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`Case 1:19-cv-00449-DAD-BAM Document 76 Filed 06/11/21 Page 1 of 26
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`UNITED STATES DISTRICT COURT
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`FOR THE EASTERN DISTRICT OF CALIFORNIA
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`FELIX PEREZ, an individual, on his own
`behalf and on behalf of all others similarly
`situated,
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`No. 1:19-cv-00449-DAD-BAM
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`Plaintiff,
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`v.
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`ORDER GRANTING FINAL APPROVAL OF
`CLASS ACTION SETTLEMENT AND
`AWARDING ATTORNEYS’ FEES, COSTS,
`AND INCENTIVE AWARD
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`CVS HEALTH CORPORATION, et al.,
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`Defendants.
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`(Doc. Nos. 71, 72, 73)
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`This matter came before the court on June 7, 2021 for a hearing on the unopposed motions
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`for final approval of a class action settlement, for an award of attorneys’ fees and costs, and for an
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`incentive award for plaintiff, filed on behalf of plaintiff Felix Perez on May 10, 2021. (Doc. Nos.
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`71, 72, 73.) Attorney Michael Bradley appeared on behalf of plaintiff and the settlement class.
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`Attorney Jennifer Zargarof appeared on behalf of defendants CVS Health Corporation and CVS
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`Pharmacy Inc. (collectively, “CVS” or “defendants”). For the reasons set forth below, the court
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`will grant the final approval of the class action settlement and will award attorneys’ fees, costs,
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`and incentive payments.
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`BACKGROUND
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`The court previously granted preliminary approval of the settlement in this action on
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`December 23, 2020, when it adopted the findings and recommendations of the assigned
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`magistrate judge. (Doc. No. 70.) Pertinent factual details may be found in those findings and
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`recommendations and will not be repeated here. (See Doc. No. 66.)
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`Plaintiff filed this putative class action in Stanislaus County Superior Court on January 16,
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`2019, alleging that his employer CVS violated several provisions of the California Labor Code by
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`not compensating him and other distribution center employees for the time they spent waiting to
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`undergo security checks of their personal bags at the beginning and end of their shifts and when
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`they left and returned from meal and rest breaks. (Doc. No. 1-3 at 10–12, 14.) On April 5, 2019,
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`defendants removed this case to this federal court. (Doc. No. 1.)
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`On March 12, 2020, defendants filed a notice of settlement (Doc. No. 27) and on May 14,
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`2020, plaintiff filed a motion for preliminary approval of the parties’ class action settlement (Doc.
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`No. 41). However, due to concerns that plaintiff had not sufficiently established the basis for the
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`court’s subject matter jurisdiction over this action in his second amended complaint or his
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`proposed third amended complaint, the court ordered plaintiff to show cause why this case should
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`not be dismissed for lack of subject matter jurisdiction. (Doc. No. 52.) The court also denied
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`plaintiff’s motion for preliminary approval without prejudice to its refiling. (Id. at 7.) Thereafter,
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`the parties each filed a response addressing the court’s concerns (Doc. Nos. 53, 54), and on June
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`19, 2020, the court discharged the order to show cause and directed plaintiff to file a third
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`amended complaint with corrected jurisdictional allegations. (Doc. No. 55.) On June 24, 2020,
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`plaintiff filed the operative third amended complaint, in which plaintiff added a claim under the
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`Private Attorney General Act (“PAGA”), California Labor Code §§ 2698 et seq. (Doc. No. 56 at
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`1, 29.)
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`On May 10, 2021, plaintiff filed the pending renewed motion for final approval of the
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`parties’ class action settlement (Doc. No. 71), motion for attorneys’ fees and costs (Doc. No. 72),
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`and motion for an incentive award for plaintiff (Doc. No. 73). As of the filing of plaintiff’s
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`pending motions, no class members have requested exclusion from the settlement or objected to
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`the settlement. (Doc. No. 71-1 at 11–12.) As of the final approval hearing on June 7, 2021, no
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`objections to the settlement have been received or filed with the court. Moreover, no class
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`members appeared at the final approval hearing.
