Judge Lon F. Hurwitz, Case 20-01174402 2023-08-25 Tentative Ruling

Judge: Lon F. Hurwitz, Case: 20-01174402, Date: 2023-08-25 Tentative Ruling

1. Status Conference

2. Motion for Preliminary Approval of Class and PAGA Settlement

Motion for Preliminary Approval of Class Action and PAGA Settlement

Moving Party: Plaintiffs Carmen Lopez and Pete Jaramillo, individually, and as a representative of other aggrieved employees

Responding Party: None

SERVICE: Revised motion, August 11, 2023, by electronic transmission

RELIEF SOUGHT: Plaintiffs seek preliminary approval of the Settlement Agreement in a putative wage-and-hour and PAGA action.

UPCOMING EVENTS: None

FACTS/OVERVIEW: The original wage and hour Class Action Complaint alleging seven causes of action was filed on December 14, 2020, by Plaintiff Carmen Lopez, individually, and as a representative of other aggrieved employees. (ROA 2). The named defendants are Vehicle Protection Specialists, LLC and Daniel Laurent.

On December 28, 2020, the Register of Actions in this matter reflects a First Amended Complaint was filed which appeared to add an eighth cause of action for “Violation of the Private Attorney General Act (‘PAGA’).” (ROA 8.)

On October 28, 2021, a Stipulation and Order was signed by the Court “allowing Plaintiff to file First Amended Complaint for Damages.” (ROA 31.) The recital in the Stipulation stated that Plaintiff sought to amend the original Complaint filed December 14, 2020, in order to add an additional class representative. However, the Stipulation did not state that the amended pleading would add a PAGA claim, and the attached “proposed First Amended Complaint for Damages” also did not include a PAGA claim or any PAGA allegations. (Ibid.)

On November 9, 2021, Plaintiff filed the First Amended Complaint, which appears to be identical to Exhibit A to the Stipulation. The pleading added a second named Plaintiff, Pete Jaramillo, but did not include a PAGA claim or PAGA allegations. (ROA 45.) In addition, an entire page of factual allegations in the FAC was completely blacked out.

On August 29, 2022, Plaintiffs filed the original Motion for Preliminary Approval of Class Action Settlement. (ROA 77.) Concurrently, a document purporting to be a “Joint Stipulation re Class Action and PAGA Penalty Settlement (the “Settlement”) was also filed. However, the document was not attached to any declaration identifying or authenticating it. (“ROA 78.) The Settlement purported to settle the “Action”, which was defined as the action initiated on December 14, 2020, and “as amended on November 9, 2021.” (Settlement, ¶ 2.) The Settlement included several references to PAGA, and purported to attach, as Exhibit B, a letter sent to the Labor Workforce Development Agency (“LWDA”) on November 2, 2020. (Settlement, ¶ 23.) Exhibit B was a “Request for Exclusion Form,” and no LWDA letter was otherwise attached. It is noted the non-operative first “FAC” alleged that notice was provided to the LWDA August 6, 2020. (ROA 8, ¶ 98.)

At the hearing on March 3, 2023, the Court found that it appeared Plaintiffs were attempting to settle a PAGA claim that had not been asserted in the operative FAC and was not incorporated by reference in the Settlement itself. (ROA 93.) The Court continued the hearing and ordered briefing on the issue, including an explanation of the timeliness of any purported PAGA claim. (Ibid.) Counsel was to submit briefing no later than 14 calendar days in advance of the continued hearing set for May 12, 2023.

On May 3, 2023, Plaintiff’s counsel filed the Supplemental Motion for Preliminary Approval of Class Action Settlement. (ROA 100.) A Notice of Errata and Errata to Plaintiffs’ First Amended Class Action Complaint was concurrently filed wherein a fully executed copy of the FAC, including the “blacked-out” page 3, was provided. (ROA 101.) However, the Supplemental Motion was untimely filed and did not address the deficiencies in the original Motion or the Settlement identified by the Court on March 3, 2023. Regarding the PAGA claim, counsel stated that the failure to file an amended Complaint alleging the cause of action was an “oversight,” and that the FAC included PAGA penalties in the prayer. Nevertheless, counsel stated that Plaintiffs were willing to amend the FAC to specifically allege a PAGA claim, if the Court so desired. But counsel did not address whether any proposed amended pleading would relate back to the original Complaint or the FAC. Counsel also did not provide a declaration identifying or authenticating the Settlement, or explaining the discrepancy between the LWDA notice date in the non-operative FAC and the one he asserted was correct.

