Judge: Elaine Lu, Case: 22STCV11259, Date: 2025-06-11 Tentative Ruling
Case Number: 22STCV11259 Hearing Date: June 11, 2025 Dept: 9
Preliminary Approval of Class Action
Settlement
Department SSC-9
Hon. Elaine Lu
Deborah Shaw, et al. v. Southern California Permanente
Medical Group, Inc., et al.
Case
No.: 22STCV11259
Hearing: June 11, 2025 (Continued from April 2,
2025)
TENTATIVE RULING
The Parties’ Motion for Preliminary Approval of
Class Action Settlement is GRANTED as the settlement is fair, adequate, and
reasonable.
The essential terms of the Settlement Agreement are:
·
The
Gross Settlement Amount (“GSA”) is $15,000,000, non-reversionary.
(¶3.1)
·
The
Net Settlement Amount (“Net”) is the GSA minus the following:
o Up to $5,000,000
(33 1/3%) for
attorney fees (¶3.2.2);
o Up to $100,000 for litigation costs (Ibid.);
o Up to $35,000 [$5,000 each] for a
Service Payment to each of seven Named Plaintiffs (¶3.2.1);
o Up to $125,000 for settlement
administration costs (¶3.2.3); and
o Payment of $500,000 PAGA penalty (75%
or $375,000 to the LWDA; and 25% or $125,000 to the Aggrieved Employees).
(¶3.2.5)
·
Defendants
will pay payroll taxes in addition to the GSA. (¶3.1)
·
Plaintiffs shall release Defendants from claims
described herein.
The Parties’ Motion for Final Approval
of Class Action Settlement must be filed by September 22, 2025 and will
be heard on November 12, 2025 at 8:30 am. Failure to file the Parties’ Motion
for Final Approval of Class Action Settlement by this deadline will result in a
continuance of the final approval hearing to the Court’s first available
hearing date, which could be months after the hearing date noted here. Prior to filing the moving papers, Plaintiff
must contact the court staff for Department 9 to obtain a briefing schedule,
which must be included in the caption of the moving papers.
The Parties’ Motion for Final Approval
of Class Action Settlement must include a concurrently lodged single
document that constitutes a [Proposed] Order and Judgment containing among
other things, the class definition, full release language, and names of the any
class members who opted out.
Non-Appearance Case Review is set for September
29, 2025, 8:30 a.m., Department 9 re filing of Motion for Final Approval of
Class Action Settlement.
BACKGROUND
Plaintiffs
Deborah Shaw, Denise Uribe, Sonia LeDoux, Daunte Jones, Susan Tinney, Daniele
Blackwell, and Tavaris McCoy sue their employer, Defendants Kaiser Foundation
Hospitals (“KFH”), Kaiser Foundation Health Plan, Inc. (“KFHP”), Southern
California Permanente Medical Group (“SCPMG”), and The Permanente Medical
Group, Inc. (“TPMG”) (collectively, “Defendants”), for alleged wage and hour
violations. Plaintiffs seek to represent a class of Defendants’ current and
former non-exempt employees who primarily worked from home for some period of
time during the class period.
The
proposed settlement seeks to resolve work-related expense reimbursement claims
that allegedly accrued between the onset of the COVID-19 pandemic when
Defendants instructed or allowed Proposed Class Members to work from home
(March 1, 2020), and April 1, 2022 (the date when Defendants implemented an
updated, universal reimbursement policy for the home office work-related
expenses at issue). The settlement before the Court resolves the reimbursement
claims during this time period for Proposed Class Members brought in three
separate actions: Jones, et al. v. Kaiser Foundation Hospitals, et al.
(Los Angeles Sup. Ct. Case No. 23STCV04104) (the “Jones Action”), Uribe,
et al. v. Southern California Permanente Medical Group (Los Angeles Sup.
Ct. Case No. 22STCV11259) (the “Uribe Action”), and LeDoux v. The
Permanente Medical Group Inc. (Alameda County Sup. Ct. Case No. 22CV019164)
(the “LeDoux Action”).
