Case 3:13-cv-03826-EMC Document 615 Filed 05/20/16 Page 1 of 31 1 2 3 4 5 6 7 8 9 10 11 12 13 THEODORE J. BOUTROUS JR., SBN 132099 tboutrous@gibsondunn.com THEANE EVANGELIS, SBN 243570 tevangelis@gibsondunn.com DHANANJAY S. MANTHRIPRAGADA, SBN 254433 dmanthripragada@gibsondunn.com GIBSON, DUNN & CRUTCHER LLP 333 South Grand Avenue Los Angeles, CA 90071-3197 Telephone: 213.229.7000 Facsimile: 213.229.7520 JOSHUA S. LIPSHUTZ, SBN 242557 jlipshutz@gibsondunn.com KEVIN RING-DOWELL, SBN 278289 kringdowell@gibsondunn.com GIBSON, DUNN & CRUTCHER LLP 555 Mission Street, Suite 3000 San Francisco, CA 94105-0921 Telephone: 415.393.8200 Facsimile: 415.393.8306 Attorneys for Defendants UBER TECHNOLOGIES, INC. and TRAVIS KALANICK 14 UNITED STATES DISTRICT COURT 15 NORTHERN DISTRICT OF CALIFORNIA 16 17 18 19 DOUGLAS O’CONNOR, THOMAS COLOPY, MATTHEW MANAHAN, and ELIE GURFINKEL, individually and on behalf of all others similarly situated, v. Plaintiffs, 20 UBER TECHNOLOGIES, INC., 21 Defendant. 22 23 24 HAKAN YUCESOY, ABDI MAHAMMED, MOKHTAR TALHA, BRIAN MORRIS, and PEDRO SANCHEZ, individually and on behalf of all others similarly situated, 27 28 Gibson, Dunn & Crutcher LLP DEFENDANTS’ RESPONSE TO COMMENTS TO PROPOSED SETTLEMENT AGREEMENT CASE NO. CV 15-00262-EMC Plaintiffs, 25 26 CASE NO. CV 13-03826-EMC v. UBER TECHNOLOGIES, INC. and TRAVIS KALANICK, Defendants. DEFS.’ RESPONSE TO COMMENTS TO PROPOSED SETTLEMENT AGREEMENT– CASE NOS. CV 13-03826EMC AND CV 15-00262-EMC Case 3:13-cv-03826-EMC Document 615 Filed 05/20/16 Page 2 of 31 1 TABLE OF CONTENTS 2 Page 3 I. INTRODUCTION .................................................................................................................... 1 4 II. ARGUMENT ............................................................................................................................ 2 5 A. 6 The Objectors’ Unsupported Assertions Provide No Basis For Rejecting The Proposed Settlement And Depriving Class Members Of Its Benefits. ......................... 4 1. Procedural Issues............................................................................................... 4 2. Merits of the Case ............................................................................................. 6 3. Release .............................................................................................................. 6 4. Adequacy of Monetary Terms .......................................................................... 8 5. Adequacy of Non-Monetary Terms ................................................................ 12 6. Clear Sailing Provision ................................................................................... 13 7. Adequacy of Class Notice ............................................................................... 15 8. Claim Form ..................................................................................................... 17 9. Purported Reaction of Drivers Who Use Uber and Negative Press Coverage ......................................................................................................... 17 16 10. Objectors’ Right to Discovery ........................................................................ 17 17 11. Vacatur of Rule 23(d) Orders .......................................................................... 19 7 8 9 10 11 12 13 14 15 18 III. CONCLUSION ....................................................................................................................... 22 19 20 21 22 23 24 25 26 27 28 i Gibson, Dunn & Crutcher LLP DEFS.’ RESPONSE TO COMMENTS TO PROPOSED SETTLEMENT AGREEMENT– CASE NOS. CV 13-03826EMC AND CV 15-00262-EMC Case 3:13-cv-03826-EMC Document 615 Filed 05/20/16 Page 3 of 31 1 TABLE OF AUTHORITIES Page(s) 2 Cases 3 Alexander v. FedEx Ground Package Sys., 2016 WL 1427358 (N.D. Cal. Apr. 12, 2016) (Chen, J.)................................................................14 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Allen-Bradley Co., LLC v. Kollmorgen Corp., 199 F.R.D. 316 (E.D. Wisc. Mar. 27, 2001) ...................................................................................21 Alliance to End Repression v. City of Chicago, 91 F.R.D. 182 (N.D. Ill. 1981) ..........................................................................................................4 In Re Am. Apparel, Inc. S’holder Litig., 2014 WL 10212865 (C.D. Cal. July 28, 2014) ...............................................................................14 Am. Games, Inc. v. Trade Prods., Inc., 142 F.3d 1164 (9th Cir. 1998).........................................................................................................20 Amaral v. Cintas Corp. No. 2, 163 Cal. App. 4th 1157 (2008) .......................................................................................................11 Amchem Prods., Inc. v. Windsor, 521 U.S. 591 (1997) ..........................................................................................................................4 Ayala v. Antelope Valley Newspapers, Inc., 59 Cal. 4th 522 (Cal. 2014) (“Perhaps the strongest evidence of the right to control is whether the hirer can discharge the worker without cause . . . .”) ..............................................12 In re Bluetooth Headset Products Liab. Litig., 654 F.3d 935 (9th Cir. 2011).....................................................................................................14, 15 Browning v. Yahoo! Inc., 2007 WL 4105971 (N.D. Cal. Nov. 16, 2007)..............................................................................4, 8 Cassell v. Superior Court, 51 Cal. 4th 113 (2011) ....................................................................................................................18 Chamberlan v. Ford Motor Co., 402 F.3d 952 (9th Cir. 2005).........................................................................................................1, 8 Chu v. Wells Fargo Investments, LLC, 2011 WL 672645 (N.D. Cal. Feb. 16, 2011) ..................................................................................10 Class Plaintiffs v. City of Seattle, 955 F.2d 1268 (9th Cir. 1992).......................................................................................................2, 7 In re Corrugated Container Antitrust Litig., 643 F.2d 195 (5th Cir. 1981).............................................................................................................7 28 ii Gibson, Dunn & Crutcher LLP DEFS.’ RESPONSE TO COMMENTS TO PROPOSED SETTLEMENT AGREEMENT– CASE NOS. CV 13-03826EMC AND CV 15-00262-EMC Case 3:13-cv-03826-EMC Document 615 Filed 05/20/16 Page 4 of 31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Cotter v. Lyft, Inc., 2016 WL 1394236 (N.D. Cal. Apr. 7, 2016) ..............................................................................2, 12 Cotter v. Lyft, Inc., 60 F. Supp. 3d 1067, 1081 (N.D. Cal. 2015) (“[T]he jury in this case will be handed a square peg and asked to choose between two round holes.”) ......................................9, 11 Credit Suisse First Boston Corp. v. Grunwald, 400 F.3d 1119 (9th Cir. 2005).........................................................................................................19 In re Crocs, Inc. Sec. Litig., 2013 WL 4547404 (D. Colo. Aug. 28, 2013) ...................................................................................3 Cruz v. Sky Chefs, Inc., 2014 WL 7247065 (N.D. Cal. Dec. 19, 2014) (Ryu, J.) .................................................................10 Fraley v. Facebook, 966 F. Supp. 2d 939 (N.D. Cal. 2013) ..............................................................................................6 Franco v. Ruiz Food Products, Inc., 2012 WL 5941801 (E.D. Cal. Nov. 27, 2012) ................................................................................10 Gates v. Rohm & Haas Co., 248 F.R.D. 434 (E.D. Pa. 2008) ........................................................................................................3 Getty v. Comm’r of Internal Revenue, 913 F.2d 1486 (9th Cir. 1990).........................................................................................................17 Greko v. Diesel U.S.A., Inc., 2013 WL 1789602 (N.D. Cal. April 26, 2013) .................................................................................7 In re Guidant Corp. Implantable Defibrillators Prods. Liability Litig., MDL No. 05–1708, 2008 WL 682174 (D. Minn. 2008) ..................................................................6 Hanlon v. Chrysler Corp., 150 F.3d 1011 (9th Cir. 1998).................................................................................................3, 4, 12 Harris v. Vector Mktg. Corp., 2011 WL 1627973 (N.D. Cal. Apr. 29, 2011) (Chen, J.)..........................................................1, 3, 9 Harris v. Vector Mktg. Corp., 2011 WL 4831157 (N.D. Cal. Oct. 12, 2011) (Chen, J.) ................................................................14 Harris v. Vector Mktg. Corp., 2012 WL 381202 (N.D. Cal. Feb. 6, 2012) ....................................................................................17 In re Heritage Bond Litig., 2005 WL 1594403 (C.D. Cal. June 10, 2005) ..................................................................................2 28 iii Gibson, Dunn & Crutcher LLP DEFS.’ RESPONSE TO COMMENTS TO PROPOSED SETTLEMENT AGREEMENT– CASE NOS. CV 13-03826EMC AND CV 15-00262-EMC Case 3:13-cv-03826-EMC Document 615 Filed 05/20/16 Page 5 of 31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Hesse v. Sprint Corp., 598 F.3d 581 (9th Cir. 2010).............................................................................................................8 In re Hewlett-Packard Co. S'holder Derivative Litig., 2015 WL 1153864 (N.D. Cal. Mar. 13, 2015) ................................................................................16 Hill v. State St. Corp., 2015 WL 127728 (D. Mass. Jan. 8, 2015) ......................................................................................14 IBM Credit Corp v. United Home for Aged Hebrews, 848 F. ..............................................................................................................................................21 Jaffe v. Morgan Stanley & Co., 2008 WL 346417 (N.D. Cal. Feb. 7, 2008) ....................................................................................16 Judson Atkinson Candies Inc. v. Latini-Hohberger Dhimantec, 529 F.3d 371 (7th Cir. 2008)...........................................................................................................19 Kingvision Pay-Per-View Ltd. v. Lake Alice Bar, 168 F.3d 347 (9th Cir. 1999)...........................................................................................................19 Klein v. O'Neal, Inc., 2009 WL 1174638 (N.D. Tex. Apr. 29, 2009)..................................................................................6 Lane v. Facebook, 696 F.3d 811 (9th Cir. 2012)...........................................................................................................12 Larson v. Trader Joe’s Co., 2014 WL 3404531 (N.D. Cal. July 11, 2014) .............................................................................6, 15 Lerma v. Schiff Nutrition Int’l, Inc., 2016 WL 773219 (S.D. Cal. Feb. 29, 2016) ...................................................................................13 Lobatz v. U.S. Cellular of Cal., Inc. 222 F.3d 1142 (9th Cir. 2000).........................................................................................................18 Malchman v. Davis, 761 F.2d 893 (2d. Cir. 1985) (Newman, J., concurring) .................................................................14 Matsushita Elec. Indus. Co., Ltd. v. Epstein, 516 U.S. 367 (1996) ..........................................................................................................................7 Microsoft Corp. v. Bristol Tech., Inc., 250 F.3d 152 (2d Cir. 2001) ............................................................................................................19 In re Netflix Privacy Litig., 2013 WL 1120801 (N.D. Cal. Mar. 18, 2013) ................................................................................22 Officers for Justice v. Civil Serv. Com’n of City & Cnty. of San Francisco, 688 F.2d 615 (9th Cir. 1982).............................................................................................................6 iv Gibson, Dunn & Crutcher LLP DEFS.’ RESPONSE TO COMMENTS TO PROPOSED SETTLEMENT AGREEMENT– CASE NOS. CV 13-03826EMC AND CV 15-00262-EMC Case 3:13-cv-03826-EMC Document 615 Filed 05/20/16 Page 6 of 31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Pablo v. ServiceMaster Global Holdings Inc., 2011 WL 3476473 (N.D. Cal. Aug. 9, 2011)....................................................................................2 In re Pac. Enters. Sec. Litig., 47 F.3d 373 (9th Cir. 1995)...............................................................................................................3 Persistence Software, Inc. v. Object People, Inc., 200 F.R.D. 626 (N.D. Cal. 2001) ..............................................................................................20, 21 Philip Servs. Corp. v. City of Seattle, 2007 WL 3396436 (S.D. Tex. Nov. 14, 2007)................................................................................21 Reyn’s Pasta Bella, LLC v. Visa USA, Inc., 442 F.3d 741 (9th Cir. 2006).............................................................................................................7 Rodriguez v. West Publ’g Corp., 563 F.3d 948 (9th Cir. 2009).......................................................................................................3, 15 Rojas v. Superior Court, 33 Cal.4th 407 (2004) .....................................................................................................................18 Satchell v. Fed. Express Corp., 2007 WL 1114010 (N.D. Cal. Apr. 13, 2007) ..................................................................................5 Schiller v. David’s Bridal, Inc., 2012 WL 2117001 (E.D. Cal. June 11, 2012).................................................................................10 Sena v. Uber Techs., Inc., 2016 WL 1376445 (D. Ariz. Apr. 7, 2016)...................................................................................2, 9 Shames v. Hertz Corp., 2012 WL 5392159 (S.D. Cal. Nov. 5, 2012) ..................................................................................17 Simmons v. Brier Bros. Co., 258 U.S. 82 (1992) ..........................................................................................................................22 Suarez v. Uber Techs., Inc., 2016 WL 2348706 (M.D. Fla. May 4, 2016) ................................................................................2, 9 Sullivan v. DB Invs., Inc., 667 F.3d 273 (3d Cir. 2011) ..........................................................................................................4, 6 In re Tableware Antitrust Litig., 484 F. Supp. 2d 1078 (N.D. Cal. 2007) ............................................................................................3 TBK Partners, Ltd. v. Western Union Corp., 675 F.2d 456 (2d Cir.1982) ...............................................................................................................7 In re TD Ameritrade Account Holder Litig., 2011 WL 4079226 (N.D. Cal. Sept. 13, 2011) .................................................................................8 v Gibson, Dunn & Crutcher LLP DEFS.’ RESPONSE TO COMMENTS TO PROPOSED SETTLEMENT AGREEMENT– CASE NOS. CV 13-03826EMC AND CV 15-00262-EMC Case 3:13-cv-03826-EMC Document 615 Filed 05/20/16 Page 7 of 31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Thurman v. Bayshore Transit Management, Inc., 203 Cal. App. 4th 1112 (2012) .......................................................................................................11 Torrisi v. Tucson Elec. Pwr. Co., 8 F.3d 1370 (9th Cir. 2001).............................................................................................................19 In re Toyota Motor Corp. Unintended Acceleration Mktg., Sales Practices & Prod. Liab. Litig., 2013 WL 3224585at (C.D. Cal. June 17, 2013) ...............................................................................7 Triquint Semiconductor, Inc. v. Avago Techs. Ltd., 2012 WL 1768084 (D. Ariz. May 17, 2012) ..................................................................................21 U.S. Bancorp Mortg. Co. v. Bonner Mall P’ship, 513 U.S. 18 (1994) ....................................................................................................................19, 21 Valle Del Sol Inc. v. Whiting, 709 F.3d 808 (9th Cir. 2013)...........................................................................................................22 Varon v. Uber Techs., Inc., 2016 WL 1752835 (D. Md. May 3, 2016) ....................................................................................2, 9 Villegas v. J.P. Morgan Chase & Co., 2012 WL 5878390 (N.D. Cal. Nov. 21, 2012)..................................................................................6 In re Vioxx Prods. Liability Litig., 574 F. Supp. 2d 606 (E.D. La. 2008) ................................................................................................6 In re Volkswagen & Audi Warranty Extension Litig., 273 F.R.D. 349 (D. Mass. 2011) .......................................................................................................4 Weinberger v. Great N. Nekoosa Corp., 925 F.2d 518 (1st Cir. 1991) ...........................................................................................................14 In re Wells Fargo Mortg.-Backed Certificates Litig., No. 09-cv-01376, 2011 U.S. Dist. LEXIS 131788 (N.D. Cal. Nov. 14, 2011) ..............................17 Wixon v. Wyndham Resort Dev. Corp., 2011 WL 3443650 (N.D. Cal. Aug. 8, 2011)..................................................................................18 Young v. Cooper Cameron Corp., 2008 WL 1748462 (S.D.N.Y. Apr. 15, 2008) .................................................................................21 Statutes 26 Cal. Labor Code § 351 ............................................................................................................................7 27 Cal. Labor Code § 2699.3(a)(1) ............................................................................................................10 28 Cal. Labor Code § 2802 ..........................................................................................................................7 vi Gibson, Dunn & Crutcher LLP DEFS.’ RESPONSE TO COMMENTS TO PROPOSED SETTLEMENT AGREEMENT– CASE NOS. CV 13-03826EMC AND CV 15-00262-EMC Case 3:13-cv-03826-EMC Document 615 Filed 05/20/16 Page 8 of 31 1 Fair Labor Standards Act ......................................................................................................................16 2 FCRA .............................................................................................................................15, 17, 19, 20, 22 3 Rules 4 5 6 7 8 9 10 11 Federal Rule of Civil Procedure 54(b) ............................................................................................20, 22 L.R. 16-8 ...............................................................................................................................................22 Rule 23 ....................................................................................................................................................4 Rule 23(d) .....................................................................................................................15, 19, 20, 21, 22 Rule 23(f) ............................................................................................................................................1, 8 Rule 30(b)(6) ...........................................................................................................................................5 Rule 60(b) .......................................................................................................................................19, 20 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 vii Gibson, Dunn & Crutcher LLP DEFS.’ RESPONSE TO COMMENTS TO PROPOSED SETTLEMENT AGREEMENT– CASE NOS. CV 13-03826EMC AND CV 15-00262-EMC Case 3:13-cv-03826-EMC Document 615 Filed 05/20/16 Page 9 of 31 1 2 I. INTRODUCTION After litigating for almost three years in a hard-fought case including more than 80 motions, 3 18 hearings, and myriad discovery disputes, the parties participated in several in-person mediation 4 sessions before a professional, highly experienced, and well-regarded labor and employment 5 mediator and reached a fair, reasonable, and adequate settlement that they have submitted for the 6 Court’s preliminary approval. This agreement includes not only a monetary payment of up to $100 7 million—the largest settlement in history involving any “on demand” company—it also incorporates 8 significant non-monetary relief affecting Uber’s driver deactivation procedures, driver appeal rights, 9 an association representing drivers’ interests, and arbitration costs, among many other topics. The 10 settlement’s potential nine-figure monetary payment and meaningful non-monetary components 11 make for a compelling and eminently reasonable deal that is entitled to preliminary approval. 12 Since the filing of this agreement, the Court has received approximately thirty largely 13 irrelevant objections, many of which fail entirely to address any of the factors relevant to evaluate the 14 fairness of a proposed class settlement. The objections also ignore that this is the preliminary 15 approval stage, which presents vastly different considerations, and requires far less scrutiny, than the 16 final approval stage, when the Court will have the opportunity to address any and all objections on a 17 full record and with the benefit of notice to the settlement class. Harris v. Vector Mktg. Corp., 2011 18 WL 1627973, at *7 (N.D. Cal. Apr. 29, 2011) (Chen, J.). 19 Beyond applying the wrong standards, these objections fail to account for the fact that the 20 settlement class is very likely to receive nothing if the case continues. By granting Uber’s Rule 23(f) 21 petition to appeal the Court’s class certification orders, the Ninth Circuit has already indicated that it 22 may have serious concern with this Court’s rulings certifying this case as a class action. See 23 Chamberlan v. Ford Motor Co., 402 F.3d 952, 959 (9th Cir. 2005) (Rule 23(f) review is a “rare 24 occurrence” that is warranted only when a class certification order “presents an unsettled and 25 fundamental issue of law relating to class actions” or when a “class certification decision is 26 manifestly erroneous.”). A ruling overturning this Court’s class certification orders would destroy 27 the certified class and derail this case entirely. 28 1 Gibson, Dunn & Crutcher LLP DEFS.’ RESPONSE TO COMMENTS TO PROPOSED SETTLEMENT AGREEMENT– CASE NOS. CV 13-03826EMC AND CV 15-00262-EMC Case 3:13-cv-03826-EMC Document 615 Filed 05/20/16 Page 10 of 31 1 Other risks stand as significant obstacles to any recovery by drivers in this litigation. For 2 example, the Court’s rulings holding Uber’s arbitration clauses to be unenforceable are the subject of 3 several pending Ninth Circuit appeals, one of which is scheduled for oral argument in just three 4 weeks. If the Ninth Circuit reverses this Court’s rulings and agrees with the three federal courts that 5 have all upheld and enforced Uber’s arbitration agreement within just the last two months,1 such a 6 ruling would “destroy the certified class in this case, making recovery unfeasible for the vast majority 7 of class members.” O’Connor, Dkt. 574 at 21; see also Pablo v. ServiceMaster Global Holdings Inc., 8 2011 WL 3476473, at *2 (N.D. Cal. Aug. 9, 2011) (noting that “a class action is not the superior 9 method of adjudication” where many class members are bound by arbitration agreements). 10 Even if this class action made it to trial, plaintiffs (admittedly) faced a steep uphill battle in 11 attempting to convince a jury to rule that drivers—who have unprecedented freedom and autonomy 12 in their use of the Uber app—are Uber employees, let alone that every single driver is an Uber 13 employee, which is what would be required for the class to prevail in this class action. See Dkt. 251 14 (“numerous factors” in California’s employment test “point in opposing directions”); see also Cotter 15 v. Lyft, Inc., 2016 WL 1394236, at *5 (N.D. Cal. Apr. 7, 2016) (“Cotter II”) (noting that plaintiff 16 drivers “face a significant risk that a jury would find the drivers to be independent contractors under 17 California law”). 18 For the reasons discussed below and in the concurrently filed joint supplemental brief 19 submitted by the parties pursuant to this Court’s Order re Supplemental Briefing (O’Connor, Dkt. 20 596), Defendants respectfully request that the Court reject the objections to the settlement and enter 21 the Order Granting Preliminary Approval. 22 II. ARGUMENT 23 “In deciding whether to approve a proposed settlement, the Ninth Circuit has a ‘strong judicial 24 policy that favors settlements, particularly where complex class action litigation is concerned.’” In re 25 Heritage Bond Litig., 2005 WL 1594403, at *2 (C.D. Cal. June 10, 2005) (quoting Class Plaintiffs v. 26 27 28 1 See Suarez v. Uber Techs., Inc., 2016 WL 2348706 (M.D. Fla. May 4, 2016); Varon v. Uber Techs., Inc., 2016 WL 1752835 (D. Md. May 3, 2016); Sena v. Uber Techs., Inc., 2016 WL 1376445 (D. Ariz. Apr. 7, 2016). 2 Gibson, Dunn & Crutcher LLP DEFS.’ RESPONSE TO COMMENTS TO PROPOSED SETTLEMENT AGREEMENT– CASE NOS. CV 13-03826EMC AND CV 15-00262-EMC Case 3:13-cv-03826-EMC Document 615 Filed 05/20/16 Page 11 of 31 1 City of Seattle, 955 F.2d 1268, 1276 (9th Cir. 1992)). As the Ninth Circuit has explained, even at the 2 final approval stage it is not the province of the Court to second-guess a reasonable and non-collusive 3 settlement, given that “‘[p]arties represented by competent counsel are better positioned than courts 4 to produce a settlement that fairly reflects each party’s expected outcome in litigation.’” Rodriguez v. 5 West Publ’g Corp., 563 F.3d 948, 965 (9th Cir. 2009) (quoting In re Pac. Enters. Sec. Litig., 47 F.3d 6 373, 378 (9th Cir. 1995)). Instead, under this more stringent review the Ninth Circuit “put[s] a good 7 deal of stock in the product of an arms-length, non-collusive, negotiated resolution, and [has] never 8 prescribed a particular formula by which that outcome must be tested.” Id. at 965 (internal citation 9 omitted). Thus, “the district court’s review of a class action settlement is ‘extremely limited’” in 10 most circumstances. Harris, 2011 WL 1627973, at *7 (Chen, J.) (quoting Hanlon v. Chrysler Corp., 11 150 F.3d 1011, 1026 (9th Cir. 1998)). 12 The strong policy in favor of settlement approval applies with all the more force at the 13 preliminary approval stage. At this stage, a court may grant preliminary approval of a settlement 14 and direct notice to the class as long as the settlement “appears to be the product of serious, informed, 15 non-collusive negotiations, has no obvious deficiencies, does not improperly grant preferential 16 treatment to class representatives or segments of the class, and falls within the range of possible 17 approval.” In re Tableware Antitrust Litig., 484 F. Supp. 2d 1078, 1079 (N.D. Cal. 2007) (quotations 18 omitted). This standard is “far less demanding” than the standard for final approval. Gates v. Rohm 19 & Haas Co., 248 F.R.D. 434, 444 n.7 (E.D. Pa. 2008); see also Harris, 2011 WL 1627973, at *7 20 (“Closer scrutiny is reserved for the final approval hearing”); In re Crocs, Inc. Sec. Litig., 2013 WL 21 4547404, at *3 (D. Colo. Aug. 28, 2013) (“The standards for preliminary approval” of a class 22 settlement “are not as stringent as those applied for final approval.”). Moreover, “[a]n initial 23 presumption of fairness is usually involved if the settlement is recommended by class counsel after 24 arm’s length bargaining,” (Harris, 2011 WL 1627973, at *8 (quotations omitted)), as is the case 25 here. See O’Connor, Dkt. 519-6 ¶¶ 26, 221. 26 This presumption of fairness holds here, as none of the objectors—who comprise a miniscule 27 percentage (0.00008%) of the potential settlement class members—raises any issue that could be a 28 basis for rejecting preliminary approval of the settlement. For example, the Ninth Circuit recognizes 3 Gibson, Dunn & Crutcher LLP DEFS.’ RESPONSE TO COMMENTS TO PROPOSED SETTLEMENT AGREEMENT– CASE NOS. CV 13-03826EMC AND CV 15-00262-EMC Case 3:13-cv-03826-EMC Document 615 Filed 05/20/16 Page 12 of 31 1 that certain settlement class members may believe that the “settlement could have been better.” 2 Hanlon, 150 F.3d at 1026-27. However, even in the final approval stage, and not this less-demanding 3 preliminary stage, “this possibility does not mean the settlement presented was not fair, reasonable or 4 adequate. Settlement is the offspring of compromise; the question we address is not whether the final 5 product could be prettier, smarter or snazzier, but whether it is fair, adequate and free from 6 collusion.” Id.; see also Browning v. Yahoo! Inc., 2007 WL 4105971, at *5 (N.D. Cal. Nov. 16, 7 2007) (objection that the settlement did not provide a full cash refund “is tantamount to complaining 8 that the settlement should be ‘better,’ which is not a valid objection”); Alliance to End Repression v. 9 City of Chicago, 91 F.R.D. 182, 195 (N.D. Ill. 1981) (“By definition, a fair settlement need not 10 satisfy every concern of the plaintiff class, but may fall anywhere within a broad range of upper and 11 lower limits.”). If the objectors believe the settlement is unfair or inadequate, they are entitled to 12 object again at the final approval stage and/or opt out of the settlement class–not defeat the settlement 13 in its entirety. 14 A. The Objectors’ Unsupported Assertions Provide No Basis For Rejecting The Proposed 15 Settlement And Depriving Class Members Of Its Benefits. 16 1. 17 18 Procedural Issues a. Certification of Settlement Class Certain objectors argue that the settlement is procedurally deficient because the Rule 23 19 standards are not satisfied. See, e.g., O’Connor, Dkt. 592. But as the Supreme Court has explained, 20 class certification for settlement purposes presents different considerations. “Confronted with a 21 request for settlement-only class certification, a district court need not inquire whether the case, if 22 tried would present intractable management problems, for the proposal is that there be no 23 trial.” Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 620 (1997) ; see In re Volkswagen & Audi 24 Warranty Extension Litig., 273 F.R.D. 349, 354 (D. Mass. 2011) (finding superiority requirement as 25 applied to settlement class was satisfied “[i]n view of the fact that this court need not deal with 26 intractable management problems presented by trial, the large size of the Class, the complexity of the 27 litigation, the cost of the litigation, and similar issues”); Sullivan v. DB Invs., Inc., 667 F.3d 273, 302- 28 303 (3d Cir. 2011) (finding “no need to inquire” into whether variations in state law undermined 4 Gibson, Dunn & Crutcher LLP DEFS.’ RESPONSE TO COMMENTS TO PROPOSED SETTLEMENT AGREEMENT– CASE NOS. CV 13-03826EMC AND CV 15-00262-EMC Case 3:13-cv-03826-EMC Document 615 Filed 05/20/16 Page 13 of 31 1 predominance requirement as to certification for settlement class). Therefore, the Court need not 2 inquire into the manageability problems that would exist in the absence of a settlement and should 3 preliminarily approve the settlement. 4 b. Negotiations 5 Objector Tabola states that the settlement is “not the product of informed negotiations” and 6 “fails to provide sufficient evidence allowing this Court to make an independent assessment of the 7 adequacy of the settlement terms and ensure that the recovery represents a reasonable compromise,” 8 partly “because the settlement was reached prior to sufficient discovery or investigation.” O’Connor, 9 Dkt. 594 at 8, 10. This is flat wrong. This case settled only two months before trial. Plaintiffs have 10 deposed two Uber managers, two Rule 30(b)(6) witnesses, and Uber’s Senior Vice-President of 11 Global Operations Ryan Graves. O’Connor, Dkt. 574 at 2-3. They also have propounded, and Uber 12 has responded to, thirty-six separate Requests For Production and thirty-six Interrogatories, resulting 13 in more than 36,000 pages of documents in discovery. See id. In addition to engaging in this 14 discovery, Plaintiffs’ counsel stated that she has been in near-constant contact with class members in 15 this case since its inception. Id. at 3. According to Plaintiffs’ counsel, at least 2,000 class members 16 have been in contact with her firm about the case. Id. 17 Moreover, the settlement agreement is the result of several protracted, contentious arm’s- 18 length negotiations during in-person mediation sessions and many follow-up phone and email 19 communications. After attempting mediation early in the case to no avail, the parties renewed their 20 efforts two years later with a respected mediator—Mark S. Rudy—who is highly experienced in 21 litigating and mediating labor and employment class action disputes. The parties met with Mr. Rudy 22 three separate times starting in early March 2016 to try to resolve the case. After these lively and in- 23 depth arms-length negotiations in front of the mediator, the parties continued negotiating for more 24 than a month before finalizing a written Memorandum of Understanding on April 15, 2016. The 25 claim that this settlement—shepherded by a neutral mediator after three years of extensive 26 investigation, discovery and hotly contested motion practice on the verge of trial—is premature or 27 collusive is almost laughable. Satchell v. Fed. Express Corp., 2007 WL 1114010, *4 (N.D. Cal. Apr. 28 13, 2007) (“The assistance of an experienced mediator in the settlement process confirms that the 5 Gibson, Dunn & Crutcher LLP DEFS.’ RESPONSE TO COMMENTS TO PROPOSED SETTLEMENT AGREEMENT– CASE NOS. CV 13-03826EMC AND CV 15-00262-EMC Case 3:13-cv-03826-EMC Document 615 Filed 05/20/16 Page 14 of 31 1 settlement is non-collusive”); Villegas v. J.P. Morgan Chase & Co., 2012 WL 5878390, *6 (N.D. 2 Cal. Nov. 21, 2012) (same). 3 2. 4 Many of the objections to the settlement focus on the perceived merits of Plaintiffs’ claims, Merits of the Case 5 and not the settlement itself. See, e.g., O’Connor, Dkt. 529, 538, 539, 540. These objections should 6 be rejected, especially at this preliminary approval stage, because “the settlement or fairness hearing 7 is not to be turned into a trial or rehearsal for trial on the merits.” Officers for Justice v. Civil Serv. 8 Com’n of City & Cnty. of San Francisco, 688 F.2d 615, 625 (9th Cir. 1982); see also Larson v. 9 Trader Joe’s Co., 2014 WL 3404531, at *6 (N.D. Cal. July 11, 2014) (“My duty is to determine 10 whether the settlement is fundamentally fair to the class, not to reexamine the underlying merits of 11 the litigation.”); Fraley v. Facebook, 966 F. Supp. 2d 939, 948 (N.D. Cal. 2013) (“The law is 12 well-settled . . . that in evaluating a settlement the court is not to ‘reach any ultimate conclusions on 13 the contested issues of fact and law which underlie the merits of the dispute, for it is the very 14 uncertainty of outcome in litigation and avoidance of wasteful and expensive litigation that induce 15 consensual settlements.’”) (quoting Officers for Justice, 688 F.2d at 625). 16 3. 17 Several objectors, mostly those with pending cases against Uber, object to the release of Release 18 various claims as part of the settlement. E.g., O’Connor, Dkt. 594 at 7-8. However, courts 19 nationwide recognize that “achieving global peace is a valid, and valuable, incentive to class action 20 settlements. Settlements avoid future litigation with all potential plaintiffs—meritorious or not.” 21 Sullivan v. DB Invs., Inc., 667 F.3d 273, 311 (3d Cir. 2011); see generally Klein v. O'Neal, Inc., 2009 22 WL 1174638, at *3 (N.D. Tex. Apr. 29, 2009) (“In a class action settlement setting, defendants seek 23 and pay for global peace—i.e., the resolution of as many claims as possible.”); In re Vioxx Prods. 24 Liability Litig., 574 F. Supp. 2d 606, 613 (E.D. La. 2008) (quoting In re Guidant Corp. Implantable 25 Defibrillators Prods. Liability Litig., MDL No. 05–1708, 2008 WL 682174, at *3 (D. Minn. 2008) 26 (noting that the parties “contemplated a global settlement covering Plaintiffs from both the MDL and 27 state cases, and included Plaintiffs whose cases had been filed or transferred to the MDL, Plaintiffs 28 6 Gibson, Dunn & Crutcher LLP DEFS.’ RESPONSE TO COMMENTS TO PROPOSED SETTLEMENT AGREEMENT– CASE NOS. CV 13-03826EMC AND CV 15-00262-EMC Case 3:13-cv-03826-EMC Document 615 Filed 05/20/16 Page 15 of 31 1 whose cases were filed outside the MDL in state court proceedings, and potential Plaintiffs who had 2 not yet filed their cases”)). 3 “The weight of authority holds that a federal court may release not only those claims alleged 4 in the complaint, but also claims ‘based on the identical factual predicate as that underlying the 5 claims in the settled class action even though the claim was not presented and might not have been 6 presentable in the class action.’” Class Plaintiffs v. City of Seattle, 955 F.2d 1268, 1287 (9th Cir. 7 1992) (citing TBK Partners, Ltd. v. Western Union Corp., 675 F.2d 456, 460 (2d Cir.1982)) 8 (emphasis in original); see also Matsushita Elec. Indus. Co., Ltd. v. Epstein, 516 U.S. 367, 374 9 (1996) (holding that federal court must give effect to state court approval of class action settlement, 10 even if settlement releases pending federal claims within exclusive jurisdiction of federal courts, as 11 long as law of the state would give preclusive effect to the judgment); Reyn’s Pasta Bella, LLC v. 12 Visa USA, Inc., 442 F.3d 741, 743 (9th Cir. 2006) (finding that settlement in E.D.N.Y. action released 13 claims in then-pending N.D. Cal. action); In re Corrugated Container Antitrust Litig., 643 F.2d 195, 14 221-23 (5th Cir. 1981) (finding that settlement in federal court action released claims in then-pending 15 state court action). 16 Here, the claims being released all share a critical factual predicate with the claims that the 17 O’Connor and Yucesoy plaintiffs asserted, namely the alleged misclassification of drivers as 18 independent contractors. The O’Connor plaintiffs could not recover damages arising from alleged 19 lost tips (Cal. Labor Code § 351), or expense reimbursements (Cal. Labor Code § 2802), without the 20 jury first resolving the employee/independent contractor issue in the drivers’ favor. Claims for such 21 things as minimum wage, overtime, workers’ compensation insurance, and meal and rest periods are 22 no different. For all of these claims, the classification of the worker, based on the same issues and 23 considerations that were at issue in this case, is the primary focus. The settlement’s release of claims 24 thus is justified. See, e.g., In re Toyota Motor Corp. Unintended Acceleration Mktg., Sales Practices 25 & Prod. Liab. Litig., 2013 WL 3224585at *17 (C.D. Cal. June 17, 2013) (approving “broad” release 26 that released defendant “from claims that were or that could have been brought” because it was 27 limited to claims “regarding the subject matter of the Actions”); Greko v. Diesel U.S.A., Inc., 2013 28 WL 1789602, at *6 (N.D. Cal. April 26, 2013) (where “settlement agreement [] provides that the 7 Gibson, Dunn & Crutcher LLP DEFS.’ RESPONSE TO COMMENTS TO PROPOSED SETTLEMENT AGREEMENT– CASE NOS. CV 13-03826EMC AND CV 15-00262-EMC Case 3:13-cv-03826-EMC Document 615 Filed 05/20/16 Page 16 of 31 1 class members will release all claims ‘arising from, or related to, the same facts alleged in or that 2 reasonably could have been included’ in the complaint,” “[w]hile the scope of this release appears 3 broad, it is permissible because it only encompasses claims that are based on the same factual 4 predicate as that underlying the claims asserted in the complaint, and does not release unrelated 5 claims”) (citing Hesse v. Sprint Corp., 598 F.3d 581, 590 (9th Cir. 2010)). 6 4. 7 Many objectors decry the monetary terms of the settlement as insufficient. E.g., O’Connor, Adequacy of Monetary Terms 8 Dkt. 529, 536, 559, 570, 594 at 7, 581 at 3. But these objections generally do not account for, or even 9 mention, the substantial risk that there would be no recovery on these claims. See Browning v. 10 Yahoo! Inc., 2007 WL 4105971, at *5 (N.D. Cal. Nov. 16, 2007) (approving settlement and noting 11 that “perhaps most importantly, [the] objections do not sufficiently consider . . . the considerable risks 12 involved with continued litigation”); In re TD Ameritrade Account Holder Litig., 2011 WL 4079226, 13 at *14 (N.D. Cal. Sept. 13, 2011) (rejecting objection that settlement payment was insufficient and 14 noting that “[t]he flaw in this objection is that it fails to take into account that a Settlement represents 15 a compromise, which takes into account Plaintiffs’ likelihood of succeeding and the amount of 16 potential recovery, against the risk of investing further time and resources and recovering nothing”). 