`
`
`
`
`
`
`
`
`
`
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`
`
`UNITED STATES DISTRICT COURT
`
`EASTERN DISTRICT OF CALIFORNIA
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`JEREMY R. LUSK,
`
`
`
`
`Plaintiff,
`
`v.
`
`FIVE GUYS ENTERPRISES LLC; AND
`ENCORE FGBF, LLC,
`
`
`Defendants.
`
`CASE NO. 1:17-cv-00762-AWI-EPG
`
`
`ORDER ON PLAINTIFF’S THIRD-
`AMENDED MOTION FOR
`PRELIMINARY APPROVAL
`
`
`(Doc. No. 75)
`
`
`
`
`
`In this class action lawsuit, Jeremy Lusk is suing Five Guys Enterprises LLC and Encore
`
`FGBF, LLC, on grounds that they violated federal and California credit/consumer reporting laws,
`
`California wage-and-hour laws, and California unfair competition law. Although the parties have
`
`reached a proposed class settlement, the Court has denied Lusk’s first three motions under Federal
`
`Rule of Civil Procedure 23(e) for preliminary approval of the settlement and conditional
`
`certification of the putative class. Lusk now moves a fourth time for such relief. For the reasons
`
`20
`
`discussed below, the Court will deny this motion.
`
`21
`
`
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`BACKGROUND
`
`Lusk filed his lawsuit in state court on May 2, 2017, and Defendants removed the action.
`
`Thereafter, Lusk filed a first-amended complaint, wherein he pleaded the following twelve class
`
`claims: (1) failure to make a proper disclosure, in violation of the federal Fair Credit Reporting
`
`Act, 15 U.S.C. § 1681b(b)(2)(A); (2) failure to provide a proper summary of rights, in violation of
`
`the Fair Credit Reporting Act, 15 U.S.C. §§ 1681d(a)(1) and 1681g(c); (3) failure to make a
`
`proper disclosure, in violation of California’s Investigative Consumer Reporting Agencies Act,
`
`
`
`
`
`Case 1:17-cv-00762-AWI-EPG Document 81 Filed 01/24/22 Page 2 of 12
`
`
`
`
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`Cal. Civ. Code § 1786.16(a)(2)(B); (4) failure to make a proper disclosure, in violation of
`
`California’s Consumer Credit Reporting Agencies Act, Cal. Civ. Code § 1785.20.5(a); (5) failure
`
`to provide meal periods or compensation in lieu thereof, in violation of Cal. Labor Code §§ 226.7,
`
`512, and 1198, and California Industrial Welfare Commission Wage Order 5-2001 (“Wage Order
`
`5”); (6) failure to provide rest periods or compensation in lieu thereof, in violation of Cal. Labor
`
`Code §§ 226.7 and 1198, and Wage Order 5; (7) failure to pay earned wages, including overtime
`
`wages, in violation of Cal. Labor Code §§ 204, 223, 510, 1194, 1197, and 1198, and Wage Order
`
`5; (8) failure to reimburse for necessary gas and mileage expenditures, in violation of Cal. Labor
`
`Code § 2802(a); (9) failure to provide accurate itemized wage statements, in violation of Cal.
`
`Labor Code § 226; (10) failure to pay separation wages, in violation of Cal. Labor Code §§ 201–
`
`203; (11) violations of California’s unfair competition law (“UCL”), Cal. Bus. & Prof. Code
`
`§ 17200 et seq.; and (12) entitlement to civil penalties under California’s Private Attorney General
`
`Act (“PAGA”), Cal. Lab. Code § 2698 et seq. Doc. No. 13 (“FAC”).
`
`After conducting some discovery, the parties participated in mediation and reached a
`
`proposed agreement for a class-wide settlement. Doc. No. 29. Lusk has since moved three times
`
`for preliminarily approval of that proposal and conditional certification of the putative class, with
`
`the Court denying each motion. Doc. Nos. 36, 43, 52, 55, 61, 66. Lusk now moves for the same
`
`18
`
`relief for a fourth time. Doc. No. 75 (“Motion”).1 With his latest motion, Lusk submits a
`
`19
`
`20
`
`supporting declaration from counsel, which itself comes with attached copies of the proposed class
`
`settlement, class notice, and class member claim form. Doc. No. 76 (“Setareh Decl.”); Doc. No.
