Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_17-cv-07205/USCOURTS-cand-4_17-cv-07205-8/pdf.json

Nature of Suit Code: 710
Nature of Suit: Fair Labor Standards Act
Cause of Action: 29:201 Fair Labor Standards Act

---

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

BRANDON NOROMA,

Plaintiff,

v.

HOME POINT FINANCIAL 

CORPORATION,

Defendant.

Case No. 17-cv-07205-HSG 

ORDER GRANTING MOTION FOR 

PRELIMINARY APPROVAL OF 

SETTLEMENT

Re: Dkt. No. 50

Pending before the Court is Plaintiff Brandon Norona’s unopposed motion for preliminary 

approval of a class action and collective settlement.

1

 See Dkt. No. 50-1 (“Mot.”). The parties 

have reached a settlement regarding Plaintiff’s claims and now seek the required court approval. 

For the following reasons, the Court GRANTS the motion for preliminary approval of the class 

action and collective settlement.

I. BACKGROUND

A. Factual Allegations

Norona worked in California for Defendant Home Point Financial Corporation, which 

“sell[s] loans to consumers.” See First Amended Complaint (“FAC”) ¶ 6, 13. Norona was a nonexempt employee who “worked overtime and earned bonuses and commission wages.” Id. ¶ 13. 

He “regularly worked in excess of” eight hours per workday or forty hours per workweek. Id. 

Norona alleges that he, like other Home Point employees, was “not compensated” for all of the 

 

1 The initial complaint spells the Plaintiff’s name as “Brandon Noroma” and the case was

captioned based on that spelling. See Complaint, Dkt. No. 1. However, in the stipulation 

regarding the filing of a First Amended Complaint, Plaintiff clarifies that the correct spelling is 

“Norona.” See Dkt. No. 21 at 1. The Court will use the corrected spelling notwithstanding the

case caption.

Case 4:17-cv-07205-HSG Document 52 Filed 04/12/19 Page 1 of 16
2

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

hours he worked, including “proper overtime,” which violated the Fair Labor Standards Act

(“FLSA”) and California law. Id. ¶ 7, 13.

Norona brought his claims on behalf of two groups of non-exempt Home Point employees, 

including “loan originators, mortgage professionals, loan officers, and loan processors” who 

“worked overtime and earned commission and bonus pay.” Id. ¶ 7. First, he asserted a 

nationwide, opt-in collective action under FLSA, 29 U.S.C. § 216(b), on behalf of Home Point 

employees who worked from three years prior to the filing date up to the date of judgment. See id.

¶ 8. His FLSA action sought “to (i) recover unpaid wages and overtime compensation owed to the 

FLSA Employees, (ii) obtain an equal amount in liquidated damages, as provided by Section 16(b) 

of the FLSA, and (iii) recover reasonable attorneys’ fees and costs of the action, as provided for by 

Section 16(b) of the FLSA.” Id. Second, he asserted claims under the California Labor Code and 

California Business and Professions Code as part of an opt-out class action composed of Home 

Point employees who worked from four years prior to the filing date up to the date of judgment

and also under the California Private Attorneys General Act (“PAGA”). Id. ¶¶ 4, 9, 48–53.

B. Procedural History

Norona filed his initial complaint on December 19, 2017. See Dkt. No. 1. He filed a first 

amended complaint on March 21, 2018. See FAC.

The parties held a mediation before the Hon. William J. Cahill on May 17, 2018, at which 

they reached a settlement in principle. See Dkt. No. 32. They filed this motion for settlement on 

November 8. See Mot. The Court held a hearing on December 13, after which it took the motion 

under submission. See Dkt. No. 51 (minute entry).

C. Proposed Settlement Agreement

Following a day-long mediation, the parties agreed to settle the case in its entirety. See 

Mot. at 2; Dkt. No. 50-4, Ex. 1 (“Settlement Agreement” or “SA”). The proposed settlement 

covers two classes of Home Point employees: the FLSA Collective (also known as the Settlement 

Collective) and the California Class (also known as the Settlement Class). See Mot. at 2; see also 

SA at 11, 13. The FLSA Collective is an opt-in collective that includes 1,392 members employed 

by Home Point outside of California from December 19, 2014 to September 30, 2018; it settles 

Case 4:17-cv-07205-HSG Document 52 Filed 04/12/19 Page 2 of 16
3

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

claims under FLSA. See Mot. at 1–2, 8. The California Class is an opt-out class of 254 members 

employed by Home Point in California from December 19, 2013 to September 30, 2018; it settles 

overtime claims under FLSA as well as California-law claims related to overtime pay, waiting 

time penalties, and meal and rest breaks. See id. Plaintiff intends to file a Second Amended 

Complaint adding Plaintiff Linda Corbin as a representative for the FLSA Collective. See SA ¶ 

3.1; see also SA Ex. F (proposed Second Amended Complaint).

