Judge David S. Cunningham, Case Number: 21STCV41382, Date: 2024-01-08 Tentative Ruling

Judge: David S. Cunningham, Case: 21STCV41382, Date: 2024-01-08 Tentative Ruling

Case Number: 21STCV41382 Hearing Date: January 8, 2024 Dept: 11

MOTION FOR FINAL APPROVAL OF CLASS ACTION SETTLEMENT

ROBERTO RISO v. MOUNT SAINT MARY'S UNIVERSITY

Date of Hearing: January 8, 2024

Department: SSC-11

Case No.: 21STCV41382

TENTATIVE

Plaintiff seeks final approval of the settlement of the wage and hour class action. The Court Grants Final Approval and approves the following:

(1) The Court certifies the class for purposes of settlement;

(2) The Court finds that the settlement is fair, adequate, and reasonable;

(3) Class counsel, Moon Law Group, PC, is awarded $316,666.67 in attorney fees and $18,507.61 in costs;

(4) Class representative Roberto Rizo is awarded an enhancement payment of $5,000;

(5) The settlement administrator, Apex Class Action, LLC, is awarded $9,500 in costs;

(6) Payment of $45,000 (75% of $60,000 PAGA penalty) payable to the LWDA is approved; and

(7) Class Counsel is ordered to provide an order consistent with this ruling and a judgment containing the class definition, release language, and a statement that no class members opted out by ______________________, 2024.

FINAL APPROVAL OF CLASS ACTION SETTLEMENT

California Rules of Court, rule 3.769(g), provides for an inquiry into the fairness of the proposed settlement prior to the final approval hearing. After this, the court must make and enter judgment, including a provision for the retention of the court's jurisdiction over the parties to enforce the terms of the judgment. (See California Rules of Court, rule 3.769(h).) The class action may not be dismissed once judgment is entered. (See California Rules of Court, rule 3.770.) All class settlements are subject to a settlement hearing and court approval before entry of judgment or final order.

The trial court has broad powers to determine whether a proposed settlement is fair. (Mallick v. Superior Court (1979) 89 Cal.App.3d 434, 438.) The California standard for approval of class settlements is similar to the federal requirement that the settlement be fair, reasonable, and adequate for class members overall. (Dunk v. Ford Motor Co. (1996) 48 Cal.App.4th 1794, 1801.)

TERMS OF SETTLEMENT AGREEMENT

· “Class” means all non-exempt employees of Defendant who worked in California in the period from November 10, 2017, through July 4, 2023. (¶1.5)

· “Class Period” means the period from November 10, 2017, through July 4, 2023. (¶1.12)

· “Aggrieved Employee” means all non-exempt employees of Defendant who worked in California in the period from November 7, 2020, through July 4, 2023. (¶1.4)

· “PAGA Period” means the period from November 7, 2020 through July 4, 2023. (¶1.31)

· “Participating Class Member” means a Class Member who does not submit a valid and timely Request for Exclusion from the Settlement. (¶1.35)

· The Parties stipulate to class certification for settlement purposes only. (¶11.1)

The Gross Settlement Amount (“GSA”) is $950,000, non-reversionary. (¶3.1)

· Escalator Clause: Based on its records, Defendant estimates that, as of the date of this Settlement Agreement, (1) there are 410 Class Members and 53,000 Total Workweeks during the Class period and (2) there were 265 Aggrieved Employees who worked 11,000 Pay Periods during the PAGA Period. In the event of an increase in Workweeks of more than 10% from original estimate of 53,000, i.e., if the number of Workweeks is 58,301 or more, the Gross Settlement Amount shall be increased by the percentage that the actual number of workweeks exceeds 58,300. (¶7)

· At final approval, the settlement administrator represents that the total number of workweeks worked by Participating Class Members during the Class Period is 51,481.43. (Decl. of Madely Nava ¶14.) Accordingly, the escalator clause was not triggered.

The Net Settlement Amount (“Net”) of $532,333.33 estimated at preliminary approval is the GSA minus:

· Up to $316,666.67 (33 1/3%) for attorneys’ fees (¶3.2.2);

· Up to $20,000 for attorneys’ costs (Ibid.);

· Up to $10,000 for a Service Payment to the class representative (¶3.2.1);

· Up to $11,000 for costs of settlement administration (¶3.2.3); and

· Payment of $60,000 PAGA penalty (75% or $45,000 to the LWDA) (¶3.2.5).

