ORDER OF PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT
NANETTE K. LAUGHREY, District Judge.
Plaintiff James Walker filed this putative class action alleging that Defendant McLane/Midwest, Inc. procured and used consumer reports between November 5, 2012, and March 30, 2015, as part of its hiring process and violated the Fair Credit Reporting Act (FCRA) by: (1) taking adverse actions against job applicants based on consumer reports without affording the class members the opportunity to dispute the accuracy of the adverse information contained in the reports; and (2) violating the disclosure and authorization provisions of the FCRA. Before the Court is the Parties' Joint Motion for Preliminary Approval of Class Action Settlement, [Doc. 25]. The Parties request that the Court preliminarily approve the class-wide Joint Stipulation of Settlement, conditionally certify this case as a class action for settlement purposes only, designate James Walker as a class representative and Jason Brown and Jayson Watkins as class counsel, approve the form and manner of class notices, set a date for a final fairness hearing, and preliminarily enjoin all members of the class from commencing, prosecuting, or maintaining any claim already asserted in and encompassed by this case.
A. Class Certification
Plaintiffs seek conditional certification of a "Settlement Class" comprised of two sub-classes defined as:
For settlement purposes only, the Parties stipulate to certification pursuant to Rule 23 of the Federal Rule of Civil Procedure 23 and request that the Court certify a Settlement Class. The Court finds that conditional class certification of the "Settlement Class" for the purpose of settlement is appropriate. Pursuant to Federal Rule of Civil Procedure 23(g), the Court appoints Jason Brown and Jayson Watkins, of Brown & Associates LLC, as Class Counsel. James Walker is designated as the representative for the Settlement Class.
B. Preliminary Approval of the Joint Stipulation of Settlement
Rule 23(e) directs that the claims of "a certified class may be settled, voluntarily dismissed, or compromised only with the court's approval." A proposal that binds the class members may only be approved "after a hearing and on finding that it is fair, reasonable, and adequate." Fed. R. Civ. Pro. 23(e)(2). This generally involves a two-step process, in which the Court first makes a preliminary inquiry into the terms of the settlement. Once satisfied that there is a plausible basis to approve the settlement, the Court directs notice and solicits the views of class members, giving them the opportunity to opt-out of the class. Following the close of any opt out and comment deadline, the Court holds the hearing required by Rule 23(e)(2) and issues a final finding on whether the settlement is fair, reasonable and adequate. This case now comes to the Court on the first step — preliminary approval and issuance of a court authorized notice of settlement.
The Court has reviewed the Joint Motion for Preliminary Approval of Class Action Settlement and the Joint Stipulation of Settlement submitted by the Parties. The terms and conditions set forth in the Joint Stipulation of Settlement place the agreement within the range of fair and reasonable settlements subject to the following amendments. Class members shall have six months, rather than ninety days, to cash settlement checks, and Paragraph 8(d) of the Joint Stipulation of Settlement shall be amended accordingly. The Joint Stipulation of Settlement shall also clearly state that class members are not required to return claim forms in order to receive settlement payments. Further consideration of the Joint Stipulation of Settlement will take place at a final approval hearing scheduled for Friday, October 23, 2015. If the Parties agree to the amendments discussed above, the Court preliminarily approves the Joint Stipulation of Settlement.
1. The Joint Stipulation of Settlement, including its provision for attorneys' fees to Class Counsel and an incentive payment to James Walker as the named Plaintiff and class representative, is preliminarily approved subject to the amendments described above and pending objections from Settlement Class members and final court approval.
2. The Settlement Class consisting of the two sub-classes defined below in paragraphs 3 and 4, is conditionally certified for settlement purposes only, pursuant to Federal Rule of Civil Procedure 23(b)(3).
3. The "Disclosure Sub-Class" is defined as:
4. The "Adverse Action Sub-Class" is defined as:
5. Any person who previously settled or released all of the claims covered by this settlement, or any person who previously was paid or received awards through civil or administrative actions for all of the claims covered by this settlement, or any person who excludes him/herself from either class shall not be a member of the Settlement Class.
