Senne v. Kan. City Royals Baseball Corp.

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AARON SENNE, et al., Plaintiffs, v. KANSAS CITY ROYALS BASEBALL CORP., et al., Defendants.

No. 14-cv-00608 JCS

United States District Court, N.D. California

March 29, 2023

ORDER RE: MOTION FOR FINAL APPROVAL OF CLASS ACTION SETTLEMENT; RESPONSE TO OBJECTIONS MOTION FOR ATTORNEYS' FEES, LITIGATION COSTS AND INCENTIVE AWARDS [DKT. NOS. 1147 1173]

Joseph C. Spero United States Magistrate Judge

I. INTRODUCTION

The parties in this case have entered into a class action settlement. Following preliminary approval of the settlement by the Court, see dkt. no. 1147, on August 26, 2022 notice was sent to class members, who were given the opportunity to object to the settlement or opt out. Objections have been received from class member Eddy Vizcaino, see dkt. no. 1163, and a group of individuals who describe themselves as “Marti plaintiffs,”^[1] see dkt. no. 1158 (collectively, “Objections”). Presently before the Court are Plaintiffs' Motion for Final Approval of Class Action Settlement; Response to Objections (“Final Approval Motion”) and a Motion for Attorneys' Fees, Litigation Costs and Incentive Awards (“Fee Motion”). A Final Fairness Hearing was held on February 17, 2023 at 9:30 a.m.^[2] At the hearing, attorneys Samuel Kornhauser and Brian David appeared on behalf of the Marti Objectors. Mr. Vizcaino did not appear at the hearing. For the reasons set forth below, the Court GRANTS both motions and overrules the Objections.^[3]

II. BACKGROUND

A. Overview of Settlement Agreement Terms

The proposed settlement consolidates the Court's already-certified Rule 23(b)(3) classes into a single (b)(3) class, with a class membership cutoff of the date of preliminary approval, defining the (b)(3) class as follows:

All persons who: while signed to a Minor League Uniform Player Contract, participated in the California League for at least seven days on or after February 7, 2010 through the date of preliminary approval, participated in spring training, instructional leagues, or extended spring training in Florida on or after February 7, 2009 through the date of preliminary approval, or participated in spring training, instructional leagues, or extended spring training in Arizona on or after February 7, 2011 through the date of preliminary approval. Provided, however, that participation in the activities set forth above must have occurred prior to that person's signing a Major League Uniform Player Contract.

Settlement Agreement (dkt. no. 1128-1) ¶ 1(nn). It further calls for the Court to maintain the certification of the previously certified Rule 23(b)(2) class and the FLSA collective. Id. ¶¶ 1(s) & (mm).

The Settlement Agreement creates a gross settlement fund of $185 million (defined in the Settlement Agreement as the “Maximum Settlement amount”). Id. ¶ 1(x). The Net Settlement Amount, which is to be distributed to the Rule 23 class and FLSA collective members (defined, collectively, as “Class Members,” id. ¶ 1(h)), is the gross amount minus the following: 1) attorneys' fees (an award of up to one third of the gross settlement amount is permitted under the Settlement Agreement), id. ¶ 1(o); 2) costs not to exceed $5.5 million, id.; 3) incentive awards of $15,000 for each class representative and $7,500 for named plaintiffs who are not be proposed as class representatives, id. ¶ 1(t); 4) administration costs of the settlement, id. ¶ 1(z); and 5) 75 percent of the agreed settlement amount of $2,315,200.00 under the California Labor Code Private Attorneys General Act of 2004, Cal. Lab. Code §§ 2698, et seq. (“PAGA”), which will be paid to the California Labor and Workforce Development Agency (“LWDA”).^[4] Id. ¶ 1(ss).

