Foster v. Advantage Sales & Marketing, LLC.
3:18-cv-07205
N.D. Cal.Dec 9, 2019Background
- Plaintiff Wilma Foster sued Advantage Sales & Marketing (Advantage) alleging CDMRs were misclassified as exempt and thus denied overtime under the FLSA and California law; the complaint later added a PAGA claim and two opt-in plaintiffs were added as named plaintiffs.
- Parties negotiated a settlement after discovery and a Magistrate Judge settlement conference; they filed a long-form settlement agreement and sought preliminary approval.
- Proposed settlement: $1,200,000 total; $734,000 Net Settlement (≈ $362k to California class; $372k to non-California collective), $400,000 (33%) attorneys’ fees, up to $20,000 costs, up to $20,000 admin, $10,000 PAGA allocation; service awards for named plaintiffs.
- Classes: (1) California Rule 23 class of CDMRs classified as exempt (Jan 1, 2017–Dec 31, 2018) (≈59 members); (2) nationwide FLSA opt-in collective of non-California CDMRs similarly classified (≈261 eligible).
- Settlement mechanics: pro rata workweek allocation; automatic mailing of checks; California non‑cash opt-outs get cy pres to Employee Rights Advocacy Institute; non‑California checks not cashed = no opt‑in and funds return to defendant.
- Court conditionally certified the classes for settlement purposes, preliminarily approved the settlement and notice plan, appointed class counsel and a claims administrator, and set deadlines and a final-approval hearing date.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether to certify a California class under Rule 23 for settlement purposes | Class meets numerosity, commonality, typicality, and adequacy; common questions (classification, duties, schedules, arbitration validity) predominate | (Implied) Individualized inquiries and arbitration issues could undermine class litigation | Conditionally certified under Rule 23(b)(3) for settlement purposes only |
| Whether to authorize a nationwide FLSA collective for settlement | CDMRs are similarly situated; common factual and legal issues support collective settlement | (Implied) Variations across states and potential defenses could limit collective litigation | Conditionally authorized the FLSA collective for settlement purposes only |
| Whether the settlement is fair, reasonable, and adequate under Hanlon factors | Settlement provides meaningful recovery given litigation risks, short liability period, and avoids delay/costs; negotiated at arm’s length after mediation | Defendant did not oppose; settlement avoids further litigation/arbitration expense | Preliminary approval granted; settlement appears fair and reasonable for preliminary purposes |
| Treatment of attorneys’ fees, service awards, and cy pres | Plaintiffs request one‑third fee, specified service awards, and cy pres for uncashed California funds | Defendant does not contest; court must ensure awards are reasonable | Court preliminarily accepted structure but deferred final rulings on fees, incentive awards, and cy pres to final approval hearing |
Key Cases Cited
- Staton v. Boeing Co., 327 F.3d 938 (9th Cir. 2003) (heightened scrutiny for settlement-only class certification and guidance on incentive awards)
- Amchem Prods., Inc. v. Windsor, 521 U.S. 591 (1997) (requirement to rigorously assess Rule 23 when certifying settlement classes)
- In re Hyundai & Kia Fuel Econ. Litig., 926 F.3d 539 (9th Cir. 2019) (certification considerations for settlement-only classes and notice adequacy)
- Wal‑Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011) (commonality standard)
- Hanlon v. Chrysler Corp., 150 F.3d 1011 (9th Cir. 1998) (factors for evaluating class-action settlements)
- Rodriguez v. West Publ’g Corp., 563 F.3d 948 (9th Cir. 2009) (deference to arm’s-length settlements negotiated by experienced counsel)
- Vizcaino v. Microsoft Corp., 290 F.3d 1043 (9th Cir. 2002) (attorney‑fees benchmark in common-fund cases)
- Tyson Foods, Inc. v. Bouaphakeo, 136 S. Ct. 1036 (2016) (use of representative evidence under the FLSA)
- Radcliffe v. Experian Info. Sols., 715 F.3d 1157 (9th Cir. 2013) (scrutiny of incentive awards and class representative adequacy)
- Lane v. Facebook, Inc., 696 F.3d 811 (9th Cir. 2012) (cy pres nexus to class and claims)
- Nachshin v. AOL, LLC, 663 F.3d 1034 (9th Cir. 2011) (cy pres considerations and limits)