The key terms of the Settlement Agreement are as follows:

i. Class Definitions

FLSA Collective: 

[A]ll persons currently or previously employed by Defendant in the 

United States while residing outside California, including under 

Defendant’s previous name, Maverick Funding Corp., as non-exempt 

loan originators, mortgage professionals, loan officers, loan 

processors and other non-exempt employees in positions that were 

eligible for commissions and/or non-discretionary bonuses, the 

amounts of which are measured by or dependent on hours worked, 

production, or efficiency, from December 19, 2014, through and 

including September 30, 2018, who have not previously released their 

claims. Individuals who resided in California for part of the relevant 

time period and outside of California for part of the relevant time

period are included in the Settlement Class for the workweeks 

employed by Defendant and residing in California, and included in 

the Settlement Collective for the workweeks employed by Defendant

and residing in the United States but outside of California.

SA ¶ 2.41.

California Class: 

[A]ll persons currently or previously employed by Defendant in 

California, including under its prior name, Maverick Funding Corp., 

as non-exempt loan originators, mortgage professionals, loan officers, 

loan processors and other non-exempt employees in positions that 

were eligible for commissions and/or non-discretionary bonuses, the 

amounts of which are measured by or dependent on hours worked, 

production, or efficiency, from December 19, 2013 through and 

including September 30, 2018, who have not previously released their 

claims. The Settlement Class does not include any person who was 

employed solely by Stonegate Capital Corporation and/or Cross-Line 

Capital, Inc. in California. Individuals employed as a non-exempt 

inside loan agent, mortgage advisor, or mortgage loan officer at 

Stonegate Capital Corporation and/or Cross-Line Capital, Inc. and 

subsequently employed by Defendant while residing in California as 

non-exempt employee are included in the Settlement Class but only 

for the period of time employed by Defendant starting June 1, 2017.

. . . Individuals who resided in California for part of the relevant time 

Case 4:17-cv-07205-HSG Document 52 Filed 04/12/19 Page 3 of 16
4

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

period and outside of California for part of the relevant time period 

are included in the Settlement Class for the workweeks employed by 

Defendant and residing in California, and included in the Settlement 

Collective for the workweeks employed by Defendant and residing 

outside of California.

SA ¶ 2.35. 

Defendant estimates that there are approximately 1,392 people in the Settlement Collective 

and approximately 254 people in the California Class. See SA ¶¶ 2.35, 2.41. 

ii. Settlement Payout

FLSA Collective: Up to $500,000 total, with amount paid out based on the number of optins. SA ¶ 4.1. After fees and costs, Plaintiff estimates that up to $305,214.07 will be paid out to 

members of the FLSA Collective. Mot. at 18. FLSA Collective members will receive a pro-rata 

share of the available funds, based on the number of weeks worked during the covered period. Id.

at 10. The average award (after fees and expenses) is expected to be about $200. Id. For tax 

purposes, the awards will be allocated as 50% wages and 50% liquidated damages. SA ¶ 5.9.1.

California Class: $1.725 million total, non-reversionary. SA ¶ 4.1. After fees and costs, 

Plaintiff estimates that $1.1 million will be paid out to California Class members. Mot. at 18. 

Class members will receive a pro-rata share of the available funds, based on the number of weeks 

worked during the covered period. Id. at 10. The average award (after fees and expenses) is 

expected to be over $4,000. Id. For tax purposes, the awards will be allocated as one-third wages, 

one-third statutory and civil penalties, and one-third interest. SA ¶ 5.9.1.

PAGA Allocation: $25,000 will be allocated to settle claims under PAGA. SA ¶ 2.21. 