17 The objectors either ignore this factor or severely underestimate the risks and hurdles that Plaintiffs 18 would have faced if they pursued their claims through class certification, trial and appeal. 19 For example, as plaintiffs noted in their motion for preliminary settlement approval 20 (O’Connor, Dkt. 574 at 20), the Ninth Circuit’s recent decision to grant Uber’s Petition for Review of 21 the Court’s Supplemental Class Certification Order pursuant to Rule 23(f) was a powerful indication 22 that this case was unlikely to proceed in its current form. See Ninth Cir. Appeal No. 16-15595.2 23 Likewise, this Court’s rulings holding Uber’s arbitration clauses to be unenforceable are the subject 24 of multiple pending appeals in the Ninth Circuit. See Ninth Cir. Appeal Nos. 14-16078, 15-16178. 25 26 27 28 2 In granting the Rule 23(f) petition, the Ninth Circuit cited Chamberlan v. Ford Motor Co., 402 F.3d 952 (9th Cir. 2005), which states that Rule 23(f) review is a “rare occurrence” that is warranted only when a class certification order “is manifestly erroneous” or “presents an unsettled and fundamental issue of law relating to class actions.” Id. at 959. 8 Gibson, Dunn & Crutcher LLP DEFS.’ RESPONSE TO COMMENTS TO PROPOSED SETTLEMENT AGREEMENT– CASE NOS. CV 13-03826EMC AND CV 15-00262-EMC Case 3:13-cv-03826-EMC Document 615 Filed 05/20/16 Page 17 of 31 1 Three federal courts have recently upheld the exact same agreements as enforceable—indirect 2 contrast to this Court’s rulings. Suarez v. Uber Techs., Inc., 2016 WL 2348706 (M.D. Fla. May 4, 3 2016); Varon v. Uber Techs., Inc., 2016 WL 1752835 (D. Md. May 3, 2016); Sena v. Uber Techs., 4 Inc., 2016 WL 1376445 (D. Ariz. Apr. 7, 2016). Plaintiffs accurately noted that a “decision reversing 5 this Court’s rulings regarding the enforceability of Uber’s arbitration clauses could destroy the 6 certified class in this case, making recovery unfeasible for the vast majority of class members.” 7 O’Connor, Dkt. 574 at 21. The uncertainty created by these appeals, which the O’Connor plaintiffs 8 “took into serious consideration” (id.), are almost wholly unaddressed in the objections. 9 Likewise, the objectors generally fail to account for the unlikelihood that the O’Connor plaintiffs 10 would be able to convince every single juror that drivers who use the Uber app are Uber employees— 11 let alone that all drivers in the certified class are employees, as would be required for the Plaintiffs to 12 prevail in a class trial. See Cotter v. Lyft, Inc., 60 F. Supp. 3d 1067, 1081 (N.D. Cal. 2015) (“Cotter 13 I”) (“[T]he jury in this case will be handed a square peg and asked to choose between two round 14 holes.”). Furthermore, objectors fail to acknowledge that even if Plaintiffs were to prevail on their 15 claims, any potential recovery would be a fraction of the amount Plaintiffs are seeking in this case 16 because Uber’s fares compensate drivers for their expenses, and because the damages award 17 Plaintiffs seek would reflect a windfall double-recovery for drivers, effectively paying them far more 18 than they anticipated earning for the rides they performed using the Uber app. 19 a. 20 Valuation of Claims3 A number of objectors argue that the parties’ valuation of the expense reimbursement claim is 21 flawed because it takes into account only Period 3 mileage (mileage while on trip). See Dkts. 536, 22 553, 562, 594, 599. To the extent Objectors seek to recover expenses incurred during Period 2 (e.g., 23 expenses incurred after a driver has received a ride request and is searching for her rider), such 24 expenses are not compensable because Uber could not possibly “control” drivers during this time 25 26 27 28 3 Objectors who consider the settlement to be “woefully inadequate” due to Uber’s “gross annual revenue” and “valuation” (O’Connor, Dkt. 562, 563) misunderstand what is required to determine the adequacy of a settlement agreement. Courts and settling parties instead must “gauge the value of the class’s claims,” not the defendant’s purported valuation. Harris v. Vector Mktg. Corp., No. C-08-5198 EMC, 2011 WL 1627973, at *8 (N.D. Cal. Apr. 29, 2011). 9 Gibson, Dunn & Crutcher LLP DEFS.’ RESPONSE TO COMMENTS TO PROPOSED SETTLEMENT AGREEMENT– CASE NOS. CV 13-03826EMC AND CV 15-00262-EMC Case 3:13-cv-03826-EMC Document 615 Filed 05/20/16 Page 18 of 31 1 period, as is necessary for them to be classified as employees. In fact, it is undisputed that drivers 2 who use Uber have discretion to cancel ride requests after accepting those requests. The objectors’ 3 proposed damages methodology likewise does not properly account for the fact that drivers often 4 accept ride requests—either using Uber or a competitor’s app—while they are still transporting the 5 previous rider, meaning that there is direct overlap between one ride’s Period 3 mileage and another 6 ride’s Period 2 mileage. 7 (i) PAGA Claims 8 The objections related to the PAGA claims are similarly meritless. 9 First, at least one objector claims “it is unclear that plaintiffs are authorized to release 10 the additional PAGA claims contemplated in the settlement” because the authority to bring a PAGA 11 claim on behalf of the California Labor and Workforce Development Agency (“LWDA”) 12 “is established by notice sent pursuant to Cal. Labor Code § 2699.3(a)(1).” O’Connor, Dkt. 593 at 13 7. According to the objection, “plaintiffs have not requested authority to prosecute most of the 14 PAGA claims . . . at issue in the settlement . . . .” Id. However, as provided in the parties’ settlement 15 agreement, the O’Connor plaintiffs sent a letter to LWDA’s PAGA administrator on April 21, 2016, 16 amending their letter to LWDA “to add any and all potential Labor Code violations to include as part 17 of the PAGA claim in the O’Connor Action.” O’Connor, Dkt. 519-6 at 8. 18 Second, Uber’s $1 million payment in settlement of Plaintiffs’ PAGA claims is 1–1.2% of the 19 total settlement amount (either $84 million or $100 million), and would be among the largest 20 recoveries in absolute terms since the statute’s enactment in 2003. Indeed, many PAGA claims settle 21 for a few thousand dollars, and less than 1% of the total settlement amount. See, e.g., Cruz v. Sky 22 Chefs, Inc., 2014 WL 7247065, at *3 (N.D. Cal. Dec. 19, 2014) (Ryu, J.) (approving PAGA 23 settlement payment of $10,000 out of a $1.75 million common-fund settlement, or 0.57%); Chu v. 24 Wells Fargo Investments, LLC, 2011 WL 672645, at *1 (N.D. Cal. Feb. 16, 2011) (approving PAGA 25 settlement payment of $10,000 out of a $6.9 million common-fund settlement, or 0.014%); Franco v. 26 Ruiz Food Products, Inc., 2012 WL 5941801, at *13 (E.D. Cal. Nov. 27, 2012) (approving PAGA 27 settlement payment of $10,000 out of $2.5 million common-fund settlement, or 0.4%); Schiller v. 28 David’s Bridal, Inc., 2012 WL 2117001, at *14 (E.D. Cal. June 11, 2012) (approving PAGA 10 Gibson, Dunn & Crutcher LLP DEFS.’ RESPONSE TO COMMENTS TO PROPOSED SETTLEMENT AGREEMENT– CASE NOS. CV 13-03826EMC AND CV 15-00262-EMC Case 3:13-cv-03826-EMC Document 615 Filed 05/20/16 Page 19 of 31 1 settlement payment of $10,000 out of $518,245 common-fund settlement, or 1.9%). Accordingly, 2 and particularly for preliminary approval purposes, this amount adequately reflects a reasonable value 3 of Plaintiffs’ PAGA claims and the objections to the contrary, O’Connor, Dkt. 594 at 2, are 4 unfounded. 5 Moreover, this amount is eminently reasonable when considering Uber’s good faith in 6 classifying drivers as independent contractors. In evaluating whether a maximum PAGA penalty 7 crosses the subsection (e)(2) threshold as “unjust, arbitrary and oppressive, or confiscatory,” courts 8 generally focus on the blameworthiness of the defendant’s conduct. For example, in Amaral v. 9 Cintas Corp. No. 2, 163 Cal. App. 4th 1157 (2008), the court affirmed the trial court’s imposition of 10 maximum PAGA penalties because the defendant “was on notice that the [living wage ordinance] 11 applied to its operations but made no attempt to comply with the ordinance.” Id. at 1214. In 12 Thurman v. Bayshore Transit Management, Inc., 203 Cal. App. 4th 1112 (2012), by contrast, the 13 California Court of Appeal affirmed the trial court’s decision to lower the PAGA award below the 14 statutory maximum, reasoning that “defendants took their obligations under Wage Order No. 9 15 seriously and attempted to comply with the law.” Id. at 1136. In other words, the governing 16 principle is proportionality to the offense. There is no suggestion here that Uber ever acted in bad 17 faith by treating drivers as independent contractors. To the contrary, this Court has acknowledged 18 that the question whether drivers are independent contractors or employees is very much an open 19 one: “Here, numerous [Borello] factors point in opposing directions. As to many, there are disputed 20 facts, including those pertaining to Uber’s level of control over the ‘manner and means’ of Plaintiffs’ 21 performance.” O’Connor, Dkt. 251 at 26. And in a similar class action brought by drivers against 22 ride-sharing app Lyft, Judge Chhabria echoed this sentiment: “The test the California courts have 23 developed over the 20th Century for classifying workers isn’t very helpful in addressing this 21st 24 Century problem. Some factors point in one direction, some point in the other, and some are 25 ambiguous.” Cotter I, 60 F. Supp. 3d at 1081. What’s more, Judge Chhabria relied on this very point 26 in concluding that it would be improper to award of maximum PAGA penalties against the defendant, 27 as “[t]his does not appear to be a case in which a company deliberately sought to evade California’s 28 wage and hour laws by classifying workers as ‘independent contractors’ when it knew they were 11 Gibson, Dunn & Crutcher LLP DEFS.’ RESPONSE TO COMMENTS TO PROPOSED SETTLEMENT AGREEMENT– CASE NOS. CV 13-03826EMC AND CV 15-00262-EMC Case 3:13-cv-03826-EMC Document 615 Filed 05/20/16 Page 20 of 31 1 really ‘employees.’ How to classify Lyft drivers under California’s archaic law is a difficult question, 2 and it does not seem that Lyft made its initial classification decision in bad faith. It would therefore 3 be ‘unjust’ or ‘oppressive’ to impose full PAGA penalties.” Cotter II, 2016 WL 1394236, at *9. 