This is a putative wage and hour class action brought by plaintiff Sharon Davis (“Plaintiff”) individually and on behalf of current and former “Field Case Managers” employed by defendant Genex Holdings Inc., d/b/a Genex Services (“Defendant”), which provides integrated managed care services for employer groups, insurance and managed care providers, and benefit administrators. Plaintiff alleges that although the position of a Field Case Manager is described as a salaried position exempt from overtime pay and related benefits, Field Case Managers perform a finite set of various non-exempt clerical tasks with regard to clients in strict compliance with established procedures and protocols which governed and controlled every aspect of their work. Plaintiff alleges that even though Field Case Managers perform skilled non-exempt clerical tasks, Defendant instituted a blanket classification policy, practice and/or procedure by which Field Case Managers were classified as exempt from overtime compensation.

The case was originally filed on February 6, 2013. Defendant filed its Answer to the original Complaint on March 22, 2013. Upon stipulation, Plaintiff filed her First Amended Complaint (“FAC”) on December 6, 2013, asserting seven causes of action for: (1) unfair competition in violation of California Business & Professions Code section 17200 et seq.; (2) failure to pay overtime compensation in violation of California Labor Code sections 201-203, 510, 515, 1194 and 1198; (3) failure to provide accurate itemized statements in violation of California Labor Code section 226; (4) failure to provide meal and rest periods in violation of California Labor Code section 226.7; (5) failure to timely pay wages in violation of California Labor Code section 203; (6) failure to pay overtime in violation of 29 U.S.C. § 201; and (7) Labor Code Private Attorney General Act, Labor Code section 2698 et seq.

On or about December 23, 2013, Plaintiff moved for preliminary approval of class action settlement. Plaintiff submitted that on October 3, 2013, the parties participated in an all-day mediation before Jeffery Ross, resulting in a mediator’s proposal for settlement, the basic terms of which were set forth in a signed Memorandum of Understanding which the parties accepted. Under the terms of the settlement, Defendant will pay $2,700,000.00 to fund the settlement, which allocates 25% for attorney’s fees, $25,000 for litigation costs, $10,000 for a service enhancement award to Plaintiff, $15,000 to Gilardi & Co., the agreed-upon claims administrator for the settlement, and a $25,000 PAGA penalty. The Net Settlement Fund will be distributed to claimants in payments based on the number of work weeks they worked during the class period. Former Employee Class Members must return a valid, signed Claim Form, while settlement class members who are current employees will be automatically paid without submitting a Claim Form. The settlement is all-in, with no reversion to Defendant.

Plaintiff also seeks conditional certification of the following settlement class: “All current and former persons employed by GENEX in the State of California between February 6, 2009 until December 31, 2013, who held full-time positions of Case Manager-Medical (Field Case Management); Bilingual Medical Case Manager; Case Manager, Medical Telephonic Case Management; MCM Specialist; Nurse Reviewer/Telephonic Case Manager; and Onsite Telephonic Nurse Case Manager.”

On or about January 17, 2014, the Court found that Plaintiff had failed adequately demonstrate that common issues of law and fact would predominate for purposes of conditionally certifying the class. Plaintiff provided only a general statement about the responsibilities of Field Case Managers in the claims administration process and did not demonstrate that there is a sufficient degree of uniformity in specific job tasks within the general categories of Field Case Manager duties. The Court also found that Plaintiff failed to adequately support the requested $10,000 enhancement award because there was no evidence supporting any amount of time and energy expended by Plaintiff in pursuit of the lawsuit, the value of her known and unknown claims, or any reputational risk or personal difficulty to Plaintiff in acting as a class representative.

The Court continued the motion to February 14, 2014 and ordered Plaintiff to submit supplemental papers addressing these deficiencies within 20 days. On February 4, 2014, Plaintiff filed supplemental papers in support of her motion for preliminary approval.