`
`21
`
`76-1.2 For the first time, Defendants have submitted a statement of non-opposition and
`
`22
`
`supplemental briefing on Lusk’s motion, along with a declaration from counsel. Doc. No. 78;
`
`23
`
`Doc. No. 78-1 (“Woo Decl.”).
`
`24
`
`
`
`25
`
`26
`
`27
`
`28
`
`
`
`1 In this order, citations to specific page numbers of Document No. 75 will refer to the pdf pagination of that
`document, and not the pagination used in the motion itself.
`
`2 The settlement, class notice, and claim form are all found at the same docket number. Doc. No. 76-1 at 1–25
`(“Proposed Settlement”); 27–32 (“Settlement Notice”); 34–35 (“Claim Form”). Lusk has also separately submitted a
`fully executed copy of the proposed settlement. Doc. No. 80-1.
`
`
`
`2
`
`
`
`Case 1:17-cv-00762-AWI-EPG Document 81 Filed 01/24/22 Page 3 of 12
`
`
`
`
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`LEGAL STANDARD
`
`Federal Rule of Civil Procedure 23(e) requires judicial review and approval of any class
`
`settlement. This process generally involves three stages. In the first, the parties move for
`
`“preliminary approval” of the proposed settlement and, if necessary, “conditional certification” of
`
`the class. 4 William B. Rubenstein, Newberg on Class Actions § 13:16 (5th ed.). If the court
`
`grants this threshold relief, the second and third stages require (1) the provision of notice to the
`
`class members, along with an opportunity for them to object to or opt out of the proposed
`
`settlement, and (2) a “final approval” determination (and actual class certification, if necessary)
`
`following a fairness hearing. Id.
`
`To secure preliminary approval and condition certification, the parties must provide
`
`sufficient information for the court to determine that it “will likely be able to” grant final approval
`
`of the settlement under Rule 23(e)(2) and certify the class for a judgment on the settlement. Fed.
`
`R. Civ. P. 23(e)(1)(B). As to the first determination, Rule 23(e)(2) states that a binding class
`
`settlement may be approved only on finding that it is “fair, reasonable, and adequate.” Fed. R.
`
`Civ. P. 23(e)(2). As to the second determination, a class may be certified if it meets the four
`
`prerequisites under Rule 23(a) and at least one of the three categories of class actions under Rule
`
`17
`
`23(b). Fed. R. Civ. P. 23(a)–(b).
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`The court’s role in the class settlement process is an important one, as “the parties that are
`
`present and settling the case—class counsel, the class representatives, and the defendants—are
`
`proposing to compromise the rights of absent class members.” Newberg on Class Actions
`
`§ 13:40. To ensure the interests of the absent class members are properly safeguarded, the “judge
`
`must adopt the role of a skeptical client and critically examine the class certification elements, the
`
`proposed settlement terms, and procedures for implementation.” Id. (quoting Manual for Complex
`
`24
`
`Litigation § 21.61 (4th ed.)).
`
`25
`
`
`
`26
`
`27
`
`28
`
`DISCUSSION
`
`The Court will deny Lusk’s latest motion because, once again, he has not provided
`
`sufficient information showing that the proposed settlement is likely to be approved as “fair,
`
`
`
`3
`
`
`
`Case 1:17-cv-00762-AWI-EPG Document 81 Filed 01/24/22 Page 4 of 12
`
`
`
`
`
`1
`
`reasonable, and adequate” upon certification of the class under Rule 23.
`
`2
`
`
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`A.
`
`Preliminary Approval
`
`As noted above, at the preliminary approval stage, the court need only determine that the
`
`proposed settlement is “likely” to be finally approved under Rule 23(e)(2). Rule 23(e)(2) itself
`
`provides that a court may approve a class-binding settlement only on finding that the settlement is
`
`“fair, reasonable, and adequate.” Fed. R. Civ. P. 23(e)(2). Before making such a finding, courts
`
`must consider whether: (1) the class representative and counsel have adequately represented the
`
`class; (2) the proposal was negotiated at arm’s length; (3) the relief provided for the class is
`
`adequate in light of the costs, risks, and delay of trial and appeal; the effectiveness of any
`
`proposed method of distributing relief to the class, including the method of processing class-
`
`member claims; the terms of any proposed award of attorney’s fees, including timing of payment;
`
`and any agreement made in connection with the proposal; and (4) the proposal treats class
`
`members equitably relative to each other. Id.; see also In re Bluetooth Headset Prods. Liab. Litig.,
`
`654 F.3d 935, 946 (9th Cir. 2011) (quoted source omitted) (enumerating additional non-exhaustive
`
`factors that are to be considered for purposes of granting final approval of a class settlement).
