Judge Lon F. Hurwitz, Case 20-01143577 2023-06-16 Tentative Ruling

Judge: Lon F. Hurwitz, Case: 20-01143577, Date: 2023-06-16 Tentative Ruling

Motion for Approval of Class Settlement

REQUEST: Plaintiff seeks preliminary approval of a settlement in a putative wage and hour class and PAGA action.

FACTS/OVERVIEW: Defendant is a non-profit school and therapy center for children/young adults with language, learning, emotional, social, and neurological needs. Defendant employed Plaintiff as a Special Education Paraprofessional (Bus Aide).

This motion was first heard on 10-21-22. (ROA 98.) The Court identified a number of issues for Plaintiff to address. (Id.) The second hearing was held 03-17-23. (ROA 126.) At that time, the Court pointed out the supplemental papers stated in conclusory fashion that all issues were resolved, but failed to provide any explanation or citation to parts of the settlement or other papers that showed resolution. This made for a needlessly time-intensive analysis. Counsel was ordered to, among other things, provide pin citations and redlines and file electronically-bookmarked and text-searchable documents otherwise a continuance would result. (Id.) The Court also found counsel had failed to address all the issues identified by the Court after the first hearing as well as creating a new issue. (Id.)

This is the THIRD hearing on this motion.

The numbering and full explanatory paragraphs provided by the Court are provided below and carried over from the last Minute Order. (ROA 126.)

ANALYSIS:

ISSUES:

1. “As an initial matter, counsel has submitted an Amended Settlement which is not fully executed. It is signed only by Plaintiff’s attorneys. Needless to say, it cannot be approved absent full execution.” (ROA 126.)

RESOLVED. This is, inexplicably, a separate filing from the Geraci Declaration, but it is fully executed. (ROA 137.) It “supersedes and replaces the partially-executed Settlement Agreement filed March 6, 2023, attached as Exhibit 1 to the Supplemental Declaration of Jeff Geraci [ROA #122].” (Id.)

NOTE: the settlement does not permit text copying from it, so yet again, needless retyping has been necessary to complete this analysis.

2. The Settlement Agreement must provide separate releases for the class and PAGA claims.

The revision to the Class release as well as the insertion of the PAGA release reflects a total failure to address the Court’s order that the releases must be “separate.” Inserting the terms “Class” and “PAGA” into an identical release (other than start date) with different paragraph numbers results in obvious and complete legal overlap, or, in other words, the opposite of what the Court required Plaintiff to do. (ROA 122 Ex. B ¶¶ 31-32.) It should go without saying, since damages are not an available remedy for a PAGA claim, no PAGA release can include them. The PAGA Release should include only penalties for those violations for which Plaintiff provided express notice to the LWDA.

ISSUE:

First, the “Amendment” (ROA 131 Ex. A) purports to amend a non-operative settlement agreement. To be clear, Plaintiff has filed an executed settlement that “supersedes and replaces the partially-executed Settlement Agreement filed March 6, 2023, attached as exhibit 1 to the Supplemental Declaration of Jeff Geraci [ROA #122].” (ROA 137 at 1.) Concurrently, Plaintiff has filed an executed amendment which expressly provides “[Exhibit 1 to the Supplemental Declaration of Jeff Geraci in Support of Motion for Preliminary Approval (ROA #122)] remains in full force and effect.” (ROA 131 Ex. 1.) In other words, the “amendment” has no legal effect on the executed, operative settlement.

Second, even assuming the amendment is effective, which it is not, paragraph 31 of the settlement, as the Court has pointed out two previous times, impermissibly purports to release the alleged PAGA claim. (ROA 137 Attachment 1 ¶ 31 [“…all claims…or causes of action of any kind alleged in the Complaint…including claims under California Labor Code sections… 2699(f), 2699.3…”].) In other words, the amendment, while offering a new definition for “Released PAGA Claims”, does not even attempt to address the intertwined, ongoing issue with the “Released Class Claims”.

Third, the Settlement includes an undefined “Effective Date” in which “Participating Class Members” will be deemed to have “released the Released Parties” from the “Released Claims.” (ROA 137 Attachment 1 ¶ 50.) The Court notes that the Settlement does include the defined term “Effective Date of Settlement” (¶ 15), but there is nothing that operates to make those terms interchangeable. The Court recommends revising the defined term “Effective Date of Settlement” to ‘Effective Date’” as the latter is already used throughout the Settlement. Additionally, the Effective Date, as used in paragraph 50, and even as revised as suggested above, does not provide an effective date as the term “Released Claims” is a holdover from the combined class and PAGA releases which Plaintiff has purported to correct and that term is therefore undefined in the Settlement. In other words, both the ”Released Class Claims” and the “Released PAGA Claims” must have a triggering date.