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`FINAL CERTIFICATION OF SETTLEMENT CLASS
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`In adopting the findings and recommendations recommending preliminary approval of the
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`parties’ class action settlement, the court concluded that the magistrate judge properly analyzed
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`the class certification factors and found certification warranted. (Doc. No. 70.) Because no
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`additional issues concerning class certification have been raised, the court finds no basis to revisit
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`any of that analysis. The court finds that final class certification in this case is appropriate.
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`The following class of an estimated 3,515 employees (the “Class Members”) is therefore
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`certified for settlement purposes:
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`All CVS non-exempt employees who worked in California
`distribution centers between January 16, 2015 and August 15, 2020
`inclusive (the “Class Period”).
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`(Doc. Nos. 58-1 at 2–3; 66 at 2–3; 70 at 2.)
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`In addition, and for the reasons stated in the findings and recommendations (Doc. No. 66
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`at 4), plaintiff Felix Perez is confirmed as the class representative, attorneys Marcus J. Bradley
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`and Kiley Grombacher of the law firm Bradley Grombacher, LLP are confirmed as class counsel,
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`and ILYM Group, Inc. (“ILYM”) is confirmed as the settlement administrator.
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`FINAL APPROVAL OF CLASS ACTION SETTLEMENT
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`Class actions require the approval of the district court prior to settlement. Fed. R. Civ.
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`P. 23(e). Federal Rule 23 requires the district court to determine whether a proposed settlement is
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`fundamentally fair, adequate, and reasonable. Hanlon v. Chrysler Corp., 150 F.3d 1011, 1026
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`(9th Cir. 1998), overruled on other grounds by Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338
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`(2011) (citing Class Plaintiffs v. City of Seattle, 955 F.2d 1268, 1276 (9th Cir. 1992)). The
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`settlement as a whole, rather than the individual component parts, is examined for overall
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`fairness. Hanlon, 150 F.3d at 1026.
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`To approve a settlement, a district court must: (i) ensure notice is sent to all class
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`members; (ii) hold a hearing and make a finding that the settlement is fair, reasonable, and
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`adequate; (iii) the parties seeking approval file a statement identifying the settlement agreement;
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`and (iv) class members be given an opportunity to object. Fed. R. Civ. P. 23(e)(1)–(5). The
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`amended settlement agreement in this action was previously filed on the court’s docket (see Doc.
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`No. 74, Ex. 1), and class members have been given an opportunity to object thereto but, as noted,
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`none have done so. The court now turns to the adequacy of notice and its review of the
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`settlement following the final fairness hearing.
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`A.
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`Notice
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`“Adequate notice is critical to court approval of a class settlement under Rule 23(e).”
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`Hanlon, 150 F.3d at 1025; see also Silber v. Mabon, 18 F.3d 1449, 1453–54 (9th Cir. 1994)
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`(noting that the court need not ensure all class members receive actual notice, only that “best
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`practicable notice” is given); Winans v. Emeritus Corp., No. 13-cv-03962-HSG, 2016 WL
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`107574, at *3 (N.D. Cal. Jan. 11, 2016) (“While Rule 23 requires that ‘reasonable effort’ be made
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`to reach all class members, it does not require that each individual actually receive notice.”).
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`“Notice is satisfactory if it ‘generally describes the terms of the settlement in sufficient detail to
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`alert those with adverse viewpoints to investigate and to come forward and be heard.’” Churchill
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`Vill., L.L.C. v. Gen. Elec., 361 F.3d 566, 575 (9th Cir. 2004) (quoting Mendoza v. Tucson Sch.
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`Dist. No. 1, 623 F.2d 1338, 1352 (9th Cir. 1980)). Any notice of the settlement sent to the class
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`should alert class members of “the opportunity to opt-out and individually pursue any state law
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`remedies that might provide a better opportunity for recovery.” Hanlon, 150 F.3d at 1025. It is
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`important for class notice to include information concerning the attorneys’ fees to be awarded
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`from the settlement because it serves as “adequate notice of class counsel’s interest in the
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`settlement.” Staton v. Boeing Co., 327 F.3d 938, 963 n.15 (9th Cir. 2003) (quoting Torrisi v.
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`Tucson Elec. Power Co., 8 F.3d 1370, 1375 (9th Cir. 1993)) (noting that where the notice
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`references attorneys’ fees only indirectly, “the courts must be all the more vigilant in protecting
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`the interests of class members with regard to the fee award”).