Three-quarters ($18,750) will be paid to the California Labor Workforce Development Agency 

and one-quarter ($6,250) will be paid to the California Class. Id.; see also Mot. at 9–10. All 

California Class members (even those who opt out) will receive their pro-rata share of the PAGA 

payment. Mot. at 11.

iii. Release

FLSA Collective:

“[A]ny and all present and past claims, actions, demands, causes of 

action, suits, debts, obligations, rights or liabilities, arising out of their 

employment with Home Point based on the facts, conduct, claims, 

and/or allegations in the Complaint, First Amended Complaint and 

Case 4:17-cv-07205-HSG Document 52 Filed 04/12/19 Page 4 of 16
5

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

Second Amended Complaint pursuant to the Fair Labor Standards 

Act, 29 U.S.C. sections 201 et seq. regarding non-payment of wages, 

minimum wages, overtime wages, and any other compensation 

(including but not limited to regular rate calculations and overtime 

premium pay), failure to timely pay any compensation (including but 

not limited to wages, bonuses, or commissions), and includes all 

wages, overtime, overtime premium, liquidated damages, costs and

expenses, attorneys’ fees, declaratory relief, injunctive relief, 

equitable remedies, exemplary or punitive damages, and/or pre- or 

post-judgment interest, at any time during the Settlement Collective 

Period of December 19, 2014, through September 30, 2018. 

Settlement Collective Members’ Released Claims also includes all 

claims that the Settlement Collective Members may have against the 

Released Parties relating to (i) the payment, taxation and allocation of 

attorneys’ fees and costs to Class Counsel pursuant to this Settlement 

Agreement and (ii) the payment, taxation and allocation of Plaintiffs’

Service Awards pursuant to this Settlement Agreement.

SA ¶ 2.44.

California Class:

[A]ny and all present and past claims, actions, demands, causes of 

action, suits, debts, obligations, damages, rights or liabilities, of any 

nature alleged in the Complaint, the First Amended Complaints, the 

proposed Second Amended Complaint (“the Complaints”) and/or in 

Plaintiff Norona’s December 14, 2017 PAGA letter to the LWDA

concerning Defendant (“the PAGA Letter”), or which could have 

been asserted based on the facts alleged in the Complaints and/or the 

PAGA letter, including without limitation all claims for unpaid

wages, minimum wage, overtime, double-time, wages (including the 

calculation of the regular rate), failure to timely pay compensation 

(i.e., wages, bonuses, or commissions), failure to provide compliant 

meal periods and rest breaks, failure to reimburse business expenses 

incurred, wage statement violations, and untimely final pay, seeking 

wages, overtime, overtime premium pay, exemplary or punitive 

damages, waiting time penalties, civil penalties, statutory penalties, 

liquidated damages, restitution, declaratory relief, injunctive relief, 

equitable remedies, attorneys’ fees, costs, disbursements, and/or preor post-judgment interest, at any time from December 19, 2013 

through September 30, 2018. The Settlement Class Members’

Released Claims include all claims alleging violations of, or seeking 

relief under, California Labor Code sections 200, 201, 201.3, 202,

203, 204, 204b, 204.1, 204.2, 205, 205.5, 208, 218, 218.6, 226, 226.3, 

226.7, 501, 502, 503, 504, 505, 506, 507, 508, 510, 512, 515, 558, 

1182, 1182.12, 1194, 1194.2, 1197, 1197.1, 1197.5, 1198, 2802,

2810.5, 2698 et seq., the California Industrial Wage Commission 

Wage Orders, the California Business and Professions Code sections 

17200 et seq.; and any other similar laws. Settlement Class Members’

Released Claims also include all claims that Plaintiffs and/or the 

Settlement Class Members may have against the Released Parties 

relating to (i) the payment, taxation and allocation of attorneys’ fees 

and costs to Class Counsel pursuant to this Settlement Agreement and 

(ii) the payment, taxation and allocation of Plaintiffs’ Service Awards 

pursuant to this Settlement Agreement. Settlement Class Members’

Released Claims also include Plaintiffs’ causes of action/claims for 

Case 4:17-cv-07205-HSG Document 52 Filed 04/12/19 Page 5 of 16
6

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

penalties under PAGA, which are fully released by Settlement Class 

Members.