As a result, at the hearing on June 16, 2023, the Court denied the preliminary approval motion without prejudice. (ROA 103). The Court stated that Plaintiff could file a second amended Complaint and refile a new motion for preliminary approval. (Ibid.)

On August 7, 2023, pursuant to a stipulation and order (ROA 111), Plaintiff filed the operative Second Amended Complaint (ROA 116) alleging the following eight causes of action:

1. Violation of Labor Code § 1194 and §§ 226.2, 1194, 1198 (Unpaid Overtime and Minimum Wages);

2. Violation of Labor Code § 510 (Unpaid Overtime);

3. Violation of Labor Code §§ 226(a) and 1174 (Non-compliant Wage Statements);

4. Violation of Labor Code §§ 201-203 (Failure to Pay All Wages and on a Timely Basis);

5. Violation of Labor Code §§ 226.7, 512(a) (Unpaid Meal Period Premiums);

6. Violation of Labor Code § 226.7 (Unpaid Rest Period Premiums);

7. Violation of Business & Professions Code §§17200, et seq.; and

8. Violation of Private Attorneys General Act.

On August 11, 2023, Plaintiff filed a new Motion for Preliminary Approval of Class Action Settlement. (ROA 127).

SUMMARY OF SETTLEMENT:

A copy of the Amended Joint Stipulation re Class Action and PAGA Penalty Settlement (“Settlement”) is attached as Exhibit C to counsel’s declaration. (ROA 125). It is not fully executed.

Class Definition: “Settlement Class Member(s)” or “Class Member(s)” means: “The collective of all current and former California employees of Defendants who worked in non-exempt positions since December 14, 2016, as well as the following subclasses: (1) all members of the class who were not paid accurate overtime compensation for all hours worked in excess of eight hours per day and/or forty hours per week; (2) all members of the class who were not at least paid minimum wage for rest periods or non-productive time under Labor Code section 226.2; (3) all members of the class who were denied meal and rest period premiums when they were entitled to them under the meal and rest period laws, and whom [sic] did not receive premiums; (4) all members of the class who, at any time after December 14, 2017, separated their employment from Defendants and were not paid wages within the times specified by California Labor Code sections 201-203 and are owed restitution for waiting time penalties deriving from wages.” [Settlement, ¶ 21.] It is not clear if the reference to December 14, 2017, in No. 4 is intended or a typographical error.

Estimated Class Size: 240. [Counsel Decl., ¶ 31.]

“Class Period” is defined as “any time between December 14, 2016 to the Effective Date.” [Id., ¶ 4.]

“PAGA Period” is defined as “the period from November 2, 2019 to the Effective Date.” [Id., ¶ 15.] It is noted that there is no definition of “PAGA Members” provided.

Under the section entitled “Definitions,” the “Effective Date” is defined as “the later of: (a) the date that approval of the Settlement is granted by the Superior Court of California for the County of Orange, or other court assuming jurisdiction of this matter; (b) if any timely objections or intervenor requests are filed and not subsequently withdrawn, the 60th day after the Court’s Final Order and Judgment approving of this Settlement; or (c) if any timely appeals are filed, the date of the resolution (or withdrawal) of any such appeal in a way that does not alter the material terms of the Settlement.” [Id., ¶ 9.]

