Price V Uber Settlement
Price V Uber Settlement
Price V Uber Settlement
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I KEITH A. JACOBY,Bar No. 150233 superior court of California
. ANDREW M.SPURCHISE,Bar No. 245998 County of Los Angeles
2 SOPHIA BEHNIA,Bar No. 289318
RACHAEL LAVI, Bar No. 294443 JAN 2 3 2018
3 LITTLER MENDELSON,P.C.
2049 Century Park East, 5th Floor Sherri R,Larter,
"ecutive Officer/Clerk
4 Los Angeles, California 90067.3107
Telephone: 310.553.0308; Fax No.: 310.553.5583 ,Deputy
Rita Na—zaryan
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THEODORE J. BOUTROUS,Jr., Bar No. 132099
6 THEANE D. EVANGELIS,Bar No. 243570
DHANANJAY S. MANTHRIPRAGADA,Bar No. 254433
7 GIBSON,DUNN & CRUTCHER LLP
333 South Grand Avenue
8 Los Angeles, California 90071-3197
Telephone: 213.229.7000; Fax No.: 213.229.7520 1 1,
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JOSHUA S. LIPSHUTZ, Bar No. 242557
10 KEVIN J. RING-DOWELL,Bar No. 278289
GIBSON,DUNN & CRUTCHER.LLP
II 555 Mission Street, Suite 3000
San Francisco, California 94105.0921
12 Telephone: 415.393.8200; Fax No.: 415.393.8306
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LITTLER MENDELSON,P.C.
2049 Century Park East
Case No. BC554512
L."111— C~
90067 NOTICE OF ORDER
310.553.0308
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I PLEASE TAKE NOTICE that on January 16, 2018 at 2:00 p.m., the Court held a
2 hearing on the parties Joint Motion for Approval ofPAGA Settlement in the above captioned matter.
3 The Court granted the Joint Motion. On January 18, 2018, the Court entered an Order Granting Joint
4 Motion For Approval Of PAGA Settlement And Granting Plaintiffs' Request For Dismissal Of
5 Action. A true and correct copy of the Court's January 18, 2018 Order is attached hereto as Exhibit
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TH A q~':'JACOBY
10 A DREW M.SPURCHISE'
SOPHIA BEHNIA
II RACHAEL LAVI
LITTLER MENDELSON,P.C.
12 Attorneys for Defendants
UBER TECHNOLOGIES,INC. and RASIER-
13 CA,LLC
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Firmwide:152425654.1 073208.1032
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LITTLER MENDELSON,P.C.
2049 Cenhiry Park East
5th A.,
Case No. BC554512
Los
Angeles,
90067
CA NOTICE OF ORDER
310.553.0308
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EXHIBIT A
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EXHIBIT A
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E-Served: Jan 19 2018 11:45AM PST Via Case Anywhere
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'AN 18 2018
. -- /;- ILI (%.~j.iv-u-jix-nt\
By A, AbvaAcg D"
3 WANCY NAVARRO
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Plaintiff,
14 RDER GRANTING JOINT MOTION FOR
PPROVAL OF PAGA SETTLEMENT AND
V.
15 GRANTING PLAINTIFFS' REQUEST FOR
ISMISSAL OF ACTION
16 UBER TECHNOLOGIES,INC., a Delaware
corporation, and DOES I through 100,
17 inclusive, Date: January 16, 2018
Time: 2:00 p.m.
18 Defendants. Dept.: 307
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21 1. BACKGROUND
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Plaintiff Steven Price filed this action against Defendant Uber Technologies, Inc. on
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August 12, 2014. The pleading sets forth ten claims on behalf ofthe class and a representative
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cause of action under the Labor Code Private Attorneys General Act of2004(PAGA), Labor
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Code § 2698, et. seq. Plaintiff filed an amendment adding Defendant Raiser-CA,LLC,as Doe I
It is alleged Uber provides technology linking drivers and passengers, as well as other
services and that Uber has a uniform policy of willfully misclassifying drivers as independent
In February, 2017,the parties filed a joint stipulation for settlement of the PAGA claim.
Concurrently, the parties submitted a stipulation to allow the filing ofa First Amended
Complaint and Price filed a request for dismissal ofthe class claims. Hearings on the request for
approval ofthe PAGA settlement were held on March 10, 2017 and June 30,2017,after which
supplemental briefing was permitted, the last of which was received August 15, 2017.
