Judge Lee W. Tsao, Case Number: 19NWCV00704, Date: 2024-11-20 Tentative Ruling

Judge: Lee W. Tsao, Case: 19NWCV00704, Date: 2024-11-20 Tentative Ruling

Case Number: 19NWCV00704 Hearing Date: November 20, 2024 Dept: C

LOPEZ v. HERAEUS METALS NORTH AMERICA LLC, et al.

CASE NO.: 19NWCV00704

HEARING: 11/20/2024

TENTATIVE ORDER

Plaintiff Joselito Lopez’s unopposed motion for approval of PAGA settlement agreement and award of attorney’s fees and costs is GRANTED.

Moving party to give notice.

Joselito Lopez (Plaintiff) moves for approval of the PAGA settlement agreement pursuant to Code of Civil Procedure section 2698.

Background

Plaintiff individually, and on behalf of other aggrieved employees pursuant to the California Private Attorneys General Act (PAGA), filed a complaint against Heraeus Precious Metals North America LLC and Heraeus Incorporated (Defendants). Plaintiff filed a first amended complaint alleging a violation of California Labor Code § 2698, et seq. for various employment violations including failure to pay overtime, failure to provide meal periods, failure to provide rest periods, and failure to pay minimum wages.

Plaintiff brings the instant motion for an approval of the parties’ PAGA settlement agreement and release and award of attorneys’ fees and costs.

Legal Standard

“The superior court shall review and approve any settlement of any civil action filed pursuant to this part.” (Code Civ. Proc. § 2699 subd. (l)(2).) “Because many of the factors used to evaluate class action settlements bear on a settlement's fairness—including the strength of the plaintiff's case, the risk, the stage of the proceeding, the complexity and likely duration of further litigation, and the settlement amount—these factors can be useful in evaluating the fairness of a PAGA settlement.” (Moniz v. Adecco USA, Inc. (2021) 72 Cal.App.5th 56.)

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.)

In an effort to aid the Court in the determination of the fairness of the settlement, Wershba v. Apple Computer, Inc. (2001) 91 Cal.App.4th 224, 244-245 discusses factors that the Court should consider when testing the reasonableness of the settlement.

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 245, citing Dunk, supra, 48 Cal.App.4th at 1802.) The test is not the maximum amount a plaintiff might have obtained at trial on the complaint but, rather, whether the settlement is reasonable under all of the circumstances. (Id. at 250.)

In making this determination, 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 (“Kullar”), citing Dunk, supra, 48 Cal.App.4th at 1801.)

“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 Corp. (2d Cir. 1974) 495 F.2d 448, 455; see also Linney v. Cellular Alaska Partnership (9th Cir. 1998) 151 F.3d 1234, 1242 [“[I]t is the very uncertainty of outcome in litigation and avoidance of wasteful and expensive litigation that induce consensual settlements. The proposed settlement is not to be judged against a hypothetical or speculative measure of what might have been achieved by the negotiators.”].)

Discussion

Plaintiff and Defendants agreed to resolve this action for a total settlement amount of $500,000. The settlement amount includes (1) $190,000.000 in attorneys’ fees and $19,860.92 in costs to Plaintiff’s counsel; (2) $7,500 as a general release fee to Plaintiff; (3) up to $5,000 in settlement administration costs to the PAGA settlement administrator; and (4) the net settlement amount to the California Labor and Workforce Development Agency (LWDA) and aggrieved employees. Of the net settlement amount, 75%, approximately $208,229.31, will be distributed to the LWDA and 25%, approximately $69,409.77, will be distributed to the aggrieved employees. The class is comprised of all current and former hourly or non-exempt employees who worked for Defendants in the state of California during the PAGA period.

Here, there is a presumption of fairness. The parties engaged in arms-length bargaining. On December 10, 2021, after a full day mediation conducted by Paul Grossman, Esq., the parties agreed to this settlement. Paul Grossman, Esq. is a respected mediator with experience in complex labor and employment matters. The parties were represented by counsel experienced with complex labor and employment matters and reached this settlement after engaging in formal and informal discovery.

The settlement recovery reflects a fair and reasonable resolution of this case based on Plaintiff’s claims and Defendants’ affirmative defenses. It also reflects the parties’ consideration of how litigation may have proceeded, trial, arbitration proceedings, potential appeals, and uncertainty surrounding PAGA claims after recent amendments to the PAGA statute. Plaintiff’s motion is unopposed.

Additionally, Plaintiff’s counsel requests 38%, or $190,000, of the total settlement amount. Plaintiff retained Lawyers for Justice, PC under a contingency fee agreement of at least 38% of the recovery. (Ghosh Decl., ¶ 20.) Plaintiff’s counsel investigated issues, conducted discovery, and engaged in settlement negotiations. (Ghosh Decl., ¶ 20.) Plaintiff’s counsel also requests $19,860.92 in litigation costs and expenses. As evidence, Plaintiff’s counsel included an itemization of the costs incurred in this case. (Ghosh Decl., Exh. 3.)

Accordingly, Plaintiff’s unopposed motion for approval of PAGA settlement agreement and award of attorney’s fees and costs is GRANTED.