6. Jason Brown and Jayson Watkins are designated as Class Counsel for the Settlement Class. James Walker is designated as representative for the Settlement Class.
7. The form of the class notice submitted to the Court and attached as Exhibit A to this Order, incorporating any such non-substantive changes as are agreed to by the Parties, ("Notice") and the plan for dissemination specified in the Joint Stipulation of Settlement, including appointment of a Settlement Administrator, are approved. No later than 10 days after entry of this Order, Defendant shall provide the Settlement Administrator with a list of names and last known addresses of all Settlement Class members and the Notice agreed upon by the parties. Within 10 business days of receipt of the Class List, the Settlement Administrator will mail the Notice to each Settlement Class member by first class mail.
8. Pending the outcome of a final fairness hearing, all members of the Settlement Class are enjoined from commencing, prosecuting, or maintaining any claim already asserted in, and encompassed by, the Action as defined in the parties' Joint Stipulation of Settlement and/or based on released claims and against released parties.
9. All proceedings in this matter, except those related to approval of the settlement, are stayed.
10. A final fairness hearing will be held on Friday, October 23, 2015, at 11:00 a.m., Courtroom 4A, United States District Court for the Western District of Missouri, 80 Lafayette Street, Jefferson City, Missouri. Any Settlement Class member who wants to object to the settlement must file an objection as stated in the Joint Stipulation of Settlement and Notice. If any objector or objector's attorney wishes to appear at the fairness hearing, he/she must effect service of a notice of intention to appear as stated in the Joint Stipulation of Settlement and Notice.
11. This Order shall become null and void and shall be without prejudice to the rights of the parties, all of whom shall be restored to their respective positions existing as of the date of execution of the Joint Stipulation of Settlement, if the settlement is terminated in accordance with the Joint Stipulation of Settlement or does not receive final approval.
12. Neither the existence nor the terms of this Order shall be construed as an admission, concession, or declaration by or against Defendant or any released party of any fault, wrongdoing, breach, or liability, or as a waiver by any party of any arguments, defenses, or claims he, she, or it may have, including, but not limited to, objections to class certification in the event that the Joint Stipulation of Settlement is terminated or not given final approval.
13. The Court may in its discretion continue the fairness hearing without further written notice.
For the foregoing reasons, the Court grants the Parties' Joint Motion for Preliminary Approval of Class Action Settlement.
JOINT STIPULATION OF SETTLEMENT
This Joint Stipulation of Settlement ("Joint Stipulation") was made and entered into by, between, and among Plaintiff James Walker on behalf of himself and the Settlement Class members as defined herein, and Defendant McLane/Midwest, Inc. ("McLane"), and is conditioned upon the Court's preliminary and final approval.
The following terms, when used in this Joint Stipulation, have the meanings set forth below, except when they are otherwise or more precisely defined in another Section.
(a) Plaintiff and Defendants herein are collectively referred to as "the Parties."
(b) "Action" means the civil action pending in the United States District Court, Western District of Missouri, entitled James Walker v. McLane/Midwest, Inc., Civil Action Number 2:14-CV-04315-NKL.
(c) "Plaintiffs' Counsel" or "Class Counsel" means C. Jason Brown and Jayson A. Watkins, Brown & Associates LLC, 301 S. U.S. 169 Hwy, Gower, Missouri 64454.
(d) "Court" means the United States District Court, Western District of Missouri.
(e) "Named Plaintiff" means James Walker, the named plaintiff in the Action.
