Opinion
1:22-cv-00246-CDB[1]
05-24-2023
OSCAR DIAZ, et al. Plaintiffs, v. UNITED PARCEL SERVICE, INC., et al. Defendants.
ORDER GRANTING PLAINTIFFS' MOTION FOR PRELIMINARY APPROVAL OF CLASS AND REPRESENTATIVE ACTION SETTLEMENT.
(DOC. 21)
Before this Court is Plaintiffs Oscar Diaz and Jace B. O'Guinn's (hereinafter collectively as “Plaintiffs”) motion for preliminary approval of class and representative action settlement. (Doc. 21). The motion is unopposed. For the reasons explained herein, Plaintiffs' motion for preliminary approval of class and representative action settlement shall be granted.
Background
Defendant United Parcel Service, Inc. (“Defendant”), an Ohio Corporation, provides packaging and shipping services worldwide. Plaintiff Oscar Diaz was employed by Defendant from, July 28, 1995, to present and has served as a Part-Time Operations Supervisor/Part-Time Local Sort Supervisor (“PTS”) since 2000. (Doc. 21-5 at ¶ 3). Plaintiff Jace O' Guinn was employed by Defendant from July 2019 to December 2021 and served as a PTS. (Doc. 21-6 at ¶ 3). Plaintiffs' job responsibilities included unloading and sorting packages and facilitating the unloading and sorting of packages from trucks. (Docs. 21-5 at ¶ 3, 21-6 at ¶ 3).
Under Defendant's policy, PTS employees are expected to work 5.5 hours per day and are paid weekly. PTS employees are guaranteed 27.5 hours of pay per week. (Doc. 21-2 at ¶ 4). However, Plaintiffs allege PTS employees regularly work in excess of 5.5 hours per day and 27.5 hours per week, especially during Defendant's “peak season”, typically during the holiday season. Id.
At some point, Defendant established and promulgated a paid vacation policy applicable to PTS employees like Plaintiffs. (Doc. 10 at 23-29). Under this policy, “the number of vacation hours that a part-time hourly paid employee receives for each vacation day is based on the employee's average straight-time daily paid hours for the prior Vacation Year.” (Doc. 21-2 at ¶ 5). Plaintiffs and the proposed class members allege that Defendant did not follow its written vacation policy, and instead paid PTS employees vacation pay of only 27.5 hours of pay for each regardless of how much they actually worked on average.” (Doc. 21-2 at ¶ 6).
Based on this allegation, on February 25, 2022, Plaintiffs filed a class action complaint against Defendants. (Doc. 1). On April 19, 2022, Plaintiffs filed a first amended complaint. (Doc. 5). On April 20, 2022, Plaintiffs filed a notice with the Labor and Workforce Development Agency (“LWDA”) of their intent to file a representative civil action by an aggrieved employee pursuant to subdivisions (a) and (f) of California Labor Code § 2699.3. (Doc. 10 at ¶ 14). The LWDA did not assume jurisdiction over the applicable penalty claims alleged. Id. On June 27, 2022, Plaintiffs filed a second amended complaint to add a cause of action under the Private Attorneys General Act (“PAGA”). (Doc. 10).
At some point, the parties engaged in informal discovery. (Doc. 21-1 at ¶ 8). Counsel for Plaintiffs reviewed Defendant's policies and Plaintiffs' employment records. Id. Plaintiffs' expert analyzed a 10% class sample of time and payroll records and prepared a damages model. Id. On August 15, 2022, the parties filed a stipulation to stay the case pending mediation. (Doc. 13). The following day, the Court issued an order granting the stipulation to stay the case for the parties to complete mediation. (Doc. 13).
On January 18, 2023, the parties engaged in mediation with the assistance of mediator David A. Rotman, Esq. (Doc. 21-2 at ¶ 10). After the mediation session, the parties reached a settlement in principle and executed a Memorandum of Understanding. Id. After additional weeks of arms-length negotiations, the parties finalized the terms of the settlement agreement. Id. On March 6, 2023, Plaintiffs filed this instant unopposed motion for preliminary approval of class and representative action settlement. (Doc. 21).
