Paniani Taafua v. Quantum Global Technologies, LLC ( 2020 )

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 SAN JOSE DIVISION 7 8 PANIANI TAAFUA, Case No. 18-cv-06602-VKD 9 Plaintiff, ORDER GRANTING RENEWED 10 v. MOTION FOR PRELIMINARY APPROVAL OF CLASS SETTLEMENT 11 QUANTUM GLOBAL TECHNOLOGIES, LLC, Re: Dkt. No. 49 12 Defendant. 13 14 The Court previously denied preliminary approval of a proposed class action settlement 15 agreement in this case that contemplated a release of claims in return for a total payment of 16 $125,902. Dkt. No. 41. The parties subsequently agreed to an amended settlement that provides 17 for payment of $174,980 and a modified proposed distribution of those funds. Mr. Taafua now 18 renews his motion for preliminary approval of the settlement. Defendant Quantum Global 19 Technologies (“QGT”) has not opposed the motion, and the matter was deemed submitted without 20 oral argument. Dkt. No. 51. Based on the current record, the Court concludes that the new 21 settlement agreement is fair, reasonable, and adequate within the meaning of Rule 23(e)(2). 22 Accordingly, the motion for preliminary approval is granted. 23 I. BACKGROUND 24 Mr. Taafua filed this action for himself, and on behalf of a putative class, for alleged 25 violations of the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681b(b)(2)(A)(i)-(ii), based 26 on a disclosure form used by QGT, his former employer, that reportedly included an extraneous 27 liability waiver. Mr. Taafua claims that QGT required him, and all prospective employees, to sign 1 Contact HR to verify an applicant’s background and experience. Mr. Taafua contends that 2 because QGT’s form included a liability waiver, in addition to a disclosure concerning a consumer 3 report, QGT violated the FCRA’s stand-alone disclosure requirement, and as a result, QGT also 4 never received proper authorizations for any reports it obtained using its standard form. Mr. 5 Taafua further alleges that he “was confused by the standard disclosure and authorization form and 6 did not understand that [QGT] would be requesting a consumer report as defined in the FCRA.” 7 Dkt. No. 1 ¶ 10. He goes on to allege that “[n]onetheless, upon information and belief, [QGT] 8 then secured a consumer report from First Contact HR.” Id. 9 Several months after this Court held an initial case management conference, and before a 10 noticed hearing on QGT’s then-pending motion to transfer venue, the parties settled. The 11 settlement covered the period October 30, 2013 to December 31, 2018, on behalf of the following 12 class: 13 all individuals who applied for employment with and/or were employed by Defendant in the United States and were the subject of 14 a consumer report that was procured by Defendant or caused to be procured by Defendant through third-party consumer reporting 15 agency First Contact HR during the Class Period. 16 Dkt. No. 34-2, Section I.2. The proposed settlement was non-reversionary and essentially 17 contemplated a release of claims in return for a total payment of $125,902 (“Global Settlement 18 Fund”), from which $16,000 in estimated administrator expenses, $41,967.33 in attorney’s fees, 19 $3,000 in costs, and a $5,000 service award would be deducted before the remaining $59,934.67 20 was distributed to a class of 1,041 members based on an estimated 1,476 reports obtained during 21 the class period. Dkt. No. 34-2. An individual class member could be entitled to more or less 22 money depending on the number of reports that were obtained for that individual. The Court 23 found no issue with certain aspects of the settlement, including the class definition, the scope of 24 the release and the proposed cy pres award of unclaimed funds to the Education Fund of the 25 National Association of Consumer Advocates (“NACA”). Dkt. No. 41. Nevertheless, the Court 26 denied Mr. Taafua’s motion for preliminary approval of the settlement, concluding that he did not 27 demonstrate that Rule 23 class certification is warranted or that the proposed settlement was fair, 1 to account for QGT’s potential statute of limitations defense with respect to Mr. Taafua’s claims, 2 at the expense of approximately half of the putative class members who have no such issue. The 3 Court also expressed concern that the requested fees for Mr. Taafua’s counsel comprised over 4 33% of the total settlement, and thus exceeded the 25% benchmark used in the Ninth Circuit. 