Defendant shall separately pay any and all employer payroll taxes owed on the Wage Portions of the Individual Class Payments. (¶3.1)

No Claim Requirement. Class Members shall not be required to submit a claim form in order to receive an individual settlement payment. (¶3.1)

Response Deadline. “Response Deadline” means sixty (60) days after the Administrator mails Class Notices to Class Members and Aggrieved Employees and shall be the last date on which Class Members may: (a) fax, email, or mail Requests for Exclusion from the Settlement, or (b) fax, email, or mail written objections to the Settlement. Class Members to whom Class Notices are re-mailed after having been returned undeliverable to the Administrator shall have an additional fourteen (14) calendar days beyond the Response Deadline has expired. (¶1.43) The same deadline applies to the submission of workweek disputes. (¶6.6)

· If the number of valid Requests for Exclusion identified in the Exclusion List exceeds 10% of the total of all Class Members, Defendant may, but is not obligated, elect to withdraw from the Settlement within thirty (30) days after expiration of the Response Deadline. (¶8)

Calculation of Individual Settlement Payments: Each Participating Class Member will receive an Individual Class Payment calculated by (a) dividing the Net Settlement Amount by the total number of Workweeks worked by all Participating Class Members during the Class Period and (b) multiplying the result by each Participating Class Member’s workweeks. (¶3.2.4) Non-Participating Class Members will not receive any Individual Class Payments. The Administrator will retain amounts equal to their Individual Class Payments in the Net Settlement Amount for distribution to Participating Class Members on a pro rata basis. (¶3.2.4.2)

· PAGA Payments: The Administrator will calculate each Individual PAGA Payment by (a) dividing the amount of the Aggrieved Employees’ 25% share of PAGA Penalties ($15,000) by the total number of PAGA Period Pay Periods worked by all Aggrieved Employees during the PAGA Period and (b) multiplying the result by each Aggrieved Employee’s PAGA Period Pay Periods. (¶3.2.5.1)

· Tax Allocation: Individual Class Payment to the Class Members shall be allocated as follows: 20% to wages, 80% to penalties and interest. (¶3.2.4.1) The Administrator will report the Individual PAGA Payments on IRS 1099 Forms. (¶3.2.5.2)

Funding of the Settlement. Defendant shall fully fund the Gross Settlement Amount, and also fund the amounts necessary to fully pay Defendant’s share of payroll taxes, by transmitting the funds to the Administrator no later than fourteen (14) days after the Effective Date. (¶4.3)

Distribution of Settlement. Within fourteen (14) days after Defendant funds the Gross Settlement Amount, the Administrator will mail checks for the Individual Class Payments, Individual PAGA Payments, LWDA PAGA Payment, Administration Expenses Payment, Class Counsel Fees Payment, Class Counsel Litigation Expenses Payment, and the Class Representative Service Payment. Disbursement of the Class Counsel Fees Payment, Class Counsel Litigation Expenses Payment, and the Class Representative Service Payment shall not precede disbursement of the Individual Class Payments and Individual PAGA Payments. (¶4.4)

Uncashed Checks. The face of each check shall prominently state the date (not less than 180 days after the date of mailing) when the check will be voided. (¶4.4.1) For any Class Member whose Individual Class Payment check or Individual PAGA Payment check is uncashed and cancelled after the void date, the Administrator shall transmit the funds represented by such checks to the Controller’s Unclaimed Property Fund in the name of the Class Member thereby leaving no “unpaid residue” subject to the requirements of California Code of Civil Procedure § 384(b). (¶4.4.3)

The Parties agree to use APEX Class Action Administration as the Settlement Administrator. (¶1.2)

Notice of Final Judgment will be posted on the administrator’s website. (¶6.8.1)

The proposed Settlement Agreement was submitted to the LWDA on August 16, 2023. (Declaration of Kane Moon ISO Prelim, Exhibit 2.)

