Galvan v. First Student Management

Background

Plaintiffs Barbara Galvan, Spynsir Tucker, and Germaine Scott worked for Defendants First Student Management, LLC, First Group America, Inc., and First Transit, Inc. as bus drivers at various points between 2001 and 2021. The operative consolidated complaint alleged violations of the California Labor Code and Business and Professions Code involving meal periods, rest breaks, premium wages, minimum wages, overtime, double-time pay, business-expense reimbursement, wage statements, and final wages.

Plaintiffs moved for class certification in 2021, but the court denied that motion. They later sought preliminary approval of a proposed class-action settlement, and the court denied that request in August 2024. Plaintiffs then filed the renewed motion addressed in this order. The defendants did not oppose it.

Class Certification

The court explained that it still had to determine whether the proposed settlement class satisfied Federal Rule of Civil Procedure 23. Plaintiffs sought certification under Rule 23(b)(3), which requires that issues common to the class predominate over issues affecting only individual members.

The court found that Plaintiffs had not corrected the predominance problems identified in its earlier orders. Their renewed motion relied largely on statements that common issues predominated and on a proposed survey that had not yet been conducted. The court found that the proposed survey did not resolve variations among the plaintiffs’ declarations or establish evidence of a common, unofficial companywide policy concerning meal periods, rest periods, off-the-clock work, and expenses. The court therefore denied the motion on predominance grounds.

The court also found that the proposed class representatives and their lawyers did not satisfy the adequacy requirement. In particular, Plaintiffs’ counsel still had not obtained a class list after years of litigation. The proposed settlement agreement provided that Defendants would compile and provide the list after preliminary approval. The court concluded that the resulting uncertainty demonstrated that Plaintiffs’ counsel were inadequate to represent the class.

Settlement Terms

The court separately identified problems with the proposed settlement. Plaintiffs had changed some assumptions used to estimate the maximum possible recovery, including increasing the assumed hourly wage from $10 to $22. But the court found that the renewed motion still did not explain the basis for the estimated meal-break violation rates of 11% for the Driver Class and 37% for the Non-Driver Class. Because the expert analysis and its supporting data remained unexplained, the court could not determine whether the settlement was fair and reasonable.

Plaintiffs corrected earlier concerns by excluding the $250,000 allocation for claims under the California Private Attorneys General Act from the numerator used to estimate recovery for class claims. They also stopped using compromise positions to calculate Defendants’ maximum exposure. However, the court found that the proposed $250,000 payment for the Private Attorneys General Act claims was only 0.15% of the potential penalty recovery. Plaintiffs had not shown unusual circumstances supporting that allocation, and they still had not stated whether the California Labor and Workforce Development Agency had objected or otherwise responded to the settlement. The court therefore could not find that the payment for those claims was fair and reasonable.

The court found that Plaintiffs had improved the distribution formula by changing it from a workweek-based formula to one based on shifts. But the court found no explanation for increasing former employees’ individual shifts by 15% to account for late-paid final-wage claims. Without an explanation connecting that adjustment to the employees’ potential recovery, the court found the adjustment arbitrary.

Disposition

The court denied Plaintiffs’ renewed motion for preliminary approval of the proposed class-action settlement. The proposed settlement class therefore was not approved in this order. The court also set a case management conference for December 2, 2025, and required an updated joint case management statement.