4 For all these reasons, the Court should preliminarily approve settlement of the PAGA claims. 5 6 7 b. Redactions Objections regarding the initial redactions of the settlement papers are moot after the parties filed revised settlement papers. See Dkts. 572, 574, 575. 8 5. 9 Some objectors find the non-monetary terms to be of little value. Many of these objections Adequacy of Non-Monetary Terms 10 take issue with the fact that drivers are still considered independent contractors. However, 11 reclassification is by no means required when parties settle misclassification-related claims; to the 12 contrary, courts routinely approve agreements that enable defendants to continue classifying workers 13 as independent contractors. Dkt. 574 at 22 (citing cases that approved settlements of 14 misclassification claims that did not result in reclassification). Nor would reclassification even make 15 sense here as a possible non-monetary provision, in light of the fact that Uber has agreed to institute a 16 “sufficient cause” deactivation policy as part of the parties’ settlement agreement. See Ayala v. 17 Antelope Valley Newspapers, Inc., 59 Cal. 4th 522, 531 (Cal. 2014) (“Perhaps the strongest evidence 18 of the right to control is whether the hirer can discharge the worker without cause . . . .”). These 19 objectors completely lose site of the fact that this is a settlement, and, “as the ‘offspring of 20 compromise,’ Hanlon, 150 F.3d at 1027, settlement agreements will necessarily reflect the interests 21 of both parties to the settlement, including those of the defendant. Defendants often insist on certain 22 concessions in exchange for monetary payments or other demands plaintiffs make, and defendants 23 can certainly be expected to structure a settlement in a way that does the least harm to their 24 interests.” Lane v. Facebook, 696 F.3d 811 (9th Cir. 2012). 25 This complaint also improperly devalues the significant relief the parties’ non-monetary 26 provide drivers. See Hanlon, 150 F.3d at 1026-27 (9th Cir. 1998). For instance, as detailed in the 27 Liss-Riordan Declaration (“Liss-Riordan Decl.”) In Support Of The Motion for Preliminary 28 Approval, Dkt. 575 ¶ 93, the “Driver’s Association could go a long way towards addressing” drivers’ 12 Gibson, Dunn & Crutcher LLP DEFS.’ RESPONSE TO COMMENTS TO PROPOSED SETTLEMENT AGREEMENT– CASE NOS. CV 13-03826EMC AND CV 15-00262-EMC Case 3:13-cv-03826-EMC Document 615 Filed 05/20/16 Page 21 of 31 1 “desire to have more of a voice in the way Uber operates and . . . frustration at feeling the company is 2 unaware of their needs.” And, contrary to what Objector Vandervoort (Dkt. 553) thinks, the drivers 3 themselves will be electing their Driver Association representatives. See Settlement Agreement § 4 135(g)(iv) (O’Connor, Dkt. 519-6). 5 Importantly, the non-monetary terms address two issues that drivers have always considered 6 vital: deactivation and tipping. Now, drivers will have (1) at least two warnings and an opportunity 7 to cure many types of deficiencies prior to deactivation; (2) a written explanation of the reasons for 8 their deactivation; and (3) an appeals process for many types of deactivations, overseen by fellow 9 drivers, for those who believe they have been unjustly deactivated. Moreover, even though Uber’s 10 tipping policy “has not changed at all,” as one objector notes (Dkt. 551), the clarification in 11 messaging ensures that riders know that tip is not included. 12 The sunset provision that some objectors noted (see, e.g., Dkt. 562) is also necessary given 13 that no one knows what the regulatory and statutory framework will look like in the future. And the 14 parties should not bind themselves to any commitments that might be inconsistent with, unnecessary 15 under, or outright prohibited by future law. As this Court noted, “[t]he application of the traditional 16 test of employment – a test which evolved under an economic model very different from the new 17 ‘sharing economy’ – to Uber’s business model creates significant challenges . . . . It is conceivable 18 that the legislature may eventually enact rules particular to the so-called ‘sharing economy.’”). Dkt. 19 251. Moreover, injunctive relief is regularly subject to time limitations. See Lerma v. Schiff 20 Nutrition Int’l, Inc., 2016 WL 773219, at *1 (S.D. Cal. Feb. 29, 2016) (“The Court has considered 21 and rejects Objector Hammack’s concern that the injunction is inadequate because its scope is limited 22 to 24 months… [T]he Court’s role is to determine whether the relief is adequate and fair, not whether 23 it is perfect or even optimal.”). 24 6. 25 Clear Sailing Provision Certain objectors claim the Settlement contains a “clear sailing” provision as to the amount of 26 attorneys’ fees and expenses for which Class Counsel might apply. Dkt. No. 562 at 16. This is 27 simply false. There is no clear sailing provision in the Settlement Agreement. 28 13 Gibson, Dunn & Crutcher LLP DEFS.’ RESPONSE TO COMMENTS TO PROPOSED SETTLEMENT AGREEMENT– CASE NOS. CV 13-03826EMC AND CV 15-00262-EMC Case 3:13-cv-03826-EMC Document 615 Filed 05/20/16 Page 22 of 31 1 A clear sailing provision is an arrangement where a class defendant “agrees not to oppose a 2 [class counsel’s] petition for a fee award up to a specified maximum value.” In re Bluetooth Headset 3 Products Liab. Litig., 654 F.3d 935, 940 n.6 (9th Cir. 2011) (emphasis added); see also Weinberger v. 4 Great N. Nekoosa Corp., 925 F.2d 518, 520 n.1 (1st Cir. 1991) (“[A] clear sailing agreement is one 5 where the party paying the fee agrees not to contest the amount to be awarded by the fee-setting court 6 so long as the award falls beneath a negotiated ceiling.”) (emphasis added). Objectors do not 7 question this definition of a clear sailing provision. Indeed, they concede that “the essence of a 8 clear[-]sailing arrangement is that the defendant agrees not to object to a fee award up to a certain 9 amount.” Dkt. No. 562 at 16 (quoting Harris v. Vector Mktg. Corp., 2011 WL 4831157, at *7 (N.D. 10 11 Cal. Oct. 12, 2011) (Chen, J.)) (alterations in original, emphasis added). But Uber has agreed to no such thing. The settlement provision at issue states that “Class 12 Counsel agrees not to seek a Fee and Expense Award from the Court in excess of twenty-five percent 13 (25%) of the Settlement Fund” and that “Uber agrees to pay the amount of Fee and Expense Award 14 (if any) determined by the Court.” No part of this provision—nor any other part of the Settlement— 15 requires Uber to refrain from contesting or opposing Class Counsel’s petition for attorneys’ fees and 16 expenses. See Malchman v. Davis, 761 F.2d 893, 907 (2d. Cir. 1985) (Newman, J., concurring) 17 (“[A] plaintiff’s agreement not to seek attorney’s fees above a stipulated ceiling must be 18 distinguished from a defendant’s agreement not to contest an application for fees up to the amount of 19 the ceiling.”) (emphasis in original). Courts have routinely held that no clear sailing provision exists 20 where a defendant’s ability to challenge attorneys’ fees and expenses is uninhibited. See e.g., In Re 21 Am. Apparel, Inc. S’holder Litig., 2014 WL 10212865, at *17 (C.D. Cal. July 28, 2014) (settlement 22 agreement that did not contain “a provision in which defendants agree not to contest” class counsel’s 23 motion for fees did not contain a clear sailing provision); Hill v. State St. Corp., 2015 WL 127728, at 24 *2 (D. Mass. Jan. 8, 2015) (settlement provision stating that defendants “will not take a position on 25 attorneys’ fees” did not constitute a “clear sailing” agreement). 26 Even if construed as a “clear-sailing” provision, the term at issue here would not raise a 27 concern because the Fee and Expense Award “shall be paid exclusively from the Settlement Fund” 28 (O’Connor, Dkt. 519-6, ¶ 122) rather than on top of it. See Alexander v. FedEx Ground Package 14 Gibson, Dunn & Crutcher LLP DEFS.’ RESPONSE TO COMMENTS TO PROPOSED SETTLEMENT AGREEMENT– CASE NOS. CV 13-03826EMC AND CV 15-00262-EMC Case 3:13-cv-03826-EMC Document 615 Filed 05/20/16 Page 23 of 31 1 Sys., 2016 WL 1427358, at *8 (N.D. Cal. Apr. 12, 2016) (Chen, J.) (rejecting class action settlement 2 objection based on clear sailing clause where the attorney fee award was included in the gross 3 settlement fund); see also Rodriguez v. West Publ’g Corp., 563 F.3d 948, 961 n.5 (9th Cir. 2009) 4 (rejecting argument that clear sailing provision evinced collusion where the attorney’s fees and 5 incentive awards “were to be made from the settlement fund”); In re Bluetooth Headset Prods. Liab. 6 Litig., 654 F.3d 935, 947 (9th Cir. 2011) (identifying a signal of collusion to be “when the parties 7 negotiate a ‘clear sailing’ arrangement providing for the payment of attorneys’ fees separate and apart 8 from class funds”); Larden v. Trader Joe’s Co., 2014 WL 3404531 (N.D. Cal. July 11, 2014) (noting 9 that, even under Bluetooth, “clear sailing provisions generally do not raise concerns where, as here, 10 the fees are to come from the settlement fund”). This objection thus should be rejected. 11 7. 12 The In Re Uber FCRA Plaintiffs object to the proposed class notice “because it fails to notify 13 class members that, under the terms of the Settlement, they are relinquishing their right to bring any 14 claims in court, rather than in arbitration, and on a class-wide basis.” Dkt. 597 at 10. More 15 specifically, they claim that “the notice needs to inform recipients that the Settlement includes a 16 stipulation that Uber’s arbitration agreements are enforceable and that vacates orders issued by this 17 Court that otherwise vindicated class members’ rights to pursue claims in court and on a class basis.” 18 Id. at 11. These objections fail for several reasons. 19 Adequacy of Class Notice First, the proposed class notice does inform class members that, “under the Settlement, they 20 are relinquishing their right to bring [certain] claims in court.” Dkt. 597 at 10. Indeed, large portions 21 of the notice do just that. See, e.g., Dkt. 575-8 at 1 (noting the following consequence of submitting a 22 claim: “Give up your right to be a part of another case against Uber about the claims being resolved 23 in this Settlement.”); id. at 12 (“Unless you exclude yourself, you are staying in the Settlement Class, 24 and that means that you can’t sue, listing released claims). Second, there is no need to inform 25 recipients about the Stipulation stating that Uber’s December 2015 arbitration agreements are 26 enforceable because there has never been any court order finding the December 2015 arbitration 27 agreements to be unenforceable (except with respect to the certified class claims of the O’Connor 28 class members). The Court’s Rule 23(d) orders pertaining to the December 2015 arbitration 15 Gibson, Dunn & Crutcher LLP DEFS.’ RESPONSE TO COMMENTS TO PROPOSED SETTLEMENT AGREEMENT– CASE NOS. CV 13-03826EMC AND CV 15-00262-EMC Case 3:13-cv-03826-EMC Document 615 Filed 05/20/16 Page 24 of 31 1 agreement merely contain certain restrictions on Uber’s ability to distribute the agreement to 2 drivers—restrictions that will no longer be applicable once these cases are resolved through the 3 Settlement. See O’Connor, Dkt. 435, 464. Those orders did not “vindicate[] class members’ rights to 4 pursue claims in court and on a class basis.” See Dkt. 435, 464, 522. Thus, even without the 5 Stipulation, the class members who agreed to, and did not opt out of, the December 2015 arbitration 6 agreement have no reason to believe they would not be bound by that agreement. Finally, the 7 Stipulation says nothing about the 2013 or 2014 arbitration agreements that actually were declared 8 unenforceable by this Court. See Dkt. 519-6 ¶ 135(e). Those orders remain intact unless and until 9 they are reversed or vacated on appeal. 10 The Ghazi plaintiff’s further objection to the class notices, stating that “they omit the true 11 effect the settlement will have on all of the other pending cases, including Mr. Ghazi’s case, and what 12 remaining in the settlement (or opting out) really means,” Dkt. 592 at 23, is belied by the long form 13 notice’s clear terms. That notice says explicitly that approval of the settlement entails “the release by 14 all Settlement Class Members of all wage and hour claims now pending against Uber in California 15 and Massachusetts . . . except that any claims that a Settlement Class Member may have under the 16 Fair Labor Standards Act (“FLSA”) will not be released unless that Settlement Class Member 17 submits a claim . . . .” Dkt. 575-8 § 8. Ghazi similarly misses the mark in arguing that his opt-out 18 right is illusory. He provides no basis for his assertion that he will be precluded from litigating his 19 case even if he opts out, and the class notice itself makes it abundantly clear that opting out means he 20 will “keep the right to sue or continue to sue Uber . . . .” Dkt. 575-7 at 2; 575-8 § 16. 21 Nor does Ghazi’s claim that a preliminary injunction renders this opt-out right illusory hold 22 any weight. He challenges the provision of the proposed order granting the motion for preliminary 23 approval that calls for a preliminary injunction barring class members from maintaining released 24 claims while the Court considers whether to approve the settlement. Dkt. 592 at 24. However, such 25 an injunction only would apply if Ghazi fails to “timely and properly” opt out of the settlement. Dkt. 26 519-6 ¶ 15. , Courts routinely grant these injunctions during settlement proceedings. See Jaffe v. 27 Morgan Stanley & Co., 2008 WL 346417, at *11 (N.D. Cal. Feb. 7, 2008); In re Hewlett-Packard 28 Co. S'holder Derivative Litig., 2015 WL 1153864, at *7 (N.D. Cal. Mar. 13, 2015). 16 Gibson, Dunn & Crutcher LLP DEFS.’ RESPONSE TO COMMENTS TO PROPOSED SETTLEMENT AGREEMENT– CASE NOS. CV 13-03826EMC AND CV 15-00262-EMC Case 3:13-cv-03826-EMC Document 615 Filed 05/20/16 Page 25 of 31 1 8. 2 The In re Uber FCRA Plaintiffs further object to the use of a claim form, suggesting that the Claim Form 3 claims “should be distributed through direct payments to drivers without requiring them to submit 4 claims.” Dkt. 597 at 16. “However, there is nothing inherently objectionable with a claims- 5 submission process, as class action settlements often include this process, and courts routinely 6 approve claimsmade settlements.” Shames v. Hertz Corp., 2012 WL 5392159, at *9 (S.D. Cal. Nov. 7 5, 2012); see also Harris v. Vector Mktg. Corp., 2012 WL 381202 (N.D. Cal. Feb. 6, 2012) (granting 8 final approval of claims-made settlement). This objection further fails to take into account two 9 important uses of the claim form here. First, the claim form provides the claims administrator with 10 the information it needs to issue W-2s. See Getty v. Comm’r of Internal Revenue, 913 F.2d 1486, 11 1490 (9th Cir. 1990). And, as the settlement class encompasses former drivers, the claim form is the 12 only opportunity for Uber to gather current payment information. This may even increase the 13 number of claimants in the end. 14 9. 15 Objectors Alcala and Borgens object on the basis that “the proposed settlement has received a Purported Reaction of Drivers Who Use Uber and Negative Press Coverage 16 negative reaction from Uber drivers and the press.” Dkt. 562 at 14. Notably, only approximately 17 thirty objections were filed from a proposed class of over 380,000 drivers. Any reporting by the 18 media of a “negative reaction” by drivers is therefore false or, at a minimum, wildly overstated, and 19 cannot be a reason for denying preliminary approval at this stage, particularly when the Court will 20 have an opportunity to consider any objections more fully at final approval, after notice has been 21 disseminated. 22 10. 23 Objectors Alcala and Borgens ask that the Court grant them leave to take discovery regarding Objectors’ Right to Discovery 24 the terms of the settlement. See Dkt. 562 at 17-19. They state that “‘[i]n determining whether to grant 25 an objector’s request for discovery, courts generally consider three factors: (1) the nature and amount 26 of previous discovery; (2) whether there is a reasonable basis for the discovery requests; and (3) the 27 number and interests of objectors.’” O’Connor, Dkt. 562 at 17 (quoting In re Wells Fargo Mortg.- 28 17 Gibson, Dunn & Crutcher LLP DEFS.’ RESPONSE TO COMMENTS TO PROPOSED SETTLEMENT AGREEMENT– CASE NOS. CV 13-03826EMC AND CV 15-00262-EMC Case 3:13-cv-03826-EMC Document 615 Filed 05/20/16 Page 26 of 31 1 Backed Certificates Litig., No. 09-cv-01376, 2011 U.S. Dist. LEXIS 131788, at *14 (N.D. Cal. Nov. 2 14, 2011)). However, all three of these factors militate against permitting settlement discovery here. 3 First, Objectors Alcala and Borgens provide no basis of support for their contention that “one 4 would have expected millions of documents and tens of millions of pages reviewed and analyzed.” 5 O’Connor, Dkt. 562 at 18. Moreover, they fail to acknowledge that Uber’s Vice President of 6 Operations, Ryan Graves, was deposed in connection with Yucesoy, and that the parties had agreed to 7 “us[e] discovery from O’Connor that is applicable to this case.” Yucesoy, Dkt. 197 at 4. Thus, their 8 contention that “the parties—at least in the Yucesoy action—did not engage in extensive discovery 9 before reaching the proposed settlement” (O’Connor, Dkt. 562 at 17) is simply wrong. 10 Objectors Alcala and Borgens also fail to show that there is a reasonable basis for these 11 discovery requests. Although discovery of settlement negotiations may be proper “where the party 12 seeking it lays a foundation by adducing from other sources evidence indicating that the settlement 13 may be collusive,” Lobatz v. U.S. Cellular of Cal., Inc. 222 F.3d 1142, 1148 (9th Cir. 2000) 14 (quotations omitted), Alcala and Borgens have made no such showing. As discussed above, the 15 purported clear sailing provision on which they rely to show collusion is not even a clear sailing 16 provision. Likewise, the settlement negotiations were conducted at arms’ length before a 17 professional mediator. Wixon v. Wyndham Resort Dev. Corp., 2011 WL 3443650, at *2 (N.D. Cal. 18 Aug. 8, 2011) (denying objectors’ motion for discovery in part because “notwithstanding their 19 arguments to the contrary, they have not shown that there is any evidence of collusion between 20 counsel for Plaintiffs and [defendant]”). 21 In any case, the legislature and courts recognize that “confidentiality is essential to effective 22 mediation.” Rojas v. Superior Court, 33 Cal.4th 407, 415 (2004). Objectors’ request seems to 23 completely ignore the recognized importance of preserving the confidentiality of settlement 24 negotiations. The parties signed a confidentiality agreement as part of their mediation proceedings, 25 and the California Supreme Court has “repeatedly said that these confidentiality provisions are clear 26 and absolute. Except in rare circumstances, they must be strictly applied and do not permit judicially 27 crafted exceptions or limitations, even where competing public policies may be affected.” Cassell v. 28 Superior Court, 51 Cal. 4th 113, 117-18 (2011) (internal footnote omitted). 18 Gibson, Dunn & Crutcher LLP DEFS.’ RESPONSE TO COMMENTS TO PROPOSED SETTLEMENT AGREEMENT– CASE NOS. CV 13-03826EMC AND CV 15-00262-EMC Case 3:13-cv-03826-EMC Document 615 Filed 05/20/16 Page 27 of 31 1 Finally, the third prong of the applicable analysis also weighs heavily against the discovery 2 that Objectors Alcala and Borgens demand because there are only approximately thirty objections to 3 the settlement, of which only one seeks discovery. This request for permission to engage in an 4 unwarranted fishing expedition should be rejected. 5 11. 6 According to the In re Uber FCRA plaintiffs, “the parties in O’Connor and Yucesoy have no Vacatur of Rule 23(d) Orders 7 standing to agree to vacate [the Court’s December 23, 2015 order.]” O’Connor, Dkt. 524 at 2. 8 However, the Court may vacate its own orders sua sponte, regardless of which party or non-party 9 asks it to do so. See Credit Suisse First Boston Corp. v. Grunwald, 400 F.3d 1119, 1124 (9th Cir. 10 2005) (noting “the well-established rule that a district judge always has power to modify or to 11 overturn an interlocutory order or decision while it remains interlocutory.”) (quotations omitted); cf. 12 Judson Atkinson Candies Inc. v. Latini-Hohberger Dhimantec, 529 F.3d 371, 385 (7th Cir. 2008) 13 (“[A] majority of circuits to have considered the power of a district court to vacate a judgment under 14 Rule 60(b) have concluded that district courts have the discretion to grant such relief sua sponte.”) 