Stoddart v. Express Services, Inc.
2:12-cv-01054
E.D. Cal.Oct 7, 2020Background
- Plaintiff Michael Stoddart, a former Express Services, Inc. temporary worker assigned to Western Wine, sued Express, its franchisee Phillips, and Western Wine alleging systemic California Labor Code violations (meal breaks, overtime calculation, wage statements, waiting-time penalties, and PAGA penalties).
- The proposed settlement arises from long-running litigation and two mediations; the parties agreed a $10,000,000 non-reversionary gross fund to resolve class claims for the period March 23, 2008–December 31, 2017.
- Proposed allocations: up to $2,500,000 (25%) in attorneys’ fees, up to $70,000 costs, $10,000 class representative award, ≈$365,066 administration, and a $50,000 PAGA payment (75% to LWDA, 25% to PAGA group).
- The putative class contains ~162,993 members; the settlement would distribute the net fund pro rata by workweeks (with wage v. penalty/interest components delineated by the agreement).
- The court previously denied preliminary approval (Feb 1, 2019) for inadequate Rule 23 analysis and settlement deficiencies; after revisions and supplemental briefing addressing commonality, release language, PAGA scope, valuation, and notice, the court granted preliminary approval on October 6, 2020.
Issues
| Issue | Plaintiff's Argument (Stoddart) | Defendant's Argument (Express) | Held |
|---|---|---|---|
| Rule 23 numerosity | Class ~162,993; joinder impracticable | N/A (numerosity not disputed) | Numerosity satisfied for settlement certification |
| Commonality / Predominance | Claims arise from Express’s uniform policies (meal-breaks, bonus treatment, wage-statement practices); classwide resolution possible | Variations in client placements, jobs, supervisors create individual issues defeating commonality/predominance | Court finds commonality and predominance satisfied for settlement purposes (policies traceable to Express; wage-statement subclass limited) |
| Typicality / Adequacy of representative & counsel | Stoddart experienced same policies; participated actively; counsel prosecuted vigorously | N/A (no material conflict shown) | Typicality and adequacy satisfied preliminarily; $10,000 incentive permissible at prelim stage but final proportionality review required |
| Fairness of gross settlement valuation ($10M) | Plaintiffs provided detailed damages estimates and offered discounts for litigation risk to justify $10M as reasonable compromise | Defendants contested liability and disputed exposure (argued individual differences and defenses) | Court finds settlement within range for preliminary approval given litigation risks and mediator involvement; final fee/lodestar review reserved |
| Scope of releases & PAGA compromise | Revised agreement narrows PAGA release to claims against the named defendants and specified notice period; PAGA payment $50K | Concern that earlier release language was overbroad and could release unnoticed PAGA claims against third-party clients | Court accepts revised, narrowed release for preliminary approval but requires stronger justification at final approval that $50K serves PAGA’s enforcement/deterrence purposes |
| Notice & opt-out/appearance language | Proposed notice adequate but omitted explicit statement that class members may appear through independent counsel | N/A | Notice approved conditionally; plaintiffs must correct notice within 14 days to clarify right to appear with an attorney |
Key Cases Cited
- Amchem Prods., Inc. v. Windsor, 521 U.S. 591 (1997) (heightened scrutiny required for settlement-only class certification)
- Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011) (commonality requires a common contention capable of classwide resolution)
- Hanlon v. Chrysler Corp., 150 F.3d 1011 (9th Cir. 1998) (settlement review must probe for collusion and treat class certification requirements carefully)
- In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935 (9th Cir. 2011) (guidance on enhanced scrutiny of settlement agreements, including clear-sailing and fees)
- In re Online DVD-Rental Antitrust Litig., 779 F.3d 934 (9th Cir. 2015) (factors for evaluating fairness, reasonableness, and adequacy of class settlements)
- Brinker Rest. Corp. v. Superior Court, 53 Cal.4th 1004 (2012) (uniform meal/rest-break policy claims often suitable for class treatment)
- Phillips Petroleum Co. v. Shutts, 472 U.S. 797 (1985) (due process requires opt-out opportunity for absent class members)
- Vizcaino v. Microsoft Corp., 290 F.3d 1043 (9th Cir. 2002) (lodestar cross-check for percentage-of-recovery fee awards)