Judge Bruce G. Iwasaki, Case Number: 21STCV41101, Date: 2023-12-05 Tentative Ruling

Moving Party: Plaintiff Evi Herrera Orantes, on behalf of himself and all others similarly situated

Tentative Ruling: The Court preliminarily approves the settlement and sets a Final Approval Hearing date on _________, 2024 at _____A.M. on Plaintiff’s Motion for Order Granting Final Approval of Class and Representative Action Settlement, and Plaintiffs’ Motion for an Award of Attorneys’ Fees and Costs, Class Representative Service Awards, and Settlement Administration Costs.

Plaintiff Evi Herrera Orantes (Plaintiff) filed a complaint on behalf of himself, other aggrieved employees, and the State of California, against Defendant International School of Los Angeles – Lycee International De Los Angeles for Private Attorneys General Act (PAGA) penalties for that various wage and hour claims.

Plaintiff now moves for an order granting conditional certification of the Class and preliminary approval of class settlement between the Plaintiff and Defendant International School of Los Angeles – Lycee International De Los Angeles (Defendant). The motion is unopposed. The breakdown of the settlement is as follows:

Plaintiff provided an e-mail confirmation that the proposed settlement was electronically submitted to the Labor and Work Force Development Agency on March 23, 2022, in compliance with Labor Code section 2699, subdivision (l)(2). (Bokhour Decl., ¶ 55, Ex. C.)

The parties settled this action through the “Class Action and PAGA Settlement Agreement” (Settlement Agreement). The Settlement Agreement requires Defendant to pay the total settlement amount of $358,000.00 (Gross Settlement Amount). The settlement will be effective (and Defendant’s obligation becomes due) ten days after the Effective Date as defined by the Settlement Agreement – after the time for objections and appeals are exhausted. (Bokhour Decl., Ex. A [Settlement Agreement], ¶ 74.) Settlement checks will be valid for 180 calendar days from issuance. Upon expiration, the uncashed checks are cancelled, and the claim will be deemed void. All unclaimed funds shall be sent to the California Unclaimed Property Fund in the name of the class member. (Bokhour Decl., Ex. A, ¶ 75.)

The “Released Claims” are for “all claims that were alleged in the Action and all claims that could have been alleged in the Action based on the facts, Labor Codes, Wage Orders and Business and Professions Codes alleged therein, including all claims that were alleged in Plaintiff’s PAGA Notice dated September 20, 2021, claims for failure to pay minimum wages, failure to pay overtime wages and/or failure to pay such wages at the correct rate(s) of pay, failure to pay all sick time wages, meal and rest break violations, failure to pay premium pay penalties, failure to provide accurate itemized wage statements, failure to timely pay all wages upon separation of employment, failure to reimburse for business expenses, and unfair and unlawful business practices, including, but not limited to, claims for injunctive relief, liquidated damages, penalties of any nature, interest, fees, costs.” (Bokhour Decl., Ex. A, ¶ 4.)

The Gross Settlement Amount will include a $20,000.00 PAGA Payment. (Bokhour Decl., ¶ 50(d)(i).) The Labor and Workforce Development Agency (LWDA) will receive 75%, or $15,000.00, as the PAGA penalty, while 25%, or $5,000.00 will be allocated to the Class Members. The amount will be ascertained from the number of weeks worked by each Class Member during the Class Period, which is defined as from September 3, 2020, to the date of preliminary court approval of the Settlement. The Settlement Administrator will calculate the individual amount on a pro-rata basis. (Bokhour Decl., ¶ 50(d)(ii).)

Plaintiff’s counsel also request attorneys’ fees not to exceed 33% of the Gross Settlement Amount (approximately $119,333.33) and costs not to exceed $15,000.00. (Bokhour Decl., ¶ 50(g).) In addition, the Settlement Agreement contemplates an enhancement payment to the named Plaintiff Evi Herrera Orantes of $10,000.00. (Bokhour Decl., ¶ 50(f).)

The parties request that the Court designate ILYM Group, Inc. as the Settlement Administrator to administer the settlement. (Bokhour Decl., ¶ 53 Ex. A, ¶ 36.) Up to $6,000.00 in Settlement Administrator Costs are allowed under the Settlement Agreement. (Bokhour Decl., ¶ 50(h).)

