United States District Court, D. Colorado
DOROTHY MURPHY and HEATHER CREAZZO, on behalf of themselves and all others similarly situated, Plaintiffs.
LENDERLIVE NETWORK, INC., Defendant.
ORDER GRANTING PLAINTIFFS' MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT AND ADDENDUM, CERTIFICATION OF THE SETTLEMENT CLASS, APPOINTMENT OF PLAINTIFFS' COUNSEL AS CLASS COUNSEL, AND APPROVAL OF PLAINTIFFS' PROPOSED NOTICE OF SETTLEMENT
R. BROOKE JACKSON, District Judge.
The above-captioned matter comes before the Court on Plaintiffs' Motion for Preliminary Approval of Class Settlement and Addendum, Certification of the Settlement Class, Appointment of Plaintiffs' Counsel as Class Counsel, and Approval of Plaintiffs' Proposed Notice of Settlement ("Motion for Preliminary Approval"). Defendant agreed, for settlement purposes only, not to oppose the motion.
I. Preliminary Approval of Settlement
1. Based upon the Court's review of the Plaintiffs' Memorandum of Law in Support of their Motion for Preliminary Approval, the Declaration of Jack A. Raisner ("Raisner Decl."), and all other papers submitted in connection with Plaintiffs' Motion for Preliminary Approval, the Court grants preliminary approval of the settlement memorialized in the Joint Agreement of Settlement and Release ("Settlement Agreement") and the Addendum to the Settlement Agreement (the "Addendum") between Plaintiffs Dorothy Murphy and Heather Creazzo (together, "Plaintiffs") and Defendant LenderLive Network, Inc. ("Defendant" or "LenderLive"), and "so orders" all of its terms.
2. Courts have discretion to approve a proposed class action settlement. See Jones v. Nuclear Pharmacy, Inc., 741 F.2d 322, 324 (10th Cir. 1984) ("In exercising its discretion, the trial court must approve a settlement if it is fair, reasonable and adequate.").
3. In granting preliminary approval, courts apply a less stringent standard than at the final approval stage. In re Motor Fuel Temperature Sales Practices Litig., 258 F.R.D. 671, 675-76 (D. Kan. 2009).
4. To assess "whether the settlement is fair, reasonable and adequate, " courts in the Tenth Circuit consider: (1) whether the proposed settlement was fairly and honestly negotiated; (2) whether serious questions of law and fact exist, placing the ultimate outcome of the litigation in doubt; (3) whether the value of an immediate recovery outweighs the mere possibility of future relief after protracted and expensive litigation; and (4) the judgment of the parties that the settlement is fair and reasonable. Jones, 741 F.2d at 324; Rutter & Wilbanks Corp. v. Shell Oil Co., 314 F.3d 1180, 1188 (10th Cir. 2002); Lucas v. Kmart Corp., 234 F.R.D. 688, 693 (D. Colo. 2006) (applying factors); Wilkerson v. Martin Marietta Corp., 171 F.R.D. 273, 283 (D. Colo. 1997) (same).
5. The Court concludes that the proposed Settlement Agreement is fair, reasonable, and adequate, such that there is probable cause to submit the proposed settlement to class members and hold a full-scale hearing as to its fairness at a later date. See Jones, 741 F.2d at 324; Rutter, 314 F.3d at 1188.
6. The Court finds that the Settlement Agreement is the result of extensive, arm's-length negotiations by counsel well-versed in the prosecution of class and collective actions. "The fairness of the negotiating process is to be examined in light of the experience of counsel, the vigor with which the case was prosecuted, and [any] coercion or collusion that may have marred the negotiations themselves." Ashley v. Reg'l Transp Dist. & Amalgamated Transit Union Div. 1001 Pension Fund Trust, No. 05 Civ. 1567, 2008 WL 384579, at *5 (D. Colo. Feb. 11, 2008). Here, the Parties initiated settlement discussions after the completion of discovery and a mediation session with an experienced employment law mediator, which subsequently led them to reach an accord resulting in the Settlement Agreement. Raisner Decl. ¶¶ 17-24.
7. The Court finds that serious questions of law and fact exist which put the outcome of the WARN litigation in doubt. "The presence of such doubt augurs in favor of settlement because settlement creates a certainty of some recovery, and eliminates doubt, meaning the possibility of no recovery after long and expensive litigation." Ashley, 2008 WL 384579, at *6 (citation omitted). Here, serious questions of law and fact exist regarding LenderLive's liability under the WARN Act, which includes a disagreement between the parties regarding the number of employees laid off from LenderLive's Madison Heights location and who are subject to the WARN act. Raisner Decl. ¶¶ 38-42.
8. The Court finds that the value of an immediate recovery in the settlement outweighs the mere possibility of future relief after protracted and expensive litigation. The Court must appraise "the monetary worth of the settlement, " Wilkerson, 171 F.R.D. at 283, and balance the "the benefits of immediate settlement" against "the costs of protracted litigation." Ashley, 2008 WL 384579, at *7. Here, both parties believe that a settlement avoids the expense and uncertainty for both parties if this case goes to trial. Moreover, the parties believe that even if litigation were to continue, it could be years before Class Members obtain any recovery, if Class Members prevail at all. By reaching a settlement prior to dispositive motions or trial, Plaintiffs will avoid significant expense and delay and ensure recovery for the Class in a prompt and efficient manner.
9. Finally, the Court finds that that the parties believe the settlement is fair and reasonable. When evaluating fairness and reasonableness, "[c]ounsels' judgment as to the fairness of the agreement is entitled to considerable weight." Lucas, 234 F.R.D. at 695. "Courts have consistently refused to substitute their business judgment for that of counsel and the parties." Alvarado Partners, L.P. v. Mehta, 723 F.Supp. 540, 548 (D. Colo. 1989) (citation omitted). Here, both Parties, with the counsel of their experienced attorneys, arrived at a settlement which provides each Class Member an average payment of approximately $3, 000. Raisner Decl. ¶ 44. These payments amount to approximately 20% of the total value of Class Members' WARN claims. Raisner Decl. ¶ 45. In light of the considerable risks involved in the WARN claim, as discussed above, the parties believe the settlement amount is fair and reasonable, and this Court agrees.
II. Certification of the Proposed Rule 23 Settlement Classes
10. For settlement purposes, Plaintiffs seek to certify the Rule 23 WARN Class under Federal Rule of Civil Procedure 23(e). The Court already granted class certification on Oct. 22, 2014. ECF No. 61. For all of the reasons set forth in Plaintiffs motions in support of class certification, ...