`
`While Rule 23(e) does not mandate that courts consider these same factors for purposes of
`
`determining whether preliminary approval is warranted, doing so often proves useful given the
`
`role these factors play in final approval determinations. The court may also consider any other
`
`topic that it regards as pertinent to determining whether the proposed settlement is fair, reasonable,
`
`and adequate. See Fed. R. Civ. P. 23(e)(2) advisory committee’s note to 2018 amendment.
`
`Naturally, the showing of fairness of a proposal will vary from case to case. Bluetooth Headset
`
`Prods. Liab. Litig., 654 F.3d at 946. Where a settlement has been negotiated before certification,
`
`however, there exists “an even greater potential for a breach of fiduciary duty owed the class
`
`during settlement,” which means “such agreements must withstand an even higher level of
`
`scrutiny for evidence of collusion or other conflicts of interest than is ordinarily required under
`
`Rule 23(e) before securing the court’s approval as fair.” Id.
`
`In its order denying Lusk’s third motion, the Court raised numerous concerns it had
`
`
`
`4
`
`
`
`Case 1:17-cv-00762-AWI-EPG Document 81 Filed 01/24/22 Page 5 of 12
`
`
`
`
`
`1
`
`regarding the proposed settlement. Many of these have since been adequately addressed by the
`
`2
`
`parties and warrant no extended discussion here.3 Because others have not, however, the Court
`
`3
`
`4
`
`must again address lingering issues regarding the adequacy of class relief and the treatment of
`
`putative class members.
`
`5
`
`
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`1.
`
`Adequacy of Class Relief
`
`The relief obtained by the class is often described as the most important part of a class
`
`settlement. Carlin v. DairyAmerica, Inc., 380 F. Supp. 3d 998, 1011 (E.D. Cal. 2019). To
`
`determine whether proposed relief is fair and reasonable, the court compares the amount that will
`
`be recovered with the estimated value of the class claims if they were to be successfully litigated.
`
`Id. (cited source omitted). As part of this comparison, the court must gauge the relative strength
`
`of the plaintiff’s case as “[e]ven a fractional recovery of the possible maximum recovery amount
`
`may be fair and adequate in light of the uncertainties of trial and difficulties in proving the case.”
`
`Millan v. Cascade Water Servs., Inc., 310 F.R.D. 593, 611 (E.D. Cal. 2015) (collecting cases
`
`approving settlements that were assumed to be fractions of the maximum potential recovery); see
`
`also In re Mego Fin. Corp. Sec. Litig., 213 F.3d 454, 459 (9th Cir. 2000) (“It is well-settled law
`
`that a cash settlement amounting to only a fraction of the potential recovery does not per se render
`
`the settlement inadequate or unfair.” (quoted source omitted)).
`
`19
`
`
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`
`
`3 To make a record, the Court recognizes that Lusk has adequately addressed both the risks attendant to the class
`claims based on credit reporting statutes and unpaid wages (and assigned nominal or zero value to these claims), and
`the calculated number of meal and rest period violations in light of permissible recovery under Labor Code § 226.7 for
`such claims. The parties have also revised the Settlement Notice and the Claim Form to include the credit reporting
`statutes amongst the extended list of released claims. Doc. No. 76-1 at 29, 35. And Lusk has submitted evidence
`showing that the proposed settlement, with its latest revisions, was submitted to the California Labor and Workforce
`Development Agency for purposes of the PAGA claim. Setareh Decl., ¶ 34; Doc. No. 76-2. Finally, as to that claim,
`the Court remains unconvinced by Lusk’s citation to Labor Code § 2699(e)(2)—and the authority it bestows on courts
`to discretionarily decrease unjust and oppressive PAGA awards—as justification for his substantial reduction of the
`PAGA claim from a (newly calculated) value of $5,144,450 to $100,000 in the proposed settlement. Lusk’s citation
`to Cotter v. Lyft, Inc., 193 F. Supp. 3d 1030, 1037 (N.D. Cal. 2016), is also inapt, in so far as the court there approved
`of a (less) drastic reduction of a PAGA claim while citing § 2699(e)(2) because the case was premised on an
`employee-independent contractor question for which there was “no straight answer” under California law. Lusk does
`not draw this case parallel to that aspect of Cotter, and the Court finds no basis for him to have even tried. All that
`said, the Court finds that the math proposed here will suffice given other case law approving small PAGA awards
`within a much larger class settlement. See Attia v. Neiman Marcus Grp., Inc., No. 8:16-cv-00504-DOC (FFM), 2019
`WL 13089601, at *8 (C.D. Cal. Feb. 25, 2019).
