Court Opinion

ID: 4276747
Source: CourtListenerOpinion
Date Created: 2018-05-18 20:00:36.111488+00
Date Added: 2024-06-11T14:33:59.877221
License: Public Domain

NOT FOR PUBLICATION                           FILED
                    UNITED STATES COURT OF APPEALS                       MAY 18 2018
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                           FOR THE NINTH CIRCUIT

MARGIE BEDOLLA; et al.,                         No.    16-56621

                Objectors-Appellants            D.C. No.
                                                2:09-cv-04266-DDP-AGR
  v.

JEFFREY LEE ALLEN, on behalf of                 MEMORANDUM*
himself, all others similarly situated, the
general public and as an “aggrieved
employee” under the California Labor Code
Private Attorneys General Act,

                Plaintiff-Appellee,

LABOR READY SOUTHWEST, INC., a
Washington corporation doing business in
the State of California; DOES, 1-50,
inclusive,

                Defendants-Appellees.

                   Appeal from the United States District Court
                      for the Central District of California
                   Dean D. Pregerson, District Judge, Presiding

                             Submitted May 15, 2018**

       *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
       **
             The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
                                Pasadena, California

Before: WARDLAW, NGUYEN, and OWENS, Circuit Judges.

      Objecting settlement-class members Margie Bedolla, Anthony Allen, and

Michael Alvarez (collectively, “the Objectors”) appeal from the district court’s

September 2016 order granting final approval to a settlement resolving Jeffrey Lee

Allen’s1 class-action wage and hour claims against Labor Ready Southwest, Inc.

(“Labor Ready”). As the parties are familiar with the facts, we do not recount

them here. We have jurisdiction under 28 U.S.C. § 1291, and we affirm.2

      1. On remand, the district court conducted a “more searching inquiry” as we

ordered in 2015. Allen v. Bedolla, 787 F.3d 1218, 1223–25 (9th Cir. 2015) (Allen

I) (quoting In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935, 938 (9th Cir.

2011)). It is true that the 2016 settlement agreement contains the same three

“subtle signs” of collusion as the 2013 settlement agreement. But this time, the

district court’s final approval order—and the transcripts of the four approval

hearings the court held before granting final approval—“provide adequate

assurance” that the district court verified the fairness of the settlement agreement

notwithstanding those three red flags. Bluetooth, 654 F.3d at 947.

      1
          This memorandum uses “Mr. Allen” only to refer to Jeffrey Lee Allen.
      2
         As briefing is now complete, we deny as moot the motion for summary
disposition. Circuit Rule 3-6.

                                          2
      First, the district court made express findings about the value of the

nonmonetary relief, as we instructed in Allen I. See 787 F.3d at 1225. That

valuation (between $6.4 million and $10.7 million), considered along with the

monetary relief, supports the district court’s finding that attorney’s fees of 27

percent of the settlement fund were warranted based on the results obtained.3 See

id.

      Second, the district court considered several rounds of briefing and argument

on the release carve-out sought by the Objectors, and denied preliminary approval

to an earlier draft of the settlement agreement because it inadequately carved out

certain claims.

      Third, the district court heard argument from the settling parties and the

Objectors on whether to honor the claims submitted in response to notice of the

2013 settlement agreement. The 2016 final approval order directs Labor Ready to

honor the non-redundant 2013 claims as Objectors urged, bringing the total class

participation rate to over 9 percent.

      Fourth, while the district court did not make “express findings . . . on what it

considered to be a reasonable lodestar amount,” id., the district court did consider

      3
          Despite the Objectors’ criticisms of the settling parties’ expert valuation of
the nonmonetary relief, the district court did not abuse its discretion in accepting
this valuation, as the Objectors made no attempt to provide a different valuation to
the district court.

                                           3
briefing and argument regarding the lodestar calculation of class-counsel attorney’s

fees, indicating that it considered that lodestar calculation in determining the

reasonableness of the 27 percent figure.

      Altogether, on remand the district court held a status conference and four

hearings on the fairness of various drafts of the settlement agreement. The district

court considered the transient nature of the class, the difficulty of providing

monetary relief to the absent class members, and whether it would be better for the

class to deny approval and allow the remaining claims to go to trial. As the district

court judge who had presided over this litigation since 2009, Judge Pregerson was

particularly well-positioned to evaluate the negotiating positions of the settling

parties and the reasonableness of the resulting settlement. See Hanlon v. Chrysler

Corp., 150 F.3d 1011, 1026 (9th Cir. 1998). Judge Pregerson asked the settling

parties specifically and repeatedly about the three “subtle signs” of collusion

identified in Allen I and ultimately concluded that their explanations were

satisfactory.

      Accordingly, the district court followed our instruction to conduct a “more

searching inquiry” into the substantive fairness of this settlement agreement, and

has “show[n] it has explored comprehensively all factors, and [has given] a

reasoned response to all non-frivolous objections.” Allen I, 787 F.3d at 1223–24

(citations omitted).

                                           4
        2. The district court did not abuse its discretion in finding that the settlement

is fair, adequate, and reasonable. Fed. R. Civ. P. 23(e)(2); Allen I, 787 F.3d at

1222.

        The district court properly concluded that the settlement as a whole provides

value to the class. See Hanlon, 150 F.3d at 1026. In this case, unlike in Koby v.

ARS National Services, Inc., 846 F.3d 1071, 1079 (9th Cir. 2017), the settling

parties indicated that the relief afforded by the settlement has value to the members

of this particular class.4 And unlike in Koby, in this case unnamed class members

also received monetary relief, notice, and the opportunity to opt out. Next, even

assuming that the Cash Dispensing Machines’ removal provided no value to the

class, the settlement includes other, truly prospective nonmonetary relief—such as

Labor Ready’s agreement to post specific notices in its California branch offices,

and to train and audit its staff on compliance with labor laws applicable to

temporary workers—which the settlement in Koby did not, see id. Finally, training

employees on California labor law and auditing branch offices for compliance

constitutes more than simply “abiding by the law.”

        4
          Contrary to the Objectors’ assertion, the district court did not “find” that
the settlement contained no valuable nonmonetary relief; rather, it objected to the
settling parties’ use of the legal term of art “injunctive relief” to refer to
nonmonetary relief negotiated absent a court order.

                                            5
      While this settlement honors two sets of claims, where the first set of claims

executes a broader release than the second set of claims for the same amount of

monetary relief, this discrepancy is justified because the first set of claimants

affirmatively accepted the broader release terms by sending in a claim form

executing the broader release. And while the district court’s final approval order

does not explicitly clarify which release applies to settlement-class members who

never submitted a claim form, the district court specifically retained jurisdiction

over “all matters relating to the interpretation, administration, implementation,

effectuation and enforcement” of its approval order and the settlement, so

presumably it can resolve any future disputes over the meaning of the “applicable

release” clause in its own order. The ambiguous phrasing of the order is not an

abuse of discretion.

      The Objectors have not argued that the district court applied the wrong law

or relied on an unreasonable finding of fact in granting final approval to the

settlement with Mr. Allen and his counsel as adequate class representatives. See

Allen I, 787 F.3d at 1222. Particularly considering its six years of experience with

these parties, see Hanlon, 150 F.3d at 1026, the district court did not abuse its

discretion in doing so.

      AFFIRMED.

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