Judge Holly J. Fujie, Case Number: 23STCV20323, Date: 2024-07-26 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: JORGE L. VASQUEZ HERNANDEZ, individually, and on behalf of all others similarly situated (“Plaintiff”)

On August 24, 2023, Plaintiff brought this action against Defendants CALIBER AEROSPACE, LLC and EMPLOYER SOLUTIONS STAFFING GROUP II, LLC (collectively, “Defendants”) for civil penalties under the Private Attorneys General Act of 2004, California Labor Code §§ 2698 et seq. (“PAGA”) stemming from Defendants’ alleged violations of the Labor Code. Upon joint stipulation seeking leave of court to file Plaintiff’s First Amended Complaint (“FAC”), which was granted, Plaintiff filed the operative FAC asserting the following causes of action: 1) Violation of Labor Code §§ 204, 246, 510, 1194, 1198 (Failure to Pay All Wages); 2) Violation of Labor Code §§ 226.7, 512 (Failure to Provide Meal Periods); 3) Violation of Labor Code § 226.7 (Failure to Provide Rest Periods); 4) Violation of Labor Code § 226, (Failure to Keep Accurate Itemized Wage Statements); 5) Violation of Labor Code §§ 201-203 (Failure to Pay Wages Upon Termination of Employment); 6) Violation of Labor Code § 2802 (Failure to Reimburse for Necessary Expenditures); 7) Violation of Bus. & Prof. Code § 17200, et seq. (Unfair Business Practices); and 8) Violation of the Private Attorneys General Act, Labor Code sections 2698, et seq.

On May 1, 2024, Plaintiff filed the instant motion for preliminary approval of class and PAGA representative action settlement (the “Motion”). No opposition or reply has been filed.

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, rule 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. (Cal. Rules of Court, rule 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.” (Cal. Rules of Court, rule 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 [quoting Dunk v. Ford Motor Co. (1996) 48 Cal.App.4th 1794, 1801].) 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.)

A class action is proper “when the question is one of a common or general interest, of many persons, or when the parties are numerous, and it is impracticable to bring them all before the court.” (Code Civ. Proc., § 382.) The party seeking certification bears the burden of establishing the existence of an ascertainable class and a well-defined community of interest among class members. (Dunk v. Ford Motor Co. (1996) 48 Cal.App.4th 1794, 1806.)

The proposed class consists of approximately 82 class members, all of whom may be identified by reference to Defendants’ records that pertain to non-exempt status and dates of employment. (Motion, p. 9; Class Action and PAGA Settlement Agreement (“Settlement”), ¶ 4.1.) Class members share a common interest in determining whether Defendants violated wage and hour requirements under state and related federal law, including the following issues: i. Whether or not Defendants paid proper wages to the Class; ii. Whether or not Defendants provided meal periods to the Class; iii. Whether or not Defendants provided rest periods to the Class; iv. Whether or not Defendants paid compensation timely upon separation of employment to former Class Members; v. Whether or not Defendants paid compensation timely throughout Class Members’ employment; vi. Whether or not Defendants provided accurate itemized wage statements to the Class; vii. Whether or not waiting-time penalties are available to the Class for violation of California Labor Code § 203; viii. Whether or not Defendants reimbursed for necessary business expenses pursuant to California Labor Code § 2802; ix. Whether or not Defendants engaged in unlawful or unfair business practices affecting the Class in violation of California Business and Professions Code §§ 17200-17208; and x. Whether or not Plaintiff and the Class are entitled to penalties pursuant to PAGA. (Declaration of Lilit Tunyan in Support of Plaintiff’s Motion (“Tunyan Decl.”), ¶ 37.) Thus, based on the commonality of issues and numerosity of class members, class resolution is a superior method of adjudication.

Plaintiff’s claims, as alleged in the FAC, are typical of the class and arise from the same common questions, and Plaintiff is an adequate representative whose interests align with the class. Like other class members, Plaintiff was employed by Defendants in a non-exempt position during the proposed class period, and Plaintiff claims that he was subject to the same policies alleged to have impacted the entire class. (Tunyan Decl., ¶ 36.) Plaintiff alleges that he and other class members share the same claims stemming from Defendants’ alleged violations of the Labor Code.

Additionally, the proposed class counsel is qualified to represent the class. Plaintiff’s counsel is experienced in wage and hour class action litigation and has no conflicts of interest with absent class members. (Tunyan Decl., ¶¶ 20-26, 39.)

A court must review and approve any PAGA penalties sought as part of a proposed settlement agreement. (Lab. Code § 2699, subd. (l).) “[C]ivil penalties recovered by aggrieved employees shall be distributed as follows: 75 percent to the Labor and Workforce Development Agency for enforcement of labor laws and education of employers and employees about their rights and responsibilities under this code, to be continuously appropriated to supplement and not supplant the funding to the agency for those purposes; and 25 percent to the aggrieved employees.” (Lab. Code, § 2699, subd. (i).) The PAGA penalties here comply with this requirement. (Settlement, p. 9, ¶ 3.2.5.) Accordingly, the PAGA penalties are appropriate, subject to a finding that the settlement is fair.

