Judge: Peter A. Hernandez, Case: 21PSCV00224, Date: 2022-08-11 Tentative Ruling

Case Number: 21PSCV00224    Hearing Date: August 11, 2022    Dept: O

Plaintiff Heriberto Marquez’s unopposed Motion for Final Approval of Class Action Settlement is GRANTED.

Background   

On December 6, 2021, the parties informed the court that the case had settled.

On April 26, 2022, an “Order (1) Granting Preliminary Approval of Class Action Settlement and (2) Granting Leave to File First Amended Complaint” was filed.

On April 26, 2022, Plaintiff Heriberto Marquez, on behalf of himself and all “aggrieved employees” pursuant to Labor Code § 2698 et seq., filed a First Amended Class and Representative Action Complaint, asserting causes of action against Defendant P&B Intermodal Services Limited Liability Company (“Defendant”) and Does 1-10 for:

 

1.             Failure to Pay All Wages Due (Labor Code §§ 510 and 1194)

2.             Failure to Reimburse Business Expenses (Labor Code § 2802Failure to Comply with Itemized Employee Wage Statement Provisions (Labor Code §§ 226(a), (e), (h))

3.             Failure to Pay Wages Due at Separation of Employment (Labor Code §§ 201-203)

4.             Violation of Business and Professions Code § 17200 et seq.)

5.             Civil Penalties Pursuant to Labor Code § 2698 et seq. for Violations of Labor Code §§ 201, 202, 204, 226(a), 510, 1194, and 2802 and Pursuant to Labor Code§ 2699(a) for Violations of Labor Code §§ 210, 226.3 and 558

 

The Hearing on Motion for Final Approval of Settlement is set for August 11, 2022.

Legal Standard

California Rules of Court (“CRC”) Rule 3.769 sets forth the procedures for settlement of class actions in California. Approval occurs in two steps: (1) an early “preliminary” review by the trial court; and (2) a subsequent “final” review after notice of the settlement has been distributed to class members for their comments and objections. (CRC Rule 3.769(c)-(g); Cellphone Termination Fee Cases (2010) 180 Cal.App.4th 1110, 1118.)

If the court grants preliminary approval of a settlement, “its order must include the time, date, and place of the final approval hearing; the notice to be given to the class; and any other matters deemed necessary for the proper conduct of a settlement hearing. (CRC Rule 3.769(e).) “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.” (CRC Rule 3.769(f).)

The trial court has broad powers to determine whether a proposed settlement is fair. (Mallick v. Superior Court (1979) 89 Cal.App.3d 434, 438.) The standard for approval of class settlements in California is that the settlement be fair, reasonable, and adequate for class members overall. (Dunk v. Ford Motor Co. (1996) 48 Cal.App.4th 1794, 1801.)

Discussion

By this motion, Plaintiff seeks final approval of the “Stipulation of Settlement” (“Settlement Agreement”).

Plaintiff has settled the released claims of all non-exempt employees employed by Defendant in California at any time during the period from March 17, 2017 to November 1, 2021 and the PAGA Members as defined in the Settlement Agreement for a Settlement Fund of $439,000.00, which consists of the following: (1) all settlement payments to Class Members; (2) the Class Counsel’s attorneys’ fees in the amount of $146,333.33; (3) the reimbursement of Class Counsel’s litigation costs and expenses in the amount of $8,562.80; (4) claims administration fees and costs in the amount of $7,500.00; (5) a service payment of $10,000.00 to Named Plaintiff and (6) PAGA Claim penalties in the amount of $20,000.00, 75% (i.e., $15,000.00) of which shall be paid to the LWDA and 25% (i.e., $5,000.00) of which shall be distributed back into the Settlement Fund for the benefit of the Class Members.

            Procedural Issues

Plaintiff’s motion reflects non-compliance with California Rules of Court (“CRC”) Rule 3.1113(d) (i.e., “[e]xcept in a summary judgment or summary adjudication motion, no opening or responding memorandum may exceed 15 pages. . .”) The court has no record of Plaintiff requesting leave to file a memorandum in excess of 15 pages, as required by subsection (e). Counsel is admonished in this regard and instructed to comply with the Rules of Court in any future filings.

Notice, Opt-Outs and Recovery under Settlement

The parties engaged ILYM Group, Inc. (“ILYM”) as settlement administrator. On May 27, 2022, ILYM received the class data file from Defendant’s counsel, which contained the name, social security number, last known mailing address, employment dates, and the total number of applicable workweeks worked for each Class Member. (Snow Decl., ¶ 5.) The Class List contained 449 individuals. (Id.)

