Judge: Mel Red Recana, Case: 20STCV47361, Date: 2024-02-26 Tentative Ruling

All rulings shown here are TENTATIVE ONLY, and thus oral argument WILL be heard. All Counsel are still required to attend.

Case Number: 20STCV47361    Hearing Date: April 4, 2024    Dept: 45

Superior Court of California

County of Los Angeles

Hearing date:              April 4, 2024 (cont. from February 26, 2024)

Moving Parties:          Plaintiffs Aldibert Esteban, Maisha Sykes, Deborah Berens, and Linda Hinkley

Responding Party:      None

Motion for Final Approval of Class Action Settlement and Provisional Certification of Class

The Court has considered the moving papers and supplemental briefing. No opposition was received.

The Court GRANTS Plaintiffs’ motion for final approval of class action settlement. Counsel is awarded $8,000,000 in fees and $60,000 in costs. The administrator is awarded $32,500 for administration costs. Plaintiffs Esteban, Berens, and Hinkley are awarded $7,500, and Sykes is awarded $5,000, as incentive awards.

Background

            Plaintiff Aldibert Esteban, on behalf of himself and all others similarly situated, filed this action on December 11, 2020. Plaintiff filed a First Amended Complaint (FAC) on February 26, 2021 against defendant American Airlines, Inc., alleging causes of action for (1) Violation of the Private Attorneys General Act of 2004 (Labor Code §§ 2698, et seq.); and (2) Violation of California’s Unfair Competition Law (Bus. & Prof. Code §§ 17200, et seq.). This action involves wage-and-hour claims alleging Defendant failing to pay all hours worked, failing to provide full meal and rest breaks, failing to provide accurate itemized wage statements, failing to provide all wages due within time periods specified in Labor Code § 204, and failing to timely pay all wages due to former aggrieved employees at termination of employment. (See FAC, ¶¶ 12-22, 26.)

            The parties have agreed on a $24 million settlement of this class and PAGA action. The gross settlement value is inclusive of settlement payments to participating Settling Class Members, PAGA Group Members, the LWDA, all attorneys’ fees and costs, the Class Representatives’ Enhancement Awards to Plaintiffs for their services as class representatives, and claims administration as provided by this settlement.

On October 27, 2023, the Court granted preliminary approval of the parties’ settlement. On November 9, 2023, Plaintiff filed the operative Second Amended Complaint which combines plaintiffs and claims from other filed cases and adds a separate Plaintiff Maisha Sykes.

            On January 31, 2024, Plaintiffs filed this motion for final approval of class action settlement and provisional certification of class. No opposition was received.

Legal Standard

            Approval of class actions settlements occurs in two steps: First, the court preliminarily approves the settlement and the class members are notified as directed by the court. (See Cal. Rules of Court, Rules 3.769(c)-(g); 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. (Id.)

            “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. 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.” (Cal. Rules of Court, Rule 3.769(f).)

            “ ‘The trial court has broad discretion to determine whether the settlement is fair.’ ” (Cellphone Termination Fee Cases, supra, 180 Cal.App.4th at 1117.) “ ‘[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. [Citation.]’ ” (Id. at 1118, quoting Dunk v. Ford Motor Co. (1996) 48 Cal.App.4th 1794, 1802.)

Once the presumption of fairness has been established, the court still “bears the responsibility to ensure that the recovery represents 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. ‘The court has a fiduciary responsibility as guardians of the rights of the absentee class members when deciding whether to approve a settlement agreement.’ [Citation.]” (Kullar v. Foot Locker Retail, Inc. (2008) 168 Cal.App.4th 116, 129.)

“Due regard should be given to what is otherwise a private consensual agreement between the parties. The inquiry ‘must be limited to the extent necessary to reach a reasoned judgment that the agreement is not the product of fraud or overreaching by, or collusion between, the negotiating parties, and that the settlement, taken as a whole, is fair, reasonable and adequate to all concerned.’ [Citation.] ‘Ultimately, the [trial] court's determination is nothing more than “an amalgam of delicate balancing, gross approximations and rough justice.” [Citation.]’ [Citation.]” (Dunk v. Ford Motor Co. (1996) 48 Cal.App.4th 1794, 1801.)

Discussion

Plaintiffs Aldibert Esteban, Maisha Sykes, Deborah Berens, and Linda Hinkley move for final approval of class action settlement and provisional certification of class.

1.     Notice to Class Members of Final Approval Hearing

Plaintiffs establish that they have provided notice to class members of the final approval hearing in the manner specified by the court, in accordance with Cal. Rules of Court, Rule 3.769(f). (See Olivares Decl., attached as Exh. 3 to Granberry Decl.)

2.     Notice to LWDA

The court notes that Plaintiffs establish that they have notified the California Labor & Workforce Development Agency (LWDA) of this motion on January 14, 2024. (Granberry Decl., ¶3, Exh. 2.)

3.     Presumption of Fairness

The Court preliminarily found in its Order on October 27, 2023, that the presumption of fairness should be applied. No facts have come to the Court’s attention that would alter that preliminary conclusion. Accordingly, the settlement is entitled to a presumption of fairness as set forth in the preliminary approval order.

4.     Is the Settlement Fair, Adequate, and Reasonable?

The settlement was preliminarily found to be fair, adequate and reasonable.  Notice has now been given to the Class and the LWDA. 

  Reaction of the class members to the proposed settlement.

Number of class members: 4,842 (Olivares Decl., ¶5.)        

Number of notice packets mailed: 4,842 (Id. at ¶7.)

Number of undeliverable notices: 38 (Olivares Supp. Decl., ¶4.)

Number of opt-outs: 3 (Id. at ¶6.)                  

