Perez v. CVS Health Corporation ( 2020 )

1 2 3 4 5 6 7 8 9 UNITED STATES DISTRICT COURT 10 EASTERN DISTRICT OF CALIFORNIA 11 FELIX PEREZ, an individual, on his own Case No. 1:19-cv-00449-DAD-BAM 12 behalf and on behalf of all others similarly situated, FINDINGS AND RECOMENDATIONS 13 REGARDING PLAINTIFF’S RENEWED Plaintiff, MOTION FOR PRELIMINARY 14 APPROVAL OF CLASS AND PAGA vs. ACTION SETTLEMENT 15 CVS HEALTH CORPORATION, a Delaware (Doc. No. 57) 16 corporation a/d/a CVS Caremark; CVS PHARMACY, INC., a Rhode Island 17 corporation; and DOES 1-100, inclusive, 18 Defendant. 19 20 21 FINDINGS AND RECOMMENDATIONS 22 Currently pending before the Court is Plaintiff Felix Perez’s Renewed Motion for Preliminary 23 Approval of Class Action Settlement. (Doc. No. 57.) The matter was heard on July 31, 2020, before the 24 Honorable Barbara A. McAuliffe. Counsel Marcus Bradley appeared by telephone on behalf of Plaintiff. 25 Counsel Jennifer Zargarof appeared by telephone on behalf of Defendants CVS Health Corporation and 26 CVS Pharmacy Inc. 27 Following the hearing, the Court directed Plaintiff to submit supplemental briefing addressing the 28 following: (1) discovery completed prior to settlement; (2) an explanation of the damage estimate and 1 counsel’s determination of the range of estimated total damages, monetary penalties or other relief tha the 2 class could reasonably expect to be awarded at trial; and (3) the adequacy of the Private Attorney General 3 Act payment. (Doc. No. 61.) Defendants also were permitted to file supplemental briefing in support of 4 preliminary approval. On August 21, 2020, Plaintiff filed his supplemental brief. (Doc. No. 65.) 5 Defendants did not file a supplemental brief, and the time to do so has passed. 6 Having considered the motion, the points and authorities, the arguments of counsel and the 7 supplemental briefing (Doc. No. 65) submitted in support of the Motion, including the Class Action and 8 PAGA Settlement and Release (“Settlement Agreement” or “Settlement”) and exhibits, and GOOD 9 CAUSE appearing, IT IS HEREBY RECOMMENDED that the Renewed Motion for Preliminary 10 Approval of the Class Action Settlement be GRANTED, subject to the following findings: 11 1. These findings and recommendations incorporate by reference the definitions in the 12 Settlement Agreement, and all terms defined therein shall have the same meaning as set forth in the 13 Settlement Agreement. 14 2. Plaintiff has filed a Third Amended Complaint to conform the pleadings with the scope 15 and definitions of the Settlement Agreement. (ECF No. 58-1.) Defendants shall not be required to answer 16 the Third Amended Complaint and will not be deemed to have waived any defenses thereto, including the 17 ability to compel some or all claims to individual arbitration. 18 3. Plaintiff alleges that Defendants subjected their hourly distribution center employees to 19 security checks resulting in deficient meal and rest periods and time that was not fully compensated. The 20 third amended complaint, filed on June 24, 2020, alleges that Defendants: (1) failed to pay for all hours 21 worked; (2) failed to pay overtime wages; (3) failed to provide meal and rest breaks in violation of the 22 California Labor Code and applicable wage order; (4) failed to provide paid vacation wages at the end of 23 employment in violation of the California Labor Code; (5) failed to provide accurate, itemized wage 24 statements in violation of the California Labor Code and applicable wage order; (6) failed to pay all wages 25 due at termination in violation of the California Labor Code; (7) engaged in unfair competition in violation 26 of California Business & Professions Code §§ 17200 et seq.; and (8) violated PAGA (i.e., California 27 Labor Code § 2698 et seq.). 28 4. For settlement purposes only, the Court recommends conditionally certifying the 1 settlement class as follows: 2 All CVS non-exempt employees who worked in California distribution centers 3 between January 16, 2015, and the earlier of (1) the Date of Preliminary Approval of this settlement, or (2) August 15, 2020 inclusive (the “Class Period”). 4 5 5. The Court finds that, for settlement purposes only, the settlement class meets the 6 requirements for certification under Rule 23 of the Federal Rules of Civil Procedure in that: (1) the 7 settlement class is ascertainable and so numerous that joinder of all members of the Settlement Class is 8 impracticable; (2) there are common questions of law and fact, and the questions of law and fact common 9 to the settlement class predominate; (3) Plaintiff’s claims are typical of the claims of the members of the 10 settlement class; (4) Plaintiff will fairly and adequately protect the interests of the members of the 11 settlement class; and (5) a class action is superior to other available methods for the efficient adjudication 12 of the controversy. 13 6. It appears to the Court on a preliminary basis that the Settlement Agreement, entered into 14 among the Parties and their counsel, is fair, adequate and reasonable. It further appears to the Court that 15 the Parties conducted extensive investigation and research, and that they were able to reasonably evaluate 16 their position and the strengths and weaknesses of the claims. The Parties have provided the Court with 17 enough information about the nature and magnitude of the claims being settled, as well as the impediments 18 to recovery, to make an independent assessment of the reasonableness of the terms to which the Parties 19 have agreed. 