5 Further, the Court noted that Mr. Taafua had not provided sufficient support for the requested 6 $5,000 service award. Id. 7 The parties have now agreed to an amended settlement, and Mr. Taafua moves for 8 preliminary approval of the amended settlement terms. Dkt. No. 49. Several aspects of the 9 amended settlement are unchanged from the prior proposed agreement. The class definition, class 10 period, estimated class size, estimated number of procured consumer reports, and the scope of the 11 release remain the same. Perhaps most notably, the Global Settlement Fund has increased to 12 $174,980. With respect to the distribution of those funds, the estimated administrator costs 13 ($16,000) remain the same, as do the fees sought by Mr. Taafua’s counsel ($41,967.33), with the 14 result that the requested fees now amount to approximately 24% of the Global Settlement Fund. 15 Additionally, counsel’s requested costs have decreased to $2,200, and the service award sought for 16 Mr. Taafua has been lowered to $3,500. As for the remaining funds, $111,312.67 (“Net 17 Settlement Fund”), the amended settlement contemplates that 13% will be distributed to class 18 members whose claims fall outside the two-year statute of limitations period and 87% will be 19 distributed among those whose claims are unquestionably timely. An individual class member 20 may be entitled to more or less money depending on the number of reports that were obtained for 21 that individual and the period of time when the report(s) were procured. As with the prior 22 agreement, the amended settlement is non-reversionary, with any unclaimed funds to be given as a 23 cy pres award to NACA. Dkt. No. 49-3. 24 For the reasons discussed below, the Court grants Mr. Taafua’s motion for preliminary 25 approval of the settlement and orders that notice be given to the class. 26 II. LEGAL STANDARD 27 Court approval is required for the settlement of Rule 23 class actions. See Fed. R. Civ. P. 1 purposes of settlement—may be settled, voluntarily dismissed, or compromised only with the 2 court’s approval.”). The Ninth Circuit has declared that a strong judicial policy favors settlement 3 of Rule 23 class actions. Class Plaintiffs v. City of Seattle, 955 F.2d 1268, 1276 (9th Cir. 1992). 4 However, no broad presumption of fairness applies to such settlements. Roes v. SFBSC Mgmt., 5 LLC, 944 F.3d 1035, 1049 (9th Cir. 2019). And where the parties reach a settlement before class 6 certification, courts must “employ[] extra caution and more rigorous scrutiny,” id., and “peruse the 7 proposed compromise to ratify both the propriety of the certification and the fairness of the 8 settlement,” Staton v. Boeing Co., 327 F.3d 938, 952 (9th Cir. 2003); see also In re Bluetooth 9 Headset Products Liability Litig., 654 F.3d 935, 946 (9th Cir. 2011) (“Prior to formal class 10 certification, there is an even greater potential for a breach of fiduciary duty owed the class during 11 settlement. Accordingly, such agreements must withstand an even higher level of scrutiny for 12 evidence of collusion or other conflicts of interest than is ordinarily required under Rule 23(e) 13 before securing the court’s approval as fair.”). 14 First the Court must assess whether a class exists. Staton, 327 F.3d at 952. Second, the 15 Court must assess whether the proposed settlement is “fundamentally fair, adequate, and 16 reasonable,” considering “the settlement taken as a whole, rather than the individual component 17 parts, that must be examined.” Id. (internal quotations and citation omitted). 18 III. DISCUSSION 19 Mr. Taafua bears the burden of establishing, by a preponderance of the evidence, that class 20 certification is appropriate under Rule 23. Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350 21 (2011) (“A party seeking class certification must affirmatively demonstrate his compliance with 22 the Rule—that is, he must be prepared to prove that there are in fact sufficiently numerous parties, 23 common questions of law or fact, etc.”). Class certification under Rule 23 requires two steps. 24 First, Mr. Taafua must satisfy the four prerequisites under Rule 23(a), namely numerosity, 25 commonality, typicality and adequacy of representation. Id. at 349. Additionally, Mr. Taafua 26 must show that at least one of the bases for certification under Rule 23(b) is met. Amchem. 27 Prods., Inc. v. Windsor, 521 U.S. 591, 614 (1997). Mr. Taafua seeks certification under Rule 1 predominate over any questions affecting only individual members, and that a class action is 2 superior to other available methods for fairly and efficiently adjudicating the controversy.” Fed. 3 R. Civ. P. 23(b)(3). 4 1. Rule 23(a) Certification 5 a. Numerosity and Commonality 6 In its order on Mr. Taafua’s initial motion for preliminary approval of the settlement, the 7 Court found that the numerosity and commonality requirements were satisfied. Dkt. No. 41. The 8 Court finds no basis on the present motion to revisit its prior analysis and conclusion. 9 b. Typicality 10 Rule 23(a) requires that “the claims or defenses of the representative parties are typical of 11 the claims or defenses of the class.” Fed. R. Civ. P. 23(a)(3). “The purpose of the typicality 12 requirement is to assure that the interest of the named representative aligns with the interests of the 13 class,” and the “test of typicality is whether other members have the same or similar injury, 14 whether the action is based on conduct which is not unique to the named plaintiffs, and whether 15 other class members have been injured by the same course of conduct.” Hanon v. Dataproducts 16 Corp., 976 F.2d 497, 508 (9th Cir. 1992) (quotations and citations omitted). The typicality 17 requirement is satisfied where representative claims “are reasonably coextensive with those of 18 absent class members; they need not be substantially identical.” Staton, 327 F.3d at 957 (internal 19 quotations and citation omitted). However, “class certification is inappropriate where a putative 20 class representative is subject to unique defenses which threaten to become the focus of the 21 litigation.” Hanon, 976 F.2d at 508 (internal quotations and citation omitted). 