Plaintiffs and the Proposed Class's Claims and Damages
According to the allegations of the operative Second Amended Complaint, Plaintiffs brought this action for (1) breach of contract/vacation pay policy, (2) promissory estoppel, (3) failure to pay accrued vacation pay/upon termination/waiting time penalties, (4) failure to furnish timely and accurate wage statements, (5) violation of California's Unfair Competition Law (“UCL”), BUS. & PROF. CODE § 17200 et seq., and (6) violation of PAGA, Labor Code § 2699, et seq. (Doc. 10 at 1, 12-20).
Plaintiffs argue Defendant's potential liability for the proposed class's direct unpaid vacation wages is $2,434,639.95. (Doc. 21-2 at ¶ 11). Plaintiff asserts Defendant's exposure for wage statement penalties is $1,204,484.45. Id. Plaintiff also argues Defendant's “maximum potential exposure” for waiting time penalties is $13,128,751, “before accounting for [Defendant's] defenses. Id. Additionally, Plaintiff estimates Defendant's total exposure for PAGA penalties is $4,212,103.35. Id. at ¶ 15.
The Proposed Settlement
A. The Class
Pursuant to the unopposed motion for preliminary approval of class and representative action settlement, the parties agree to a gross settlement amount of $1,375,000.00 for the class defined as follows:
All current and former Part-Time Supervisors, including employees with similar job titles and/or duties, who worked for Defendant within the State of California during the Settlement Class Period, defined as from April 19, 2018, and through the date of the Preliminary Settlement Approval, and who at least once during the Settlement Class
Period took paid vacation under UPS's vacation policy, and whose average straight-time daily paid hours exceeded 5.5 hours per day for the prior Vacation Year, but whose vacation pay was limited to 5.5 hours per day, or 27.5 hours per week of vacation in the Vacation Year.(Doc. 21-2 at 4, 17). The parties state the Settlement Class does not include any person who submits a timely and valid opt-out request. (Doc. 21-1 at 9).
B. PAGA Settlement Members
The Settlement Agreement defines the PAGA Settlement Members like the class. See Id. at ¶ 29. Twenty-five percent of the civil PAGA penalties will be paid to the PAGA Settlement Members as described below. (Doc. 21-1 at 13). The PAGA Settlement Class Period means the time period from April 20, 2021, to the date of the Preliminary Settlement Approval. (Doc. 21-2 at 49).
C. Payment Terms
a. Gross Settlement Amount
The gross settlement fund will cover payments to class members with additional compensation to Plaintiffs as the class representatives. (Doc. 21-1 at 9, 15). In addition, the Settlement provides for payments to Class Counsel for attorney's fees and expenses, to the proposed Settlement Administrator, and the LWDA. Id. at 9-15. Specifically, the Settlement provides for the following payments from the gross settlement amount:
1. Class Representatives (Plaintiffs)
The parties agree, subject to Court approval, to pay up to $6,500 from the Gross Settlement Amount to each Plaintiff for their service as Class Representatives. Id. at 15. Any portion of this award not awarded to the Plaintiffs shall be part of the Net Settlement Amount, to be disturbed to Settlement Class Members. Id.
2. Class Counsel
The parties agree, subject to Court approval, to pay up to $458,333.33, or one-third of the Settlement Amount, may be allocated to pay attorney's fees, and up to $30,000.00 may be allocated to reimburse Class Counsel for litigation costs. Id. at 12. Class Counsel notes they intend to file a motion for attorney fees pursuant to In re Mercury Interactive Corp. Securities Litigation, 618 F.3d 988, 993 (9th Cir. 2010), and any portion of the requested attorney's fees and costs not awarded to Class Counsel shall be part of the net settlement amount. Id. at 12-13.
3. LWDA
The parties agree, subject to Court approval, to allocate $68,750 (or 5%) of the Gross Settlement Amount under the PAGA. $51,562.50 (or 75%) of this amount will be paid to the LWDA, and $17,187.50 (or 25%) to PAGA Settlement Members. Id. at 13.
