Judge Holly J. Fujie, Case 21STCV02635 2022-10-11 Tentative Ruling

DEPARTMENT 56 JUDGE HOLLY J. FUJIE, LAW AND MOTION RULINGS. The court makes every effort to post tentative rulings by 5.00 pm of the court day before the hearing. The tentative ruling will not become the final ruling until the hearing [see CRC 3.1308(a)(2)], and are also available in the courtroom on the day of the hearing [see CRC 3.1308(b)]. If the parties wish to submit on the tentative ruling and avoid a court appearance, all counsel must agree and choose which counsel will give notice. That counsel must 1) call Dept 56 by 8:30 a.m. on the day of the hearing (213/633-0656) and state that all parties will submit on the tentative ruling, and 2) serve notice of the ruling on all parties. If any party declines to submit on the tentative ruling, then no telephone call is necessary and all parties should appear at the hearing in person or by Court Call. Court reporters are not provided, and parties who want a record of motions and other proceedings must hire a privately retained certified court reporter.

MOVING PARTY: Plaintiff Hector Ferrer ("Ferrer") and Francisco Ortiz Castor (“Castor”) (collectively, “Plaintiffs”)

The Court has considered the moving papers. No opposition papers were filed. Any opposition papers were required to have been filed and served at least nine court days before the hearing pursuant to California Code of Civil Procedure (“CCP”) section 1005, subdivision (b).

This action arises out of an employment relationship. On January 21, 2021, Ferrer filed a complaint (the “Complaint”) on behalf of himself and all other aggrieved employees asserting a cause of action for civil penalties pursuant to the Private Attorneys General Act (“PAGA”).

On September 16, 2022, Plaintiffs filed a motion for preliminary approval of class action settlement (the “Motion”) indicating that Plaintiffs have reached a settlement agreement (the “Settlement Agreement”) with Defendant United Site Services of California, Inc. (“USS”). The Motion requests that the Court: (1) certify a class for settlement purposes only; (2) grant leave to file a first amended complaint (the “FAC”) for purposes of settlement; (3) appoint Ferrer and Castor as class representatives for settlement purposes only; (4)approve Kane Moon (“Moon”) of Moon & Yang, APC; Joseph Lavi (“Lavi”) of Lavi & Ebrahimian, LLP; and Sahag Majarian, II (“Majarian”) of Law Offices of Sahag Majarian, II as class counsel; (5) approve the notice of class action settlement and hearing date for court approval; and (6) set a final approval and settlement fairness hearing.

The proposed FAC seeks to add Castor as a Plaintiff to this action. Castor previously filed a case alleging similar claims in a court in San Diego; during the negotiation of the Settlement, it was agreed that his claims be combined with Ferrer’s and adjudicated in one action. (See Declaration of Melissa A. Heuther (“Heuther Decl.”) ¶¶ 5-8, Exhibit 3.)

Approval of class action settlements occurs in two steps. First, the court preliminarily approves the settlement, and the class members are notified as directed by the court. (Cal. Rules of Court (“CRC”), r. 3.769(c), (f); Cellphone Termination Fee Cases (2009) 180 Cal.App.4th 1110, 1118.) Second, the court conducts a final approval hearing to inquire into the fairness of the proposed settlement. (CRC, r. 3.769(e); Cellphone Termination Fee Cases, supra, 180 Cal.App.4th at 1118.) Any party to a settlement agreement may serve and file a written notice of motion for preliminary approval of the settlement. (CRC, r. 3.769(c).) The settlement agreement and proposed notice to class members must be filed with the motion, and the proposed order must be lodged with the motion. (Id.)

The trial court has broad discretion to determine whether the settlement is fair. (Cellphone Termination Fee Cases, supra, 180 Cal.App.4th at 1117.) In determining whether to approve a class settlement, the court’s responsibility is to “prevent fraud, collusion or unfairness to the class” through settlement and dismissal of the class action because the rights of the class members, and even named plaintiffs, “may not have been given due regard by the negotiating parties.” (Consumer Advocacy Group, Inc. v. Kintetsu Enterprises of America (2006) 141 Cal.App.4th 46, 60.)

Pursuant to the proposed Settlement, the Parties agree to settle this matter in a total amount of $1,175,000 (the “Gross Settlement Amount” or “GSA”). (Declaration of Melissa A. Huether (“Huether Decl.”), Exhibit 1.) The Parties have agreed to a disbursement of the GSA as follows: $80,000 allocated to PAGA penalties, 75 percent of which ($60,000) to be paid to the Labor and Workforce Development Agency (“LWDA”) with the remaining 25 percent to be divided among the PAGA Aggrieved Employees as defined under the Settlement. (See id.)

Before the court may approve the settlement, the settlement class must satisfy the normal prerequisites for class action. (Amchem. Products, Inc. v. Windsor (1997) 521 U.S. 591, 625-27.) The party advocating class treatment must demonstrate the: (1) existence of an ascertainable and sufficiently numerous class; (2) well-defined community of interest; and (3) substantial benefits from certification that render proceeding as a class superior to the alternatives. (Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004, 1021.)

