Pataky v. Brigantine, Inc., Case No.: 17-cv-00352-GPC-AGS
| Decision Date | 18 June 2018 |
| Docket Number | Case No.: 17-cv-00352-GPC-AGS |
| Parties | NEAL PATAKY, JESSICA CLEEK, and LAUREN MICHELSON, individually, and on behalf of others similarly situated,, Plaintiffs, v. THE BRIGANTINE, INC., a California corporation, Defendant. |
| Court | U.S. District Court — Southern District of California |
ORDER GRANTING PRELIMINARY APPROVAL OF CLASS SETTLEMENT
Pending before the Court is Plaintiffs' Motion for Preliminary Approval of Settlement. Dkt. No. 78. On May 25, 2018, this Court held a hearing on this motion and requested that plaintiff file supplemental briefing regarding its concerns on publication notice and the overall reach percentage of the class. Dkt. No. 82. On June 15, 2018, Plaintiffs filed the Declaration of Timothy G. Williams in response to the Court's concerns. Dkt. No. 83. Williams asserted that the proposed class administrator informed him that current mailing addresses could be obtained for all class members through the use of the former employee's social security number, which Brigantine had been required to obtain and retain under state and federal law. Id. Accordingly, the Court is satisfied that the settlement now provides adequate reach and notice to the class. Consequently, having considered the briefing, the argument of counsel, and counsel's supplemental declaration the Court will GRANT Plaintiff's Motion for Preliminary Approval of Settlement. Dkt. No. 83.
This case is involves a wage-and-hour class action. On February 22, 2017, Plaintiffs Neal Pataky, Jessica Cleek, and Lauren Michelson filed a Complaint alleging that they and other servers were paid tips from Brigantine's customers, but that Brigantine imposed a mandatory "tip pooling" policy in all restaurants dating back a decade, requiring servers to "tip out" to other employees, including those that did not provide direct table service in violation of Federal and California law. Reynolds Decl. ¶ 8.
The Brigantine Corporation, Inc. ("Defendant") owns at least a dozen restaurants throughout San Diego County, including Brigantine Seafood and Miguel's Cocina, each of which have multiple locations. Reynolds Decl. ¶ 6. Defendant currently has over 1,000 team members. Id. Between 2005-2016, Brigantine employed Neal Pataky in various roles including dining room server, bartender, and as a member of the wait staff. Brigantine employed Plaintiff Jessica Cleek and Lauren Michelson as a cocktail server and wait staff member between 2013-2016. Id. ¶ 7. Plaintiffs allege that Defendant violated the Fair Labor Standards Act ("FLSA") prohibition against forcing employees to share tips with employees who do not provide direct table service to customers in places where the kitchen staff does not customarily and regularly receive tips. Oregon Restaurant and Lodging Ass'n v. Perez, 816 F.3d 1080, 1090 (9th Cir. 2016). Plaintiffs further allege that this violation is a predicate violation of the California Business & Professions Code, section 17200, et seq. ("Unfair Competition Law" or "UCL").
On March 24, 2017, Plaintiffs filed a motion seeking an order under 29 U.S.C. section 216(b) to "conditionally certify" an FLSA Collective Class Action. Dkt. No. 12. The Court granted Plaintiffs' motion to certify the FLSA class as to:
All current or former employees of The Brigantine, Inc. who have worked on and after February 22, 2014 as "servers" including but not limited to under job titles of food servers, cocktail lounge servers, dining room servers, and bartenders. Notices were sent to over 900 potential class members and over 120 individuals joined the FLSA case.
Reynolds Decl. ¶ 10. Notices were sent to over 900 potential class members in 2017 and to date over 120 individuals joined the FLSA case as FLSA class members. Id. Following that Order, Plaintiffs were preparing to file a class certification motion for the FRCP Rule 23 opt out class when this settlement was obtained. Reynolds Decl. ¶ 11.
Plaintiffs and Defendants negotiated a proposed settlement that will benefit approximately 800 Settlement Class members with monetary payments wherein Defendant will pay $550,000 without refund or reversion to the Settlement Class.
The Settlement Agreement contemplates that Defendant will pay certain compensation to settle the claims of Plaintiffs and all other servers within the class period and includes (1) all members of the FLSA Collective Action who have filed Consent to Join forms and (2) all other servers within the scope of the potential Rule 23 Class Action defined as:
All current or former employees of The Brigantine, Inc. who have worked anytime between February 22, 2013 and April 30, 2017 as "servers," including but not limited to under job titles of food servers, cocktail lounge servers, dining room servers, and bartenders.