In the section entitled “Settlement and Release,” there is a provision entitled “Effective Date” wherein Plaintiff seems to provide another definition of the term. In Paragraph 31.b. of the Settlement, it provides:

Effective Date: The Settlement embodied in this Stipulation of Settlement shall become effective when all of the following events have occurred (“Effective Date”):

(i) this Stipulation of Settlement has been executed by Plaintiffs, Defendants, Class Counsel and Defense Counsel;

(ii) the Court has given preliminary approval to the Settlement;

(iii) the Notice has been sent to the Settlement Class, providing them the opportunity to object to the Settlement, and the opportunity to opt out of the Settlement;

(iv) the Court has held a formal fairness hearing and entered the Court’s Final Order and Judgment; and

(v) only in the event there are written objections filed prior to the formal fairness hearing which are not later withdrawn, the later of the following events:

(A) when the period for filing any appeal, writ or other appellate proceeding opposing the Settlement has elapsed without any appeal, writ or other appellate proceeding having been filed;

(B) when any appeal, writ or other appellate proceeding opposing the Settlement has been dismissed finally and conclusively with no right to pursue further remedies or relief; or ;

(C) when any appeal, writ or appellate proceeding has upheld the Court’s Final Order and Judgment with no right to pursue further remedies or relief.

ISSUE: The end date for the Class Period, i.e., the “Effective Date,” is a moving target and the definition is, to say the least, problematic. The resolution or withdrawal of appeals is necessarily the “later of” the three options stated. Moreover, the “Effective Date” is entirely dependent on when final approval is granted and the Final Order and Judgment are entered. Accordingly, it is also entirely dependent on whether counsel adequately addresses any issues identified by the Court and meets all Court-ordered deadlines. As a result, the indefinite end period of the Class Period leaves open the possibility of an increase in class size that would decrease the amount of the average payment and increase the probability that the Court will find the Settlement to be unfair—especially since there is no escalator clause in the Settlement.

Gross Settlement Amount (“GSA”): $275,000.00. Defendants will also pay employer payroll tax on the wage portion of the settlement. [Settlement, ¶ 22.]

$ 91,666.67 Attorneys’ fee (1/3 of GSA, not

to exceed) [Id., ¶ 31.d.iv.]

$ 10,000.00 Litigation costs (not to exceed) [Ibid.]

$ 6,300.00 Administration costs (not to exceed) [Id., ¶ 31.d.iii.]

$ 15,000.00 Enhancement ($7,500.00 each) [Id., ¶ 31.d.v.]

$ 20,000.00 PAGA penalties (75% to LWDA) [Id., ¶ 31.d.vi.]

$ 132,033.33 Net Settlement Amount (“NSA”)

Escalator Clause: None. Settlement expressly states: “Defendants will not be required to pay any additional monies beyond the amount of the [Gross Settlement Amount] under any provision of this Settlement ….” [Id., ¶ 22.]

ISSUE: Lack of escalator clause will result in a decrease in individual payments to Class Members if there is an increase in Class size.

Payments to Class:

How Calculated? Pro rata based on number of workweeks worked during Class Period. [Settlement, ¶ 31.d.i.]

Pro rata, based on number of workweeks, to PAGA Members who worked during the PAGA Period. [Id., ¶ 31.d.vi.]

ISSUE: No estimate of total workweeks is provided in the Settlement or counsel’s declaration. Settlement does not provide definition of “PAGA Members.” Moreover, there are two definitions in the Settlement related to payments to Class Members. “Settlement Awards” defined as “the monetary payments made to the Settlement Class who do not validly opt-out of this Settlement.” [Id., ¶ 19.] “Settlement Class Award” defined as “the pro-rata share of the Net Settlement Amount for Settlement Class Members who do not validly opt-out of this Settlement.” [Id., ¶ 20.]

Reversion? No

Claims Made? No

Taxation? Administrator will withhold all required federal and state taxes; will issue 1099s “with respect to the amounts paid to the Settlement Class Members, which shall be classified as 100% penalties.” [Id., ¶ 31.d.vii.]

ISSUE: Other provision in Settlement states that 90% of “Settlement Award” shall be classified as penalties and interest, and 10% as wages. [Id., ¶ 31.d.i.] Counsel needs to address these conflicting provisions. Settlement also does not address classification of PAGA payments.

Uncashed Checks? After 180 days, funds from uncashed checks will be transmitted to State Controller’s office. [Id., ¶ 31.d.i.]