SA ¶ 2.38.

iv. Class Notice & Procedure

The parties have agreed on a third-party settlement administrator to send notices to class 

members. See Mot. at 11–12; see also Dkt. No. 50-4, Ex. 5. They have attached the proposed 

notices to be sent to the FLSA Collective and the California Class. See SA, Exs. A, B. Recipients 

will have 60 days from the mailing date to opt in (for members of the FLSA Collective) or to opt

out or object (for members of the California Class). SA ¶¶ 2.9, 3.2.

v. Service Awards

The Settlement Agreement contemplates a service award to Norona and Corbin of up to 

$10,000 each. SA ¶ 2.31.

vi. Attorneys’ Fees and Costs

Counsel for Plaintiff will file a separate motion for attorneys’ fees, for up to one-third of 

the gross settlement fund of $2.225 million. SA ¶ 4.3. Plaintiff proposes to allocate 77.5% of 

attorneys’ fees and costs to the California Class and 22.5% to the FLSA Collective. SA ¶ 4.3; 

Mot. at 10. Plaintiff estimates that administrative costs for the Settlement Administrator will total 

$23,410.92 for the FLSA Collective and $4,089.08 for the California Class. SA ¶ 2.34; Mot. at 

10.

II. PROVISIONAL CLASS CERTIFICATION

Provisional class certification is a prerequisite to preliminary approval of a class action 

settlement. The Court finds these requirements met and provisionally certifies the California 

Class for settlement purposes.

A. Legal Standard

The plaintiff bears the burden of showing by a preponderance of the evidence that class 

certification is appropriate under Federal Rule of Civil Procedure 23. Wal-Mart Stores, Inc. v. 

Dukes, 564 U.S. 338, 350–351 (2011). Class certification is a two-step process. First, a plaintiff 

must establish that each of the four requirements of Rule 23(a) is met: numerosity, commonality, 

typicality, and adequacy of representation. Id. at 349. Second, he must establish that at least one 

Case 4:17-cv-07205-HSG Document 52 Filed 04/12/19 Page 6 of 16
7

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

of the bases for certification under Rule 23(b) is met. Where, as here, a plaintiff seeks to certify a 

class under Rule 23(b)(3), he must show that “questions of law or fact common to class members 

predominate over any questions affecting only individual members, and that a class action is 

superior to other available methods for fairly and efficiently adjudicating the controversy.” Fed. 

R. Civ. P. 23(b)(3).

B. Analysis

i. Rule 23(a) Certification

a. Numerosity

Rule 23(a)(1) requires that the putative class be “so numerous that joinder of all members 

is impracticable.” Fed. R. Civ. P. 23(a)(1). The Court finds that joinder of the 254 members of 

the California Class would be impracticable.

b. Commonality

Rule 23(a)(2) requires that “there are questions of law or fact common to the class.” Fed. 

R. Civ. P. 23(a)(2). A contention is sufficiently common where “it is capable of classwide 

resolution—which means that determination of its truth or falsity will resolve an issue that is 

central to the validity of each one of the claims in one stroke.” Dukes, 564 U.S at 350. 

Commonality exists where “the circumstances of each particular class member vary but retain a 

common core of factual or legal issues with the rest of the class.” Parra v. Bashas’, Inc., 536 F.3d 

975, 978–79 (9th Cir. 2008). “What matters to class certification . . . is not the raising of common 

‘questions’―even in droves—but rather the capacity of a classwide proceeding to generate 

common answers apt to drive the resolution of the litigation.” Dukes, 564 U.S at 350. Even a 

single common question is sufficient to meet this requirement. Id. at 359.

Here, the central question is whether Home Point maintained a policy of failing to properly 

include bonus payments and commissions in the regular rate when it calculated the overtime rate. 

See Mot. at 14. Thus, the Court finds that the commonality requirement is met.

c. Typicality

Rule 23(a)(3) requires that “the claims or defenses of the representative parties are typical 

of the claims or defenses of the class.” Fed. R. Civ. P. 23(a)(3). “The test of typicality is whether 

Case 4:17-cv-07205-HSG Document 52 Filed 04/12/19 Page 7 of 16
8

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

other members have the same or similar injury, whether the action is based on conduct which is 

not unique to the named plaintiffs, and whether other class members have been injured by the 

same course of conduct.” Hanon v. Dataproducts Corp., 976 F.2d 497, 508 (9th Cir. 1992) 

(internal quotation marks omitted). That said, under the “permissive standards” of Rule 23(a)(3), 

the claims “need not be substantially identical.” Hanlon v. Chrysler Corp., 150 F.3d 1011, 1020 

(9th Cir. 1998).