The Court declined to approve the prior PAGA settlement agreement for two primary
reasons. First, the release was overly broad as it purported to release PAGA claims related to any
possible Labor Code violation, whether or not alleged in the Complaint. Second, the Court was
concerned about the fairness of providing incentive payments to the representative class member
(Price) and to the proposed additional named class member(Aly). Thus, on September 14, 2017,
the Court issued an order denying approval, without prejudice to a renewed motion putting forth
a settlement with a narrower release and without incentive payments to Price or Aly.
The parties revised their proposed settlement agreement. The two issues identified in the
September 14, 2017 Order are addressed in the revised settlement. On November 21, 2017 the
parties submitted a stipulation seeking approval of the settlement. Same was rejected. The
On December 21, 2017 a joint motion seeking to approve settlement ofthe PAGA claim
and dismiss the class claims was filed. The Labor and Workforce Redevelopment Agency
("LWDA")was notified of the revised settlement pursuant to statute and did not object thereto.
Counsel for plaintiffs in 0*Connor ei. al. v. Uber Technologies Inc., Case No. 13-cv-03826-
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EMC("O'Connor") pending in the United States District Court for the Northern District of
California and counsel for plaintiffs in Del Rio v Uber Techs, Inc., No. 3:15-cv-03667-EMC(Del
Oral argument was conducted January 16, 2018, at which time, objectors were heard. The
settlement was orally approved at that time, as was the request to dismiss the class claims.
As discussed at oral argument,and to complete the record, this order sets forth the
Court's analysis ofthe issues presented. Familiarity with the Court's prior orders is assumed.
The findings, conclusions and orders from the Court's September 14, 2017 Order are
incorporated herein to the extent possible, except as to amendments to the settlement agreement.
11. DISCUSSION
The gravamen of this litigation is the contention that Defendant misclassified its drivers
as independent contractors rather than employees. The proposed First Amended Complaint
2. Failure to pay minimum wage — Labor Code §§ 1182.12, 1194, 1194.2, 1197, 1197.1
4. Failure to pay for missed meal periods — Labor Code §§ 226.7 and 512
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1 10. Unlawful business practices- B&P Code § 17200 et seq.(Minimum wages, overtime,
2 missed meal and rest periods, taking of employee gratuities(Labor Code §35 1), reporting
4 11. The PAGA claim - Labor Code §§ 2699(a)and/or (f)(Based on alleged violations of
has violated and continues to violate Labor Code §§ 226, 226.3, 226.7, 351, 353,354,
8 432.5,450, 510, 512,551,552,558, 1174, 1174.5, 1194, 1197, 1197.1, 1198, 1199, 2753,
9 and/or 2802.]
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A copy of the Amended Settlement Agreement is attached to the Memorandum of Points
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and Authorities filed December 21, 2017. it contains the following essential terms:
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16 sign-up process to use Uber software application and/or used the Uber software
17 application to generate leads in California at any time from July 8, 2013 up to and
19 PAGA Settlement Group Members means,"any and all Drivers who consented to a
20 background check as part of the sign-up process to use the Uber software application
21 and/or used the Uber software application to generate leads in California at any time
24 Settlement Payments means the $2,500 Uber has agreed to pay Plaintiff Steven Price
25 in exchange for a general release ofclaims, and the $17,500 Uber has agreed to pay
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Hani Aly in exchange for a general release of claims. The Settlement Payments will
not be deducted from the Settlement Sum and will be paid separately by Uber to Price
and Aly.(TI.x)
• Ofthe Net Settlement Amount $775,000 will be allocated to Labor Code §558
($2,906,250)and the other 25% will go to the PAGA Settlement Group Members
($968,750).' (T1II.C.a.3)
• The amount paid to each PAGA Settlement Group Member will be determined by
first dividing the Net Settlement Amount2 by the total number of Active Weeks for
all PAGA Settlement Group Members during the relevant period (July 8, 2013 —
January 29,2017)to arrive at the "Active Week Amount" and then multiplying each
Settlement Group Member's total number of Active Weeks by the Active Week
Amount.(TIII.C.a.3)
• Driver Penalty Payments will be reported on IRS Form 1099. PAGA Settlement
Group Members will be responsible for paying all applicable state, local and federal
income taxes on all amounts received pursuant to this settlement and shall not seek
$775,000 Section 558 penalties plus $968,750 PAGA penalties equals $1,743,750.