4. Settlement Administrator
The parties selected Simpluris, Inc. as the Settlement Administrator in this action. Id. at 14. The parties estimate, subject to Court approval, that $38,400 will be deducted from the Gross Settlement Agreement for Simpluris's administration of the settlement. (Doc. 21-4 at ¶ 13).
b. Net Settlement Amount
After the aforementioned payments, the Net Settlement Amount, estimated to be $783,704.17, minus the employer's share of payroll taxes applicable to the portion of the settlement payment attributable to the wages shall be paid out to the Settlement Class. (Doc. 21-1 at 9-10).
75% of the Net Settlement Amount will be distributed to Class Members who are also “members of the Waiting Time Penalties Subclass based on the number of workweeks they worked at any time from and after April 19, 2019, through preliminary approval, in proportion to the aggregate number of workweeks worked by all members of the Waiting Time Penalties Subclass.” Id. at 10. Counsel for Plaintiffs estimate this subclass encompasses up to 3,286 former employees during the relevant time period. (Doc. 21-2 at ¶ 11). Class Members who do not opt out of the Settlement will receive Individual Settlement Payments from the Net Settlement Amount, with each Individual Settlement Amount determined by that class members' share of Waiting Time Penalties for members of the Waiting Time Penalties Sub-Class. (Doc. 21-1 at 10).
The remaining 25% of the Net Settlement Amount will be distributed to Participating Class Members on a pro-rata basis based upon the number of workweeks during which the employee worked in proportion to the aggregate number of workweeks by all Settlement Class Members as follows:
Workweeks Worked by Class Members Net Settlement = Class Member's
_______________________________ X
Total Workweeks Worked by all Amount Payment
Class MembersId. Plaintiffs note this is a non-reversion cash Settlement and Class Members need not submit a claim form to receive a payment. Id. Class Members who do not opt out of the Settlement will release Defendant from all claims that relate to the causes of action asserted in this action - or those that could have been asserted in this action based on the facts alleged by Plaintiffs' operative Complaint. (Docs. 10, 21-1 at 10).
Settlement checks will be valid and negotiable for 180 calendar days. (Doc. 21-1 at 10).
After that time, the Parties propose that the funds represented by uncashed checks be tendered to the Controller of the State of California to be held pursuant to the Unclaimed Property Law, California Civil Code § 1500 et seq., for the benefit of those Class Members who did not cash their checks, until such time that they claim their property, in compliance with Code of Civil Procedure section 384(b), and subject to the Court's approval. Id. Plaintiffs state “In no event will any of the funds revert to Defendant. ” Id. (emphasis in original).
D. The Release of Claims
The Settlement Agreement defines the Released Parties as “Defendant, [it's] past and present officers, directors, shareholders, employees, agents, principals, heirs, representatives, accountants, auditors, consultants, and their respective successors and predecessors in interest, subsidiaries, affiliates, parents and attorneys.” (Doc. 21-2 at 22). The Settlement Agreement provides Plaintiffs shall:
release the Released Parties from all for the Released Claims during the Settlement Class Period and PAGA Released Claims during the PAGA Period. Plaintiffs, for themselves and their heirs, successors and assigns, further waive, release, acquit and forever discharge the Released Parties from any and all claims, actions, charges, complaints, grievances and causes of action, of whatever nature, whether known or unknown, which exist or may exist on behalf of Plaintiffs as of the date of this Agreement, including, but not limited to, any and all tort claims, contract claims, wage claims, wrongful termination claims, disability claims, benefits claims, public policy claims, retaliation claims, statutory claims, personal injury claims, emotional distress claims, invasion of privacy claims, defamation claims, fraud claims, quantum merit claims, and any and all claims arising under any
federal state or other governmental statute, law, regulation or ordinance, including, but not limited to, claims for violation of the Fair Labor Standards Act (FLSA), the California Labor Code, the Wage Orders of California's Industrial Welfare Commission, other state wage and hour laws, the American Disabilities Act, the Age Discrimination in Employment Act (ADEA), the Employee Retirement Income Security Act, Title VII of the Civil Rights Act of 1964, the California Fair Employment and Housing Act, the California Family Rights Act, the Family Medical Leave Act, California's Whistleblower Protection Act, California Business & Professions Code §§ 17200 et seq., and any and all claims arising under any federal state or other governmental statute, law, regulation or ordinance.Id. at 27-28. Plaintiffs' release includes a waiver of all rights under California Civil Code § 1542. Id. at 28. Plaintiff agrees “to fully, finally and forever settle and release any and all claims against the Released Parties, known or unknown, suspected or unsuspected, which exist or may exist on behalf of or against the other at the time of execution of this Agreement, including, but not limited to, any and all claims relating to or arising from Plaintiffs' employment with Defendant.” Id.
