Judge Elaine Lu, Case Number: 20STCV37994, Date: 2025-05-14 Tentative Ruling

Judge: Elaine Lu, Case: 20STCV37994, Date: 2025-05-14 Tentative Ruling

Case Number: 20STCV37994 Hearing Date: May 14, 2025 Dept: 9

Final Approval of Class Action Settlement

Department SSC-9

Hon. Elaine Lu

Manuel Regalado, et al. v. Pride Intermodal Inc., et al.

Case No.: 20STCV37994

Hearing Date: May 14, 2025

TENTATIVE RULING

The Parties’ Motion for Final Approval of class action settlement is GRANTED as the settlement is fair, adequate, and reasonable.

The essential terms are:

· The Gross Settlement Amount (“GSA”) is $315,000, non-reversionary. (¶6.p)

· The Net Settlement Amount (“Net”) is the GSA minus the following:

o $104,985 (33%) for attorney fees to Class Counsel, The Cullen Law Firm, APC (¶3.2.2);

o $13,000 for litigation costs to Class Counsel (Ibid.);

o Service payments of $7,500 each to the class representatives, Manuel Regalado and Carlos Aguilar; and (¶3.2.1); and

o 8,000 for settlement administration costs to Phoenix Settlement Administrators (¶3.2.3).

· Defendant shall pay Employer’s share of the payroll taxes on the taxable portion of the settlement payments separately from the GSA. Participating Class Members shall have no obligation to defend or indemnify PRIDE for any tax obligations that are deemed to have arisen as a result of the payments made pursuant to this Settlement. (¶3.2.4.1)

· Plaintiffs’ release of Defendants from claims described herein.

No later than May 27, 2025, 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 July 14, 2025, Class Counsel must give notice to the class members pursuant to California Rules of Court, Rule 3.771(b) (which may be effected by posting on the Administrator’s website if consistent with the parties’ Class Action Settlement) and to the LWDA, if applicable, pursuant to Labor Code §2699 (1)(3).

By August 14, 2026, Class Counsel must file a Final Report re: Distribution of the settlement funds.

The Court hereby sets a Non-Appearance Case Review for August 21, 2026, 8:30 a.m., Department 9.

BACKGROUND

Plaintiffs Manuel Regalado and Carlos Aguilar sue their former employer, Defendants Pride Intermodal, Inc., Tania Xiomara Leon, and Mauricio Leon (hereinafter “PRIDE” or “Defendants”), for alleged wage and hour violations. PRIDE is a privately-owned motor carrier that focuses on intermodal and drayage services, located in Commerce, California. Plaintiffs’ action is premised on the alleged misclassification of Defendants’ truck drivers as independent contractors. Plaintiffs seek to represent a class of Defendants’ truck drivers who had been identified as contractors during the class period.

On October 2, 2022, Plaintiffs filed their class action complaint against Defendants alleging causes of action for: (1) reimbursement of business expenses (Labor Code § 2802); (2) unlawful deductions from wages (Labor Code §§ 221-223); (3) failure to provide off-duty meal periods (Labor Code §§ 226.7, 512); (4) failure to provide off-duty paid rest periods (Labor Code §§ 226.7); (5) minimum wage (Labor Code §§ 1182.11, 1194, et seq.); (6) waiting time penalty (Labor Code § 203); (7) failure to timely furnish accurate itemized wage statements (Labor Code § 226); (8) breach of contract; and (9) violations of the Unfair Competition Law (Business & Professions Code §§ 17200-09).

On September 27, 2023, the parties mediated before the Hon. Jan M. Adler (Ret.), which ultimately resulted in settlement. The terms of settlement were finalized in the long-form Class Action Settlement Agreement (“Settlement Agreement”), a copy of which is attached to the Declaration of Paul T. Cullen filed June 3, 2024 (“Cullen Decl.”) as Exhibit 1.

On September 19, 2024, the Court issued a “checklist” to the parties pertaining to deficiencies in the proposed settlement. In response, the parties filed further briefing and the revised Settlement Agreement attached to the Declaration of Christopher C. McNatt, Jr. filed October 28, 2024.

