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Rotondo v. JPMorgan Chase Bank, N.A.

United States District Court, S.D. Ohio, Eastern Division

November 20, 2019

DEREK ROTONDO, Plaintiff,
v.
JPMORGAN CHASE BANK, N.A., Defendant.

          George C. Smith Judge

          REPORT AND RECOMMENDATION

          CHELSEY M. VASCURA UNITED STATES MAGISTRATE JUDGE

         This matter is before the Court on Plaintiff Derek Rotondo's (“Plaintiff” or “Mr. Rotondo”) Unopposed Motion for Final Approval of Class Action Settlement (ECF No. 22). Plaintiff, individually and on behalf of similarly situated individuals, seeks final approval of the proposed class action settlement described in the parties' Settlement Agreement (ECF No. 24-5) (the “Settlement”). Notice was given to members of the Settlement Class, and a Fairness Hearing was held before the undersigned on November 6, 2019. Also before the Court is Plaintiff's Unopposed Motion for Approval of Attorneys' Fees, Reimbursement of Expenses, and Service Payment (ECF No. 24). Having considered the Settlement and the arguments in support of final approval, it is RECOMMENDED that Plaintiff's Motions (ECF Nos. 22 and 24) be GRANTED.

         I. BACKGROUND

         A. Procedural History

         This action arises out of Defendant JPMorgan Chase Bank, N.A.'s (“Defendant” or “Chase”) parental leave policy. Under its policy effective in 2016 (the “2016 Policy”), Chase employees who were primary caregivers could receive up to 16 weeks of paid parental leave upon the birth of a child, while employees who were not primary caregivers (non-primary caregivers) could receive only up to 2 weeks of paid parental leave. Named Plaintiff Rotondo was told by Chase human resources personnel that, under the 2016 Policy, birth mothers were presumptively treated as primary caregivers, while birth fathers were presumptively treated as non-primary caregivers. To qualify as primary caregivers, birth fathers would have to show that: (1) the father's spouse had returned to work; or (2) the spouse was medically incapable of caring for the child. Mr. Rotondo intended to be the primary caregiver for his son born in 2017, but could not satisfy the 2016 Policy's primary caregiver requirements because his wife had not yet returned to work and was capable of caring for their child.

         Mr. Rotondo timely filed a Charge of Discrimination with the U.S. Equal Employment Opportunity Commission (“EEOC”) challenging Chase's alleged policy and practice of denying primary caregiver leave to fathers, on behalf of himself and a class of similarly situated male employees. From July 2017 through April 2019, the parties engaged in settlement discussions and informal discovery about Chase's policies and their impact on putative class members, including in-person negotiations on July 25 and October 3, 2017, and two days of mediation with an independent mediator on April 16 and May 14, 2018. While the settlement talks were ongoing, Chase changed its parental leave policy in December 2017 to remove gender-specific language and clarify that fathers are eligible to be designated as primary caregivers on the same basis as mothers. The parties executed the Settlement on May 28, 2019, and Mr. Rotondo filed this putative class action on May 30, 2019. (ECF No. 1.)

         B. Preliminary Approval

         On June 21, 2019, the Court granted preliminary approval of the Settlement. (ECF No. 16.) The Court certified the following class under Federal Rules of Civil Procedure 23(a) and 23(b)(3) for settlement purposes only:

[A]ll male employees of Defendant nationwide who took the maximum amount of non-primary caregiver leave available under Defendant's policy in effect at the time of the birth of one or more child (either 1 week or 2 weeks depending on the time period) during the Settlement Class Period, or if applicable, the State Settlement Class Periods, and would have otherwise qualified for paid primary caregiver leave, but did not take primary caregiver leave.

(Prelim. Approval Order 2, ECF No. 16, incorporating Settlement § 1.38, ECF No. 24-5). The Settlement Class period for class members not subject to the State Settlement Class Periods is from August 19, 2016 (300 days before the charge was filed) through December 4, 2017 (when Chase revised the 2016 policy). Class members who worked in one of the following states are subject to the following State Settlement Class Periods:

(a) Alaska, Maine, New Jersey, and West Virginia: June 15, 2015 through December 4, 2017
(b) Michigan, New York, Washington, and Vermont: June 15, 2014 through December 4, 2017
(c) California: June 15, 2013 through December 4, 2017
(d) Kentucky: June 15, 2012 through December 4, 2017
(e) Ohio: June 15, 2011 through December 4, 2017
(f) Arkansas, Louisiana, Minnesota, North Carolina, Oregon, South Dakota, Tennessee, and District of Columbia: June 15, 2016 through December 4, 2017

(Id. 2-3.) Chase, through its personnel records, identified 5, 035 members of the Settlement Class.

         C. The Settlement Agreement

         The Settlement provides both programmatic and monetary relief to Settlement Class Members. As part of the Settlement, Chase will continue to maintain a gender-neutral parental leave policy and will not reduce the amount of non-primary or primary paid caregiver leave it provides for four years from the effective date of the Settlement. (Settlement § 3.5(A), ECF No. 24-5.) Chase will also conduct training of relevant human resources personnel and contractors on its new parental leave policy, monitor implementation of the policy, and provide data to Plaintiff's counsel on the implementation of the policy for two years after the Settlement's approval. (Id. § 3.5(B)-(C).)