15 (citing, inter alia, Kingvision Pay-Per-View Ltd. v. Lake Alice Bar, 168 F.3d 347, 351-52 (9th Cir. 16 1999)). Moreover, the In re Uber FCRA plaintiffs have demonstrated through their objections both 17 that they received notice of the potential vacatur and have had an opportunity to be heard. See Torrisi 18 v. Tucson Elec. Pwr. Co., 8 F.3d 1370, 1374 (9th Cir. 2001) (“Due process requires that notice 19 provide affected parties with the opportunity to be heard.”). 20 The issue, then, is whether the Court should exercise its plenary power to vacate the Rule 21 23(d) orders. Objectors Alcala and Borgens argue that the settling parties must show that 22 “exceptional circumstances” exist to justify vacatur. O’Connor, Dkt. 562 at 15 (citing U.S. Bancorp 23 Mortg. Co. v. Bonner Mall P’ship, 513 U.S. 18, 29 (1994)). In Bonner Mall, the Supreme Court 24 noted that “those exceptional circumstances do not include the mere fact that the settlement 25 agreement provides for vacatur. . . .” 513 U.S. at 29; see Microsoft Corp. v. Bristol Tech., Inc., 250 26 F.3d 152, 154 (2d Cir. 2001) (noting that Bonner Mall “raised the bar appreciably” where vacatur is 27 sought as a result of settlement). But the Bonner Mall standard that Alcala and Borgens invoke does 28 not apply here. 19 Gibson, Dunn & Crutcher LLP DEFS.’ RESPONSE TO COMMENTS TO PROPOSED SETTLEMENT AGREEMENT– CASE NOS. CV 13-03826EMC AND CV 15-00262-EMC Case 3:13-cv-03826-EMC Document 615 Filed 05/20/16 Page 28 of 31 1 The Ninth Circuit has held that the “exceptional circumstances” test applies only where an 2 appellate court is deciding whether to vacate a district court judgment. Am. Games, Inc. v. Trade 3 Prods., Inc., 142 F.3d 1164, 1167-68 (9th Cir. 1998). By contrast, “a district court may vacate its 4 own decision in the absence of extraordinary circumstances.” Id. at 1168 (emphasis added); see also 5 id. at 1170 (“Given the fact-intensive nature of the inquiry required, it seems appropriate that a 6 district court should enjoy greater equitable discretion when reviewing its own judgments than do 7 appellate courts operating at a distance.”). In fact, the required showing to justify vacatur here is 8 even lower still. 9 Whereas both Bonner Mall and American Games involved a motion to vacate a judgment, the 10 settling parties only seek to vacate two interlocutory orders pursuant to Federal Rule of Civil 11 Procedure 54(b). The Court thus has even greater leeway to exercise its plenary power to vacate the 12 Rule 23(d) orders. See Persistence Software, Inc. v. Object People, Inc., 200 F.R.D. 626, 627 (N.D. 13 Cal. 2001) (“The standard for granting a motion to vacate under Rule 54(b) is less rigid than that 14 under Rule 60(b) governing vacation of final judgments.”) Considering the equities involved, vacatur 15 is amply justified. 16 As a threshold matter, the core purposes of the Rule 23(d) orders are now moot. The In re 17 Uber FCRA plaintiffs dispute that the principal purpose of the December 23, 2015 order was to 18 provide what the order described as “clarity” to drivers regarding a “legal landscape” that, in the 19 Court’s view, became “materially more complicated” when this Court certified the O’Connor class 20 action. O’Connor, Dkt. 435 at 3–4. But virtually all of the legal and factual developments that the 21 Court cited in support of its Rule 23(d) Orders (which did not address the enforceability of the terms 22 of the December 2015 Agreement) pertained only to the O’Connor litigation and thus were unique to 23 that particular case. See, e.g., O’Connor, Dkt. 435 at 3 (“[T]here have been significant developments 24 since . . . December 6, 2013, including . . . the denial of Uber’s motion for summary judgment in 25 O’Connor, certification of a class and claims in O’Connor, . . . and the setting of the O’Connor case 26 for trial.”); id. at 4 (“[D]rivers may give greater credence to litigation over arbitration in view of the 27 progression of the O’Connor case . . . .”); see also id. (noting that Uber’s promulgation of the 28 December 2015 Arbitration Provision supposedly “led to considerable confusion among the drivers” 20 Gibson, Dunn & Crutcher LLP DEFS.’ RESPONSE TO COMMENTS TO PROPOSED SETTLEMENT AGREEMENT– CASE NOS. CV 13-03826EMC AND CV 15-00262-EMC Case 3:13-cv-03826-EMC Document 615 Filed 05/20/16 Page 29 of 31 1 in the O’Connor class). The “complex legal landscape” that this Court identified no longer exists 2 now that the parties have reached a settlement agreement in O’Connor. Thus, the interest in 3 preserving those orders is minimal. 4 The fact-based nature of the Rule 23(d) orders also undermines Alcala’s and Borgens’ 5 opposition to vacatur on the ground that those orders represent “presumptively correct and valuable” 6 legal precedent.” O’Connor, Dkt. 562 at 16 (quotations omitted); see Persistence Software, 200 7 F.R.D. at 627 (noting that because circumstances “significantly limit[] the order to the facts of this 8 case, the general doctrine that ‘judicial precedents are presumptively correct and valuable to the legal 9 community as a whole’ U.S. Bancorp Mortgage Co. v. Bonner Mall Partnership, 513 U.S. 18, 206 . . 10 . (1994), does not compel the denial of plaintiff’s motion to vacate.”); Triquint Semiconductor, Inc. v. 11 Avago Techs. Ltd., 2012 WL 1768084, at *3 (D. Ariz. May 17, 2012) (granting joint motion to vacate 12 and noting that “[u]nlike appellate opinions, district court opinions are not precedential”). 13 To be sure, several courts have identified the impact of vacatur on third parties as a 14 consideration when declining to grant a motion to vacate a judgment. See, e.g., Allen-Bradley Co., 15 LLC v. Kollmorgen Corp., 199 F.R.D. 316 (E.D. Wisc. Mar. 27, 2001) (“At least in the Seventh 16 Circuit, great weight has been accorded the countervailing interest in judicial economy and the effect 17 of the decision upon third parties.”); IBM Credit Corp v. United Home for Aged Hebrews, 848 F. sup. 18 495, 496-97 (S.D.N.Y. 1994) (granting vacatur in part because “no nonparties appear to be directly 19 impacted by the decision under consideration”). But none of these cases holds that an impact on third 20 parties in and of itself precludes a court from granting a motion to vacate. 21 Moreover, the many courts declining to vacate on this ground applied the most demanding 22 Bonner Mall standard, which is inapplicable here. See, e.g., Philip Servs. Corp. v. City of Seattle, 23 2007 WL 3396436, at *1 (S.D. Tex. Nov. 14, 2007) (“[M]ost courts considering the question have 24 held that a district court should apply the Bonner Mall ‘exceptional circumstances’ standard in 25 deciding whether to vacate its own judgment when a case becomes moot as a result of settlement.”); 26 id. at *2 (“Only the Ninth Circuit has explicitly rejected the view that the Bonner Mall standard for 27 vacatur is relevant to a district court deciding whether to vacate a prior judgment.”); Young v. Cooper 28 Cameron Corp., 2008 WL 1748462, at *2 (S.D.N.Y. Apr. 15, 2008) (“Subsequent Second Circuit 21 Gibson, Dunn & Crutcher LLP DEFS.’ RESPONSE TO COMMENTS TO PROPOSED SETTLEMENT AGREEMENT– CASE NOS. CV 13-03826EMC AND CV 15-00262-EMC Case 3:13-cv-03826-EMC Document 615 Filed 05/20/16 Page 30 of 31 1 decisions have followed [Bonner Mall] in requiring that exceptional circumstances be shown where 2 vacatur is sought as part of a settlement.”). 3 Moreover, the impact on any third parties here of vacating the Rule 23(d) orders is minimal 4 compared to the First Amendment harms that Uber will continue to suffer with those orders in place. 5 See Cuviello v. Cal Expo, 2104 WL 1379873, at *5 (E.D. Cal. Apr. 8, 2014) (granting motion to 6 vacate an interlocutory order and holding that “the parties’ desire to conserve their resources, the 7 potential to conserve judicial resources, and the public interest in vindicating free speech rights favor 8 granting the vacatur”); cf. Valle Del Sol Inc. v. Whiting, 709 F.3d 808, 828-29 (9th Cir. 2013) (“Both 9 [the Ninth Circuit] and the Supreme Court have repeatedly held that ‘[t]he loss of First Amendment 10 freedoms, even for minimal periods of time, unquestionably constitutes irreparable injury.’”). In light 11 of the judicial economy achieved by settlement, it thus would be “consonant with equity” for the 12 Court to exercise its discretion under Federal Rule of Civil Procedure 54(b) to vacate the Rule 23(d) 13 orders, notwithstanding any impact on putative class members in the In re Uber FCRA Litigation. 14 See Simmons v. Brier Bros. Co., 258 U.S. 82, 90–91 (1992); see generally N.D. Cal. L.R. 16-8 (“It is 15 the policy of this Court to assist parties involved in civil litigation to resolve their disputes in a just, 16 timely, and cost-effective manner.”). 17 III. CONCLUSION 18 At the preliminary stage, district courts in this Circuit focus on whether a settlement 19 agreement “was the product of non-collusive, arms’ length negotiations conducted by capable and 20 experienced counsel.” In re Netflix Privacy Litig., 2013 WL 1120801, at *4 (N.D. Cal. Mar. 18, 21 2013). The settlement here was the product of just such a process, and presided over by an able and 22 highly experienced mediator. The settlement confers substantial benefits on the proposed settlement 23 class, particularly in light of the risks that class members’ claims face both at trial and on appeal. The 24 meritless objections, which are very few in number relative to the size of the class, should be rejected 25 and the settlement preliminarily approved. 26 27 28 22 Gibson, Dunn & Crutcher LLP DEFS.’ RESPONSE TO COMMENTS TO PROPOSED SETTLEMENT AGREEMENT– CASE NOS. CV 13-03826EMC AND CV 15-00262-EMC Case 3:13-cv-03826-EMC Document 615 Filed 05/20/16 Page 31 of 31 1 2 Dated: May 20, 2016 GIBSON, DUNN & CRUTCHER LLP 3 4 By: /s/Theane Evangelis Theane Evangelis 5 6 Attorneys for Defendants UBER TECHNOLOGIES, INC. and TRAVIS KALANICK 7 8 9 10 11 12 ECF ATTESTATION I hereby attest that I have on file all holographic signatures corresponding to any signatures indicated by a conformed signature (/s/) within this e-filed document. 13 14 By: /s/ Kevin J. Ring-Dowell Kevin J. Ring-Dowell 15 16 17 18 19 20 21 22 23 24 25 26 27 28 23 Gibson, Dunn & Crutcher LLP DEFS.’ RESPONSE TO COMMENTS TO PROPOSED SETTLEMENT AGREEMENT– CASE NOS. CV 13-03826EMC AND CV 15-00262-EMC