22 While the Court may not “engage in free-ranging merits inquiries at the certification 23 stage,” merits questions may be considered to the extent “that they are relevant to determining 24 whether the Rule 23 prerequisites for class certification are satisfied.” Amgen Inc. v. Connecticut 25 Ret. Plans & Trust Funds, 568 U.S. 455, 466 (2013) (citing Dukes, 564 U.S. at 350-51 and n.6). 26 The Court previously found that Mr. Taafua’s claims are typical of the class insofar as QGT is 27 alleged to have procured one or more consumer reports for each putative class member, after 1 waiver. Dkt. No. 41 at 11. Nevertheless, the Court concluded that the typicality requirement was 2 not met in view of a potential statute of limitations defense affecting the claims of Mr. Taafua and 3 approximately half the class, but not those of the remaining putative class members. Id. at 11-14. 4 In his renewed motion for approval, Mr. Taafua notes that his overall theory is that due to 5 the presence of an extraneous liability waiver, he and putative class members did not understand 6 or were not aware that they were authorizing QGT to obtain a consumer report. See Syed v. M-I, 7 LLC, 853 F.3d 492, 502 (9th Cir. 2017) (“An authorization requiring the job applicant’s signature 8 focuses the applicant’s attention on the nature of the personal information the prospective 9 employer may obtain, and the employer’s inability to obtain that information without his consent. 10 But a liability waiver does just the opposite—it pulls the applicant’s attention away from his 11 privacy rights protected by the FCRA by calling his attention to the rights he must forego if he 12 signs the document.”). Moreover, as discussed above, the proposed modifications to distribution 13 of the settlement funds address the Court’s primary concerns and indicate that the settlement has 14 not been reached at the expense of class members with unquestionably timely claims. At this 15 time, the Court is satisfied that the typicality requirement for class certification is met. 16 c. Adequacy of Representation 17 For much the same reasons, the Court also concludes that the parties’ amended settlement 18 satisfies the requirement for adequacy of representation. Rule 23(a) requires that “the 19 representative parties will fairly and adequately protect the interests of the class.” Fed. R. Civ. P. 20 23(a)(4). In assessing this factor, the Court addresses two legal issues, i.e., whether Mr. Taafua 21 and his counsel (1) have any conflicts of interest with other class members, and (2) will prosecute 22 the action vigorously on behalf of the class. Staton, 327 F.3d at 957. 23 The Court previously found no reason to question the competence or experience of Mr. 24 Taafua’s counsel. Dkt. No. 41 at 15. On the record presented, the Court finds no basis to revisit 25 that conclusion. While the Court previously noted that, based on the potential statute of 26 limitations defense, the interests of the class as a whole may not have been sufficiently addressed 27 by the prior proposed settlement, the parties’ amended settlement amply addresses those concerns 1 his counsel can adequately represent the class. 2 2. Rule 23(b)(3) Certification 3 Mr. Taafua seeks to certify the proposed class under Rule 23(b)(3), which requires that 4 “the questions of law or fact common to class members predominate over any questions affecting 5 only individual members” and “that a class action is superior to other available methods for fairly 6 and efficiently adjudicating the controversy.” Fed. R. Civ. P. 23(b)(3). Having previously 7 concluded that the superiority requirement is satisfied (Dkt. No. 41 at 15-16), the Court finds no 8 reason on the record presented to revisit that conclusion. As for predominance, the Court 9 preliminarily finds that that requirement is also satisfied. As discussed above, Mr. Taafua 10 emphasizes that the overall theory of this case is that due to QGT’s allegedly unlawful disclosure 11 form, neither he nor any of the putative class members were aware that they were authorizing the 12 procurement of a consumer report. Additionally, the parties’ settlement now accounts for 13 difference in risks among the class members regarding the potential statute of limitations defense. 14 In sum, for purposes of settlement, the Court concludes that provisional certification of a 15 Rule 23 class is appropriate. 