Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_17-cv-04656/USCOURTS-cand-4_17-cv-04656-3/pdf.json

Nature of Suit Code: 710
Nature of Suit: Fair Labor Standards Act
Cause of Action: 28:1332 Diversity-Petition for Removal

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

BHANU VIKRAM,

Plaintiff,

v.

FIRST STUDENT MANAGEMENT, LLC,

Defendant.

Case No. 17-cv-04656-KAW 

ORDER REQUIRING 

SUPPLEMENTAL BRIEFING RE 

PLAINTIFFS' MOTION FOR 

PRELIMINARY APPROVAL

Re: Dkt. No. 47

The Court has reviewed Plaintiffs' motion for preliminary approval, and hereby orders the 

parties to provide a joint supplemental brief regarding the following issues. The supplemental 

briefing should be filed no later than January 7, 2019.

A. Attorney's Fees

Plaintiff's counsel intends to seek an award of 25% of the Gross Settlement Fund 

($108,750) as the Fee Award, plus reimbursement of reasonable and actual expenses, not to 

exceed $10,000, as the Expense Award. (Settlement Agreement ¶ III.B.2, Dkt. No. 47-1.) To 

assess the fee request, even for purposes of preliminary approval, the Court requires information 

as to the lodestar claimed, i.e., the number of hours incurred in the case and the hourly rates 

claimed.

B. Range of Reasonableness

At the preliminary approval stage, courts in this district "have stated that the relevant 

inquiry is whether the settlement falls within the range of possible approval or within the range of 

reasonableness." Cotter v. Lyft, 176 F. Supp. 3d 930, 935 (N.D. Cal. 2016) (internal quotation 

omitted). "In determining whether the proposed settlement falls within the range of 

reasonableness, perhaps the most important factor to consider is plaintiff's expected recovery 

balanced against the value of the settlement offer." Id.; see also O'Connor v. Uber Techs., Inc., 

Case 4:17-cv-04656-KAW Document 50 Filed 12/20/18 Page 1 of 5
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201 F. Supp. 3d 1110, 1120-21 (N.D. Cal. 2016). This determination "requires evaluating the 

relative strengths and weaknesses of the plaintiffs' case; it may be reasonable to settle a weak 

claim for relatively little, while it is not reasonable to settle a strong claim for the same amount." 

Cotter, 176 F. Supp. at 936 (citing In re High-Tech Emp. Antitrust Litig., Case No: 11-cv-2509-

LHK, 2014 WL 3917126, at *4 (N.D. Cal. Aug. 8, 2014). Furthermore, the Ninth Circuit has 

recognized that where no class has been formally certified, "there is an even greater potential for a 

breach of fiduciary duty owed the class during settlement. Accordingly, such agreements must 

withstand an even higher level of scrutiny for evidence of collusion or other conflicts of interest 

than is ordinarily required under Rule 23(e) before securing the court's approval as fair." In re 

Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935, 947 (9th Cir. 2011). Signs of collusion that 

the Court must consider include: (1) whether counsel receives a disproportionate distribution of 

the settlement, (2) where the parties negotiate a "clear sailing" provision for payment of attorneys' 

fees separate and apart from class funds; and (3) when the parties arrange for fees not awarded to 

revert to the defendants. Id.

In the instant case, Plaintiffs bring employment misclassification claims, including claims 

for unpaid minimum wage and overtime wages in violation of California labor law and the Fair 

Labor Standards Act ("FLSA"), as well as for failure to provide accurate itemized wage statements 

and waiting time penalties. (Plf.'s Mot. at 3, Dkt. No. 47.) Plaintiffs also bring a California 

Private Attorneys General Act ("PAGA") claim. (Id.) The proposed settlement is for $435,000; 

once the attorney's fees ($108,750), costs ($10,000), incentive award ($10,000), class 

administrative costs ($10,000), and PAGA penalty ($7,500) are excluded, the net settlement fund 

is estimated to be $288,750. (Settlement Agreement ¶¶ III.A-B.)

Plaintiff states that the settlement represents 78% of the damages estimated by Plaintiff, 

which consists of $15,921 in miscalculation of overtime, $336,438 in waiting time penalties, and 

$205,000 in waiting time penalties. The Court requires additional briefing on how these damages 

were calculated, to determine their reasonableness. Additionally, Plaintiff shall explain whether 

there are other claims at issue being released and their estimated value, including the PAGA claim.