Norona is typical of the California Class because he held a similar position and suffered 

the same type of injury because of his employment with Home Point as did the putative class 

members.

d. Adequacy of Representation

Rule 23(a)(4) requires that the “representative parties will fairly and adequately represent 

the interests of the class.” Fed. R. Civ. P. 23(a)(4). The Court must address two legal questions: 

(1) whether the named plaintiffs and their counsel have any conflicts of interest with other class 

members, and (2) whether the named plaintiffs and their counsel will prosecute the action 

vigorously on behalf of the class. See In re Mego Fin. Corp. Sec. Litig., 213 F.3d 454, 462 (9th 

Cir. 2000). This inquiry “tend[s] to merge” with the commonality and typicality criteria. Gen. 

Tel. Co. of Sw. v. Falcon, 457 U.S. 147, 158 n.13 (1982). In part, these requirements determine 

whether “the named plaintiff’s claim and the class claims are so interrelated that the interests of 

the class members will be fairly and adequately protected in their absence.” Id.

The Court finds that there are no conflicts of interest and that Plaintiff and counsel have 

prosecuted this action vigorously, including by reaching this settlement agreement prior to class 

certification.

ii. Rule 23(b)(3) Certification

To certify a class, a plaintiff must also satisfy the two requirements of Rule 23(b)(3). First, 

“questions of law or fact common to class members [must] predominate over any questions 

affecting only individual members.” Fed. R. Civ. P. 23(b)(3). And second, “a class action [must 

be] superior to other available methods for fairly and efficiently adjudicating the controversy.” Id. 

Case 4:17-cv-07205-HSG Document 52 Filed 04/12/19 Page 8 of 16
9

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

a. Predominance

“The predominance inquiry tests whether proposed classes are sufficiently cohesive to 

warrant adjudication by representation.” Tyson Foods, Inc. v. Bouaphakeo, 136 S. Ct. 1036, 1045 

(2016) (internal quotation marks omitted). The Supreme Court has defined an individual question 

as “one where members of a proposed class will need to present evidence that varies from member 

to member.” Id. (internal quotation marks omitted). A common question, on the other hand, “is 

one where the same evidence will suffice for each member to make a prima facie showing [or] the 

issue is susceptible to generalized, class-wide proof.” Id. (internal quotation marks omitted). 

The Court concludes that common questions predominate here because the issue of 

whether Home Point’s payroll method was proper is susceptible to class-wide proof. Although the 

class members will need to rely upon individual evidence to some extent to calculate their 

individual damages, “damage calculations alone cannot defeat certification.” Yokoyama v. 

Midland Nat’l Life Ins. Co., 594 F.3d 1087, 1094 (9th Cir. 2010). See also Leyva v. Medline 

Indus. Inc., 716 F.3d 510, 513 (9th Cir. 2013) (noting that “damages determinations are individual 

in nearly all wage-and-hour class actions”).

b. Superiority

The superiority requirement tests whether “a class action is superior to other available 

methods for fairly and efficiently adjudicating the controversy.” Fed. R. Civ. P. 23(b)(3). The 

Court considers four non-exclusive factors: (1) the interest of each class member in individually 

controlling the prosecution or defense of separate actions; (2) the extent and nature of any 

litigation concerning the controversy already commenced by or against the class; (3) the 

desirability of concentrating the litigation of the claims in the particular forum; and (4) the 

difficulties likely to be encountered in the management of a class action. Id.

A class action is superior here because it is a more efficient use of Court and attorney 

resources, reduces costs to the class members by allocating costs among them, the forum is 

appropriate, and there are no obvious difficulties in managing this class action.

The Court finds that the predominance and superiority requirements of Rule 23(b)(3) are 

met.

Case 4:17-cv-07205-HSG Document 52 Filed 04/12/19 Page 9 of 16
10

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

C. Class Representative and Class Counsel

Because the Court finds that Plaintiff meets the commonality, typicality, and adequacy 

requirements of Rule 23(a), the Court appoints Norona as class representative. When a court 

certifies a class, it must also appoint class counsel. Fed. R. Civ. P. 23(c)(1)(B). Factors that 

courts must consider when making that decision include:

(i) the work counsel has done in identifying or investigating potential 

claims in the action;

(ii) counsel’s experience in handling class actions, other complex 

litigation, and the types of claims asserted in the action; 

(iii) counsel’s knowledge of the applicable law; and 

(iv) the resources that counsel will commit to representing the class. 

Fed. R. Civ. P. 23(g)(1)(A). 

Counsel have investigated and litigated this case throughout its existence and have

submitted declarations of their expertise in representing plaintiffs in class action suits, especially 

in the area of wage and hour violations. See Declaration of Reuben Nathan, Dkt. No. 50-2; 

Declaration of John Glugoski, Dkt. No. 50-3 at 2–4. Accordingly, the Court appoints the law 

firms of Righetti Glugoski, P.C. and Nathan & Associates, APC as class counsel.

