Judge: Elaine Lu, Case: 19STCV20063, Date: 2024-10-17 Tentative Ruling
Case Number: 19STCV20063 Hearing Date: October 17, 2024 Dept: 9
[TENTATIVE]
RULING RE: MOTION FOR FINAL APPROVAL OF CLASS ACTION SETTLEMENT
Ernest Gonzales v. Draper and Kramer Mortgage
Corp.
Case No.: 19STCV20063
Department
SSC-9
Hon.
Elaine Lu
Hearing Date: October 17, 2024 continued from August
17, 2024 continued from May 8, 2024
The
Parties’ Motion for Final Approval of Class Action settlement is GRANTED
as the settlement is fair, adequate, and reasonable.
The
essential terms are:
A.
The Gross Settlement Amount (“GSA”) is
$350,000, non-reversionary.
(¶III.1.)
B.
The Net Settlement Amount (“Net”) ($183,498.33)
is the GSA minus the following:
o
$ 116,666.67
(33 1/3%) for attorney fees (¶III.3);
o
$18,335 for litigation
costs (Notice, pg. 2);
o
$7,500
for a Service Payment to the Named Plaintiff (¶III.2);
o
$6,450 for
settlement administration costs (¶III.5); and
o
$15,000 (75%
of $20,000 PAGA penalty) to the LWDA. (¶III.4.)
C.
Employer’s share of the payroll taxes
on the taxable portion of the settlement payments shall be paid separately from
the GSA by Defendant. (¶III.1.)
D.
Plaintiffs’ release of Defendants from
claims described herein.
Within
14 days, Plaintiff’s counsel shall file a single document that
constitutes both a proposed Order and Judgment, consistent with this ruling
containing all requisite terms, including the class definition, release
language, and a statement of the number and identity of class members who
requested exclusion.
By
December 16, 2024, Class Counsel must give notice to the class
members pursuant to California Rules of Court, rule 3.771(b) and to the LWDA,
if applicable, pursuant to Labor Code §2699 (1)(3).
By
February 2, 2026, Class Counsel must file a Final Report re:
Distribution of the settlement funds.
The
Court hereby sets a Non-Appearance Case Review for February 9, 2026, 8:30
a.m., Department 9.
BACKGROUND
This is a wage and hour class action.
Defendant Draper and Kramer Mortgage is a national mortgage lender. On June 10,
2019, Plaintiff filed the Complaint alleging alleges the following causes of
action: (1) failure to pay wages; (2) failure to provide meal periods; (3)
failure to permit rest breaks; (4) failure to provide accurate wage statements;
(5) failure to pay all wages timely and upon separation of employment; (6)
violation of Business and Professions Code § 17200, et seq., based on the
preceding claims; and (7) enforcement of Lab. Code § 2698, et seq. (“PAGA”), for
the preceding claims.
On August 23, 2019, Plaintiff filed a First Amended Complaint
(hereinafter, the operative “Complaint”) seeking penalties under the Private
Attorneys General Act of 2004 for alleged violations of California Labor Code
§§ 201, 202, 203, 204, 210, 226, 226.3, 226.7, 227.3, 510, 512, 558, 1174,
1174.5, 1194, 1194.2, 1197, 1197.1, and 1198.
On August 26, 2020, the Parties attended
private mediation but did not reach a settlement. On January 25, 2022, the
Parties attended a mediation session with Cynthia Remmers. At this second mediation,
the Parties reached an agreement in principle. The Parties spent the next
several months following mediation negotiating at arms-length the final terms
of the Settlement, which the parties fully executed in March of 2022. A copy of
the Settlement Agreement was filed with the Court on February 17, 2023 attached
to the Declaration Of Joseph M. Szilagyi (“Szilagyi Decl.”), ISO Preliminary
Approval as Exhibit 1.
Counsel represents that Defendant is also
named in the class action entitled Jose Vasquez v. Draper and Kramer
Mortgage Corporation, filed on January 26, 2021 and pending in the United
States District Court, Central District of California, Case Number
2:21-cv-00693-FMO-AS (the “Vasquez Action”). Counsel further represents
that Counsel for plaintiff in the Vasquez Action declined to participate
in the Parties’ mediation. On March 17, 2022, the district court in the Vasquez
Action granted conditional class certification limited to claims related to
violations of the Fair Labor Standards Act (“FLSA”) and including
non-California employees.
