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Matthew Ripley, et al v. Sunoco

June 26, 2012

MATTHEW RIPLEY, ET AL.,
PLAINTIFFS,
v.
SUNOCO, INC., ET AL., DEFENDANTS.



The opinion of the court was delivered by: Eduardo C. Robreno, J.

MEMORANDUM

TABLE OF CONTENTS

I. BACKGROUND................................................2 II. LEGAL STANDARD............................................4 III. DISCUSSION................................................5 A. Class Certification..................................5 1. Rule 23(a)'s Requirements.......................8 a. Numerosity.................................9 b. Commonality................................9 c. Typicality................................12 d. Adequacy of Representation................13 2. Rule 23(b)'s Requirements......................14 B. Fairness............................................17 1. Terms of the Settlement Agreement..............19 2. Analysis of the Settlement Agreement...........22 a. The complexity and duration of the litigation................................22 b. The reaction of the class to the settlement................................23 c. The stage of the proceedings and amount of discovery completed.......................23 d. The risks of establishing liability and risks of establishing damages.............25 e. The risks of maintaining a class action...27 f. The ability of Defendant to withstand a 1 greater judgment..........................28 g. The range of reasonableness of the settlement in light of the best recovery, and the range of reasonableness of the settlement in light of all the attendant risks of litigation.......................28 h. The relevant Prudential factor - approval of attorneys' fees...........................29 i. The size of the fund created and the number of persons benefitted.........30 ii. The presence or absence of substantial objections by members of the class to the settlement terms and/or fees requested by counsel.................31 iii. The skill and efficiency of the attorneys involved...................32 iv. The complexity and duration of the litigation...........................33 v. The risk of nonpayment...............33 vi. The amount of time devoted to the case by plaintiffs' counsel...............34 vii. The awards in similar cases..........34 viii.Lodestar check.......................35 C. Objection to the Settlement.........................36 D. Approval of Payment to Claims Administrator.........39 E. Approval of Reversionary Interest Beneficiary.......39 V. CONCLUSION...............................................40

I.BACKGROUND

Plaintiffs Matthew Ripley, Richard Sim, Joseph Grosse, Anne Minor, Michael Olsen, Gabriel Schwartz, Bradford Takacs, and James Savage ("Plaintiffs") commenced this action on behalf of themselves and all other similarly situated individuals against Sunoco, Inc. ("Defendant").*fn1 Plaintiffs are eight current or former operations and maintenance employees employed at Sunoco's Philadelphia, Pennsylvania refinery, located at 3144 West Passyunk Avenue (the "Refinery"). Plaintiffs aver that Defendant failed to pay them for overtime wages when they worked over forty hours per week. Plaintiffs seek to represent a putative class of present and former operations and maintenance employees at the Refinery during a class period commencing on February 24, 2007.

Following pre-class certification discovery, and after much negotiation and two settlement conferences with Magistrate Judge Thomas Rueter, the parties reached a settlement agreement in November 2011 for a total of $675,000, inclusive of attorneys' fees and costs. Thereafter, Plaintiffs filed a motion for preliminary class certification and approval of the settlement. ECF No. 39. The Court held a status and scheduling conference to discuss this preliminary approval of settlement. At this conference, the Court required Plaintiffs to include various dates and settlement amounts in their preliminary notice. Plaintiffs complied with this request, and the Court preliminarily certified the class and approved the settlement on December 15, 2011. ECF No. 43. The Court also ordered notice sent to proposed class members. ECF No. 44. The Court received one objection to the settlement agreement that argued the proposed attorneys' fees of $222,750 were excessive, and that the claimed recovery was not reasonable. Plaintiffs recently submitted a motion for final certification and settlement approval. ECF No. 52. The Court held oral argument. The matter is now ripe for disposition.

II.LEGAL STANDARD

Class action settlements must be approved by the Court. See Fed. R. Civ. P. 23(e) ("The claims, issues, or defenses of a certified class may be settled . . . only with the court's approval."). At the threshold, the court must determine that certification of the proposed settlement class is appropriate under Rules 23(a) and (b) because "[f]ederal courts . . . lack authority to substitute for Rule 23's certification criteria a standard never adopted - that if a settlement is 'fair,' then certification is proper." Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 622 (1997); see In re Cmty. Bank of N. Va., 418 F.3d 277, 299 (3d Cir. 2005) ("[T]he ultimate inquiry into the fairness of the settlement under [Federal Rule of Civil Procedure] 23(e) does not relieve the court of its responsibility to evaluate Rule 23(a) and (b) considerations."). In addition, the Court will consider whether the Settlement Agreement is fair, reasonable, and adequate. The purpose of this inquiry is "to protect the unnamed members of the class from unjust or unfair settlements." Ehrheart v. Verizon Wireless, 609 F.3d 590, 593 (3d Cir. 2010). In making this determination, the Court acts as a "fiduciary, guarding the claims and rights of the absent class members." Id.