III. CONDITIONAL CERTIFICATION OF FLSA COLLECTIVE ACTION

Employees may bring a collective action on behalf of other employees who are “similarly 

situated” under the FLSA. 29 U.S.C.A. § 216(b). Certification of a collective action is within the 

discretion of the district court. See Tijero v. Aaron Bros., Inc., 301 F.R.D. 314, 323 (N.D. Cal. 

2013). 

Courts typically make an initial determination at the notice stage as to whether plaintiffs 

are “similarly situated.” See Bisaccia v. Revel Sys. Inc., No. 17-CV-02533-HSG, 2019 WL 

861425, at *5 (N.D. Cal. Feb. 22, 2019). “Courts have generally held that the ‘similarly situated’

standard under the FLSA is not as stringent a standard as the ‘common questions predominate’

standard under Federal Rule of Civil Procedure 23(b)(3).” Harris v. Vector Mktg. Corp., 753 F. 

Supp. 2d 996, 1003 (N.D. Cal. 2010) (citing cases).

The Court finds that Plaintiff has satisfied the lenient standard for conditional FLSA

certification. Plaintiff has shown that the potential FLSA Collective members were subject to the 

same policy that resulted in Defendant’s alleged failure to pay them overtime wages in violation of

Case 4:17-cv-07205-HSG Document 52 Filed 04/12/19 Page 10 of 16
11

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

the FLSA. Plaintiff has demonstrated that potential FLSA Collective members are “similarly 

situated” by meeting the more stringent requirements for conditional class certification, as 

discussed above in Section II.

IV. PRELIMINARY SETTLEMENT APPROVAL

A. Legal Standard

Federal Rule of Civil Procedure 23(e) provides that “[t]he claims, issues, or defenses of a 

certified class—or a class proposed to be certified for purposes of settlement— may be settled . . . 

only with the court’s approval.” Fed. R. Civ. P. 23(e). “The purpose of Rule 23(e) is to protect 

the unnamed members of the class from unjust or unfair settlements affecting their rights.” In re 

Syncor ERISA Litig., 516 F.3d 1095, 1100 (9th Cir. 2008). Accordingly, before a district court 

approves a class action settlement, it must conclude that the settlement is “fundamentally fair, 

adequate and reasonable.” In re Heritage Bond Litig., 546 F.3d 667, 674–75 (9th Cir. 2008). 

Courts may preliminarily approve a settlement and direct notice to the class if the proposed 

settlement: (1) appears to be the product of serious, informed, non-collusive negotiations; (2) does 

not grant improper preferential treatment to class representatives or other segments of the class; 

(3) falls within the range of possible approval; and (4) has no obvious deficiencies. See In re 

Tableware Antitrust Litig., 484 F. Supp. 2d 1078, 1079 (N.D. Cal. 2007); see also Mendez v. CTwo Grp., Inc., No. 13-CV-05914-HSG, 2017 WL 1133371, at *3 (N.D. Cal. Mar. 27, 2017). 

Courts lack the authority, however, to “delete, modify or substitute certain provisions.” Hanlon, 

150 F.3d at 1026. Rather, the “settlement must stand or fall in its entirety.” Id.

Where the parties reach a class action settlement prior to class certification, district courts 

apply “a higher standard of fairness and a more probing inquiry than may normally be required 

under Rule 23(e).” Dennis v. Kellogg Co., 697 F.3d 858, 864 (9th Cir. 2012) (internal quotation 

marks omitted). In those situations, courts “must be particularly vigilant not only for explicit 

collusion, but also for more subtle signs that class counsel have allowed pursuit of their own selfinterests and that of certain class members to infect the negotiations.” In re Bluetooth Headset 

Prods. Liab. Litig., 654 F.3d 935, 947 (9th Cir. 2011). Such signs of self-interest include class 

“counsel receiv[ing] a disproportionate distribution of the settlement,” the negotiation of a “clear

Case 4:17-cv-07205-HSG Document 52 Filed 04/12/19 Page 11 of 16
12

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

sailing” arrangement in which attorneys’ fees are paid separate from class funds, and “when the 

parties arrange for fees not awarded to revert to defendants rather than be added to the class fund.” 

Id. at 947.