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`Here, the court reviewed the class notice that was proposed when the parties sought
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`preliminary approval of the settlement and found it to be inadequate because it lacked meaningful
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`information about the terms of the settlement, such as the amount plaintiff would seek from the
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`court for an award of attorneys’ fees and costs, and because there were inconsistent references to
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`a settlement website. (Doc. No. 68.) Thus, the court directed the parties to file supplemental
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`briefing to address the court’s concerns, and the parties did so on December 21, 2020. (Doc. No.
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`69.) Plaintiff attached a revised class notice as an exhibit to class counsel’s declaration in support
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`of the parties’ supplemental brief. (Doc. No. 69-1 at 6–14.) Thereafter, the court reviewed that
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`revised class notice and found it to be adequate. (Doc. No. 70.)
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`Following the grant of preliminary approval, counsel for defendants provided the
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`settlement administrator ILYM with the last known mailing addresses for each of the 3,515
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`proposed class members. (Doc. Nos. 71-1 at ¶ 5.) ILYM then conducted a National Change of
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`Address search to update the list of proposed class members with current addresses and mailed
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`the court-approved notice packet to each of the 3,515 proposed class members. (Id. at ¶¶ 6–7.)
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`Of the 3,515 initial mailings, 139 were returned as undeliverable. (Id. at ¶ 8.) Of those 139
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`returned notice packets, 2 were returned with a forwarding address and ILYM states that they
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`promptly re-mailed the notice packet to those forwarding addresses. (Id.) ILYM performed a
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`computerized skip trace on the 137 notice packets returned without a forwarding address to locate
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`an updated address for each, and they were able to do so for 104 of them and re-mailed notice
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`packets to those updated addresses. (Id.) As of May 10, 2021, a total of 33 notice packets have
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`been deemed undeliverable because the administrator was unable to find a deliverable address.
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`(Id. at ¶ 10.) Thus, of the 3,515 total class members, 3,482 proposed class members, or 99%, are
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`estimated to have received actual notice of the settlement.
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`Given the above, the court concludes that adequate notice was provided to the class here.
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`See Silber v. Mabon, 18 F.3d 1449, 1453–54 (9th Cir. 1994) (courts need not ensure all class
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`members receive actual notice, only that “best practicable notice” is given); Winans v. Emeritus
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`Corp., No. 13-cv-03962-HSG, 2016 WL 107574, at *3 (N.D. Cal. Jan. 11, 2016) (“While Rule 23
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`requires that ‘reasonable effort’ be made to reach all class members, it does not require that each
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`individual actually receive notice.”). The court accepts the reports of the settlement administrator
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`and finds that sufficient notice has been provided satisfying Rule 23(e)(1).
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`B.
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`Final Fairness Determination
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`On June 7, 2021, the court held a final fairness hearing, at which class counsel and
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`defense counsel appeared by video conferencing. No class members, objectors, or counsel
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`representing the same appeared at that hearing. For the reasons explained below, the court now
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`determines that the settlement reached in this case is fair, adequate, and reasonable. See Fed. R.
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`Civ. P. 23(e)(2).
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`At the final approval stage, the primary inquiry is whether the proposed settlement “is
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`fundamentally fair, adequate, and reasonable.” Lane v. Facebook, Inc., 696 F.3d 811, 818 (9th
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`Cir. 2012); Hanlon, 150 F.3d at 1026. “It is the settlement taken as a whole, rather than the
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`individual component parts, that must be examined for overall fairness.” Hanlon, 150 F.3d at
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`1026 (citing Officers for Justice v. Civil Serv. Comm’n of S.F., 688 F.2d 615, 628 (9th Cir.
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`1982)); see also Lane, 696 F.3d at 818–19. Having already completed a preliminary examination
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`of the agreement, the court reviews it again, mindful that the law favors the compromise and
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`settlement of class action suits. See, e.g., In re Syncor ERISA Litig., 516 F.3d 1095, 1101 (9th
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`Cir. 2008); Churchill Vill., L.L.C., 361 F.3d at 576; Class Plaintiffs v. City of Seattle, 955 F.2d
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`1268, 1276 (9th Cir. 1992); Officers for Justice, 688 F.2d at 625. Ultimately, “the decision to
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`approve or reject a settlement is committed to the sound discretion of the trial judge because he
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`[or she] is exposed to the litigants and their strategies, positions, and proof.” Staton, 327 F.3d at
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`953 (quoting Hanlon, 150 F.3d at 1026).
