1 2 3 4 5 6 7 8 Douglas Caiafa, Esq. (SBN 107747) DOUGLAS CAIAFA, A Professional Law Corporation 11845 West Olympic Boulevard, Suite 1245 Los Angeles, California 90064 (310) 444-5240 - phone; (310) 312-8260 - fax Email: dcaiafa@caiafalaw.com Christopher J. Morosoff, Esq. (SBN 200465) LAW OFFICE OF CHRISTOPHER J. MOROSOFF 77-760 Country Club Drive, Suite G Palm Desert, California 92211 (760) 469-5986 - phone; (760) 345-1581 - fax Email: cjmorosoff@morosofflaw.com Attorneys for Objector and Interested Party STEVEN PRICE 9 10 UNITED STATES DISTRICT COURT 11 NORTHERN DISTRICT OF CALIFORNIA 12 SAN FRANCISCO DIVISION 13 14 15 16 17 18 19 DOUGLAS O’CONNOR, et al., Plaintiffs, vs. UBER TECHNOLOGIES, INC., Defendant, CASE NO.: 3:13-cv-03826-EMC CLASS ACTION RESPONSE AND OBJECTION BY OBJECTOR AND INTERESTED PARTY STEVEN PRICE TO MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT 20 21 22 23 Courtroom: Date: Time: Judge: 5 June 2, 2016 1:30 p.m. Hon. Edward M. Chen 24 25 26 27 28 RESPONSE AND OBJECTION BY STEVEN PRICE TO MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT TABLE OF CONTENTS 1 Page 2 3 I. INTRODUCTION...................................................................................................... 1 4 II. FACTUAL AND PROCEDURAL SUMMARY .................................................. 1 5 III. THE PROPOSED SETTLEMENT SHOULD NOT BE APPROVED............... 2 6 A. The Proposed Non-Monetary Relief is Illusory....................................................... 3 7 B. The Proposed Monetary Relief is Insufficient ......................................................... 4 8 1. The Reimbursement Claim ............................................................................ 5 9 2. The Tip Claim.................................................................................................. 5 10 3. Plaintiffs and Their Counsel Impermissibly Propose to Settle the Claims 11 Being Litigated In the Price Action For $0 .................................................. 6 12 a. Minimum Wage Claim ....................................................................... 6 13 b. Overtime Claim.................................................................................... 8 14 c. Meal and Rest Break Claims .............................................................. 9 15 d. Inaccurate Employment Record and Wage Statement Claims ....... 10 16 e. PAGA Claims ...................................................................................... 10 17 C. Plaintiffs and Their Counsel Are Not Adequate Representatives for the Claims Being Litigated In the Price Action ............................................................. 12 18 19 D. The Proposed Settlement Has Obvious Deficiencies .............................................. 12 20 IV. CONCLUSION .......................................................................................................... 20 21 22 23 24 25 26 27 28 i RESPONSE AND OBJECTION BY STEVEN PRICE TO MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT TABLE OF AUTHORITIES 1 Page Nos. 2 3 4 FEDERAL CASES 5 Achal v. Gate Gourmet, Inc. 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 114 F. Supp. 3d 781 (N.D. Cal. 2015) ................................................................... 11 Class Plaintiffs v. City of Seattle 955 F.2d 1268 (9th Cir. 1992) ................................................................................ 2 Ellis v. Costco Wholesale Corp. 657 F.3d 970 (9th Cir. 2011) .................................................................................. 12 Hanlon v. Chrysler Corp. 150 F.3d 1011 (9th Cir. 1998) ............................................................................... 2,6 In re Bluetooth Headset Products Liab. Litig. 654 F.3d 935 (9th Cir. 2011) .................................................................................. 3 In re Heritage Bond Litig. 546 F.3d 667 (9th Cir. 2008) .................................................................................. 3 In re Syncor ERISA Litig. 516 F.3d 1095 (9th Cir. 2008) ................................................................................ 3 In re Tableware Antitrust Litig. 484 F. Supp. 2d 1078, 1079 (N.D. Cal. 2007) ...................................................... 2 Officers for Justice v. Civil Service Commission, 688 F.2d 615 (9th Cir. 1982) .................................................................................. 3 Sakkab v. Luxottica Retail N. Am., Inc. 803 F.3d 425 (9th Cir. 2015) .................................................................................. 