Counsel confirmed at oral argument that this is meant to refer to the $1,743,750 amount rather
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Upon entry ofthe Final Order, Plaintiff, Aly, all PAGA Settlement Group Members,
and the State of California shall be deemed to have fully, finally, and forever waived,
released, relinquished, and discharged each and all ofthe Released Parties from any
and all PAGA Claims as defined herein that arose or may be alleged to have arisen at
any time from July 8,2013 up to and including January 29, 2017. Specifically, in
exchange for the payments described above, Plaintiff and Aly, on behalf of
themselves, the State of California, and the PAGA Settlement Group Members, will
release Defendants from liability for any and all claims for civil penalties related to
alleged driver misclassification that might be brought under the PAGA based on
alleged violations of Labor Code §§ 226,226.3, 226.7. 226.8, 351, 353, 354,432.5,
450, 510, 512,551,552,558(not for wage claims), It 74, 1174.5, 1182.12, 1194,
1197, 1197.1, 1198, 1199, 2753, 2802, as well as under Wage Order No.9 only. The
release of penalties under section 558 ofthe Labor Code does not affect the
underlying wage claims. To the extent an alleged PAGA violation arises directly
from the operative facts pled in the Complaint and implicates the same primary rights
and defenses being settled here, those claims are settled and released to the fullest
extent permitted under applicable law. Nothing in the foregoing is meant to release
the PAGA claims pursuant to Labor Code sections 245-249 asserted in Tabola v.
Uber Technologies, Inc., et al., San Francisco Superior Court Case No. CGC-16-
550992.(IV.C)
226.7, 226.8, 351,353, 354,432.5, 450,510, 512, 551, 552,558 (not for
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I wage claims), 1]74, 1174.5, 1182.12, 1194, 1197t 1197.1, 1198, 1199,
2 2802, and 2753; claims under Business and Professions Code section
5 Order 9-2001."(TI.r)
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C.The Nature of a PAGA Claim
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Briefly, and as set forth in more detail in the Court's September 14, 2017 Order, the
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PAGA was enacted to aid public agencies, which lack adequate funding, in enforcement of
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California's labor laws. While the full parameters of PAGA actions are not settled, it is clear
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that private persons suing under the PAGA do so as a proxy ofthe state.(Arias v. Superior Court
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(2009)46 Cal. 4" 969, 986.) Aggrieved employees suing under the PAGA are authorized to
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recover certain civil penalties. Ofthe civil penalties recovered 75% goes to the LWDA,leaving
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the remaining 25% for the "aggrieved employees." Labor Code § 2699 (a). Additionally,
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because an aggrieved employee is acting on behalf of the state, the state is bound by any
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judgment entered in a PAGA action.(Arias,46 Cal.4 969 at 986.) However,the State and
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other aggrieved employees authorized by the LWDA are also free to bring PAGA actions for
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alleged on-going violations for time periods outside the settlement period, as counsel
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acknowledged at hearing. As to at least the LWDA,this includes claims for injunctive relief
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D. The Legal Standard
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Labor Code §2699(l)(2)requires courts to "review and approve any settlement of any
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civil action filed pursuant to this part." No published case has determined the standards the
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Court should employ in evaluating a PAGA settlement. The California Supreme Court explains
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that a PAGA claim is a form of a qui tam action. Iskanian v. CLS Transportation Los Angeles
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LLC(2014)59 Cal.4 348,382. As such, this Court looks to qui tam standards in evaluating
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this settlement, i.e. whether the settlement is "fair, adequate, and reasonable" in the
circumstances. Cf Cal. Govt. Code § 12652(In a qui tam action a state or political subdivision
may settle the action with the defendant notwithstanding the objections ofthe qui tam plaintiff if
the court determines, after a hearing providing the qui tam plaintiff an opportunity to present
evidence, that the proposed settlement is fair, adequate, and reasonable under all ofthe
circumstances.) While PAGA actions are distinct from class actions,the class action standard
(fair, reasonable, and adequate settlement) is adopted here for these reasons.'
