Opponent calls proposed AT&T wage class settlement ‘collusion’

A settlement a San Bernardino County judge tentatively approved Monday in a wage and hour class action against AT&T is the result of collusion, plaintiffs in a competing action said after being specifically carved out of the deal.

Finding it fair and not a result of collusion, San Bernardino County Judge David Cohn tentatively approved the deal but said he would not finalize his order if class members specifically barred by name from the settlement were not allowed to participate and better explain their reasons for objecting.

"The court's tentative ruling to grant preliminary approval is predicated on the court's proposal to modify the class definition to remove the specifically excluded individuals," Cohn wrote. "This will give the would-be intervenors an opportunity to object to the settlement, if they choose to, and to point out in better detail why they believe the settlement is collusive and not in the best interests of the class."

Luis M. Salas Razo, represented by Westlake attorney Marcus J. Bradley of Bradley Grombacher LLP, worked at an AT&T Mobility Store in Madera, as a sales representative for 11 years until June 2018. Removed to a federal court in Fresno in January, Razo's wage and hour complaint alleged that throughout his employment, AT&T improperly paid him meal and rest period premiums at his base hourly rate rather than his regular rate. Razo v. AT&T Mobility Services, LLC, 20-cv-00172 (C.D. Cal., filed Jan 31, 2021).

On Aug. 25, the parties met to discuss AT&T's alleged refusal to produce classwide discovery, Bradley's co-counsel, Kiley L. Grombacher, said in a declaration. During that call, counsel for AT&T told her it had reached a settlement with plaintiffs' counsel in another action, Wallack v. AT&T, to settle the class claims in the Razo case, she said. Counsel for AT&T went on to say that in light of the proposed deal, AT&T would not produce class discovery in the Razo case but would consider an individual settlement for the plaintiff, Grombacher wrote.

After learning of the Wallack case, filed in state court in San Bernardino County by Edward Joseph Wynne of the Wynne Law Firm, Razo asked that Bradley be appointed interim class counsel. Wallack et al. v. AT&T Mobility Services, LLC, CIVSB 2117915. (S.B. Sup. Ct., filed June 22, 2021).

Razo's attorneys stated in a court document the Wallack deal approved by Cohn Monday, is "a clandestine and collusive proposed reverse auction settlement," aimed at "gutting this (Razo's) case," thus necessitating the appointment of interim class counsel to "protect the rights of the putative class."

A reverse auction occurs when "the defendant in a series of class actions picks the most ineffectual class lawyers to negotiate a settlement with the hope that the district court will approve a weak settlement that will preclude other claims against the defendant." Reynolds v. Beneficial Nat'l Bank, 288 F. 3d 277, 282 (7th Cir. 2002).

Finding Razo's argument compelling, U.S. District Judge Dale A. Drozd in Fresno last week granted the motion to appoint Bradley class counsel in his lawsuit but said Razo's ability to participate in the Wallack case was not part of his ruling.

"Among other things, plaintiff highlights the fact that he has been explicitly carved out of the settlement in Wallack, meaning that normal avenues by which he might object to that settlement are likely unavailable or at the very least uncertain," Drozd wrote.

Razo and his group argue that the settlement in Wallack, if approved, will foreclose the right to relief pursued by the putative class in the instant action, including the meal and rest break violations.

Attorneys representing class members in the Razo and Wallack suits were not available for comment Monday.

Asked to comment on the settlement, AT&T spokesman Jim Kimberly said, "While we continue to dispute the allegations, we settled to avoid drawn-out and expensive litigation."