B. Analysis

i. Settlement Process

The first factor the Court considers is the means by which the parties settled the action. 

“An initial presumption of fairness is usually involved if the settlement is recommended by class 

counsel after arm’s-length bargaining.” Harris v. Vector Mktg. Corp., No. 08-cv-5198, 2011 WL 

1627973, at *8 (N.D. Cal. Apr. 29, 2011).

This settlement was reached after considerable arms-length bargaining between the parties, 

including a full-day formal mediation conducted by a mediator experienced with wage and hour 

class action cases. See Mot. at 17; see also Dkt. No. 32 (status report on mediation). This process 

weighs in favor of granting preliminary settlement approval. See also Satchell v. Fed. Exp. 

Corp., No. C 03–2659 SI, 2007 WL 1114010, at *4 (N.D. Cal. Apr. 13, 2007) (“The assistance of 

an experienced mediator in the settlement process confirms that the settlement is non-collusive.”).

ii. Preferential Treatment

The Ninth Circuit has instructed that district courts must be “particularly vigilant” for signs 

that counsel have allowed the “self-interests” of “certain class members to infect negotiations.” In 

re Bluetooth, 654 F.3d at 947. For that reason, courts in this district have consistently stated that 

preliminary approval of a class action settlement is inappropriate where the proposed agreement 

“improperly grants preferential treatment to class representatives.” See In re Tableware, 484 F. 

Supp. 2d at 1079.

Incentive awards “are intended to compensate class representatives for work done on 

behalf of the class, to make up for financial or reputational risk undertaken in bringing the action.” 

Rodriguez v. West Publ’g Corp., 563 F.3d 948, 958–59 (9th Cir. 2009). Such awards are “fairly 

typical” but “discretionary.” Id. at 958. Plaintiffs must provide sufficient evidence to allow the 

Court to “evaluate [the named plaintiff’s] award[] individually, using relevant factors including 

the actions the plaintiff has taken to protect the interests of the class, the degree to which the class 

Case 4:17-cv-07205-HSG Document 52 Filed 04/12/19 Page 12 of 16
13

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

has benefitted from those actions, . . . [and] the amount of time and effort the plaintiff expended in 

pursuing the litigation.” Stanton v. Boeing Co., 327 F.3d 938, 977 (9th Cir. 2003) (internal 

quotation omitted). Courts in this district have routinely stated that a $5,000 award is 

“presumptively reasonable.” See Jacobs v. California State Auto. Ass’n Inter-Ins. Bureau, No. C 

07-00362 MHP, 2009 WL 3562871, at *5 (N.D. Cal. Oct. 27, 2009).

The Settlement Agreement authorizes Norona and Corbin to seek incentive awards of up to 

$10,000 each for their roles in this lawsuit. See SA ¶ 2.31. And the Agreement provides that if 

the Court approves a reduced award, the remainder will be distributed to members of the FLSA 

Collective and California Class. See id. Class counsel contends that the requested incentive 

awards are reasonable because they compensate the named Plaintiffs “for the important role they 

played for the benefit of the class, and the substantial time, effort, and risks they undertook to 

secure the result obtained on behalf of the class.” Mot. at 22. The Court finds that at the 

preliminary approval stage, the intent to seek incentive awards does not improperly grant 

preferential treatment to any segment of the class, particularly because any portion of the award 

that the Court declines to grant will be distributed to Class and Collective members.

iii. Settlement Within Range of Possible Approval

The third factor that the Court considers is whether the settlement is within the range of 

possible approval. To evaluate whether the settlement amount is adequate, “courts primarily 

consider plaintiffs’ expected recovery balanced against the value of the settlement offer.” In re 

Tableware, 484 F. Supp. 2d at 1080. This requires the Court to evaluate the strength of Plaintiff’s

case. 

Class counsel estimates that the total value of the claims for the FLSA Collective ranges 

from zero to $1 million. Mot. at 19. And counsel estimates that after fees and costs, roughly 

$300,000 of the $500,000 settlement will be paid out to members of the Collective. Id. at 18. 

Thus, the FLSA Collective will receive a recovery equal to roughly 30% of the high-end estimate.