Plaintiffs seek conditional certification of the proposed class: “all non-exempt employees who work or worked for Defendant in California from September 3, 2020 until the date the Court grants the preliminary approval of the settlement.” (Bokhour Decl., ¶ 2.)

Class certification is appropriate when “the question is one of a common or general interest, of many persons, or when parties are numerous, and it is impracticable to bring them all before the court.” (Code Civ. Proc., § 382.) “The party advocating class treatment must demonstrate the existence of an ascertainable and sufficiently numerous class, a well-defined community of interest, and substantial benefits from certification that render proceeding as a class superior to the alternatives.” (Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal. 4th 1004, 1021.) Trial courts are afforded great discretion in granting or denying certification, and “ ‘[a]ny valid pertinent reason stated will be sufficient to uphold the order.’ ” (Linder v. Thrifty Oil Co. (2000) 23 Cal.4th 429, 435-36.)

A class is ascertainable “when it is defined ‘in terms of objective characteristics and common transactional facts’ that make ‘the ultimate identification of class members possible when that identification becomes necessary.’ [Citation.]” (Noel v. Thrifty Payless (2019) 7 Cal.5th 955, 980.)

Here, the evidence is sufficient to establish that the proposed class is ascertainable. Plaintiff asserts that Defendant produced information about the class, including the total number of employees at issue, and the total workweeks at issue. (Bokhour Decl., ¶ 16.) Thus, the class consists of approximately 144 class members who can be readily identified through Defendant’s records. (Bokhour Decl., ¶ 11; Cal. Code Regs., tit. 8 § 11050, subd. (7)(A).) This proposed class is sufficiently defined “in terms of objective characteristics and common transactional facts” to be identified, and the Court finds that the class is ascertainable.

California Courts have recognized that “[n]o set number is required as a matter of law for the maintenance of a class action.” (Rose v. City of Hayward (1981) 126 Cal.App.3d 926, 934 (Rose) [surveying cases and recognizing that classes of ten to forty-two individuals were sufficiently numerous for a class action], disapproved on unrelated grounds in Noel v. Thrifty Payless, Inc. (2019) 7 Cal.5th 955.)

The proposed settlement class is estimated to be 144 class members. (Bokhour Decl., ¶ 11.) The class is sufficiently numerous. (See Rose, supra, 126 Cal.App.3d at pp. 934-935.)

“ ‘The community of interest requirement involves three factors: “(1) predominant common questions of law or fact; (2) class representatives with claims or defenses typical of the class; and (3) class representatives who can adequately represent the class.” ’ [Citation.] Regarding the first of these factors, [the Supreme Court has] recognized ‘ “[a]s a general rule” ’ that ‘ “if the defendant’s liability can be determined by facts common to all members of the class, a class will be certified even if the members must individually prove their damages.” ’ [Citations.] Relatedly, ‘In certifying a class action, the court must also conclude that litigation of individual issues, including those arising from affirmative defenses, can be managed fairly and efficiently.’ [Citation.] Finally, other considerations relevant to certification ‘include the probability that each class member will come forward ultimately to prove his or her separate claim to a portion of the total recovery and whether the class approach would actually serve to deter and redress alleged wrongdoing.’ [Citation.]” (Noel, supra, 7 Cal.5th at pp. 968-970.)

Here, the evidence demonstrates that (1) the claims at issue pertain to the common provision of meal and rest periods and payment of minimum and overtime wages (among other things) applicable to all class members, (2) such Plaintiff’s claims and injuries arise from the same facts and theories as all other class members, i.e., Defendant’s wage and hour practices, and (3) such claims are adequately pursued by the Class Representatives, who experienced the same wage and hour practices as the other members, understood his duties as representative, was willing to undergo the risk of litigation, and has no apparent conflict with other class members. (Bokhour Decl., ¶¶ 18-41; Orantes Decl., ¶¶ 4-9.)

Defendant does not file an opposition to Plaintiffs’ motion and does not challenge Plaintiff’s assertions regarding community of interest. Thus, the Court accepts Plaintiff’s assertions and finds that a community of interest exists among the Class members.

