United States District Court, D. Colorado
THOMAS ARAGON, on behalf of himself and all similarly situated persons, Plaintiff,
CLEAR WATER PRODUCTS LLC, MILLS SOLIDS CONTROL CONSULTING, LLC, AQUA CLEAR SOLUTIONS LLC, BRODY HANSEN, SCOTT FORKNER, WAYNE JEFFREY HUBBARD, JAY GARRETT MILLS, and DANIELLE MILLS, Defendants.
A. BRIMMER UNITED STATES DISTRICT JUDGE.
matter comes before the Court on the Joint Motion for Final
Approval of Settlement Agreement [Docket No. 110] and
plaintiff's Unopposed Motion for Approval of
Attorney's Fees and Costs [Docket No. 109]. The Court has
jurisdiction over this lawsuit pursuant to 28 U.S.C. §
case arises out of a wage dispute. Plaintiff, a solids
control technician, claims that he and other similarly
situated employees of defendants were not paid full
compensation for overtime hours worked and were instead paid
a “day rate with no overtime premium pay.” Docket
No. 1 at 4, ¶ 9. Plaintiff also alleges that he was not
paid for all his hours worked and rest breaks as mandated by
Colorado law. Id.
filed a class action complaint on December 28, 2015. Docket
No. 1. Plaintiff asserts claims for violation of the Fair
Labor Standards Act (“FLSA”), 29 U.S.C. §
201 et seq., the Colorado Wage Claim Act, Colo. Rev.
Stat. § 8-4-101, et seq., the Colorado Minimum
Wage Act, Colo. Rev. Stat. § 8-6-101, et seq.,
and breach of contract. Id. at 6-9, ¶¶
14-37. On May 5, 2017, the parties filed a joint motion for
preliminary approval of a class action settlement. Docket No.
103. The Court granted the motion on March 5, 2018 and
approved the parties' plan to disseminate notice of the
settlement to class members. Docket No. 106. On May 14, 2018,
plaintiff filed a motion requesting an award of
attorney's fees and costs. Docket No. 109. On June 28,
2018, the parties moved for final approval of the class
action settlement. Docket No. 110. The Court held a final
fairness hearing regarding the proposed settlement on
December 13, 2018. Docket No. 114.
FINAL APPROVAL OF CLASS ACTION SETTLEMENT
Overview of the Settlement Agreement
proposed settlement agreement defines the settlement class
all persons who worked for Clear Water as solids control
technicians and were paid a day rate at any time from
December 28, 2013 through the date that the Court enters an
order preliminarily approving this Agreement.
Docket No. 103-3 at 1, ¶ II.A. Under the proposed
settlement agreement, defendants agree to pay a total of
$350, 000.00 as well as the settlement administrator's
fees. Id. at 6, ¶ IV.E.1. The settlement funds
are to be distributed as follows: (1) service awards of $7,
000.00 to plaintiff and $2, 750.00 each to opt-in plaintiffs
Michael Aragon, Raymond Romero, Kevin Shay, and David Yoho,
id., ¶ IV.E.3; (2) payments to class counsel of
up to $116, 666.00 for attorneys' fees and costs,
id., ¶ IV.E.2; (3) payment of class
members' payroll taxes, id. at 7, ¶ IV.E.4;
and (4) pro rata payments to settlement class members of all
remaining funds based on the number of weeks they were paid a
day rate since December 28, 2013. Id., ¶
Notice to the Settlement Class
Rule 23(e)(1), a district court approving a class action
settlement “must direct notice in a reasonable manner
to all class members who would be bound by the
proposal.” Fed.R.Civ.P. 23(e)(1). Rule 23(c)(2)(B)
provides, in relevant part, that for “any class
certified under Rule 23(b)(3), the court must direct to class
members the best notice that is practicable under the
circumstances, including individual notice to all members who
can be identified through reasonable effort.”
Fed.R.Civ.P. 23(c)(2)(B). In addition to the requirements of
Rule 23, the Due Process Clause also guarantees unnamed class
members the right to notice of a settlement. DeJulius v.
New England Health Care Emps. Pension Fund, 429 F.3d
935, 943-44 (10th Cir. 2005). However, due process does not
require that each class member receive actual notice to be
bound by the adjudication of a representative action.
Id. Instead, the procedural rights of absent class
members are satisfied so long as “the best notice
practicable under the circumstances [is given] including
individual notice to all members who can be identified
through reasonable effort.” In re Integra Realty
Resources, Inc., 262 F.3d 1089, 1110 (10th Cir. 2001)
(citation omitted). Thus, “[t]he legal standards for
satisfying Rule 23(c)(2)(B) and the constitutional guarantee
of procedural due process are coextensive and substantially
similar.” DeJulius, 429 F.3d at 944.
Court finds that the parties complied with the notice plan
that was approved by this Court in its ruling on the
parties' motion for preliminary approval of the class
action settlement. See Docket No. 106 at 16-18. The
settlement administrator mailed a notice of preliminary
approval to each of the eighty-nine settlement class members.
Docket No. 110-2 at 2, ¶ 6. The settlement administrator
also emailed notice of the settlement to eighty-six class
members. Id. One class notice was returned to the
settlement administrator and was undeliverable upon remailing
of the notice. Id. at ¶ 7.
with its prior order, the Court finds that the parties made
reasonable efforts to identify and provide notice to all
class members who would be bound by the settlement.