10 25 26 STATE CASES 27 Aguilar v. Association for Retarded Citizens 28 (1991) 234 Cal.App.3d 21 ...................................................................................... 8 -iiRESPONSE AND OBJECTION BY STEVEN PRICE TO MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Amaral v. Cintas Corp. No. 2 78 Cal. Rptr. 3d 572 (Cal. Ct. App. 2008)............................................................. 11 Augustus v. ABM Security Serv. (2014) 233 Cal.App.4th 1065 ................................................................................. 7 Faulkinbury v. Boyd & Associates, Inc. (2013) 216 Cal.App.4th 220 ................................................................................... 9 Gonzalez v. Downtown LA Motors, LP (2013) 215 Cal.App.4th 36 ..................................................................................... 7 Iskanian v. CLS Transp. L.A., LLC 327 P.3d 129 (2014), cert. denied, 135 S. Ct. 1155 (2015) ................................. 10 Mendiola v. CPS Security Solutions, Inc. (2015) 60 Cal.4th 833.............................................................................................. 7 Price v. Uber Technologies, Inc. LASC Case No. BC554512 (filed August 12, 2014) .........................................passim 15 16 STATUTES AND RULES 17 Fed. R. Civ. Proc. 23 .........................................................................................................passim 18 Business & Professions Code §17200............................................................................... 2 19 Labor Code §226 ................................................................................................................. 2 20 Labor Code §226.7 ............................................................................................................. 1 21 Labor Code §226.8.............................................................................................................. 1 22 Labor Code §351 ................................................................................................................. 2,6 23 Labor Code §512 ................................................................................................................ 1 24 Labor Code §1174............................................................................................................... 2 25 Labor Code §1197............................................................................................................... 1 26 Labor Code §1198 .............................................................................................................. 1 27 Labor Code §2802............................................................................................................... 1,6 28 -iiiRESPONSE AND OBJECTION BY STEVEN PRICE TO MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT MEMORANDUM OF POINTS AND AUTHORITIES 1 2 I. INTRODUCTION: Steven Price (“Price”), the plaintiff and putative class representative in the Los 3 4 Angeles Superior Court action Price v. Uber Technologies, Inc., LASC Case No. 5 BC554512 (filed August 12, 2014) (the “Price action”), and a member of the proposed 6 Settlement Class here, respectfully submits this response and objection to Plaintiffs’ 7 Motion for Preliminary Approval of the proposed settlement in this case (the “MPA”) 8 (ECF 519-6). Price also joins in the objections of Leticia Alcala, et al. (ECF 562), Ricardo 9 Del Rio, et al. (ECF 563), and Paul Tovmassian, et al. (ECF 567), as they relate to the 10 proposed settlement of the O’Connor action. Price respectfully requests that this Court 11 deny Plaintiffs’ MPA for the reasons set forth herein, as well as the reasons set forth in the 12 Alcala, Del Rio, and Tovmassian objections. 13 II. 14 FACTUAL AND PROCEDURAL SUMMARY: Price worked as a driver in Los Angeles, California, for Uber during the proposed 15 settlement class period. Price filed his suit against Uber on August 12, 2014, under the 16 Private Attorneys General Act (“PAGA”), California Industrial Welfare Commission 17 Wage Order No. 9-2001 (“Wage Order”), and the California Labor Code. Price has been 18 actively litigating his claims against Uber for nearly 2 years. He seeks certification of his 19 Wage Order and Labor Code claims as a class action on behalf of himself and all other 20 current and/or former Uber drivers in California who worked as an Uber driver at any time 21 between August 12, 2010, and the present. 