Average Pymt. No information provided.

ISSUE: Counsel must provide amounts of high, low, and average individual class payments, and average PAGA payment.

CERTIFICATION OF CLASS:

The party seeking class certification must establish three things: “(1) the existence of an ascertainable and sufficiently numerous class, (2) a 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. Sup. Ct. (2012) 53 Cal.4th 1004, 1021.)

It appears that these elements are met, and the proposed class can be conditionally certified for settlement purposes. The parties agree to conditional certification of the class for settlement purposes. The class appears to be ascertainable, sufficiently numerous, and well-defined.

SETTLEMENT ISSUES:

1. Class Members Release: “Upon funding of the Settlement Fund by Defendants, each Class Member, including all sub-class members, who has not submitted a valid request for exclusion fully releases and discharges Defendants and the Released Parties, from any and all claims, debts, liabilities, demands, obligations, guarantees, costs, expenses, attorneys’ fees, and/or damages, including without limitation for violation of all corresponding Labor Code and related claims based on the facts alleged in the Operative Complaint (‘Class Member Released Claims’).” [Settlement, ¶ 42.]

“Released Parties” means “Defendants and any divisions, affiliates, parents, subsidiaries, and operating companies thereof, and their respective members, agents, employees, representatives, stockholders, investors, officers, directors, attorneys, administrators, assigns, executors, trustees, and partners.” [Id., ¶ 17.]

2. Released Claims by Class Representatives: “The Class Representatives hereby fully and finally releases and discharges Defendants and the Released Parties, from any and all claims, whether known or unknown, at any time up to and including the date of preliminary court approval of this Settlement, involving federal, state and/or local law, statute, ordinance, regulation, common law or other source of law including those arising from or dependent on the California Labor Code; the Fair Labor Standard Act; California Business and Professions Code Section 17200 et seq., whether or not such claims are in the nature of claims for damages, unpaid wages including, but not limited to, overtime and minimum wages and payments for alleged meal and rest period violations, improper deductions, unreimbursed business expenses and any and all available penalties including, but not limited to, record-keeping penalties, pay stub penalties, failure to pay on time penalties, minimum wage penalties, meal and rest period penalties and premium payments, waiting time penalties, PAGA penalties, interest and other claims or penalties and other alleged state or federal law wage and hour violations, attorneys’ fees and/or injunctive relief. [Id., ¶ 43.]

ISSUE: Operative Complaint does not alleged claims for improper deductions or unreimbursed business expenses. These claims should not be included in the Class Representatives’ release.

3. Valuation of Claims: The parties exchanged documents and statistical information, and Plaintiffs interviewed several witnesses. Counsel retained a statistical expert to analyze a 20% sampling of pay data. Plaintiffs also received employees’ handbooks and other documents regarding Defendants’ wage and hour practices, timekeeping and payroll policies, meal and rest period records, employee time audit records, time and payroll records, and wage statements.

Counsel purportedly determined approximate average hourly rate of pay for Class Members, total number of former and current employees in Class, total number of PAGA members, and total number of pay periods and workweeks worked by all Class Members during Class Period.

ISSUE: Even though the motion references Paragraph 11 in counsel’s declaration, counsel does not actually attest to this in his declaration. Determination of total number of pay periods and workweeks is inaccurate since the Class Period, by definition, is still open.

There are approximately 240 Class Members. Valuation analysis provided by counsel is as follows [Counsel Decl., ¶¶ 10-20]:

• Approx. 10% of the Class were paid under minimum wage for a few pay periods. Total exposure is $21,879.

• Approx. 138 former employees in Class. Potential waiting time penalties equals $450,971. Only half of former employees subject to regular rate calculation or minimum wage error, but all of them had some form of unpaid wages. Availability of waiting time penalties not certain and was a significant risk at litigation.

• Meal Periods – 43% of shifts had late meal periods, and Defendants never paid meal period premiums. $245,200 in unpaid premiums, $15,388 owed for short meal periods. Interest owed on premiums is $59,841. Individual issues impacting certification and Defendants’ contention that meal period policy was enforced resulted in significant discount to settlement value.

