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Harlow v. Sprint Nextel Corp.

United States District Court, D. Kansas

June 4, 2018

RICK HARLOW, et al., Plaintiffs,
v.
SPRINT NEXTEL CORPORATION, et al., Defendants.

          MEMORANDUM AND ORDER

          Kathryn H. Vratil United States District Judge.

         This matter is before the Court on Plaintiffs' Motion For Preliminary Approval Of Settlement (Doc. #372) filed March 2, 2018, Plaintiffs' Second Supplemental Motion For Preliminary Approval Of Settlement (Doc. #387) filed May 21, 2018 and Plaintiffs' Motion For Approval Of Adequacy Of Settlement Notice Process (Doc. #389) filed May 21, 2018. Plaintiffs' unopposed motions seek (1) preliminary approval of the parties' proposed settlement agreement; (2) a finding that plaintiffs' requests for attorneys' fees are fair and reasonable; (3) approval of plaintiffs' requests for costs to class counsel and service awards to class representatives; (4) a final settlement approval hearing date; and (5) approval of the parties' proposed notice plan. Plaintiffs' Motion For Preliminary Approval (Doc. #372), ¶¶ 1-5; Plaintiffs' Motion For Approval Of Adequacy Of Settlement Notice Process (Doc. #389) at 1. For reasons below, the Court sustains plaintiffs' motions in part.

         Factual And Procedural Background

         On May 9, 2008, four plaintiffs - former Sprint business channel employees - filed suit against their employers Sprint Nextel Corporation and Sprint/United Management Company (collectively, “Sprint”). Complaint (Doc. #1). Plaintiffs alleged that when Sprint acquired Nextel, it failed to properly integrate the companies' payroll systems and routinely failed to pay commissions plaintiffs had earned. Id. On behalf of a nationwide class of similarly-situated Sprint employees, plaintiffs asserted claims for violations of the Kansas Wage Payment Act (“KWPA”), K.S.A. § 44-313 et seq., and breach of contract. See Second Amended Class Action Complaint (Doc. #43) filed August 22, 2008, ¶¶ 35-47.

         On December 10, 2008, the Court certified a class pursuant to Rule 23(b)(3), Fed. R. Civ. P., composed of “those who worked in Sales and Distribution for [Sprint's] Business Direct Channel since January 1, 2006, including General Business, Enterprise, and Public Sector Account Executives (or those in similar positions), and those who managed these individuals, who were paid in full or in part based on commissions.” Memorandum And Order (Doc. #77) at 4-17. The Court appointed Nichols Kaster, PLLP and Stueve Siegle Hanson LLP as class counsel. Id. at 18. The certification order also reassigned the case to the undersigned Judge because she was presiding over its companion case - Sibley v. Sprint Nextel Corp. et al., No. 08-cv-2063-KHV. Id. at 2-3, 19. The parties in Sibley and Harlow retained the same counsel and experts, and the classes asserted similar claims - i.e. that Sprint underpaid commissions due to issues with its payroll system arising from the Nextel merger.

         On April 8, 2009, the Court directed plaintiffs to send potential class members a letter to place them on notice of the suit and their ability to opt out of it. Memorandum And Order (Doc. #91) at 2. On May 21, 2014, the parties stipulated that the class should be limited to “business direct channel employees who worked as ‘transactional' sales representatives and/or ‘hunters, ' or their managers, including ‘hybrid' managers, who worked in those positions at any time from January 1, 2006 through December 31, 2009.” Amended Stipulation Specifying Class Membership And Class Period And Providing For Corrective And Supplemental Notice (Doc. #350) at 3-5. Shortly thereafter, the parties sent supplemental class notices and notices of exclusion which described these limitations to current class members and potential new class members. Id. at 5-6; see Doc. #350-2 (notice letter); see Doc. #350-3 (same); see Doc. #350-4 (same); see Order Approving Amended Stipulation (Doc. #351) filed May 27, 2014.

         When this action began, the parties engaged in active motion practice. On June 17, 2008, Sprint filed a motion to dismiss. Defendants' Motion To Dismiss Counts I And III-V, And Partially Dismiss Count II Of Plaintiffs' Amended Complaint (Doc. #13); Memorandum And Order (Doc. #44) filed September 2, 2008 (overruling motion as moot). On August 15, 2008, plaintiffs moved for certification. Plaintiffs' Motion For Rule 23 Class Certification (Doc. #38). After extensive briefing and oral argument, the Court granted certification. Memorandum And Order (Doc. #77) at 2, 19. Sprint attempted an interlocutory appeal of the certification order, which the Tenth Circuit denied. See Order (Doc. #87) filed February 6, 2009 (denying petition from appeal).