On
December 3, 2021, Daunte Jones initiated an action against KFH and KFHP in
Alameda County Superior Court (the “Original Jones Action”), which was
dismissed without prejudice on February 14, 2023. On February 24, 2023, Jones,
Danielle Blackwell, Tavaris McCoy, and Susan Tinney initiated a new Jones
Action against SCPMG, KFH, KFHP, and TPMG in Los Angeles Superior Court. On
April 4, 2022, Deborah Shaw and Denise Uribe initiated the Uribe Action
in Los Angeles Superior Court. Although the Uribe Action initially named
SCPMG and Kaiser Permanente International as defendants, the Third Amended
Complaint served on October 26, 2022 only names SCPMG as a defendant. On
October 6, 2022, Sonia LeDoux initiated the LeDoux Action against TPMG
in Alameda County Superior Court.
On October 12, 2022, the parties to
the Original Jones Action participated in a full day mediation with
mediator Jeff Wohl, Esq. which did not result in settlement. On September 14,
2023 and November 15, 2023, all the Parties participated in two full-day
mediations with David Rotman, which ultimately resulted in settlement after
continued discussions. 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 Robin G. Workman
(“Workman Decl.”) as Exhibit F.
On April 2, 2025, the Court issued a
“checklist” to the parties pertaining to deficiencies in the proposed
settlement. In response, the parties filed further briefing, including the
Amended Settlement Agreement attached to the Supplemental Declaration of Robin
G. Workman (“Supp. Workman Decl.”) as Exhibit B. All references below are to
that agreement. Additional signatures are on the copy of the agreement attached
to the Supplemental Declaration James M. Treglio.
Now
before the Court is Plaintiffs’ Motion for Preliminary Approval of the
Settlement.
SETTLEMENT CLASS DEFINITION
·
“Class Members” means all exempt and nonexempt individuals employed in
the State of California by Defendants who primarily worked from home for some
period of time between March 1, 2020 and April 1, 2022 (the “Class Period”). An
employee will be considered to have “primarily worked from home for some period
of time” if, for six consecutive weeks or longer, at least 51% of the time they
worked was worked from home. Employees who were sent home but not expected to
provide active services for Defendants do not qualify as having worked from
home. Defendants have established and has represented that there are 31,028
Class Members who worked 3,048,860 workweeks during the Class Period. The parties
agree that Defendants’ telecommuting, expense reimbursement, and relevant work
location data shall be used to identify Class Members. Employees who
participated in and/or were covered by the Chasmine Shaw v. Kaiser
Foundation Health Plan, Inc. settlement are not Class Members for purposes
of this settlement. It shall be an opt-out class. Moreover, employees in
Defendants’ Executive Region are not Class Members for purposes of this
settlement. (¶1.5)
·
“Class Period” or “Settlement Period” means the period from March 1, 2020
through April 1, 2022. (¶1.12)
·
“Aggrieved Employees” means all exempt and nonexempt individuals employed
in the State of California by Defendants who primarily worked from home for
some period of time between December 2, 2020 and April 1, 2022 (the “PAGA
Period”). An employee will be considered to have “primarily worked from home
for some period of time” if, for six consecutive weeks or longer, at least 51%
of the time they worked was worked from home. Employees who were sent home but
not expected to provide active services for Defendants do not qualify as having
worked from home. Defendants have established and has represented that there
are 30,763 Aggrieved Employees who worked 997,651 pay periods during the PAGA
Period. The parties agree that Defendants’ telecommuting, expense
reimbursement, and relevant work location data shall be used to identify
Aggrieved Employees. Employees who participated in and/or were covered by the Chasmine
Shaw v. Kaiser Foundation Health Plan, Inc. settlement are not Aggrieved
Employees for purposes of this settlement. Moreover, employees in Defendants’
Executive Region (i.e., executives working for Defendants who are identified in
Defendants’ HR data as falling within Defendants’ “Executive Region”) are not
Aggrieved Employees for purposes of this settlement. (¶1.4)
·
“PAGA Period” means the period from December 2, 2020 through April 1,
2022. (¶1.29)
·
“Participating Class Member” means a Class Member who does not submit a
valid and timely Request for Exclusion from the Settlement. (¶1.33)
TERMS OF SETTLEMENT AGREEMENT
The essential terms are as follows:
·
The Gross
Settlement Amount (“GSA”) is $15,000,000, non-reversionary.