(f) The "Settlement Class" means all employees or prospective employees of McLane who (a) suffered an adverse employment action between November 5, 2012 and March 30, 2015, that was based, in whole or in part, on information contained in a Consumer Report, and who were not provided a copy of such report, a reasonable notice period in which to challenge any inaccuracy in the Consumer Report, and/or a written description of their rights in accordance with the FCRA in advance of said adverse employment action (the "Adverse Action Sub-Class"), or (b) were the subject of a Consumer Report that was sought by McLane between November 5, 2012 and March 30, 2015, and who were provided the form of disclosure attached hereto as Exhibit A (the "Disclosure Sub-Class"). The Adverse Action Sub-Class consists of 121 individuals, and the Disclosure Sub-Class consists of 1696 individuals. 72 individuals are members of both subclasses. All members of the Settlement Class who do not opt-out of the Settlement shall be bound by the terms of this Joint Stipulation.
(g) "FCRA" refers to the federal Fair Credit Reporting Act, 15 U.S.C. § 1681, et seq.
(h) "Consumer Report" shall have the same meaning as used in the FCRA.
On November 5, 2014, Plaintiff filed a Petition in the Circuit Court of Cole County, Missouri, alleging class-wide claims under the FCRA relating to an application for employment Plaintiff submitted to McLane. That matter was duly removed to this Court on December 5, 2014. Thereafter, on December 15, 2014 Plaintiff filed a first amended complaint against McLane. For settlement purposes only, the Parties stipulate that Plaintiff may file with the Court the Second Amended Complaint, a copy of which is attached hereto as Exhibit B.
In the Second Amended Complaint, Plaintiff alleges that McLane violated the FCRA in two ways. First, he alleges that McLane obtained and relied upon Consumer Reports to take adverse employment action against Plaintiff and members of the Adverse Action Sub-Class without providing them with a copy of the report, a reasonable time to cure any inaccuracies in the consumer report, and/or a written description of their rights in accordance with the FCRA prior to taking the adverse employment action, all in willful violation of 15 U.S.C. § 1681b(b)(3)(A). Second, Plaintiff alleges that McLane procured Consumer Reports relating to Plaintiff and the members of the Disclosure Sub-Class, without providing a proper disclosure and, therefore, improperly obtained authorization, in willful violation of 15 U.S.C. § 1681b(b)(2)(A)(i) and (ii) of the FCRA.
The Parties disagree on many procedural and substantive issues. Plaintiff believes that class certification is appropriate and that he would prevail on all claims if the Action proceeded. Defendant believes that it could defeat class certification. Defendant further believes that it would prevail on all claims if the Action proceeded, because it acted in good faith at all times and complied with the provisions of the FCRA and other applicable laws.
For settlement purposes only, the Parties submit this Joint Stipulation. If for any reason this Joint Stipulation is not approved by the Court, this Joint Stipulation (and the related Settlement Term Sheet, signed March 30, 2015) will be void and of no force and effect, and the Parties expressly reserve their rights with respect to the prosecution and defense of the Action as if this Joint Stipulation never existed.
REASONS FOR SETTLEMENT
(a) Plaintiff's Counsel have diligently and thoroughly investigated the facts of this Action and researched the legal issues involved. Based on their own independent investigation and evaluation, Plaintiff's Counsel believe that settlement for the consideration and other terms set forth in this Joint Stipulation is fair, reasonable and adequate, and in the best interests of Plaintiff and the Settlement Class. While Plaintiff's Counsel believe the claims asserted in the Action have merit and that class certification was likely, they recognize and acknowledge that it would be expensive, time consuming, and burdensome to fully prosecute this Action. Plaintiff's Counsel has taken into account the uncertainty and risks inherent in any litigation, especially in complex class actions like this one.
(b) Defendant denies liability or wrongdoing of any kind associated with Plaintiff's claims, and Defendant further denies that this Action is appropriate for class treatment for any purpose other than settlement.
(c) Although the Parties do not abandon the positions they took in this Action, they believe that continued litigation would be protracted, expensive, uncertain, and contrary to their best interests. In light of these realities, the Parties believe that this Joint Stipulation is fair, reasonable and the best way to resolve the disputes between and among them.