E. Objections and Opt-Out Procedure
The parties agreed class members would not be required to take any action to receive their settlement shares. (Doc. 21-1 at 9). However, any class member who wishes may file objections or elect not to participate in the settlement. (Doc, 21-2 at 32-32). The proposed notice for class members explains the procedures to object and/or request exclusion from the class. Id. 48-55.
Preliminary Approval of a Class Settlement
When parties settle an action prior to class certification, the Court has an obligation to “peruse the proposed compromise to ratify both the propriety of the certification and the fairness of the settlement.” Staton v. Boeing Co., 327 F.3d 938, 952 (9th Cir. 2003). Preliminary approval of a class settlement is generally a two-step process. First, the Court must assess whether a class exists. Id. (citing Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 620 (1997)). Second, the Court must “determine whether the proposed settlement is fundamentally fair, adequate, and reasonable.” Id. (citing Hanlon v. Chrysler Corp., 150 F.3d 1011, 1026 (9th Cir. 1998)). The decision to approve or reject a settlement is within the Court's discretion. Hanlon, 150 F.3d at 1026.
I. Conditional Certification of a Settlement Class
Class certification is governed by Rule 23 of the Federal Rules of Civil Procedure, which provides that “[o]ne or more members of a class may sue or be sued as representative parties on behalf of all.” Fed. R. Civ. P. 23(a). Parties seeking class certification bear the burden of demonstrating the elements of Rule 23(a) are satisfied, and “must affirmatively demonstrate.. .compliance with the Rule.” Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350 (2011); Doninger v. Pacific Northwest Bell, Inc., 563 F.2d 1304, 1308 (9th Cir. 1977). If an action meets the prerequisites of Rule 23(a), the Court must consider whether the class is maintainable under one or more of the three alternatives set forth in Rule 23(b). Narouz v. Charter Communs., LLC., 591 F.3d 1261, 1266 (9th Cir. 2010). However, courts need not consider Rule 23(b)(3) issues regarding the manageability of the class action, as settlement obviates the need for a manageable trial. See Morey v. Louis Vuitton N. Am., Inc., 2014 WL 109194, * 12 (S.D. Cal. 2014) (“[B]ecause this certification of the Class is in connection with the Settlement rather than litigation, the Court need not address any issues of manageability that may be presented by certification of the class proposed in the Settlement Agreement.”).
A. Rule 23(a) Requirements
The prerequisites of Rule 23(a) “effectively limit the class claims to those fairly encompassed by the named plaintiff's claims.” General Telephone Co. of the Southwest. v. Falcon, 457 U.S. 147, 155-56 (1982). Certification of a class is proper if:
(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.Fed. R. Civ. P. 23(a). These prerequisites are generally referred to as numerosity, commonality, typicality, and adequacy of representation. Falcon, 457 U.S. at 156.
1. Numerosity
This prerequisite requires the Court to consider “specific facts of each case and imposes no absolute limitations.” General Telephone Co. v. EEOC, 446 U.S. 318, 330 (1980). Although there is not a specific threshold, joining more than one hundred plaintiffs is impracticable. See Immigrant Assistance Project of Los Angeles Cnt. Fed'n of Labor v. INS, 306 F.3d 842, 869 (9th Cir. 2002) (finding the requirement “satisfied solely on the basis of the number of ascertained class members”); Gay v. Waiters' & Diary Lunchmen's Union, 549 F.2d 1330, 1332 n.7 (9th Cir. 1977) (a proposed class with 110 members “clearly [included] a sufficient number to meet the numerosity requirements”). Here, Plaintiffs state “the Class is composed of approximately 6,495 individuals, who can be identified and located from [Defendant's] personnel and payroll records.” (Doc. 21-1 at 17). Therefore, joinder of all identified as plaintiffs is impracticable, and the numerosity requirement is satisfied.
