Judge: Curtis A. Kin, Case: 19STCV27487, Date: 2022-10-18 Tentative Ruling

Case Number: 19STCV27487    Hearing Date: October 18, 2022    Dept: 72

MOTION FOR PRELIMINARY APPROVAL OF

CLASS ACTION AND PAGA SETTLEMENT

Date:               10/18/22 (8:30 AM)

Case:               Stephanie Ouellette v. MKTG, Inc. et al. (19STCV27487)

TENTATIVE RULING:

Plaintiff Stephanie Ouellette’s Motion for Preliminary Approval of Class Action and PAGA Settlement is CONTINUED.

In reviewing the proposed Settlement Agreement, the court has the following concerns:

1.                  It is unclear whether the $5,000,000 Gross Settlement Sum is sufficient to cover all the components of the Settlement. (See Gold Decl. ¶ 21 & Ex. 2 [“Settlement”] at § VI.1.14.) The amount allocated for attorney fees is $1,750,000. (Id.) The maximum amount allocated to costs and litigation expenses is $250,000. (Id.) The maximum amount allocated to the Class/PAGA Representative as a service award is $30,000. (Id.) The maximum amount allocated to the Settlement Administrator is $19,000. (Id.) The maximum amount allocated to the Gross PAGA Payment is $500,000. The Class Member Payout Fund is estimated to be at least $2,470,000. (Settlement § VI.1.5.) Assuming plaintiff claims the maximum amounts for each component of the Gross Settlement Sum, the total amount of the Gross Settlement Sum would be $5,019,000, more than the $5,000,000 provided under the Settlement. It is unclear how any amount exceeding the Gross Settlement Sum would be covered under the Settlement.

2.                  It is unclear how many Class Members will benefit from the Settlement. Counsel declares that there was an “an average of approximately 175 employees working for Defendants as promotional models, lead promotional models, occasional employees, brand representatives, brand ambassadors, or promoters, at any given point in time from June 8, 2017 through February 2, 2022, resulting in 175 Full Time Equivalent Employees during the class period.” (Gold Decl. ¶ 26, cf. Settlement § VI.1.2 [definition of “Class”].) However, in the proposed First Amended Complaint, plaintiff alleges that the number of class members exceeds 2,000. (Gold Decl. ¶ 24 & Ex. 5 [“Proposed FAC”] at ¶ 31.)

3.                  With respect to Section VI.1.22 of the Settlement, the procedure for exclusion from the class action settlement is set forth in Paragraph 3.3.5 of the Settlement, not Paragraph 3.3.4.

4.                  It is unclear why the definition for PAGA Representative Action Member in Section VI.1.29 of the Settlement includes persons who are or were previously employed by Defendants MKTG, Inc. “and/or” U.S. Concepts LLC, whereas the definition of Class Member in Section VI.1.2 of the Settlement includes persons who are or were previously employed by Defendants MKTG, Inc. “and” U.S. Concepts LLC. Because the Settlement requires Class Members to be employed by MKTG, Inc. and U.S. Concepts LLC to benefit from the Settlement, the definition of Class Member appears to be unnecessarily restrictive.

5.                  With respect to Section VI.3.5.3 of the Settlement, there is no Labor Code section 132, subdivision (a). There is, however, a Labor Code section 132a.

6.                  With respect to Section V.3.3.3 of the Settlement, the Settlement provides that Class Members may object to the Settlement by submitting written objections to the Settlement Administrator. It is unclear what the Settlement Administrator is required to do with any such objections and, more to the point, how any objections would ultimately be presented to the Court for consideration.

7.                  With respect to Section V.3.3.1 of the Settlement, this section mentions the Class Members’ ability to dispute the pay periods, but not the hours listed in the Verification Form or the Individual Class Settlement Amount. (Cf. Settlement § V.1.45 [stating Verification Form will allow dispute to (1) hours worked; (2) pay periods, and (3) individual settlement amount], (2) hours; Gold Decl. ¶ 22 & Ex. 3(b) [Proposed Verification Form allowing challenge to (1) hours and (2) pay periods].) There appears to be an inconsistency in terms of what a Class Member will be permitted to challenge via the Verification Form.  Moreover, the Settlement provides that, if the parties to the Settlement disagree with the Settlement Administrator’s determination concerning any Class Member’s dispute regarding the number of pay periods, the parties may seek resolution with the Court. However, the Settlement does not state what recourse a Class Member has available if the Class Member disagrees with the Settlement Administrator’s determination.

Plaintiff is ordered to provide supplemental briefing or other documents (which may include, among other things, an Amended Stipulation and Agreement to Settle Class and PAGA Action) addressing the above concerns by no later than ______________.  The Motion for Preliminary Approval of Class Action and PAGA Settlement is CONTINUED to ____________ at _______ in Department 72.