The settlement amount is non-reversionary and class members are not required to file a claim to receive an award. Id. ¶¶ 1(x), 14-16. The Settlement Agreement establishes a method for calculating each class member's award using Defendants' records relating to the periods when the class member worked and the location of the work:

(a) Defendants' records will be used to determine the work periods that each Participating Class Member participated in during the relevant years. The work periods include: (1) spring training, extended spring training, and instructional league from either 2009 to the date of Preliminary Approval in Florida, or 2011 to the date of Preliminary Approval in Arizona; (2) the California League, from 2010 to the date of Preliminary Approval; and (3) championship seasons outside the California League, from the start of the statute of limitations for the state in which the class member's minor league team is located to the date of Preliminary Approval. For each workweek within a work period, an estimate of hours worked will be applied. Minimum wage rates in effect at the time the work occurred will be taken into account when calculating the amount of damages owed in a workweek. Each person's “individual damages” will be the difference between what he allegedly should have been paid versus what he was actually paid according to Defendants' records; for work performed during relevant years during the championship season outside the California League, a 50% reduction will be applied. Any liquidated damages available under Arizona, Florida, and California law will be taken into account when calculating a person's individual damages, as will any statutory penalties under Arizona and California law.

(b) The calculation of Settlement Award determinations pursuant to this Section 16 shall be based on the pro rata portion of the Net Settlement Fund that each Participating Class Member is entitled to. The pro rata payment will be calculated by multiplying the proportional share that each Participating Class Member is entitled to by the Net Settlement Fund. That proportional share will be determined by dividing the aggregate total of all Participating Class Member's alleged individual damages by the individual Participating Class Member's damages.

Id. ¶ 16. Class members will have ninety days to cash their checks and unclaimed funds are to be distributed in a second round of payments, pro rata, to participating Class Members who timely cashed their checks unless, “in the sole discretion of Class Counsel, the amount remaining is too small to justify the expense of a redistribution[.]” Id. ¶¶ 18-19. In that case, the unclaimed funds will be donated to the cy pres designated by the parties in the Settlement Agreement, Legal Aid at Work. Id. ¶¶ 1(e), 19.

Rule 23(b)(3) class members, who were previously allowed to opt out after class certification, were given another opportunity to opt out, with the deadline for this opt-out period set at sixty days after the settlement notice. Id. ¶ 1(kk). The Settlement Agreement also includes a provision allowing class members to correct their employment information and/or challenge the calculation of their settlement award. Id. ¶ 5.

The Settlement Agreement provides for the following injunctive relief for the Rule 23(b)(2) class:

a) within ten (10) business days of the Effective Date of the Agreement, MLB will rescind any and all contractual prohibitions against Major League Clubs paying wages to minor league players outside of the championship season.

b) Within ten (10) business days of the Effective Date of the Agreement, MLB will send a memorandum to the Major League Clubs specifically stating that, “The Office of the Commissioner has rescinded any and all contractual prohibitions against Clubs paying wages to minor league players outside of the championship season, and accordingly, each Club is advised that it must compensate minor league players in compliance with wage-and-hour laws in effect in Arizona and Florida during spring training, extended spring training, instructional leagues, and the championship season in those states, including any minimum wage laws that apply.”

Id. ¶¶ 21(a) & (b). The Settlement Agreement further provides that “[t]he Court shall retain jurisdiction over MLB with respect to the Rule 23(b)(2) Class to enforce MLB's obligations under this Section 21.” Id. ¶ 21(d).

The Settlement Agreement contains the following release provision:

10. Releases. Provided there is Final Approval of the Settlement by the Court, in exchange for the consideration set forth in this Agreement, each Named Plaintiff, Class Representative, Participating Class Member Rule 23(b)(2) Class Member, and Aggrieved Employee, individually and on behalf of all of their respective successors, assigns, agents, attorneys, executors, heirs and personal representatives, shall fully and finally release and discharge the Released Parties as set forth herein.

a. The “Released Claims.” All Named Plaintiffs, Class Representatives, and Rule 23(b)(3) Class Members who do not timely submit a valid Request for Exclusion, consistent with the terms set forth in this Agreement, will release the Released Parties from any and all claims pled, or which could have been pled, in the Second Consolidated Amended Complaint (the “SCAC”) arising out of and/or based on the facts alleged in the SCAC, whether known or unknown, for any wage-and-hour claims based on the performance of services pursuant to a Minor League Uniform Player Contract. This release includes claims for wages, penalties, interest, attorneys' fees, restitution, and/or costs, and including, without limitation, claims for: unpaid minimum wages, unpaid overtime, failure to provide meal periods or unpaid meal period premiums, failure to provide rest periods or unpaid rest period premiums, untimely final wages, untimely wages during employment, non-compliant itemized wage statements, failure to maintain required payroll records, and unreimbursed business expenses under any state, territory, or local wage-and-hour-law and/or common law on

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