2. Commonality
Rule 23(a) requires “questions of law or fact common to the class.” Fed. R. Civ. P. 23(a)(2). To satisfy the commonality requirement, the plaintiff must demonstrate common points of facts and law. Wal-Mart Stores, 564 U.S. at 350. Thus, “commonality requires that the class members' claim depend upon a common contention such that determination of its truth or falsity will resolve an issue that is central to the validity of each claim in one stroke,” and the “plaintiff must demonstrate the capacity of [class-wide] proceedings to generate common answers to common questions of law or fact that are apt to drive the resolution of the litigation.” Mazza v. Am. Honda Motor Co., 666 F.3d 581, 588 (9th Cir. 2012) (internal quotation marks, citations omitted).
This case involves common class-wide issues that are apt to drive the resolution of Plaintiffs' claims. Plaintiff asserts these common questions include:
(1) whether or not Class Members were subject to Defendant's vacation policy, (2) whether or not Class Members were paid vacation wages under Defendant's vacation policy, (3) whether or not Class Members were provided with all vacation wages due and owing upon separation under Labor Code section 203, (4) whether or not Class Members were provided with accurate wage statements as required by Labor Code section 226, and (5) whether or not Defendant engaged in unfair business practices in violation of the UCL(Doc. 21-1 at 18). It appears that Plaintiffs' “common questions” are premised on policies that applied to all class members equally, given that all class members were (at one point during the class period) employees of Defendant.
The Court notes commonality is not established for the Second Amended Complaint's third cause of action, failure to pay accrued vacation pay upon termination/waiting time penalties. (Doc. 10 at ¶¶ 53-60); See Cal. Lab. Code §§ 201-203 (establishing sanction of up to 30 days' wages for employers who “willfully fail to pay” full amounts due at separation). This cause of action can only be asserted by an estimated 3,286 former employees during the relevant time period. (Doc. 21-2 at ¶ 11). Therefore, it is not common to all 6,495 individuals identified for the proposed class. (Doc. 21-1 at 17). While this might pose certain fairness problems in terms of approving the settlement, it does not destroy commonality because many other common questions apply to the full class. Wang v. Chinese Daily News, 737 F.3d 538, 544 (9th Cir. 2013) (“Plaintiffs need not show that every question in the case, or even a preponderance of questions, is capable of classwide resolution. So long as there is ‘even a single common question,' a would-be class can satisfy the commonality requirement of Rule 23(a)(2).”) (quoting Wal-Mart Stores, Inc. v. Dukes, 131 S.Ct. 2541, 2556 (2011)).
Because of the common questions identified form the basis of the proposed 6,495 individual class members' claims, Plaintiffs satisfy the commonality requirement. Jimenez v. Allstate Ins. Co., 765 F.3d 1161, 1165-66 (9th Cir. 2014). “Even if individual members of the class will be entitled to different amounts of damages... ‘the presence of individual damages cannot, by itself, defeat class certification.'” Mejia v. Walgreen Co., No. 2:19-cv-00218 WBS AC, 2020 WL 6887749, at *4 (E.D. Cal. Nov. 24, 2020). Accordingly, these common questions satisfy Rule 23(a)'s commonality requirement.
3. Typicality
“Typicality refers to the nature of the claim or defense of the class representative, and not to the specific facts from which it arose of the relief sought.” Ellis v. Costco Wholesale Corp., 657 F.3d 970, 984 (9th Cir. 2011) (internal quotation marks and citation omitted). To demonstrate typicality, a plaintiff's claims must be “reasonably co-extensive with those of absent class members[,]” although “they need not be substantially identical.” Hanlon, 150 F.3d at 1020. “The test of typicality is whether other members have the same or similar injury, whether the action is based on conduct which is not unique to the named plaintiffs, and whether other class members have been injured by the same course of conduct.” Ellis, 657 F.3d at 984 (internal quotation marks and citation omitted).