On November 27, 2024, the Court granted preliminary approval of the settlement. Notice was given to the Class Members as ordered (see Declaration of Yami Burns (“Burns Decl.”)). Now before the Court is the Motion for Final Approval of the settlement.

SETTLEMENT CLASS DEFINITION

· “Class” or “Settlement Class” means “all natural persons who are or have operated as truck drivers for Pride Intermodal Inc. in the State of California while identified as the “Contractor” in an operative “Independent Contractor Operating Agreement” and/or similar agreement that identifies Pride as a party or “Carrier” in such an agreement, during the period from October 2, 2016 through September 27, 2023.” “Class,” however, excludes those individuals who would otherwise qualify as Class Members, but who have reached a separate release of their claims with PRIDE. (¶1.4)

· “Class Period” means the period from October 2, 2016 through September 27, 2023. (¶1.11)

· “Participating Class Member” means a Class Member who does not submit a valid and timely Request for Exclusion from the Settlement. (¶1.26)

TERMS OF SETTLEMENT AGREEMENT

The essential terms are as follows:

· The Gross Settlement Amount (“GSA”) is $315,000, non-reversionary. (¶6.p)

o Escalator Clause: If the number of Work Weeks worked by Class Members during the Class Period exceeds 11,776 by 15%, PRIDE shall be obligated to increase the Gross Settlement Fund proportionately. (¶9)

o At final approval, the settlement administrator represents that Settlement Class Members worked a collective total of eleven thousand six hundred sixty-three (11,663) Workweeks during the Class Period. (Burns Decl. ¶11.) Accordingly, the escalator clause is not triggered.

· The Net Settlement Amount (“Net”) estimated at preliminary approval ($162,105) is the GSA minus the following:

o Up to $104,895 (33.3%) for attorney fees (¶3.2.2);

o Up to $13,000 for litigation costs (Ibid.);

o Up to $20,000 total [$10,000 each] for Service Payments to the Named Plaintiffs (¶3.2.1); and

o Up to $15,000 for settlement administration costs (¶3.2.3).

· There is no claim form requirement. (¶3.1)

· Individual Settlement Payment Calculation: 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)

o Tax Allocation: No portion of each Participating Class Member’s Individual Class Payment will be separately allocated to settlement of wage claims due to the fact that that the payments made are based on alleged unlawful deduction of expenses and alleged penalties. PRIDE placed zero value on the Plaintiffs’ wage claims. The Parties agree that the Individual Settlement Payments constitute all income and will be reported to appropriate taxing authorities by the Administrator on individual IRS Form 1099. Participating Class Members assume full responsibility and liability for any taxes they will owe on their Individual Class Payment, but not for any taxes that may be owed by PRIDE for the same. Participating Class Members shall have no obligation to defend or indemnify PRIDE for any tax obligations that are deemed to have arisen as a result of the payments made pursuant to this Settlement. (¶3.2.4.1)

· Response Deadline: “Response Deadline” means 60 days after the Administrator mails Notice to Class Members 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 his or her Objection to the Settlement. Class Members to whom Notice Packets are resent after having been returned undeliverable to the Administrator shall have an additional 14 calendar days beyond the Response Deadline has expired. (¶1.33) The same deadlines apply to the submission of workweek disputes. (¶7.6)

o If the count of Work Weeks from Class Members who file valid Exclusion Requests and are listed in the Exclusion List exceeds 15% of the overall Work Weeks of all Class Members, PRIDE shall be entitled to void the Settlement. (¶9)

· Funding of Settlement: PRIDE shall fully fund the Gross Settlement Amount by transmitting the funds to the Administrator in two installments. PRIDE shall transmit the initial payment of $157,500.00 within 15 days following the Effective Date. PRIDE shall transmit the second payment of $157,500.00 no later than 6 months after the first payment. (¶4.3) If the total number of Work Weeks exceeds 15% of 11,776 workweeks, the Gross Settlement Amount will increase proportionally. The increased amount will be divided into two equal payments. The first payment of the increased amount will be funded within 15 days of the Settlement's Effective Date, and the second payment of the increased amount will be funded within 6 months after the first payment. (¶3.1)