Based upon evidence presented in connection with the prior settlement agreement, the
It is not suggested that further fact discovery is needed to understand the claims herein.
According to Plaintiffs' counsel the most likely outcome would be that the PAGA recovery in
this case is between $52 million and $1 billion if plaintiffs prevail in this action.(Declaration of
represents approximately 15% of the low value estimate($52 million) and .77% ofthe highest
As the Court previously noted, this case is unusual in that the outcome as to liability
uncertain, as is the range of possible relief. Further, it could be many years before the legal issue
are settled. The objection and reply arguments reinforce the unsettled nature ofthe claims being
resolved. The range of value ofthe claims could be zero, as in some ofthe arbitration awards, or
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it could be $121 billion if Plaintiffs were completely successful at trial, the maximum penalties
were assessed, and either no appeal is taken or the judgment is affirmed on appeal.
The $7.75 million PAGA settlement is fair,just and reasonable in all the circumstances,
including that adequate discovery has been done; even if plaintiffs prevail, trial courts have
discretion to award less than the maximum penalties to avoid unjust, arbitrary, oppressive or
confiscatory awards; the unsettled nature ofthe legal question (whether drivers are employees)
and the likelihood ofappeal if plaintiffs' prevail; the experience of counsel; the fact that the
settlement does not preclude PAGA claims for time periods after January 29,2017, allowing the
question of employee status to be further litigated; and the fact that the real party in interest
(LWDA)did not express any objection to the settlement.(i~f Kullar v. Fool Locker Relail, Inc.
In this regard, the Court acknowledges that in its experience LWDA has not traditionally
"weighed in" on PAGA settlements. While it can be argued that this is because it does not have
the resources to do so(the very reason for the PAGA statute), it is statutorily required that notice
ofany proposed settlement be given to the LWDA (Labor Code §2699(l)(2)), thus suggesting
that it may object if it finds a settlement deficient. Further, at the Court's invitation LWDA
filed an amicus brief earlier in this case. Thus, at least for purposes of this motion, it is
significant that LWDA has not commented on this particular settlement and also elected to take
In approving the settlement, the Court considered the objection filed on behalf of the
class in O'Connor, which essentially challenges the amount ofthe settlement and charges that
the settlement is collusive, the product of a reverse auction, and constitutes inappropriate forum
shopping.
No evidence is tendered that supports the charge that a reverse auction was conducted.
The settlement was negotiated by an experienced retired judicial 'officer. There is no evidence
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that defendants' counsel "shopped" the settlement among lawyers representing others who had
been permitted by LWDA to bring claims on its behalf or dealt with the weakest only, which are
The Court is likewise not persuaded that the settlement is the product ofinappropriate
forum shopping. A proposed settlement in O'Connor (tendered by the same counsel who is now
objecting to the amount of the settlement herein) included a proposal that the parties' amend the
complaint to include a PAGA claim and settle the PAGA claim for $1,000,000. This was
rejected by the District Court. Apparently, counsel in O'Connor then suggested that the PAGA
claim could be settled for $11 million if she waived a portion of her fee, The District Court
indicated, in dicta, that a PAGA settlement of $11 miIlion would amount to 1.1% of the
potential verdict value and"would take away funds that otherwise would have gone to drivers,
putting the burden of supporting the public interest on the employee rather than the employer."
(Spurchise Declaration filed February 1, 2017 113 and Exhibit 10 thereto: Order Denying
A decision thereafter to negotiate settlement ofthe claims in a case in which the claims
were actually pled (and have been pled since 2014)cannot be considered inappropriate forum
shopping. This is particularly true because the District Court has made clear that it intends to
defer to this Court with respect to settlement ofthe PAGA claims in this action.
Further, the O'Connor class' argument that the Court should decline to approve the
settlement because the California Supreme Court has requested briefing and set oral argument
concerning the criteria for determining independent contractor status in an unrelated action
(Dynamex Operations West, Inc. v. Superior Court, Case No. S222731) is an insufficient reason
for denying approval of this settlement. The Court must assess this case under the current law.