SCOPE OF RELEASE

Releases of Claims. Effective on the date Defendant fully funds the entire Gross Settlement Amount and funds all employer payroll taxes owed on the Wage Portion of the Individual Class Payments, Plaintiffs, Class Members, and Class Counsel will release claims against all Released Parties as follows: (¶5)

· Release by Participating Class Members: All Participating Class Members, on behalf of themselves and their respective former and present representatives, agents, attorneys, heirs, administrators, successors, and assigns, release Released Parties from (i) all claims that were alleged, or reasonably could have been alleged, based on the Class Period facts stated in the Operative Complaint and ascertained in the course of the Action, including, any and all claims involving any alleged (a) failure to pay all minimum wages; (b) failure to pay overtime wages; (c) failure to provide meal periods, or premium pay for non-compliant meal periods; (d) failure to authorize and permit rest periods, or premium pay for noncompliant rest periods; (e) failure to issue accurate, itemized wage statements and maintain payroll records; (f) failure to pay all wages due upon separation of employment; (g) failure to reimburse for necessary business expenses; (h) all claims under California Business & Professions Code §§ 17200 for unfair business practices that could have been premised on the facts, claims, causes of action or legal theories described above; (i) violation of or claims under the following sections of the California Labor Code sections 201, 202, 203, 204, 206, 218.6, 226, 226.3, 226.7, 510, 512, 1174, 1182.12, 1194, 1194.2, 1197, 1197.1, 1198, 2802; and (j) violation of the California Industrial Wage Orders that could have been premised on the facts, claims, causes of action or legal theories described above, as well as any potential penalties, interest or attorneys’ fees associated with all of such causes of action under California law. Except as set forth in Section 5.3 of this Agreement, Participating Class Members do not release any other claims, including claims for vested benefits, wrongful termination, violation of the Fair Employment and Housing Act, unemployment insurance, disability, social security, workers’ compensation, or claims based on facts occurring outside the Class Period. (¶5.2)

· Release by Aggrieved Employees: All Aggrieved Employees are deemed to release, on behalf of themselves and their respective former and present representatives, agents, attorneys, heirs, administrators, successors, and assigns, the Released Parties from all claims for PAGA penalties that were alleged, or reasonably could have been alleged, based on the PAGA Period facts stated in the Operative Complaint and the PAGA Notice and ascertained in the course of the Action. (¶5.3)

o “PAGA Notice” means Plaintiff’s November 7, 2021 letter to Defendant and the LWDA providing written notice pursuant to Labor Code § 2699.3(a). (¶1.33)

o Because future PAGA claims are subject to claim preclusion upon entry of the Judgment, Non-Participating Class Members who are Aggrieved Employees are deemed to release the claims identified in Paragraph 5.3 of this Agreement and are eligible for an Individual PAGA Payment. (¶6.5.4)

· “Released Parties” means: Defendant and all related companies, subsidiaries, owners, shareholders, founders and members (i.e., the Sisters of St. Joseph of Carondelet), agents (including, without limitation, any investment bankers, accountants, insurers,

reinsurers, attorneys and any past, present or future officers, directors and employees) predecessors, successors, heirs, executors, administrators, and assigns, and all persons acting by, through, under, or in concert with any of them. (¶1.41)

· Named Plaintiff will additionally provide a general release and §1542 waiver. (¶5.1)

CLASS NOTICE AND CLASS RESPONSE

1. How was notice given? Apex Class Action, LLC (“Apex”) is the administrator for this settlement. (Declaration of Madely Nava (“Nava Decl.”) ¶1.) On September 11, 2023, Defense Counsel provided Apex with the Class List, which contained 411 Class Members. (Id. at ¶5.) On October 11, 2023, after updating the mailing addresses through the NCOA, Notice Packets were mailed via First Class Mail to all 411 Class Members contained in the Class List. (Id. at ¶7.) 6 Notice Packets were returned to Apex as undeliverable. (Id. at ¶10.) The deadline for Class Members to submit a dispute, request for exclusion, or objection to the settlement was December 11, 2023. (Id. at ¶¶11-12.)

2. How many opted-out? 0. (Id. at ¶11.)

3. How many objected? 0. (Id. at ¶12.)

4. How many submitted a claim form? n/a

5. Estimate of recovery to each class member? If the Court takes the maximum requested deductions, $535,325.72 will remain to be distributed to 411 Class Members who did not opt out. The average individual settlement payment will be approximately $1,302.50. The highest individual settlement payment is $3,064.56. (Id. at ¶15.)

