Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_14-cv-03011/USCOURTS-cand-3_14-cv-03011-0/pdf.json

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

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

MARIA GRANADOS FLORES, et al.,

Plaintiffs,

v.

ALAMEDA COUNTY INDUSTRIES INC,

Defendant.

Case No. 14-cv-03011-JD 

ORDER GRANTING MOTION FOR 

PRELIMINARY APPROVAL OF CLASS 

& COLLECTIVE ACTION 

SETTLEMENT

Re: Dkt. No. 39

This is a wage-and-hour class and collective action brought by five named plaintiffs on 

behalf of themselves and 300 fellow current and former recycling workers employed by Alameda 

County Industries. The parties reached a proposed settlement and now seek preliminarily 

approval. After holding a hearing and requesting certain changes to the settlement -- which the 

parties have made -- the Court grants preliminary approval and certifies the class for purposes of

settlement. 

BACKGROUND

The plaintiffs in this wage-and-hour action, originally filed July 1, 2014, are current and

former recycling workers employed by defendant Alameda County Industries, Inc. (“ACI”). Dkt. 

No. 15 ¶ 4. ACI is a California corporation headquartered in San Leandro, California, that “has 

contracted with the City of San Leandro to provide refuse collection and processing services.” Id. 

¶ 16. The named plaintiffs in this action -- Maria Granados Flores, Ignacia Garcia, Griselda Mora, 

Pablo Rodriguez and Divina Saguilán -- allege that ACI failed to pay them proper wages for 

overtime, vacation and other paid time off. Id. at 4-5. The recycling workers’ compensation was 

“at or near California’s minimum wage rate” and they received “overtime at one and one-half 

times these same rates.” Dkt. No. 39 at 9. Prior to 2012, if an employee worked more than 720 

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hours in a calendar year, they were entitled to 10 days of paid time off (“PTO”), and 5 days of 

PTO between 2012 and 2014. Id. These compensation levels are below the minimum 

compensation rates mandated by San Leandro’s Local Wage Ordinance (“LWO”), but the parties 

dispute whether the LWO covers ACI or the workers. Id. 

The parties participated in mediation after the plaintiffs filed their first amended complaint, 

and were able to reach a settlement. At the hearing on the motion for preliminary approval of this 

settlement, the Court flagged several areas of concern involving reversion of unclaimed funds to 

the defendant, inflated incentive payments to class representatives, and insufficient time for class 

members to cash their settlement checks. Dkt. No. 38. The Court gave the parties additional time 

to submit an amended motion, which they chose to do. Id. The parties signed a revised settlement 

agreement, the operative agreement here, in early January 2015 and refiled it with the Court. Dkt. 

No. 39. 

DISCUSSION

The parties have made multiple changes to the previous settlement agreement to address 

the problems discussed at the last hearing. The revised motion fixes the Court’s concerns. 

I. TERMS OF THE PROPOSED SETTLEMENT

The putative class consists of approximately 300 current and former ACI recycling 

workers. Dkt. No. 39 at 3. It includes “all persons who are or have worked as sorters, yard 

spotters, bailers, cleaners (including evening screen cleaners), forklift operators, and operators of 

other equipment at Alameda County Industries’ Materials Recovery processing facility at 610 

Aladdin Avenue in San Leandro, California during the Class Period,” which covers January 27, 

2010 to October 31, 2014.1

 Dkt. No. 39-1, Ex. 1 at 4-5. 

Under the revised settlement agreement, ACI will pay $1,100,000 into a non-reversionary 

settlement fund, which will be the source for settlement administration costs (up to a maximum of 

$10,000), attorney’s fees and costs (up to a maximum of $180,000 as decided by the Court in 

subsequent proceedings), class representative service awards for each of the 5 representatives if 

 1 The FLSA class is defined identically, but only covers January 27, 2011 to October 31, 2014. 

Dkt. No. 39 at 18. 

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the Court approves the request ($2,500 each, totaling $12,500), and monetary relief for the class. 

See Dkt. No. 39-1, Ex. 1. Each class member will receive “a proportionate share of the [net 

settlement fund] based on the Class Member’s proportionate number of hours worked during the 

Class Period.” Id. at 6-9. The class members do not have to submit claim forms to get a 

settlement check -- current and former employees will get a check sent directly to them based on 

best known contact information. Id. at 9; Dkt. No. 39 at 2. If the amount of uncashed checks 

totals more than $10,000 after 90 days, the amount of time class members have to cash their 

check, those funds will be redistributed to the class members who cashed their initial checks on a 

pro-rata basis. Dkt. No. 39-1, Ex. 1 at 3. If the amount remaining from the uncashed checks is 

less than $10,000, it will be paid to the Legal Aid Society Employment Law Center. Id.

The scope of the released non-FLSA claims is as follows:

[T]he Plaintiffs and each Class Member who has not validly opted 

out...do hereby and forever release, acquit and discharge, and 

covenant not to sue any of the Released Parties from all causes of 

action, claims, liens, demands, damages, penalties, fines, wages, 

liquidated damages, restitutionary amounts, attorneys’ fees and 

costs, punitive damages, controversies and liabilities which were 

alleged in the Lawsuit, or which could have been alleged in the 

Lawsuit based on the same facts and circumstances as alleged in the 

complaint. 