With respect to the California Class, class counsel estimates that the value of the claims are

zero to $2.47 million for the overtime claims, zero to $3.5 million for the meal and rest break 

claims, and zero to $1.7 million for the waiting time penalties and PAGA claims. See Mot. at 18–

Case 4:17-cv-07205-HSG Document 52 Filed 04/12/19 Page 13 of 16
14

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

19. This amounts to a total exposure of between zero and $7.67 million. Class counsel calculates 

that of the $1.725 million settlement, approximately $1.1 million will be paid out to members of 

the California Class after fees and costs. See id. at 18. Based on these estimates, the settlement 

amounts to an approximately 14% recovery as compared to the high-end estimate.

Class counsel has highlighted some of the specific defenses raised by Defendant that could

result in class members receiving less than the high-end estimate were this case to proceed rather 

than settle. For example, the Court might find that Defendant “properly calculated the overtime 

rate,” that “certain Class Members did not always work overtime,” that the three-year statute of 

limitations did not apply, or that liquidated damages were unwarranted. See Mot. at 18–19.

Given the expected recovery and enumerated defenses, along with the usual risks and costs 

of continued litigation, the Court finds that the settlement is within the range of possible approval.

iv. Obvious Deficiencies

The fourth and final factor that the Court considers is whether there are obvious 

deficiencies in the settlement agreement. The Court finds no obvious deficiencies.

* * *

In addition, the Court notes that although FLSA collective action settlements require court 

approval, that approval need not occur at the preliminary stage as with a Rule 23 class 

action. See Jones v. Agilysys, Inc., No. C 12-03516 SBA, 2013 WL 4426504, at *2 (N.D. Cal. 

Aug. 15, 2013). Nevertheless, on the record provided, and for the same reasons as discussed 

above, the Court preliminarily finds the FLSA collective action settlement to be “fair and 

reasonable.” See Lynn’s Food Stores, Inc. v. United States, 679 F.2d 1350, 1355 (11th Cir. 1982); 

see also Bisaccia, 2019 WL 861425, at *5 n.1.

Having weighed the relevant factors, the Court preliminarily finds that the Settlement 

Agreement is fair, reasonable, and adequate, and GRANTS preliminary approval. 

V. MOTION FOR FINAL SETTLEMENT APROVAL AND ATTORNEYS’ FEES

The Court DIRECTS the parties to include both a joint proposed order and a joint 

proposed judgment when submitting their motion for final approval.

Case 4:17-cv-07205-HSG Document 52 Filed 04/12/19 Page 14 of 16
15

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

VI. PROPOSED CLASS NOTICE PLAN

For Rule 23(b)(3) class actions, “the court must direct notice to the class members the best 

notice that is practicable under the circumstances, including individual notice to all members who 

can be identified through reasonable effort.” Fed. R. Civ. P. 23(c)(2)(B). 

With respect to the content of the notice itself, the notice must clearly and concisely state 

in plain, easily understood language:

(i) the nature of the action; 

(ii) the definition of the class certified; 

(iii) the class claims, issues, or defenses; 

(iv) that a class member may enter an appearance through an attorney if 

the member so desires; 

(v) that the court will exclude from the class any member who requests 

exclusion; 

(vi) the time and manner for requesting exclusion; and 

(vii) the binding effect of a class judgment on members[.]

Fed. R. Civ. P. 23(c)(2)(B).

The Court finds that the proposed notice, see SA Exs. A, B, is the best practicable form of 

notice under the circumstances.

VII. CONCLUSION

For the foregoing reasons, the Court GRANTS Plaintiff’s motion for preliminary approval 

of class action and collective settlement. The Court DIRECTS Plaintiff to file the proposed 

Second Amended Complaint within three days of this order.

The parties are DIRECTED to meet and confer and stipulate to a schedule of dates for 

each event listed below, which shall be submitted to the Court within seven days of the date of this 

order:

Event Date

Deadline for Settlement Administrator to mail notice to all 

putative members of the California Class and FLSA 

Collective

Filing deadline for attorneys’ fees and costs motion

Filing deadline for incentive payment motion

Deadline for California Class members to opt out or object 

to settlement and/or application for attorneys’ fees and costs 

and incentive payment

Deadline for FLSA Collective members to opt in

Filing deadline for final approval motion

Final fairness hearing and hearing on motions

Case 4:17-cv-07205-HSG Document 52 Filed 04/12/19 Page 15 of 16
16

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

 The parties are further DIRECTED to implement the proposed class notice plan.

IT IS SO ORDERED.

Dated: 4/12/19

______________________________________

HAYWOOD S. GILLIAM, JR.

United States District Judge

Case 4:17-cv-07205-HSG Document 52 Filed 04/12/19 Page 16 of 16