In determining the existence of an ascertainable and sufficiently numerous class, courts examine the class definition, the size of the class, and the means of identifying class members. (Miller v. Woods (1983) 148 Cal.App.3d 862, 873.) Class members are ascertainable when they can be readily identified without unreasonable expense or time by reference to official or business records. (Sevidal v. Target Corp. (2010) 189 Cal.App.4th 905, 919.) The ascertainability requirement is satisfied if the potential class members may be identified without unreasonable expense or time and given notice of the litigation, and the proposed class definition offers an objective means of identifying those persons who will be bound by the results of the litigation. (Id. at 919.)

Plaintiff contends that the Class consists of a proposed class of approximately 1,455 individuals which is ascertainable based on USS’s regular business records. The Court finds that Plaintiff has sufficiently established the existence of an ascertainable and sufficiently numerous class.

The community of interest component embodies 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. (Sav-On Drug Sotres, Inc. v. Superior Court (2004) 34 Cal.4th 319, 326.) The “ultimate question” for predominance is whether the issues which may be jointly tried, when compared with those requiring separate adjudication, are so numerous or substantial that the maintenance of a class action would be advantageous to the judicial process and to the litigants. (Duran v. U.S. Bank Nat’l Assn. (2014) 59 Cal.4th 1, 28.)

As a general rule, if the defendant’s liability can be determined by facts common to all members of the class, a class will be certified even if the members must individually prove their damages. (Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004, 1021-22.) However, class treatment is not appropriate if every member of the alleged class would be required to litigate numerous and substantial questions determining his individual right to recover following the class judgment determining issues common to the purported class. (City of San Jose v. Superior Court (1974) 12 Cal.3d 447, 459.)

In order to be deemed an adequate class representative, the class action proponent must show it has claims or defenses that are typical of the class, and it can adequately represent the class. (J.P. Morgan & Co. v. Superior Court (2003) 113 Cal.App.4th 195, 212.) Where there is a conflict that goes to the very subject matter of the litigation, it will defeat a party’s claim of class representative status. (Id.) Thus, a finding of adequate representation will not be appropriate if the proposed class representative’s interests are antagonistic to the remainder of the class. (Id.)

The Motion contends that the employment practices at issue in this case regarding the propriety of several of USS’s wage and pay policies. (See Motion 20:23-21:2.) Plaintiffs’ claims are typical of those of the class members, as they were all employed by Defendant and injured by Defendant’s common policies. (Motion 17:6-19.) Ferrer and Castor have both diligently participated in the prosecution of this action, including during settlement negotiations and mediation. (See Huether Decl. ¶ 35.) Additionally, neither Ferrer nor Castor have interests which are adverse to those of other class members. (Id.)

Given that there are approximately 1,455 individuals with potential claims against Defendant and such claims involve common questions of law, the Court finds there are substantial benefits from class certification that render proceeding as a class superior to the alternatives.

The Court finds that Plaintiffs have satisfied the prerequisites for class certification.

In determining whether a settlement is fair, the Court considers all relevant factors, including the strength of the plaintiffs’ case, the risk, expense, complexity and likely duration of further litigation, the risk of maintaining class action status through trial, the amount offered in settlement, the extent of discovery completed and the stage of the proceedings, the experience and views of counsel, the presence of a governmental participant, and the reaction of the class members to the proposed settlement. (Kullar v. Foot Locker Retail, Inc. (2008) 168 Cal.App.4th 116, 128.) The recovery should represent a reasonable compromise, given the magnitude and apparent merit of the claims being released, discounted by the risks and expenses of attempting to establish and collect on those claims by pursuing the litigation. (Id. at 129.) Nevertheless, the strength of the case on the merits for the plaintiffs is the most important factor, balanced against the amount offered in settlement. (Id. at 130.)

The fact that a proposed settlement may only amount to a fraction of the potential recovery does not, in and of itself, mean that the proposed settlement is grossly inadequate and should be disapproved. (City of Detroit v. Grinnell Corporation (2d Cir. 1974) 495 F.2d 448, 455.) The test is not the maximum amount plaintiff might have obtained at trial on the complaint but, rather, whether the settlement is reasonable under all of the circumstances. (Wershba v. Apple Computer, Inc. (2001) 91 Cal.App.4th 224, 250.)

A presumption of fairness exists where: (1) the settlement is reached through arm’s-length bargaining; (2) investigation and discovery are sufficient to allow counsel and the court to act intelligently; (3) counsel is experienced in similar litigation; and (4) the percentage of objectors is small. (Cellphone Termination Fee Cases (2009) 180 Cal.App.4th 1110, 1118.)

Plaintiffs’ counsel has analyzed evidence from class members and evidence produced by USS. (See Huether Decl. ¶¶9, 12-23 (Moon Decl. ¶¶ 9-10, 17-18.) The Parties participated in mediation with an experienced wage and hour mediator on March 15, 2022 which featured analysis by counsel and Plaintiffs’ expert witness. (Huether Decl. ¶ 11.) The negotiation of the Settlement was adversarial at all times. (Id.) Plaintiffs and counsel agreed that given the risk of litigation and benefit of immediately receiving settlement funds made entering into the Settlement was a prudent decision. (See Huether Decl. ¶ 12.) Plaintiffs’ counsel has over 20 years of experience. (See Huether Decl. ¶ 31.)