Id. at 17. For the FLSA claims, each putative FLSA collective action member who cashes a 

settlement check will be deemed to have “opted in” to this action. Id. As of January 7, 2015, “a 

total of 61 Recycling Workers have filed Consent to Join forms to become part of the FLSA 

collective action.” Dkt. No. 39 at 10. The scope of the released FLSA claims is identical to the 

non-FLSA release, except that it covers all actions or claims that were

alleged in the Lawsuit, or which could have been alleged in the 

lawsuit, under the FLSA, 29 U.S.C. § 201 et seq., ... which the 

Class Members or any of them, or any of the Plaintiffs has, or had, 

during the Release Period against any Released Party based on and 

related to the facts alleged in the Complaint. 

Id. at 17-18. Finally, each plaintiff for whom the Court approves an incentive payment of at least 

$1,000 will be subject to an additional release: 

[A]ny and all charges, complaints, claims, liabilities, obligations, 

promises, agreements, controversies, damages, actions, causes of 

action, suits, rights, demands, costs, losses, debts and expenses...of 

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any nature whatsoever, from the beginning of time through the date 

of their respective signatures on this Agreement, known or 

unknown, suspected or unsuspected, including but not limited to all 

claims arising out of, based upon, or relating to their employment

with Select and/or ACI, or the remuneration for, or termination of, 

such employment. 

Id. at 18. 

Notice will be sent by mail to all class members, and will be written in both English and 

Spanish. Dkt. No. 39-1, Ex. 1 at 11-12. The notice will summarize the terms of the settlement 

and will be individualized, identifying the respective “Class Member by his or her name and 

current mailing address, the total hours worked by the Class Member during the Class Period, the 

Hourly Settlement Rate provided under the Settlement, and the estimated Individual Settlement

Payment.” Id. at 11-12. 

II. FAIRNESS OF THE SETTLEMENT

When the parties reach a proposed settlement prior to class certification, the court reviews

both the propriety of the certification and the fairness of the settlement. Sarkisov v. StoneMor 

Partners L.P., No. 13-CV-04834-JD, 2015 WL 1249169, at *2 (N.D. Cal. Mar. 18, 2015). Rule 

23(e) directs the Court to examine the proposed settlement and make a preliminary finding of 

fairness. A class action settlement may be approved only if the Court finds that it is “fair, 

reasonable, and adequate.” Fed. R. Civ. Pro. 23(e)(1)(C). The parties bear the burden of showing 

that the proposed settlement is fair. Officers for Justice v. Civil Service Comm’n, 688 F.2d 615, 

625 (9th Cir. 1982). There is a higher standard of fairness when settlement occurs before formal

class certification, because “the dangers of collusion between class counsel and the defendant, as 

well as the need for additional protections when the settlement is not negotiated by a courtdesignated class representative, weigh in favor of a more probing inquiry than may normally be 

required under Rule 23(e).” Sarkisov, 2015 WL 1249169, at * 2 (quoting Hanlon v. Chrysler 

Corp., 150 F.3d 1011, 1026 (9th Cir. 1998)). 

The primary consideration in evaluating a class settlement agreement is “the protection of 

those class members, including the named plaintiffs, whose rights may not have been given due 

regard by the negotiating parties.” Officers for Justice, 688 F.2d at 624. To realize this goal, the 

Court will give preliminary approval of a class settlement and notice only when “[1] the proposed 

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settlement appears to be the product of a serious, informed, noncollusive negotiations, [2] has no 

obvious deficiencies, [3] does not improperly grant preferential treatment to class representatives 

or segments of the class, and [4] falls with the range of possible approval . . . ” Stokes v. Interline 

Brands, Inc., No. 12-CV-05527-JD, 2014 WL 5826335, at *3 (N.D. Cal. Nov. 10, 2014) (citations 

omitted). 

The prior settlement agreement had several problems. For example, unclaimed funds 

reverted to the defendant, which effectively discounts the settlement in an unfavorable way to the 

class. As the Court said at the hearing, reversion of funds is an indicia of a collusive deal and 

unfairness to the class. See In re Bluetooth Headset Products Liab. Litig., 654 F.3d 935, 947 (9th. 

Cir. 2011). Under the revised agreement, funds no longer revert to the defendant. The parties 

have now agreed to maximize the money delivered to the class by agreeing that unclaimed funds 

exceeding $10,000 will be distributed on a pro rata basis to the class members who cashed their 

initial checks. If the unclaimed amount is less that $10,000, the balance will be given to the Legal 

Aid Society Employment Law Center, not to the defendant. This is a good result and the Court 

appreciates the parties’ work to get there. 

The previous settlement agreement also gave class members only sixty days to cash their 

settlement checks. Dkt. No. 38. The Court advised the parties that class members should have at 

least ninety days to cash their checks, and the parties have made that happen.