Plaintiff’s counsel in the Vasquez Action
filed a motion to intervene into the present action, which the Court (the
Honorable Yvette Palazuelos) denied on September 20, 2022.
On March 16, 2023, the court issued a
checklist of items for the parties to address and continued preliminary
approval. In response, on March 22, 2023, counsel filed a fully executed
Amended Settlement Agreement attached to the Supplemental Declaration Of Joseph
M. Szilagyi (“Szilagyi Supp. Decl.”) ISO Preliminary Approval as Exhibit 1.
The Court granted Preliminary Approval on
August 25, 2023. Notice was provided as directed. (See Declaration Of Mayra
Gonzalez (“Gonzalez Decl.”); Declaration Of Mayra Gonzalez (“Gonzalez Supp.
Decl.”); Supplemental Declaration Of Mayra Gonzalez (“Gonzalez 2nd
Supp. Decl.”); Further Supplemental Declaration Of Mayra Gonzalez (“Gonzalez 3rd
Supp. Decl.”); Second Further Supplemental Declaration Of Mayra Gonzalez
(“Gonzalez 4th Supp. Decl.”).
Now before the Court is Plaintiff’s Motion for
Final Approval.
SETTLEMENT CLASS DEFINITION
· “Settlement
Class” means all individuals who are or were previously employed as loan
officers by Defendant in California during the period of June 10, 2015 to
January 25, 2022. (Settlement Agreement, ¶II.1.)
o
“Class Period” means the period
of time from June 10, 2015 through January 25, 2022. (¶II.9.)
· “PAGA
Group” means all individuals who are or were
previously employed as loan officers by Defendant in California during the
period of June 10, 2018 to January 25, 2022. (¶II.2.)
o
“PAGA Period” means
the period of time from June 10, 2018 through January 25, 2022. (¶II.10.)
· Class
End Date Modification. Defendant represented that as of
January 25, 2022, there were approximately 65 Class Members who collectively
worked 5,631 workweeks during the Class Period. Defendant will provide a
declaration as to the number of Class Members and workweeks worked by the Class
Members and the PAGA Group during the California Class Period prior to the
filing of the motion for preliminary approval. If the total number of workweeks
worked by Class Members, as of January 25, 2022, exceeds 5,631 by more than 10%
(i.e., by 564 or more additional workweeks), then the end date of the Release
Period shall be reduced accordingly so that the number of actual workweeks does
not exceed 5,631 by more than 10% and the definitions set forth in Paragraph 2
for Class Members and the PAGA Group will be modified accordingly to account
for the new end dates. (¶III.11.)
o
The initial mailing list contained 67
Class Members who worked a total of 3,145 weeks during the Class Period. (Gonzalez
4th Supp. Decl., ¶3.) There are 63 Aggrieved Employees who worked a
total of 5,756 weeks during the PAGA Period. (Id. at ¶20.)
· The
parties stipulate to class certification for settlement purposes only.
(¶VI.3.b.)
TERMS OF SETTLEMENT AGREEMENT
The essential terms are as follows:
· The
Gross Settlement Amount (“GSA”) is $350,000, non-reversionary. (¶III.1.)
· The
Net Settlement Amount (“Net”) ($183,498.33) is the GSA minus the
following:
o
Up to $ 116,666.67 (33
1/3%) for attorney fees (¶III.3);
o
Up to $18,335 for litigation costs (Notice, pg. 2);
o
Up to $10,000 for a Service
Payment to the Named Plaintiff (¶III.2);
o
Up to $6,500 for settlement
administration costs (¶III.5); and
o
Payment of $15,000 (75% of
$20,000 PAGA penalty) to the LWDA. (¶III.4.)
· Defendants
will pay their share of taxes separate from the GSA. (¶III.1.)
· Funding
of Settlement: Defendant shall fund the Gross
Settlement Amount within fifteen (15) calendar days of the Settlement Effective
Date. (¶IV.9.)