• Rest Periods – Defendants’ policy did not relinquish control over employees during rest periods. Assuming a 100% violation rate, exposure is $777,436 in rest period premiums and interest. Employee handbook had compliant rest period policy; therefore, with conflicting policies, significant risk raised as to viability of claim, thus resulting in substantial discount to settlement value.

• Wage statement claim – 88 employees in sub-class with maximum exposure of $159,300. Establishing injury was a challenge, thus resulting in significant discount of settlement value.

• PAGA claim – based on 2,489 pay periods. Maximum exposure was $248,000 in penalties. Amount likely to be substantially reduced by court due to overlapping statutory penalties.

Based on information provided by counsel, maximum value of claims is $1,030,122. GSA of $275,000 is approximately 26% of maximum value. Allocation of $20,000 to PAGA penalties represents less than 2% of GSA.

ISSUE: Counsel does not provide information about amount of total class-wide liability, amount of discount for each claim, and adjusted estimated liability for each claim. Counsel also does not provide total estimated workweeks. There is no “wage statement” sub-class in the Operative Complaint; therefore, it is not clear which sub-class is being referenced. Settlement does not appear to be reasonable. Risk-adjusted GSA is low compared to apparent maximum potential liability.

4. Requests for Exclusion: Class Members have 45 calendar days from mailing of class notice to send written opt out request. No requests accepted if postmarked after 45th day. Disputes regarding timeliness or validity of requests will be resolved by Court if they cannot be resolved by the parties. [Settlement, ¶ 39.]

ISSUE: No provision for remailed notices. Court prefers at least 45 days for response period after remailing. Also, there is no provision for cure.

5. Objections: Class Members have 45 days from mailing of class notice to submit written objections. Must provide written statement of grounds for objection. May submit objection in any other written format in lieu of Objection Form. May appear at Final Approval hearing to have objections hear, whether or not they submitted prior written objection. [Settlement, ¶ 41.]

ISSUE: No provision for remailed notices. Deadline should be 45 days after remailing. Settlement must provide that Court retains final authority as to consideration and admissibility of objections.

6. Disputes: Settlement does not have provision regarding disputes.

ISSUE: Settlement must provide process for Class Members to dispute the number of workweeks they have been credited in calculating their individual payments.

7. Attorneys’ Fees and Costs: Class counsel to receive fees of up to 1/3 of GSA, or approximately $91,666.67, plus reimbursement of costs up to $10,000. Any portion of fees or costs not awarded to counsel will be reallocated to the NSA. [Settlement, ¶ 31.d.iv.]

ISSUE: At Final Approval, counsel must provide billing records in support of its fees and documentation of costs. Counsel must also disclose whether there is a fee-splitting arrangement with any other counsel, or confirm none exists. (CRC Rule 3.769(b).)

8. Enhancement: Class Representatives shall receive enhancement of $7,500 each. [Settlement, ¶ 31.d.v.]

ISSUE: Enhancement amount is higher than usual $5,000 payment. Each representative submitted identical declarations stating they participated remotely in the 8-hour mediation, and spent at least 20 hours working on this case. [Lopez Decl. (ROA 119), ¶ 5; Jaramillo Decl. (ROA 121), ¶ 5.] At Final Approval, Plaintiffs must submit declarations describing circumstances to justify enhancement, and addressing the factors set forth in Golba v. Dick’s Sporting Goods, Inc. (2015) 238 Cal.App.4th 1251, 1272, and Clark v. Am. Residential Servs., LLC (2009) 175 Cal.App.4th 785, 804, including a more detailed estimate of hours spent on this litigation.

9. Settlement Administration: Parties have chosen Simpluris as the claims administrator. [Settlement, ¶ 2.] Administrator will be paid up to $6,300 for fees and expenses. [Id., ¶ 31.d.iii.] Concurrent with final approval motion, administrator will provide declaration of due diligence and proof of mailing regarding class notice. [Id., ¶ 38.]