16 B. Preliminary Approval of Settlement 17 Courts employ a two-step process in evaluating class action settlements. First, if the 18 parties show “that the court will likely be able to . . . approve the proposal under Rule 23(e)(2),” 19 courts preliminarily approve the settlement and authorize notice to the class. Fed. R. Civ. P. 20 23(e)(1)(B)(i). Second, courts conduct a hearing to make a final determination whether a 21 settlement is “fair, reasonable, and adequate.” Fed. R. Civ. P. 23(e)(2). On Mr. Taafua’s present 22 motion, this Court must therefore make a preliminary determination that the settlement “is fair, 23 reasonable, and adequate” when considering the factors set out in Rule 23(e)(2). 24 In making that determination, district courts consider several factors, including: 25 the strength of the plaintiffs’ case; the risk, expense, complexity, and likely duration of further litigation; the risk of maintaining class 26 action status throughout the trial; the amount offered in settlement; the extent of discovery completed and the stage of the proceedings; 27 the experience and views of counsel; the presence of a governmental 1 Hanlon., 150 F.3d at 1026. The 2018 amendments to Rule 23 require the Court to consider a 2 similar list of factors before approving a settlement, including whether: 3 (A) the class representatives and class counsel have adequately represented the class; 4 (B) the proposal was negotiated at arm’s length; 5 (C) the relief provided for the class is adequate, taking into account: 6 (i) the costs, risks, and delay of trial and appeal; 7 (ii) the effectiveness of any proposed method of distributing 8 relief to the class, including the method of processing class- member claims; 9 (iii) the terms of any proposed award of attorney’s fees, 10 including timing of payment; and 11 (iv) any agreement required to be identified under Rule 23(e)(3); and 12 (D) the proposal treats class members equitably relative to each other. 13 14 Fed. R. Civ. P. 23(e)(2). This list of factors is not intended to displace any factors currently 15 considered by courts, “but rather to focus the court and the lawyers on the core concerns of 16 procedure and substance that should guide the decision whether to approve the proposal.” Fed. R. 17 Civ. P. 23(e) Advisory Comm. Note (2018). The overall purpose of Rule 23(e) is to ensure that 18 class representatives and their counsel do not obtain a disproportionate benefit at the expense of 19 the unnamed class members, who class counsel have a duty to represent. SFBSC Mgmt., LLC, 944 20 F.3d at 1049. 21 Within this framework, courts have preliminarily approved a Rule 23 class action 22 settlement and ordered notice to the class if the proposed settlement (1) appears to be the product 23 of serious, informed, non-collusive negotiations; (2) does not grant improper preferential treatment 24 to class representatives or other segments of the class; (3) falls within the range of possible 25 approval; and (4) has no obvious deficiencies. In re Tableware Antitrust Litig., 484 F. Supp. 2d 26 1078, 1079 (N.D. Cal. 2007); see also Nen Thio v. Genji, LLC, 14 F. Supp. 3d 1324, 1333 (N.D. 27 Cal. 2014). However, while “rigorous inquiry at the initial stage” should not “convert final review 1 more lax inquiry at the preliminary approval stage[.]” Cotter v. Lyft, Inc., 193 F.Supp.3d 1030, 2 1036 (N.D. Cal. 2016). 3 In determining whether a proposed settlement is fair, the Court must apply “an even higher 4 level of scrutiny for evidence of collusion or other conflicts of interest than is ordinarily required 5 under Rule 23(e).” In re Bluetooth, 654 F.3d at 946. Additionally, courts “must be particularly 6 vigilant not only for explicit collusion, but also for more subtle signs that class counsel have 7 allowed pursuit of their own self-interests and that of certain class members to infect the 8 negotiations.” Id. at 947. Such signs include (1) class counsel’s receipt of a disproportionate 9 distribution of the settlement, (2) a “clear sailing” agreement “providing for the payment of 10 attorneys’ fees separate and apart from class funds, which carries the potential of enabling a 11 defendant to pay class counsel excessive fees and costs in exchange for counsel accepting an 12 unfair settlement on behalf of the class”; and (3) an arrangement whereby fees that are not 13 awarded are reverted to the defendants, rather than added to the class fund. Id. 14 1. Strength of Mr. Taafua’s Case, Risks of Litigation and the Amount in Settlement 15 16 With respect to the first four Hanlon factors, in denying Mr. Taafua’s initial motion for 17 preliminary approval of the settlement, the Court’s main concern was that, in view of relatively 18 recent Ninth Circuit authority including Syed, Mr. Taafua had overstated certain risks of continued 19 litigation, and that the prior settlement took statute of limitations issues into account at the expense 20 of class members whose claims indisputably are timely. Relatedly, the Court noted that Mr. 21 Taafua’s prior estimates of an individual’s potential recovery were inflated and based on the 22 number of class members, rather than the number of reports procured as required by the parties’ 23 agreement. In sum, it appeared that the potential weakness of Mr. Taafua’s claims with respect to 24 the statute of limitations may have resulted in a smaller recovery for the class as a whole, even 25 though approximately half the class’s claims present no timing issues. Dkt. No. 41 at 19-21. 