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.)