SF Judge Raises '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
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.
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