22 The Price action includes eleven (11) causes of action against Uber for: (1) 23 Unlawful misclassification of an employee as an independent contractor (Labor Code 24 §226.8); (2) Failure to pay minimum wage (Labor Code §1197 and Wage Order No. 9); 25 (3) Failure to pay overtime compensation (Labor Code §1198 and Wage Order No. 9); (4) 26 Failure to provide meal periods (Labor Code §512 and Wage Order No. 9); (5) Failure to 27 provide rest periods (Labor Code §226.7 and Wage Order No. 9); (6) Failure to pay 28 reporting time pay (Wage Order No. 9); (7) Failure to reimburse expenses (Labor Code -1RESPONSE AND OBJECTION BY STEVEN PRICE TO MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT 1 §2802); (8) Failure to keep accurate employment records (Labor Code §1174 and Wage 2 Order No. 9); (9) Failure to provide accurate wage statements (Labor Code §226); (10) 3 Unlawful Business Practices in Violation of B&P §17200; and, (11); PAGA penalties for 4 Defendant’s violation of Labor Code sections §§226, 226.7, 351, 353, 432.5, 450, 510, 5 512, 551, 552, 1174, 1194, 1197, 1197.1, 1198, 1199, and 2802, in relation to Plaintiff and 6 all Putative Class Members. Pursuant to agreement of the parties and order of the court in the Price action, Price 7 8 filed a motion for class certification on March 18, 2016. Recognizing that this Court has 9 certified a class to pursue claims for expense reimbursement under Labor Code §2802 and 10 repayment of unlawfully taken gratuities under Labor Code §351 and Business & 11 Professions Code §17200, Price’s currently pending motion for class certification seeks 12 certification of a class to pursue only those claims in the Price which have not been 13 certified by this Court. 14 III. 15 THE PROPOSED SETTLEMENT SHOULD NOT BE APPROVED: The Court must determine whether the proposed Settlement is fair, reasonable, and 16 adequate. Fed. R. Civ. Proc. 23(e)(2). Preliminary approval is “appropriate where ‘[1] the 17 proposed settlement appears to be the product of serious, informed, non-collusive 18 negotiations, [2] has no obvious deficiencies, [3] does not improperly grant preferential 19 treatment to class representatives or segments of the class, and [4] falls with the range of 20 possible approval . . . .’ In re Tableware Antitrust Litig., 484 F. Supp. 2d 1078, 1079 21 (N.D. Cal. 2007). Here, the proposed Settlement has obvious deficiencies and grants 22 preferential treatment to certain segments of the proposed Settlement Class. 23 This Court must assess whether the proposed Settlement falls within a range of fair 24 outcomes for the Class Members, considering the risks they would face if they took the 25 case to trial. Rule 23(e) generally requires the Court "to determine whether a proposed 26 settlement is fundamentally fair, adequate, and reasonable." Hanlon v. Chrysler Corp., 150 27 F.3d 1011, 1026 (9th Cir. 1998) (citing Class Plaintiffs v. City of Seattle, 955 F.2d 1268, 28 1276 (9th Cir. 1992)). "It is the settlement taken as a whole, rather than the individual -2RESPONSE AND OBJECTION BY STEVEN PRICE TO MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT 1 component parts, that must be examined for overall fairness." Id. (citing Officers for 2 Justice v. Civil Serv. Comm'n of S.F., 688 F.2d 615, 628 (9th Cir. 1982)). The claims of a certified class “may be settled, voluntarily dismissed, or 3 4 compromised only with the court’s approval.” Fed. R. Civ. P. 23(e). The purpose of this 5 rule “is to protect the unnamed members of the class from unjust or unfair settlements 6 affecting their rights.” In re Syncor ERISA Litig., 516 F.3d 1095, 1100 (9th Cir. 2008). 7 “[S]ettlement class actions present unique due process concerns for absent class 8 members.” In re Bluetooth Headset Products Liab. Litig., 654 F.3d 935, 946 (9th Cir. 9 2011) (quotation marks and citation omitted). Accordingly, to gain approval, a settlement 10 must be “fair, adequate, and reasonable.” In re Heritage Bond Litig., 546 F.3d 667, 674- 11 75 (9th Cir. 2008). 12 A. 13 The Proposed Non-Monetary Relief is Illusory: While the proposed Settlement includes a non-monetary component, those non- 14 monetary provisions are illusory and, even if they had some substantive effect, will expire 15 after only two years. The main form of prospective relief identified by the MPA is Uber’s 16 supposed agreement to remove the "at-will termination" provision of the Driver Contract 17 and replace it with a provision permitting Uber to deactivate drivers only for specific 18 reasons, such as poor ratings from customers, safety concerns, or too many ride 19 cancelations. There is no practical impact of this change. Uber will continue to be 20 permitted to terminate drivers in their sole and absolute discretion even under the proposed 21 new language. 