Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_18-cv-00755/USCOURTS-caed-1_18-cv-00755-4/pdf.json

Parties Involved:
Derrel's Mini Storage, Inc.
Defendant
Rick Kutzman
Plaintiff
Jamie Leonardo
Plaintiff

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

INTRODUCTION

Plaintiffs Rick Kutzman, Jamie Leonardo, Joseph Pomilla, Roseann Oliveto, Charles 

Madden and Maria Ibarra (“Plaintiffs”), on behalf of themselves and others similarly situated, 

bring this putative class action against Defendant Derrel’s Mini Storage, Inc. (“Defendant”), 

alleging various employment-related claims involving background checks, overtime pay, breaks 

and such under the Fair Credit Reporting Act (“FCRA”), California Labor Code, California 

Business and Professions Code, and Industrial Welfare Commission (“IWC”) Wage Orders. The 

parties reached a settlement prior to class certification. Plaintiffs now move for conditional 

certification of two proposed classes under Rule 23 and preliminary approval of the class action 

RICK KUTZMAN, JAMIE LEONARDO,

JOSEPH POMILLA, ROSEANN

OLIVETO, CHARLES MADDEN and

MARIA IBARRA, individuals, on behalf

of themselves, and on behalf of all persons

similarly situated,

Plaintiffs,

vs.

DERREL'S MINI STORAGE, INC., a

California Corporation,

Defendant.

CASE NO. 1:18-cv-00755-AWI-JLT

ORDER:

(1) GRANTING PRELIMINARY 

APPROVAL OF SETTLEMENT;

(2) APPROVING CLASS NOTICE;

(3) APPOINTING SETTLEMENT 

ADMINISTRATOR; AND,

(4) SCHEDULING FINAL APPROVAL 

HEARING

(Doc. No. 34)

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settlement. Doc. No. 34. Defendant does not oppose the motion.

For the reasons set forth below, Plaintiffs’ motion will be granted.

BACKGROUND

I. Claims and Allegations in Operative Pleading

Defendant is a California corporation with operations in California and, apparently, 

elsewhere. Doc. No. 29 ¶ 1. This action has to do with Defendant’s practices nationwide with 

respect to background checks, and its employment practices in the state of California as to

overtime pay, breaks, business expenses and such.

As to background checks, the Second Amended Complaint (“2AC”) (the operative 

pleading in this action) alleges that Defendant improperly included a “liability release provision in 

the background check disclosure and authorization document” used in screening job applicants, 

and thus “obtained consumer reports” regarding employees (and prospective employees) “without 

proper authorization.” Doc. No. 29 ¶¶ 14-15.

As to employment practices in California, the 2AC alleges that Defendant had a “uniform 

policy and practice which failed to lawfully compensate [] employees for all wages due to them, 

including overtime wages” and payment for “missed meal and rest periods.” Doc. No. 29 ¶ 11. 

Specifically, Plaintiffs contend that Defendant “failed to include incentive compensation [in] 

employees’ ‘regular rate of pay’ for purposes of calculating overtime pay,” id. ¶ 17, and failed to 

make additional payments to employees for meal and rest breaks that employees “were 

periodically denied” due to “workload” and “time constraints” imposed by Defendant. Id. ¶¶ 18-

19.

Further, the 2AC alleges that Defendant “systematically failed” to reimburse employees in 

California “for required business expenses,” including expenses relating to the use of personal 

cellular phones for work, Doc. No. 29 ¶¶ 26, 27, and that Defendant failed to furnish employees 

with “complete and accurate wage statements” showing, for example, “all applicable hourly rates 

in effect during [a] pay period” and the “amount of time worked at each hourly rate.” Id. ¶ 28.

This case was filed in Kern County Superior Court on May 7, 2018 and removed to this 

Court on June 1, 2018. Doc. No. 2. Plaintiffs claim to have been subjected to the various types of 

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wrongdoing described above and purport to litigate this action on behalf of themselves and two

putative classes: (i) the so-called “FCRA Class,” which is defined in the 2AC as all employees or 

prospective employees of Defendant in the United States who executed Defendant’s standard 

background check disclosure and authorization document in the period beginning five years prior 

to the commencement of this action, Doc. No. 29 ¶ 30; and (ii) the so-called “California Class,” 

which is defined in the 2AC as all individuals employed by Defendant as non-exempt employees 

in California at any time during the period beginning four years prior to the commencement of this 

action. Id. ¶ 40.

Claims pertaining to the FCRA Class are brought under the FCRA for “including a liability 

release clause in [Defendant’s] background check disclosure and authorization document” in 

violation of 15 U.S.C. § 1681b(b)(2)(A)(i), Doc. No. 29 ¶¶ 59-64, and for “procuring consumer 

reports” relating to Plaintiffs and putative members of the FCRA Class “without proper 

authorization” in violation of 15 U.S.C. § 1681b(b)(2)(A)(ii). Id. ¶¶ 65-70.

As to the California Class, the 2AC alleges claims under the California Business and 

Profession Code, the California Labor Code and IWC Wage Orders, for failure to calculate 

overtime correctly, failure to provide premiums for missed meal and rest breaks, failure to provide 

reimbursement for work-related expenses, failure to provide accurate wage statements, and failure 

to pay wages when due. Doc. No. 29 at pp. 31-43.

The 2AC also includes individual claims for wrongful termination and retaliation

pertaining to two of the Plaintiffs, Doc. No. 29 at pp. 44-46, as well as a claim seeking civil 

penalties for violation of California’s Private Attorneys General Act (“PAGA”). Doc. Id. at pp. 46-

48.

II. Proposed Settlement

Plaintiffs seek preliminary approval of the proposed settlement, as set forth in the Class 

Action Settlement Agreement (“Settlement Agreement”), Doc. No. 34-2, p. 20 of 106, as well as 

conditional certification of the FCRA Class and the California Class (together, the “Class”) for 

settlement purposes. Doc. No. 34-1, Parts V & VI.

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A. Classes

The FCRA Class is defined in the Settlement Agreement as “all employees or prospective 

employees of Defendant in the United States regarding whom Defendant procured a background 

check from May 7, 2016 to December 13, 2018 [].”1 Doc. No. 34-2, p. 20 of 106 (Settlement 

Agreement § I(B)). The California Class is defined as “all individuals who are or previously were 

employed by Defendant [] in California and classified as non-exempt employees at any time

between May 7, 2014 to December 13, 2018[].” Id. Defendant estimates that there are 97 FCRA 

Class Members and 518 California Class Members who collectively worked 77,088 workweeks 

between May 7, 2014 and December 13, 2018. Id., p. 29 of 106 (Settlement Agreement § III.C.6.).

B. Terms of Settlement Agreement

Under the proposed Settlement Agreement, Defendant will pay a “Gross Settlement

Amount” of $1,450,000, including $245,165.17 that Defendant has already paid to certain 

employees (referred to as “Settled Class Members”) pursuant to other settlements relating to 

allegations in this action. Doc. No. 34-2, p. 26 of 106 (Settlement Agreement § III.A.).