In light of these and other provisions in the revised papers, the Court finds that the 

agreement is “fair, reasonable, and adequate,” and that it adequately protects the interests of the 

putative class members. Fed. R. Civ. Pro. 23(e)(1)(C). 

III.CLASS CERTIFICATION 

The parties also request that the Court conditionally certify the proposed class for 

settlement purposes only. In certifying a class for settlement purposes, review of the proposed 

class is “of vital importance,” as the court lacks the opportunity to make adjustments to the class, 

as it ordinarily would when a case is fully litigated. Amchem Prods. Inc. v. Windsor, 521 U.S. 

591, 620 (1997). 

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To be certified, the proposed class settlement must satisfy the requirements of Federal Rule 

of Civil Procedure 23(a) and (b)(3). Rule 23(a) provides that a class action is available only 

where: (1) the class is so numerous that joinder is impracticable; (2) common question of law or 

fact exist; (3) the claims or defenses of the representative parties are typical of the class; and (4) 

the representative parties will fairly and adequately protect the class interests. Additionally, Rule 

23(b)(3) requires the Court to find that common questions of law or fact predominate over the 

questions of individual class members and that a class action is the superior method for fair and 

efficient adjudication.

The Court finds that the requirements of Rule 23(a) are met. The numerosity requirement

is met because the putative class consists of about 300 former and current recycling workers. The 

commonality requirement is met because the resolution of the claims depends on common 

questions of law and fact about the class members’ employment with ACI. The named plaintiffs’ 

claims meet the typicality requirement because they are all current or former recycling workers 

who, “like all Class Members...were underpaid according to...state and federal overtime laws. 

They also suffered the same forfeiture of paid vacation [and paid time off] as other Class 

Members.” Dkt. No. 39 at 15. And the adequacy requirement is met because there is no 

indication of any conflicts of interest between the named plaintiffs and the absent class members, 

and because plaintiffs’ counsel appear to be well-qualified to serve as class counsel. See

Kaufmann Decl., Dkt. No. 39-1 at 4-8. For the same reason, the Court finds that plaintiffs’ 

counsel are adequate under Rule 23(g)(1) and (4) and appoints them as class counsel. 

The Court also finds that the requirements of Rule 23(b)(3) are met. Common questions of 

law and fact predominate over any questions affecting only individual class members because the 

primary issues in dispute revolve around ACI’s alleged failure to properly compensate the class 

members under the LWO and whether the LWO applies to ACI and the workers. The superiority 

requirement is also met because “recovery on an individual basis would be dwarfed by the cost of 

litigating on an individual basis,” as would likely be the case here. See Wolin v. Jaguar Land 

Rover North Am., LLC, 617 F.3d 1168, 1175 (9th Cir. 2010).

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The preliminary approval motion seeks the conditional certification of an FLSA collective 

action consisting of those class action members that opt-in to the FLSA settlement. Dkt. No. 39 at 

18. The district court may, in its discretion, conditionally certify an FLSA collective action if 

plaintiff meets his burden of showing that the putative collective action members are “similarly 

situated,” and “[c]ourts 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).” Sarkisov, 2015 WL 1249169, at *5 (citation omitted). By meeting 

the more stringent requirements for conditional class certification, the Court finds that Plaintiffs 

have sufficiently shown that potential collective action members are “similarly situated” within the 

meaning of the FLSA for purposes of conditional certification. 

IV.CLASS NOTICE

The Court approves the parties’ proposed notice pursuant to Federal Rule of Civil 

Procedure 23(c)(2) -- the form uses language that is concise and easy to understand, and otherwise 

complies with Rule 23(c)(2). The Court also approves the notice under the FLSA. The purpose of 

a FLSA notice is to alert putative class members of the action and the proposed settlement to allow 

them the opportunity to opt-in. Hoffmann-La Roche Inc. v. Sperling, 493 U.S. 165, 171 (1989)

(noting that a FLSA notice should include “accurate and timely notice concerning the pendency of 

the collective action, so that they can make informed decisions about whether to participate.”). 

The notice form does just that, clearly explaining how to opt out of the non-FLSA class and that, 

by cashing a settlement check, the class member opts in to the FLSA class. Dkt. No. 39-1, Ex. 3 

at 4-5. The notice form is approved. 

CONCLUSION

The Court sets a hearing for final approval of the settlement on October 14, 2015 at 10:00 

a.m. and otherwise adopts the notice schedule proposed in plaintiffs’ motion for preliminary 

approval. Dkt. No. 39 at 17. Plaintiffs’ motion for final approval and any memorandum in 

support by defendants should be filed 28 days before the final approval hearing. Plaintiffs’ 

counsel’s application for attorney’s fees and costs and service awards to the class representatives

should be filed by June 26, 2015. The Court will decide the attorney’s fees and whether the

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named plaintiffs will receive an incentive payment for service as the class representatives, a 

practice that this Court normally disfavors, at the final approval stage. 

IT IS SO ORDERED.

Dated: June 16, 2015

________________________

JAMES DONATO

United States District Judge

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