22 The main goal of the O’Connor case, and every other related case including the 23 Price action, is to have Uber drivers declared to be "employees" rather than "independent 24 contractors" under California law. The proposed settlement would abandon this goal and 25 unjustifiably concede that the drivers are and have been independent contractors. Thus, 26 the main aspect of the proposed settlement is contrary to the original goal of the lawsuit. 27 This Court should not approve a settlement agreement that is contrary to the original goal 28 of the lawsuit. -3RESPONSE AND OBJECTION BY STEVEN PRICE TO MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT The question here is whether the prospective relief contemplated by the proposed 1 2 Settlement here is of any real value to the drivers. Plaintiffs contend that the non- 3 monetary relief they have obtained as part of the proposed Settlement is significant 4 because it “will provide drivers with greater transparency, a way to seek redress from 5 Uber, and greater bargaining power in the event of future disputes.” (MPA at 1:12-14). 6 However, under the terms of the proposed Settlement, Uber will be permitted to deactivate 7 drivers for “sufficient cause.” (Id.). Drivers will receive a “written explanation” from 8 Uber of the reasons they were deactivated, but they will be deactivated nonetheless. (Id.). 9 It is little consolation to a terminated employee to simply receive a written explanation of 10 why he or she was terminated. In addition, any supposed benefit to Settlement Class 11 members is limited by the failure to permanently implement the non-monetary changes. 12 For example, many benefits will expire in only two years. 13 As part of the proposed Settlement here, Uber also expressly “maintain[s] the right 14 to make further changes to its licensing agreements and business practices and/or any and 15 all Uber platforms in the future.” Under the terms of the proposed Settlement, Uber will 16 still have the right to terminate drivers for whatever it deems to be “sufficient cause,” but 17 drivers will now be told in writing why they were terminated. Plaintiffs contend with a 18 straight face that these supposed “changes” constitute “real and practical relief” for 19 drivers. (Id.). This Court should not be fooled. These vapid “changes” do not in any way 20 alter Uber’s right to terminate any driver at any time for any reason that Uber, in its sole 21 and absolute discretion, deems “sufficient.” In other words, there is no real “change” in 22 the proposed Settlement. 23 B. The Proposed Monetary Relief is Insufficient: 24 The monetary component of the settlement is grossly inadequate. Plaintiffs’ 25 counsel admittedly has drastically discounted the value of the Class claims in the proposed 26 settlement to less than 10% of their value, while at the same time insisting that they are 27 “relishing the prospect of trial in this matter.” (MPA at 5:11-12). After adjusting for 28 expenses and fees, over half of the drivers would receive an average distribution of $24 or -4RESPONSE AND OBJECTION BY STEVEN PRICE TO MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT 1 less. These miniscule payments result from the formula used to calculate each driver’s 2 proposed recovery. The formula proposed by Plaintiffs and their counsel only counts 3 miles driven when a passenger is in the car. The formula fails to account for any mileage 4 spent driving to pick up a passenger after accepting a fare or waiting for a passenger to 5 request a fare (i.e., waiting for a trip request). As a result, over half of the Settlement Class 6 stand to receive less than $25 from the proposed Settlement. 7 The proposed Settlement here fails to account for the majority of Settlement Class 8 members’ claims, including Uber’s failure to pay minimum wage and overtime 9 compensation, missed meal and rest breaks, and PAGA penalties. Accordingly, the 10 monetary component of the proposed Settlement here is grossly inadequate. 11 1. The Reimbursement Claim: 12 The settlement figure here was calculated by estimating a maximum recovery for 13 the Class in the event it prevailed at trial, and then discounting that amount to account for 14 the risks the Class would face if the case were to proceed to trial. In estimating the 15 maximum recovery, and in reaching the ultimate settlement amount, the primary factor for 16 Plaintiffs and their counsel considered was the mileage reimbursement claim. Counsel 17 used the mileage reimbursement rate adopted by the Internal Revenue Service. This 18 accounts for the cost of gas, as well as vehicle wear and tear. According to Plaintiffs and 19 their counsel, 19% of the Settlement Class could receive an average distribution of $12 20 and 51% could receive an average distribution of $24 or less. These amounts are 21 particularly disturbing considering that the Settlement Agreement does not account for 22 over $29 million in telephone expenses or tips (which would range from 16-20% per ride). 