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`In assessing the fairness of a class action settlement, courts balance the following factors:
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`(1) the strength of the plaintiffs’ case; (2) the risk, expense,
`complexity, and likely duration of further litigation; (3) the risk of
`maintaining class action status throughout the trial; (4) the amount
`offered in settlement; (5) the extent of discovery completed and the
`stage of the proceedings; (6) the experience and views of counsel;
`(7) the presence of a governmental participant; and (8) the reaction
`of the class members to the proposed settlement.
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`Churchill Vill., L.L.C., 361 F.3d at 575; see also In re Online DVD-Rental Antitrust Litig., 779
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`F.3d 934, 944 (9th Cir. 2015); Rodriguez v. West Publ’g Corp., 563 F.3d 948, 964–67 (9th Cir.
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`2009). These settlement factors are non-exclusive, and each need not be discussed if they are
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`irrelevant to a particular case. Churchill Vill., L.L.C., 361 F.3d at 576 n.7.
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`Where the parties have reached a settlement agreement prior to class certification, the
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`court has an independent duty on behalf of absent class members to be vigilant for any sign of
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`collusion among the negotiating parties. See In re Bluetooth Headset Prods. Liab. Litig., 654
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`F.3d 935, 946 (9th Cir. 2011) (noting “settlement class actions present unique due process
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`concerns for absent class members” because the “inherent risk is that class counsel may collude
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`with the defendants, ‘tacitly reducing the overall settlement in return for a higher attorney’s fee’”)
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`(citations omitted). In particular, where a class action settlement agreement is reached prior to a
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`class being certified by the court, “consideration of these eight Churchill factors alone is not
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`enough to survive appellate review.” Id. at 946–47. District courts must be watchful “not only
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`for explicit collusion, but also for more subtle signs that class counsel have allowed pursuit of
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`their own self-interests and that of certain class members to infect the negotiations.” Id. at 947.
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`These more subtle signs include: (i) “when counsel receive a disproportionate distribution of the
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`settlement, or when the class receives no monetary distribution but class counsel are amply
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`rewarded”; (ii) the existence of a “clear sailing” arrangement, which provides “for the payment of
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`attorneys’ fees separate and apart from class funds,” and therefore carries “the potential of
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`enabling a defendant to pay class counsel excessive fees and costs in exchange for counsel
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`accepting an unfair settlement on behalf of the class”; and (iii) “when the parties arrange for fees
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`not awarded to revert to defendants rather than be added to the class fund.” Id. (internal
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`quotations and citations omitted). The Ninth Circuit has also recognized that a version of a “clear
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`sailing” arrangement exists when a defendant expressly agrees not to oppose an award of
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`attorneys’ fees up to an agreed upon amount. Lane, 696 F.3d at 832; In re Bluetooth, 654 F.3d at
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`947; In re Toys R Us-Delaware, Inc.–Fair and Accurate Credit Transactions Act (FACTA) Litig.,
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`295 F.R.D. 438, 458 (C.D. Cal. 2014) (“In general, a clear sailing agreement is one where the
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`party paying the fee agrees not to contest the amount to be awarded by the fee-setting court so
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`long as the award falls beneath a negotiated ceiling.”) (quoting Weinberger v. Great N. Nekoosa
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`Corp., 925 F.2d 518, 520 n.1 (1st Cir. 1991)).
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`While this court has wide latitude to determine whether a settlement is substantively fair,
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`it is held to a higher procedural standard and “must show it has explored comprehensively all
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`factors, and must give a reasoned response to all non-frivolous objections.” Allen v. Bedolla, 787
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`F.3d 1218, 1223–24 (9th Cir. 2015) (quoting Dennis v. Kellogg Co., 697 F.3d 858, 864 (9th Cir.
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`2012)). Thus, while the court should examine any relevant Churchill factors, the failure to review
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`a pre-class certification settlement for those subtle signs of collusion identified above may
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`constitute error. Id. at 1224–25.