(¶3.1)
o Escalator Clause: The parties recognize that
the Gross Settlement Amount is predicated upon the number of Workweeks being
not greater than 15 percent more than 3,053,732 for the period March 1, 2020
through April 1, 2022. If the actual number Workweeks worked by Class Members
during the Class Period is greater than 15% more than 3,053,732, the Gross
Settlement Amount will be increased on a pro rata basis. By way of examples, if
the overage is reached, then if the excess is 16% then the increase in the
Gross Settlement Amount will be 1%; if the excess is 17% then the increase will
be 2%, etc. (¶8)
·
The
Net Settlement Amount (“Net”) ($9,240,000) is the GSA minus the
following:
o Up to $5,000,000
(33 1/3%) for
attorney fees (¶3.2.2);
o Up to $100,000 for litigation costs (Ibid.);
o Up to $35,000 [$5,000 each] for a
Service Payment to each Named Plaintiff (¶3.2.1);
o Up to $125,000 for settlement
administration costs (¶3.2.3); and
o Payment of $500,000 PAGA penalty (75%
or $375,000 to the LWDA). (¶3.2.5)
·
Defendants
will pay payroll taxes in addition to the GSA. (¶3.1)
·
There
is no claim form requirement. (¶3.1)
·
Individual Settlement Payment Calculation: Each
Participating Class Member will be entitled to receive an amount, subject to
any applicable employee payroll taxes, equal to a proportionate share of the
Net Settlement Amount, calculated by (i) the number of the Participating Class
Member’s weeks worked during the Class Period, divided by (ii) the total weeks
worked of all Participating Class Members during the Class Period.
Determination of the number of weeks that a Participating Class Member worked
shall be based on Defendants’ time records. The Parties will consider in good
faith any challenge to the weeks worked supplied by Defendants to the Settlement
Administrator. The Settlement Administrator shall examine all evidence
submitted and make a decision regarding the challenge. The determination of the
Settlement Administrator shall be final. (¶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 PAGA Payments: The Individual PAGA Payments
shall be paid to all Aggrieved Employees (regardless of whether they opt out of
the Settlement Class) who worked for Defendants at any time during the PAGA
Period, based on their proportional number of pay periods worked for Defendants
during the PAGA Period. The Administrator will calculate each Individual PAGA
Payment as follows: The amount of the payment will be calculated on a pro rata
basis by the Settlement Administrator based on an Aggrieved Employee’s
individual pay periods worked during the PAGA Period in relation to the total
pay periods worked by all Aggrieved Employees during the PAGA Period.
(¶3.2.5.1)
o Tax Allocation: Each Participating Class Member’s Individual
Class Payments will be allocated as follows: 30% as wages, 70% as interest and penalties.
(¶3.2.4.1) The Administrator will report the Individual PAGA Payments on IRS
1099 Forms. (¶3.2.5.2)
·
Response Deadline: “Response Deadline”
means 45 days after the Administrator mails Notice to Class Members and
Aggrieved Employees (attached as Exhibit A) (“Class Notices”), 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 objections to the
Settlement. Class Members to whom Class Notices are resent after having been
returned undeliverable to the Administrator shall have an additional 14
calendar days beyond the Response Deadline. (¶1.41) The same deadlines apply to
the submission of workweek disputes. (¶7.6)
o
If the number of valid Requests for Exclusion
identified in the Exclusion List exceeds 2% of the total of all Class Members,
then Defendants may, but need not, elect to withdraw from the Settlement. (¶9)
·
Funding
of Settlement: Within 5 business days of the Effective Date, the
Administrator shall provide Defendants with the documents and information
necessary in order for Defendants to fund the settlement, including the
information that Defendants will need in order to pay their share of the
payroll taxes owed. Defendants shall fully fund the Gross Settlement Amount,
and also fund the amounts necessary to fully pay their share of payroll taxes,
by transmitting the funds to the Administrator no later than 20 business days
after the Effective Date. (¶4.2)
·
Disbursement:
Within 35 business days of the Effective Date, the Administrator will mail
checks for all Individual Class Payments, all Individual PAGA Payments, the
LWDA PAGA Payment, the Administration Expenses Payment, the Class Counsel Fees
Payment, the Class Counsel Litigation Expenses Payment, and the Class
Representative Service Payments. Disbursement of the Class Counsel Fees
Payment, the Class Counsel Litigation Expenses Payment, and the Class
Representative Service Payments shall not precede disbursement of Individual
Class Payments and Individual PAGA Payments. (¶4.3)
·
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. (¶4.3.1) The Settlement
Administrator will mail postcards to Class Members who have not cashed or
negotiated their checks 30 days before those checks expire reminding them of
the expiration deadline. 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 California Unclaimed Property Fund in the name of the Participating Class
Member, thereby leaving no “unpaid residue” subject to the requirements of Code
of Civil Procedure section 384, subdivision (b). (¶4.3.3)
·
The
settlement administrator will be ILYM Group, Inc. (¶7.1)
·
The proposed Settlement
Agreement was submitted to the LWDA on May 7, 2025. (Supp. Workman
Decl., Exhibit E.)
ANALYSIS OF SETTLEMENT AGREEMENT
1. Does a presumption of fairness exist?
1.
Was
the settlement reached through arm’s-length bargaining? On
October 12, 2022, the parties to the Original Jones Action participated
in a full day mediation with mediator Jeff Wohl, Esq. which did not result in
settlement. On September 14, 2023 and November 15, 2023, all the Parties
participated in two full-day mediations with David Rotman, which ultimately
resulted in settlement after continued discussions. (Workman
Decl. ¶8.)
2.
Were
investigation and discovery sufficient to allow counsel and the court to act
intelligently? Class Counsel represents that prior to engaging in settlement negotiations,
the Parties engaged in discovery. The data and documents exchanged included,
among other documents, Defendants’ policies and procedures relating to the
claims alleged, information regarding the amount paid in reimbursement by
Defendants during the Class Period, the number of Proposed Class Members and
Aggrieved Employees, and the number of pay periods and work weeks at issue. (Id.
at ¶10.) Class Counsel litigated the LeDoux matter for over two years, and
had propounded special interrogatories and requests for production of documents
to Defendant, reviewed initial responses, supplemental responses, and reviewed
over 1,400 pages of documents produced. The parties also exchanged confidential
materials to facilitate preparation for the mediation. (Id. at ¶14.) The
Parties in the Jones Alameda Action also pursued formal discovery before
it was dismissed. (Declaration of Reuben D. Nathan ¶30.)
3.
Is
counsel experienced in similar litigation? Yes. Class
Counsel is experienced in class action litigation, including
wage and hour class actions. (Workman
Decl. ¶24;
Declaration of James M. Treglio ¶8; Declaration
of Reuben D. Nathan ¶50; Declaration of Matthew Righetti ¶2.)
4.
What
percentage of the class has objected? This cannot be determined until the fairness hearing. See Weil & Brown, Cal. Practice Guide:
Civil Procedure Before Trial (The Rutter Group 2014) ¶ 14:139.18, (“Should the
court receive objections to the proposed settlement, it will consider and
either sustain or overrule them at the fairness hearing.”).
CONCLUSION: The settlement is entitled to a presumption
of fairness.
2.
Is the settlement fair, adequate, and
reasonable?
1.
Strength
of Plaintiff’s case. “The most important factor is the strength of
the case for plaintiff on the merits, balanced against the
amount offered in settlement.” (Kullar v. Foot Locker Retail, Inc.
(2008) 168 Cal.App.4th 116, 130.) Here,
Class Counsel has provided information, summarized below, regarding the estimated
values of the class claims alleged:
|
Violation |
Maximum Exposure |
|
Reimbursement
Claim [$1,200
per member x 31,028 members] |
$36,033,600 |
|
PAGA
Penalties |
$500,000 |
|
Total |
$36,533,600 |
(Workman
Decl. ¶¶15-16; Nathan Decl. ¶40;
see also Supp. Memo ISO Prelim at pp. 6-10.)
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. Plaintiffs’
counsel estimated Defendant’s maximum damages at $36,533,600. Plaintiffs’ counsel obtained a $15,000,000 non-reversionary settlement. This is approximately
41.1% of Plaintiffs’ estimated maximum recovery which, given the uncertain
outcomes, is within the “ballpark” of reasonableness.
The settlement amount, if reduced by the
requested deductions, leaves approximately $9,240,000 to be divided among
approximately 31,028 class members. Assuming full participation, the resulting
payments will average approximately $297.79 per class member.
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. 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. The class members’ reactions will not be known until
they receive notice and are afforded an opportunity to object, opt-out and/or
submit claim forms. This factor becomes
relevant during the fairness hearing.
CONCLUSION: The settlement can be preliminarily deemed “fair,
adequate, and reasonable.”
3.
Scope of the release
Releases and
Preclusion of Claims. Upon the date that Defendants fully fund the Settlement,
and except as to the right to enforce the terms and conditions of the
Settlement: (¶5)
·
Release by Participating Class Members: All Participating
Class Members fully release Defendants and their present and former affiliates
and all of their officers, directors, employees, agents, servants, registered
representatives, attorneys, insurers, successors and assigns, and any other persons
acting by through, under or in concert with any of them (“Releasees”), from any
and all claims, debts, liabilities, demands, obligations, penalties, premium
pay, guarantees, costs, expenses, attorney’s fees, damages, actions or causes
of action of whatever kind or nature, alleged in the Fourth Amended Complaint
under any legal theory under federal and state law for any alleged failure to
reimburse business expenses, for the period from March 1, 2020 through April 1,
2022. This Release shall include all claims and theories regarding
reimbursement of expenses arising under any applicable laws and legal theories,
including under the California Labor Code, the California Business and
Professions Code, the applicable Wage Orders, and the applicable regulations.
For example, and without limiting the foregoing, the release shall include
expense claims to the extent they exist under Labor Code sections 201, 202,
203, 204, 226, and 2802, claims under Business and Professions Code section
17200 et seq., and claims for related expense claim penalties, interest, and
attorneys’ fees based on alleged violations of the above Labor Code provisions.
(¶5.1)
·
Release by Aggrieved Employees: All Aggrieved Employees
fully release and discharge the Releasees from any and all claims under the
PAGA premised on the facts and/or allegations in the Fourth Amended Complaint
that arose during the PAGA Period (the “PAGA Release”). It is understood and
acknowledged that Aggrieved Employees entitled to a share of the PAGA Penalties
will be issued payment for their share of the PAGA Penalties and will not have
the opportunity to opt out of, or object to, the PAGA Release as set forth in
this Paragraph. The PAGA Release is binding upon all Aggrieved Employees upon
Court approval and payment of the PAGA Penalties. Further, the Aggrieved
Employees are bound by the PAGA Release regardless of whether they cash the
check with their PAGA Payment. (¶5.2)
o “PAGA
Notice” means any and all letters submitted by Plaintiffs to Defendants and the
LWDA in connection with the Actions, providing notice pursuant to Labor Code
section 2699.3, subdivision (a). This includes the letters submitted by
Plaintiffs on the following dates: December 2, 2021, February 27, 2022, October
18, 2022, and December 21, 2022. (¶1.31)
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
5.2 of this Agreement and are eligible for and will receive an Individual PAGA
Payment. (¶7.5.4)
·
“Released Parties” means Defendants and their present and
former affiliates and all of their officers, directors, employees, agents,
servants, registered representatives, attorneys, insurers, successors and
assigns, and any other persons acting by through, under or in concert with any
of them.
(¶1.39)
·
Named Plaintiffs will also
provide a general release and CC § 1542 waiver. (¶5.3)
o With the exception of
Plaintiff LeDoux, who does not release the claims asserted in the In Re:
Kaiser Vaccine Exemption Cases, JCCP No. 5274. (Id.)
4.
May conditional class certification be
granted?
1.
Standards
A detailed analysis of the elements required
for class certification is not required, but it is advisable to review each
element when a class is being conditionally certified (Amchem Products, Inc. v. Winsor (1997) 521 U.S. 620, 622-627.) The trial court can appropriately utilize a
different standard to determine the propriety of a settlement class as opposed
to a litigation class certification.
Specifically, a lesser standard of scrutiny is used for settlement
cases. (Dunk at 1807, fn 19.)
Finally, the Court is under no “ironclad requirement” to conduct an
evidentiary hearing to consider whether the prerequisites for class
certification have been satisfied. (Wershba
at 240.)
2.
Analysis
a.
Numerosity. There are approximately 31,028 class members. (Memo ISO
Prelim at 24:4-5.) This element is met.
b.
Ascertainability. The
proposed class is defined above. The
class definition is “precise, objective and presently ascertainable.” (Sevidal
v. Target Corp. (2010) 189 Cal.App.4th 905, 919.) The class members are
identifiable from Defendants’ records. (Memo
ISO Prelim at 24:4.)
c.
Community
of interest. “The community of interest requirement
involves three factors: ‘(1) predominant common questions of law or fact; (2)
class representatives with claims or defenses typical of the class; and (3)
class representatives who can adequately represent the class.’” (Linder
v. Thrifty Oil Co. (2000) 23 Cal.4th 429, 435.)
As to commonality, Plaintiffs allege the answer to the
question Plaintiffs present applies with equal force to all Class Members.
Plaintiffs allege that Defendants uniformly failed to reimburse Class Members
for work-related expenses incurred for home offices when, due to the COVID-19
pandemic, Defendants ordered Class Members to work from home. Plaintiffs allege
that although Defendants required Class Members to work from home, that, during
the Class Period, Defendants did not reimburse Class Members for all
work-related expenses. (Memo ISO Prelim 24:22-25:2.)
As to typicality, Plaintiffs allege that
their claims are typical of those of the Settlement Class Members because
Plaintiffs and the Class Members operated under the same policies and
procedures that applied to during the class period. (Id. at 25:3-10.)
As to adequacy, each Plaintiff represents
that he or she is aware of the duties of serving as class representative and
has participated in the litigation. (See Declarations of Deborah
Shaw, Denise Uribe, Sonia LeDoux, Daunte Jones, Susan Tinney, Daniele
Blackwell, Tavaris McCoy.)
d.
Adequacy
of class counsel. As indicated above, Class Counsel has shown
experience in class action litigation, including wage and hour class actions.
e.
Superiority. Given
the relatively small size of the individual claims, a class action appears to
be superior to separate actions by the class members.
CONCLUSION: The class may be conditionally certified
since the prerequisites of class certification have been satisfied.
5.
Is the notice proper?
1.
Content
of class notice. The proposed notice is attached to the Settlement
Agreement as Exhibit A. Its content appears to be acceptable. It includes information such as: a summary of
the litigation; the nature of the settlement; the terms of the settlement
agreement; the proposed deductions from the gross settlement amount (attorney
fees and costs, enhancement awards, and administration costs); the procedures
and deadlines for participating in, opting out of, or objecting to, the
settlement; the consequences of participating in, opting out of, or objecting
to, the settlement; and the date, time, and place of the final approval hearing.
Notice will be given in English. (¶1.11) It is Plaintiffs’ Counsels’ understanding
that, given Defendants’ job requirements, specifically that Class Members must
be able to communicate with the public, Class Members must be able to speak
English. It is for this reason that the Parties agreed that the Class Notice
will only be provided in English. (Supp. Workman Decl. ¶8.)
2.
Method
of class notice.
Not later than 15 business days after
Preliminary Approval, Defendants will deliver the Class Data to the
Administrator, in the form of a spreadsheet. (¶4.1) Using best efforts to
perform as soon as possible, and in no event later than 25 business days after
preliminary approval of the Agreement, the Administrator will send to all Class
Members identified in the Class Data, via first-class USPS mail, the Class
Notice. Before mailing Class Notices,
the Administrator shall update Class Member addresses using the National Change
of Address database. (¶7.4.1)
Not later than five
business days after the Administrator’s receipt of any Class Notice returned by
the USPS as undelivered, the Administrator shall re-mail the Class Notice using
any forwarding address provided by the USPS. If the USPS does not provide a
forwarding address, the Administrator shall conduct a Class Member Address
Search, and re-mail the Class Notice to the most current address obtained. The
Administrator has no obligation to make further attempts to locate or send
Class Notice to Class Members whose Class Notice is returned by the USPS a
second time. (¶7.4.2)
The deadlines for
Class Members’ written objections, challenges to workdays, and Requests for
Exclusion will be extended an additional 14 days beyond the 45 days otherwise
provided in the Class Notice for all Class Members whose notice is remailed. (¶7.4.3)
3.
Cost
of class notice. As indicated above, settlement administration
costs are estimated not to exceed $125,000. Prior to the time of the final fairness hearing, the
administrator must submit a declaration attesting to the total costs incurred
and anticipated to be incurred to finalize the settlement for approval by the
Court.
6. Attorney fees and costs
CRC rule 3.769(b) states: “Any
agreement, express or implied, that has been entered into with respect to the
payment of attorney fees or the submission of an application for the approval
of attorney fees must be set forth in full in any application for approval of
the dismissal or settlement of an action that has been certified as a class
action.”
Ultimately, the award of attorney
fees is made by the court at the fairness hearing, using the lodestar method
with a multiplier, if appropriate. (PLCM Group, Inc. v. Drexler (2000) 22
Cal.4th 1084, 1095-1096; Ramos v.
Countrywide Home Loans, Inc. (2000) 82 Cal.App.4th 615, 625-626; Ketchum III v. Moses (2000) 24 Cal.4th 1122,
1132-1136.) Despite any agreement by the
parties to the contrary, “the court ha[s] an independent right and
responsibility to review the attorney fee provision of the settlement agreement
and award only so much as it determined reasonable.” (Garabedian v. Los Angeles Cellular Telephone Company (2004) 118
Cal.App.4th 123, 128.)
The question of whether Class Counsel is
entitled to $5,000,000 (33 1/3%) in attorney fees will be addressed
at the fairness hearing when class counsel brings a noticed motion for attorney
fees. Class counsel must provide the court with billing information so that it
can properly apply the lodestar method and must indicate what multiplier (if
applicable) is being sought as to each counsel.
Fee Split: Plaintiffs’
Counsel agree to the following allocation of attorneys’ fees awarded from the
common fund: Because the Righetti Glugoski, P.C, and Nathan & Associates,
A.P.C. brought an action against the KFHP and KFH entities, Plaintiffs’ Counsel
agree that they would receive 63.5% of the $5,000,000 attorneys’ fee award, or
$3,175,000. The firms will divide this amount 1/2 to Righetti Glugoski, P.C.,
and 1/2 to Nathan & Associates. Because the Potter Handy, LLP firm brought
an action against SCPMG, Plaintiffs’ Counsel agree to allocate to Potter Handy
15.8%. of the $5,000,000 attorneys’ fee award, or $790,000. Because the Workman
Law Firm, PC brought an action against TPMG, Plaintiffs’ Counsel agree to
allocate 20.7% of the $5,000,000 attorneys’ fee award, or $1,035,000, to the
Workman Law Firm. (Supp. Workman Decl. ¶¶9-11.) All Plaintiffs acknowledged and
agreed to the fee agreed to by Plaintiffs’ Counsel. (Id. at ¶12.)
Class Counsel should also be
prepared to justify the costs sought (capped at $100,000) by detailing how they were incurred.
7.
Incentive Awards
The Settlement Agreement provides
for enhancement awards of up to $5,000 each to the seven named Plaintiffs.
In connection with the final fairness hearing, named Plaintiffs each must
submit a declaration attesting to why he or she should be entitled to an
enhancement award in the proposed amount.
The named Plaintiff must explain why he or she “should be compensated
for the expense or risk she 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 plaintiff, 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.)
The Court will decide the issue of the enhancement awards at the time of
final approval.
CONCLUSION AND ORDER
The Parties’ Motion for Preliminary Approval of
Class Action Settlement is GRANTED as the settlement is fair, adequate, and
reasonable.
The essential terms of the Settlement Agreement are:
·
The
Gross Settlement Amount (“GSA”) is $15,000,000, non-reversionary.
(¶3.1)
·
The
Net Settlement Amount (“Net”) is the GSA minus the following:
o Up to $5,000,000
(33 1/3%) for
attorney fees (¶3.2.2);
o Up to $100,000 for litigation costs (Ibid.);
o Up to $35,000 [$5,000 each] for a
Service Payment to each of seven Named Plaintiffs (¶3.2.1);
o Up to $125,000 for settlement
administration costs (¶3.2.3); and
o Payment of $500,000 PAGA penalty (75%
or $375,000 to the LWDA; and 25% or $125,000 to the Aggrieved Employees).
(¶3.2.5)
·
Defendants
will pay payroll taxes in addition to the GSA. (¶3.1)
·
Plaintiffs shall release Defendants from claims
described herein.
The Parties’ Motion for Final Approval
of Class Action Settlement must be filed by September 22, 2025 and will
be heard on November 12, 2025 at 8:30 am. Failure to file the Parties’ Motion
for Final Approval of Class Action Settlement by this deadline will result in a
continuance of the final approval hearing to the Court’s first available
hearing date, which could be months after the hearing date noted here. Prior to filing the moving papers, Plaintiff
must contact the court staff for Department 9 to obtain a briefing schedule,
which must be included in the caption of the moving papers.
The Parties’ Motion for Final Approval
of Class Action Settlement must include a concurrently lodged single
document that constitutes a [Proposed] Order and Judgment containing among
other things, the class definition, full release language, and names of the any
class members who opted out.
Non-Appearance Case Review is set for September
29, 2025, 8:30 a.m., Department 9 re filing of Motion for Final Approval of
Class Action Settlement.
The Judicial
Assistant is to give notice to Counsel for Plaintiff who is ordered to give
further and formal notice to all parties and file proof of service of such
within 10 days.
IT IS SO
ORDERED.
DATED: June
11, 2025 ___________________________
Elaine
Lu
Judge
of the Superior Court