The “Net Settlement Amount” will be calculated by deducting for the Gross Settlement 

Amount Court-approved payments for class counsel fees, class counsel litigation expenses, service 

payments for class representatives, the California Labor and Workforce Development Agency’s 

(“LWDA”) share of any Court-approved award under the PAGA, any applicable payroll taxes, and

approved costs for settlement administration. Doc. No. 34-2, p. 26 of 106 (Settlement Agreement 

§ III.B.). The Settlement Agreement provides that the payment for class counsel fees will not 

exceed $362,500 (25% of the Gross Settlement Amount) and that the payment for litigation

expenses will not exceed $15,000. Id. (Settlement Agreement § III.B.2.). Settlement 

administration costs, similarly, are capped at $25,000, id., p. 27 of 106 (Settlement Agreement §

III.B.4.), and the class representative service payment is capped at $7,500 for each of the Plaintiffs 

(for a maximum, it appears, of $45,000 across all six Plaintiffs). Id., p. 26 of 106 (Settlement 

 

1 The December 13, 2018 end date for the periods of time used in defining the FCRA Class and the California Class in 

the Settlement Agreement appears to be the date of the “all-day mediation” in which the parties agreed to settle this 

action. See Doc. No. 34-1 at 5:15-21. The end date used in the class definitions in the 2AC was the filing date of this 

action. The Court notes that distinction for the sake clarity, but it is irrelevant to the disposition of this motion.

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Agreement § III.B.1.). Also, the Settlement Agreement calls for seeking a “PAGA Payment” of 

$25,000, of which $18,750 would be allocated to the LWDA (leaving $6,250 for distribution to 

class members).2Id., p. 27 of 106 (Settlement Agreement § III.B.3.). 

Next, $100 would be paid to each participating member of the FCRA Class. Doc. No. 34-

2, p. 28 of 106 (Settlement Agreement § III.C.1.). There appear to be 97 members in the FCRA 

Class, so assuming full participation, the total payment from the Net Settlement Amount to the 

FCRA Class would be $9,700. Id., p. 7 of 106, ¶ 15.

As to the California Class, the Net Settlement Amount less the aforementioned payments 

of up to $9,700 to the FCRA Class would be divided by the total number of workweeks worked

between May 7, 2014 to December 13, 2018 by all members of the California Class who elect to 

participate in the settlement to come up with a dollar amount per workweek (“Workweek 

Payment”). Doc. No. 34-2, p. 28 of 106 (Settlement Agreement § III.C.2.). The payment for a 

given member of the California Class would be calculated by multiplying the Workweek Payment 

by the number of weeks the class member in question worked between May 7, 2014 and 

December 13, 2018. Id., p. 28 of 106 (Settlement Agreement § III.C.2.). That amount would then 

be reduced by any settlement payment already made to that class member by Defendant, subject to 

a guarantee that every member of the California Class is entitled to receive at least $200 from this 

settlement. Id., p. 28 of 106 (Settlement Agreement §§ III.C.2.-3.).

No Class member will be required to return any funds received from the prior settlement 

payment, Doc. No. 34-2, p. 26 of 106 (Settlement Agreement § III.A.), and funds from uncashed 

checks will be paid to Valley Children’s Hospital. Doc. No. 34-2, p. 19 of 106 (Settlement 

Agreement § III.E.13.), with no reversion to Defendant. Id., p. 20 of 106 (Settlement Agreement § 

III.A.). 

C. Notice

The Settlement Agreement provides that, following preliminary approval of the settlement

by the Court, each Class member will be provided with a packet that includes notice of the action,

 

2 Settlement payments for individual claims as to termination and retaliation would be made separately and in addition 

to the Gross Settlement Amount and thus do not bear on this motion. See Doc. No. 34-2, Part III.B.

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the terms of the proposed settlement and the hearing date for final approval of the settlement, as 

well as individualized data (such as workweeks worked) relating to his or her prospective recovery 

under the settlement. Doc. No. 34-2, p. 32 of 106 (Settlement Agreement § III.E.2.). Further, each 

member of the Class will be provided several weeks to object to or opt out of the Settlement. Id.,

p. 33 of 106 (Settlement Agreement § III.E.3.). Settlement payments will be mailed to 

participating Class members as checks, without the need to submit a claim form. Id., p. 22 of 106 

(Settlement Agreement § I.Q.) & p. 38 of 106 (Settlement Agreement § III.E.10.).

D. Released Claims

Class members who do not opt-out of the settlement will be “deemed to have fully and 

finally released all claims that were set forth, or could have been set forth based on the facts 

alleged, in the Second Amended Complaint.” Doc. No. 34-2, p. 39 of 106 (Settlement Agreement 

§ III.F.1.). The proposed Settlement Agreement also includes a waiver of rights as to unknown 

claims under Section 1542 of the California Civil Code. Id., p. 40 of 106 (Settlement Agreement §

III.F.3.).

E. Discovery, Mediation and Class Representation

The parties engaged in an exchange of information and documents following the report and 

scheduling conference required under Rule 26 of the Federal Rules of Civil Procedure. Doc. No. 

34-2, p. 5 of 106, ¶ 9. Class counsel states that “Plaintiffs and Defendant have engaged in 

substantial investigation in connection with the [action], including the detailed investigation and 

the exchange of information regarding the number of possible class members, Defendant’s payroll 

information [], and other relevant issues.” Id., p. 5 of 106, ¶ 10. Class counsel further states that it 

has “thoroughly analyzed” the value of the claims in this action, through, inter alia, meetings with 

Plaintiffs, the inspection and analysis of records furnished by the parties, legal analysis, and 

engagement of a damages expert. Doc. No. 34-2, p. 4 of 106, ¶ 10 & p. 9 of 106, ¶ 20.

On December 13, 2018, the parties participated in an all-day mediation with an 

experienced employment mediator and agreed to settle this action pursuant to terms set forth in a 

proposal made by the mediator. Doc. No. 34-2, p. 6 of 106, ¶ 12. On December 19, 2018, the 

Parties notified the Court of the settlement, Doc. No. 25, and on January 10, 2019, the Plaintiffs 

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filed the 2AC, which remains the operative pleading in this action. Doc. No. 29. 

Class counsel has experience in settlements involving similar claims against other 

employers and is “of the opinion that the settlement with Defendant for the consideration and on 

the terms set forth in the Agreement is fair, reasonable, and adequate in light of all known facts 

and circumstances ....” Doc. No. 34-2, p. 8 of 106, ¶ 18. With the assistance of a damages expert, 

Class counsel estimates total estimated damages for the California Class of $4,764,841 (including 

recovery on claims relating to overtime, meal breaks, rest breaks and unreimbursed expenses). Id., 

p. 9 of 106, ¶ 20. As to the FCRA Class, the FCRA provides for statutory damages of $100 to 

$1,000 per willful violation. Id., p. 10 of 106, ¶ 20.

F. Defendant’s Position

Defendant does not admit any liability, denies any and all allegations of wrongdoing 

relating to this action and has asserted numerous affirmative defenses. Doc. No. 34-2, p. 6 of 106, 

¶ 11; Doc. No. 16 at 15-16. Defendant contends, for example, that employees were able to take 

breaks because they worked in pairs, that use of cellphones was voluntary (and, therefore, not 

subject to reimbursement), that prior settlement bars some claims, and that Plaintiff’s FCRA claim 

is not viable under Safeco Ins. Co. of Am. V. Burr, 551 U.S. 47 (2007). Id., p. 11 of 106, ¶ 21. 