`
`
`
`5
`
`
`
`Case 1:17-cv-00762-AWI-EPG Document 81 Filed 01/24/22 Page 6 of 12
`
`
`
`
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`a.
`
`The UCL Claim
`
`In past motions, Lusk has not addressed the value and risks of the UCL claim. Doc. No.
`
`43 at 13; Doc. No. 66 at 12. In his latest motion, Lusk takes steps to solve this continuing
`
`problem. Motion at 38–39. Namely, he explains that, as pleaded, the UCL claim is entirely
`
`derivative of some of the Labor Code claims, which in turn means that it carries all the risks that
`
`attach to those underlying allegations. FAC, ¶¶ 173–174 (incorporating meal period, rest period,
`
`unpaid wages, and unreimbursed expenses allegations for purposes of the UCL claim). The Court
`
`credits this explanation, but still finds no information within Lusk’s greater potential recovery
`
`analysis regarding the estimated value of the UCL claim. Motion at 24–26. Without this
`
`information, the Court is left to surmise that the claim is worthless. This is exactly where the
`
`Court was with Lusk’s last motion as well. In denying that motion, the Court informed Lusk that
`
`if this claim is in fact entirely without merit, he needs to explain why that is the case and why the
`
`Court should approve of the proposed settlement’s broad release of UCL claims for nothing in
`
`return. Doc. No. 66 at 12. Lusk can add to that task an explanation for why the UCL claim is
`
`considered worthless when it is based entirely on the same Labor Code allegations that populate
`
`claims he estimates are collectively worth over $4.5 million. See also Cal. Bus. & Prof. Code
`
`§ 17205 (“Unless otherwise expressly provided, the remedies or penalties provided by this chapter
`
`are cumulative to each other and to the remedies or penalties available under all other laws of this
`
`19
`
`state.”).
`
`20
`
`
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`b.
`
`Class period
`
`The Court previously expressed concern with the parties’ proposal to define the applicable
`
`class period as “the period of time from August 22, 2013 through the date of Preliminary Approval
`
`of the Settlement.” Doc. No. 66 at 14–16. As the Court explained, this open-ended class period
`
`threatened to both undervalue the class claims and release other claims that were being assigned
`
`no value in the proposed settlement. Id. The parties have responded to this concern by newly
`
`defining the applicable class period as “the period of time from August 22, 2013 through October
`
`28
`
`19, 2020.” Proposed Settlement, ¶ 4.
`
`
`
`6
`
`
`
`Case 1:17-cv-00762-AWI-EPG Document 81 Filed 01/24/22 Page 7 of 12
`
`
`
`
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`This revision cures the problem with an open-ended class period. But the Court is
`
`unconvinced that the parties have used the correct end date. Lusk justifies that choice by noting
`
`that the Court denied his second motion for preliminary approval on October 19, 2020. Motion at
`
`16. Yet, his successive motions suggest that the value of the class claims has remained largely
`
`unchanged since the parties reached their settlement agreement on October 12, 2018. Compare
`
`Doc. No. 36 at 20, with Doc. No. 52 at 18–19, and Motion at 24–26. In other words, the Court’s
`
`October 19, 2020 order seemingly has nothing to do with Lusk’s valuation of the claims. Like
`
`before, the Court suspects that the failure to account for this two-year span represents an
`
`undervaluation of the claims. And as the Court previously explained, undervaluing the claims in
`
`10
`
`this fashion also comes with a gratuitous release of potential claims that could have been raised to
`
`11
`
`secure the recovery that is being overlooked here.4
`
`12
`
`
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`2.