Here, the claims of the named Plaintiffs are typical of the claims of the class. Plaintiffs, like the class members, were employees of Defendant, held the same position as the proposed class, and were subject to Defendant's vacation policy like the other class members. (Docs. 21-5, 21-6). The claims of Plaintiffs and the class members arise from the same factual basis and are based on the same legal theories. If Plaintiffs were not serving as class representatives, they would qualify as members of the class. Further, named Plaintiff O' Guinn separated from employment with Defendant in 2021. Doc. 21-6 at ¶ 3). Thus, Plaintiff O' Guinn's claims are substantially identical to those within the Waiting Time Penalties Subclass. The Court is not aware of any facts that would subject the class representatives “to unique defenses which would threaten to become the focus of the litigation.” Hanon v. Dataproducts Corp., 976 F.2d 497, 508 (9th Cir. 1992). Therefore, typicality has been met.
4. Adequacy of Representation
Absentee class members must be adequately represented for judgment to be binding upon them. Hansberry v. Lee, 311 U.S. 32, 42-43 (1940); see Ellis, 657 F.3d at 985 (“The named Plaintiffs must fairly and adequately protect the interests of the class.”) (citing Fed. R. Civ. P. 23(a)(4)). “[R]esolution of this issue requires that two questions be addressed: (a) do the named plaintiffs and their counsel have any conflicts of interest with other class members and (b) will the named plaintiffs and their counsel prosecute the action vigorously on behalf of the class?” In re Mego Fin. Corp. Sec. Litig., 213 F.3d 454, 462 (9th Cir. 2000) (citing Hanlon, 150 F.3d at 1020).
Plaintiffs Diaz and O'Guinn seek appointment as the class representatives for the settlement class. Plaintiffs claim they were injured by Defendant's vacation policy and chose to contact a lawyer to address these purported injuries. Plaintiffs purport they do not possess any conflict of interest with any other class member. Id. The parties have not identified any conflict between Plaintiffs and the settlement class, and a review of the record before the Court does not reveal any conflict.
As previously discussed, the Settlement Agreement proposes to pay up to $6,500 to each of the two Plaintiffs (a total of $13,000) from the Gross Settlement Amount for their service as Class Representatives. (Doc. 21-1 at 15). This award would amount to just under 1% of the gross settlement amount of $1,375,000. Compare Ontiveros v. Zamora, 303 F.R.D. 356, 365 (E.D. Cal. 2014) (incentive awards equaling even 1% of a gross settlement are “unusually high”) with Morales v. Stevco, Inc., No. 1:09-cv-00704 AWI JLT, 2012 WL 1790371, at *19 (E.D. Cal. May 16, 2012) (total incentive payment of $7,500 did not exceed .81% of total settlement). The award for each Plaintiff is over 37 times larger than the average $175 recovery expected for the Waiting Time Penalties Subclass and over 216 times larger than the average $30 recovery expected for all unnamed class members. See McDonald v. CP OPCO, LLC, No. 17-cv-04915-HSG, 2019 WL 2088421, at *8 (N.D. Cal. May 13, 2019) (finding $15,000 incentive award outsized at 7.5 times the recovery of average class member, and instead awarding $10,000 incentive award).
Plaintiffs assert that they invested a significant amount of time and effort into this lawsuit from its inception to the proposed settlement. (Docs. 21-5, 21-6). Specifically, Plaintiffs claim they spent hours searching for and providing documents to their attorneys and a lot of time answering their attorneys' questions. Id. Plaintiffs note they had to be on standby for a full day during the mediation of this action. Id. Plaintiffs assert they assumed a lot of risk suing their current/former employer and had to balance full-time jobs and other responsibilities with their responsibility to this case. Id.
The Court finds for the purpose of preliminary approval of this action, the proposed incentive award is not so disproportionate that it necessarily creates a conflict of interest and renders Plaintiffs as inadequate representatives. However, if Plaintiffs should ultimately seek such an award, they will be required to provide additional evidence and argument, to ensure that their additional compensation requested above other class members is justified. Accordingly, the Court will retain jurisdiction to award less than the requested $13,000 at the final approval stage if it finds that such an award is not warranted by Plaintiffs' future pleadings.