20 7. The Court also finds that settlement now will avoid additional and potentially substantial 21 litigation costs, as well as delay and risks if the Parties were to continue to litigate the Action. It further 22 appears that the Settlement has been reached as the result of intensive, serious, and non-collusive arms- 23 length negotiations, and was entered into in good faith. 24 8. The Court preliminarily finds that the Settlement, which provides for a Gross Settlement 25 Amount of $1,850,000 for approximately 3,405 current and former non-exempt distribution center 26 employees, appears to be within the range of reasonableness of a settlement that could ultimately be given 27 final approval by this Court. The Gross Settlement Amount includes all attorneys’ fees, litigation costs, 28 claims administration fees, and incentive payment to the Class Representative. The Court hereby 1 recommends that the Settlement Agreement be preliminarily approved, including all the terms and 2 conditions set forth therein and the Gross Settlement Amount and allocation of payments. 3 9. The rights of any potential dissenters to the proposed Settlement are adequately protected 4 in that they may exclude themselves from the Settlement and proceed with any alleged claims they may 5 have against Defendant, or they may object to the Settlement and appear before this Court. However, to 6 do so they must follow the procedures outlined in the Settlement Agreement and Class Notice. 7 10. The Court finds that the notice of settlement that Plaintiff provided to the LWDA satisfies 8 the notice requirements of the California Private Attorneys General Act. 9 11. The Court recommends approving as to form and content the proposed Class Notice 10 (“Notice”) to be distributed to Class Members. 11 12. For purposes of settlement only, the Court recommends appointing ILYM Group, LLC be 12 as the Settlement Administrator. The Court also recommends that the mailing, by First-Class U.S. mail, of 13 the Notices to Class Members be directed in accordance with the schedule set forth below and the other 14 procedures described in the Settlement Agreement. The Court finds that the method selected for 15 communicating the preliminary approval of the Settlement Agreement to Class Members is the best notice 16 practicable under the circumstances, constitutes due and sufficient notice to all persons entitled to notice, 17 and thereby satisfies due process. 18 13. For purposes of settlement only, the Court finds that Felix Perez is a suitable class 19 representative and recommends that he be appointed as the representative for the settlement class 20 conditionally certified by the order adopting these findings and recommendations. 21 14. For purposes of settlement only, the Court recommends appointing Bradley/Grombacher, 22 LLP as Class Counsel. The Court finds that counsel have demonstrable experience litigating, certifying, 23 and settling class actions, and will serve as adequate counsel for the class conditionally certified and 24 approved by the order adopting these findings and recommendations. 25 15. The Court recommends that the following dates govern for purposes of this Settlement: 26 27 28 1 Date Event 20 calendar days after the Court adopts the Last day for Defendant to produce the Settlement 2 findings and recommendations granting Employee Data to the Settlement Administrator. 3 preliminary approval of the Settlement Agreement 30 calendar days after the Court adopts the Last day for the Settlement Administrator to mail 4 findings and recommendations granting Notices to all Class Members. preliminary approval of the Settlement Agreement 5 45 calendar days after the Settlement Last day for Class Members to submit Requests Administrator mails the Notices for Exclusion or Objections to the Settlement. 6 January 29, 2021 Last day for Plaintiff to file the Motion for Final 7 Approval of Class Action Settlement and Motion for Attorneys’ Fees, Costs, and Class 8 Representative Enhancement Payments. February 26, 2021, at 9:00 AM in Courtroom 8 Hearing on Motion for Final Approval of Class 9 (BAM) before Magistrate Judge Barbara A. Action Settlement and Motion for Attorneys’ McAuliffe 10 Fees, Costs, and Class Representative Enhancement Payments. 11 12 As of the date this Order, all dates and deadlines associated with the Actions shall be stayed, other 13 than those pertaining to the administration of the Settlement of the Action. 14 16. The Court expressly reserves the right to continue or adjourn the final approval hearing without further notice to the Class Members. 15 These Findings and Recommendations will be submitted to the United States District 16 Judge assigned to the case, pursuant to the provisions of Title 28 U.S.C. § 636(b)(l). Within fourteen (14) 17 days after being served with these Findings and Recommendations, the parties may file written objections 18 with the Court. The document should be captioned “Objections to Magistrate Judge’s Findings and 19 Recommendations.” The parties are advised that failure to file objections within the specified time may 20 result in the waiver of the “right to challenge the magistrate’s factual findings” on appeal. Wilkerson v. 21 Wheeler, 772 F.3d 834, 839 (9th Cir. 2014) (citing Baxter v. Sullivan, 923 F.2d 1391, 1394 (9th Cir. 22 1991)). 23 IT IS SO ORDERED. 24 Dated: September 1, 2020 /s/ Barbara A. McAuliffe _ 25 UNITED STATES MAGISTRATE JUDGE 26 27 28