Discussion

“The well-recognized factors that the trial court should consider in evaluating the reasonableness of a class action settlement agreement include ‘the strength of plaintiffs’ case, the risk, expense, complexity and likely duration of further litigation, the risk of maintaining class action status through trial, the amount offered in settlement, the extent of discovery completed and the stage of the proceedings, the experience and views of counsel, the presence of a governmental participant, and the reaction of the class members to the proposed settlement.’ [Citations.] This list ‘is not exhaustive and should be tailored to each case.’ [Citation.]” (Kullar v. Foot Locker Retail, Inc. (2008) 168 Cal.App.4th 116, 128.) “[A] presumption of fairness exists where: (1) the settlement is reached through arm’s-length bargaining; (2) investigation and discovery are sufficient to allow counsel and the court to act intelligently; (3) counsel is experienced in similar litigation; and (4) the percentage of objectors is small. [Citation.]” (Dunk v. Ford Motor Co. (1996) 48 Cal.App.4th 1794, 1802.)

As previously held in the Court’s January 17, 2014 order, the settlement is entitled to a presumption of fairness. It was reached through arm’s-length bargaining after formal mediation. Although formal discovery was not conducted in this litigation, Defendant provided Plaintiff with information regarding the position, number of class members, and workweeks for the class, and Plaintiff’s counsel, Blumenthal, Nordrehaug & Bhowmik, conducted an investigation into the facts of the case before the action was filed. Plaintiff’s counsel further submitted that counsel for both parties previously litigated a similar action on behalf of Field Case Managers through class certification in Rieve v. Coventry Health Care (“Rieve”) and thus, the attorneys for both sides were familiar with the law and facts concerning this type of action, and that hundreds of pages of documentation were exchanged by the parties. The Blumenthal firm is experienced in similar litigation, as demonstrated by the firm’s resume.

“Although [t]here is usually an initial presumption of fairness when a proposed class settlement … was negotiated at arm’s length by counsel for the class, … it is clear that the court should not give rubber-stamp approval. Rather, to protect the interests of absent class members, the court must independently and objectively analyze the evidence and circumstances before it in order to determine whether the settlement is in the best interests of those whose claims will be extinguished. To make this determination, the factual record before the … court must be sufficiently developed… . The proposed settlement cannot be judged without reference to the strength of plaintiffs’ claims. The most important factor is the strength of the case for plaintiffs on the merits, balanced against the amount offered in settlement. The court must stop short of the detailed and thorough investigation that it would undertake if it were actually trying the case, but nonetheless it must eschew any rubber stamp approval in favor of an independent evaluation.” (Kullar, supra, 168 Cal.App.4th at p. 130, internal citations and quotation marks omitted.)

Here, the case involves seven causes of action based on Labor Code violations regarding overtime compensation, wages, and meal and rest periods. Plaintiff alleges she and the putative class were misclassified as exempt employees and were denied overtime. As previously recognized by the Court in its January 17, 2014 order, there are inherent difficulties in successfully litigating overtime claims, particularly in the class action context where it may be difficult to prove that common issues of law and fact will predominate over individual inquiries on the job duties of each class member, and to defend against Defendant’s claim that class members were exempt under the learned professional and administrative exemptions. Balanced against these difficulties and risks is the significant amount offered in settlement. The moving papers did not discuss the outcome of the Rieve case, but the substantial settlement amount supports an inference that Plaintiff’s counsel held a strong position in Rieve as well as in this action. Thus, the Court found the settlement amount was entitled to preliminary approval.

The Court also found the 25% in proposed attorney’s fees was facially reasonable, given that this is not an uncommon contingency fee amount. However, the Court instructed Plaintiff’s counsel to provide sufficient billing records in support of a lodestar cross-check prior to final approval. (See Lealao v. Beneficial Cal. Inc. (2000) 82 Cal.App.4th 19, 46-47.)