The Court has also considered the objections ofcounsel in the ded Rio matter to the effect
that the settlement is inadequate in amount; does not consider additional exposure for liability;
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and seeks "expedited" relief The arguments regarding the amount of the settlement are rejected,
for the reasons set forth above. The balance ofthe arguments are factually inaccurate. The
liability period under the settlement ends at January 29, 2017,as counsel acknowledged at oral
argument. Further, the settlement is being considered after a regularly noticed motion. Nothing
was "expedited."
The Declaration of Douglas Caiafa sufficiently supports the Request for Dismissal. Cal.
Rules of Court, Rule 3.770. The Court is satisfied that dismissal ofthe class claims will not
prejudice absent class members as other actions assert the same claims. Further, given that Price
and Aly are signing general releases and given the amounts in controversy respecting their
individual claims, the separate payments to them do not suggest collusion and are not in the
Attorneys Morosoff and Caiafa request an award offees and costs in an amount up to
30% of the $7.75 million PAGA settlement, or $2,325,000. Fee awards based on a percentage
ofthe settlement are permitted in the class action arena and arguably in the PAGA arena as well.
A fee of one third of the total settlement is within the range of what may be considered average,
FN 13:"Empirical studies show that, regardless whether the percentage method or the lodestar
method is used, fee awards in class actions average around one-third of the recovery.")
A lodestar crosscheck confirms the reasonableness of the fee request here. Attorney
Morosoff has filed three declarations in support ofthe fee award, two in connection with the
prior proposed settlement and one in connection with the amended settlement. Morosoffattaches
copies of his prior declarations to his current declaration. The total time spent on this litigation
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(PAGA claim only) as evidenced in these three declarations is 1,580 hours. At his hourly rate of
$650 this is a lodestar of$1,028,300. Attorney Caiafa's hours. are likewise calculated by way of
three declarations; they total 1,505 hours. At Caiafa's $750 hourly rate, his lodestar is
$1,131,760. The combined lodestar amount is $2,160,060. No objection to the amount of the
fees was tendered by LWDA or the objectors. The Court finds that the fee request is reasonable
1. The settlement set forth as Exhibit A to the Joint Motion filed December 21, 2017 is
4. A status conference in the remaining related cases will be heard on March 22,2018 at
1:45 p.m.
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Dated:
MAREN E. NELSON
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1 Documents Considered:
8 Declaration of Douglas Caiafa in Support ofStipulation for Filing First Amended Complaint
9 Declaration of Douglas Caiafa in Support of Joint Stipulation for Approval ofPAGA Settlement
10 and Attorneys' Fees and Costs(and attached exhibits, consisting of copies of documents filed in
13 Settlement
15 Settlement
17 PAGA Settlement
19 PAGA Settlement
21 Attorneys' Fees and Costs re Joint Request for Approval ofPAGA Settlement
22 -Supplemental Declaration of Douglas Caiafa in Support of Joint Request for Approval o'
.25 PAGA Settlement, Request to Dismiss Entire Action, and Plaintiffs' Request for
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Approval of Attorneys' Fees and Costs re Joint Stipulation for Approval ofPAGA
Settlement
Approval ofPAGA Settlement, Request to Dismiss Entire Action, and Plaintiffs' Request
for Approval of Attorneys' Fees and Costs re Joint Request for Approval ofPAGA
Settlement
Settlement
Plaintiffs' Request to Dismiss Entire Action Including Individual and Putative Class Claims
Notice of Joint Motion and Motion for Joint Approval ofPAGA Settlement
Memorandum of Points and Authorities in Support of Joint Motion for Approval ofPAGA
Settlement
Declaration of Rachel Lavi in Support of Joint Motion for Approval ofPAGA Settlement
Declaration of Douglas Caiafa in Support of Joint Motion for Approval ofPAGA Settlement and
Attorneys' Fees and Costs(and attached exhibits, copies of previously filed documents)
Plaintiffs' Request to Dismiss Entire Action Including Individual and Putative Class Claims
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Supplemental Declaration of Rachel Lavi in Support of Joint Motion for Approval of PAGA
Settlement(re: submission ofthe amended settlement agreement, motion, and proposed order to
Plaintiff Steven Price's Reply in Support of Joint Motion for Approval ofPAGA Settlement
Defendants Uber Technologies, Inc. and Raiser-Ca, LLC's Reply to 0'Connor Class' Renewed
Objection to Settlement
Objection to Settlement
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