Bautista v. Juul Labs, Inc.

Background

Plaintiffs brought claims under the California Labor Code, San Francisco law, the federal Fair Labor Standards Act (FLSA), and California’s Private Attorneys General Act (PAGA). They alleged that Juul Labs, Inc., Long Ying International, Inc., and David Ho were responsible for labor-law violations involving workers hired for the Yes on C campaign. According to the allegations, about 365 workers performed canvassing, phone banking, and administrative work; were hired as independent contractors; did not receive compliant wage statements; and were not paid for all hours worked or immediately upon discharge. Plaintiffs also alleged that Juul and Coalition were joint employers and that Juul and Coalition should be treated as alter egos for liability purposes.

The case had proceeded through motions to compel arbitration, motions to dismiss, conditional certification of the FLSA collective action, discovery, and mediation. The parties later reached a settlement and asked the court for preliminary approval.

Settlement terms

The proposed settlement covers individuals hired directly by Long Ying to perform campaign phone banking, canvassing, or administrative work during the class period. The parties represented that approximately 369 people fall within this definition.

The defendants agreed to pay a gross settlement fund of $1,750,000. The agreement allocates $400,000 to PAGA claims, including $300,000 to California and $100,000 to class members; $1,500 to the FLSA claims; and at least $563,000 to class members for Labor Code and San Francisco-law claims. It also permits up to $750,000 in attorneys’ fees, $18,500 for the settlement administrator, and $17,000 in service awards for class representatives.

Class members will receive notice by mail and, when available, email. They may exclude themselves from the class settlement by submitting a written request within 45 days after notice is mailed. Workers with FLSA claims may opt into the FLSA portion by submitting the required consent. Class members will not need to file a claim to receive payment. The agreement also describes procedures for distributing uncashed funds and, if less than $20,000 remains after a second distribution, sending the remainder to Open Door Legal as a cy pres beneficiary.

Provisional class certification and settlement review

For settlement purposes, the court found that the proposed class met Federal Rule of Civil Procedure 23’s requirements of numerosity, commonality, typicality, and adequate representation. The court also found that common issues predominated over individual issues and that a class action was the superior method for resolving the dispute. The court appointed the plaintiffs as class representatives and Legal Aid at Work and Leonard Carder as class counsel.

The court reviewed whether the settlement appeared to result from informed, non-collusive negotiations, whether it contained obvious deficiencies, whether it improperly favored class representatives or other groups, and whether it fell within the possible range of approval. The court found no apparent collusion or obvious deficiencies. It noted that the final approval stage would include closer review of attorneys’ fees and any incentive awards. The court also found that the proposed $1.75 million settlement was within the possible approval range in light of the estimated value of the claims and the risks identified by plaintiffs.

Ruling and next steps

The court preliminarily found the settlement fair, reasonable, and adequate and granted plaintiffs’ motion for preliminary approval of the class action settlement. It also found that the proposed notice process and content were adequate, directed the parties to implement the notice plan, and ordered them to meet and confer about dates for opting out, objecting, filing the final approval motion, and holding the final fairness hearing. This order provided preliminary approval; it did not constitute final approval of the settlement or determine the final amount of attorneys’ fees or service awards.