The Monetary Compensation consists of $550,000 without refund or reversion. The Settlement Amount is inclusive and in satisfaction of all requests for relief andpayments to Plaintiffs and the Settlement Class arising from and related to this case including all claims for damages, interest, attorneys' fees, etc. Ex. 1 at 14.
The Ninth Circuit maintains a "strong" judicial policy favoring the settlement of class actions. Class Plaintiffs v. City of Seattle, 955 F.2d 1268, 1276 (9th Cir. 1992). The policy of the federal courts is to encourage settlement before trial. Franklin v. Kaypro Corp., 884 F.2d 1222, 1225 (9th Cir. 1989). Federal Rule of Civil Procedure 23(e) first "require[s] the district court to determine whether a proposed settlement is fundamentally fair, adequate, and reasonable." In re Mego Fin. Corp. Sec. Litig., 213 F.3d 454, 458 (9th Cir. 2000) (citing Hanlon v. Chrysler Corp., 150 F.3d 1011, 1026 (9th Cir. 1998)). To grant preliminary approval of a class action settlement, a court need only find that the settlement is within "the range of reasonableness" to justify publishing and sending notice of the settlement to class members and the scheduling of a final approval hearing. In re Tableware Antitrust Litig., 484 F. Supp. 2d. 1078, 1079-80 (N.D. Cal. 2007). Because class members will subsequently receive notice and have an opportunity to be heard on the settlement, this Court need not review the settlement in detail at this juncture. In re M.L. Stern Overtime Litig., No. 07-CV-0118-BTM JMA, 2009 WL 995864, at *3 (S.D. Cal. Apr. 13, 2009).
After review of the proposed settlement, the Court determines that there is adequate reason to provide notice to class members of the proposed settlement and to schedule a fairness hearing.
The Court must make a determination of whether the class-action settlement is "fair, reasonable, and adequate" pursuant to Rule 23(e)(1)(C). "It is the settlement taken as a whole, rather than the individual component parts, that must be examined for overall fairness." Hanlon, 150 F.3d at 1026. The Court evaluates whether "(1) the proposedsettlement appears to be the product of serious, informed, non-collusive negotiations; (2) has no obvious deficiencies; (3) does not improperly grant preferential treatment to class representatives or segments of the class; and (4) falls within the range of possible approval. Dilts v. Penske Logistics, LLC, No. 08-cv-318-CAB-BLM, 2014 WL 12515159, at *2 (S.D. Cal. July 11, 2014).
A settlement is presumed to be fair if reached in arms-length negotiations after relevant discovery has taken place. Cohorst v. BRE Prop., Inc., 2011 WL 7061923, *12 (S.D. Cal. Nov. 14, 2011) (citing In re Immune Response Sec. Litig., 497 F. Supp. 1166, 1171 (S.D. Cal. 2007). Here, the settlement resulted after Defendant produced discovery responses and class data relating to wage and hour issues. Reynolds Decl. ¶ 12. The parties reached a settlement after extensive negotiations with the assistance of the Honorable Magistrate Judge Schopler's "mediator's proposal." Id. ¶ 12. In particular, the Court takes note that the parties entered into the agreement only after a second Early Neutral Evaluation. See Reynolds Decl. ¶ 12. Consequently, this factor weighs strongly in favor of approval.
The Court concludes that there are no obvious deficiencies to the settlement finding that the settlement appears to offer Settlement Class members a substantial portion of the tip income they were deprived of during their employment. The settlement appears to be a compromise between the strengths and weaknesses of plaintiff's case. Plaintiffs alleged that Brigantine faced possible liability between $500,000 to $520,000 in the case, as well as Attorneys' fees and costs that are recoverable under the FLSA. Plaintiffs, however, faced significant risk including a pending petition for a writ of certiorari before the Supreme Court to review the Ninth Circuit's decision in Oregon Restaurant and Lodging Ass'n v. Perez, 843 F.3d 355 (9th Cir. 2016). Furthermore, theDepartment of Labor has indicated that it may revisit the tip pool issue at the core of this case. Furthermore, Plaintiffs' also assert that the issue of whether plaintiffs' claims must be subject to arbitration remains unsettled. These uncertainties create risk for plaintiffs which weighs in favor of preliminary approval of this settlement.
The proposed settlement does not appear to provide preferential treatment to Plaintiffs or any segment of the Settlement Class. Defendant has provided Plaintiffs' counsel with a spreadsheet that it contends shows all tips its managers collected from servers and re-distributed to kitchen staff from January 1, 2013 through April 30, 2017 totaling $529,956.34.2 Reynolds Decl. ¶ 13. Defendant has also provided Plaintiffs' counsel with spreadsheet data that includes all tip money reported by each individual server within the class period. Reynolds Decl. ¶ 14. With this information which includes each individual server's reported...
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