Defendant also contests class certification and the prosecution of this case as a class action. Id., p. 

6 of 106, ¶ 11.

DISCUSSION

The Ninth Circuit has declared that a strong judicial policy favors settlement of class 

actions. Class Plaintiffs v. City of Seattle, 955 F.2d 1268, 1276 (9th Cir. 1992). Nevertheless, 

where, as here, “parties reach a settlement agreement prior to class certification, courts must 

peruse the proposed compromise to ratify both [i] the propriety of the certification and [ii] the 

fairness of the settlement.” Staton v. Boeing Co., 327 F.3d 938, 952 (9th Cir. 2003). “This 

independent judicial review protects the due process rights of absent class members who have not 

yet appeared” especially where, as here, “the settlement agreement is negotiated in their absence.” 

Acosta v. Evergreen Moneysource Mortgage Company, 2018 WL 3831004, at *2 (E.D. Cal. Aug. 

13, 2018) (citing In re Bluetooth Headset Prod. Liab. Litig., 654 F.3d 935, 945 (9th Cir. 2011)).

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I. Certification of the Class for Purposes of Settlement

Before certifying a class, the Court must determine whether that class meets the 

requirements set forth in Rule 23(a) and Rule 23(b) of the Federal Rules of Civil Procedure. 

Fed.R.Civ.P. 23(e)(2). Courts must pay “undiluted, even heightened, attention” to class 

certification requirements in a settlement context. Amchem Products, Inc. v. Windsor, 521 U.S. 

591, 620 (1997); Molski v. Gleich, 318 F.3d 937, 946 (9th Cir. 2003). The parties cannot “agree to 

certify a class that clearly leaves any one requirement unfulfilled,” and consequently a court 

cannot blindly rely on the fact that the parties have stipulated that a class exists for purposes of 

settlement. Berry v. Baca, 2005 WL 1030248, at *7 (C.D. Cal. May 2, 2005).

The Court will first determine whether subsection (a) of Rule 23 is satisfied and then turn 

to the certification requirements in Rule 23(b)(3). If subsections (a) and (b) of Rule 23 are both 

satisfied, the Court will look at whether the settlement is “fair, reasonable and adequate.” 

Fed.R.Civ.P. 23(e)(1)(C).

A. Rule 23(a) Class Certification Requirements

The following four criteria “must be met to certify a class action: (1) numerosity; (2) 

commonality of law or fact; (3) typicality of the representative plaintiff’s claims; and (4) adequacy 

of representation.” Gripenstraw v. Blazin’ Wings, Inc., 2013 WL 6798926, at *3 (E.D. Cal. Dec. 

20, 2013); Fed.R.Civ.P. 23(a). A class may only be certified if the court is “satisfied, after a 

rigorous analysis, that the prerequisites of Rule 23(a) have been satisfied.” General Tel. Co. of 

Southwest v. Falcon, 457 U.S. 147, 161 (1982). The burden is on the party seeking class 

certification to show that these elements have been met. Doninger v. Pac. N.W. Bell, Inc., 564 

F.2d 1304, 1308 (9th Cir. 1977).

1. Numerosity

To satisfy the numerosity requirement in Rule 23(a), a class must be so numerous that 

joinder of all members individually is “impracticable.” Fed.R.Civ.P. 23(a)(1). This requirement 

“does not mean that joinder must be impossible, but rather means only that the court must find that 

the difficulty or inconvenience of joining all members of the class makes class litigation 

desirable.” In re Itel Sec. Litig., 89 F.R.D. 104, 112 (N.D. Cal. 1981) (citing Harris v. Palm 

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Springs Alpine Estates, Inc., 329 F.2d 909, 913-914 (9th Cir. 1964)). There is no specific 

numerical threshold; instead, the law “requires examination of the specific facts of each case and 

imposes no absolute limitations.” General Tel. Co. v. E.E.O.C., 446 U.S. 318, 330 (1980).

Generally, forty or more members will satisfy the numerosity requirement. Collins v. Cargill 

Mean Solutions Corp., 274 F.R.D. 294, 300 (E.D. Cal. 2011); Consolidated Rail Corp. v. Town of 

Hyde Park, 47 F.3d 473, 483 (2d Cir. 1995).

Here, Defendant estimates that there are 97 FCRA Class Members and 518 California 

Class Members. Doc. No. 34-2, p. 29 of 106 (Settlement Agreement § III.C.6.). Joinder of all of 

the putative class members would be impracticable in both cases. Numerosity is therefore satisfied 

as to the FCRA Class and as to the California Class.

2. Commonality

Questions of law or fact must be “common to the class.” Fed.R.Civ.P. 23(a)(2). This does 

not mean all questions of fact and law need be common. Hanlon v. Chrysler Corp., 150 F.3d 1011, 

1019 (9th Cir. 1998). Instead, a plaintiff need only demonstrate “the class members have suffered 

the same injury ....” Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 349-350 (2011). “Their claims 

must depend upon a common contention” that, when determined, would resolve an issue “central 

to the validity of each one of the claims in one stroke.” Id. at 350. In an employment context, this 

inquiry is satisfied when the entire class was injured by the same system-wide policy or practice. 

See Goodwin v. Winn Management Group LLC, 2017 WL 3173006, at * 5 (E.D. Cal. July 26, 

2017) (citation omitted); Arredondo v. Delano Farms Co., 301 F.R.D. 493, 513 (E.D. Cal. 2014); 

Vedachalam v. Tata Consultancy Servs., Ltd., 2012 WL 1110004, at *12–*13, (N.D. Cal. April 2, 

2012); In re Taco Bell Wage & Hour Actions, 2012 WL 5932833, at *6 (E.D. Cal. Nov. 27, 2012). 

As to the FCRA Class, Plaintiffs allege that, pursuant to “corporate policy, practice and 

procedure,” Defendant’s “standard FCRA disclosure and authorization document” – which 

members of the FCRA Class were “required to execute as a condition of employment” with 

Defendant – improperly contained a “liability release clause,” Doc. No. 29 ¶¶ 30-31 & 60-62, and 

that, due to this defect, background checks involving members of the FCRA Class were not 

properly authorized. Id. ¶¶ 66-67. This raises common questions of fact as to, inter alia, the 

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contents of the document at issue and the manner in which said document was used, as well as 

common questions of law as to whether the document and/or background checks based on the 

document violated the FCRA. Commonality is therefore satisfied as to the FCRA Class.

The California Class is comprised solely of persons employed by Defendant as nonexempt employees in California during a certain period of time. Plaintiffs contend that there was

“systematic underpayment of overtime compensation” to members of the California Class as a 

result of a “uniform policy and practice” on the part of Defendant. Doc. No. 29 ¶¶ 11, 16-17. 

Similarly, Plaintiffs contend that members of the California Class missed “meal and rest periods 

because of the workload and time constraints imposed upon them by [Defendant]” and that, in 

accordance with “strict corporate policy and practice,” members of the California Class were not 

compensated for missing such breaks in the manner required under California law. Doc. No. 29 ¶¶ 

18-19. Plaintiffs further contend that, “as a matter of corporate policy, practice and procedure,” 

Defendant failed to reimburse and indemnify members of the California Class for required 

business expenses. Id. ¶ 26. And Plaintiffs contend that pay statements provided to members of the 

California Class omitted required information as to pay rates and hours worked. Id. ¶ 28. These 

contentions raise common questions of fact as to Defendant’s policies and practices with respect to 

overtime, breaks, expenses and pay statements, as well as questions as to whether such policies 

and practices violated California law. Commonality is therefore satisfied as to the California 

Class.

