Judge: Alison Mackenzie, Case: 21STCV17630, Date: 2024-07-19 Tentative Ruling
Case Number: 21STCV17630 Hearing Date: July 19, 2024 Dept: 55
NATURE OF PROCEEDINGS:
Hearing on Motion for Preliminary Approval of Class Action
BACKGROUND
Plaintiff Osmin Calderon sued defendants Dynamo
Aviation, Inc. and ADP Totalsource, Inc. on May 11, 2022 for (1) failure to pay
wages, (2) failure to provide meal and rest periods, (3) failure to provide
accurate itemized wage statements, (4) waiting time penalties, (5) failure to
permit inspection of personnel and payroll records, (6) unfair competition in
violation of business and Professions Code § 17200 et seq., and (7) civil
penalties under the Private Attorney General Act.
On November 02, 2022, Plaintiff filed the operative
First Amended Complaint for (1) minimum wage violations, (2) Failure to pay
allover time wages, (3) Meal period violations, (4) rest period violations, (5)
waiting time penalties, (6) wage statement violations, (7) failure to reimburse
employees for necessary business expenditures, (8) failure to permit inspection
of personnel and payroll records, (9) unfair competition in violation of
business and Professions Code § 17200 et seq., and (10) civil penalties under
the Private Attorney General Act.
On February 15, 2024, Plaintiff filed the instant
motion for preliminary approval of class action settlement. No opposition or
reply has been filed.
LEGAL STANDARD
Approval of class action settlements occurs in two
steps. First, the court preliminarily approves the settlement and the
class members are notified as directed by the court. (Cal. Rules of
Court, rule 3.769(c), (f); Cellphone Termination Fee Cases (2009) 180
Cal.App.4th 1110, 1118.) Second, the court conducts a final approval
hearing to inquire into the fairness of the proposed settlement. (Cal.
Rules of Court, rule 3.769(e); Cellphone Termination Fee Cases, supra,
180 Cal.App.4th at 1118.) “Any party to a settlement agreement may serve
and file a written notice of motion for preliminary approval of the settlement.”
(Cal. Rules of Court, rule 3.769(c).) “The settlement agreement and
proposed notice to class members must be filed with the motion, and the
proposed order must be lodged with the motion.” (Id.)
“‘The trial court has broad discretion to determine whether
the settlement is fair.’” (Cellphone Termination Fee Cases, supra,
180 Cal.App.4th at 1117 (quoting Dunk v. Ford Motor Co. (1996) 48
Cal.App.4th 1794, 1801).) In determining whether to approve a class
settlement, the court’s responsibility is to “prevent fraud, collusion or
unfairness to the class” through settlement and dismissal of the class action
because the rights of the class members, and even named plaintiffs, “may not
have been given due regard by the negotiating parties.” (Consumer
Advocacy Group, Inc. v. Kintetsu Enterprises of America (2006) 141
Cal.App.4th 46, 60.)
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ANALYSIS
A. Class
Certification is Appropriate.
A
class action is proper “when the question is one of a common or general
interest, of many persons, or when the parties are numerous, and it is
impracticable to bring them all before the court.” (Code Civ. Proc., § 382.) The party seeking certification bears the
burden of establishing the existence of an ascertainable class and a
well-defined community of interest among class members. (Dunk v. Ford Motor Co. (1996) 48
Cal.App.4th 1794, 1806 (Dunk).)
The
proposed class consists of approximately 130 Class Members, all of whom are
former non-exempt employees. (Blakely
Decl. ¶ 13.) These class members share
common questions that predominate this action, including Dynamo’s meal and rest
period policies/practices. (Motion at p. 21.)
Thus, based on the commonality of issues and numerosity of class
members, class resolution is a superior method of adjudication.
Plaintiff’s
claims, as alleged in the FAC, are typical of the class and arise from the same
common questions, and Plaintiff is an adequate representative whose interests
align with the class. Plaintiff states in his declaration that he worked for
Dynamo as a non-exempt store clerk and was subject to Dynamo’s wage an hour
policies that are the subject of the action. (Calderon Decl. ¶ 2.) Plaintiff
claims he was deprived of all wages and contends that he was deprived of all
legally compliant meal and rest periods. (Id. ¶ 3.) Plaintiff asserts he
was denied all wages owed and that he was also deprived of legally mandated
meal and rest periods. (Id.) Plaintiff further asserts that he did not
receive accurate and legally compliant wage statements, and that he was not
given the wages owed at the time his employment ended. Based on this Plaintiff’s
injury derives from the same challenged policies/practices that injured the class.
Additionally,
the proposed class counsel is adequate and qualified to represent the class.
Both of Plaintiff’s counsel have over 10 years of legal experience, and have
extensive experience in wage
and
hour class action litigation. (Blakely Decl., ¶¶ 2-6; Haines Decl., ¶¶ 2-8.)
Accordingly,
class certification is appropriate.
B. The PAGA Penalties Are Appropriate.
A
court must review and approve any PAGA penalties sought as part of a proposed
settlement agreement. (Lab. Code § 2699,
subd. (l).) “[C]ivil penalties recovered
by aggrieved employees shall be distributed as follows: 75 percent to the Labor
and Workforce Development Agency for enforcement of labor laws and education of
employers and employees about their rights and responsibilities under this
code, to be continuously appropriated to supplement and not supplant the
funding to the agency for those purposes; and 25 percent to the aggrieved
employees.” (Lab. Code, § 2699, subd.
(i).) The PAGA penalties here comply
with this requirement. (See Blakely Decl.;
Exh. 1 p. 3.) Accordingly, the PAGA penalties are appropriate, subject to a
finding that the settlement is fair.