EVALUATION OF THE SETTLEMENT

The Court must determine if the settlement is fair, adequate, and reasonable. The settlement is entitled to a presumption of fairness 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.” (Dunk v. Ford Motor Company (1996) 48 Cal.App.4th 1794, 1802 (“Dunk”).) As Wershba v. Apple Computer (2001) 91 Cal.App.4th 224, 250, further notes:

A settlement need not obtain 100 percent of the damages sought in order to be fair and reasonable. (See Rebney v. Wells Fargo Bank, supra, 220 Cal.App.3d at p. 1139 [settlements found to be fair and reasonable even though monetary relief provided was "relatively paltry"]; City of Detroit v. Grinnell Corp., supra, 495 F.2d at p. 455 [settlement amounted to only "a fraction of the potential recovery"].) Compromise is inherent and necessary in the settlement process. Thus, even if "the relief afforded by the proposed settlement is substantially narrower than it would be if the suits were to be successfully litigated," this is no bar to a class settlement because "the public interest may indeed be served by a voluntary settlement in which each side gives ground in the interest of avoiding litigation." (Air Line Stewards, etc., Loc. 550 v. American Airlines, Inc. (7th Cir. 1972) 455 F.2d 101, 109.)

The Court finds that the settlement is fair, adequate, and reasonable based on the following:

n Settlement was reached through arms’-length negotiations. On May 5, 2023, the parties attended mediation before Steven Serratore, Esq., which resulted in settlement. (Moon Decl. ISO Prelim ¶8.)

n Investigation and discovery were sufficient to allow counsel and the court to act intelligently. Class Counsel represents that in preparation for mediation, the Parties agreed to an informal exchange of data and documents. The data and documents included, but was not limited to, the time and corresponding payroll records of a sample of the putative Class; the employee handbooks in effect during the putative Class Period; the total number of putative Class Members and Aggrieved Employees; and the total number of workweeks and pay periods worked by the putative Class Members and Aggrieved Employees. (Id. at ¶7.)

n Counsel is experienced in similar litigation. Class Counsel is experienced in complex litigation, including wage and hour class action cases. (Id. at ¶¶32-43.)

n The percentage of objectors is small. There were no objectors. (Nava Decl. ¶12.)

As noted in Munoz v. BCI Coca-Cola Bottling Co. of Los Angeles (2010) 186 Cal.App.4th 399, 408:

…a trial court's approval of a class action settlement will be vacated if the court “is not provided with basic information about the nature and magnitude of the claims in question and the basis for concluding that the consideration being paid for the release of those claims represents a reasonable compromise.” (Kullar, supra, 168 Cal.App.4th at p. 130.) In short, the trial court may not determine the adequacy of a class action settlement “without independently satisfying itself that the consideration being received for the release of the class members' claims is reasonable in light of the strengths and weaknesses of the claims and the risks of the particular litigation.” (Id. at p. 129.)

Counsel provided the following exposure analysis in this matter:

Violation Maximum Exposure Realistic Exposure

Unpaid Wages $3,652,250.28 $365,225.03

Meal Period Violations $311,266.35 $77,816.59

Rest Period Violations $4,970,283.90 $497,028.39

Reimbursement Claim $54,500.00 $5,450.00

Waiting Time Penalties $1,049,563.00 $145,720.65

Wage Statement Penalties $813,550.00

PAGA Penalties $1,051,300.00

Total $11,902,713.53 $1,091,240.66

(Moon Decl. ISO Prelim ¶¶21-30.)

The moving papers, declarations and exhibits attached thereto, have provided this Court with “basic information about the nature and magnitude of the claims in question and the basis for concluding that the consideration being paid for the release of those claims represents a reasonable compromise” such that this Court is satisfied “that the consideration being received for the release of the class members' claims is reasonable in light of the strengths and weaknesses of the claims and the risks of the particular litigation.” (See Dunk, supra at p. 1802 [“So long as the record is adequate to reach ‘an intelligent and objective opinion of the probabilities of success should the claim be litigated’ and ‘form’ an educated estimate of the complexity, expense and likely duration of such litigation…it is sufficient.”].)

