Case3:13-cv JCS Document34 Filed09/26/14 Page1 of 14

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1 Case:-cv-0-JCS Document Filed0// Page of 0 0 Alexander I. Dychter (SBN ) alex@dychterlaw.com Dychter Law Offices, APC 00 Second Ave., Suite San Diego, California 0 Telephone:..0 Facsimile:.0. Norman B. Blumenthal (SBN 0) norm@bamlawlj.com Kyle R. Nordrehaug (SBN 0) kyle@bamlawlj.com Blumenthal, Nordrehaug & Bhowmik Calle Clara La Jolla, California 0 Telephone:.. Facsimile:.. Attorneys for Plaintiff GIOVANNI LOPEZ GIOVANNI LOPEZ, an individual, on behalf of himself and on behalf of all persons similarly situated, v. Plaintiff, TIRE CENTERS, LLC, a Delaware Corporation; and DOES through 0, inclusive, Defendant. UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN FRANCISCO DIVISION Case No. :-cv-0-jcs CLASS ACTION PLAINTIFF S MOTION FOR FINAL APPROVAL OF CLASS ACTION SETTLEMENT Date: October, 0 Time: :0 a.m. Ctrm: G Case No. :-cv-0-jcs

2 Case:-cv-0-JCS Document Filed0// Page of 0 0 Please take notice that, on October, 0, at :0 a.m. or as soon thereafter as counsel may be heard, in Courtroom G at the United States Courthouse, located at 0 Golden Gate Ave., San Francisco, California, Plaintiff Giovanni Lopez (hereinafter Plaintiff or Lopez ) will and hereby does move for an order granting final approval of the class action settlement reached with Defendant Tire Centers, LLC (hereinafter Defendant or TCI ) that was preliminarily approved by the Court on July, 0. Specifically, Plaintiff moves for an order:. Granting final approval of the Settlement, and finding the terms of the Settlement to be fair, reasonable and adequate under Rule (e) of the Federal Rules of Civil Procedure, including the amount of the settlement fund; the amount of distributions to class members; the procedure for giving notice to class members; the procedure for objecting to or opting out of the Settlement; the procedure for submitting claims; and the maximum amounts allocated to an incentive payment, costs and attorney s fees.. Certifying for settlement purposes the Settlement Class described in the Settlement, comprised of all persons employed in California by TCI as a non-exempt employee between October, 00 and July, 0.. Finding that class members were provided proper and adequate notice of their rights in a manner that satisfies the requirements of due process.. Directing that all class members who did not timely file a request for exclusion from the Settlement are barred from prosecuting against the Released Parties any and all released claims as set forth in the Settlement.. Directing payment from the settlement fund of settlement administration fees to CPT Group, Inc. in the amount of $,000 in accordance with the Settlement.. Directing payment from the settlement fund of settlement benefits to class members entitled to receive settlement benefits in accordance with the Settlement.. Awarding Plaintiff the amount of $,. for costs.. Awarding Plaintiff the amount of $00,000 for attorney s fees.. Awarding Plaintiff the amount of $,000 as a class representative enhancement payment. Case No. :-cv-0-jcs

3 Case:-cv-0-JCS Document Filed0// Page of 0 0. Entering a final judgment dismissing the action with prejudice.. Providing that, notwithstanding entry of final judgment, the Court shall retain jurisdiction in this matter for the purposes of interpreting or enforcing the Settlement or final judgment. Plaintiff s motion is made under Rule of the Federal Rules of Civil Procedure on the grounds that the Settlement is fair, reasonable and adequate; in accordance with due process, class members were provided notice of their rights under the Settlement in a reasonable manner and were given a reasonable opportunity to exclude themselves from the Settlement; and the amounts of fees, costs and enhancement award requested by Plaintiff are reasonable. Plaintiff s motion is based on this Notice and attached Memorandum of Points and Authorities; the Declarations of Alexander I. Dychter and Ani Shirinian submitted herewith; all other pleadings and papers on file in this action; and any oral argument or other matter that may be considered by the Court. Dated: September, 0 By DYCHTER LAW OFFICES, APC Blumenthal, Nordrehaug & Bhowmik /s/ Alexander I. Dychter Alexander I. Dychter Attorneys for Plaintiff 0 Case No. :-cv-0-jcs