Regarding class notice, the parties agree to use Gilardi & Co. as Settlement Administrator. In accordance with the parties’ stipulation, Defendant will provide Gilardi & Co. with identifying information regarding the class members, and Gilardi & Co. will perform address updates and verifications as necessary before sending the notice packets by first-class mail. Class members will have 45 days from the date of mailing to request exclusion or submit an objection, and will have 60 days from the date of mailing to return the Claim Form. In its January 17, 2014 order, the Court found that the proposed class notice complies with California Rules of Court, rule 3.766(d) by providing a brief explanation of the case, the contentions of the parties, discussions regarding exclusion, the binding effect of judgment, and the option to appear through counsel. The Court also found that the proposed notice procedure was reasonably calculated to give due notice to the class, and the proposed $15,000 in claims administration fees was facially reasonable, but must be supported by evidence in advance of the final approval hearing.

Regarding provisional class certification, “[t]he party seeking certification has the burden to establish the existence of both an ascertainable class and a well-defined community of interest among class members. [Citations.] The ‘community of interest’ requirement embodies three factors: (1) predominant common questions of law or fact; (2) class representatives with claims or defenses typical of the class; and (3) class representatives who can adequately represent the class. [Citation.] [¶] The certification question is ‘essentially a procedural one that does not ask whether an action is legally or factually meritorious.’ [Citation.] A trial court ruling on a certification motion determines ‘whether … the issues which may be jointly tried, when compared with those requiring separate adjudication, are so numerous or substantial that the maintenance of a class action would be advantageous to the judicial process and to the litigants.’ [Citations.]” (Sav-On, Inc. v. Superior Court (2004) 34 Cal.4th 319, 326.)

A class is ascertainable if it can be readily identified without unreasonable time and expense. (Rose v. City of Hayward (1981) 126 Cal.App.3d 926, 932.) The numerosity requirement requires that it is impracticable to join all of the class members all before the court.” (Miller v. Woods (1983) 148 Cal.App.3d 862, 873.) “Adequacy of representation depends on whether the plaintiff’s attorney is qualified to conduct the proposed litigation and the plaintiff’s interests are not antagonistic to the interests of the class. [Citations.]” (McGhee v. Bank of America (1976) 60 Cal.App.3d 442, 450-451.) “The test of typicality is whether other members have the same or similar injury, whether the action is based on conduct which is not unique to the named plaintiffs, and whether other class members have been injured by the same course of conduct.” (Seastrom v. Neways, Inc. (2007) 149 Cal.App.4th 1496, 1502.) The party moving for class certification must also establish “by a preponderance of the evidence that the class action proceeding is superior to alternate means for a fair and efficient adjudication of the litigation.” (Washington Mutual Bank v. Superior Court (Briseno) (2001) 24 Cal.4th 906, 914 [class treatment must “provide substantial benefits both to the courts and the litigants”].)

In its January 17, 2014 order, the Court found that the approximately 330-member putative class of Field Case Managers is sufficiently numerous to make joinder impracticable, and the identities of the class members are most likely ascertainable from Defendant’s employment records. The Court also found that Plaintiff’s claims appear to be typical of the putative class, and class counsel’s experience in similar litigation demonstrates they can adequately represent the settlement class.

Regarding the requirement that common issues of law and fact predominate, “each member must not be required to individually litigate numerous and substantial questions to determine his [or her] right to recover following the class judgment.” (Briseno, supra, 24 Cal.4th at p. 913 [emphasis added].) In Sav-On, the California Supreme Court upheld certification of a class of drugstore managers where the drugstore’s operations were “standardized” and the managers’ tasks “comprise[d] a reasonably definite and finite list.” (See Sav-On, supra, 34 Cal.4th at pp. 330-331.) Thus, commonality may be demonstrated by evidence of standardized operations and finite job duties. Plaintiff previously submitted that Defendant uniformly classified these employees, even though they all performed essentially the same role and basic tasks in the workers’ compensation claims process. Plaintiff also submitted that Field Case Managers are responsible for assessment, planning, coordination, implementation and evaluation of injured/disabled individuals involved in the medical case management process, and work as intermediaries between carriers, attorneys, medical case providers, employers and employees to ensure appropriate and cost effective healthcare services and a medically rehabilitated individual who was ready to return to work. Plaintiff further submitted that Field Case Managers were required to have a registered nursing degree and a case manager certification. As discussed above, the Court found this showing insufficient and ordered supplemental briefing and evidence.