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`1.
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`Strength of Plaintiff’s Case
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`When assessing the strength of a plaintiff’s case, the court does not reach “any ultimate
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`conclusions regarding the contested issues of fact and law that underlie the merits of th[e]
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`litigation.” In re Wash. Pub. Power Supply Sys. Sec. Litig., 720 F. Supp. 1379, 1388 (D. Ariz.
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`1989). The court cannot reach such a conclusion because evidence has not been fully presented.
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`Id. Instead, the court “evaluate[s] objectively the strengths and weaknesses inherent in the
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`litigation and the impact of those considerations on the parties’ decisions to reach these
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`agreements.” Id.
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`Here, plaintiff states that while he remained “confident in, and committed to, the merits of
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`the case throughout the litigation and settlement process, [he] was realistic regarding the risks at
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`each stage going forward.” (Doc. No. 71 at 18–19.) Plaintiff notes that the parties would have
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`engaged in lengthy and complex motion practice, including for class certification and summary
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`judgment, and would likely appeal those rulings, all of which would have delayed recovery for a
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`class of “modest wage workers for whom receiving speedy remuneration is particularly
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`important.” (Id. at 19.) Plaintiff also noted that without evidence that defendants’ policies were
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`unlawful on their face, this case was particularly risky because it would be difficult to
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`demonstrate manageability based on evidence of an unlawful “pattern and practice” and to prove
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`those claims at trial. (Id.) Further, class counsel asserts that in their experience litigating these
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`type of claims—based on a defendant’s pattern and practice rather than facially unlawful
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`policies—a plaintiff faces significant difficulties in proving the merits of those claims. (Doc. No.
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`72 at 8.) In addition, class counsel argues that even if plaintiff prevailed on liability for the
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`PAGA claim, “the measure of penalties still would have been hotly contested and presented
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`further risk.” (Doc. No. 71 at 19.) Thus, class counsel contends that the uncertainty and potential
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`risks attendant further litigation weigh in favor of granting final approval of this settlement. (Id.
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`at 18.)
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`/////
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`Therefore, it appears that while plaintiff may have meritorious claims on a class-wide
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`basis, it is far from certain that he would have prevailed on those claims or achieved full recovery
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`on each or any of them. The court finds that consideration of this factor weighs in favor of
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`granting final approval of the settlement in this action.
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`2.
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`Risk, Expense, Complexity, and Likely Duration of Further Litigation
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`“[T]here is a strong judicial policy that favors settlements, particularly where complex
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`class action litigation is concerned.” In re Syncor ERISA Litig., 516 F.3d at 1101 (citing Class
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`Plaintiffs, 955 F.2d at 1276). As a result, “[a]pproval of settlement is preferable to lengthy and
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`expensive litigation with uncertain results.” Johnson v. Shaffer, No. 2:12-cv-1059-KJM-AC,
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`2016 WL 3027744, at *4 (E.D. Cal. May 27, 2016) (citing Morales v. Stevco, Inc., No. 1:09-cv-
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`00704-AWI-JLT, 2011 WL 5511767, at *10 (E.D. Cal. Nov. 10, 2011)). Employment law class
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`actions are, by their nature, time-consuming and expensive to litigate. Hightower v. JPMorgan
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`Chase Bank, N.A., No. 11-cv-1802-PSG-PLA, 2015 WL 9664959, at *6 (C.D. Cal. Aug. 4, 2015).
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`Though the parties have been litigating this case for only two-and-a-half years, class
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`counsel asserts that “[p]roceeding to trial (and the inevitable appeals) could add many more years
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`to the resolution of this case,” and “the road to success in this case was far from certain.” (Doc.
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`No. 71 at 18.) Class counsel also note that given the nature of this case, the number of disputed
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`issues, and the fact that this case has not yet proceeded to the class certification stage, there is
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`potential for many years of delay, especially if defendants appeal any of the court’s
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`determinations on class certification, liability, evidentiary rulings, and penalty calculations. (Id.
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`at 19.) Though plaintiff did not address the potential expense of further litigation in his motion, at
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`the final approval hearing, class counsel noted that litigating this case to a final resolution would
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`have required significant investments of both time and expenses, absent a settlement, particularly
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`because several class members from different shifts would need to be deposed to provide their
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`accounts of how much time they spent undergoing security checks. Thus, consideration of this
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`factor also weighs in favor of granting final approval.
