Sanchez v. Hearst Communications, Inc.

Background

Pablo Sanchez and Violet Alvarez brought the action individually and on behalf of others similarly situated against Hearst Communications, Inc. The plaintiffs alleged that Hearst misclassified them and other California newspaper home-delivery workers as independent contractors. They alleged resulting violations of California wage laws, including failure to pay for all hours worked; failure to pay piece-rate workers for rest, recovery, and other nonproductive time; failure to provide meal and rest periods; failure to pay minimum and overtime wages; failure to keep complete and accurate employment records; failure to provide accurate, itemized wage statements; failure to reimburse business expenses; and failure to make timely wage payments. The plaintiffs also alleged violations of California’s Unfair Competition Law. Sanchez additionally sought civil penalties under California’s Private Attorneys General Act on behalf of himself and other allegedly affected employees.

Hearst disputed and denied the claims. It also denied that the case could be certified as a class action or representative action for trial and contended that it had complied with the applicable laws. The order expressly stated that the court had not decided the merits of the plaintiffs’ claims.

Preliminary Settlement Approval

The parties negotiated a proposed settlement to avoid the expense, uncertainty, and burden of continued litigation. Applying the standard that a proposed class settlement must be fair, reasonable, and adequate, the court preliminarily approved the agreement and settlement, subject to further review at a final approval hearing. The court found on a preliminary basis that the settlement fell within the range of reasonableness, resulted from informed, good-faith, arms-length negotiations, and was not collusive. The court also found that the participation of an experienced, unbiased mediator supported that conclusion.

This was preliminary approval, not final approval. The order did not decide whether the plaintiffs would ultimately prevail or whether the settlement would receive final approval.

Settlement Class and Appointments

For settlement purposes only, the court conditionally certified a class consisting of:

- All people who entered into written contracts with Hearst solely under a home-delivery agreement in California concerning newspaper distribution, including but not limited to the San Francisco Chronicle; - who did so at any time from July 27, 2016, through December 19, 2022; and - who do not submit a timely and valid request to opt out.

The court stated that, for settlement purposes only, the requirements for a class action under Federal Rule of Civil Procedure 23 were met. Those findings included that the class was numerous enough that joining everyone individually was impracticable, that common legal and factual questions predominated, that the plaintiffs’ claims were typical, that the representatives and their lawyers would adequately protect the class, and that a class action was superior to other methods of resolving the dispute.

The court appointed Pablo Sanchez and Violet Alvarez as class representatives. It jointly appointed Outten & Golden LLP and The Ottinger Firm, P.C. as class counsel. It also appointed ILYM Group, Inc. as settlement administrator.

Notice, Exclusion, and Objections

The court approved the proposed notice and found that its content and distribution plan satisfied Rule 23 and due-process requirements. The plan was designed to reach all 57 settlement class members by first-class mail and, when readily available, email at their last known addresses. The settlement administrator was also directed to re-mail returned notices under specified procedures and to provide counsel with proof of mailing and a declaration describing its efforts.

Class members could request exclusion by sending the settlement administrator a written request within 45 days after the initial notice distribution. People who did not timely and properly opt out would be bound by the settlement’s determinations and judgments. The order also established procedures and a 45-day deadline for objections, allowed appearances at the final approval hearing under stated conditions, and provided that failures to substantially comply could waive objection rights unless excused for good cause.

The order gave Hearst the option to withdraw from the settlement if more than two class members submitted timely and valid opt-out requests, subject to the terms and deadline stated in the order.

Further Proceedings and Disposition

The court set a final approval hearing for April 20, 2023, by Zoom. At that hearing, the court would consider whether to grant final approval, whether to enter final judgment, whether class members should be bound by the release, objections, and applications for attorneys’ fees, costs, and awards for the plaintiffs’ service to the class.

The court stayed all proceedings except those needed to implement the settlement or comply with the agreement. It authorized the parties to take steps needed to implement the agreement and retained jurisdiction over implementation and related matters. The order preliminarily approved the settlement and conditionally certified the settlement class; it did not grant final approval or enter final judgment.