As to the second aspect of the adequacy inquiry, David R. Markham of the Markham Law Firm and Walter L. Haines of United Employees Law Group, PC seek appointment as class counsel. (Docs. 21-2, 21-3). Both attorneys have extensive experience in prosecuting wage and hour class actions. Id. Further, the attorneys contend this settlement agreement is the result of vigorous and competent representation, and that they possess no conflicts of interest with the proposed class, class representatives or Defendant. Id.
The attorney's described litigation experience and work on this case supports a conclusion that counsel can serve as adequate representatives of the proposed class. Additionally, Defendant has not opposed the appointment of the proposed class counsels, or asserted the attorneys are inadequate to represent the interests of the class for purposes of the pending settlement. (Doc. 21). Therefore, the Court finds David R. Markham and Walter L. Haines meet the adequacy requirement to serve as class counsels.
B. Certification of a Class under Rule 23(b)(3)
Once the requirements of Rule 23(a) are satisfied, a class may only be certified if it is maintainable under one of the three alternatives identified under Rule 23(b). Here, Plaintiffs seek certification under Rule 23(b)(3). The test of Rule 23(b)(3) is “far more demanding” than that of Rule 23(a). Wolin v. Jaguar Land Rover N. Am., LLC, 617 F.3d 1168, 1172 (9th Cir. 2010) (quoting Amchem, 521 U.S. at 623-24). Certification under Rule 23(b)(3) is proper “whenever the actual interests of the parties can be served best by settling their differences in a single action.” Hanlon, 150 F.3d at 1022 (internal quotation marks omitted). The rule requires two different inquiries, specifically a determination as to whether (1) “questions of law or fact common to class members predominate over any questions affecting only individual members” and (2) “a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.” Fed. R. Civ. P. 23(b)(3).
1. Predominance
“Rule 23(b)(3) predominance inquiry tests whether [the] proposed classes are sufficiently cohesive to warrant adjudication by representation.” Amchem, 521 U.S. at 623. “Rule 23(b)(3) focuses on the relationship between the common and individual issues. When common questions present a significant aspect of the case and they can be resolved for all members of the class in a single adjudication, there is clear justification for handling the dispute on a representative rather than on an individual basis.” Hanlon, 150 F.3d at 1022 (internal quotation marks and citations omitted); see In re Wells Fargo Home Mortg. Overtime Pay Litig., 571 F.3d 953, 959 (9th Cir. 2009) (“[T]he main concern in the predominance inquiry . . . [is] the balance between individual and common issues.”). Additionally, the class damages must be sufficiently traceable to plaintiff's liability case. See Comcast Corp. v. Behrend, 569 U.S. 27, 35, (2013).
The Court is persuaded that “[a] common nucleus of facts and potential legal remedies dominates this litigation.” Hanlon, 150 F.3d at 1022. As discussed above, there are common questions regarding Defendant's vacation policy. Specifically, Plaintiffs and all the proposed class members were subject to Defendant's vacation policy at issue and were underpaid as a result of Defendant's alleged violation of its policy. (Doc. 21-1 at 19); see, e.g., Wright v. Linkus Enters., Inc., 259 F.R.D. 468, 473 (E.D. Cal. 2009) (finding predominance, “despite the existence of minor factual differences between individual class members,” where the case involved “alleged policies that required class members to work without compensation, meal and rest periods, and/or reimbursement for expenses”). Further, addressing all of the common questions raised in this single action will preserve the court's time and resources. Accordingly, this factor weighs in favor of certification under Rule 23(b)(3).
2. Superiority
“The superiority inquiry under Rule 23(b)(3) requires determination of whether the objectives of the particular class action procedure will be achieved in the particular case” and “necessarily involves a comparative evaluation of alternative mechanisms of dispute resolution.” Hanlon, 150 F.3d at 1023. Rule 23(b)(3) provides a list of four non-exhaustive factors relevant to superiority. See Fed.R.Civ.P. 23(b)(3)(A-D).