26 The parties’ amended settlement agreement adequately addresses the concerns expressed in 27 the Court’s prior ruling. The Global Settlement Fund has increased nearly $50,000, while 1 requested costs and seek fees no greater than those sought in the original settlement agreement, 2 and Mr. Taafua now seeks a lower service award. The result is an increased Net Settlement Fund 3 of $111,312.67 available for distribution to the class. 4 For a willful violation of the FCRA, a plaintiff may recover statutory damages of between 5 $100 and $1,000. 15 U.S.C. § 1681n. As discussed above, the proposed distribution now reflects 6 relative risks of the statute of limitations and differentiates between claims outside the two-year 7 limitations period and those that unquestionably are timely. To that end, the settlement proposes 8 that 87% of the Net Settlement Fund will be allocated to claims arising from consumer reports that 9 QGT procured or caused to be procured for class members from October 30, 2016 through 10 December 31, 2018. Based on the 777 reports estimated to have been pulled during this period, 11 recovery is expected to be approximately $124.64 per report. Thirteen percent of the Net 12 Settlement Fund will be allocated to claims arising from consumer reports that QGT procured or 13 caused to be procured from October 30, 2013 through October 29, 2016. Based on an estimated 14 699 reports obtained during this period, the estimated recovery is approximately $20.70 per 15 consumer report. Dkt. No. 49-3, Section III. ¶ 3. Mr. Taafua acknowledges that settlements in 16 similar cases are based on the number of settlement class members, rather than the number of 17 reports obtained, and he notes that sums from other cited cases focus on payments for two-year 18 FCRA classes. Even so, sums proposed by the parties’ amended settlement appear to be 19 comparable to awards approved in other cases concerning FCRA’s stand-alone disclosure 20 requirement. Dkt. Nos. 49-1, 50.1 Here, recovery for indisputably timely claims is expected to 21 exceed the $100 statutory minimum per report. While claims outside the two-year limitations 22 period will be paid below the statutory minimum, that discount appropriately reflects the risks of 23 proceeding in litigation with a potentially untimely claim See generally Schofield v. Delta Air 24 Lines, Inc., No. 18-cv-00382-EMC, 2019 WL 955288 (N.D. Cal. Feb. 27, 2019) (approving a 25 settlement with a proposed distribution of funds that differentiated between class members whose 26 claims were filed within the two-year limitations period and those whose claims were not). In any 27 1 event, “[t]he fact that a proposed settlement may only amount to a fraction of the potential 2 recovery does not, in and of itself, mean that the proposed settlement is grossly inadequate and 3 should be disapproved.” Linney v. Cellular Alaska P’ship, 151 F.3d 1234, 1242 (9th Cir. 1998) 4 (internal quotations and citation omitted). 5 Moreover, class members who participate in the settlement may avoid the costs and delays 6 of proceeding to a trial, and will not need to make a claim or do anything to receive a payment. If 7 the settlement is approved, QGT will deposit the settlement sums into a fund to be managed by 8 third-party claims administrator JND Legal Administration, which will mail settlement checks to 9 each participating class member. Dkt. No. 49-3. There will be no reversion to QGT. Considering 10 the potential risks and costs of proceeding to trial, as well as the relative ease with which class 11 members may receive their funds, at this stage the Court is satisfied that the settlement 12 consideration is adequate. 13 2. Stage of Proceedings and Settlement Negotiations 14 As noted in the Court’s order on Mr. Taafua’s prior motion for approval of settlement, the 15 Court finds no reason to conclude that the relatively quick settlement of this matter was due to 16 lack of vigorous representation. The facts underlying Mr. Taafua’s claims are straightforward. 17 Mr. Taafua’s counsel avers that the proposed settlement is the product of the parties’ arms-length 18 direct negotiations and “extensive discussions about their respective positions and the information 19 and data needed to properly evaluate the merits of the claims alleged.” Dkt. No. 49-2 ¶ 6. Both 20 sides in this matter are represented by experienced counsel, and there is no evidence suggesting 21 that Mr. Taafua was inadequately prepared for the settlement discussions. See Linney, 151 F.3d at 22 1239 (“In the context of class action settlements, ‘formal discovery is not a necessary ticket to the 23 bargaining table’ where the parties have sufficient information to make an informed decision 24 about settlement.”) (citation omitted). 