(d) Neither Plaintiff nor McLane, nor anyone on their behalf, shall issue any press release or otherwise publicize this Settlement.
STATEMENTS OF NO ADMISSION AND NO PUBLICITY
(a) This Joint Stipulation does not constitute and is not to be deemed, construed, or used as an admission by Defendant as to the truth of the factual allegations or the merits of the claims made against them in this Action.
(b) This Joint Stipulation does not constitute and is not to be deemed, construed, or used as an admission of liability or wrongdoing on the part of Defendant with respect to this Action.
(c) Neither Plaintiff nor Plaintiff's counsel shall issue a press release or otherwise seek any publicity regarding the Action or the terms of this settlement, without the express written consent of the other party.
MONETARY TERMS OF SETTLEMENT
(a) Defendant will make a "Total Settlement Payment" in the amount of $105,100.00. From this amount, the following will be deducted:
(i) "Attorneys' Fees and Litigation Costs" in the total amount of $34,683.00;
(ii) "Settlement Administrator Costs," which are estimated to be $11,660; and
(iii) A stipend in the amount of $5,000 for the Named Plaintiff for his services as representative of the Settlement Class;
(b) The settlement proceeds that remain after the deductions described in paragraph 6(a) will be divided as follows: an estimated total of $12,378 divided equally among the members of the Adverse Action Sub-Class and an estimated total of $41,379 divided equally among the members of the Disclosure Sub-Class. Under no circumstances shall McLane make any payments not specifically required by this Joint Stipulation.
For settlement purposes only, the parties stipulate to the certification of the Action as a class action pursuant to Rule 23 of the Federal Rules of Civil Procedure. In making this stipulation the Parties acknowledge for settlement purposes only that the Named Plaintiff is similarly situated to the members of the Settlement Class and that Plaintiff's Counsel is adequate Class Counsel.
The parties agree to follow the following timeline for the completion of the settlement process and the dismissal of this Action:
(a) Through a Settlement Administrator, jointly selected by the Parties, the members of the Settlement Class will receive a Notice of Settlement, which will (i) describe the Action, (ii) explain how members of the Settlement Class were identified as members of the Adverse Action Sub-Class and the Disclosure Sub-Class, (iii) indicate the estimated settlement payment for each member of the Adverse Action Sub-Class and each member of the Disclosure Sub-Class, (iv) indicate that the Court has preliminarily approved the settlement, (v) provide instructions for how to opt-out of the Settlement, and (vi) provide instructions for how to object to the settlement at the Fairness Hearing. The Settlement Administrator shall be responsible for completing an address verification and skip trace process as necessary to locate members of the Settlement Class, and it shall be responsible for the issuance of all checks from the Total Settlement Payment.
(b) Within five business days following the end of the Notice Period, the Settlement Administrator shall notify counsel for the Parties of the number of individuals in the Settlement Class who have opted out of the Settlement, and of the total amount that would have been paid to those Settlement Class members had they not chosen to opt-out. In the event that 10% or more of the Settlement Class members opt-out of the settlement, McLane shall have the right to terminate this Settlement by giving written notice to Class Counsel within five business days after receipt of the Settlement Administrator's notification described in this sub-paragraph 8(b).
(c) McLane shall deliver or cause to be delivered the Total Settlement Payment to the Settlement Administrator no later than fifteen (15) business days after the Settlement Administrator provides counsel for the Parties with the notice required in sub-paragraph 8(b), provided that McLane has not terminated this Settlement pursuant to sub-paragraph 8(b) above. The Settlement Administrator shall not disburse any settlement funds to Plaintiffs or Plaintiffs' Counsel until thirty-one (31) days after the Court has granted final approval of this Settlement, granted final approval of this Joint Stipulation, and entered Judgment dismissing the Action with prejudice, provided that no appeal has been taken from the Judgment. Settlement funds shall be dispersed by the Settlement Administrator within 10 business days thereafter.