· There
is no claim form requirement. (Notice at p. 1.)
·
Calculation of Settlement Share:
The value of each Participating Class Member’s Settlement Share will be based
on the number of each Participating Class Member’s Workweeks. Specifically, the
Net Settlement Amount less 25% of the approved PAGA Payment will be divided by
the total number of Workweeks at issue for all Class Members, and then taking
that number and multiplying it by the number of Workweeks at issue for each
respective Participating Class Member. (¶III.7.)
o
Tax
Allocation: 60% as wages and 40% as interest and
penalties. (¶III.9.)
· PAGA
Share: The value of each PAGA Group member’s PAGA
Share will be based on the number of each PAGA Group member’s Workweeks during
the PAGA Period. Specifically, 25% of the approved PAGA Payment allocated to
the Net Settlement Amount will be divided by the total number of Workweeks at
issue for all PAGA Group members and then taking that number and multiplying it
by the number of Workweeks at issue for each respective PAGA Group member.
(¶III.8.)
o
Tax
Allocation: 100% penalties. (¶III.8.)
· Response Deadline: Each Participating Class Member shall have 45
calendar days from the date of the initial mailing of the Class Notice Packet
in which to object to the settlement, dispute the number of workweeks the Class
Notice allocates to them during the Class Period, or request exclusion from the
settlement. If the 45th day falls on a Sunday or holiday, the deadline will be
the next business day that is not a Sunday or holiday. (¶¶IV.3.a-b) Class Members for whom Class Notice Packets
are remailed will have an additional 14 calendar days added to the response
deadline. (¶IV.2.c.)
o If more than 3 Class Members submit valid Elections
Not to Participate in Settlement, Defendant will have the right to void the
Settlement. (¶IV.4.)
· Uncashed
Settlement Share Checks or PAGA Share Checks: A
Participating Class Member or PAGA Group members must cash his or her
Settlement Share check within 180 days after it is mailed to him or her. If a
check is returned to the Settlement Administrator, the Settlement Administrator
will make all reasonable efforts to re-mail it to the Participating Class
Member or PAGA Group members at his or her correct address. If a Participating
Class Member’s Settlement Share check is not cashed within 180 days after its
last mailing to the Participating Class Member, or a PAGA Group member’s PAGA
Share check is not cashed within 180 days after its last mailing to the PAGA
Group, the funds from such uncashed checks will be paid to the Controller of
the State of California to be held pursuant to the Unclaimed Property Law,
California Civil Code § 1500 et seq., for the benefit of those Participating
Class Members and PAGA Group members who did not cash their checks, until such
time that they claim their property, within 30 days of expiration of the check
void date. No funds from the Gross Settlement Amount will revert to Defendant.
The Parties agree that this disposition results in no “unpaid residue” under
California Code of Civil Procedure section 384. (¶IV.10.)
· The
settlement administrator will be Phoenix Settlement Administrators. (¶12)
· “Released
Class Claims” are defined as any and all federal, state, local and common
law claims for unpaid wages and overtime compensation (including but not
limited to any claims based on working “off-the-clock”), unpaid minimum wages,
unpaid rest break premiums, unpaid meal period premiums, waiting time
penalties, wage statement penalties, any and all claims for civil penalties
(including those asserted under PAGA) based on any of the acts alleged in the
Action or arising out of the facts, matters, transactions or occurrences set
forth in the Action as set forth above. Released Class Claims shall also
include any and all claims for attorneys’ fees, costs, expenses, interest,
penalties, liquidated damages, and any other damages or relief that have been
or could have been asserted by any Class Member arising out of the facts,
matters, transactions or occurrences set forth in the Action. Specifically
excluded from the Released Class Claims are claims that: (1) cannot be waived
as a matter of law, such as claims for unemployment insurance, workers’
compensation and vested benefits covered by ERISA; (2) claims for wrongful
termination, discrimination, retaliation and harassment under any state or
federal civil rights law, including Title VII and California’s Fair Employment
and Housing Act; and (3) claims outside the temporal scope of the Release
Period. (¶I.26.)
