
15 employees who worked for defendant from October 31, 2018, to
16 April 14, 2025.” (See Docket No. 44-2 at §§ 1.4, 1.11, 1.15.)
17 (2) The court appoints Wilshire Law Firm, PLC, as class
18 counsel.
19 (3) The court appoints plaintiff Jose Arellano as class
20 representative.
21 (4) The court appoints Phoenix Settlement
22 Administrators as settlement administrator to perform such duties
23 as set forth in this order and the settlement agreement. (See,
24 e.g., Docket No. 44-2 at §§ 1.2, 7.1.)
25 (5) The court approves the class notice and the mailing
26 of the class notice to each settlement class member’s last known
27 address, with appropriate skip tracing and mail forwarding for
28 notices returned as undeliverable, as specifically described in
1 the settlement agreement. (See Docket No. 44-2.)
2 (6) Within fifteen (15) days of the issuance of this
3 Order, defendant shall provide the settlement administrator with
4 the class data, as specified in the settlement agreement. (See
5 Docket No. 44-2 at § 4.2.)
6 (7) Within thirty (30) days of the court’s order
7 granting final approval of the class settlement becoming final,
8 defendant will fully fund the gross settlement amount, and also
9 fund the amounts necessary to fully pay its share of payroll
10 taxes by transmitting the funds to the settlement administrator.
11 (See Docket No. 44-2 at §§ 4.3-4.4.)
12 (8) Within fourteen (14) days after funding of the
13 gross settlement amount, the settlement administrator shall mail
14 the class notice in the manner specified in the settlement
15 agreement. (See Docket No. 44-2 at §§ 7.4.1-7.4.5.)
16 (9) Any request for exclusion from the settlement must
17 be postmarked no later than sixty (60) days after the class
18 notice is initially mailed to settlement class members, and that
19 request must be received by the settlement administrator to be
20 valid, except for settlement class members whose class notices
21 are returned as undeliverable and then mailed again to a
22 corrected/forwarding address will have an additional fourteen
23 (14) days beyond the response deadline has expired to fax, email,
24 or mail his or her request for exclusion from the settlement or
25 objection to the settlement. (See Docket No. 44-2 at §§ 7.4.1-
26 7.4.5, 7.5.1-7.5.4, 7.7.1-7.7.3.)
27 (10) Any settlement class member who does not timely
28 and validly request exclusion from the settlement may object to
1 the settlement agreement. Any objection must be in writing, and
2 must be faxed, mailed, or emailed to the settlement
3 administrator. Such objection shall include the name and address
4 of the settlement class member and the basis of the objection and
5 must be signed by the settlement class member. To be timely, the
6 objection must be postmarked no later than sixty (60) days after
7 the class notice is initially mailed to class members except for
8 settlement class members whose class notices are returned as
9 undeliverable and then mailed again to a corrected address will
10 have an additional fourteen (14) days beyond the response
11 deadline has expired to fax, email, or mail his or her objection
12 to the settlement. Any settlement class member who does not
13 timely submit such a written objection will not be permitted to
14 raise such objection, except for good cause shown, and any
15 settlement class Member who fails to object in the manner
16 prescribed by this order will be deemed to have waived, and will
17 be foreclosed from raising, any such objection. (See Docket No.
18 44-2 at §§ 7.4.1-7.4.5, 7.5.1-7.5.4, 7.7.1-7.7.3.)
19 (11) The final approval hearing will be held on January
20 5, 2026, at 1:30 p.m., to consider the fairness, adequacy, and
21 reasonableness of the proposed settlement preliminarily approved
22 by this order, and to consider the motion of class counsel for an
23 award of reasonable attorneys’ fees and costs as well as the
24 class representative enhancement award.
25 (12) Briefs for the final approval hearing shall be
26 served and filed in accordance with the following briefing
27 schedule: plaintiff’s motion for attorneys’ fees and costs is due
28 on or before December 8, 2025; plaintiff’s motion for final
een nen en EE I OS EE Se
1 approval of the settlement and for class representative
2 enhancement awards is due on or before December 8, 2025;
3 defendants’ declaration attesting that CAFA notice has been
4 properly served pursuant to 28 U.S.C. § 1715 is due on or before
5 December 22, 2025; and any reply briefs are due on or before
6 December 22, 2025.
7 (13) Any party to this case, including any settlement
8 class member, may be heard in person or by counsel, to the extent
9 allowed by the court, in support of, or in opposition to, the
10 court’s determination of the good faith, fairness,
11 reasonableness, and adequacy of the proposed settlement, the
12 requested attorneys’ fees and costs, the requested class
13 representative enhancement awards, and any order of final
14 approval and judgment regarding such settlement, fees, costs, and
15 payments; provided however, that no person shall be heard in
16 opposition to such matters unless such person has complied with
17 | the conditions set forth in the class notice. (See Docket No.
18 44-2 at § 7.7.2.)
19 (14) Pending further order of this court, all
20 | proceedings in this matter except those contemplated herein and
21 in the settlement agreement are STAYED.
22 | Dated: April 14, 2025 pete . 4h. □□□ □
23 WILLIAM B. SHUBB
UNITED STATES DISTRICT JUDGE
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