4 Case:-cv-0-JCS Document Filed0// Page of 0 Alexander I. Dychter (SBN ) alex@dychterlaw.com Dychter Law Offices, APC 00 Second Ave., Suite San Diego, California 0 Telephone:..0 Facsimile:.0. Norman B. Blumenthal (SBN 0) norm@bamlawlj.com Kyle R. Nordrehaug (SBN 0) kyle@bamlawlj.com Blumenthal, Nordrehaug & Bhowmik Calle Clara La Jolla, California 0 Telephone:.. Facsimile:.. Attorneys for Plaintiff GIOVANNI LOPEZ UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN FRANCISCO DIVISION 0 GIOVANNI LOPEZ, an individual, on behalf of himself and on behalf of all persons similarly situated, v. Plaintiff, TIRE CENTERS, LLC, a Delaware Corporation; and DOES through 0, inclusive, Defendant. Case No. :-cv-0-jcs CLASS ACTION MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFF S MOTION FOR FINAL APPROVAL OF CLASS ACTION SETTLEMENT Date: October, 0 Time: :0 a.m. Ctrm: G Case No. :-cv-0-jcs

5 Case:-cv-0-JCS Document Filed0// Page of 0 TABLE OF CONTENTS INTRODUCTION AND LITIGATION HISTORY... SUMMARY OF SETTLEMENT TERMS... ARGUMENT... I. THE SETTLEMENT MERITS FINAL APPROVAL... A. The Strength Of Plaintiff s Case... B. The Risk, Expense, Complexity And Likely Duration Of Further Litigation... C. The Risk Of Maintaining Class Action Status... D. The Amount Offered In Settlement... E. The Extent Of Discovery Completed And The Stage Of The Proceedings... F. The Experience And Views Of Counsel... G. The Reaction Of Class Members To The Settlement... CONCLUSION... 0 i Case No. :-cv-0-jcs

6 Case:-cv-0-JCS Document Filed0// Page of 0 0 TABLE OF AUTHORITIES CASES Anderson v. Nextel Retail Stores, LLC (C.D. Cal. 00) 00 WL Class Plaintiffs v. Seattle ( th Cir. ) F.d... Hanlon v. Chrysler Corp. ( th Cir. ) 0 F.d 0... Harris v. Vector Mktg. Corp. (N.D. Cal. 0) 0 WL 0... In re Lifelock, Inc. Marketing and Sales Practices Litigation (D. Ari. 00) 00 WL Linney v. Cellular Alaska Partnership (N.D. Cal ) WL 00, at *.... Molski v. Gleich ( th Cir. 00) F. d,... Nat l Rural Telecommons. Coop v. DirectTV, Inc. (C.D. Cal. 00) F.R.D.... Pelletz v. Weyerhaeuser Co. (W.D. Wash. 00) F.R.D.... Reynolds v. National Football League ( th Cir. ) F.d 0... Sandoval v. Tharaldson Employee Management, Inc. (C.D. Cal. 00) 00 WL... Schiller v. David s Bridal, Inc. (E.D. Cal. 0) 0 WL Shames v. Hertz Corp. (C.D. Cal. 0) 0 WL... Van Bronkhorst v. Safeco Corp. ( th Cir. ) F. d... Van Bronkhorst, F.d at 0... Vasquez v. Coast Valley Roofing, Inc. (E.D. Cal. 00) F.R.D...., West v. Circle K. Stores, Inc. (E.D. Cal. 00) 00 U.S. Dist. LEXIS... FEDERAL RULES OF CIVIL PROCEDURE Rule (e)... Rule (e)()... Rule (h)... STATE STATUTES Labor Code Section 0..., Labor Code Section..., Labor Code Section.... Labor Code Section... ii Case No. :-cv-0-jcs

