Nucci v. Rite Aid Corporation

Background

Kristal Nucci, Kelly Shaw, and Ana Goswick brought a wage-and-hour class action against Rite Aid Corporation, Thrifty Payless, Inc., and Does 1–10. The plaintiffs alleged that the defendants failed to reimburse required uniform expenses, which allegedly led to violations involving minimum wages, wage statements, wages due at termination, wages due on regular paydays, California’s Unfair Competition Law, and the Private Attorneys General Act. The court previously certified a class under Federal Rule of Civil Procedure 23(b)(3).

The parties conducted extensive discovery, including document production, interrogatories, depositions, class-member declarations, and expert reports. They participated in four mediations and reached a settlement after a September 2021 mediation. When they settled, two summary-judgment motions and a motion to decertify the class were pending, and trial was scheduled for November 19, 2021. The court preliminarily approved the settlement on February 3, 2022, then held a final fairness hearing on May 26, 2022.

Settlement Terms

The settlement class included non-exempt employees, excluding pharmacists, pharmacy interns, and asset-protection agents, who worked in a Rite Aid store in California from March 19, 2015, through February 3, 2022. The final class list contained 29,451 class members, excluding the 22 people who had requested exclusion after the original class notice.

The gross settlement amount was $12,000,000. The proposed net settlement amount was approximately $7,444,460 after deductions for representative payments, attorney’s fees, costs, administration expenses, and penalties under the Private Attorneys General Act. Ten percent of the net settlement was allocated as wages, and 90 percent was allocated as non-wage payments for expense reimbursements, interest, statutory and civil penalties, and attorney’s fees. Class members hired after March 2020 were to receive a nominal $25 payment; other payments were generally based on workweek totals. Claim forms were not required.

The settlement was non-reversionary. Certain unclaimed amounts were to be distributed to Legal Aid at Work, a legal-services organization identified in the order as the settlement’s beneficiary. The settlement released the class and Private Attorneys General Act claims pleaded or that could have been pleaded under the facts alleged in the complaint, as well as potential Fair Labor Standards Act claims. The named plaintiffs also provided a general release.

Court’s Analysis

The court concluded that the settlement was fair, reasonable, and adequate under Rule 23(e). It relied on the settlement’s value compared with the plaintiffs’ estimated maximum damages, the risks and costs of further litigation, the extensive discovery, the arm’s-length negotiations, the risks associated with the pending summary-judgment and class-decertification motions, and the absence of objections. The court also found that the notice program satisfied the applicable requirements and that the settlement administration procedures were followed.

The court confirmed the appointments of Nucci, Shaw, and Goswick as class representatives; Randall B. Aiman-Smith, Reed W.L. Marcy, Hallie Von Rock, and Brent A. Robinson as class counsel; and Atticus Administration as settlement administrator. It approved $75,000 for settlement administration.

Fees, Costs, and Service Awards

The court granted class counsel’s request for $3,999,600 in attorney’s fees, equal to 33 percent of the gross settlement amount, after reviewing the requested percentage and a lodestar cross-check. It also approved $300,940 in litigation costs.

The named plaintiffs requested $10,000 each in service awards. The court awarded $7,500 to each plaintiff, for a total of $22,500, based on their work on the case, including attending mediations and depositions, and the benefit obtained for the class. The court therefore reduced the requested service-award total by $7,500.

Disposition

The court approved the class-action settlement, including the attorney’s fees, costs, and service awards, but reduced the requested $30,000 in service awards to $22,500. The order states that, upon the settlement’s effective date, the named plaintiffs and class members who did not exclude themselves would release the released claims with prejudice. The court reserved jurisdiction over settlement implementation, administration, enforcement, and related matters. The order disposed of the motions identified as ECF Nos. 130 and 131.