Parker v. Cherne Contracting Corporation, 4:18-cv-01912

Background

Plaintiffs (Parker and Gurule) are hourly refinery workers alleging Defendant Cherne Contracting operated an "in on employee’s time/out on employer’s time" policy and violated California wage-and-hour laws, including Labor Code § 226 (defective paper wage statements).
The Court previously certified a Wage Statement Subclass: former hourly employees who worked in California between Dec. 18, 2016 and June 6, 2019 and received paper wage statements missing Defendant’s full name/address; 1,840 Class Members received 28,343 paper paychecks.
After extensive discovery and a full-day mediation, the parties agreed to a $2,500,000 Maximum Settlement Amount (MSA); $500,000 allocated to PAGA, estimated Net Settlement Amount ≈ $1,146,500.57 for class distribution; no reversion to Defendant.
Individual Settlement Payments are allocated pro rata by number of qualified paper paychecks per class member; average class member recovery ≈ $623.10 (≈42% of estimated per-member maximum); PAGA individual average ≈ $56.54.
Other settlement terms: attorneys’ fees up to $750,000 (30% of MSA) plus costs (≈$40,000), class representative incentive awards (up to $5,000 for Parker, $2,500 for Gurule), $20,000 general-release payments to each named plaintiff, cy pres recipients for unclaimed funds, RG2 selected as settlement administrator, individualized mailed notice and 45-day opt-out/objection period.
The Court granted preliminary approval, finding the settlement process, terms, allocation, and proposed notice plan satisfy Rule 23(e) preliminarily and directed the parties to submit a detailed implementation schedule.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether settlement is product of serious, informed, non-collusive negotiations	Settlement reached after arms-length bargaining and full-day mediation with experienced mediator; supports approval	Filed statement of non-opposition	Court preliminarily finds process non-collusive and approves for notice purposes
Whether settlement grants improper preferential treatment (incentive awards, general release)	Incentive awards modest and typical; general-release payments limited to named plaintiffs and separate from class release; non-reversionary settlement means unawarded amounts return to class	Non-opposition	Court finds no improper preferential treatment at preliminary stage; will re-evaluate awards at final approval/fee motion
Whether settlement amount is within range of possible approval (adequacy)	MSA $2.5M equals ~91% of Class Counsel’s max damages calc; average payout ~42% of per-member potential; avoids trial risks/costs/delay	Non-opposition	Court preliminarily finds settlement falls within range of possible approval given risks and recovery
Adequacy of notice plan under Rule 23	Individualized mailed notice with paycheck counts, opt-out/objection instructions, 45-day response window; administrator will update addresses and re-mail as needed	Non-opposition	Court finds the proposed mailed notice plan is the best practicable notice and satisfies Rule 23(c)(2)(B)
Treatment and distribution of PAGA and unclaimed funds (cy pres, LWDA)	$500k to PAGA (25% to aggrieved employees), uncashed PAGA checks after 90 days to LWDA, unclaimed class funds split between two cy pres	Non-opposition	Court preliminarily approves the PAGA allocation and cy pres/LWDA provisions

Key Cases Cited

In re Syncor ERISA Litig., 516 F.3d 1095 (9th Cir. 2008) (Rule 23(e) protects unnamed class members; court must ensure fairness)
In re Heritage Bond Litig., 546 F.3d 667 (9th Cir. 2008) (settlement must be fundamentally fair, adequate, and reasonable)
Hanlon v. Chrysler Corp., 150 F.3d 1011 (9th Cir. 1998) (court may not rewrite settlement; must approve or reject entirety)
In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935 (9th Cir. 2011) (courts scrutinize "clear sailing" and fee arrangements)
In re Tableware Antitrust Litig., 484 F. Supp. 2d 1078 (N.D. Cal. 2007) (courts must be vigilant against preferential treatment to class representatives)
Rodriguez v. West Publ’g Corp., 563 F.3d 948 (9th Cir. 2009) (standards for incentive awards and evaluation factors)
Stanton v. Boeing Co., 327 F.3d 938 (9th Cir. 2003) (factors for evaluating named-plaintiff incentive awards)