Additionally,
a proposed PAGA settlement must be submitted to LWDA at the same time that it
is submitted to the court for review and approval. (Lab. Code § 2699, subd. (l)(2).) Plaintiff’s counsel declaration does not
indicate that a copy of the settlement was sent to LWDA when the motion was
initially filed. Instead, Plaintiff’s counsel states that Plaintiff sent his
PAGA notice Letter to the LWDA. (Blakely Decl. ¶ 9; Exh. B.) However, counsel’s
declaration is insufficient to demonstrate compliance with Labor Code section
2699(l)(2) as it does not clearly indicate that a copy of the settlement was
sent to the LWDA. Plaintiff must submit
confirmation of the submission to the LWDA.
C. The Terms of Settlement Are Fair.
Settlement
of a class action requires court approval to prevent fraud, collusion, or
unfairness to the class. (Dunk,
supra, 48 Cal.App.4th at pp. 1800-1801.)
In making the fairness determination, “a presumption of fairness exists
where (1) the settlement is reached through arm’s-length bargaining; (2)
investigation and discovery are sufficient to allow counsel and the court to
act intelligently; (3) counsel is experienced in similar litigation; and (4)
the percentage of objectors is small.” (Id.
at p. 1802.)
The
proposed settlement was reached through a mediation session with Jeffrey A.
Ross, Esq., “a well-respected wage and hour class action mediator.” (Blakely
Decl. ¶ 11.) In connection with the
mediation, the parties engaged in substantial discovery, including Dynamo
providing Plaintiff’s counsel with a “random sampling of timekeeping and
payroll records for its former employees… relevant data points such as the
total number of former employees and the number of aggregate workweeks worked
by its former employees during the class period, as well as Dynamo’s written
policies and other information.” (Id. ¶ 10.) Furthermore, Plaintiff’s
Counsel states that “Mr. Ross issued a mediator’s proposal for a class wide
settlement, which was ultimately accepted by the Parties. During the months
that followed, the Parties finalized the terms of the Settlement and executed
the long-form Settlement Agreement now before the court.” (Id. ¶ 11.) The
settlement was therefore reached through arm’s-length
bargaining with sufficient investigation to allow counsel and the Court to act
intelligently.
Defendants
will pay a gross settlement amount of $250,000.00 which represents
approximately 84% of the reasonably forecasted recovery for the Settlement
Class. (Blakely Decl.¶¶ 12, 22, Ex. A at
p.4.) Of this amount, $7,500.00 will be
paid to Plaintiff as a class representative service award, no more than $83,333.33
will be paid as attorney fees, $35,000.00 will be paid towards costs, $10,000.00
will be paid for settlement administration, and $20,000.00 will be paid for
PAGA penalties. (Blakely Decl., Ex. A p.
7.) Of the PAGA payment, $15,000.00
(75%) will be paid to the LWDA and $5,000.00 (25%) will be paid to class
members. Class members’ individual payments will be based on their number of
workweeks during the class period. (Blakely
Decl., Ex. A at p. 7.)
Incentive
payments are based on the expense and risk undertaken by named plaintiffs for
the benefit of other class members. (Munoz
v. BCI Coca-Cola Bottling Co. of Los Angeles (2010) 186 Cal.App.4th 399,
412.) Based on Plaintiff’s involvement
in this action (Blakely Decl. ¶ 25), a $7,500.00 payment to Plaintiff is
reasonable.
The
requested $83,333.33 in attorney fees is reasonable and consistent with fee
awards in class actions. (See Chavez
v. Netflix, Inc. (2008) 162 Cal.App.4th 43, 66, fn. 11 [“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,”
internal quotation marks omitted].)
Additionally, the requested $35,000.00 in costs is reasonable.
The
parties agreed to recommend Phoenix Settlement Administrators (“Phoenix”) as
the settlement administrator. (Blakely Decl.,
Ex. A at p. 4, ¶ 3.A.) Based on the
Court’s experience, the $10,000.00 fee is reasonable.
As
discussed above, Plaintiff’s counsel has extensive experience in labor and
employment law, including class and representative actions. (Blakely Decl., ¶¶ 2-6; Haines Decl., ¶¶ 2-8.)
There
are no objectors to the settlement at this time, so at the preliminary approval
stage, the proposed settlement is entitled to a presumption of fairness.
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D. The Notice Procedure Is Appropriate.
The settlement administrator will perform
a search based on the National Change of Address Database to update and correct
any known or identifiable address changes before mailing the notice packet to
class members. (Blakely Decl., Ex. A at
¶ 9.B.) Packets returned as
non-delivered will be remailed to a forwarding address, or if no forwarding
address is provided, the settlement administrator will otherwise attempt to
determine the correct address. Remailed
packets will also contain an extended response deadline.
The
content of the notice contains a brief explanation of the case, a statement
regarding exclusion from the class, a procedure for exclusion, a statement that
judgment will bind all non-excluded members, and a statement that any member
who does not request exclusion may appear through counsel, in compliance with
California Rules of Court, rule 3.766(d).
If a class member wants to be excluded, he or she must return the
provided exclusion form. (See Blakely
Decl., Exhs. 1-2 to Exh. A.) Class
members do not need to take any action to submit a claim if they do wish to
remain in the class.
Accordingly,
the proposed notice procedure is appropriate.
CONCLUSION
Based on the foregoing, the motion for preliminary
approval of class action settlement is CONTINUED to a date that the Court will
set with the parties at the hearing. Plaintiff is ordered to submit evidence
confirming the submission of the proposed settlement to the LWDA and an amended
proposed order modifying the schedule as indicated above.