· “Released
PAGA Claims” are defined as the claims asserted by
the PAGA Group for alleged violations of the California Labor Code and IWC Wage
Order provisions identified in the PAGA notices Plaintiff sent to the LWDA and
further identified in the operative Complaint in the Action that are alleged to
have occurred during the PAGA Period, including alleged violations of
California Labor Code §§ 201, 202, 203, 204, 210, 226, 226.3, 226.7, 227.3,
510, 512, 558, 1174, 1174.5, 1194, 1194.2, 1197, 1197.1, and 1198 (“Released
PAGA Claims”). (¶I.27.)
· “Released
Parties” means Defendant, and its parents, subsidiaries, affiliates,
related entities, predecessors or successors in interest, and each of their
respective owners, officers, directors, shareholders, partners, members,
managing agents, employees, consultants, attorneys, joint venturers, agents,
successors, assigns, insurers, or reinsurers of any of them, and other related
persons and entities. (¶I.28.)
· “Release
Period” for the Released Class Claims means the period of time from June
10, 2015 through January 25, 2022, unless the total number of unique Workweeks
implicated for the Settlement Period exceeds 5,631 by more than 10% (i.e., by
564 or more additional Workweeks), in which case the end date of the Release
Period shall be shortened accordingly so that the number of actual Workweeks
does not exceed 5,631 by more than 10%. Workweeks covered by Individual
Releases executed by Class Members will be excluded from the Workweek count.
However, all class members who signed an individual release shall receive at
least some consideration to bind the Class Release on them. (¶I.29.)
· “Individual
Releases” are defined as all claims released by Class Members consistent
with the individual settlement agreements between Class Members and Defendant.
(¶I.31.)
o
Named Plaintiff will also provide a
general release and CC § 1542 waiver. (¶I.30; ¶V.2.)
ANALYSIS
OF SETTLEMENT AGREEMENT
A. Does a presumption
of fairness exist?
1.
On August 26, 2020, the Parties
attended private mediation but did not reach a settlement. (Szilagyi Decl. ISO
Preliminary Approval, ¶6.) On January
25, 2022, the Parties attended a mediation session with Cynthia Remmers. At
mediation the Parties reached an agreement in principle. (Id. at ¶11.)
The Parties spent the next several months following mediation negotiating at
arms-length the final terms of the Settlement, which was fully executed in
March of 2022. (Id. at ¶12.)
2.
Were investigation and discovery
sufficient to allow counsel and the court to act intelligently? Yes. Counsel represents that prior to the
mediation, Plaintiff’s Counsel served discovery for documents necessary to
evaluate the claims in this action, including payroll records, time punches,
compensation agreements, job descriptions, written work policies, and other
information for damages calculations. (Id. at ¶¶ 5-9.) Plaintiff’s
Counsel further agreed to the informal production of additional data and
documents to assess the value of the class claims for mediation. (Id. at
¶10.) Counsel represents that prior to mediation, Plaintiff received all the
timekeeping and payroll data for all putative class members in lieu of a
statistical sampling. Plaintiff retained an expert for purposes of mediation to
provide an analysis of this data and calculate Defendant’s damages. (Szilagyi
Supp. Decl. ISO Preliminary Approval, ¶6.)
3.
Is counsel experienced in similar
litigation?
Yes. Class Counsel represents
that they are experienced in class action litigation, including wage and hour
class actions. (Szilagyi Decl., ¶¶ 38-50; See also Declaration of
Jonathan M. Lebe ISO Preliminary Approval, passim.)
4.
What percentage of the class has
objected? One objector.
(Gonzalez Decl., ¶10, 12 and Exhibit B thereto.) All objections/oppositions/
etc. are addressed further in detail below.
CONCLUSION: The settlement is entitled to a presumption
of fairness.
B. Is the settlement
fair, adequate, and reasonable?
1.