Additionally, a proposed PAGA settlement must be submitted to the Labor and Workforce Development Agency (“LWDA”) at the same time that it is submitted to the court for review and approval. (Lab. Code § 2699, subd. (l)(2).) Here, counsel for Plaintiff provided a copy of the notice of the PAGA settlement to the LWDA through the online submission portal. (Tunyan Decl., ¶¶ 42-43; Exh. 2.) Thus, Plaintiff demonstrated compliance with Labor Code section 2699(l)(2).

Settlement of a class action requires court approval to prevent fraud, collusion, or unfairness to the class. (Dunk, supra, 48 Cal.App.4th at 1800-1801.) In making the fairness determination, “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.” (Id. at p. 1802.)

The proposed settlement was reached through a mediation session with Michael Young, Esq., “a highly experienced and well-regarded mediator for wage and hour class action litigation,” during which “the Parties discussed at length the burdens and risks of continuing with the litigation as well as the merits of the claims and defenses.” (Tunyan Decl., ¶ 7.) In connection with the mediation, the parties engaged in substantial discovery and investigation, including, inter alia, “the exchange of informal data and discoverable information in preparation for the settlement negotiations. The Parties have analyzed payroll and other data pertaining to Plaintiff and the Class during the relevant Settlement Period, including but not limited to the numbers of former and current members of the Class, average workweeks, sample size time and pay records and average rate of hourly pay, wage and hour policies.” (Id. ¶ 5.) The settlement was therefore reached through arm’s-length bargaining with sufficient investigation to allow counsel and the Court to act intelligently.

Defendants will pay a gross settlement amount of $110,000.00, which is about 74% of the $148,367.80 estimate of risk-adjusted recovery (excluding interest) at this stage in the litigation. (Tunyan Decl., ¶¶ 10(c), 17; Settlement, ¶ 3.1.) Of this amount, no more than $10,000.00 will be paid to Plaintiff as a class representative service payment, no more than $36,666.67 will be paid as attorney fees, no more than $16,000.00 will be paid as class counsel litigation expenses payment, no more than $10,000.00 will be paid for settlement administration, and $15,000.00 will be paid as PAGA penalties. (Settlement, pp. 7-9, ¶ 3.) Of the PAGA payment, $11,250.00 (75%) will be paid to the LWDA and $3,750.00 (25%) will be allocated to the individual PAGA payments. Class members’ individual payments will be based on their number of workweeks during the class period. (Settlement, p. 8, ¶ 3.2.4.)

Incentive payments are based on the expense and risk undertaken by named plaintiffs for the benefit of other class members. (Munoz v. BCI Coca-Cola Bottling Co. of Los Angeles (2010) 186 Cal.App.4th 399, 412.) Based on Plaintiff’s involvement in this action (Tunyan Decl. ¶ 32), a $10,000.00 payment to Plaintiff is reasonable.

The requested $36,666.67 in attorney fees is reasonable and consistent with fee awards in class actions. (Chavez v. Netflix, Inc. (2008) 162 Cal.App.4th 43, 66, fn. 11 [“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,” internal quotation marks omitted].) Additionally, the requested $16,000.00 in costs is reasonable.

The parties agreed to recommend Phoenix Class Action Administration Solutions (“Phoenix”) as the settlement administrator. (Tunyan Decl., ¶ 33.) Based on the Court’s experience, the $10,000.00 requested fee is reasonable.

As discussed above, Plaintiff’s counsel has extensive experience in labor and employment law, including class and representative actions. (Tunyan Decl., ¶¶ 20-26.)

There are no objectors to the settlement at this time, so at the preliminary approval stage, the proposed settlement is entitled to a presumption of fairness.

The Notice to Class Members (“Notice”) will issue within 14 days of receipt of the Class List (Settlement, ¶ 7.4.2). The Notice describes how to dispute workweeks, submit an objection in writing, in person, or through an attorney, or request exclusion (Settlement, ¶¶ 7.4 – 7.7)

The content of the Notice contains a brief explanation of the case, a statement regarding exclusion from the class, a procedure for exclusion, a statement that judgment will bind all non-excluded members, and a statement that any member who does not request exclusion may appear through counsel, in compliance with California Rules of Court, rule 3.766(d). If a class member wants to be excluded, one can exclude himself or herself from the Settlement by submitting a written request for exclusion or otherwise notifying the Administrator in writing. Class members do not need to take any action to submit a claim if they do wish to remain in the class. (Exh. A to Settlement, Notice.)

Defendants must provide the Class Data to the Administrator within 14 days of the preliminary approval. The Administrator must serve notices to Class Members within 14 days of receiving the Class List. Members of the Settlement Class shall have 45 calendar days from the mailing of the Class Notice to object or opt out. The Final Approval Hearing is set for November 5, 2024 at 8:30 a.m. Class Counsel shall file the Motion for Final Approval of Settlement at least 16 court days prior to hearing.

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