California Rules of Court, rule 3.769 sets forth the procedure to evaluate class actions that settle before class certification, which generally requires court approval. (Cal. Rules of Court, rule 3.769(a).) Either party to the settlement agreement may move for preliminary approval and must attach a proposed notice to class members and proposed order. (Cal. Rules of Court, rule 3.769(c).) Prior to final approval of the settlement, “the court must conduct an inquiry into the fairness of the proposed settlement.” (Cal. Rules of Court, rule 3.769(g).)

In reviewing the terms of a settlement agreement, the court determines whether the settlement is fair, reasonable, and adequate to all concerned, and not the product of fraud, collusion, or overreaching. (Reed v. United Teachers Los Angeles (2012) 208 Cal.App.4th 322, 337; Nordstrom Commission Cases (2010) 186 Cal.App.4th 576, 581.) In the context of a class action settlement, the court considers various factors including whether (1) the settlement is the result of 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. (Nordstrom, at p. 581; Wershba v. Apple Computer, Inc. (2001) 91 Cal.App.4th 224, 245; see also Dunk v. Ford Motor Co. (1996) 48 Cal.App.4th 1794, 1802 [finding a presumption of fairness to exist if those four factors are met.].) In considering the amount of settlement, the Court is mindful that compromise is inherent and necessary in the settlement process. (Wershba, at p. 250.) The burden of establishing the fairness and reasonableness of the settlement is on the proponent. (7-Eleven Owners for Fair Franchising v. Southland Corp. (2000) 85 Cal.App.4th 1135, 1165-66.)

Plaintiff’s counsel attests that the Settlement Agreement was achieved over a mediation session that was conducted at arm’s-length with employment-law mediator Tripper Ortman. (Bokhour Decl., ¶¶ 13, 42.) Counsel states that the negotiations were “cordial and professional,” but adversarial and non-collusive. (Bokhour Decl., ¶ 42.)

The parties do not give the Court any reason to believe that the settlement was not reached through arm’s length settlement negotiations.¿This factor thus weighs in favor of a presumption of fairness.

Investigation and Discovery Sufficient to Allow Counsel and the Courts to Act intelligently

Mr. Bokhour attests that the parties engaged in extensive discovery and investigation, which allowed for proper calculation of the case prior to settlement. (Bokhour Decl., ¶¶ 13, 16, 26.) He stated that there was a substantial exchange of documents, including Defendant’s production of its applicable policies and procedures, payroll and time keeping records, size of the Class, compensation policies and practices. (Bokhour Decl., ¶ 16.) Mr. Bokhour further attests that he used this information to conduct a detailed risk analysis. (Bokhour Decl., ¶ 16.) This factor weighs in favor of fairness.¿¿¿

Mehrdad Bokhour and Jake Finkel attest to their experience in class actions and labor and employment cases.

Mr. Bokhour represents that he has been practicing law since 2012 and his firm has significant experience in complex employment litigation. (Bokhour Decl., ¶¶ 3-8, 50.) Mr. Bokhour has handled upwards of 100 class and representative actions, has been appointed as class counsel and have successfully litigated and resolved several class actions. (Bokhour Decl., ¶ 50.)

Similarly, Mr. Finkel attests that a substantial percentage of his practice consists of wage-and-hour litigation. (Finkel Decl., ¶¶ 5-9.)

The percentage of objectors cannot be determined¿at this time, and this factor¿does not weigh in favor or against a presumption of fairness.¿¿¿

Even if a presumption of fairness exists, the court still must “ ‘independently and objectively analyze the evidence and circumstances before it in order to determine whether the settlement is in the best interest of those whose claims will be extinguished.’ ” (Kullar v. Foot Locker Retail, Inc. (2008) 168 Cal.App.4th 116, 130.) “The well-recognized factors that the trial court should consider in evaluating the reasonableness of a class action settlement agreement include ‘the strength of¿plaintiffs’ case, the risk, expense, complexity and likely duration of further litigation, the risk of maintaining class action status through trial, the amount offered in settlement, the extent of discovery completed and the stage of the proceedings, the experience and views of counsel, the presence of a governmental participant, and the reaction of the class members to the proposed settlement.” [Citation.] This list “ ‘is not exhaustive and should be tailored to each case.’ ” (Id. at p. 129.)