The Court finds that it appears a presumption of fairness of the Settlement exists. The Court notes that because the percentage of objectors cannot be determined until the fairness hearing and final approval, the Court’s finding of a presumption of fairness is provisional.

If the court has certified the action as a class action, notice of the final approval hearing must be given to the class members in the manner specified by the court. (CRC, r. 3.769(f).) The notice must contain an explanation of the proposed settlement and procedures for class members to follow in filing written objections to it and in arranging to appear at the settlement hearing and state any objections to the proposed settlement. (Id.)

(1) A brief explanation of the case, including the basic contentions or denials of the parties;

(2) A statement that the court will exclude the member from the class if the member so requests by a specific date;

(3) A procedure for the member to follow in requesting exclusion from the class;

(4) A statement that the judgment, whether favorable or not, will bind all members who do not request exclusion; and

(5) A statement that any member who does not request exclusion may, if the member so desires, enter an appearance through counsel.

Plaintiffs’ proposed notice (the “Notice”) contains each of the requirements set forth by CRC rule 3.766(d). (See Huether Decl, Exhibit 1 at Exhibit A.)

Labor Code section 2699, subdivision (l)(2) provides that the superior court shall review and approve any settlement of any civil action filed pursuant to PAGA. (Lab. Code § 2699, subd. (l)(2).) Section 2699, subdivision (l)(2) requires submission of the proposed settlement to the Labor Workforce and Development Agency (the “LWDA”) at the same time it is submitted to the court. (Id.) Any settlement of any civil action filed under PAGA must be “fair and adequate in view of the purposes and policies of the statute.” (Flores v. Starwood Hotels & Resorts Worldwide, Inc. (C.D. Cal. 2017) 253 F.Supp.3d 1074, 1077.) Seventy five percent of all PAGA penalties must be paid to the LWDA and the remaining 25 percent must be paid to the aggrieved employees. (Lab. Code, § 2699, subd. (i).)

Based on the terms of the Settlement and allocation of the GSA to the LDWA as described above, the Court finds that the PAGA Settlement complies with Labor Code section 2699, subdivision (i).

Plaintiffs seek to be appointed as the class representatives in this action. As Plaintiffs’ claims are typical of the class and Plaintiffs have no conflicts and can adequately represent the Class, the Court approves the request and appoints Ferrer and Castor as class representatives.

The Court finds that Plaintiffs’ counsel is sufficiently experienced in litigating wage and hour and employment class actions. (See Huether Decl. ¶ 31; Declaration of Allen Feghali (“Feghali Decl.”) ¶¶ 5-17.)

Any agreement, express or implied, that has been entered into with respect to the payment of attorney’s 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. (CRC, r. 3.769(b).)

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, 1095-96.) In common fund cases, the court may utilize the percentage method, cross-checked by the lodestar. (Laffitte v. Robert Half Int’l, Inc. (2016) 1 Cal.5th 480, 503.) Despite any agreement by the parties to the contrary, the court has an independent right and responsibility to review the attorney fees 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.)

Plaintiffs seek preliminary approval of attorney’s fees of up to one-third of the GSA in the amount of $391,666.97 and litigation costs of up to $20,000. The Court preliminarily approves these amounts, pending clarification and confirmation that the amounts sought are consistent with the amounts specified in the Settlement. The Court notes that the actual amount of attorney’s fees and litigation costs awarded to counsel will be determined at the final approval hearing. Counsel should submit evidence justifying the requested attorney’s fees and litigation costs with the motion for final approval of the settlement.

The Motion seeks preliminary approval of an incentive award of $9,900 to Ferrer and Castor individually for acting as class representatives in this action. The Court preliminarily approves this amount.

Based on the foregoing, the Court GRANTS the Motion for preliminary approval of class action settlement in its entirety. The Court sets a hearing for the final approval of the Settlement on February 21, 2023 at 8:30 a.m. in this department. Plaintiffs are ordered to file the proposed FAC within five court days.

In consideration of the current COVID-19 pandemic situation, the Court¿strongly¿encourages that appearances on all proceedings, including this one, be made by LACourtConnect if the parties do not submit on the tentative.¿¿If you instead intend to make an appearance in person at Court on this matter, you must send an email by 2 p.m. on the last Court day before the scheduled date of the hearing to¿SMC_DEPT56@lacourt.org¿stating your intention to appear in person.¿ The Court will then inform you by close of business that day of the time your hearing will be held. The time set for the hearing may be at any time during that scheduled hearing day, or it may be necessary to schedule the hearing for another date if the Court is unable to accommodate all personal appearances set on that date.¿ This rule is necessary to ensure that adequate precautions can be taken for proper social distancing.

Parties who intend to submit on this tentative must send an email to the Court at SMC_DEPT56@lacourt.org as directed by the instructions provided on the court website at www.lacourt.org. If the department does not receive an email and there are no appearances at the hearing, the motion will be placed off calendar.

Hon. Holly J. Fujie

Judge of the Superior Court