Strength of Plaintiffs’ case. “The most important factor is the strength of
the case for plaintiffs on the merits, balanced against the
amount offered in settlement.” (Kullar v. Foot Locker Retail, Inc. (2008)
168 Cal.App.4th 116, 130.)
Counsel
has provided the following exposure analysis:
|
Violation |
Maximum Exposure |
Realistic Exposure |
|
Unpaid Overtime |
$1,156,750.00 |
$231,350.00 |
|
Meal Breaks |
$507,300.00 |
$50,730.00 |
|
Rest Period Violations |
$694,600.00 |
$69,460.00 |
|
Waiting Time Penalties |
$139,000.00 |
$0.00 |
|
Wage Statement Violations |
$133,750.00 |
$0.00 |
|
PAGA |
$136,400.00 |
$20,000.00 |
|
TOTAL |
$2,767,800.00 |
$371,540.00 |
(Szilagyi Decl. ISO Preliminary
Approval, ¶¶ 25-34.)
2. Risk, expense, complexity
and likely duration of further litigation.
Given the nature of the class claims, the case is likely to be expensive
and lengthy to try. Procedural hurdles
(e.g., motion practice and appeals) are also likely to prolong the litigation
as well as any recovery by the class members.
3. Risk of maintaining class action status
through trial. Even if a class is
certified, there is always a risk of decertification. (See Weinstat v. Dentsply
Intern., Inc. (2010) 180 Cal.App.4th
1213, 1226 [“Our Supreme Court has recognized that trial courts
should retain some flexibility in conducting class
actions, which means, under suitable circumstances,
entertaining successive motions on certification if the court subsequently
discovers that the propriety of a class action is not appropriate.”].)
4. Amount
offered in settlement. Plaintiff’s
counsel obtained a $350,000 non-reversionary settlement. The $305,000 settlement amount constitutes
approximately 12.65% of Defendant’s maximum exposure and 94.20% of Defendant’s
realistic exposure. Given the uncertain outcomes, the settlement appears to be
within the “ballpark of reasonableness.”
The highest Individual Settlement
Payment to be paid is approximately $15,157.89, the lowest Individual
Settlement Payment to be paid is approximately $288.72, while the average
Individual Settlement Payment to be paid is approximately $3,296.24. (Gonzalez
4th Supp. Decl., ¶18.) The average Individual PAGA Payment to be
paid is approximately $79.37. (Id. at ¶20.)
5. Extent of discovery completed
and stage of the proceedings. As
indicated above, at the time of the settlement, Class Counsel had conducted
sufficient discovery.
6. Experience and views of counsel. Class Counsel is of the opinion that the
Class Settlement is fair, adequate, and reasonable. The settlement was
negotiated and endorsed by class counsel who, as indicated above, is experienced
in class action litigation, including wage and hour class actions.
7. Presence of a governmental
participant. This factor is not
applicable here.
8. Reaction of the class members to
the proposed settlement.
Number of Class Members: 67 (Gonzalez 4th
Supp. Decl., ¶3.)
Number of notice packets mailed: 67 (Id. at ¶5.)
Number of undeliverable notices: 0 (Id. at ¶7.)
Number
of opt-outs: 13 (Id. at ¶¶9, 16.)
At
the October 17, 2024 hearing, the parties and the Objector’s attorney orally advised
that: (1 )none of the opt outs are currently employed by Defendant, (2) Defendant
has not reached a settlement with any of the 13 opt outs, and (3) Objector’s
Counsel represents 10 of the 13 opt outs.
Number of objections: 1 (Id. at ¶¶10, 12, 16.)[1]
Number
of Participating Class Members: 54 (Id. at ¶¶3, 9, 16.)
Average individual payment: $3,296.24 (Id.
at ¶18.)
Highest individual payment: $15,157.89 (Ibid.)
Lowest individual payment: $288.72 (Ibid.)
Number
of Aggrieved Employees: 63. (Id. at ¶20.)
Average
PAGA payment: $79.37 (Ibid.)
OBJECTION
On
April 23, 2024 and August 9, 2024 Objector Velia Razo (“Objector”) filed an
Opposition to Plaintiff’s Motion for Final Approval (“Opposition”). Velia Razo and
her Counsel also each appeared remotely at the final approval hearing on
October 17, 2024 and each orally expressed their objections the Court.
Objector
contends that Defendants’ misclassification resulted in substantial liability
by Defendant, yet the Motion for Final Approval and its supporting declarations
fails to present evidence for the court to analyze and is insufficient under Kullar
v. Foot Locker Retail, Inc. (2008) 168 Cal.App.4th 116. (Opposition, pgs.
