Johnson v. Serenity Transportation, Inc.

Background

Gary Johnson and 16 opt-in plaintiffs, described as mortuary drivers, sued Serenity Transportation, Inc., its owner David Friedel, and SCI California Funeral Services, Inc. and Service Corporation International. They alleged that they had been misclassified as independent contractors and denied benefits required by federal and California wage-and-hour laws.

The order addresses two motions: the plaintiffs’ motion to approve an agreement settling and releasing their Fair Labor Standards Act (FLSA) and other wage-and-hour claims against the SCI defendants, and Rukin Hyland & Riggin LLP’s motion to withdraw as counsel for plaintiff Anthony Aranda. The defendants did not oppose either motion. The court vacated the scheduled hearing and decided the motions without oral argument.

Settlement Approval

The settlement required the SCI defendants to pay $50,000. The plaintiffs were to receive a total of $21,547.54, with each plaintiff’s payment based on the number of relevant shifts worked for SCI California. The agreement allocated the remaining $28,452.46 to attorneys’ fees and costs. In exchange, the plaintiffs would release wage-and-hour claims against the SCI defendants and their affiliates, including FLSA claims.

The court explained that FLSA claims cannot be settled without approval from the Secretary of Labor or a district court. The court therefore examined whether the agreement resolved a genuine dispute and whether it was fair and reasonable.

The court found a genuine dispute because the parties had litigated for years, including disputes about classification and liability under federal and California wage laws, extensive motion practice, and an appeal to the Ninth Circuit. The court also found that the settlement was fair and reasonable under the overall circumstances. It relied on the case’s advanced stage, completed discovery, the risks of continued litigation, the limited scope of the release, the experience of counsel, and the participating plaintiffs’ approval. Sixteen of the 17 SCI California plaintiffs had signed the settlement agreement.

The court noted that the plaintiffs’ possible recovery from the SCI defendants under the FLSA had been limited by an earlier summary-judgment ruling that rejected a joint-employer theory of liability. The court also stated that the only remaining claims against the SCI defendants were under California Labor Code section 2810.3. It concluded that the settlement amount had a reasonable relationship to the value of the claims and that continued litigation could result in a smaller recovery or no recovery.

The release covered claims asserted in the action or claims that could have been asserted based on the facts alleged. The court found that this release was tailored to the wage-and-hour dispute rather than releasing unrelated claims. The court further found no indication of fraud or collusion. Although the fee-and-cost allocation represented approximately 56.9 percent of the total settlement, the court found it reasonable in light of the years of litigation and the Ninth Circuit appeal. The court approved both the settlement and the $28,452.46 award for fees and costs.

Withdrawal of Counsel

Peter Rukin, Jessica Riggin, Valerie Brender, and Rukin Hyland & Riggin LLP sought permission to withdraw as counsel for Anthony Aranda. The court found good cause because the firm had tried nearly a dozen times over three months to contact Aranda by telephone, email, and letter, while receiving no communication from him for more than two years.

The firm had notified Aranda about the settlement and its intent to withdraw, sent additional notice before filing the motion, and served the motion on him. The court found no indication that withdrawal would affect the case schedule, delay the upcoming case-management hearing, or harm the administration of justice. Because no substitute counsel had appeared, the withdrawal was granted subject to Civil Local Rule 11-5(b). Under that condition, the firm must continue receiving papers for forwarding to Aranda until he appears through other counsel or represents himself, and the firm must notify him of that condition.

Disposition

Judge Acqueline Scott Corl granted the SCI California plaintiffs’ motion for settlement approval and granted Rukin Hyland & Riggin’s motion to withdraw as counsel for Aranda, subject to the conditions of Civil Local Rule 11-5(b). The order disposed of Docket Nos. 320 and 321.