23 2. The Tip Claim: 24 The value of the proposed Settlement here is based solely on Plaintiffs’ evaluation 25 of their §2802 expense reimbursement claim. Plaintiffs and their counsel ascribe no value 26 to their tip repayment claim. It is difficult to imagine how the Class’s tip repayment claim 27 could have a value of $0. 28 -5RESPONSE AND OBJECTION BY STEVEN PRICE TO MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT 1 2 3 3. Plaintiffs and Their Counsel Impermissibly Propose to Settle the Claims Being Litigated In the Price Action For $0: The instant O’Connor action includes only two claims: reimbursement under Labor 4 Code §2802, and compensation for unlawful taking of gratuities in violation of Labor 5 Code §351. In contrast, the Price action includes claims on behalf of the same putative 6 class for unpaid minimum wages and overtime compensation, missed meal and rest 7 breaks, inaccurate employment records and wage statements, and a full array of PAGA 8 penalties. No class has yet been certified, and thus no class counsel or class representative 9 appointed, to pursue the claims in the Price action. Where, as here, the parties reach a 10 settlement before class certification, the district court must apply a "higher standard of 11 fairness." Hanlon, 150 F.3d at 1026. This additional scrutiny is needed to ensure that the 12 interests of the class are adequately protected, because the agreement has "not [been] 13 negotiated by a court-designated class representative." Id. 14 Other than the claims for reimbursement, Plaintiffs' counsel assigned no value to 15 any of the claims in the Price action – claims they now seek to add to the O’Connor action 16 and release as part of the proposed Settlement – save for a minimal valuation of the 17 Class’s overtime and PAGA claims. Counsel valued the claim for overtime pay at 18 $2,000,000. Counsel valued the remaining claims for damages (based on alleged failure 19 to pay minimum wage, failure to pay for missed meal and rest breaks, failure to provide 20 accurate pay records, and failure to provide accurate paystubs) at zero. Counsel valued the 21 over 2 dozen PAGA claims at $1,000,000. Though Plaintiffs ask the Court for permission 22 to amend their operative complaint to include every conceivable wage and hour claim, 23 including every conceivable PAGA penalty claim, and settle and release each of those 24 claims, Plaintiffs and their counsel assign no value to any of those claims save for a 25 miniscule value to the overtime and PAGA claims. 26 a. Minimum Wage Claim: 27 Plaintiffs and their counsel propose to settle the minimum wage claims of each and 28 every Class Member for $0. (Liss-Riordan Dec. at ¶¶52-54). Although Plaintiffs’ counsel -6RESPONSE AND OBJECTION BY STEVEN PRICE TO MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT 1 provides no explanation of why she believes no Class Member has any valid claim for 2 unpaid minimum wages, it appears that she does not understand California’s minimum 3 wage and/or overtime laws. 4 For nearly 2 years, Price has been actively litigating claims on behalf of himself and 5 the putative class for Uber’s failure to pay minimum wage. Price’s complaint alleges that 6 he and all other Uber drivers are only paid for time spent transporting passengers, but not 7 for time spent waiting for passengers to transport. Plaintiffs and their counsel ask this 8 Court to certify them to represent the members of the Settlement Class to pursue minimum 9 wage claims on behalf of the Class, and then ask the Court to permit them to settle these 10 11 minimum wage claims for $0. Plaintiffs’ analysis of the Class’s minimum wage claims is fundamentally flawed. 12 Although Uber has admitted in discovery in the Price action that it has not paid any driver 13 any wage for work performed as a driver, Plaintiffs’ counsel here contends that “discovery 14 has not revealed that Uber has had a uniform policy or practice” related to the Class’s 15 minimum wage claims. Price has argued for nearly 2 years that as soon as a driver logs 16 on to the Uber App and is “on duty,” ready to receive trip requests, the driver is on the 17 clock and subject to Uber’s control. Simply because the driver is waiting for a trip request 18 and not actually performing a trip request (i.e., transporting a passenger from point A to 19 point B) does not mean the driver is not entitled to be compensated for his waiting time. 20 In fact, the opposite is true. Employees in California “are entitled to separate hourly 21 compensation for time spent waiting” to perform a task. Gonzalez v. Downtown LA 22 Motors, LP (2013) 215 Cal.App.4th 36, 40-41. 