3. Typicality

The requirement of typicality is met if “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). Typicality requires that a 

class representative “possess the same interest and suffer the same injury” as the putative class. 

Falcon, 457 U.S. at 156. Representative claims need only be “reasonably co-extensive with those 

of absent class members; they need not be substantially identical.” Hanlon, 150 F.3d at 1020. The 

typicality requirement ensures that “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.” Falcon, 457 U.S. at 157, n.13.

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There are six named Plaintiffs in this putative class action. Four of the six expressly allege 

that they completed the “background investigation disclosure document” at issue in the FCRA 

claims when applying for employment with Defendant, and four of the six Plaintiffs expressly 

allege that they worked for Defendant in California in a non-exempt capacity and that they were 

unlawfully deprived compensation for overtime and breaks at some point in the period of time 

relevant to this action. Doc. No. 29 ¶¶ 2-7. Plaintiffs’ claims are thus “reasonably co-extensive”

with those of absent potential members of the FCRA Class and “reasonably co-extensive” with 

those of absent potential members of the California Class. The typicality requirement is therefore

satisfied as to both classes.

4. Adequacy

The requirement of adequate representation asks whether the representative “will fairly and 

adequately protect the interests of the class.” See Fed.R.Civ.P. 23(a)(4). Courts are to inquire (1) 

whether the named plaintiffs and counsel have any conflicts of interest with the rest of the 

potential class members and (2) whether the named plaintiff and counsel will prosecute the action 

vigorously for the class as a whole. See Hanlon, 150 F.3d at 1020.

Plaintiffs do not appear to have any conflicts of interest with putative members of either 

the FCRA Class or the California Class, and have apparently participated actively in the 

preparation and prosecution of this case. Doc. No. 34-2, p. 13 of 106, ¶ 25.d. Similarly, Mr. 

Blumenthal, Mr. Nordrehaug and their firm, Blumenthal Nordrehaug Bhowik De Blouw LLP,

have no apparent conflicts with either the FCRA Class or the California Class and have been 

involved as class counsel in “hundreds of wage and hour class action matters.” Id., p. 15 of 106, ¶ 

26. The named Plaintiffs and class counsel are adequate representatives of the class.

B. Rule 23(b) Class Certification Requirements

In addition to satisfying Rule 23(a), a putative class must fulfill one of the requirements of 

Rule 23(b) for a court to grant certification. Amchem, 521 U.S. at 614. As to both the FCRA Class 

and the California Class, Plaintiffs seek certification under Rule 23(b)(3), Doc. No. 34-1, Part 

VI.F., which requires a showing that: (1) questions of law or fact common to class members 

predominate over any questions affecting only individual members; and (2) a class action is 

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

Amchem, 521 U.S. at 615. The test of Rule 23(b)(3) is “far more demanding,” than that of Rule 

23(a). Wolin v. Jaguar Land Rover N. Am., LLC, 617 F.3d 1168, 1172 (9th Cir. 2010).

1. Predominance

Common questions of law and fact predominate over individual questions, satisfying the 

first component of the Rule 23(b)(3) inquiry, where “the issues in the class action subject to 

generalized proof, and thus applicable to the class as a whole ... predominate over those issues that 

are subject only to individualized proof.” Ortega v. J.B. Hunt Transport, Inc., 258 F.R.D. 361, 366 

(C.D. Cal. 2009) (citing Wal-Mart Stores, Inc. v. Visa U.S.A. Inc., 280 F.3d 124, 136 (2nd Cir. 

2001)). In evaluating predominance, courts look to whether the focus of the proposed class action 

will be on the words and conduct of the defendants rather than on the behavior of the individual 

class members. Id. “[C]ourts’ discomfort with individualized liability issues is assuaged in large 

part where the plaintiff points to a specific company-wide policy or practice that allegedly gives 

rise to consistent liability.” Kurihara v. Best Buy Co., 2007 WL 2501698, at *10 (N.D. Cal. Aug. 

30, 2007). Where there exist “broad employer policies [which] can impact many workers at once 

... a need for class treatment” is often present. Sepulveda v. Wal–Mart Stores, Inc., 237 F.R.D. 

229, 247 (C.D. Cal. 2006).

“Considering whether ‘questions of law or fact common to class members predominate’ 

begins, of course, with the elements of the underlying cause of action.” Stearns v. Ticketmaster

Corp., 655 F.3d 1013, 1020 (9th Cir. 2011) (quoting Erica P. John Fund, Inc., v. Halliburton Co., 

563 U.S. 804, 809 (2011)). The requirement is satisfied if a plaintiff establishes that a “common 

nucleus of facts and potential legal remedies dominates the litigation.” Hanlon, 150 F.3d at 1022.

As to the FCRA Class, the predominate question of fact is whether Defendant’s 

background check authorization and disclosure form contained a liability release provision –

which implicates a company-wide policy and practice – and the predominate question of law is 

whether the inclusion of such a provision violated the FCRA. Individualized determinations as to 

which employees executed such forms are fairly minor by comparison. As to the FCRA claims, in 

other words, the focus is largely on the conduct on the Defendant and, thus, the predominance 

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requirement is met as to the FCRA Class.

As to the California Class, there are common questions as to Defendant’s policies and 

practices with respect to overtime pay, breaks, expense reimbursement and wage statements in the 

state of California, and whether such policies and practices violated California law. Individualized 

determinations may, of course, be required as to overtime worked, breaks missed and expenses 

incurred by each member of the California Class for calculating recovery, but it appears that

findings as to the nature and legality of Defendant’s employment policies and practices in the 

foregoing areas would have broad applicability to members of the California Class for purposes of 

determining liability. The predominance requirement is therefore met as to the California Class. 

2. Superiority

Courts are also to consider “(a) the class members’ interests in individually controlling the 

prosecution or defense of separate actions; (b) the extent and nature of any litigation concerning 

the controversy already begun by or against class members; (c) the desirability or undesirability of 

concentrating the litigation of the claims in the particular forum; and (d) the likely difficulties in 

managing a class action.” Fed.R.Civ.P. 23(b)(3). Where the parties have agreed to pre-certification 

settlement (d) and perhaps (c) are irrelevant. Amchem, 521 U.S. at 620; Murillo v. Pac. Gas & 

Elec. Co., 266 F.R.D. 468, 473 (E.D. Cal. 2010).

The FCRA claims in this case provide for statutory damages in the range of $100 to 

$1,000, and the proposed settlement provides for a payment of $100 to each participating member

of the FCRA Class. Given litigation costs, it is hard to imagine how a member of the FCRA Class 

could conclude that the mere possibility of recovering an additional $900 justifies prosecuting an

individual action under the FCRA. Wolin, 617 F.3d at 1175 (“Where recovery on an individual 

basis would be dwarfed by the cost of litigating on an individual basis, this factor weighs in favor 

of class certification.” (citation omitted).) Moreover, the Court is not aware of any pending 

litigation that would offer a superior method of adjudicating Plaintiffs’ FCRA claims. The 

superiority requirement is therefore satisfied as to adjudication of claims relating to the FCRA 

Class.

