Galvan v. First Student Management, LLC
- Jon Tigar
- 4:18-cv-07378
- U.S. District Court · Northern District of California
- 17
In Galvan v. First Student Management, LLC, Judge Tigar denied preliminary approval of a proposed class settlement because certification and settlement-support deficiencies remained.
The proposed Driver and Non-Driver settlement classes, the named plaintiffs and proposed class counsel, and the defendants; the proposed settlement was not approved.
What happened
In Galvan v. First Student Management, LLC, employees alleged that transportation companies violated California wage-and-hour laws involving meal periods, rest breaks, overtime, wages, expenses, wage statements, and final pay.
The plaintiffs proposed a $3.5 million settlement for driver and non-driver groups, including a separate $250,000 payment for claims brought on behalf of California. The defendants did not oppose the request.
Judge Jon S. Tigar denied the motion for provisional certification of the settlement classes and preliminary approval of the settlement. He found that the plaintiffs had not addressed earlier problems with class certification, had not shown that their counsel adequately represented the class, had not provided a reliable estimate of the defendants’ potential liability, and had proposed an allocation formula that could treat class members inequitably.
The detailed version
- Galvan v. First Student Management, LLC · No. 4:18-cv-07378
- Jon Tigar
- Aug. 16, 2024
Background
The plaintiffs were bus drivers who worked for the defendants at various times between 2001 and 2021. The consolidated complaint alleged violations of the California Labor Code and Business and Professions Code, including failure to provide meal periods and rest breaks, failure to pay related premium wages, failure to pay minimum wages, overtime, and double-time wages, failure to reimburse business expenses, inaccurate wage statements, and failure to pay final wages on time.
The plaintiffs had previously moved for class certification. The court denied that motion after finding that individualized questions about employees’ experiences would overshadow common issues. The court also found that the plaintiffs’ expert report did not provide a reliable representative sample and that employee declarations showed differing experiences rather than a uniform unofficial policy.
Proposed Settlement
The plaintiffs sought provisional certification of two settlement subclasses: a Driver Class covering non-exempt drivers in California during the period from November 6, 2014, through November 8, 2023, and a Non-Driver Class covering other non-exempt employees in California during the period from August 1, 2019, through November 8, 2023.
The proposed settlement required the defendants to pay a maximum settlement amount of $3,500,000. The estimated amount available for participating class members after specified deductions was $1,940,761.05. The proposed allocation would give 90% of that amount to the Driver Class and 10% to the Non-Driver Class, with individual payments based primarily on weeks worked. The parties also proposed a $250,000 settlement of claims brought on behalf of California under the Private Attorneys General Act, with $187,500 going to the California Labor and Workforce Development Agency and $62,500 distributed among affected individuals.
Reasons for Denial
The court denied the motion for provisional certification because the plaintiffs had not supplied new evidence or analysis addressing the earlier finding that individualized issues prevented common questions from predominating. The court stated that the record had not materially changed, apart from the defendants’ decision not to oppose certification.
The court also found that proposed class counsel were inadequate under Federal Rule of Civil Procedure 23. Counsel had not conducted the fact and expert discovery needed to support certification, presented the same deficient record in the settlement motion, incorrectly stated that the case had previously been certified, and apparently had not obtained a class list from the defendants.
The court identified additional problems with the settlement terms. The plaintiffs’ estimate of the defendants’ maximum potential exposure relied on unsupported assumptions, including a $10 hourly wage, an estimated number of workweeks, and a 10% violation rate. The court found that the defendants’ records were incomplete and inadequate, making the estimates unreliable. The plaintiffs also included the $250,000 PAGA payment when calculating the percentage recovered on the class claims, and they reduced some maximum-exposure estimates based on anticipated defenses rather than presenting the best estimate of maximum liability.
The court further found that the plaintiffs had not estimated the maximum possible recovery for the PAGA claims or explained whether the California Labor and Workforce Development Agency had responded to the proposed settlement. Finally, the proposed allocation formula did not distinguish between current and former employees for a final-wages claim that could be brought only by separated or terminated employees. The formula also treated a person who worked 60 hours in a week the same as a person who worked one hour for purposes of counting that week.
Disposition
The court denied the plaintiffs’ motion for provisional certification of the settlement class and preliminary approval of the proposed settlement. The opinion did not approve the settlement or decide the underlying wage claims on their merits.
Read the full 17-page opinion on CourtListener, the free public archive maintained by the Free Law Project.