3-10.) Objector further contends that the “Gonzales’ Motion
for Final Approval fails to identify any maximum damage that each or any class
member sustained, nor DKMC’s aggregate exposure. More importantly, the NOTICE
of Settlement fails to disclose to the class members (including Objector Velia
Razo) the maximum damages for each of their claims.” (Opposition, pg. 11:
7-12.)
Objector
further contends that the settlement is unfair as evidenced by the “HUGE
percentage of the unnamed putative class members have opted out or objected to
the proposed settlement agreement – fully twenty percent (20%) of the entire
class.” (Opposition, pg. 11: 24-25)
Objector
further claims that the settlement recovery is inadequate, and that the Motion
for Final Approval “erroneously claims the absence of any ‘Objectors” to the
Settlement, as does the claims administrator – disregarding the Notice of Velia
Razo’s objection and appearance of counsel on her behalf was served and filed
November 11, 2029 (delivered to Judge Feeney consistent with the erroneous
Notice of Settlement misidentifying the Judicial officer before whom this
fairness and Final Approval Motion would be heard), and additionally, the
Amended Notice correcting the identity of the judicial officer before whom this
Motion for Final Approval Motion is actually being heard (contrary to the
Notice) served on all counsel, and the Settlement Administrator, December 4,
2023.” (Opposition, pg. 12:15-23.)
As
to inadequacy, objector contends that the settlement is inadequate because it
does not provide compensation for many claims and that the notice is inadequate
because it did not identify the value of the claims being released. (Opposition
pgs. 12-14.)
On
May 1, 2024 Plaintiff filed a reply to the Opposition (“Reply”). In its reply,
Plaintiff claims that the objection in untimely as it was submitted outside of
the Response Deadline, with only a Notice of Intent to Appear being sent to the
administrator, and should be disregarded. (Reply, pgs. 1-3.)
On
August 22, 2024 Plaintiff filed a reply to the Opposition (“2nd Reply”). In
this second Reply, Plaintiff again contends that the Opposition is untimely,
that the settlement satisfies Kullar v. Foot Locker Retail, Inc., 168
Cal. App. 4th 116 (2008) and Wershba v. Apple Computer, Inc., 91 Cal.
App. 4th 224 (2001), wherein a formal investigation took place, plaintiff
assessed the value of the claims, and attended two mediation sessions prior to
settlement. (2nd Reply, ps. 2-4.) Further, Plaintiff claims the notice was sent
twice to the Class, which “provide adequate notice of the Settlement, their
rights, and Final Approval hearing.” (Id. at ¶4:17-19.)
On
September 9, 2024, Objector filed a Supplemental Opposition to Plaintiff’s
Motion for Final Approval (“Supp. Opposition”) wherein she claims that she has
a right to object despite the parties claims that no objection was filed, only
a Notice of Appearance by her counsel. (Supp. Opposition, pgs. 1-2.) Objector
further claims that the dispute over the timeliness of Ms. Razo’s objection to
is an attempt to distract the court from the inadequacy of the settlement, and that “settling counsel
disclose the total dollar value of the claims being released”, as they are much
larger than what is being recovered. (Supp. Opposition, 2:21-28.) Objector
further contends that Plaintiff’s supplemental briefing is inadequate as cases
“cited by settling counsel’s Supplemental Briefs have been reversed,
criticized, or ordered Unpublished and not citable, or do not stand for the
propositions claimed.” (Supp. Opposition, 5:25-26.)
On
May 1, 2024 and September 19, 2023, Defendant filed Responses to the Opposition
(“Response”) and the Supp. Opposition (“Supp. Response”). The response claims
the Objector is untimely and makes erroneous claims as the parties engaged in
formal and informal discovery prior to settlement. (Response, pgs. 1-3.) The
supplemental response contends “
Objector’s supplemental opposition and the points addressed therein are
erroneous for the following three reasons: (1) Objector’s initial Notice of
Appearance (the “Notice”) should not be considered as part of the record
because it did not follow requirements set forth under the Court approved
notice. Objector also concedes that the Notice was untimely; (2) Objector
mischaracterizes the record when she contends that there has been no discussion
regarding the “value” of the settlement. The value of each of the claims was
discussed in declarations filed by Plaintiff’s counsel and the Court noted
these values in its Amended Rulings/Orders dated August 25, 2023 granting
preliminary approval (the “Order”); and (3) Objector’s contention that the Roos
opinion cited in DKMC’s supplemental papers is “fully reversed” is false and
Objector fails to address, let alone rebut, DKMC’s argument” (Supp. Response,
1:7-16.)