A similar analysis applies to the California Class. With the assistance of a damages expert, 

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Class counsel estimates the maximum cumulative recovery for the 518 putative members of the 

California Class to be $4,764,841, for an average of $9,198 per person. Doc. No. 34-2, p. 10 of 

106, ¶ 20. Before deductions for attorneys’ fees and such, the proposed settlement provides more 

than 30% of that amount – or about $2,750 per person – on claims relating to the California Class. 

Id. The difference of about $6,450 does not appear sufficient to justify litigating on an individual 

basis, particularly given number of claims involved and the uncertainty of the outcome as to each. 

Moreover, the Court is not aware of any pending litigation that would offer a superior method of 

adjudicating claims relating to the California Class. The superiority requirement is therefore 

satisfied as to adjudication of claims relating to the California Class.

C. Conclusion as to Class Certification

The requirements of numerosity, commonality, typicality, and adequacy have been met for

each of the classes at issue here. Further, the Court finds that common questions predominate and

that class litigation is the superior method of resolving the claims relating to each class, The Court 

will, therefore, conditionally certify the both classes for settlement purposes. 

Based on the terms of the Settlement Agreement and the foregoing discussion, the Court 

conditionally certifies the FCRA Class for settlement purposes as all employees or prospective 

employees of Defendant in the United States regarding whom Defendant procured a background 

check from May 7, 2016 to December 13, 2018.

The Court conditionally certifies the California Class for settlement purposes as all 

individuals who are or previously were employed by Defendant in California and classified as 

non-exempt employees at any time between May 7, 2014 to December 13, 2018.

The Court now turns to the substance of the proposed settlement.

II. Fundamental Fairness, Adequacy, and Reasonableness of the Settlement 

Class action settlements are permitted “only with the court’s approval ... on a finding that 

[the agreement] is fair, reasonable, and adequate.” See Fed.R.Civ.P. 23(e); Hanlon, 150 F.3d at 

1026. The principal purpose of court supervision of a class action settlement is to ensure “the 

agreement is not the product of fraud or overreaching by, or collusion between, the negotiating 

parties ....” Id. at 1027. This “ensure[s] that class representatives and their counsel do not secure a 

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disproportionate benefit at the expense of the unnamed plaintiffs who class counsel had a duty to 

represent.” Lane v. Facebook, Inc., 696 F.3d 811, 819 (9th Cir. 2012).

Before providing final approval of a settlement, a court is to balance several factors, 

including: “[i] the strength of the plaintiffs’ case; [ii] the risk, expense, complexity, and likely 

duration of further litigation [and] the risk of maintaining class action status throughout the trial; 

[iii] the amount offered in settlement; [iv] the extent of discovery completed and the stage of the 

proceedings; [and] [v] the experience and views of counsel ....” Hanlon, 150 F.3d at 1026.

Less authority exists regarding the standard a court is to use in providing preliminary 

approval of a settlement. See O’Connor v. Uber Technologies, Inc., 201 F.Supp.3d 1110, 1122 

(C.D. Cal. 2016). Some courts save the Hanlon factors set forth above for the final-approval stage, 

focusing at the preliminary stage simply on whether the settlement “falls within the range of 

possible approval.” Id. This includes an examination of whether the settlement is the product of 

non-collusive negotiations, has no obvious deficiencies, and does not otherwise improperly grant 

preferential treatment to class representatives or segments of the class. See In re High-Tech 

Employee Antitrust Litig., 2014 WL 3917126, at *3 (N.D. Cal. Aug. 8, 2014). Other courts 

examine the Hanlon factors in addition to conducting a range-of-reasonableness analysis at the 

preliminary stage, reasoning it is better to closely scrutinize the settlement terms at the earliest 

opportunity so that if a fatal flaw exists, it can be addressed before the parties “waste a great deal 

of time and money in the notice and opt-out process.” Millan v. Cascade Water Services, Inc., 310 

F.R.D. 593 (E.D. Cal. 2015). The Court agrees with the latter approach, and thus applies both the

Hanlon factors and the range-of-reasonableness analysis here.

A. Strength of Plaintiffs’ Case

The court should “evaluate objectively the strengths and weaknesses inherent in the 

litigation and the impact of those considerations on the parties’ decisions to reach these 

agreements.” Adoma v. Univ. of Phoenix, Inc., 913 F.Supp.2d 964, 975 (E.D. Cal. 2012) (citation 

omitted). That in mind, the court need “not reach ‘any conclusions regarding the contested issues 

of fact and law that underlie the merits of th[e] litigation.’ ” Brewer v. Salyer, 2017 WL 2813178, 

at *3 (E.D. Cal. June 29, 2017).

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Here, Defendants deny all allegations of wrongdoing and allege numerous affirmative 

defenses relating not only to Plaintiffs’ claims, but also to class certification and standing. Further, 

Defendant asserts facts that could negate essential elements of Plaintiffs’ claims. Defendant 

contends, for example, that its non-exempt employees were able to take meal and rest breaks 

because they worked in pairs and that the use of personal cell phones by non-exempt employees in 

connection with work was voluntary and thus not a necessary expense that required 

reimbursement. Doc. No. 34-2, p. 11 of 106, ¶ 21. In addition, Defendant has already obtained 

releases from some putative class members in connection with claims at issue in this litigation, id.,

and it appears that, for some members of the California Class, recovery could be limited by the 

statute of limitations applicable to claims under the Labor Code. Doc. No. 29 (compare Third 

Cause of Action to Fourth through Ninth Causes of Action). Moreover, Defendants contend that 

the FCRA claims at issue here are barred entirely by Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47 

(2007) (in addition to denying that consent to background checks was invalid), and there could be 

significant problems of proof regarding the extent to which members of the California Class 

missed breaks or incurred compensable expenses relating to their employ with Defendant. 

Plaintiffs’ willingness to settle this action at a discount to the maximum estimated recovery does 

not appear suspect – or improvident – in light of such considerations.

B. The Risk, Expense, Complexity and Likely Duration of Further Litigation and the 

Risk of Maintaining Class Action Status Throughout Trial

“Approval of settlement is ‘preferable to lengthy and expensive litigation with uncertain 

results.’ ” Munoz v. Giumarra Vineyards Corp., 2017 WL 2665075, at *9 (E.D. Cal. June 21, 

2017); accord In re Syncor ERISA Litig., 516 F.3d 1095, 1101 (9th Cir. 2008) (“[T]here is a 

strong policy that favors settlements, particularly where complex class action litigation is 

concerned.”). Moreover, “[e]mployment law class actions are, by their nature, time-consuming 

and expensive to litigate.” Aguilar v. Wawona Frozen Foods, 2017 WL 2214936, at *3 (E.D. Cal 

May 19, 2017).