25 3. Counsel’s Requested Fees 26 Because the proposed settlement was negotiated prior to formal class certification, “there is 27 an even greater potential for a breach of fiduciary duty owed the class during settlement.” In re 1 of scrutiny for evidence of collusion or other conflicts of interest than is ordinarily required under 2 Rule 23(e) before securing the court’s approval as fair.” Id. As noted above, courts consider 3 whether there are “subtle signs that class counsel have allowed pursuit of their own self-interests 4 and that of certain class members to infect the negotiations.” Id. at 947. Several such signs are: 5 (1) “when counsel receive a disproportionate distribution of the settlement, or when the class 6 receives no monetary distribution but class counsel are amply rewarded; (2) “when the parties 7 negotiate a ‘clear sailing’ arrangement providing for the payment of attorneys’ fees separate and 8 apart from class funds”; and (3) “when the parties arrange for fees not awarded to revert to 9 defendants rather than be added to the class fund.” Id. 10 The proposed amended settlement does not include a “clear sailing” agreement and is fully 11 non-reversionary with all unclaimed funds to be given as a cy pres award to NACA. Dkt. No. 49- 12 3. The Court previously expressed concerns about Mr. Taafua’s counsel’s request for fees of 13 33.33% of the total settlement, as well as their arguments favoring distribution as a percentage of 14 the common fund, rather than payment based on a lodestar method. However, as discussed above, 15 counsel’s requested fees of $41,967.33 are now less than 25% of the proposed total settlement, 16 and counsel avers that the requested sum is also below counsel’s current lodestar of $64,612. Dkt. 17 No. 49-2 ¶¶ 28-30. Although the Court need not, at this time, finally resolve the amount of any 18 fees to be awarded, on the record presented it is satisfied that Mr. Taafua’s requested fees and 19 costs do not warrant denying preliminary approval. 20 4. Experience and Views of Counsel 21 As noted above, the Court currently is satisfied that counsel meet the adequacy 22 requirement and finds no basis on the present record to question the competence of Mr. Taafua’s 23 counsel, who aver that they have considerable experience in consumer litigation and believe that 24 the proposed settlement is fair and reasonable. Dkt. No. 49-2 ¶ 31. 25 5. Presence of a Government Participant 26 A court may not grant final approval of a class action settlement until the Class Action 27 Fairness Act (“CAFA”) notice requirement is met. 28 U.S.C. § 1715(d) (“An order giving final 1 on which the appropriate Federal official and the appropriate State official are served with the 2 notice required under subsection (b).”). Here, Mr. Taafua’s motion indicates that QGT will have 3 provided the required CAFA notice no later than April 24, 2020. Dkt. No. 49 at 32 n.22. 4 6. Reaction of the Class Members to the Proposed Settlement 5 The class members’ reaction will be best addressed at the final approval hearing, by which 6 time the Court will have information regarding how many class members have opted out or object 7 to the proposed settlement. 8 7. Equitable Treatment of Class Members Relative to Others 9 In assessing whether “the proposal treats class members equitably relative to each other,” 10 Fed. R. Civ. P. 23(e)(2)(D), the Court considers whether the proposed settlement “improperly 11 grant[s] preferential treatment to class representatives or segments of the class . . . .” In re 12 Tableware Antitrust Litig., 484 F. Supp. 2d at 1079 (internal quotations and citation omitted). 13 a. Proposed Distribution 14 Under the proposed amended settlement, each class member who remains in the settlement 15 class will receive payment from the Net Settlement Fund based on the number of consumer reports 16 that QGT procured for that individual. Allocating the Net Settlement Fund on a pro rata basis in 17 this manner is equitable and fair. Additionally, for the reasons discussed above, the Court is 18 satisfied that the proposed greater allocation of funds for indisputably timely claims fairly reflects 19 the risks of statute of limitations issues. 20 b. Service Award 21 While service awards are permissible, they must also be reasonable. Staton, 327 F.3d at 22 977. Courts must evaluate such awards individually, using “relevant factors includ[ing] the 23 actions the plaintiff has taken to protect the interests of the class, the degree to which the class has 24 benefitted from those actions, . . . the amount of time and effort the plaintiff expended in pursuing 25 the litigation . . . and reasonabl[e] fear[s of] workplace retaliation.” Id. (internal quotations and 26 citation omitted). Courts in this district have recognized that a $5,000 service award, as a general 27 matter, is a reasonable amount. See Schofield, 2019 WL 955288 at *7. 