23 California’s Wage Order No. 9 defines "Hours worked" as "the time during which 24 an employee is subject to the control of an employer, and includes all the time the 25 employee is suffered or permitted to work, whether or not required to do so." (Cal. Code 26 Regs., tit. 8, § 11040, subd. 2(K).). See Augustus v. ABM Security Serv. (2014) 233 27 Cal.App.4th 1065; see also, (Mendiola v. CPS Security Solutions, Inc. (2015) 60 Cal.4th 28 833, 840 (“on-call hours constitute ‘hours worked.’” "Not all employees at work actually -7RESPONSE AND OBJECTION BY STEVEN PRICE TO MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT 1 perform work. "`[A]n employer, if he chooses, may hire a man to do nothing, or to do 2 nothing but wait for something to happen.... [I]dleness plays a part in all employments in a 3 stand-by capacity.'"); Aguilar v. Association for Retarded Citizens (1991) 234 Cal.App.3d 4 21, 24, 30 (time employees were required to remain at group homes during an overnight 5 shift, during which they could sleep but had to remain on call, was compensable work 6 time.). As soon as a driver logs onto the Uber app and is “on duty” waiting for a trip 7 request, the driver is arguably under Uber’s control. For example, as soon as a driver logs 8 onto the app and is “on duty,” Uber requires that the driver remain in or near his or her 9 vehicle, that the vehicle comply with Uber’s standards, and that the driver comply with 10 Uber’s standards. Price has vigorously litigated these meritorious minimum wage claims 11 on behalf of the Class. Despite Plaintiffs’ Counsel’s flawed reasoning and argument 12 against recovery of unpaid minimum wages on behalf of the Class, the Class’s minimum 13 wage claims against Uber have a much higher value than $0. 14 Plaintiffs and their counsel have failed to address the issue of the drivers’ waiting 15 time, and have failed to ascribe any value whatsoever to the Class’s valid claim for unpaid 16 minimum wages. The Class in this case deserves better, more vigorous representation. 17 18 b. Overtime Claim: Plaintiffs and their counsel propose to settle the overtime claims of each and every 19 Class Member for $0, and value the overtime claims of the Class at $2,000,000, with no 20 explanation of how they arrived at this valuation. (Liss-Riordan Dec. at ¶¶55-58). 21 For nearly 2 years, Price has also been actively litigating claims on behalf of 22 himself and the putative class for Uber’s failure to pay overtime compensation. Plaintiffs 23 and their counsel similarly ask this Court to certify them to represent the members of the 24 Settlement Class to pursue the Class’s overtime claims, and then ask the Court to permit 25 them to settle these overtime claims for $0. 26 Plaintiffs and their counsel ascribe a value of $2,000,000 to overtime claims of the 27 approximately 385,000 proposed Settlement Class Members. Although it is far from clear 28 from Plaintiffs’ Counsel’s declaration, it appears that Plaintiffs and their counsel estimate -8RESPONSE AND OBJECTION BY STEVEN PRICE TO MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT 1 that the 385,000 class members worked only 100,000 overtime hours over a 7-year period. 2 It seems apparent that once again Plaintiffs and their counsel have failed to address the 3 issue of the drivers’ waiting time, and have grossly underestimated the value of the Class’s 4 overtime claims. The Class in this case again deserves better. 5 6 c. Meal and Rest Break Claims: Plaintiffs and their counsel propose to settle the meal and rest break claims of each 7 and every Class Member for $0. (Liss-Riordan Dec. at ¶¶59-60). Plaintiffs and their 8 counsel clearly do not adequately represent the interests of the Class with respect to their 9 meal and rest break claims. 10 Price has been actively litigating claims on behalf of himself and the putative class 11 for Uber’s failure to compensate for missed meal and rest breaks. Determining Uber’s 12 liability for unpaid missed meal and/or rest break premiums will require the trier of fact to 13 consider whether Uber has a common meal or rest break policy, and if so, whether that 14 policy complies with California law. The trier of fact will also be required to consider 15 whether Uber has a common policy regarding the payment (or lack thereof) of the 16 premium pay required by California law for missed meal and rest breaks. 