         The Settlement also establishes a $5 million Gross Settlement Amount that covers all amounts to be paid to, or on behalf of, Settlement Class Members; any Court-approved Service Payment to the Named Plaintiff; any Attorneys' Fees and Litigation Expenses approved by the Court; and any Settlement Administrator's fees and costs that exceed $50, 000. (Id. §§ 1.18, 3.1(A).) Class Counsel may request attorneys' fees not to exceed one-third of the Gross Settlement Amount, as well as reimbursement of reasonable costs and expenses. (Id. §§ 3.1(A), 3.2.) Chase will pay the Settlement Administrator's fees and costs up to $50, 000 in addition to the Gross Settlement Amount. (Id. § 3.1(A).) The fees and costs of the Settlement Administrator above $50, 000 will be paid from the Gross Settlement Amount. (Id.)

         The Net Settlement Amount (which is the Gross Settlement Amount minus attorneys' fees and costs, service payments, and the settlement administrator's fees and costs that exceed $50, 000) will be distributed in equal shares to Settlement Class Members based on the total number of valid claims submitted by Settlement Class Members. (Id. § 3.4(B).) Settlement Class Members who had more than one child during the Settlement Class Period may receive compensation for multiple claims that they filed. (Id. § 3.4(B)(v).)

         To receive a Settlement Award, Settlement Class Members must have submitted a valid Claim Form by the Claim Form Deadline. (Id. §§ 1.6, 2.6(A).) As of October 22, 2019, the Settlement Administrator had received 1, 503 claim forms, of which at least 1, 440 have been determined to be valid. (Baldwin Dec. ¶ 16, ECF No. 24-9.) The Settlement Administrator has calculated the pro rata share of the Net Settlement Amount for each valid claim to be $2, 301.04. (Id. ¶ 18.) Settlement Class Members will have 180 days to cash the checks that they receive from the Settlement Administrator. (Settlement §§ 1.1, 3.1(D), ECF No. 24-5.) Any amount remaining 20 days after the expiration of the 180-day Acceptance Period will be redistributed to Settlement Class Members who have timely cashed their checks or, if the amount remaining is small enough that a redistribution is not appropriate, unclaimed funds will be donated to a nonprofit organization that the parties propose and the Court approves pursuant to the cy pres doctrine. (Id. §§ 1.4, 3.1(F).)

         D. Notice

         Plaintiff retained RG/2 as the Settlement Administrator. On July 12, 2019, RG/2 sent the Court-approved Notice and Claim Form to the 5, 035 members of the Settlement Class by First Class U.S. Mail. (Baldwin Dec. ¶ 7, ECF No. 24-9.) The Court-approved Notice informed class members of the principal terms of the Settlement, the opportunity to object or opt out of the Settlement, the necessity of filing a claim form in order to receive monetary compensation, and the deadline for claim form submission and the date and location of the final approval hearing. On August 12, 2019, the Settlement Administrator also mailed a reminder postcard to 4, 904 Settlement Class Members who had not yet returned a valid Claim Form. (Id. ¶ 9.) When RG/2 reported on August 16, 2019, that less than 300 claim forms had been filed, the parties sought and obtained Court approval to extend the claims deadline to September 30, 2019 and to continue the Final Approval Hearing until November 6, 2019. (ECF No. 21.) RG/2 then sent a supplemental notice to all class members on September 19, 2019 informing them of the revised dates via First Class U.S. Mail, and, to the extent email addresses were available to Chase, by email. (Baldwin Dec. ¶ 14, ECF No. 24-9.)

         As of October 22, 2019, RG/2 had received 1, 503 claim forms. (Id. ¶ 15.) No. class members objected to the Settlement, and 3 class members opted out of the Settlement. (Id. ¶ 10.)

         II. APPROVAL OF THE PROPOSED CLASS SETTLEMENT

         The undersigned presided over a Fairness Hearing on November 6, 2019, to hear evidence and argument as to the adequacy of the proposed Settlement. At the Fairness Hearing, the undersigned heard argument from counsel for Plaintiffs and Defendant and heard from Mr. Rotondo.

         In deciding whether to approve the proposed settlement, the Court must consider whether the settlement is “fair, reasonable, and adequate.” Fed.R.Civ.P. 23(e)(2). In making this determination, the Court considers the following factors:

(1) the risk of fraud or collusion; (2) the complexity, expense and likely duration of the litigation; (3) the amount of discovery engaged in by the parties; (4) the likelihood of success on the merits; (5) the opinions of class counsel and class representatives; (6) the reaction of absent class members; and (7) the public interest.

Poplar Creek Dev. Co. v. Chesapeake Appalachia, L.L.C., 636 F.3d 235, 244 (6th Cir. 2011) (citations and internal quotation marks omitted). The Court “enjoys wide discretion in assessing the weight and applicability of these factors.” Granada Invs., Inc. v. DWG Corp., 962 F.2d 1203 (6th Cir. 1992).

         For the reasons that follow, the undersigned concludes that the Settlement ...


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