The Court also finds that Plaintiff has not adequately explained why the proposed discount 

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United States District Court

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is warranted in this case. For example, Plaintiff raises arguments that Defendant could raise, 

including on class certification, but provides no analysis of why cases such as Ferguson v. Randy's 

Trucking, Inc., Case No. 1:15-cv-697-JLT, 2016 U.S. Dist. LEXIS 32719 (E.D. Cal. Mar. 11, 

2016) and Santos v. TWC Admin. LLC, Case No. CV 13-4799-MMM (CWx), 2014 U.S. Dist. 

LEXIS 199358 (C.D. Cal. Aug. 4, 2014) are comparable. (See Plf.'s Mot. at 12-13.) Plaintiff 

must fully explain the risks of non-certification and losing on the merits for each of their claims, 

citing to specific case law and facts, and why these risks warrant the proposed discount.

C. PAGA Claim

The Court requires that Plaintiff address whether he submitted a copy of the settlement to 

the Labor and Workforce Development Agency ("LWDA"), and whether he has received any 

comments from the LWDA. See Cal. Labor Code § 2699(l)(2) ("The proposed settlement shall be 

submitted to the agency at the same time that it is submitted to the court"); see also Private 

Attorney Generals Act (PAGA), CALIFORNIA LABOR & WORKFORCE DEVELOPMENT AGENCY, 

http://www.labor.ca.gov/Private_Attorneys_General_Act.htm (last visited Dec. 17, 2018). If the 

LWDA has provided any comments, the comments should be attached as an exhibit to the 

supplemental brief. 

D. Class Representative Service Payment

The Settlement proposes a service payment of $10,000 to Plaintiff. (Settlement Agreement 

¶ III.B.1.) "It is well-established in this circuit that named plaintiffs in a class action are eligible 

for reasonable incentive payments, also known as service awards." Harris v. Vector Mktg. Corp., 

No. C-08-5198 EMC, 2012 WL 381202, at *6 (N.D. Cal. Feb. 6, 2012) (internal quotation 

omitted). "Several courts in this District have indicated that incentive payments of $10,000 or 

$25,000 are quite high and/or that, as a general matter, $5,000 is a reasonable amount." Id. at *7. 

Plaintiff must explain the amount of time and work he put into the case, and why the work 

performed warrants the requested service payment when this district has typically considered 

$5,000 to be the benchmark amount, especially in light of the discounted settlement amount.

E. Class Action Fairness Act ("CAFA") Notice

CAFA requires that notice of a settlement be given to the appropriate government officials. 

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28 U.S.C. § 1715(b). The parties should address whether CAFA notice is required and if so, when 

it will be given.

F. Procedures for Objecting to the Settlement

The Settlement requires that objections be submitted to the Settlement Administrator. 

(Settlement Agreement ¶ III.E.3.) The Procedural Guidance for Class Action Settlements, adopted 

by this district on November 1, 2018, requires that the notice instruct class members who wish to 

object to the settlement to send their written objections to the Court. United States District Court, 

Northern District of California, Procedural Guidance for Class Action Settlements, available at

https://www.cand.uscourts.gov/ClassActionSettlementGuidance (last visited Dec. 17, 2018). The 

Court will then scan the objections into the electronic case docket, and the parties will receive 

electronic notices of the filing. The parties shall refer to the Procedural Guidance for 

recommended language on the procedures for objecting to the settlement.

G. Class Notice (Exhibit A of Settlement Agreement)

i. What are the Terms of the Settlement? (Page 2)

The Notice states that the Settlement Administration Expenses are "estimated not to exceed 

$10,000, for expenses . . . ." The Settlement Agreement states that the expenses will not exceed 

$10,000. (Settlement Agreement ¶ III.B.4.) The Notice should remove the word "estimated."

ii. What Do I Release Under the Settlement? (Pages 3-4)

This section lists claims that will be released, including facts on the instant case. This 

section repeatedly refers to "lift pay," but does not explain what "lift pay" is. The Notice should 

explain "lift pay" so that class members understand what practices are at issue in this case.

iii. How Do I Tell the Court that I Don't Like the Settlement? (Page 5)

As discussed above, the objection procedure should be updated to be consistent with the 

Procedural Guidance for Class Action Settlements. 

iv. When and Where Will the Court Decide Whether to Approve the 

Settlement? (Page 6)

The Notice states that the Final Approval hearing will be held in Courtroom 4. As the 

Courtroom assignment is not guaranteed, the parties should remove this information from the 

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Notice. This section should also advise class members to check the settlement website or the 

Court's PACER site to confirm the date and location of the Final Approval hearing.

IT IS SO ORDERED.

Dated: December 20, 2018

__________________________________

KANDIS A. WESTMORE

United States Magistrate Judge

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