· Disbursement: Within 14 days after PRIDE funds from each payment of the Gross Settlement Amount, the Administrator will mail checks for all Individual Class Payments, the Administration Expenses Payment, the Class Counsel Fees Payment, the Class Counsel Litigation Expenses Payment, and the Class Representative Service Payment. These checks will be for 50% of the amount allocated to each of the foregoing intended recipients of the funds from the Settlement. (¶4.4)

· Uncashed Settlement 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. The Administrator will cancel all checks not cashed by the void date. (¶4.4.1) For any Class Member whose Individual Class Payment check is uncashed and cancelled after the void date, the Administrator shall transmit the funds represented by such checks to the General Services fund of the Legal Aid Foundation of Los Angeles, a nonprofit organization providing civil legal services to the indigent, which is a foundation consistent with Code of Civil Procedure Section 384, subd. (b) (“Cy Pres Recipient”). (¶4.4.3) The Parties, Class Counsel and Defense Counsel represent that they have no interest or relationship, financial or otherwise, with the intended Cy Pres Recipient. (Cullen Decl. ¶89; Decl. of Carlos Aguilar ¶31; Decl. of Manuel Regalado ¶31; Decl. of Christopher C. McNatt, Jr. ¶2; Decl. of Mauricio Joel Leon ¶3; Decl. of Tania Xiomara Leon ¶3.)

· The settlement administrator will be Phoenix Class Action Administration Solutions. (¶1.2)

· Notice of Final Judgment will be posted on the Settlement Administrator’s website. (¶7.8.1)

· Release of Claims. Effective on the date when PRIDE fully funds the entire Gross Settlement Amount, Plaintiffs, Class Members, and Class Counsel will release claims against all Released Parties as follows: (¶5)

o 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 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, e.g., “(a) any and all claims involving any alleged failure to reimburse business expenses; (b) any and all claims involving any alleged unlawful deductions from wages; (c) any and all claims involving any alleged failure to provide off-duty meal periods; (d) any and all claims involving any alleged failure to provide off-duty rest periods; (e) any and all claims involving any alleged violations of minimum wage; (f) any and all claims involving any alleged waiting time penalty; (g) any and all claims involving any alleged failure to timely furnish accurate itemized wage statements; (h) any and all claims involving any alleged breach of contract; and (i) any and all claims involving any alleged violations of the unfair competition law (UCL) (Business & Professions Code §§ 17200 et seq. 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)

o “Released Parties” means: Defendants and each of their former and present directors, officers, shareholders, owners, attorneys, insurers, predecessors, successors, assigns, subsidiaries, and affiliates. (¶1.31)

Named Plaintiffs will also provide a general release and CC § 1542 waiver. (¶5.1)

ANALYSIS OF SETTLEMENT AGREEMENT

A. Does a presumption of fairness exist?

The Court preliminarily found in its Order of November 27, 2024 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.

B. Is the settlement fair, adequate, and reasonable?

The settlement was preliminarily found to be fair, adequate and reasonable. Notice has now been given to the Class.

Reaction of the class members to the proposed settlement.

Number of class members: 148 (Burns Decl. ¶3.)

Number of notice packets mailed: 148 (Id. at ¶5.)

Number of undeliverable notices: 1 (Id. at ¶7.)

Number of opt-outs: 0 (Id. at ¶8.)

Number of objections: 0 (Id. at ¶9.)

Number of participating class members: 148 (Id. at ¶11.)

Average individual payment: $1,142.50 (Id. at ¶14.)

Highest individual payment: $4,668.77 (Ibid.)

The Court finds that the notice was given as directed and conforms to due process requirements. Given the reactions of the Class Members to the proposed settlement and for the reasons set for in the Preliminary Approval order, the settlement is found to be fair, adequate, and reasonable.

C. Attorney Fees and Costs

Class Counsel requests an award of $104,985 in fees and $17,108.46 in costs. (MFA at i:11-12.) The Settlement Agreement provides for up to $104,895 (33.3%) of the GSA for attorney fees and up to $13,000 in costs (¶3.2.2).

“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, as crosschecked by lodestar. (MFA at pp. 4-7.)

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 one-third 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.”].)

Class Counsel has provided information, summarized below, from which the lodestar may be calculated:

Attorney	Rates	Hours	Totals
Paul T. Cullen	$1,100	196.6	$216,260
Totals		196.6	$216,260

(Declaration of Paul T. Cullen ISO Final ¶¶28-31, Exhibit B.)

Counsel’s percentage-based fee request is lower than the unadjusted lodestar, and would represent application of a multiplier of approximately 0.49x.

Here, the $104,985 fee request represents a reasonable percentage of the total funds paid by Defendant. Notice of the fee request was provided to class members in the notice packet, and no one objected. (Burns Decl. ¶9, Exhibit A thereto.)

As for costs, Class Counsel is requesting a cost amount of $17,108.46. This exceeds the $13,000 cap estimated at preliminary approval, which was disclosed to Class Members in the Notice and not objected to. (Burns Decl. ¶9, Exhibit A thereto.) Counsel represents that costs include, but are not limited to: filing fees, mediation fees, and Case Anywhere. (Cullen Decl. ISO Final ¶¶32-25, Exhibit C thereto.) Counsel asserts that his costs are higher than previously estimated because the mediator charged another $4,125 in post-mediation fees, which was not paid until after the parties executed the settlement, as well as additional Case Anywhere fees. (Id. at ¶¶38-42.)

These costs appear to be reasonable in amount and reasonably necessary to this litigation. However, the Court is not inclined to award costs in an amount exceeding the estimate previously disclosed to the Class on the notice.

Based on the above, the Court hereby awards $104,985 in fees and $13,000 in costs.

D. Incentive Awards

The class representatives, Manuel Regalado and Carlos Aguilar, seek enhancement payments of $10,000 each for their contributions to the action. (MFA at i:15-16.)

In connection with the final fairness hearing, named Plaintiffs must submit declarations attesting to why they should be entitled to an enhancement award in the proposed amount. The named Plaintiffs must explain why they “should be compensated for the expense or risk he has incurred in conferring a benefit on other members of the class.” (Clark v. American Residential Services LLC (2009) 175 Cal.App.4th 785, 806.) Trial courts should not sanction enhancement awards of thousands of dollars with “nothing more than pro forma claims as to ‘countless’ hours expended, ‘potential stigma’ and ‘potential risk.’ Significantly more specificity, in the form of quantification of time and effort expended on the litigation, and in the form of reasoned explanation of financial or other risks incurred by the named plaintiffs, is required in order for the trial court to conclude that an enhancement was ‘necessary to induce [the named plaintiff] to participate in the suit . . . .’” (Id. at 806-807, italics and ellipsis in original.)

Each Plaintiff represents that his contributions to this litigation include: providing and explaining work-related records to their attorneys, discussing with their counsel relevant legal and factual issues in the case, including Defendant’s policies, practices, and procedures, identifying potential witnesses, providing factual information and strategic considerations in support of their claims, answering questions from their attorneys, providing information regarding the duties of other drivers, proposing case-related ideas, and reviewing the settlement. Each estimates spending approximately 20-25 hours on the case. (Declaration of Manuel Regalado ISO Prelim ¶¶23-24; Declaration of Carlos Aguilar ISO Prelim ¶¶23-24.)

Based on the above, as well as the benefits obtained on behalf of the class, the Court hereby grants the enhancement payments in the reduced amount of $7,500 each to the named Plaintiffs.

E. Settlement Administration Costs

The settlement administrator, Phoenix Settlement Administrators, is requesting $8,000 for the costs of settlement administration. (Burns Decl. ¶15.) This is less than the cost of $15,000 estimated at preliminary approval (¶3.2.3) and disclosed to the Class on the Notice form, to which there were no objections. (Burns Decl. ¶9, Exhibit A thereto.) Based on the above, the Court awards administration costs in the requested amount of $8,000.

CONCLUSION AND ORDER