`
`Equitable Treatment of Class Members
`
`Rule 23(e) requires examination of whether a proposed settlement “treats class members
`
`equitably relative to each other.” Fed. R. Civ. P. 23(e)(2)(D). To consider this factor, the court
`
`assesses whether the proposed settlement “improperly grant[s] preferential treatment to class
`
`representatives or segments of the class.” Taafua v. Quantum Glob. Techs., LLC, No. 18-cv-
`
`06602-VKD, 2021 WL 579862, at *7 (N.D. Cal. Feb. 16, 2021) (quoted source omitted). “Matters
`
`of concern could include whether the apportionment of relief among class members takes
`
`appropriate account of differences among their claims, and whether the scope of the release may
`
`affect class members in different ways that bear on the apportionment of relief.” Fed. R. Civ. P.
`
`23(e)(2)(D) advisory committee’s note to 2018 amendment.
`
`In denying Lusk’s third motion, the Court explained that the proposed settlement was not
`
`equitably treating class members because settlement shares failed to reflect apparent distinctions
`
`
`
`4 Adding confusion, Lusk indicates in his motion that if October 19, 2020, is used as the end date of the class period,
`the putative class expands from 2,206 to approximately 3,629 class members. Motion at 14 n.1. Despite
`acknowledging this relatively massive expansion of the putative class, Lusk continues to calculate the estimated value
`of the class claims using the lower figure. Motion at 24–26. This itself leads to the claims being undervalued and the
`return for class members being overstated in the instant motion.
`
`
`
`7
`
`
`
`Case 1:17-cv-00762-AWI-EPG Document 81 Filed 01/24/22 Page 8 of 12
`
`
`
`
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`amongst the class members based on the class claims. Doc. No. 66 at 17. As one example, the
`
`Court highlighted the proposal to equally split compensation for the separation wages claim across
`
`the entire putative class despite more than 40% of the class not having had a termination event
`
`during the class period that would entitle them to relief under Labor Code § 203. The parties
`
`responded to this problem by revising the proposed settlement. Namely, the proposed settlement
`
`now dictates that 25% of the net settlement amount will be allocated for equal distribution
`
`amongst those class members who experienced a termination event during the class period, while
`
`the remaining 75% will be allocated for equal distribution amongst all class members. Proposed
`
`Settlement, ¶ 15. Their solution fixes part of the problem, but leaves unaddressed the Court’s
`
`stated concern that the same problem existed with other class claims that appear to disparately
`
`affect class members. For instance, in the greater potential recovery analysis, Lusk indicates that
`
`the value of the wage statement claim is premised, in part, on 996 first violations of Labor Code
`
`§ 226. Motion at 24. This number (996)—which matches the number of aggrieved employees for
`
`purposes of the PAGA claim—is substantially less than the number of putative class members
`
`(2,206). Once again, this math concerns the Court in so far as it projects that some class members
`
`will receive a windfall at the expense of other class members. As the Court has noted, Lusk’s
`
`pleading of separate subclasses for the meal period, rest period, unreimbursed expenses, wage
`
`statement, and separation wages claims seems to recognize this precise problem. FAC, ¶¶ 20, 95,
`
`108, 111, 119, 140, 143, 159, 167. The parties’ revision of the proposed settlement accounts for
`
`one of these claims, but their neglect of the others is left unexplained with clear red flags present.
`
`21
`
`
`
`22
`
`23
`
`24
`
`B.
`
`Conditional Certification
`
`Rule 23 of the Federal Rules of Civil Procedure imposes a two-step test for deciding
`
`whether a class may be certified. Under the first step, the court determines whether the moving
`
`25
`
`party has established four prerequisites:
`
`26
`
`27
`
`28
`
`
`
`(1) the class is so numerous that joinder of all members is impracticable; (2) there
`are questions of law or fact common to the class; (3) the claims or defenses of the
`representative parties are typical of the claims or defenses of the class; and (4) the
`representative parties will fairly and adequately protect the interests of the class.
`
`8
`
`
`
`Case 1:17-cv-00762-AWI-EPG Document 81 Filed 01/24/22 Page 9 of 12
`
`
`
`
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`Fed. R. Civ. P. 23(a)(1)–(4). If these prerequisites are met, the court considers whether the
`
`proposed class action meets at least one of the three provisions of Rule 23(b). Fed. R. Civ. P.