The first factor considers “the class members' interests in individually controlling the prosecution or defense of separate actions.” Fed. R. Civ. P. 23(b)(3)(A). “This factor weighs against class certification where each class member has suffered sizeable damages or has an emotional stake in the litigation.” Barbosa v. Cargill Meat Solutions Corp., 297 F.R.D. 431, 444 (E.D. Cal. 2013). Plaintiff and the proposed class do not assert any claims for emotional distress, nor is there any indication that the amount of damages any individual class member may recover could be substantially greater than the potential recovery of any other class member. See generally, (Doc. 10); see supra at 4-5.
Further, the alternative method of resolution-pursuing induvial claims for a relatively modest amount of damages-would likely never be brought, as “litigation costs would dwarf potential recovery.” Hanlon, 150 F.3d at 1023. Plaintiffs through counsel propose a net settlement amount of $783,704.17, to be split among a possible class of 6,495 individuals. See supra at 5-7. Given the presumed small size of each class member's claim, class treatment is not merely superior, but necessary to ensure a fair and efficient adjudication of this action. See Leyva v. Medline Indus. Inc., 716 F.3d 510, 515 (9th Cir. 2013) (“In light of the small size of the putative class member's potential individual monetary recovery, class certification may be the only feasible means for them to adjudicate their claims. Thus, class certification is also the superior method of adjudication.”).
The second factor asks the Court to consider “the extent and nature of any litigation concerning the controversy already begun by or against class members[.]” Fed.R.Civ.P. 23(b)(3)(B). While any class member who wishes to control his or her own case may opt out of the class, see Fed.R.Civ.P. 23(c)(2)(B)(v), “other pending litigation is evidence that individuals have an interest in controlling their own litigation.” See Newberg on Class Actions § 4:70 at p. 277 (5th ed. 2014) (emphasis omitted). Here, “to the parties' knowledge, this is the only action which alleges underpayment of vacation wages.” (Doc. 21-1 at 20).
The third factor considers “the desirability or undesirability of concentrating the litigation of the claims in the particular forum,” and the fourth factor is “the likely difficulties in managing a class action.” Fed.R.Civ.P. 23(b)(3)(C-D). In the context of a settlement, the third and fourth factors are rendered moot and irrelevant. Barbosa, 297 F.R.D. at 444; see Amchem, 521 U.S. at 620 (“Confronted with a request for settlement-only class certification, a district court need not inquire whether the case, if tired, would present intractable management problems, for the proposal is that there be no trial.” (citation omitted).
The only factors in play here weigh in favor of class treatment. Under the circumstances, the court finds that the superiority requirement is satisfied. Consequently, the Court finds conditional certification of the proposed Settlement Class is proper under Rule 23(b)(3).
II. Evaluation of the Settlement Terms
Settlement of a class action requires approval of the Court, which may be granted “only after a hearing and on finding that [the settlement] is fair, reasonable, and adequate.” Fed.R.Civ.P. 23(e)(2). Approval is required to ensure settlement is consistent with the plaintiff's fiduciary obligations to the class. See Ficalora v. Lockheed Cal. Co., 751 F.2d 995, 996 (9th Cir. 1985). Toward that end, “Congress and the Supreme Court amended Rule 23(e) to set forth specific factors to consider in determining whether a settlement is ‘fair, reasonable, and adequate.'” Briseno v. Henderson, 998 F.3d 1014, 1023 (9th Cir. 2021). Rule 23(e)(2) now directs the Court to consider whether:
(A) the class representatives and class counsel have adequately represented the class;
(B) the proposal was negotiated at arm's length;
(C) the relief provided for the class is adequate, taking into account;
(i) the costs, risks, and delay of trial and appeal;
(ii) the effectiveness of any proposed method of distributing relief to the class, including the method of processing class-member claims;
(iii) the terms of any proposed award of attorney's fees, including the timing of payment; and
(iv) any agreement required to be identified under Rule 23(e)(3); and (D) the proposal treats class members equitably relative to each other.Fed. R. Civ. P. 23(e)(2); see also Briseno, 998 F.3d at 1023-24. The Ninth Circuit has determined this revision to Rule 23 requires courts “to go beyond [its] precedent.” Briseno, 998 F.3d at 1026.