ISSUE: Settlement does not discuss whether administrator must post the Operative Complaint, Settlement, Class Notice, and Orders for Preliminary Approval online. It also does not state how administrator will notify Class Members of final judgment. Administrator’s invoice must be provided at Final Approval.

10. Notice to LWDA: Counsel provides copy of LWDA letter, and attests that the Settlement was provided to the LWDA. [Counsel Decl., ¶ 37, Exhs. A and B.]

11. Continuing Jurisdiction: Paragraph 57 of Settlement provides the Court shall retain jurisdiction to enforce terms of Settlement, pursuant to CCP § 664.6.

ISSUES RE CLASS NOTICE:

The proposed Class Notice is attached as Exhibit A to the Settlement. There are a few issues that should be addressed:

1. Class Notice is to be revised consistent with the issues addressed above.

2. Title of Class Notice should refer to Class and PAGA Action Settlement.

3. In Section 2, date of filing of First Amended Complaint should read “November 9, 2021.” Also need to add information about filing of Second Amended Complaint.

4. In Section 4, line 1 – correct typo “who” worked.

5. Section 6 needs to refer to the Second Amended Complaint.

6. Delete references in Section 6 to claims for improper deductions and unreimbursed business expenses.

7. Section 8 should clearly state that objections must be mailed no later than 45 days after date of mailing of Notice. Bolded capitalized paragraph should state that Class Members do not need to submit written objection in order to speak at Final Approval hearing.

8. Section 9 should clearly state that opt-outs must be mailed no later than 45 days after date of mailing of Notice.

9. Section 14 should state “Department CX 103” and provide the physical address of the Complex Civil Courthouse.

ISSUES RE PROPOSED ORDER: (ROA 117)

1. Proposed Order is to be revised consistent with the issues identified above.

2. Caption should read: “[Proposed] Order Granting Preliminary Approval of Class Action and PAGA Action Settlement.” Should also include date of filing of Second Amended Complaint.

3. Recital should reference Joint Stipulation by ROA number of declaration to which it is attached.

4. Paragraph 2 – correct date to read “December 14, 2016”

5. Paragraph 6 should include Department number of Final Approval hearing. Also should refer to hearing as “Final Approval Hearing” instead of “Settlement Hearing.”

6. Paragraph 6 should propose an actual date for the Final Approval hearing.

7. Paragraph 7 should specifically refer to “Attorneys’ Fees” and “Litigation Costs.” Should also refer to “Service Award” only, and not to “General Release Payment.”

8. Paragraph 7 – capitalize “Unclaimed Property Fund.”

9. Paragraph 10 should include deadline for submission of opt-outs or exclusions.

10. Paragraph 11 should include deadline for written objections.

11. Proposed Order should state that Class Members who are PAGA Members cannot opt out of the PAGA Settlement, will be bound by the PAGA release, and will receive their individual PAGA payments.

12. Paragraph must be added stating that Class Members may submit disputes.

13. Should include requirement that Claims Administrator must provide a copy of its invoice with its declaration regarding administration of the settlement.

14. Paragraph 16 should state that Court’s continuing jurisdiction is pursuant to CCP § 664.6.

15. Proposed Order should include paragraph advising how Class Members will be notified of final judgment.

RULING:

The hearing on the Motion for Preliminary Approval of Class Action Settlement is CONTINUED to November 3, 2023 at 1:30 p.m. in Department CX103 so that Plaintiffs may address the issues identified below.

Counsel is ORDERED to file supplemental papers addressing the Court’s concerns no later than fourteen (14) calendar days prior to the continued hearing date. Counsel is ORDERED to provide red-lined versions of all revised papers. Counsel is ORDERED to provide the Court with an explanation of how the pending issues were resolved, with precise citation to any corrections or revisions. A supplemental declaration or brief that simply asserts the issues have been resolved, or does not clearly state a specific concern has been resolved, is insufficient and will result in a continuance and/or an OSC re Sanctions for failure to follow a Court order pursuant to CCP Section 177.5.