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`3.
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`Amount Offered in Settlement
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`To evaluate the fairness of the settlement award, the court should “compare the terms of
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`the compromise with the likely rewards of litigation.” Protective Comm. for Indep. Stockholders
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`of TMT Trailer Ferry, Inc. v. Anderson, 390 U.S. 414, 424–25 (1968). “It is well-settled law that
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`a cash settlement amounting to only a fraction of the potential recovery does not per se render the
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`settlement inadequate or unfair.” In re Mego Fin. Corp. Sec. Litig., 213 F.3d 454, 459 (9th Cir.
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`2000). To determine whether a settlement “falls within the range of possible approval” a court
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`must focus on “substantive fairness and adequacy,” and “consider plaintiffs’ expected recovery
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`balanced against the value of the settlement offer.” In re Tableware Antitrust Litig., 484 F. Supp.
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`2d 1078, 1080 (N.D. Cal. 2007).
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`Here, the parties have agreed to non-reversionary settlement of $1,850,000 (the “gross
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`settlement amount”). (Doc. No. 71 at 8.) The settlement agreement provides for allocation of the
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`gross settlement fund as follows: (1) payment for attorneys’ fees in the amount of $616,666.67,
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`which is one-third of the gross settlement fund; (2) class counsel’s litigation expenses in the
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`amount of $8,763.80; (3) pursuant to PAGA, payment to the Labor and Workforce Development
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`Agency (“LWDA”) in the amount of $75,000 and payment to the subset of Class Members who
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`worked during the PAGA Period (“PAGA Employees”) of $25,000; (4) settlement administration
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`costs estimated to be $30,000.00; (5) incentive award of $10,000 to plaintiff Perez; and (6)
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`distribution to the class members in the amount of the remaining funds, estimated to be
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`$1,084,569.53 (the “net settlement amount”). (Doc. Nos. 71 at 8–9; 71-7 at ¶¶ 15–16.) Each
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`individual class member’s share of the net settlement amount will be proportional to the number
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`of weeks worked during the applicable time period in comparison to the aggregate number of
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`weeks worked by all Class Members during that period. (Doc. No. 71 at 9.) The settlement
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`administrator estimates that the average gross payment to Class Members will be $315.67 and the
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`highest gross payment will be $768.41. (Doc. No. 71-1 at ¶ 15.) None of the settlement funds
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`will revert to defendants; the settlement agreement provides that any funds from uncashed checks
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`will be transmitted to the State Controller’s Office under the Unclaimed Property Law Statutes.
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`(Doc. No. 58-1 at 17.)
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`Plaintiff argues that the amount offered in this settlement is reasonable and that the totality
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`of the relief provided to the class is well within the range of reasonableness. Plaintiff contends
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`that the average recoveries for Class Members “compare favorably to wage-and-hour class action
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`settlements in California.” (Doc. No. 71 at 18) (citing cases). In addition, class counsel explain
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`that they prepared an exposure analysis after they vetted plaintiff’s claim through rigorous legal
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`analysis, evaluated employment data of a representative sample of the class, and interviewed a
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`122 current and former putative class members. (Doc. No. 71 at 16–17.) However, class counsel
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`did not provide their estimate of the maximum potential damages in their motion for final
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`approval. In his motion for preliminary approval, plaintiff stated that the total exposure on his
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`core non-PAGA claims was approximately $76,000,000. (Doc. No. 57 at 27–32.) Thus, the
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`settlement amount of $1,850,000 represents approximately 2.5% of the class’s potential
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`maximum recovery as estimated by plaintiff. This settlement amount is not per se unreasonable,
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`and district courts in California have found similarly low percentage recoveries under some
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`circumstances to be reasonable for this purpose. See, e.g., Balderas v. Massage Envy
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`Franchising, LLC, No. 12-cv-06327-NC, 2014 WL 3610945, at *5 (N.D. Cal. July 21, 2014)
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`(settlement of approximately 5 percent found to be preliminarily fair); Maciel et al., v. Bar 20
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`Dairy, LLC, No. 1:17-cv-00902-DAD-SKO, 2021 WL 1813177, at *6 (E.D. Cal. May 6, 2021)
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`(settlement of approximately 3 percent found to be fair and adequate). The court has previously
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`assessed the fairness and adequacy of the settlement amount, in light of the circumstances of this
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`case, and found a 2.5 percent recovery rate to be reasonable even though it is at the low end of the
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`range of percentage recoveries. In addition, the approximated value of $76 million consists of the
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`maximum amount of damages for every possible labor code violation, including stacked damages
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`for the PAGA claims, and does not account for any discounts or give any weight to the defenses
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`presented by the defendants. (Id.) At the final approval hearing, class counsel argued that
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`settlement of the class claims for a discounted amount is appropriate given that individual class
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`members spent a de minimis amount of uncompensated time undergoing security checks (e.g., 30
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`seconds per security check).