In her supplemental papers, Plaintiff submits that all of the Field Case Managers performed essentially the same role in Defendant’s standardized operations and performed the same basic tasks for the position. Plaintiff submits her own declaration in which she discusses Field Case Managers’ roles and responsibilities in Defendant’s claims administration process, and also provides a finite list of common tasks, including reviewing medical records, interviewing injured workers, communicating with doctors, healthcare facilities, injured workers, claims adjusters, employers and attorneys, and coordinating care among various healthcare providers. Plaintiff also submits job description documents for “Case Manager, Medical (Field case Management)” and “Case Manager, Medical Telephonic Case Management” in support of the commonality of basic categories of duties. Plaintiff further contends that the standardization of Field Case Manager duties is maintained by Defendant through its online Case Management System (“CMS”), which is used by every Field Case Manager for all of their duties, such as getting new assignments, developing care plans, reviewing medical data, inputting notes on communications and treatment, documenting cost savings, and generating reports. Although the proposed class definition includes six different titles, they all appear to be part of the same broad category of case managers who review medical records and communicate with claimants, healthcare professionals, and employers both in the field and on the telephone. The supplemental evidence provides an adequate record supporting Defendant’s standardized operations and the finite nature of “Field Case Manager” job duties to support Plaintiff’s allegation that Field Case Managers perform the same type of skilled non-exempt clerical tasks, and thus, in a class action of Field Case Managers, common questions of law and fact would predominate. With a class this large, where the common issues of law and fact predominate, a class action would be a superior and efficient means of adjudicating the issue of Field Class Manager exemption from California’s overtime laws. The Court GRANTS provisional certification of the class for settlement purposes.

Regarding class representative awards, “‘[t]he rationale for making enhancement or incentive awards to named plaintiffs is that they should be compensated for the expense or risk they have incurred in conferring a benefit on other members of the class.’ [Citation.] An incentive award is appropriate ‘“if it is necessary to induce an individual to participate in the suit[.]” … [Citation.]’ [Citation.] ‘[C]riteria courts may consider in determining whether to make an incentive award include: 1) the risk to the class representative in commencing suit, both financial and otherwise; 2) the notoriety and personal difficulties encountered by the class representative; 3) the amount of time and effort spent by the class representative; 4) the duration of the litigation and; 5) the personal benefit (or lack thereof) enjoyed by the class representative as a result of the litigation. [Citations.]’ [Citation.] These ‘incentive awards’ to class representatives must not be disproportionate to the amount of time and energy expended in pursuit of the lawsuit. [Citation.]” (Cellphone Termination Fee Cases (2010) 186 Cal.App.4th 1380, 1394-1395.) As discussed above, Plaintiff failed to support the reasonableness of the requested $10,000 enhancement award, and the Court ordered supplemental and briefing and evidence.

In her supplemental papers, Plaintiff submits her own declaration discussing her involvement in the case which included regular conversations with attorneys at the Blumenthal firm, time spent searching for documentation, reviewing documents and settlement papers, and attendance at the October 3, 2013 mediation. Plaintiff estimates that she spent between 50 and 80 hours working on this case. Plaintiff also discusses the stigma that is sometimes attached to being involved in class action lawsuits in terms of her ability to find future employment, and she also points out that she would be responsible for some or all of Defendant’s legal costs if the case was not successfully litigated. The Court finds that Plaintiff presents an adequate record supporting the $10,000 enhancement award. Although the case did not involve substantial discovery and was essentially settled based on counsel’s prior work in the Rieve case, Plaintiff’s estimate of up to 80 hours spent assisting the case is substantial, and combined with the stated risks to her future employment, the enhancement award is facially reasonable.

For all of these reasons, the motion for preliminary approval is GRANTED. The final approval hearing will be held on Friday, June 20, 2014 at 9:00 a.m. in Department 1.