7 Case:-cv-0-JCS Document Filed0// Page of 0 0 INTRODUCTION AND LITIGATION HISTORY Plaintiff brings class action claims against Defendant Tire Centers, LLC (hereinafter Defendant or TCI ) for violation of California law on behalf of hourly non-exempt employees in California ( employees ). Plaintiff primarily contends that TCI failed to pay all overtime wages based upon a failure to include certain bonuses into the regular rate of pay for purposes of calculating the overtime wage rate; employees were not provided the opportunity to take a duty free meal period of at least thirty minutes or paid premium wages for missed meal periods; and employees were not provided the opportunity to a take a duty free rest period of at least ten minutes or paid premium wages for missed rest periods. Based on these central contentions, Plaintiff claims that TCI owes employees overtime wages under Labor Code Section, premium wages for missed meal periods under Labor Code Section., and premium wages for missed meal periods under Labor Code Section.. (Declaration of Alexander I. Dychter (hereinafter the Dychter Decl. ) ). Plaintiff commenced this action in October 0. (Dychter Decl. ). After engaging in preliminary discussions and conducting initial disclosures the parties agreed to mediate with respect to Plaintiff s principal claims. (Id.) The mediation was held on May, 0, before an experienced and well regarded mediator, Mark S. Rudy, Esq. (Id.) At the conclusion of the mediation, the parties reached agreement on the material terms of a Settlement. (Id.) Subsequently, formal settlement documents were negotiated and executed as set forth in the parties Joint Stipulation and Settlement Agreement (the Settlement ) filed with the Court on June, 0. (Id.) On July, 0, the Court granted Plaintiff s motion for preliminary approval of the Settlement, as modified at the preliminary approval hearing to provide for a web-site wherein case scheduling information and settlement documents could be viewed by class members. (Id.) Following preliminary approval, the Settlement Administrator provided notice of the Settlement to class members. In accordance with the Court s order, class members were given days to submit an objection to the settlement, or request exclusion from the settlement, and with respect to Based on his overtime, meal break, and rest period claims, Plaintiff also asserts derivative claims for penalties under Labor Code (for failure to provide accurate wage statements) and Labor Code 0 (for failing to pay all wages owed to terminated employees). (Dychter Decl. ). Case No. :-cv-0-jcs

8 Case:-cv-0-JCS Document Filed0// Page of 0 employees formerly employed as of July, 0, to submit a claim form (class members employed as of July, 0, were not required to submit a claim in order to receive settlement benefits). (Dychter Decl. ). In response, not a single class member objected to the Settlement and not a single class member requested exclusion from the Settlement. (Declaration of Ani Shirinian (hereinafter the Shirinian Decl. ) -). As of September, 0, out of class members are participating settlement class members (more than % of the Class) and will receive settlement benefits. (Shirinian ). The average gross settlement benefit is $, and the highest settlement benefit is $,. (Shirinian Decl. ). Additionally, over.0% of the Net Settlement Amount has been claimed by settlement class members. (Id.) Plaintiff now moves under Rules (e) and (h) of the Federal Rules of Civil Procedure for final approval of the Settlement and for an award of costs and fees and an enhancement payment. As set forth below, the Settlement is fair, adequate and reasonable. Plaintiff respectfully requests that the Court grant final approval to the Settlement and award Plaintiff the full amount of costs and fees and enhancement payment as requested. SUMMARY OF SETTLEMENT TERMS The material terms of the Settlement are as follows: 0 The Settlement Class is comprised of all persons employed in California by TCI as a nonexempt employee between October, 00 and July, 0. There are class members who were employed by TCI as of July, 0 ( Current Employees ) and there are class members who were formerly employed by TCI as of July, 0 ( Former Employees ). TCI will pay a non-reversionary sum of Eight Hundred Thousand Dollars ($00,000) in exchange for a release of class member claims. After settlement administration expenses, attorney s costs and fees, and an enhancement award are deducted from the Gross Settlement Amount, approximately $,. shall be distributed to class members as follows: a. Each of the Current Employees who do not opt-out from the Settlement will automatically receive a settlement payment based on the number of workweeks worked during the Class Period. Case No. :-cv-0-jcs