See Fed. R. Civ. P. 23(e)(1) (requiring court to
“direct notice in a reasonable member to all class
members who would be bound by the proposal”);
Tennille v. W. Union Co., 785 F.3d 422, 438-39 (10th
Cir. 2015) (finding that mailing of settlement notice to
addresses updated through post office's change-of-address
database was sufficient under Rule 23 and due
process); DeJulius, 429 F.3d at 944 (noting
that due process inquiry “focuses upon whether the
district court gave the best notice practicable under the
circumstances including individual notice to all members who
can be identified through reasonable effort” (internal
quotation marks omitted)). Moreover, the notice itself
contained information regarding the nature of the lawsuit,
the definition of the class, class members' anticipated
recovery under the settlement, the amount of attorneys'
fees and costs sought, and a summary of the class
members' legal rights, including the right to object or
exclude themselves from the settlement. See Docket
No. 110-3; see also Fed. R. Civ. P. 23(c)(2)(B)
(describing information to be included in notice). The notice
also directed class members to a toll-free number for
additional information regarding the settlement. See
Docket No. 110-3 at 4; see also Tennille, 785 F.3d
at 437 (finding that “notice satisfied due process by
informing class members of several ways they could obtain
information about the claims that they would be releasing if
they joined the settlement”).
on the foregoing, the Court is satisfied that the notice
provided to class members met the requirements of Rule 23(e)
and Due Process.
Analysis of Rule 23 Factors 
23(e) provides that a proposed settlement may only be
approved after a “finding that it is fair, reasonable,
and adequate.” Fed.R.Civ.P. 23(e)(2). In this process,
“trial judges bear the important responsibility of
protecting absent class members, ” and must be
“assur[ed] that the settlement represents adequate
compensation for the release of the class claims.”
In re Pet Food Prods. Liab. Litig., 629 F.3d 333,
349 (3d Cir. 2010); see also Amchem Prods., Inc. v.
Windsor, 521 U.S. 591, 623 (1997) (noting that the Rule
23(e) inquiry “protects unnamed class members from
unjust or unfair settlements affecting their rights when the
representatives become fainthearted before the action is
adjudicated or are able to secure satisfaction of their
individual claims by a compromise”) (citations
omitted). To determine whether a proposed settlement is fair,
reasonable, and adequate, courts consider the following
factors: “(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.” Rutter & Wilbanks Corp. v. Shell
Oil Co., 314 F.3d 1180, 1188 (10th Cir. 2002). If the
settling parties can establish these factors, courts usually
presume that the proposed settlement is fair and reasonable.
In re Warfarin Sodium Antitrust Litig., 391 F.3d
516, 535 (3d Cir. 2004) (applying an “initial
presumption of fairness” to a proposed settlement
where: (1) it was the result of arm's length
negotiations; (2) it was based on sufficient discovery; (3)
“the proponents of the settlement [were] experienced in
similar litigation; and (4) only a small fraction of the
regard to the first factor, the Court finds no evidence of
collusion. This case has been pending for nearly three years,
during which time the parties have briefed several motions
and engaged in formal discovery, including written discovery
and depositions. See Docket No. 110 at 7; Docket No.
79 (plaintiff's motion for class certification); Docket
No. 80 (plaintiff's motion to approve
Hoffman-LaRoche notice). The parties also engaged in
informal discovery, which indicated that any substantial
recovery won by plaintiff could lead to defendants'
bankruptcy. See Docket No. 110 at 7. Based on the
information provided, the Court is satisfied that the
parties' settlement is the product of fair and honest
negotiations between the parties. See Reiskin v.
Reg'l Transp. Dist. Colo., No. 14-cv-03111-CMA-KLM,
2017 WL 5990103, at *2 (D. Colo. July 11, 2017) (finding that
class settlement was fairly and honestly negotiated where
“case involved intensive discovery, ”
“expert witness reports, ” depositions, and
Court also finds that there are serious questions of law and
fact in this case that likely would have affected
plaintiffs' chance at recovery. Defendants represent that
they believe that many of the class members are subject to
the Motor Carrier Act exemption to the FLSA, 29 U.S.C. §
213(b)(1). See Docket No. 110 at 8-9. The parties
also dispute several issues related to damages, such as which
statute of limitations applies and to what extent the Motor
Carrier Act exemption applies. Id. Finally, the
financial information disclosed by defendants during
discovery indicated that defendants would not have been able
to pay a large lump sum judgment, possibly leading to minimal
recovery by the class members. Id. at 7. Given the
real prospect that plaintiffs would not have obtained any
recovery had the case proceeded to trial, the Court finds
that this factor weighs in favor of approving the
parties' settlement agreement.
Court next considers whether the value of immediate recovery
outweighs the mere possibility of future relief after
protracted and expensive litigation. The parties indicate
that continued litigation would lead to additional discovery,
extensive motions practice, trial, and an appeal.
See Docket No. 110 at 9-10. Under the parties'
settlement agreement, class members will receive a pro rata
share of $350, 000, less attorney's fees and other
adjustments. See Docket No. 110-1 at 6-7,
¶¶ 1-7. Given the risks and costs of protracted
litigation and uncertainty surrounding class members'
ability to recover on ...