III.DISCUSSION

Plaintiffs move for final approval of the class action settlement. In accordance with the standard of review, the Court must determine (1) that certification of the proposed class is appropriate and (2) that the settlement "is fair, reasonable, and adequate." Fed. R. Civ. P. 23(e).

A. Class Certification

Before turning to the fairness of the proposed settlement, the Court must determine that certification of the proposed settlement class is appropriate under Rules 23(a) and (b).*fn2 To do so, Plaintiffs must satisfy all of the requirements of Rule 23(a) and the requirements of one of the subsections of Rule 23(b). See Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 2548 (2011); In re Prudential Ins. Co. Am. Sales Practice Litig. Agent Actions, 148 F.3d 283, 309 (3d Cir. 1998).

"Rule 23 does not set forth a mere pleading standard," but instead "[a] party seeking class certification must affirmatively demonstrate his compliance with the Rule - that is, he must be prepared to prove that there are in fact sufficiently numerous parties, common questions of law or fact, etc." Dukes, 131 S. Ct. at 2551. The Supreme Court has repeatedly "recognized . . . that 'sometimes it may be necessary for the court to probe behind the pleadings before coming to rest on the certification question,' and that certification is proper only if 'the trial court is satisfied, after a rigorous analysis, that the prerequisites of Rule 23(a) have been satisfied.'" Id. at 2551 (quoting Gen. Tele. Co. of Sw. v. Falcon, 457 U.S. 147, 160-61 (1982)) (citation omitted). Indeed, even before Dukes, the Third Circuit recognized that in keeping with Rule 23(e)'s policy to protect unnamed class members, the Supreme Court has instructed that the court should be particularly vigilant in determining whether to certify a class for settlement with respect to those class certification rules in Rule 23(a) and (b) that are "designed to protect absentees by blocking unwarranted or overbroad class definitions." Prudential, 148 F.3d at 308.

The Supreme Court has also recognized that "[f]requently, th[is] 'rigorous analysis' will entail some overlap with the merits of the plaintiff's underlying claim. Th[is] cannot be helped.'" Dukes, 131 S. Ct. at 2551 (quoting Falcon, 457 U.S. at 160). Indeed, "'class determination generally involves considerations that are enmeshed in the factual and legal issues comprising the plaintiff's cause of action.'" Dukes, 131 S. Ct. at 2552 (quoting Falcon, 457 U.S. at 160).

It is with this guidance that the Court evaluates whether the proposed class in this case meets the requirements under Rule 23(a) and (b) to establish a class. In this regard, Plaintiffs seek final certification of the following class: "All current and former operations and laboratory employees employed by Defendant at its Philadelphia Refinery at any time from February 24, 2007 through the present." Joint Stipulation of Settlement and Release ¶ 3, Pls.' Mot. for Preliminary Approval of Settlement Ex. 1, ECF No 39-1.

1. Rule 23(a)'s requirements

Rule 23(a) requires: (1) numerosity; (2) commonality; (3) typicality; and (4) adequacy of representation to certify a class. See Fed. R. Civ. P. 23(a).*fn3

a. Numerosity

To numerosity, Rule 23(a) requires that the class be "so numerous that joinder of all members is impracticable."

Fed. R. Civ. P. 23(a)(1). In this case, the class includes over 485 individuals. While there is no set minimum, if the potential class is greater than forty, the numerosity requirement is generally met. See Stewart v. Abraham, 275 F.3d 220, 226-27 (3d Cir. 2001) (finding that numerosity requirement will generally be satisfied "if the named plaintiff demonstrates that the potential number of plaintiffs exceeds 40."); Eisenberg v. Gagnon, 766 F.2d 770, 785-86 (3d Cir. 1985) (class of 90). Thus, numerosity is met here.

b. Commonality

Commonality "requir[es] a plaintiff to show that 'there are questions of law or fact common to the class.'"

Dukes, 131 S. Ct. at 2550-51 (quoting Fed. R. Civ. P. 23(a)(2)). Before Dukes, courts believed that "the commonality standard of Rule 23(a)(2) [was] not a high bar." Chiang v. Veneman, 385 F.3d 256, 265 (3d Cir. 2004) (finding "the commonality standard of Rule 23(a)(2) is not a high bar: it does not require identical claims or facts among class members, as 'the commonality requirement will be satisfied if the named plaintiffs share at least one question of law or fact with the grievances of the prospective class'" (quoting Johnston v. HBO Film Mgmt., 265 F.3d 178, 184 (3d Cir. 2001))).