(d) Settlement checks that are not returned to the Settlement Administrator but have not been cashed within 90 days after issuance by the Settlement Administrator shall be void, and any such amounts shall revert to McLane. Settlement checks that are returned to the Settlement Administrator as undeliverable shall revert to the following cy pres fund: US Committee for Refugees and Immigrants.
Following the Fairness Hearing, and upon the Court issuing an Order granting final approval of the settlement, granting final approval of this Joint Stipulation, and entering Judgment dismissing the Action with prejudice, and prior to and as a condition of negotiating any payment pursuant to this Joint Stipulation, Plaintiff and each member of the Settlement Class will release and discharge McLane and its former and present parents, subsidiaries, and affiliated corporations, and their officers, directors, employees, partners, shareholders and agents, and any other successors, assigns, or legal representatives ("Released Parties") from any and all claims, causes of action, or liabilities based on or arising out of the allegations in the Action or which could arise out of the allegations in the Second Amended Complaint, under any federal, state, or local statutory or common law, including but not limited to all claims under the FCRA (the "Released Claims"). In addition, Plaintiff will, to the fullest extent permitted by law, release the Released Parties from any and all claims, causes of action, or liabilities, known or unknown, of whatever nature, arising from events taking place at any time prior to the effective date of the release.
The Parties agree to cooperate and take all steps necessary and appropriate to dismiss this Action with prejudice. The Parties agree that following expiration of the Notice Period, they shall file with the Court a Joint Motion for Final Settlement Approval, requesting that (1) the Action be dismissed with prejudice; and (2) the claims of all members of the Settlement Class who did not duly opt-out of the settlement be dismissed without prejudice.
The terms and conditions of this Joint Stipulation are the result of lengthy, intensive, arm's-length negotiations between and among the Parties. Accordingly, this Joint Stipulation is not to be construed in favor of or against any party by reason of the extent to which any party or its counsel participated in the drafting of the Joint Stipulation.
This Joint Stipulation contains the entire agreement between the parties relating to the settlement and transactions contemplated hereby, and all prior or contemporaneous agreements, understandings, representations, and statements, whether oral or written and whether by a party or such party's legal counsel, are merged herein. No rights hereunder may be waived except in writing.
NO COLLATERAL ATTACK
This Settlement shall not be subject to collateral attack by any Settlement Class member or any recipient of the notice, as described in Section 8(a), after the Judgment and Dismissal is entered. Such prohibited collateral attacks shall include claims that a Settlement Class member's payment was improperly calculated or adjusted, that the Settlement Class member failed to timely receive notice, or for any other related reasons. All Class Members shall be enjoined from pursuing and/or seeking to reopen claims of any type based upon the conduct alleged in the Action and released herein.
This Agreement shall be governed by, construed, and interpreted, and the rights of the Parties determined in accordance with federal law. This Agreement shall be interpreted in accordance with the plain meaning of its terms and not strictly for or against any of the Parties hereto.
REPRESENTATION BY COUNSEL
The Parties acknowledge that they have been represented by counsel throughout the negotiations which preceded the execution of this Settlement, and that this Joint Stipulation has been executed with the consent and advice of counsel.
This Joint Stipulation, and any amendments hereto, may be executed in any number of counterparts and any party hereto may execute any such counterpart, each of which when executed and delivered shall be deemed to be an original and all of which counterparts taken together shall constitute but one and the same instrument. It shall not be necessary in making proof of this Joint Stipulation or any counterpart hereof to produce or account for any of the other counterparts.
BINDING ON SUCCESSORS AND ASSIGNS
This Joint Stipulation shall be binding upon and inure to the benefit of the Parties and their respective heirs, trustees, executors, administrators, successors, and assigns.
The signatories hereto represent that they are fully authorized to enter into this Joint Stipulation and bind the respective Parties to its terms and conditions.
Signed this ___ day of _____________, 2015.