SF Judge Has 'Significant Concerns' About Proposed $11M Settlement in Postmates Class Action
In a tentative order, San Francisco Superior Court Judge Anne-Christine Massullo had more than 30 questions about the terms of a deal that plaintiffs lawyers at Lichten & Liss-Riordan and Postmates counsel at Gibson, Dunn & Crutcher reached to settle claims that delivery workers had been misclassified as independent contractors.
November 22, 2019 at 05:15 PM
3 minute read
The original version of this story was published on The Recorder
A state court judge in San Francisco on Friday pushed off a scheduled preliminary approval hearing on a proposed $11 million deal to settle claims that gig-economy company Postmates misclassified couriers who used its mobile delivery app as independent contractors.
In a tentative order issued on the eve of the scheduled hearing, San Francisco Superior Court Judge Anne-Christine Massullo raised more than 30 questions about the terms of the deal and prodded the parties for an estimation of the maximum value of all claims in the case, a figure that was missing in the parties' proposed settlement.
"Significant concerns are present both by what is contained in the language of the settlement and what facts are missing from the motion," wrote Massullo, who noted that it could take "several rounds of briefing" for her to grant a preliminary sign-off on the deal.
Plaintiffs lawyer Shannon Liss-Riordan of Lichten & Liss-Riordan said via email Friday that the judge's ruling was "not unusual or unexpected."
"It is routine now in California for judges to issue these orders asking for more information in the process of approving settlements," Liss-Riordan said. She noted that the settlement papers and information in the proposed deal drew from an earlier $8.75 million settlement her firm reached with Postmates covering a different class period which was approved by a federal judge in San Francisco last year.
"This settlement is even more robust than one previously approved involving Postmates, as we explained," Liss-Riordan said.
Massullo's tentative order noted that the federal case settled before the California Supreme Court decision in Dynamex Operations West v. Superior Court adopted the less stringent test for when workers are considered employees due heightened protections and benefits under California law, and before Assembly Bill 5 codified the decision's holding. Massullo also questioned why the settlement allocated just $250,000 in penalties under California's Private Attorney General Representatives law, or 0.09% of the $274 million identified by Liss-Riordan as the maximum expense reimbursement claim. Massullo wrote Thursday that "while a substantial discount for PAGA penalties may be reasonable, counsel failed to provide any factual or legal basis to justify the near 100% discount."
Liss-Riordan, who reached the proposed settlement with Postmates' counsel at Gibson, Dunn & Crutcher after a July mediation in case, said that she's "happy to answer the judge's questions."
The proposed deal faced separate objections from plaintiffs firms also pursuing cases against Postmates on behalf of couriers who sought to intervene. Massullo denied those requests for now, finding them premature at this stage. The judge did, however, ask the settling parties to address some of the concerns raised by the objecting firms, including those who are pursuing individual arbitrations on behalf of couriers, about why the proposed deal prohibits outside counsel from assisting class members in objecting to or opting out of the deal.
Liss-Riordan said Friday that there is some concern that firms claim to represent couriers whom they don't actually represent and the proposed process "simply ensures that the class members themselves are the ones making the affirmative choice to participate in the settlement or not."
Travis Lenkner, of Keller Lenkner, whose firm was one of the three firms seeking to intervene in the case, said that the proposed deal was "inadequate and unfair in the extreme."
"We're heartened and happy that the court recognized as much," Lenkner said.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllLitigators of the Week: After a 74-Day Trial, Shook Fends Off Claims From Artist’s Heirs Against UMB Bank
An ‘Indiana Jones Moment’: Mayer Brown’s John Nadolenco and Kelly Kramer on the 10-Year Legal Saga of the Bahia Emerald
‘It's Your Funeral’: Avoiding Doing Damage to Your Client’s Case With Uncivil Behavior
Law Firms Mentioned
Trending Stories
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250