1 service award does not, by itself, indicate that he failed to settle this matter in the best interests of 2 the entire class. Dkt. No. 41 at 23. Nevertheless, the Court found that he “provide[d] minimal 3 explanation, in conclusory fashion, for the requested award.” Id. at 24. On the present motion, 4 Mr. Taafua has not provided any additional justification for a service award, and his counsel 5 reiterates that he spent time compiling documents and meeting with his attorneys, and incurred 6 personal risks of potentially being responsible for QGT’s costs and having potential employment 7 adversely affected by his public prosecution of this action. Dkt. No. 49-2 ¶¶ 33-34. Additionally, 8 to the extent the amended settlement agreement suggests that the requested service award is also 9 meant to compensate Mr. Taafua for his execution of a general release (Dkt. No. 49-3, Section 10 III.8), that is not a purpose for which service awards are intended. See SFBSC Mgmt., LLC, 944 11 F.3d at 1046-47. Nevertheless, as noted above, Mr. Taafua now requests a smaller sum of $3,500. 12 While that sum is still subject to the Court’s final approval, at this time, Mr. Taafua’s requested 13 service award does not warrant denying preliminary approval inasmuch as it is within sums that 14 courts in this district consider reasonable. 15 8. Notice 16 As with the parties’ prior proposed settlement, the Court finds that the proposed notice of 17 settlement to be sent to class members “clearly and concisely state[s] in plain, easily understood 18 language” the nature of the action, the class definition, and the class members’ right to exclude 19 themselves from the class. Fed. R. Civ. P. 23(c)(2)(B). The Court previously requested 20 clarification whether the proposed notice procedures are fair and adequate in view of recent Ninth 21 Circuit authority. See SFBSC Mgmt., LLC, 944 F.3d at 1049. For present purposes, absent any 22 indication that class members will be difficult to reach by mail, and given that class members who 23 remain in the settlement class need not take any action to receive their allotted settlement funds, 24 the Court is satisfied that the parties’ proposed notice of settlement is adequate. 25 IV. CONCLUSION 26 Considering the risks, expense and delay Mr. Taafua and class members would face in 27 proceeding to trial, together with the value of all of the claims being released and the value of the 1 on the current record, is “fair, reasonable, and adequate” within the meaning of Rule 23(e)(2), 2 such that it is appropriate to send notice to the class. 3 V. ORDER 4 Based on the foregoing and the parties’ Amended Class Action Release and Settlement 5 Agreement (“Settlement Agreement”), the Court orders as follows: 6 1. For purposes of this Order, the Court adopts and incorporates all definitions set forth in 7 the Settlement Agreement unless a different definition is set forth in this Order. 8 2. The Court finds, preliminarily and for purposes of this settlement only, that the 9 requirements of Rule 23 of the Federal Rules of Civil Procedure and other laws and 10 rules applicable to preliminary settlement approval of class actions have been satisfied 11 in that: (a) the number of Settlement Class Members is so numerous that joinder of all 12 members of the Settlement Class is impracticable; (b) there are questions of law or fact 13 common to the Settlement Class Members that predominate over any individual 14 questions; (c) the claims of Mr. Taafua are typical of the claims of the Settlement 15 Class he seeks to represent; (d) Mr. Taafua fairly and adequately represents the 16 interests of the Settlement Class; and (e) a class action is superior to other available 17 methods for the fair and efficient adjudication of the Action. 18 3. The Court preliminarily approves the settlement of this Action as memorialized in the 19 Settlement Agreement, which is incorporated herein by this reference, subject to 20 further consideration at the Final Approval Hearing described below, and thus hereby: 21 a. Conditionally certifies, for purposes of implementing the Settlement 22 Agreement, the following settlement class: “All individuals who applied for 23 employment with and/or were employed by Quantum Global Technologies, 24 LLC in the United States and who were the subject of a consumer report that 25 was procured by Quantum Global or caused to be procured by Quantum Global 26 through third-party consumer reporting agency First Contact HR during the 27 Class Period of October 30, 2013 through December 31, 2018.” (the 1 b. Appoints Mr. Taafua as the representative of the Settlement Class. 2 c. Appoints Eric B. Kingsley and Kelsey M. Szamet of Kingsley & Kingsley APC 3 and Emil Davtyan of Davtyan Professional Law Corporation as attorneys for 4 the Settlement Class for purposes of settlement and finds for the purposes of 5 settlement that these attorneys are qualified to represent the Settlement Class. 6 4. The Court approves, as to form and content, the Settlement Agreement. The Court 7 finds that: (a) the Settlement Agreement resulted from good faith, arms-length 8 negotiations; and (b) the Settlement Agreement is sufficiently fair, just, reasonable, and 9 adequate to the Class Members to warrant providing notice of the settlement to Class 10 Members and holding a Final Approval Hearing. 