All 449 names and addresses contained in the Class List were then processed against the National Change of Address ("NCOA') database maintained by the United States Postal Service ("USPS") to ensure the most up to date addresses. (Id., ¶ 6.) On June 6, 2022, the Notice Packet was mailed, via U.S First Class Mail, to all 449 individuals contained in the Class List. (Id., ¶ 7, Exh. A.) As of July 22, 2022, 61 Notice Packets were returned to ILYM. (Id., ¶ 8.) Of the 61 returned Notice Packets, none were returned with a forwarding address. (Id.) ILYM performed a computerized skip trace on the 61 returned Notice Packets that did not have a forwarding address. (Id.) As a result of this skip trace, 33 updated addresses were obtained and the Notice Packet was re-mailed to the Settlement Class Member, via U.S First Class Mail. (Id.)

As of July 22, 2022. a total of 33 Notice Packets have been re-mailed, whereas a total of 28 Notice Packets have been deemed undeliverable because no updated address was found notwithstanding skip tracing. (Id., ¶¶ 9 and 10.)

As of July 22, 2022, ILYM has not received any requests for exclusion or objections to the settlement. (Id., ¶¶ 11 and 12.) The deadline to request exclusion or to file an objection was July 21, 2022. (Id.) As of July 22, 2022, ILYM will report a total of 449 Participating Class Members, representing 100% of the 449 Settlement Class Members. (Id., ¶ 13.)

The Net Settlement Fund is $246,603.87 (i.e., $366,788.00 Gross Settlement Fund, minus Class Counsel attorney’s fees [$146,333.33], Class Counsel costs payment [$8,562.80], Named Plaintiff enhancement award [$10,000.00], PAGA penalties [$20,000.00] and the Claims Administrator costs [$7,500.00].) (Id., ¶ 14.) Based upon the calculations stipulated in the Settlement, the highest individual gross payment to be paid will be approximately $1,562.99, with the average individual gross payment to be paid being approximately $549.23. (Id.)

ILYM’s costs associated with the administration of this matter are $7,500.00. (Id., ¶ 15.)

            Evaluation of Settlement

Before granting final approval, the court must evaluate the fairness of the proposed settlement and independently assess the reasonableness of the settlement’s terms. (CRC Rule 3.769, subd. (g); Kullar v. Foot Locker Retail, Inc. (2008) 168 Cal.App.4th 116, 130, 133.)  “The burden is on the proponent of the settlement to show that it is fair and reasonable.” (Wershba v. Apple Computer, Inc. (2001) 91 Cal.App.4th 224, 245 [disapproved on other grounds by Hernandez v. Restoration Hardware, Inc. (2018) 4 Cal.5th 260].)

“[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.” (Dunk v. Ford Motor Co. (1996) 48 Cal.App.4th 1794, 1802.) “[T]he test is not the maximum amount plaintiffs might have obtained at trial on the complaint, but rather whether the settlement is reasonable under all of the circumstances.” (Wershba, supra, 91 Cal.App.4th at 250.)

In making this determination, the court considers all relevant factors, “such as the strength of 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. The list of factors is not exhaustive and should be tailored to each case.” (Dunk, supra, 48 Cal.App.4th at 1801.)

The court “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.” (Kullar, supra, 168 Cal.App.4th at 129.) Of the relevant factors, “[t]he most important factor is the strength of the case for plaintiffs on the merits, balanced against the amount offered in settlement.” (Id. at 130 [quotation marks and citations omitted].)

 

The court already determined on Plaintiff’s motion for preliminary approval of class settlement that many of the factors established that the settlement is fair (e.g., the parties participated in arms’-length negotiations concerning settlement, the parties actively litigated and participated in the exchange of extensive informal discovery, and the amount offered in settlement vis-à-vis the strength of Plaintiff’s case and the risk associated with further litigation). Based on the foregoing, and based on the reasoning set forth in the court’s order granting preliminary approval of the class action settlement, court finds that Plaintiff has established that the settlement is fair, adequate, and reasonable. There being no objections to the settlement., the court determines that it is appropriate to approve it. The court also approved conditional certification of the class for purposes of settlement in its order granting preliminary approval of the settlement, and because there appear to be no subsequent events that have cast any doubt on the court’s preliminary determination, the court finds it appropriate to certify the class for settlement purposes.

            Attorney’s Fees and Costs

CRC Rule 3.769(b) provides: “Any agreement, express or implied, that has been entered into with respect to the payment of attorney’s fees or the submission of an application for the approval of attorney’s fees must be set forth in full in any application for approval of the dismissal or settlement of an action that has been certified as a class action.”

An award of attorney’s fees is made by the court at the fairness hearing. Despite any agreement by the parties to the contrary, “the court ha[s] an independent right and responsibility to review the attorney fee provision of the settlement agreement and award only so much as it determine[s] reasonable.” (Garabedian v. Los Angeles Cellular Telephone Co. (2004) 118 Cal.App.4th 123, 128.)