         This action also required expansive discovery. Sprint alone produced more than 10 million pages of documents. Memorandum In Support Of Plaintiffs' Motion For Preliminary Approval Of Settlement (Doc. #373) filed March 2, 2018 at 6 (citing Declaration Of Michele R. Fisher In Support Of Supplemental Preliminary Approval Of Settlement (Doc. #373-1), ¶ 12). Plaintiffs deposed 37 Sprint corporate representatives, executives and employees. Declaration Of Michele R. Fisher (Doc. #373-1), ¶ 7. Both parties relied heavily on experts who examined Sprint's computerized commissions system. The Court summarized the experts' challenge as follows:

As is the case in Sibley, the experts' opinions in Harlow will address the proper methodology for: (1) investigating enormous databases, (2) writing specialized code to create forensic computer programs, (3) manipulating complex data fields, (4) applying numerous interrelated accounting variables, and (5) calculating sales commissions specific to tens of thousands of employees in the telecommunications industry.

Order Of Appointment (Doc. #348) filed May 2, 2014 at 2-3. Because this case involved an extraordinary amount of highly technical data, the Court appointed a Special Master to oversee expert discovery and case management deadlines. Id. at 3, 5-7. On August 26, 2014, while the experts were preparing their initial reports, the Court stayed all deadlines to allow the parties and experts to focus on Sibley. Order Staying Case Management Deadlines (Doc. #354) at 2; see also Declaration Of Michele R. Fisher (Doc. #373-1), ¶ 8.

         On September 1, 2017, the Court ordered that the Sibley parties engage in mediation before the Honorable Daniel D. Crabtree of the District of Kansas. Order Referring The Parties To Mediation (Doc. #762 in No. 08-cv-2063-KHV). On January 8 and 9, 2018, the Sibley parties attended mediation sessions with Judge Crabtree. ADR Report (Doc. #798 in No. 08-cv-2063-KHV) filed January 10, 2018. The parties did not settle during these sessions, but on January 18, 2018 - with the continued aid of Judge Crabtree - the parties reached a settlement which resolved both cases. See Memorandum In Support (Doc. #373) at 15.

         I. Preliminary Settlement Approval

         On March 2, 2018, plaintiffs moved for preliminary approval of their settlement agreement. Plaintiffs' Motion For Preliminary Approval (Doc. #372). On March 8, 2018, the Court held a preliminary settlement approval hearing. At the hearing, the Court voiced concerns about certain aspects of the proposed settlement agreement. On March 16, 2018, plaintiffs filed a Supplemental Memorandum In Support Of Plaintiffs' Motion For Preliminary Approval Of Settlement (Doc. #378). Plaintiffs' supplemental memorandum provided additional information concerning (1) revisions to the settlement process; (2) the parties' efforts to ensure the most practicable notice of settlement; and (3) a new cy pres recipient. See generally id.

         On April 5, 2018, the Court ordered the parties to submit additional information and show cause why they should not revise certain provisions of the proposed settlement agreement. Order To Show Cause (Doc. #380) at 1-7. On April 16, 2018, the parties responded and submitted for preliminary approval a revised settlement agreement. Plaintiffs' Response To Order To Show Cause (Doc. #381); Defendants' Response To The Court's Order To Show Cause [] Regarding The Supplemental Memorandum In Support Of Plaintiffs' Motion For Preliminary Approval Of Settlement (Doc. #383); see Settlement Agreement (Doc. #381-15). On May 2, 2018, plaintiffs submitted another revised settlement agreement which corrected typographical errors and revised one provision. See Settlement Agreement (Doc. #385-1). On May 9, 2018, the Court ordered the parties to show cause why they should not make further revisions to certain provisions of the settlement agreement. Second Order To Show Cause (Doc. #386). On May 21, 2018, plaintiffs filed Plaintiffs' Second Supplemental Motion For Preliminary Approval Of Settlement (Doc. #387), Plaintiffs' Motion For Approval Of Adequacy Of Settlement Notice Process (Doc. #389) and a revised settlement agreement. See Settlement Agreement in Declaration Of Michele R. Fisher In Response To Second Order To Show Cause (Doc. #388-1) at 3-44.

         II. Proposed Settlement (Doc. #388-1)

         The Settlement Agreement defines the settlement class as follows:

All business direct channel employees at Sprint who worked as transactional sales representatives and/or hunters, and those who managed them (including hybrid managers), during the Class Period of January 1, 2006 through December 31, 2009, who were paid in full or in part based on commission, and did not request exclusion from this case. The parties have agreed there are 3, 919 such individuals in the Settlement Class.

Settlement Agreement (Doc. #388-1), ¶ 4.

         A. Settle ...


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