11 5. The Final Approval Hearing shall be held on February 16, 2021, at 10:00 a.m. before 12 the Honorable Virginia K. DeMarchi, in Courtroom 2, 5th Floor, of the United States 13 District Court for the Northern District of California, located at the San Jose Federal 14 Courthouse, 280 South 1st Street, San Jose, California 95113.2 At that time, the Court 15 shall determine: (a) whether the proposed settlement of the Action on the terms and 16 conditions provided for in the Settlement Agreement is fair, just, reasonable, and 17 adequate and should be finally approved; (b) whether judgment as provided in the 18 Settlement Agreement should be entered herein; and (c) whether to approve the 19 proposed distribution formula as a fair and reasonable method to allocate the Net 20 Settlement Amount among the Settlement Class. The Court may continue or adjourn 21 the Final Approval Hearing without further notice to members of the Settlement Class. 22 6. The Court approves, as to form and content, the Notice of Class Action Settlement (the 23 Notice”) attached to the Settlement Agreement. The Court finds that distribution of the 24 Notice in the manner set forth in the Settlement Agreement constitutes the best notice 25 practicable and is valid, due, and sufficient notice to all members of the Settlement 26 Class, complying fully with the requirements of Rule 23 of the Federal Rules of Civil 27 1 Procedure, the Constitution of the United States, and any other applicable laws. 2 7. The Court approves the selection of JND Legal Administration to be the Settlement 3 Administrator. The Settlement Administrator will administer the applicable provisions 4 of the Settlement Agreement, including, but not limited to, mailing the Notice to each 5 class member and distributing settlement payments to Settlement Class Members as 6 specifically set forth in the Settlement Agreement. 7 8. The Procedures set forth in the Settlement Agreement to “Opt Out” and Object are fair 8 and reasonable, as are the deadlines set forth. 9 9. All Settlement Class Members shall be bound by all determinations and judgments in 10 this Action concerning the settlement, unless such person requests exclusion from the 11 Settlement Class in a timely manner and in accordance with the terms of the Settlement 12 Agreement. 13 10. All papers in support of final approval of the Settlement Agreement and the application 14 for attorneys’ fees or expenses shall be filed and served no later than thirty-five (35) 15 calendar days prior to the Final Approval Hearing. 16 11. Defendant, its counsel, and the Released Parties shall have no responsibility or liability 17 with respect to any application for attorneys’ fees or expenses submitted by Class 18 Counsel or for a service award to Mr. Taafua, and the Court’s determination as to the 19 fees (if any) to be awarded will not be a basis for nullification of the settlement. 20 12. Neither the Settlement Agreement, nor any of its terms or provisions, nor any of the 21 negotiations or proceedings connected with it, shall be construed as an admission or 22 concession by Defendant or any of the Released Parties of the truth of any of the 23 allegations in the Action, or of any liability, fault, or wrongdoing of any kind. Further, 24 neither the Settlement Agreement, nor any of its terms or provisions, nor any of the 25 negotiations or proceedings connected with it, nor this Order shall be construed as an 26 admission or concession by Mr. Taafua of the validity of any factual or legal defense or 27 of any infirmity in any of the claims or facts alleged in this Action. 1 Agreement. In such event, or in the event the settlement does not become effective in 2 accordance with the terms of the Settlement Agreement or the Effective Date does not 3 occur, then the Settlement Agreement shall be rendered null and void, of no further 4 force or effect, and without prejudice to any party, and may not be introduced as 5 evidence or used in any action or proceeding by any person against the Parties or the 6 Releasees, and each shall be restored to his, her, or its respective litigation positions as 7 they existed prior to the execution of the Settlement Agreement. 8 14. Pending final determination of whether the settlement should be approved, all 9 Settlement Class Members and each of them, and anyone acting or purporting to act for 10 any of them, shall be enjoined from prosecuting, attempting to prosecute, or assisting 11 in the prosecution of, any settled claims, as set forth in the Settlement Agreement. In 12 addition, all previously scheduled deadlines and appearances, including the final 5 13 pretrial conference and trial, are vacated. 14 15. The Court reserves the right to adjourn the date of the Final Approval Hearing and any 3 15 adjournment thereof without further notice to the members of the Settlement Class, and 16 retains jurisdiction to consider all further applications arising out of or connected with 3 17 the Settlement Agreement. The Court may approve the settlement, with such 18 modifications as may be agreed to by the Parties, if appropriate, without further notice 19 to the Settlement Class Members. 20 IT IS SO ORDERED. 21 Dated: August 14, 2020 22 VIRGINIA K. DEMARCH United States Magistrate Judge 25 26 27 28