Plaintiffs’ counsel engaged in a detailed analysis of the investigation and risks associated with this case. (Bokhour Decl., ¶¶ 26-41.)

Mr. Bokhour acknowledged Defendant’s defenses: (1) Defendant’s pay practices were neutral and underpayment was de minimis; (2) Defendant’s meal and rest period policies and practices were compliant with California law, and that non-exempt employees were at all times allowed and permitted to take their meal and rest periods; (3) the waiting time penalty and wage statement claims based on the underlying meal and rest period violations were unfounded as these violations did not entitle employees to pursue the derivative penalties under Labor Code sections 203 and 226; and (4) Plaintiff’s claims were not suitable for class certification because it involved individualized inquiries. (Bokhour Decl., ¶¶ 22-25.)

In light of those defenses, Plaintiff made corresponding reductions to the expected exposure. (Bokhour Decl., ¶¶ 26-41.)

With respect to waiting time penalties, there were approximately 45 Class Members that separated from their employment with Defendant during the relevant statutory period. As such, the maximum potential penalty under Labor Code § 201 – 203 is $335,212 (79 employees x 8.0 hours per day x average rate of $17.68 x 30 days). (Bokhour Decl. ¶ 27.) Based on the asserted defenses, Plaintiff applied a 25% risk of defeat at the class certification stage, and an additional 35% risk of defeat at the summary judgment stage or on the merits, resulting in the risk adjusted value of $163,414 for Plaintiff’s waiting time penalty claim. (Bokhour Decl. ¶ 30.)

With respect to Plaintiff’s meal and rest period violation claims, the Class Members worked 55,571 shifts during the Class Period. Based on an alleged 45% violation rate for the meal period claims and an alleged 33% violation rate for the rest period claims, the estimated maximum potential damages totaled $442,122 for the meal period claim and $324,223 for the rest period claim, respectively. (Bokhour Decl. ¶ 31.) Plaintiff acknowledged the risks and incorporated a further 60% reduction, which calculates the risk-adjusted value of the meal period claims to be $114,951 and rest period claims to be $84,298. (Bokhour Decl. ¶ 34.)

Plaintiff estimates that the maximum potential penalties for the derivative wage statement claim as $143,000 (based on approximately 2,860 allegedly violative wage statements issued during the Class Period). In calculating Defendant’s exposure, Plaintiff gave Defendant the benefit of assuming Plaintiff could only obtain the “initial” wage statement penalty of $50 per violation, for a total of $143,000 in potential wage statement penalties. Based on Defendant’s defenses, Plaintiff discounted the calculated maximum exposure by 30% for risk of noncertification, and by an additional 25% for risk of being unsuccessful on the merits, to arrive at an estimated total of $75,075. (Bokhour Decl. ¶ 41.)

Plaintiff also sought PAGA penalties for each violation for which they are available and alleged that these penalties can be “stacked.” Assuming that a PAGA penalty is available in the default amount of $100 per pay period and is not reduced, Plaintiff determined the maximum potential PAGA penalty would be $286,000 for the pay periods in the PAGA period. (Bokhour Decl., ¶ 42.) Plaintiff then discounted the calculated maximum exposure by 80% for risk of nonmanageability, and by an additional 65% for risk of being unsuccessful on the merits, to arrive at an estimated total of $20,000. (Bokhour Decl., ¶ 44.)

The expected exposure for the wage and hour causes of action and PAGA penalties is $163,414 + $114,951 + $84,298 + $75,075 + $20,000 = $457,738. Therefore, Plaintiffs asserts that the gross settlement amount of $358,000 is fair and reasonable. (Kullar v. Foot Locker Retail, Inc., supra, 168 Cal.App.4th at p. 128.) The Court grants preliminary approval as to the class action settlement, including the allocation of PAGA penalties.

The Settlement Agreement authorizes Plaintiff’s counsel to request an award of attorney fees no more than 33% of the Gross Settlement Amount, or approximately $119,333.33, and actual costs not to exceed $15,000.00. (Bokhour Decl., ¶ 50(g).)