9 Case:-cv-0-JCS Document Filed0// Page of 0 0 b. Each of the Former Employees who do not opt-out from the Settlement and who submit a timely and valid claim form will receive a settlement payment based on the number of workweeks worked during the Class Period. ARGUMENT I. THE SETTLEMENT MERITS FINAL APPROVAL The law favors settlement, particularly in class actions and other complex cases where substantial resources can be conserved by avoiding the time, cots, and rigors of formal litigation. Van Bronkhorst v. Safeco Corp. ( th Cir. ) F. d, 0. Rule (e)() of the Federal Rules of Civil Procedures provides that a court may approve a settlement of a class action when it finds that the settlement is fair, reasonable, and adequate. The following factors are relevant to this determination: ) the strength of the plaintiff s case; ) the risk, expense, complexity, and likely duration of further litigation; ) the risk of maintaining class action status throughout the trial; ) the consideration offered in settlement; ) the extent of discovery completed, and the stage of the proceedings; ) the experience and views of counsel; and ) the reaction of the class to the proposed settlement. Molski v. Gleich ( th Cir. 00) F. d, ; Hanlon v. Chrysler Corp. ( th Cir. ) 0 F.d 0, 0. In this case, each of these factors weighs in favor of granting final approval to the Settlement. A. The Strength Of Plaintiff s Case Assessing the strength of a plaintiff s case involves weighing the merits against the settlement amount and potential recovery. Van Bronkhorst, F.d at 0. See also, Vasquez v. Coast Valley Roofing, Inc. (E.D. Cal. 00) F.R.D.,. A district court need not, however, reach any ultimate conclusions on the contested issues of fact and law which underlie the merits of the dispute, for it is the very uncertainty of outcome in the litigation and avoidance of wasteful and expensive litigation that induce consensual settlements. Class Plaintiffs v. Seattle ( th Cir. ) F.d,. Here, the outcome of this case was extremely uncertain. Defendant denied Plaintiff s claims and, in the absence of settlement, would have vigorously contested a motion for class certification. With respect to Plaintiff s meal period claims, TCI maintained that employees did in fact clock-in and clock-out for breaks and employees also utilized a biometric timekeeping system. Case No. :-cv-0-jcs

10 Case:-cv-0-JCS Document Filed0// Page0 of 0 0 (Dychter Decl. ). With respect to Plaintiff s rest period claims, TCI maintained that employees were able to take their rest breaks and nothing prevented them from doing so. (Id.) There were also inherent problems with proof of damages, as TCI argued the class members maintained varying job duties at different physical locations. (Id.) Thus, in the absence of settlement, there were possible litigation outcomes where class members would have recovered absolutely nothing. (Id.) Plaintiff clearly faced high litigation risks and the prospect of years before obtaining, if ever, a final judgment in favor of the class. The difficulty of predicting whether Plaintiff or Defendant would ultimately have prevailed in this case strongly supports approval of the Settlement. B. The Risk, Expense, Complexity And Likely Duration Of Further Litigation Continued litigation of this case would have exposed Plaintiff to substantial expense and risk. In the absence of settlement, Plaintiff ran the risk that a contested motion for class certification would have been denied. Moreover, even if class certification had been granted as Plaintiff thought likely, Plaintiff still ran the risk of subsequent decertification. Plaintiff also faced substantial risk, and the prospect of lengthy and expensive discovery, with respect to the merits of Plaintiff s claims, especially in light of the fact that there are approximately class members located throughout California. Among other issues, continued litigation would likely have involved expensive and lengthy disputes regarding Plaintiff s discovery of class member contact information, personnel records, and/or other employment records. The prospect of lengthy and expensive litigation with uncertain results clearly supports settlement. See, Nat l Rural Telecommons. Coop v. DirectTV, Inc. (C.D. Cal. 00) F.R.D.,. C. The Risk Of Maintaining Class Action Status While Defendant has not objected to class certification for the purposes of settlement, Plaintiff faced the substantial risk of an adverse result on a contested motion for class certification, which would have resulted in class members getting absolutely nothing. When it comes to class certification, district courts have wide discretion and it remained to be seen how the Court would have ruled on the propriety of class certification in the absence of a settlement. While Plaintiff believed the likelihood of class certification was high, obtaining class certification in cases involving claims for overtime wages, missed meal periods, and missed rest periods can be extremely difficult, and class certification in those Case No. :-cv-0-jcs