On
September 19, 2024, Plaintiff filed a
reply to the Supplemental Opposition(“Supp. Reply”). Plaintiff contends that
the objection is untimely, provides no explanation as to why it is untimely,
and lacks merit to deny final approval as all of the issues raised were addressed during the preliminary
approval stage. Counsel contends that “[a]t preliminary approval, Plaintiff’s
counsel outlined its investigation which included their receipt of multiple
productions of work records and data for Plaintiff and Class Members following
multiple sets of formal discovery, continued meeting and conferring, and in
preparation for two mediation sessions. Decl. of Joseph Szilagyi ISO
Preliminary Approval, ¶¶ 5-10, filed on February 17, 2023. Plaintiff provided a
breakdown of the potential value of each claim which was weighed against the
substantial further costs and real risks related to class certification and
trial. Decl. of Joseph Szilagyi ISO Preliminary Approval, ¶¶ 25-34, filed on
February 17, 2023.” (Supp. Rely, 3:17-24.)
The
court has reviewed all of the briefing submitted in connection with final
approval, and addresses it all in turn.
First,
timely or not, the court has heard from any and all class members who appeared
at final approval, and the Court has considered every objection on its
merits. Velia Razo was the only objector
who appeared at the October 17, 2024 final approval hearing. Velia Razo and her Counsel each appeared
remotely at the final approval hearing on October 17, 2024 and each orally expressed
their objections the Court.
Second,
as far as the errors in the initial notice to the class, a corrective notice
was issued, and each class has now had a full opportunity to respond and appear
to be heard. Thus, the Opposition is
moot as to this point.
Third,
prior to preliminary approval being granted on August 25, 2023, the parties underwent
multiple rounds of briefing, wherein the court reviewed the value of the
claims, the investigation and discovery done prior to settlement, etc. After a
full review of all of the evidence submitted, the Court preliminarily found in
its Order on August 25, 2023, that the presumption of fairness should be
applied. No facts have come to the
Court’s attention that would alter that preliminary conclusion. Accordingly, the settlement is entitled to a
presumption of fairness as set forth in the preliminary approval order. Because the settlement is non-reversionary, each
participating class member will receive a larger share of the recovery as a
result of the 13 opt outs, and the class members are not prejudiced by the
approximate 20% opt out.
Further,
Objector has failed to provide any case law that states that the notice must identify
the value of the claims being released. The value of a claim is subjective, the
parties will rarely agree to the value of a claim prior to trial, so containing
values in the notice would cause more confusion than provide notice.
Finally,
Settlements are a compromise, rather than a full recovery, based on the costs
and risks associated with trial. If Objector
believed that that she deserves more monies, she could have opted out of the
settlement and attempted to seek recover with less costs and fees as part of
the compromised settlement (like the other class members who sought exclusion).
Therefore,
to the extent that the Opposition is an objection, it is OVERRULED.
C.
Attorney
Fees and Costs
Class
Counsel requests an award of $116,666.67
in fees and $18,886.44 in costs.
(MFA, 14:16-20.) The Settlement
Agreement provides for fees up to $116,666.67 (1/3) and costs up to $18,335 (Settlement Agreement ¶III.3; Notice, pg. 2);
class members were provided notice of the requested awards and none objected to
the requested awards. (Gonzalez 4th Supp. Decl., ¶¶10; 12 and
Exhibit A-B thereto.)
“Courts recognize two methods for
calculating attorney fees in civil class actions: the lodestar/multiplier
method and the percentage of recovery method.”