The one-third fee award is reasonable and consistent with fee awards in class action cases.¿ (See¿Chavez v. Netflix, Inc.¿(2008) 162 Cal.App.4th 43, 66, fn. 11.) Plaintiff’s counsel indicates that they will submit a request for attorneys’ fees and costs with its final approval motion. (Mot., 21:25-28.)

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.)

The Settlement Agreement allows for an enhancement award to the named Plaintiff, not to exceed $10,000.00, that is included in the Gross Settlement Amount. (Bokhour Decl., Ex. A, ¶ 50(f).) The named Plaintiff indicates that he has provided “significant assistance” to counsel on this case; such assistance included providing including providing factual background for the class and PAGA Complaint; reviewing the litigation documents; providing information and documentation about Defendant’ policies and practices; participating in phone calls to discuss litigation and settlement strategy; and reviewing the settlement documents. (Bokhour Decl., ¶ 49; Orantes Decl., ¶ 7.) Plaintiff incurred significant risk because he would have been required to pay Defendant’s costs if he lost in the litigation. (Orantes Decl., ¶ 8.)

The Settlement Agreement also provides that named Plaintiff is executing a separate general release of all claims under Code of Civil Procedure section 1542. (Bokhour Decl., Ex. A, ¶¶ 60-62.) The Court finds that the proposed enhancement payment is reasonable based on the declaration from named Plaintiff.

“The notice given should have a reasonable chance of reaching a substantial percentage of the class members” who do not search for such litigation. (Cartt v. Superior Court (1975) 50 Cal.App.3d 960, 974.) If the court grants preliminary approval of the settlement, it sets a final approval hearing and provides for notice to be given to the class. (Cal. Rules of Court, rule 3.769(e).) “The notice must contain an explanation of the proposed settlement and procedures for class members to follow in filing written objections to it and in arranging to appear at the settlement hearing and state any objections to the proposed settlement.” (Cal. Rules of Court, rule 3.769(f).) The trial court “ ‘ “has virtually complete discretion as to the manner of giving notice to class members.” [Citation.]’ ” (Cellphone Fee Termination Cases (2010) 186 Cal.App.4th 1380, 1390.)

Plaintiffs attached a copy of the proposed “Notice of Settlement, of Class Action” as Exhibit B. (Bokhour Decl., ¶¶ 64-78, Ex. B.) The Court has reviewed the proposed notice and finds that it will provide sufficient notice to the class members under California Rule of Court, rule 3.766. The notice provides a background of the case, exclusion procedures including instructions on how to object (file written objection with Settlement Administrator), estimated payment, a statement that the judgment will bind all members who do not request exclusion, and a statement that a class member may appear through counsel without requesting exclusion. Otherwise, participation in the Settlement is automatic and Class Members must affirmatively opt out if they choose not to participate.

Within 7 days after preliminary approval is granted by the Court, Defendant will provide data to the Settlement Administrator, who will obtain all class members’ addresses (and other information) and send the notice within 15 days after receipt of the data. If any mail is non-delivered, the Settlement Administrator will conduct a skip-trace and re-mail. (Bokhour Decl., Ex. A, ¶ 68.) The Notice will be sent in both English and Spanish. (Bokhour Decl., Ex. A ¶ 67.)

The parties have agreed to engage ILYM Group, Inc. (ILYM) as the Settlement Administrator and requests preliminary court approval of $6,000.00 for administration costs. (Bokhour Decl., ¶ 55, Ex. B.) ILYM will mail the Notice of Settlement Agreement to all class members, review and calculate the amounts due to class members, issue and send out settlement checks, and other administrative tasks. (Bokhour Decl., Ex. A, ¶¶ 64-78.)

In documents accompanying a request for final approval, the Court will require more information on the qualifications and experience of ILYM, and a statement of the various tasks it will undertake, particularly providing notice to class members.

As for taxes, the Settlement Agreement provides that all awards will be reported as alleged “wages,” penalties, and interests in which either the Defendant or the Settlement Administrator will issue IRS forms W-2 or 1099. (Bokhour Decl., Ex. A, ¶ 49(e), 65.)

Residue from uncashed Settlement Award checks after the 180-day check cashing period expires will be sent to the California Unclaimed Property Fund in the name of the class member. (Bokhour Decl., Ex. A, ¶ 75.)