This action involves two putative classes – the FCRA Class and the California Class – as 

well as multiple claims under state and federal law, implicating several aspects of Defendant’s 

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operations, including Defendant’s background check process for job applicants nationwide over a 

period of more than two years, and the payment of overtime, the management of meal and rest 

breaks, the reimbursement of expenses and the preparation of wage statements in California over a 

period of more than four years. Even assuming Plaintiffs could show that Defendant had unlawful

policies and practices in the foregoing areas, Plaintiffs would still have to set forth evidence that 

Defendant’s conduct was willful and individualized proof would likely be required to establish the 

extent to which a given employee missed breaks, incurred work-related expenses and such. In 

addition to increasing the complexity, expense and duration of this litigation, the accumulation of 

such individualized issues would raise a risk of non-certification at some point in these 

proceedings. There is also risk involved in seeking non-mandatory PAGA penalties, and given the 

relative infancy of this action, it is unlikely that trial would commence in the near future. 

Moreover, even assuming Plaintiffs prevail, payment could be further delayed (and expenses could 

be further increased) by appeal. The potential costs of maintaining this action through trial and 

appeal merit particular consideration in light of the fact that that maximum estimated damages for 

the FCRA Class and the California Class combined are less than $5,000,000. Doc. No. 34-2, p. 9 

of 106, ¶ 20. The Court therefore finds that the risks, costs and duration of further litigation, as 

well as the potential risks attendant to a contested class certification, weigh in favor of preliminary

approval of the settlement.

C. The Amount Offered in Settlement

The amount offered in settlement is generally considered to be the most important 

consideration of any class settlement. See Bayat v. Bank of the West, 2015 WL 1744342, at *4 

(N.D. Cal. Apr. 15, 2015) (citing, inter alia, In re HP Inkjet Printer Litig., 716 F.3d 1173, 1178-79 

(9th Cir. 2013)). To determine whether a settlement amount is reasonable, the Court must consider 

the amount obtained in recovery against the estimated value of the class claims if successfully 

litigated. Litty v. Merrill Lynch & Co., Inc., 2015 WL 4698475, at *9 (C.D. Cal. Apr. 27, 2015) 

(quoting In re Mego Financial Corp. Sec. Litig., 213 F.3d 454, 459 (9th Cir. 2000)); see also

Officers for Justice v. Civil Service Com’n of City and Cty. of S.F., 688 F.2d 615, 628 (9th Cir. 

1982) (“[A] cash settlement amounting to only a fraction of the potential recovery will not per se 

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render the settlement inadequate or unfair.”). Courts regularly approve class settlements where 

class members recover less than one quarter of the maximum potential recovery amount. See

Bravo v. Gale Triangle, Inc., 2017 WL 708766, at *10 (C.D. Cal. Feb. 16, 2017) (approving a 

settlement where net recovery to class members was approximately 7.5% of the projected 

maximum recovery amount); Bellinghausen v. Tractor Supply Co., 306 F.R.D. 245, 256 (N.D. 

Cal. 2015) (approving a settlement where the gross recovery to the class was approximately 8.5% 

of the maximum recovery amount).

The FCRA provides for statutory damages of $100 to $1,000 for willful violations, and the 

Settlement Agreement provides for a payment of $100 to each participating member in the FCRA 

Class. Doc. No. 34-2, p. 7 of 106, ¶ 15. The $100 award contemplated in the Settlement

Agreement appears to compare favorably with approved settlements involving FCRA claims. See, 

e.g., Pietras v. Sentry Ins. Co., 513 F. Supp. 2d 983, 985 (N.D. Ill 2007) (citing “eighteen cases, 

which settled for an average of $34.59 per class member”); Bailes v. Lineage Logistics, LLC, 

2016 WL 4415356, at *6 (D. Kan. Aug. 19, 2016) (approving an FCRA settlement for $149,205 

for a class of 3,430, which correlates to $43.50 per person); see also, Lengel v. HomeAdvisor, 

Inc., 2017 WL 364582, at *9 (D. Kan. Jan. 25, 2017) (stating that “[a] $100 gross recovery and net 

recovery of at least $50 per class member is notably higher than other FCRA disclosure 

settlements that courts have approved” and collecting cases); Serrano v. Sterling Testing Sys., 

Inc., 711 F. Supp. 2d 402, 418 (E.D. Pa. 2010) (indicating the per-member recovery in a FCRA 

action can be significantly below the statutory limit of $1,000 considering the attendant risks of 

litigation).

Assuming maximum deductions for the FCRA Class, attorney fees, costs and such, the 

amount remaining for the 518 members of the California Class (before payroll taxes and including 

settlement payments that have already been made) would be $974,050,

3 which represents 20% of 

the total maximum estimated damages of the California Class of $4,764,841, as calculated by 

 

3 The Court calculates this $974,050 figure as the Gross Settlement Amount of $1,450,000 minus $9,700 (maximum 

payment to FCRA Class), $362,500 (maximum attorney fees), $15,000 (maximum litigation expenses), $45,000 

(maximum class representative compensation (6 x $7,500)), $18,750 (maximum Labor and Workforce Development 

Agency payment from any PAGA award) and $25,000 (maximum payment to settlement administrator). See Doc. No. 

34-2, p. 22 of 106 (Settlement Agreement § I.Q.), p. 26 of 106 (Settlement Agreement § III.B.-C.). 

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Class counsel and its damages expert.4 Doc. No. 34-2, p. 10 of 106, ¶ 20. Thus, to oversimplify, 

instead of rolling the dice on a maximum award of $9,198.53 (before attorney fees and costs), 

each of member of the California Class (assuming full participation) would collect $1,880.41. 

While that is clearly a significant discount, it is not excessive, particularly given the costs of 

litigating this action of this scope to completion in comparison to relatively modest amount of the 

maximum possible recovery. See Bravo, 2017 WL 708766, at *10; Bellinghausen, 306 F.R.D. at

256. This factor does not weigh against settlement. 

D. The Extent of Discovery Completed

The Court should lean in favor of a settlement where evidence is presented that a 

considerable amount of discovery has been conducted “because it suggests that the parties arrived 

at a compromise based on a full understanding of the legal and factual issues surrounding the 

case.” Adoma, 913 F.Supp.2d at 977 (citation omitted).

The parties engaged in an all-day mediation in this action, conducted by a mediator with

experience in employment class actions, and agreed to settle this action pursuant to the terms and 

conditions of a proposal provided by the mediator. Doc. No. 34-2, p. 6 of 106, ¶ 12. Prior to the 

mediation, Class counsel obtained production of employment, payroll, background check and 

class member information from Defendant, Doc. No. 34-2, p. 5 of 106, ¶ 10, p. 9 of 106, ¶ 20 & p. 

12 of 106, ¶ 23, and engaged a damages expert with experience to employment actions such as the 

one at bar to assist in the computation of prospective recoveries in connection with Plaintiffs’

claims. Doc. No. 34-2, p. 5 of 106, ¶¶ 10, 18. Class counsel also states that it has conducted 

extensive legal research and analysis in connection with the claims in this action. Doc. No. 34-2, 

p. 5 of 106, ¶ 10. It therefore appears that, in addition to participating in mediation and settling 

pursuant to a mediator proposal, the parties have engaged in sufficient discovery to have a full 

understanding of the legal and factual issues underlying this action. These factors weigh in favor 

of approving the settlement.

 

4 The Court notes that these expert opinions as to maximum damages do not appear to be in the record for this action. 

For the Court to be able to evaluate the soundness of the Plaintiffs’ assertions as to maximum damages, Plaintiffs are 

advised to furnish such materials in connection with their motion for final approval.