(Wershba v. Apple Computer, Inc. (2001)
91 Cal.App.4th 224, 254.) Here, class counsel request attorney fees
using the percentage method, with a lodestar crosscheck. (MFA, pgs. 8-12.)
In common fund cases, the Court may
employ a percentage of the benefit method, as cross-checked against the
lodestar. (Laffitte v. Robert Half Int’l,
Inc. (2016) 1 Cal.5th 480, 503.) The
fee request represents 33% of the gross settlement amount, which is the
average generally awarded in class actions.
(See In re Consumer Privacy Cases
(2009) 175 Cal.App.4th 545, 558, 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.”].)
Counsel has provided the following
lodestar information:
|
Biller |
Hours |
Rate |
Total |
|
Jonathan M. Lebe |
25.3 |
$800 |
$20,240 |
|
Samuel Wong |
46.70 |
$950 |
$44,365 |
|
Kashif Haque |
7.40 |
$950 |
$7,030 |
|
Jessica Campbell |
36.50 |
$800 |
$29,200 |
|
Fawn Bekam |
67.20 |
$700 |
$47,040 |
|
Joseph Szilagyi |
163.40 |
$625 |
$102,125 |
|
Totals |
346.5 |
|
$250,000 |
(Szilagyi
Decl. ISO Final, ¶24; Lebe Decl. ISO Final, ¶11.)
Therefore, counsel represent they have
incurred a lodestar of $250,000, which will require a negative multiplier to yield
the requested fee award. (Ibid.)
As for costs, Class Counsel is requesting $18,886.44 in costs. (Szilagyi Decl. ISO Final, ¶25, and Ex. 4.) This is greater than $18,335 cap for which Class Members were
given notice and deemed the requested costs unobjectionable. (Gonzalez
4th Supp. Decl., ¶¶10; 12 and Exhibit A-B thereto.)
To date, Class Counsel
have incurred a total of $18,886.44 in this Action. (Szilagyi
Decl. ISO Final, ¶25, and Ex. 4.) The costs include,
but are not limited to, expert costs (Berger Consulting Group ($1,312.50),
mediation fees ($12,750), and filing fees ($1,557.36),
(Ibid.) The costs appear to be reasonable in amount
and reasonably necessary to this litigation.
Based on the above, the Court hereby awards
$116,666.67 in attorney’s fees and $18,335 in costs.
D.
Incentive
Award to Class Representative
The Settlement provides for up for $10,000
for an enhancement award to the named Plaintiff. (Settlement Agreement, ¶III.2.)
Plaintiff Gonzales represents that his
contributions to this litigation, include, but are not limited to spending at
least 110 to 130 hours on the following: having numerous conversations with
counsel, identifying witnesses, gathering documents, reviewing documents,
assisting in providing discovery responses, preparing for and remaining
telephonically available for two mediations, and reviewing the settlement. (Gonzales
Decl., ¶¶3-13; 18.)
The court notes that such efforts are
commendable, but not exceptional. Based on the above, as well as the benefits obtained on behalf of the
class, the Court hereby grants an enhancement payment in the amount of $7,500 to Plaintiff Gonzales.
E.
Claims
Administration Costs
The claims administrator is
requesting $6,450 for the costs of
settlement administration. (Gonzalez 4th Supp. Decl., ¶22.)
This is less than the estimated cost of $6,500 provided for in the Settlement
Agreement (¶III.5) and disclosed to class members in the Notice, to which there
were no objections. (Gonzalez 4th Supp. Decl., ¶¶10; 12 and Exhibit
A-B thereto.) Based on
the above, the Court hereby awards costs in the requested amount of $6,450.
THE PLAINTIFF IS ORDERED TO DOWNLOAD THE INSTANT SIGNED
ORDER FROM THE COURT’S WEBSITE AND TO GIVE NOTICE TO ALL OTHER PARTIES.
IT IS SO ORDERED.
DATED: October
17, 2024 ___________________________
Elaine
Lu
Judge of the Superior Court
[1] On December 5, 2023, Phoenix received via US Mail a
document entitled “Notice of Appearance” for the class member Velia Razo, sent
to provide notice that Mr. Razo has an objection to the settlement. (Gonzalez
Decl., ¶12.)