Number of objections: 2 (Id. at ¶8.)

Number of participating class members: 4,839 (Id. at ¶9.)

Average individual payment: $2,935.01 (Id. at ¶10.)

Highest estimated payment: $5,659.94 (Ibid.)

As noted above, there were two objectors to the settlement. (Granberry Decl., ¶42, Exhs. 14-15.) However, they were not submitted properly and also did not contain all required information. (Ibid.) Thus, the objections are procedurally invalid. Further, both objectors argue that individual settlement payments should be based on hours worked rather than workweeks. (Ibid.) As counsel points out, workweeks is widely considered the standard in wage and hour litigation valuation. Counsel argues that it is equitable because workweeks accurately captures how many possible violations a Defendant could have committed and how many violations an individual class member may have suffered during the time period covered by the settlement based on the number of weeks an individual actually worked without considering periods an individual did not work, for example, during vacations, leaves of absence, etc., and therefore could not have suffered wage and hour violations. (Id. at ¶44.) Further, counsel argues that in this particular case hours worked has minimal to no bearing on factual theories underlying the alleged claims. (Id. at ¶45.) Based on the foregoing, the Court overrules the objections.

There were also two late objection submissions by Marcelle Fowers and Stacy Bankhead. (Oliveras Second Supp. Decl., Exhs. A-B.) Both appear to be plaintiffs in the Alameda county case and are now proceeding in pro per and there has been no class certification or appointment of class representation. (Supp. Brief at pp. 7-8.) Both state that they did not receive their “letter” which seemingly means they did not receive notice. However, Counsel provides evidence of proper notice to both. (Id. at p. 7.) As to the merits of the objections, Fowers does not object on any actual basis, and Bankhead’s only objection is as to SB41. Counsel points out that SB41 was considered in the evaluation of the case and in reaching the settlement, which was described in their Kullar analysis in Plaintiffs’ motion for preliminary approval filed with the Court on August 21, 2023. (Id. at p. 8.) Based on the foregoing, the Court finds the objections procedurally improper and substantively without merit. Thus, they are overruled.

The Court finds that the notice was given as directed and conforms to due process requirements.  Given the reactions of the Class Members and the LWDA to the proposed settlement and for the reasons set for in the Preliminary Approval order, the settlement is found to be fair, adequate, and reasonable.

5.     Attorneys’ Fees and Costs

Class Counsel requests $8,400,000 (35%) in attorney fees and $60,000 in litigation costs. (See Notice of Motion at p. 3.) The Settlement provides for attorney's fees up to $8,400,000 and costs up to $60,000. The class was provided notice of the requested awards, and none objected on this basis.

“Courts recognize two methods for calculating attorney fees in civil class actions: the lodestar/multiplier method and the percentage of recovery method.”  (Wershba at 254.)  Here, class counsel requests attorney fees using the percentage method with lodestar crosscheck. (Motion ISO Final Approval at pp. 16-23.) In common fund cases, the Court may employ a percentage of the benefit method, as cross-checked against the lodestar. (Laffitte v. Robert Half Int’l, Inc. (2016) 1 Cal.5th 480, 503.)

            Counsel provides the following lodestar information:

(Motion ISO Final Approval at p. 20.)

Counsel’s lodestar is approximately $1,382,373 which would require a multiplier of 6.07 to yield the requested fee amount. As counsel requests attorney’s fees in the amount of 35% of the settlement, the Court finds that the lodestar cross-check does not support this request in light of the higher percentage requested. (See In re Consumer Privacy Cases (2009) 175 Cal.App.4th 545, 558, fn. 13 [“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.”].)  The Court will award attorney fees in the amount of $8,000,000 which is one-third of the total settlement.

Further, Class Counsel is requesting $60,000 in costs and represents that they incurred more than this amount but are only requesting the amount that was noticed to the Class. (Motion ISO Final Approval at p. 23, fn. 7.)  The costs in this case include, but are not limited to, mediation fees ($16,166.67), notice to class members ($5,496), filing fees ($2,579.80), expert fees ($5,000), travel ($5,837.46), and court reporter fees ($5,000). (Id. at p. 23; Bainer Decl., ¶2, attached as Exhibit 3 to Granberry Supp. Decl.) The costs seem reasonable and necessary to litigation.

6.     Incentive Award/Enhancement Fee to Named Plaintiffs

The Settlement Agreement provides for up to $105,000 ($30,000 for Plaintiffs Esteban, Berens, and Hinkley, and $15,000 for Plaintiff Sykes) for an incentive award to the class representative.  

The Court finds these amounts grossly high even in light of the efforts and time expended by named Plaintiffs and the amount of the settlement, especially considering the amount each class member will receive from the settlement. Plaintiffs’ supplemental declarations do not show that these representatives contributions went beyond what the average representative in most class actions contribute. Accordingly, the Court awards $7,500 to Plaintiffs Esteban, Berens, and Hinkley, and $5,000 to Sykes.

7.     Costs of Claims Administration

The claims administrator requests $32,500 for the costs of administering the settlement. (Olivares Supp. Decl., ¶13.) This is equal to the maximum amount estimated of which was disclosed in the notice to class members, to which there were no objections. Based on all the work performed by the Claims Administrator, the recommendation is to award costs in the requested amount.

            Based on the foregoing, the court GRANTS Plaintiffs’ motion for final approval of class action settlement. Counsel is awarded $8,000,000 in fees and $60,000 in costs. The administrator is awarded $32,500 for administration costs. Plaintiffs Esteban, Berens, and Hinkley are awarded $7,500, and Sykes is awarded $5,000, as incentive awards.

It is so ordered.

Dated: April 4, 2024

_______________________

ROLF TREU

Judge of the Superior Court