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E. The Experience and Views of Counsel

Class counsel has significant experience in wage and hour class action litigation, Doc. No. 

34-2, p. 15 of 106, ¶ 26, and they are “of the opinion that the settlement with Defendant for the 

consideration and on the terms set forth in the [Settlement] Agreement is fair, reasonable, and 

adequate, and is in the best interest of the class in light of all known facts and circumstances, 

including the risk of significant delay, defenses asserted by Defendant, and numerous potential 

appellate issues.” Doc. No. 34-2, p. 12 of 106, ¶ 24. Class counsel’s recommendation that the 

settlement be approved is entitled to significant weight and supports approval of the Settlement

Agreement. See Nat’l Rural Telecommunications Coop. v. DIRECTV, Inc., 221 F.R.D. 523, 528 

(C.D. Cal. 2004) (“Great weight is accorded to the recommendation of counsel, who are most 

closely acquainted with the facts of the underlying litigation.” (citation and internal quotation 

marks omitted)). 

F. Range-of-Reasonableness: Collusion, Deficiencies, Preferential Treatment

The Court now turns to whether any collusion, deficiencies, or preferential treatment 

exists. See In re High-Tech Employee Antitrust Litig., 2014 WL 3917126, at *3. The goal is to 

ensure that the class representatives and their counsel do not receive a disproportionate benefit “at 

the expense of the unnamed plaintiffs who class counsel had a duty to represent.” Lane, 696 F.3d 

at 819. To that end, the Ninth Circuit in Bluetooth identified three “subtle signs that class counsel 

have allowed pursuit of their own self-interests ... to infect the negotiations:” “(1) when counsel 

receive a disproportionate distribution of the settlement; (2) when the parties negotiate a ‘clear 

sailing’ arrangement (i.e., an arrangement where defendant will not object to a certain fee request 

by class counsel); and (3) when the parties create a reverter that returns unclaimed fees to the 

defendant.” Allen v. Bedolla, 787 F.3d 1218, 1224 (9th Cir. 2015) (quoting Bluetooth, 654 F.3d at 

947) (internal quotation marks omitted); see also, Staton, 327 F.3d at 960 (stating the collusion 

inquiry addresses “overt misconduct by the negotiators” or improper incentives of some class 

members at the expense of others). However, as recently discussed by the Ninth Circuit: “[f]or all 

these factors, considerations, ‘subtle signs,’ and red flags, ... the underlying question remains this: 

Is the settlement fair?” In re Volkswagen “Clean Diesel” Mktg., Sales Practices, & Prod. Liab. 

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Litig., 895 F.3d 597, 611 (9th Cir. 2018).

Here, class counsel seeks attorney fees of up to $362,500 – which would amount to 25% of 

the gross fund. Doc. No. 34-2, p. 26 of 106 (Settlement Agreement §§ III.A. & III.B.2.). The 

parties have also agreed to an administrative fee of up to $25,000, as well as a class representative

service award of up to $7,500 for each of the six Plaintiffs. Id., p. 26 of 106 (Settlement 

Agreement §§ III.B.1 & III.B.4.).

The proposed maximum attorney fees are in line with the benchmark for this Circuit, see

Bluetooth, 654 F.3d at 947 (referencing a 25% benchmark); Staton, 327 F. 3d at 952 (same); Six 

(6) Mexican Workers v. Arizona Citrus Growers, 904 F.2d 1301, 1311 (9th Cir. 1990) (same), 

Ross v. Bar None Enterprises, Inc., 2014 WL 4109592, at *10 (E.D. Cal. Aug. 19, 2014) (stating 

that “[t]he typical range of acceptable attorneys’ fees in the Ninth Circuit is 20% to 33 1/3% of the 

total settlement value, with 25% considered the benchmark” (quoting Morales v. Stevco, Inc., 

2011 WL 5511767, at *12 (E.D. Cal. Nov. 10, 2011)), and the proposed maximum fee for the 

settlement administrator does not strike the Court as excessive, particularly given the fact that this 

action involves two classes comprising, in aggregate, several hundred members. See Garcia v. 

Gordon Trucking, 2012 WL 5364575, at *3 (E.D. Cal. Oct.31, 2012) (approving $25,000 

administrator fee awarded in a wage and hour case involving 1,868 potential class members); 

Vasquez v. Coast Valley Roofing, Inc., 266 F.R.D. 482, 483 (E.D. Cal. 2010) (approving $25,000 

administrator fee awarded in wage and hour case involving 177 potential class members). The 

Court also notes that the Settlement Agreement does not contain a provision for the reversion of 

funds to Defendant. All of these factors favor approval of the settlement.

The fact that the Agreement includes a “clear sailing” provision, see Doc. No. 34-2, p. 26 

of 106 (Settlement Agreement § III.B.2), on the other hand, is not ideal, see Bluetooth, 654 F.3d at 

942, 947, and the absolute dollar amount of the proposed attorney fees could be somewhat high 

for a case of such short duration. The Settlement Agreement, however, merely provides for 

attorney fees “up to” $362,500, and the Court can scrutinize the final award more closely once the 

request for attorney fees is actually made. 

The fact that that the parties engaged in mediation and that the Settlement is based on a 

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mediator’s proposal. Doc. No. 34-2, p. 6 of 106, ¶ 12, supports a finding that the settlement 

agreement is not the product of collusion, see Villegas v. J.P. Morgan Chase & Co., 2012 WL 

5878390, at *6 (N.D. Cal. Nov.21, 2012) (finding that reaching a settlement following 

participation in mediation with “with a private mediator experienced in wage and hour class 

actions ... tends to support the conclusion that the settlement process was not collusive” (citation 

omitted)), but the Court has some concerns with the potential size of the proposed service awards.

It appears that the service award of up to $7,500 for each of the named Plaintiffs could be more 

than four times the typical recovery of an unnamed plaintiff who is a member of both the FCRA 

Class and the California Class, see Staton, 327 F.3d 938 at 978 (expressing concerns as to “the 

very large differential in the amount of damage awards between [] named and unnamed class 

members” due to proposed service awards), and the Court notes that in aggregate, the proposed 

service awards could amount to more than 3% of the gross fund in the settlement. See

Monterrubio v. Best Buy Stores, L.P., 291 F.R.D. 443, 462–63 (E.D. Cal. 2013) (finding proposed 

enhancement award of 1.8% of the total settlement amount inappropriate and awarding a service

fee of approximately .62% of the total settlement for the purpose of preliminary approval).

Further, the existing record in this action – which has been relatively short-lived – provides little 

evidence of what Plaintiffs have done to merit an amount so far in excess (at least on a percentage 

basis) of what unnamed class members stand to receive through settlement. 

Given the relatively modest size of the proposed incentive awards in absolute terms, see

Staton, 327 F.3d at 976 (noting Ninth Circuit’s approval of “incentive awards of $5,000 each to 

the two class representatives of 5,400 potential class members in a settlement of $1.725 million”); 

Hopson v. Hanesbrands Inc., 2009 WL 928133, at *10 (N.D. Cal. Apr. 3, 2009) (“In general, 

courts have found that $5,000 incentive payments are reasonable.”), and the fact that incentive 

awards are not uncommon in wage-and-hour actions, see Rodriguez v. West Publ’g Corp., 563 

F.3d 948, 958–59 (9th Cir. 2009) (“Incentive awards are fairly typical in class action cases.”), the 

Court will not withhold preliminary approval on the basis of the foregoing concerns, particularly 

since the Settlement Agreement merely provides for a service fee of “up to” $7,500 for each of the 

named Plaintiffs. Plaintiffs are advised, however, that additional justification for the proposed 

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service fees will be required before the Court grants final approval. See Staton, 327 F.3d at 977 

(setting forth factors relevant to determining whether a service award is merited (quoting Cook v. 

Niedert, 142 F.3d 1004, 1016 (7th Cir. 1998) ); Van Vranken v. Atlantic Richfield Co., 901 F. 

Supp. 294, 299 (N.D. Cal. 1995) (similar).

G. Conclusion as to Fairness, Adequacy, and Reasonableness of the Settlement

Subject to the caveats above as to the size of the attorney fees and the service awards, the 

Court finds that the Settlement Agreement appears to be the product of arms-length negotiation 

and to grant all class members a fair shake. See In re Volkswagen, 895 F.3d at 611. This factor, 

therefore, does not weigh against preliminary approval of the settlement.

III. Notice and Release

A. Notice Form and Notice Plan

For any class certified under Rule 23(b)(3), “the court must direct to class members the 

best notice that is practicable under the circumstances.” Fed.R.Civ.P. 23(c)(2)(B), 23(e)(1). The 

absent class members must be provided with notice, an opportunity to be heard, and a right to optout of the class. AT & T Mobility LLC v. Concepcion, 563 U.S. 333, 349 (2011). “The notice 

must clearly and concisely state in plain, easily understood language” the following information:

(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 

under Rule 23(c)(3).

Fed.R.Civ.P. 23(c)(2)(B). “Adequate notice is critical to court approval of a class action settlement 

under Rule 23(c)(2)(B).... [B]oth the content of the notice and the form of the notice must be 

adequate and approved by the Court.” Monterrubio, 291 F.R.D. at 452 (internal citation omitted).

The proposals as to notice in this action appears to satisfy all of these criteria. The preface 

to the notice form, for example, expressly states, in the plainest possible terms, that class members 

may object to the settlement, opt out of the settlement, or do nothing and receive payment, and 

clearly marked sections of the notice form provide concise, easy-to-understand instructions as to 

each course of action. Doc. No. 34-2, p. 53 through 58 of 106. Other parts of the notice, similarly,

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provide a thorough explanation of the case, the classes and the proposed settlement, including the 

claims that a participating class member will release, individualized estimates of each class 

member’s prospective settlement share, and instructions on how to get additional information 

regarding the case (including, for example, a copy of the Settlement Agreement). Id. Further, the 

notice plan calls for thorough measures to contact class members, including the use of a qualified 

settlement administrator in tracking all undelivered mail, performing address searches for all mail 

returned without a forwarding address, and promptly re-mailing notices to class members for 

whom new addressed are found. Doc. No. 34-2, p. 29 and p. 32 of 106 (Settlement Agreement §§

III.D. & III.E.2.c.). The proposed notice is adequate.

B. Scope of Release

Class action settlement agreements cannot release claims of absent class members that are 

unrelated to the factual allegations of the class complaint. Hesse v. Sprint Corp., 598 F.3d 581, 

590 (9th Cir. 2010). Class action settlements may, and often do, commonly release concealed or 

hidden claims related to the facts alleged. In re Volkswagen “Clean Diesel” Mktg., Sales Practices, 

& Prod. Liab. Litig., 2017 WL 2212780, at *8 (N.D. Cal. May 17, 2017), aff’d, 746 F. App’x 655 

(9th Cir. 2018).

The release in the proposed settlement is permissible. The notice form states, as to both the 

FCRA Class and the California Class, that class members who elect to remain in the settlement 

class “shall be deemed to have fully and finally released all claims that were set forth, or could 

have been set forth based on the facts alleged, in the Second Amended Complaint that occurred 

during the Class Period,” while expressly excluding from the release for each class, “all other 

claims.” Doc. No. 34-2, p. 56 of 106. The release is adequately tailored to release only those 

claims covered by the lawsuit.

C. Notice Schedule

The Court has reviewed Plaintiffs’ proposed notice. The Court agrees that the proposed 

notice schedule is appropriate. The schedule shall be implemented as set forth in the Settlement 

Agreement, and the date of entry of this Order shall be deemed January 24, 2020 for such 

purposes.

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The final approval hearing will be set for June 22, 2020 at 1:30 p.m.

D. Conclusion Regarding Notice and Release

The Court finds that the scope of the proposed release is acceptable and that the proposed 

notice protocols comply with the requirements of Federal Rule of Civil Procedure 23 and the due 

process requirements of the Constitution of the United States.

ORDER

Based on the foregoing, IT IS HEREBY ORDERED that:

1. Plaintiffs’ motion for conditional class action certification and preliminary approval of 

class action settlement (Doc. No. 34) is GRANTED;

2. The FCRA Class and the California Class are each conditionally certified for purposes of 

settlement only;

a. The FCRA Class is defined as follows: All employees or prospective employees of 

Defendant Derrel’s Mini Storage, Inc. in the United States regarding whom 

Defendant procured a background check from May 7, 2016 to December 13, 2018;

b. The California Class is defined as follows: All individuals who are or previously 

were employed by Defendant Derrel’s Mini Storage, Inc. in California and 

classified as non-exempt employees at any time between May 7, 2014 to December 

13, 2018;

3. The notice plan set forth in the Settlement Agreement, including the Notice of Pendency of 

Class Action Settlement and Hearing Date for Court Approval (Exhibit A to the Settlement 

Agreement, Doc. No. 34-2, p. 53 of 106), is approved; 

4. The Parties shall implement the schedule as to notice, briefing and such set forth in the 

Settlement Agreement and the entry date for this Order shall be deemed January 24, 2020 

for such purposes;

5. The Court authorizes the retention of KCC Class Action Services as Settlement 

Administrator, pursuant to the terms set forth in the Settlement Agreement;

6. Blumenthal Nordrehaug Bhowmik De Blouw LLP is conditionally designated as counsel 

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for the FCRA Class and for the California Class;

7. Rick Kutzman, Jamie Leonardo, Joseph Pomilla, Roseann Oliveto, Charles Madden and 

Maria Ibarra are are conditionally designated as the class representatives for the FCRA 

Class and for the California Class;

8. The parties shall appear on June 22, 2020, 1:30 p.m. in Courtroom 2 of the United States 

District Court, Eastern District, Fresno Division, before the undersigned for a final 

settlement approval hearing, which may include consideration of the following:

a. Timely objections to the proposed settlement by Class members;

b. Responses by Class counsel and counsel for Defendant to any objections timely 

filed by Class members;

c. Responses by either party to provide appropriate information bearing on whether 

the settlement and settlement administration costs should be approved; and

d. Responses by Class counsel to any questions regarding its request for fees and 

costs, as well as responses relating to the application for class representative service 

payments.

IT IS SO ORDERED.

Dated: January 24, 2020 

 SENIOR DISTRICT JUDGE

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