4. The PAGA and Class periods referenced throughout the Notice and in the Proposed Order are inconsistent with the periods defined in the Settlement Agreement. (Compare Notice with Settlement Agreement, ¶¶9, 25). Per the Settlement Agreement, the end date of both periods is July 19, 2021, whereas the notice and proposed order repeatedly refer to end dates of March 13, 2020.

While counsel states this has been addressed, a cursory review indicates counsel has critically failed to do so. Both the Class and PAGA releases, which counsel purported to revise here, still include the end date of July 19, 2019. (ROA 122 Ex. B ¶¶ 31-32.)

ISSUE:

Counsel states the “’Release Date’ is July 19, 2021 in the Agreement and the Class Notice.” (ROA 131 ¶ 5.) First, “Release Date” is not defined in the Settlement. Second, Plaintiff states “employees hired after [03-13-20] are not included in the Class.” (ROA 131 ¶ 9.) While this is indeed reflected in the terms “Class Members”, “PAGA Members” (as used in the Notice, but should also be defined in the Settlement), and “Class Period” (¶ 9), the problem arises because, as Plaintiff acknowledges, there are both “Class Members” and “PAGA Members” who returned to work after 03-13-20. (Id. ¶ 10.) That means, by operation of the ”Released Class Claims” and the “Released PAGA Claims”, those unknown number of employees, who were not “hired after” 03-13-20 are also releasing all claims that arose from 03-13-20 “through July 19, 2021.” (ROA 137 Attachment 1 ¶¶ 31–32.) Such claims could be different from those “alleged,” in the complaint. (Id. ¶ 9.) Additionally, even as to the limited violations “alleged” in the complaint, which counsel represents “did not occur after March 13, 2020”, counsel’s vague statement that his conclusion is “based on the evidence produced”, does not provide sufficient basis to extend the ”Released Class Claims” and the “Released PAGA Claims” an additional 16 months without compensation. The ”Released Class Claims” and the “Released PAGA Claims” should be limited to such claims that arose during the respective Class and PAGA periods.

7. Counsel must address whether there are any class, representative or other collective actions which may potentially be influenced by settlement. (See Guideline 13).

Counsel’s statement of investigation lacks foundation to the extent he claims actions on behalf of the “Parties” without more. Additionally, searching only Orange County Superior Court records and without any explanation why other California state and Federal court records need not be searched is insufficient. Additionally, counsel fails to provide any details or explanation as to who, when, and how “the California Labor and Workforce Development Agency (LWDA)” was searched. For purposes of this issue, the Court intends counsel to include Defendants’ attorneys.

RESOLVED. While declarations from the actual individuals would be preferred, counsel explains (1) he instructed an unnamed paralegal to search court records and the LWDA for actions involving Defendant and (2) was advised by Defense counsel, after Defense counsel conferred with his client, that there are no existing claims that “could be influenced by this settlement.” (ROA 131 ¶ 11.)

8. The proposed order needs to refer to the settlement agreement by the ROA number of the declaration to which it is attached. A copy of the notice must be attached to the proposed order as Exhibit 1.

Counsel has failed to comply with the Court’s order as no revised Proposed Order or redline has been provided for the Court’s review.

ISSUE. Counsel has again failed to comply with the Court’s order as a redline of the Proposed Order (ROA 127) has not been provided for the Court’s review. Counsel has also identified (at 1) the operative Settlement as ROA 122, which is incorrect for the same reasons stated in No. 2, supra. Additionally, it is unclear why Paragraph 7 includes consecutive subsections labeled “A”, “B”, “C”, and “D”.

RULING:

The hearing on this motion is continued to August 18, 2023, at 1:30 p.m. in Department CX103 so that Plaintiff may address the issues identified below.