17 Price’s complaint alleges that no driver has ever been paid by Uber for a missed 18 meal break. Through discovery in the Price action, Uber has admitted that it has no meal 19 or rest break break policy with respect to its drivers. In Faulkinbury v. Boyd & Associates, 20 Inc., a security guard company maintained no "policy regarding the provision of rest 21 breaks to security guards and had an express policy requiring all security guards to remain 22 at their posts at all times." Faulkinbury v. Boyd & Associates, Inc. (2013) 216 23 Cal.App.4th 220, 236-237. The issue was whether the scope of the employer's rest break 24 policy could be determined on a classwide basis. The court concluded that "the lawfulness 25 of [the employer's] lack of rest break policy and requirement that all security guard 26 employees remain at their posts can be determined on a classwide basis." 216 27 Cal.App.4th at 237. The same is true here. Faulkinbury makes clear that “no policy” is in 28 fact a policy common to all workers. -9RESPONSE AND OBJECTION BY STEVEN PRICE TO MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT 1 Again, despite Plaintiffs’ counsel’s best effort to advocate against any recovery for 2 any Class Member for missed meal or rest breaks, the meal and rest break claims of the 3 Class here have real, significant value. They certainly have a value greater than $0. Once 4 again, Plaintiffs and their counsel have failed to ascribe any value whatsoever to the 5 Class’s valid claim for missed meal and rest breaks. And once again, the Class in this case 6 deserves better. 7 d. 8 9 Inaccurate Employment Record and Wage Statement Claims: Price’s complaint alleges that Uber did not maintain records required by the Labor Code for any Class Member. In response to a request for admission in the Price action, 10 Uber has admitted that it has not kept Labor Code and/or Wage Order compliant 11 employment records, or provided compliant wage statements, to any driver throughout the 12 Class Period. Despite this admission, Plaintiffs and their counsel ascribe a nonsensical 13 value of $0 to the Class’s legitimate record keeping and wage statement claims. (Liss- 14 Riordan Dec. at ¶¶61-68). Again, the Class here deserves better representation. 15 16 e. PAGA Claims: Plaintiffs’ counsel admit that the value of the PAGA claims in this case exceed $1 17 Billion. Yet Plaintiffs ascribe only $1,000,000 (less than 1/10 of 1% of the value of the 18 PAGA claims) of the settlement amount to the PAGA claims they ask this Court to allow 19 them to release. 20 Price’s claims under California's Private Attorneys General Act to enforce 21 the state's wage and hour laws, are not subject to individual arbitration, and thus do not 22 suffer from the same supposed “risks” of continued litigation used by Plaintiffs’ counsel to 23 drastically discount Price’s other claims. See Sakkab v. Luxottica Retail N. Am., Inc., 803 24 F.3d 425, 427 (9th Cir. 2015); Iskanian v. CLS Transp. L.A., LLC, 327 P.3d 129, 152 25 (2014), cert. denied, 135 S. Ct. 1155 (2015). Thus, Plaintiffs and their counsel have 26 grossly underestimated the value of the PAGA claims in this case – claims that Price has 27 been actively and vigorously litigating on behalf of the Class here for nearly 2 years. 28 Alarmingly, Plaintiffs’ counsel has chosen to arbitrarily reduce the potential PAGA -10RESPONSE AND OBJECTION BY STEVEN PRICE TO MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT 1 penalties to a miniscule portion of the settlement amount – $1,000,000, which is less than 2 1/10 of 1% of the full verdict value of those claims. 3 Plaintiffs and their counsel assume that the Court would impose a miniscule 4 amount of PAGA penalties in this case. For that proposition they cite Amaral v. Cintas 5 Corp. No. 2, 78 Cal. Rptr. 3d 572 (Cal. Ct. App. 2008), which they portray as requiring a 6 trial court to limit PAGA penalties to one-third the amount of damages. But Amaral says 7 no such thing. The California Court of Appeal merely held that the trial court did not 8 abuse its discretion, on the facts of that case, in declining to reduce PAGA penalties to an 9 amount lower than approximately one-third of the total damages award. Id. at 618. This 10 suggests nothing about the full verdict value of the PAGA claims or what amount of 11 PAGA penalties this court might impose in this case. 12 In estimating the maximum reasonable PAGA penalty, there is no basis for slashing 13 it to less than one-tenth of one percent (as Plaintiffs' counsel did here). Plaintiffs’ and their 14 counsel appear to argue that the PAGA claims should be drastically discounted because 15 the State of California would be entitled to recover 75% of any penalties imposed by the 16 Court. This argument, however, is nonsensical. Simply because the State would receive 17 75% of any penalties assessed does not mean that the penalties should be reduced to less 18 than 1/10 of 1% of their full verdict value. To the contrary, a PAGA plaintiff – which 19 Plaintiffs and their counsel ask this Court to allow them to be – stands in the shoes of the 20 State in enforcing its wage and hour laws. See, e.g., Achal v. Gate Gourmet, Inc., 114 F. 21 Supp. 3d 781, 806 (N.D. Cal. 2015). Therefore, it makes no sense to discount the value of 22 the PAGA claims here to nearly zero simply because the State will receive a portion of 23 them. If the case went to trial, and if the Plaintiffs won, and if the Court imposed PAGA 24 penalties, the State would get seventy-five percent of that amount. It is simply not proper 25 for Plaintiffs to arbitrarily discount the value of the PAGA claims in this case and 26 shortchange the State of the amount it should be entitled to recover under the proposed 27 Settlement. In acting as class representatives for the PAGA claims, Plaintiffs and their 28 -11RESPONSE AND OBJECTION BY STEVEN PRICE TO MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT 1 counsel effectively owe a fiduciary duty to the State. Their proposal to limit the value of 2 the PAGA claims as they propose here amounts to nothing less than a breach of that duty. 3 C. Plaintiffs and Their Counsel Are Not Adequate Representatives for the Claims 4 Being Litigated In the Price Action: 5 FRCP 23(a)(4) requires that class representative and their counsel “fairly and 6 adequately protect the interests of the class.” A two-prong test is used to determine 7 whether this standard is met: “(1) do the named plaintiffs and their counsel have any 8 conflicts of interest with other class members and (2) will the named plaintiffs and their 9 counsel prosecute the action vigorously on behalf of the class?” Ellis v. Costco Wholesale 10 Corp., 657 F.3d 970, 985 (9th Cir. 2011). Plaintiffs and their counsel have conflicts of interest with the putative class in the 11 12 Price action. It is blatantly apparent from Plaintiffs’ counsel’s declaration and their 13 valuation of the claims being litigated in the Price action that Plaintiffs and their counsel 14 will not prosecute the claims in the Price action vigorously on behalf of the Class. 15 Accordingly, this Court should not grant Plaintiffs’ request to be appointed as counsel for 16 the Class with respect to those claims being litigated in the Price action. 17 D. The Proposed Settlement Has Obvious Deficiencies: 18 The “formula” proposed by Plaintiffs’ counsel here is based only on “the amount of 19 miles driven” by Class Members “with a passenger in the car,” and gives no consideration 20 whatsoever to the amount of time Class Members were actually on the clock (logged on to 21 the Uber App waiting for a trip request) and subject to Uber’s control. The “formula” 22 therefore rewards those Class Members who were fortunate enough to receive the most 23 trip requests, and thus already earned the most money for their time spent working for 24 Uber. Those Class Members who spent more time waiting for trip requests, albeit 25 working an equal or greater amount of time as those who performed more trips with 26 customers, not only received less for their time while working for Uber, but they will be 27 penalized again under the terms of the proposed Settlement and will receive a much 28 smaller share of the fund than their fellow drivers. The “formula” agreed to by Plaintiffs’ -12RESPONSE AND OBJECTION BY STEVEN PRICE TO MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT 1 counsel here is fundamentally unfair and arbitrarily discriminates in favor of those Class 2 Members who earned more during the Class Period at the expense of those who earned 3 less. 4 IV. 5 6 CONCLUSION: For the reasons set forth herein, Price respectfully requests that this Court DENY Plaintiffs’ Motion for Preliminary Approval of the proposed class action settlement here. 7 8 Dated: May 13, 2016 Respectfully submitted, LAW OFFICE OF CHRISTOPHER J. MOROSOFF 9 10 11 By: /s/ Christopher J. Morosoff Christopher J. Morosoff Attorneys for Objector and Interested Party STEVEN PRICE 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -13RESPONSE AND OBJECTION BY STEVEN PRICE TO MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT