Judge: Elaine Lu, Case: 23STCV30498, Date: 2025-04-30 Tentative Ruling

Case Number: 23STCV30498    Hearing Date: April 30, 2025    Dept: 9

Counsel must address the following before the Court will grant preliminary approval:

The total settlement fund is One Hundred Thirty-Six Thousand Dollars and Zero Cents ($136,000.00), which is the Gross Settlement Amount (i.e., $100,000.00) plus the total amount that Defendant has previously paid to employees who signed individual settlement agreements in exchange for their release of the claims alleged in the Action (i.e., $36,000.00). (Genish Decl., ¶39.)  The Settlement Agreement provides that attorney’s fees are calculated as 1/3 of this “total fund.”  

However, the gross settlement fund available to class members covered by the Settlement Agreement is only $100,000, which means that class members in this settlement will be receiving a smaller share of the common fund because nearly half of the common fund will be going to attorneys’ fees.  Why should this be deemed fair to class members?

Looking at this another way, the total amount that Defendant paid to the 39 employees who signed individual settlement agreements in exchange for their release of the claims alleged in the Action is $36,000. Their average settlement recovery is approximately $923 [$36,000 / 39].

The average class member recovery for 41 class members, assuming the current deductions, is $674.80 [$27,666.67 Net / 41].  Why is it fair to class members to shoulder the payment of all attorney’s fees – including the benefit that the 39 individually settling employees reaped from Plaintiff’s Counsel filing the action?

Alternatively, if Counsel only receives a third of the GSA instead of a third of the total amount paid by Defendant, the average class member recovery would be $967.48 [$39,666.67 Net / 41], which is in line with what the individually settling employees recovered.

The parties must be prepared to explain how the current Settlement Agreement is fair to Class Members and to discuss alternative ways to structure the catalyst payment to Plaintiffs’ Counsel.