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`The court finds that the settlement amount in this case is appropriate and fair. Thus,
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`consideration of this factor also weighs in favor of final approval.
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`a.
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`PAGA Penalties Amount Offered in Settlement
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`The settlement also provides for $100,000.00 in civil PAGA penalties. (Doc. No. 71 at 8–
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`9.) Pursuant to PAGA, 75% of the civil penalties, or $75,000.00, will go to the LWDA, and 25%,
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`or $25,000.00, will be included in the net settlement amount. (Id.) See Cal. Lab. Code § 2699(i).
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`In the class action context, where PAGA claims are also often brought, a district court
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`must independently determine that a proposed settlement agreement is “fundamentally fair,
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`adequate and reasonable” before granting approval. See Officers for Justice v. Civil Serv.
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`Comm’n of City & Cty. of San Francisco, 688 F.2d 615, 625 (9th Cir. 1982); see also In re
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`Heritage Bond Litigation, 546 F.3d 667, 674–75 (9th Cir. 2008). The LWDA has provided some
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`guidance regarding court approval of PAGA settlements. See California Labor and Workforce
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`Development Agency’s Comments on Proposed PAGA Settlement (“LWDA Comments”);
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`O’Connor v. Uber Techs., Inc., No. 3:13-cv-03826-EMC, Doc. No. 736 at 2–3, (N.D. Cal. Jul. 29,
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`2016). In O’Connor, where both class action and PAGA claims were covered by a proposed
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`settlement, the LWDA stressed that
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`Id.
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`It is [] important that when a PAGA claim is settled, the relief
`provided for under the PAGA be genuine and meaningful,
`consistent with the underlying purpose of the statute to benefit the
`public and, in the context of a class action, [it is important that] the
`court evaluate whether the settlement meets the standards of being
`“fundamentally fair, reasonable, and adequate” with reference to
`the public policies underlying the PAGA.
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`The proposed $100,000.00 penalty payment in this case represents approximately 5.2% of
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`the estimated $1.85 million gross settlement amount and will be allocated across the subset of
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`Class Members who worked during the PAGA Period. Judges of this court have previously
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`approved comparable PAGA penalties in other class actions. See Syed v. M-I, L.L.C., No. 1:12-
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`cv-01718-DAD-MJS, 2017 WL 714367, at *13 (E.D. Cal. Feb. 22, 2017) (approving $100,000
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`PAGA penalty for a California class with a $3.95 million gross settlement payment); Garcia v.
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`Gordon Trucking, Inc., No. 1:10-cv-0324-AWI-SKO, 2012 WL 5364575, at *7 (E.D. Cal. Oct.
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`31, 2012) (approving $10,000 PAGA penalty for a California class with a $3.7 million gross
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`settlement payment). Having reviewed the parties’ submission and the terms of the proposed
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`settlement, the court finds that the settlement amount related to plaintiff’s PAGA claims is fair,
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`reasonable, and adequate in light of the public policy goals of PAGA.
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`Because of the concrete risks attendant with the pursuit of further litigation in this action
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`articulated above, the court finds that the amount offered in settlement of the PAGA claims here
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`weighs in favor of final approval of the settlement.
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`4.
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`Extent of Discovery Completed and Stage of the Proceedings
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`“In the context of class action settlement, ‘formal discovery is not a necessary ticket to the
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`bargaining table’ where the parties have sufficient information to make an informed decision
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`about settlement.” Linney v