11 Case:-cv-0-JCS Document Filed0// Page of 0 0 kinds of wage and hour cases has frequently been denied. D. The Amount Offered In Settlement Based on the information provided by Defendant either prior to or at the mediation, Plaintiff s counsel estimated that Defendant faced maximum potential liability of the following amounts with respect to Plaintiff s principal claims: ) $, for unpaid overtime wages; ) $,00,000 for missed meal periods; ) $,000 for missed rest periods. The Gross Settlement Amount reflects a recovery by Plaintiff equal to 00% of the estimated maximum value of his unpaid wage claim for unpaid overtime wages. (Dychter Decl. ). The Gross Settlement Amount reflects a recovery by Plaintiff equal to approximately 0% of Plaintiff s estimate of Defendant s potential liability on Plaintiff s principal claims. (Id.) Plaintiff clearly achieved a fair settlement well within the range of reasonable outcomes that merits final approval. See, In re Cedant Corp., Derivative Action Litigation (D. N.J. 00) F. Supp.d (approving settlement which provided % value compared to maximum possible recovery). Upon final approval, the Settlement will result, after deductions from the Gross Settlement Amount are made for attorney s fees and costs, an enhancement award to the named Plaintiff, and Settlement Administration costs, in distribution of approximately $,. to individuals (as of September, 0). (Dychter Decl. ). The participating settlement class members will receive an average settlement payment of $,., with the highest settlement payment equaling $,.0. (Shirinian Decl. ). Plaintiff s counsel believes that, in light of the uncertainty and risk of continued litigation, providing settlement class members an average gross recovery of approximately $,. is an extremely good result for the class and strongly recommends final approval of the Settlement. / / / / / / Plaintiff s derivative claims had relatively little value because recovery of waiting time penalties under Labor Code 0 requires a showing that the employer s failure to pay all wages upon termination was willful and recovery of civil penalties under Labor Code requires a showing that the failure to provide accurate wage statements was knowing and intentional. (Dychter Decl. ). Case No. :-cv-0-jcs

12 Case:-cv-0-JCS Document Filed0// Page of 0 0 The fact that the parties reached a settlement that, with respect to Former Employees (but not Current Employees) is claims made, does not militate against the conclusion that the Settlement is fair, adequate and reasonable. District courts have recognized that there is nothing inherently objectionable with a claims-submission process, as class action settlements often include this process, and courts routinely approve claims made settlements. Shames v. Hertz Corp. (C.D. Cal. 0) 0 WL, at *. For example, district courts have approved settlements requiring a claims process far more complex than the simple claim form in this case. See, Pelletz v. Weyerhaeuser Co. (W.D. Wash. 00) F.R.D., (class members were required to submit two claims forms and submit photographs). Because a requirement for class members to submit a claim in order to receive settlement benefits does not render a class action settlement unfair, inadequate or unreasonable, district courts have likewise granted final approval even where the claims rate after preliminary approval was not particularly high. See, e.g., Harris v. Vector Mktg. Corp. (N.D. Cal. 0) 0 WL 0 (final approval granted where claims rate was.%); Anderson v. Nextel Retail Stores, LLC (C.D. Cal. 00) 00 WL 00 (final approval granted where claims rate was %); Sandoval v. Tharaldson Employee Management, Inc. (C.D. Cal. 00) 00 WL (final approval granted where claims rate was %); Schiller v. David s Bridal, Inc. (E.D. Cal. 0) 0 WL 00 (final approval granted where claims rate was %). The effective claims rate for Former Employees in this case is approximately 0%. (Dychter Decl. 0). A claims rate that high falls well within the range of reasonableness as required for final approval. Moreover, because current employees were not required to submit claims in order to receive settlement benefits, overall more than.0% of the Class will receive a distribution of settlement benefits upon final approval and approximately.0% of the Net Settlement Amount has been claimed by the settlement class members. (Dychter Decl. ). Because this is a non-reversionary settlement, all funds not claimed by Class Members from the Net Settlement Amount will be redistributed, on a pro rata basis, to all settlement class members. (Id.) Additionally, it is important to note that the employer s share of payroll taxes is being paid by TCI outside of the settlement. (Id.) / / / / / / Case No. :-cv-0-jcs