“[W]hen a number of persons are entitled in common to a specific fund, and an action brought by a plaintiff or plaintiffs for the benefit of all results in the creation or preservation of that fund, such plaintiff or plaintiffs may be awarded attorney’s fees out of the fund.” (Serrano v. Priest (1977) 20 Cal.3d 25, 34.) “[W]hen class action litigation establishes a monetary fund for the benefit of the class members, and the trial court in its equitable powers awards class counsel a fee out of that fund, the court may determine the amount of a reasonable fee by choosing an appropriate percentage of the fund created.” (Laffitte v. Robert Half Internat. Inc. (2016) 1 Cal.5th 480, 495.) “The choice of a fee calculation method is generally one within the discretion of the trial court, the goal under either the percentage or lodestar approach being the award of a reasonable fee to compensate counsel for their efforts.” (Id. at 504.)

The requested attorneys’ fee award is 33 1/3% of the Settlement Fund. The court finds that the request for attorneys’ fees for Plaintiff’s counsel in the amount of $146,333.33 is sufficiently supported by the Declarations of Daniel F. Gaines (“D. Gaines”) and Alex P. Katofsky (“Katofsky”). D. Gaines attests that the Named Plaintiff agreed in writing to a fee sharing agreement whereby the Davtyan Law Firm would be paid 1/3 of any attorneys’ fees recovered in this matter, and that his firm (i.e., Gaines & Gaines, APLC [“Firm”]) would be paid the balance. (D. Gaines Decl., ¶ 59.) He further attests that this fee sharing agreement does not alter the total fees charged in any way. (Id.)

D. Gaines further explains that, at any rate, Firm has spent approximately 117.4 hours to date litigating this case (i.e., 52.8 hours for Gaines [at $650.00/hour], 49.9 hours for Katofsky [at $700.00/hour], and 34.7 hours for associate Evan Gaines [at $575.00/hour]), for a lodestar of $89,202.50. (Id., ¶¶ 60 and 62-66; see also Katofsky Decl., ¶¶ 6 and 7.) Firm has also incurred out-of-pocket expenses exceeding $8,000.00 and expects to spend another 20 hours in connection with this instant motion and administering the settlement through its conclusion. (D. Gaines Decl.., ¶¶ 60 and 73, Exh. F.) The requested fee award would represent a multiplier of 1.64 above the lodestar of $89,202.50. (Id., ¶ 72; Motion, 13:7-8.)

The amount requested in costs, $8,562.80, is less than the $12,000.00 maximum cost allocation stipulated to by the parties in settlement. Here, no Class Member objected to the settlement, to the attorney fee award based on 33 1/3% of the settlement award, or the amount allocated to costs.

Enhancements

The Settlement Agreement provides for an enhancement award of up to $10,000.00 for Plaintiff, as the named plaintiff. The court already determined on Plaintiff’s motion for preliminary approval of class settlement that the proposed enhancement facially appeared to be fair and reasonable compensation. Plaintiff, moreover, has submitted a declaration attesting as to why he should be entitled to an enhancement award in the proposed amount of $10,000.00.

 

Plaintiff attests that he believes he has spent a total of approximately 25 hours assisting his attorneys with the preparation of this case, and doing work and analysis independent from his attorneys both before and during this case, including conducting an independent investigation of the facts. (Marquez Decl., ¶ 7.) He spent approximately 10 hours gathering, organizing and reviewing documents and information for this lawsuit, including sifting through many of his own documents and reviewing information produced by Defendant as part of this case. (Id., ¶ 8.) He also spent time through numerous phone calls with several of his attorneys explaining what he believed to be Defendant’s policies and procedures and how they were applied. (Id., ¶ 6.) During the course of this litigation, he kept actively involved with its status, tracking the status of the case and participating as much as possible. (Id.)

The court finds that Plaintiff’s declaration is sufficient to establish that the service award to him is fair and reasonable and finds it appropriate to approve the award as such.

            Claims Administrator Costs

The court finds that the request for costs for ILYM in the amount of $7,500.00 is sufficiently supported by the Declaration of Makenna Snow.

PAGA Settlement

The Settlement Agreement provides for payment to the Labor and Workforce Development Agency from the Settlement Fund in the amount of $15,000.00 as its 75% share of PAGA penalties. The court already determined on Plaintiff’s motion for preliminary approval of class settlement that the settlement amount for PAGA was substantial and fair.

Conclusion

The court GRANTS Plaintiff’s Motion for Final Approval of Class Action Settlement set forth in the “Stipulation of Settlement.”