However, the Supreme Court, in Dukes, clarified this standard:

Th[e] language [of Rule 23(a)'s commonality requirement] is easy to misread, since any competently crafted class complaint literally raises common questions. For example: Do all of us plaintiffs indeed work for Wal-Mart? Do our managers have discretion over pay? Is that an unlawful employment practice? What remedies should we get? Reciting these questions is not sufficient to obtain class certification. Commonality requires the plaintiff to demonstrate that the class members have suffered the same injury. This does not mean merely that they have all suffered a violation of the same provision of law. Title VII, for example, can be violated in many ways - by intentional discrimination, or by hiring and promotion criteria that result in disparate impact, and by the use of these practices on the part of many different superiors in a single company. Quite obviously, the mere claim by employees of the same company that they have suffered a Title VII injury, or even a disparate-impact Title VII injury, gives no cause to believe that all their claims can productively be litigated at once. Their claims must depend upon a common contention - for example, the assertion of discriminatory bias on the part of the same supervisor. That common contention, moreover, must be of such a nature that it is capable of classwide resolution - which means that determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke. What matters to class certification . . . is not the raising of common questions - even in droves - but, rather the capacity of a classwide proceeding to generate common answers apt to drive the resolution of the litigation. Dissimilarities within the proposed class are what have the potential to impede the generation of common answers.

Dukes, 131 S. Ct. at 2551 (citations omitted) (internal quotation marks omitted).

In this case, the commonality requirement is met. Here, while each Plaintiff's recovery might be different due to the number of hours that he or she worked without proper compensation, the wrong was from Defendant's alleged common timekeeping and payroll policies that precluded proper compensation for overtime work.

To be sure, there were several possible theories upon which Plaintiffs sought recovery. Plaintiffs sought compensation for the following work: clearing a security checkpoint at the beginning of each shift; engaging in off-site and off-the-clock work while "on-call," donning and doffing personal protective equipment, obtaining and storing work tools, traveling to and from assigned work sites, preparing and cleaning work equipment, and engaging in shift-change briefings with co-workers. While it is unclear if each instance of this alleged uncompensated work affected every Plaintiff in the class, this does not run afoul of Dukes. As the Seventh Circuit recently noted in a Fair Labor Standards Act case, while "there might be slight variations in how [the defendant] enforced its overtime policy, both classes maintain a common claim that [the defendant] broadly enforced an unlawful policy denying employees earned overtime compensation. This unofficial policy is the common answer that potentially drives the resolution of this litigation." Ross v. RBS Citizens, N.A., 667 F.3d 900, 909 (7th Cir. 2012). Accordingly, the "common answer" in this case would be whether Defendant had such policies that prevented payment for overtime work, and if it did, then Plaintiffs had the potential to recover. Commonality is met here.

c. Typicality

In determining typicality, the third 23(a) requirement, the Court must examine whether "the named plaintiff's individual circumstances are markedly different or . . . the legal theory upon which the claims are based differs from that upon which the claims of other class members will perforce be based." Eisenberg, 766 F.2d at 786. Typicality permits "the court to assess whether the class representatives themselves present those common issues of law and fact that justify class treatment." Id. As is often the case, the typicality requirement in Rule 23(a) is likely satisfied for the same reasons the commonality requirement is satisfied. See Community Bank, 418 F.3d at 303 ("'The concepts of commonality and typicality are broadly defined and tend to merge.'" (quoting Baby Neil ex rel. Kanter v. Casey, 43 F.3d 48, 56 (3d Cir. 1994))). Accordingly, for the same reasons expressed above, Plaintiffs meet the typicality requirement.

d. Adequacy of Representation

The adequacy requirement "encompasses two distinct inquiries designed to protect the interests of absentee class members: 'it considers whether the named plaintiffs' interests are sufficiently aligned with the absentees', and it tests the qualifications of the counsel to represent the class.'" Community Bank, 418 F.3d at 303 (quoting In re Gen. Motors Corp. Pick-Up Truck Fuel Tank Prods. Liab. Litig., 55 F.3d 768, 800 (3d Cir. 1995)).*fn4 Here, the named Plaintiffs' interests are aligned with the class as both seek to prove that Defendant's payroll policies and procedures prevent the payment of proper overtime wages. Also, class counsel have extensive ...


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