COSTS AND FEES

1. How much is requested for fees? The lodestar is the primary method of establishing the amount of reasonable attorney fees in California. (Consumer Privacy Cases (2009) 175 Cal.App.4th 545, 556.) In common fund cases, courts may award fees pursuant to the percentage method, as cross-checked against the lodestar. (Laffitte v. Robert Half Intern., Inc. (2016) 1 Cal.5th 480, 503.)

Here, Class Counsel is requesting $316,666.67, pursuant to the percentage method. (Motion for Final Approval at 4:22-25.) The fee request constitutes one-third of the settlement amount, which is the average range for class action litigation. (In re Consumer Privacy Cases (2009) 175 Cal.App.4th 545, 558, fn. 13 [“Empirical studies show that, regardless of whether the percentage method or the lodestar method is used, fee award in class actions average around one-third of the recovery.”].)

Class Counsel has also summarized their lodestar as follows:

Attorney Hours Rate Totals

Allen Feghali 97.60 $675 $65,880.00

Kane Moon 87.53 $725 $63,459.25

Jacquelyne VanEmmerik 63.40 $395 $25,043.00

Totals 248.53 $154,382.25

(Moon Decl. ISO Final ¶54.)

Therefore, counsel’s total lodestar in this matter is $154,382.25, which requires a multiplier of 2.05x to get to the requested fees.

Because the fee request represents a reasonable percentage of the settlement fund, the Court awards fees in the amount of $316,666.67, which is supported by the lodestar.

2. What are the costs claimed? Class Counsel is requesting $18,507.61 for litigation costs. (MFA at 17:27-28.) The Settlement Agreement provides for a $20,000 cost cap (¶3.2.2) that was made known to the class and not objected to. (Nava Decl. ¶12, Exhibit A thereto.) Costs include, but are not limited to: Mediation ($10,000), Expert ($3,275), and Complaint Fee ($$1,481.72). (Moon Decl. ISO Final, Exhibit 5.)

As the costs appear to be reasonable in amount and appear to have been necessary to the litigation, the Court awards costs of $18,507.61.

3. Incentive payment to class representative? An incentive fee award to a named class representative must be supported by evidence that quantifies time and effort expended by the individual and a reasoned explanation of financial or other risks undertaken by the class representative. (Clark v. American Residential Services LLC (2009) 175 Cal.App.4th 785, 806-807; Cellphone Termination Cases (2010) 186 Cal.App.4th 1380, 1394-1395 [“‘[C]riteria courts may consider in determining whether to make an incentive award include: (1) the risk to the class representative in commencing suit, both financial and otherwise; (2) the notoriety and personal difficulties encountered by the class representative; (3) the amount of time and effort spent by the class representative; (4) the duration of the litigation and; (5) the personal benefit (or lack thereof) enjoyed by the class representative as a result of the litigation. [Citations.]’,”] [citing Van Vranken v. Atlantic Richfield Co. (N.D.Cal. 1995) 901 F.Supp. 294, 299.].)

Plaintiff Roberto Rizo seeks an incentive award of $10,000. (MFA at 19:1.) Plaintiff represents that his contributions to this litigation include: identifying witnesses, providing documents to his attorneys, responding to their inquiries, requesting case updates, asking questions, discussing the mediation and reviewing the settlement. He estimates spending 26 hours on the case. (Declaration of Roberto Rizo ISO Final ¶14.)

The Court finds that a Class Representative enhancement award of $5,000 to Plaintiff is reasonable under these circumstances.

4. Settlement Administration Costs? The settlement administrator, Apex, requests $9,500 for the costs of settlement administration. (Nava Decl. ¶18.) At the time of preliminary approval, costs for settlement administration were capped at $11,000 (Settlement Agreement ¶3.2.3), which was disclosed to class members and not objected to. (Nava Decl. ¶12, Exhibit A thereto.) Accordingly, the Court approves settlement administration costs in the amount of $9,500.

FINAL REPORT:

The Court orders class counsel to file a final report summarizing all distributions made pursuant to the approved settlement, supported by declaration.

The Court will set a non-appearance date for submission of a final report for ______________.