Counsel IS ORDERED to file supplemental papers addressing the Court’s concerns (not fully revised papers that would have to be reread) no later than 14 calendar days prior to next hearing date. If necessary, counsel must submit an amendment to the to the settlement agreement rather than any amended settlement agreement. Counsel IS ORDERED to provide redlined versions of all revised papers. Further failure to follow this Court’s procedures and Orders will result in the setting of an OSC re monetary sanctions pursuant to CCP Section 177.5. Additionally, the failure of Plaintiffs’ Counsel to follow this Court’s prior orders, including resolving issues previously identified, will impact any award of attorney’s fees.

This motion was first heard on 10-21-22. (ROA 98.) The Court identified a number of issues for Plaintiff to address. (Id.) The second hearing was held 03-17-23. (ROA 126.) This is THIRD hearing on this motion.

The issue numbering below is carried over from the prior Minute Orders (ROA 98, 126.), which are incorporated by reference.

2. First, the “Amendment” (ROA 131 Ex. A) purports to amend a non-operative settlement agreement. To be clear, Plaintiff has filed an executed settlement that “supersedes and replaces the partially-executed Settlement Agreement filed March 6, 2023, attached as exhibit 1 to the Supplemental Declaration of Jeff Geraci [ROA #122].” (ROA 137 at 1.) Concurrently, Plaintiff has filed an executed amendment which expressly provides “[Exhibit 1 to the Supplemental Declaration of Jeff Geraci in Support of Motion for Preliminary Approval (ROA #122)] remains in full force and effect.” (ROA 131 Ex. 1.) In other words, the “amendment” has no legal effect on the executed, operative settlement.

Third, the Settlement includes an undefined “Effective Date” in which “Participating Class Members” will be deemed to have “released the Released Parties” from the “Released Claims.” (ROA 137 Attachment 1 ¶ 50.) The Court notes that the Settlement does include the defined term “Effective Date of Settlement” (¶ 15), but there is nothing that operates to make those terms interchangeable. The Court recommends revising the defined term “Effective Date of Settlement” to “’Effective Date of Settlement’ or ‘Effective Date’” as the latter is already used throughout the Settlement. Additionally, the Effective Date, as used in paragraph 50, and even as revised as suggested above, does not provide an effective date as the term “Released Claims” is a holdover from the combined class and PAGA releases which Plaintiff has purported to correct and that term is therefore undefined in the Settlement. In other words, both the ”Released Class Claims” and the “Released PAGA Claims” must have a triggering date.

4. Counsel states the “’Release Date’ is July 19, 2021 in the Agreement and the Class Notice.” (ROA 131 ¶ 5.) First, “Release Date” is not defined in the

Settlement. Second, Plaintiff states “employees hired after [03-13-20] are not included in the Class.” (ROA 131 ¶ 9.) While this is indeed reflected in the terms “Class Members”, “PAGA Members” (as used in the Notice, but should also be defined in the Settlement), and “Class Period” (¶ 9), the problem arises because, as Plaintiff acknowledges, there are both “Class Members” and “PAGA Members” who returned to work after 03-13-20. (Id. ¶ 10.) That means, by operation of the ”Released Class Claims” and the “Released PAGA Claims”, those unknown number of employees, who were not “hired after” 03-13-20 are also releasing all claims that arose from 03-13-20 “through July 19, 2021.” (ROA 137 Attachment 1 ¶¶ 31–32.) Such claims could be different from those “alleged,” in the complaint. (Id. ¶ 9.) Additionally, even as to the limited violations “alleged” in the complaint, which counsel represents “did not occur after March 13, 2020”, counsel’s vague statement that his conclusion is “based on the evidence produced”, does not provide sufficient basis to extend the ”Released Class Claims” and the “Released PAGA Claims” an additional 16 months without compensation. The ”Released Class Claims” and the “Released PAGA Claims” should be limited to such claims that arose during the respective Class and PAGA periods.

8. Counsel has again failed to comply with the Court’s order as a redline of the Proposed Order (ROA 127) has not been provided for the Court’s review. Counsel has also identified (at 1) the operative Settlement as ROA 122, which is incorrect for the same reasons stated in No. 2, supra. Additionally, it is unclear why Paragraph 7 includes consecutive subsections labeled “A”, “B”, “C”, and “D”.

The hearing has been continued the first available date. There are no earlier dates available.

The Court does not require any physical or remote appearance at the hearing scheduled for 06-16-23.

Please inform the clerk by emailing her before 12:00 p.m. on the day of the hearing at CX103@occourts.org if both parties intend to submit on the tentative.