Issues re Settlement Agreement:

1. Please provide a fully executed copy of the Settlement Agreement.

2. The Settlement Agreement does not provide a definition of “PAGA Members.”

3. The end date for the Class Period, i.e., the “Effective Date,” is a moving target and the definition is nonsensical. The resolution or withdrawal of appeals is necessarily the “later of” the three options stated. Moreover, the “Effective Date” is entirely dependent on when final approval is granted and the Final Order and Judgment are entered. Accordingly, it is also entirely dependent on whether counsel adequately addresses any issues identified by the Court and meets all Court-ordered deadlines. As a result, the indefinite end period of the Class Period leaves open the possibility of an increase in class size that would decrease the amount of the average payment and increase the probability that the Court will find the Settlement to be unfair—especially since there is no escalator clause in the Settlement. The lack of an escalator clause will result in a decrease in individual payments if there is an increase in class size.

Counsel must address the potential unfairness wrought by the terms of the Settlement due to the indefinite Class Period and lack of escalator clause.

4. No estimate of total workweeks is provided in the Settlement or counsel’s declaration. Moreover, there are two definitions in the Settlement related to payments to Class Members. “Settlement Awards” defined as “the monetary payments made to the Settlement Class who do not validly opt-out of this Settlement.” [Id., ¶ 19.] “Settlement Class Award” defined as “the pro-rata share of the Net Settlement Amount for Settlement Class Members who do not validly opt-out of this Settlement.” [Id., ¶ 20.]

5. There are conflicting provisions in Settlement. One provision states that payments to the Settlement Class Members shall be classified as 100% penalties. Other provision in Settlement states that 90% of “Settlement Award” shall be classified as penalties and interest, and 10% as wages. Counsel needs to address these conflicting provisions. Settlement also does not address classification of PAGA payments.

6. Please provide amounts of high, low, and average individual payments, and average amount of PAGA payments. (See, Procedural Guideline No. 3.) A statement that counsel is unable to calculate these figures is not acceptable.

7. Release purports to release claims for improper deductions and unreimbursed business expenses, but no such claims are alleged in the operative Complaint. Counsel needs to either explain why these claims should be included or delete them from the release provision.

8. The estimated maximum reasonable exposure for total class-wide liability is not provided, and discussion regarding estimated amount of discount and adjusted liability for each claim is not fully developed or supported. No calculations were provided to support the drop from an estimated maximum recovery of $1,030,122.00 (calculated from figures provided in counsel’s declaration) to GSA of $275,000.00. Please also provide total estimated workweeks. In addition, there is no “wage statement” sub-class in the Operative Complaint; therefore, it is not clear which sub-class is being referenced. Counsel needs to clarify this reference in his declaration.

9. Settlement does not include provision for deadline for submission of Requests for Exclusion or objections if Class Notice is returned as undeliverable and must be remailed to Class Members. Settlement should allow for a 45-day response deadline after remailing of Class Notice.

10. Settlement does not provide a process for Class Members to dispute the number of workweeks they have been credited in calculating their individual payments. A dispute provision must be included in the Settlement, or counsel must explain why no such provision is included.

11. Counsel must also disclose whether there is a fee-splitting arrangement with any other counsel, or confirm none exists. (CRC Rule 3.769(b).)

12. Enhancement amount is higher than usual $5,000 payment. At Final Approval, Plaintiffs must submit declarations describing circumstances to justify enhancement, and addressing the factors set forth in Golba v. Dick’s Sporting Goods, Inc. (2015) 238 Cal.App.4th 1251, 1272, and Clark v. Am. Residential Servs., LLC (2009) 175 Cal.App.4th 785, 804, including a more detailed estimate of hours spent on this litigation.

13. Settlement does not discuss whether administrator must post the Operative Complaint, Settlement, Class Notice, and Orders for Preliminary Approval online. It also does not state how administrator will notify Class Members of final judgment. Administrator’s invoice must be provided at Final Approval.

14. The Memorandum of Points and Authorities, counsel’s declaration, and the Settlement Agreement do not discuss whether the Notice to the Class Members should or should not be distributed in a language or languages other than English. Why or why not?

Issues re Class Notice: