913 F. Supp. 2d 964
E.D. Cal.2012Background
- This is a class-action wage-and-hour settlement involving Enrollment Counselors of The University of Phoenix, Inc. and Apollo Group, Inc. that was preliminarily certified and ultimately settled.
- Court approved a $4,000,000 settlement fund, with up to $1,333,333 in attorneys’ fees and $25,000 in costs sought by class counsel, and individual and governmental payments specified in the agreement.
- CAFA notice was served late to state officials but the court found it substantially acceptable because more than 90 days passed before final approval and no objections were raised.
- Rule 23(b)(3) class certification had already been established, and the settlement retained traditional Rule 23 requirements without re-certification.
- The court considered the strength of plaintiffs’ wage-and-hour claims, the risk of continued litigation, discovery completed, counsel’s experience, presence of a government entity (PAGA), and lack of class member objections in weighing fairness.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| CAFA notice sufficiency | Adoma argues CAFA notice was untimely. | Defendants satisfied the 90-day notice requirement. | CAFA notice deemed effective; late service did not bar final approval. |
| Rule 23 adequacy of settlement | Settlement fairly protects class interests given damages uncertainties. | Settlement reflects substantial compromise amid litigation risks. | Settlement found fair, reasonable, and adequate under Rule 23(e). |
| Attorneys’ fees reasonableness | Fees should reflect complex litigation and benefits to the class. | Benchmark 25% is starting point; 29% justified by complexity and results. | $1,160,000 (29% of $4,000,000) approved as reasonable with lodestar cross-check. |
| Objections by class member | Adoma’s objections raise concerns about representation and value. | Objections insufficient to derail settlement; Adoma signed stipulation binding her. | Objections considered but settlement approved; Adoma’s concerns overcome by final agreement terms. |
| Release scope and class composition | Settlement covers relevant California wage-and-hour claims and Sobol-related opt-outs. | Release broad but limited to class-defined claims and agreed terms. | Release and class definitions approved consistent with settlement agreement. |
Key Cases Cited
- Hanlon v. Chrysler Corp., 150 F.3d 1011 (9th Cir. 1998) (settlement fairness factors; no excessive deference to merits)
- Linney v. Cellular Alaska Partnership, 151 F.3d 1234 (9th Cir. 1998) (nonexclusive factors for determining fairness of settlement)
- Officers for Justice v. Civil Service Commission, 688 F.2d 615 (9th Cir. 1982) (necessity of court approval to protect class members)
- DIRECTV, Inc. v. Shamrock Communications, 221 F.R.D. 523 (C.D. Cal. 2004) (context for settlement approval and discovery considerations)
- Vizcaino v. Microsoft Corp., 290 F.3d 1043 (9th Cir. 2002) (lodestar cross-check and multiplier guidance)
- In re Wash. Pub. Power Supply Sys. Sec. Litig., 19 F.3d 1291 (9th Cir. 1994) (procedural cautious approach to class action settlements)