13 Case:-cv-0-JCS Document Filed0// Page of 0 0 E. The Extent Of Discovery Completed And The Stage Of The Proceedings The parties reached a Settlement in good faith after engaging in informal discovery and participating in a full-day mediation conducted by an extremely experienced mediator. Although the parties mediated before completing all possible discovery, approval of a class action settlement does not require that discovery be exhaustive. See, e.g., In re Immune Response Securities Litigation (S.D. Cal. 00) F.Supp.d, (settlement approved where informal discovery gave the parties a clear view of the strength and weaknesses of their cases). The fact that settlement results from arms length negotiations following relevant discovery creates a presumption that the agreement is fair. Linney v. Cellular Alaska Partnership (N.D. Cal ) WL 00, at *. Here, Defendant s responses to Plaintiff s request for documents and information, raw timepunch data, and putative class member contact information enabled Plaintiff to evaluate the strengths and weaknesses of his claims. (Dychter Decl. ). Moreover, prior to mediation, Defendant informally provided all the statistical information needed by Plaintiff to calculate the maximum amount of Defendant s potential liability. (Id.) Having only reached a settlement after a full day of mediation with a well experienced and respected wage and hour class action mediator, Mr. Mark S. Rudy, Esq., there is no dispute that the parties settlement negotiations were all conducted at arms length. In this case, the parties held clear (and strongly opposing) views of the strengths and weaknesses of their cases and, with the assistance of the mediator, ultimately reached a fair settlement that required each side to compromise. (Dychter Decl. ). F. The Experience And Views Of Counsel The opinions of experienced class counsel are entitled to considerable weight. West v. Circle K. Stores, Inc. (E.D. Cal. 00) 00 U.S. Dist. LEXIS, *-. See also, Vasquez, F.R.D. at (courts should give great weight to counsel s recommendations). Plaintiff's counsel has substantial experience litigating class actions in general and wage and hour class actions in particular. The opinion of Plaintiff s counsel that the Settlement is fair and reasonable, and that final approval of the Settlement would best serve the interests of class members because the extremely favorable result achieved by the Settlement outweighs the risks and uncertainty of continued litigation, weighs strongly in favor of final approval. Case No. :-cv-0-jcs

14 Case:-cv-0-JCS Document Filed0// Page of 0 G. The Reaction Of Class Members To The Settlement No class members have submitted a request for exclusion (i.e. Opt-Out ). (Shirinian Decl. ). No class members have submitted a dispute. (Shirinian Decl. ). No class members have submitted an objection to the Settlement. (Shirinian Decl. ). The reaction from the class demonstrates an overwhelmingly positive response to the Settlement that strongly supports final approval. See, e.g., Reynolds v. National Football League ( th Cir. ) F.d 0 ( objectors out of,00 class members provided strong evidence of no significant dissatisfaction with settlement); In re Lifelock, Inc. Marketing and Sales Practices Litigation (D. Ari. 00) 00 WL, * (relatively few objections and requests for exclusion support approval). CONCLUSION The Settlement is fair, reasonable and adequate in all respects. Plaintiff respectfully requests the Court to grant Plaintiff s motion for final approval of the Settlement and award the Settlement Administrator costs. Dated: September, 0 DYCHTER LAW OFFICES, APC Blumenthal, Nordrehaug & Bhowmik 0 By /s/ Alexander I. Dychter Alexander I. Dychter Attorneys for Plaintiff Case No. :-cv-0-jcs