Pearson v. P.F. Chang's China Bistro, Inc., 3:13-cv-02009

Background

Three related class actions were filed against P.F. Chang’s alleging multiple California wage-and-hour violations by non-exempt hourly employees (meal/rest breaks, split-shift, reporting time, wage statements, waiting time, PAGA). The proposed Settlement Class covers California non-exempt hourly employees from July 22, 2009 to May 21, 2018.
After extensive discovery, motions, arbitration, and two full-day mediations, parties reached a non-reversionary $6.5 million global settlement for the consolidated actions.
The settlement fund covers class member payments (pro rata by compensable workweeks), claims administration, attorney fees and costs (class counsel may request up to one-third of the fund), representative incentive payments, and LWDA payment; uncashed checks escheat to California.
Plaintiffs moved for preliminary approval and settlement-only class certification under Rule 23(b)(3); Defendant does not oppose certification for settlement purposes but denies liability.
The court evaluated Rule 23(a) and (b)(3) factors (numerosity ~17,000 members; commonality; typicality; adequacy; predominance and superiority for settlement) and preliminarily certified the class and preliminarily approved the settlement as fair, reasonable, and adequate.
The court approved notice procedures subject to a small revision: the class notice must include detailed objection/appearance requirements; set a final approval hearing and a schedule for class list delivery, notice mailing, opt-outs, objections, fee petitions, and final approval briefing.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the proposed Settlement Class may be certified for settlement purposes under Rule 23(b)(3)	Class members share common injuries from uniform policies; class treatment is superior and manageable for settlement	Defendant does not oppose settlement-class certification but denies liability and disputes certifiability outside settlement	Court preliminarily certified the settlement class under Rule 23(b)(3) for settlement purposes only
Whether the $6.5M settlement is fair, reasonable, and adequate	Settlement is ~50% of Plaintiffs’ estimated likely recovery (~$13M), reached after extensive discovery and mediation	Settlement avoids substantial litigation risk, appeal risk, and uncertainty on PAGA/class viability	Court preliminarily approved the settlement as fair, reasonable, and adequate after applying Hanlon factors
Attorney fees and costs request (structure)	Class counsel may seek up to one-third of the fund plus costs (<= $100,000); such percentage is within Ninth Circuit customary range	Defendant agreed not to oppose the requested fee percentage	Court found the fee provision prima facie reasonable at preliminary stage but noted counsel must justify any departure from the 25% benchmark at final approval
Notice and objection mechanics	Parties proposed individual mailed notice (English/Spanish) and objection/appearance procedures in the settlement agreement	—	Court approved notice form/method as best practicable but required amended notice to include the specific 15-day pre-hearing "Notice of Intention to Appear" and witness/exhibit identification requirements

Key Cases Cited

Amchem Prods. v. Windsor, 521 U.S. 591 (1997) (heightened scrutiny for settlement-only class certification)
Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011) (commonality requires common injury)
Hanlon v. Chrysler Corp., 150 F.3d 1011 (9th Cir. 1998) (factors for evaluating class settlements)
Class Plaintiffs v. City of Seattle, 955 F.2d 1268 (9th Cir. 1992) (federal court may release claims sharing identical factual predicate even if outside its subject-matter jurisdiction)
TBK Partners, Ltd. v. Western Union Corp., 675 F.2d 456 (2d Cir. 1982) (scope of release for related claims)
Fischel v. Equitable Life Assurance Society of U.S., 307 F.3d 997 (9th Cir. 2002) (methods for awarding attorneys’ fees in common-fund cases)
In re Pacific Enterprises Securities Litigation, 47 F.3d 373 (9th Cir. 1995) (25% benchmark for common-fund fee awards subject to adjustment)
Staton v. Boeing Co., 327 F.3d 938 (9th Cir. 2003) (standards for incentive awards to class representatives)
Rodriguez v. West Publishing Corp., 563 F.3d 948 (9th Cir. 2009) (notice must describe settlement terms sufficiently to alert those with adverse viewpoints)