`
`23(b). Lusk seeks certification under Rule 23(b)(3), which states that a class action may be
`
`maintained if “the court finds that the questions of law or fact common to class members
`
`predominate over any questions affecting only individual members, and that a class action is
`
`superior to other available methods for fairly and efficiently adjudicating the controversy.” Fed.
`
`R. Civ. P. 23(b)(3). As for this preliminary stage, where a settlement class has not already been
`
`certified, the court must determine that it will “likely be able to . . . certify the class for purposes of
`
`judgment on the proposal following the final approval hearing.” Fed. R. Civ. P. 23(e)(1)(B). To
`
`make such a determination, the court needs “a suitable basis in the record.” Fed. R. Civ. P.
`
`23(e)(1) advisory committee’s note to 2018 amendment.
`
`Big picture, the Court’s task at hand is to project whether Lusk will be able to establish at a
`
`final approval hearing that his claims are typical of the class claims and that common questions
`
`predominate over individualized inquiries. Acosta v. Evergreen Moneysource Mortg. Co., No.
`
`2:17-CV-00466-KJM-DB, 2018 WL 3831004, at *2 (E.D. Cal. Aug. 13, 2018); Mitchinson v.
`
`Love’s Travel Stops & Country Stores, Inc., No. 1:15-cv-01474-DAD-BAM, 2016 WL 7426115,
`
`at *4 (E.D. Cal. Dec. 22, 2016). It is also generally recognized that class certification must be
`
`proved by a preponderance of the evidence. Martin v. Sysco Corp., 325 F.R.D. 343, 354 (E.D.
`
`Cal. 2018). With that challenge looming, the Court has expressed concern with its ability to
`
`actually certify this class based on the evidentiary record. Doc. No. 66 at 21–23. Although they
`
`recognize this concern in their latest briefing, the parties have done little to dispel the Court’s
`
`22
`
`lingering apprehension.5
`
`23
`
`To start, counsel for Lusk once again describes the parties’ evidentiary efforts in rather
`
`24
`
`conclusory fashion, stating:
`
`25
`
`26
`
`27
`
`28
`
`[t]he Parties conducted significant and extensive investigation of the facts and law
`during the prosecution of this action. Such investigation included formal written
`
`
`
`5 As noted in the last order and above, the Court remains concerned with the lack of subclass treatment for certain
`class claims and this concern applies in the certification context as well. Doc. No. 66 at 21. Lusk does not address
`this problem in his latest motion.
`
`
`
`9
`
`
`
`Case 1:17-cv-00762-AWI-EPG Document 81 Filed 01/24/22 Page 10 of 12
`
`
`
`
`
`discovery by both Parties and the production of the class list and almost 1,000
`pages of documents (which included Defendants’ meal period and rest break
`policies, along with the relevant employee handbook, time punch records and wage
`statements), as well as Plaintiff’s videotaped deposition.
`
`Setareh Decl., ¶ 7. Counsel for Defendants offers something similar in his own declaration. Woo
`
`Decl., ¶¶ 4–8. While these descriptions are themselves uninspiring, what the Court finds truly
`
`troubling is defense counsel’s submission of sworn declarations from sixty-nine putative class
`
`members. Id., ¶ 9, Ex. B. Lusk has previously referred to these declarations to emphasize
`
`significant risks attendant to certain class claims. He does the same here. Motion at 28, 30, 32.
`
`Defendants then do him one better by using the declarations in their statement of non-opposition
`
`to support their assertions that the class claims are wholly meritless because Lusk has no evidence
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`to support his legal theories. Doc. No. 78 at 5–11.6 Defendants’ non-opposition is clearly
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`designed to assist Lusk’s argument that evidence-related risks demonstrate that the proposed
`
`settlement is fair and reasonable. But in providing that help, Defendants have also re-emphasized
`
`the exact problem the Court described in its last order regarding a seeming dearth of evidence that
`
`will be available for the Court to use to certify the class under Rule 23.
`
`All of this leaves the Court in a complicated position. Across multiple motions, Lusk has
`
`offered next to nothing to show that the prospects for certification are adequately supported by the
`
`record, and Defendants have now made his task even harder by presenting evidence that directly
`
`undermines his certification position. Notwithstanding, the Court could provide conditional
`
`certification on the ground that the class claims follow a familiar format to claims that frequently
`
`garner certification. Yet, in so doing, the Court is concerned that the record presented for
`
`certification and final approval of the settlement will be as barren as the parties’ current
`
`descriptions suggest. If it is, and the collective evidence shows Lusk as the lone putative class
`
`member who suffered from the alleged harms, there will be no grounds for the Court to conclude
`
`that his claims are typical of those possessed by the broader class. Rather, Lusk’s own claims
`
`will, by definition, represent individualized inquiries as opposed to predominating common
`
`
`
`6 Defendants further bolster their assertions with excerpts of Lusk’s deposition and their employee handbooks and
`meal and rest break policies. Doc. No. 78 at 5–11; Woo Decl., ¶¶ 6, 13, Ex. A, Ex. C. Lusk, for his part, also notes
`how the written materials pose risks to certain class claims.
`
`
`
`10
`
`
`
`Case 1:17-cv-00762-AWI-EPG Document 81 Filed 01/24/22 Page 11 of 12
`
`
`
`
`
`1
`
`2
`
`3
`
`4
`
`questions of law or fact. In other words, certification will not be possible, as Lusk will not have
`
`shown by a preponderance of the evidence that the requirements of Rule 23(a) and (b)(3) are met.
`
`And all that will be left is potential confusion moving forward. Rodriguez v. Penske Logistics,
`
`LLC, No. 2:14-cv-02061-KJM-CKD, 2017 WL 4132430, at *4 (E.D. Cal. Sept. 19, 2017).
`
`5
`
`
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`C.
`
`Conclusion
`
`The Court’s role in its current position is to cautiously and rigorously scrutinize this
`
`attempt to settle a class action before the putative class has been certified. Roes, 1-2 v. SFBSC
`
`Mgmt., LLC, 944 F.3d 1035, 1049 (9th Cir. 2019). In doing that here, the Court will deny Lusk’s
`
`latest motion seeking preliminary approval and conditional certification for the reasons discussed
`
`above. The Court also requests that the parties carefully consider how they would like to proceed
`
`before another motion of this kind is immediately filed. At this point, Lusk appears to be doing
`
`himself and the putative class he seeks to represent a disservice by trying to fit a square peg in a
`
`round hole. The Court does not find clear signs of collusion here. Bluetooth Headset Prods. Liab.
`
`Litig., 654 F.3d at 946. But it faces a perverse set of circumstances where Defendants are willing
`
`to pay more than $1 million to settle the class claims despite their briefing and all presented
`
`evidence singly pointing to a complete lack of merit in those claims. This seeming incongruity
`
`could have a few different explanations, from an undervaluing of the class claims to a nuisance fee
`
`agreement of low-merit claims. The Court also recognizes the possibility that this prolonged
`
`inability to secure preliminary approval and conditional certification is a result of insufficient
`
`effort to lay a foundation for such relief. If that is the case, an appropriate path forward may
`
`include additional pre-certification discovery. Manual for Complex Litigation §§ 21.14, 21.141.
`
`Regardless of the precise steps taken, however, the Court will not further consider a new motion
`
`that merely tinkers with the same details that have now been inadequately presented to the Court
`
`four times. In other words, to seek this form of relief in the future, Lusk must substantively
`
`account for the problems discussed in this order—including, importantly, a suitable basis in the
`
`record for certification—even if doing so first requires the parties to return to the negotiating table
`
`28
`
`or conduct more discovery.
`
`
`
`11
`
`
`
`Case 1:17-cv-00762-AWI-EPG Document 81 Filed 01/24/22 Page 12 of 12
`
`
`
`
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`Accordingly, IT IS HEREBY ORDERED that:
`
`ORDER
`
`1.
`
`Lusk’s third-amended motion for preliminary approval and conditional certification
`
`(Doc. No. 75) is DENIED without prejudice; and
`
`2.
`
`This case is referred back to the magistrate judge for further scheduling and
`
`management.
`
`
`IT IS SO ORDERED.
`
`Dated: January 22, 2022
`
`
`
`
`
`
`
` SENIOR DISTRICT JUDGE
`
`
`
`
`
`12
`
`