Judge: Randall J. Sherman, Case: 2018-00980488, Date: 2022-12-02 Tentative Ruling

The tentative ruling is to continue the hearing on plaintiffs’ Motion for Preliminary Approval of Class Action Settlement to February 17, 2023 at 10:00 a.m.  Counsel must file supplemental papers addressing the court’s concerns (not fully revised papers that would have to be re-read) at least 16 days before the next hearing date.  Counsel should submit an amendment to the settlement agreement rather than any amended settlement agreement.  Counsel also should provide a red-lined version of any revised papers, including the class notice.  Counsel also should provide the court with an explanation of how the pending issues were resolved, with references to any corrections to the settlement agreement and the class notice, rather than with just a supplemental declaration or brief that simply asserts the issues have been resolved.

There is no definition in either the settlement agreement or the class notice of the PAGA group, or aggrieved employees who will be paid PAGA penalties.

Although the motion provides the estimated average payment to class members under the proposed settlement, it fails to provide the estimated high and low payments.  Those estimates are needed to assist the court in properly determining the fairness of the proposed settlement to the class.  If those figures are not available now, they must be provided in the motion for final approval.

The heading for §I(Y) of the settlement agreement, Participating Settlement Class Member, the same heading used for §I(Z), must be changed to match its content, a time period.

Section III.B.4 of the settlement agreement must be corrected, since it states that there will be a payment of $75,000 to the LWDA, when in fact only 75% of that amount will be paid to the LWDA.

The settlement agreement (in §IV(C)) and the class notice (at the end of §3) provide that the Administrator will resolve any workweek disputes.  The documents should reflect instead that the Administrator and the parties will attempt to resolve any such dispute, but the court ultimately will decide any workweek dispute (like the opt-out form says).

The parties must delete the language in §IV(E) of the settlement agreement saying that the Final Order and Judgment will bar and enjoin class members from prosecuting any particular future claims.  The court will not issue an injunction against the class members or aggrieved employees.  Res judicata and collateral estoppel arguments should provide defendants with sufficient protection against facing these same claims again.

The settlement agreement in §III(B)(5) and the class notice on p. 3 say that True-Up payments of approximately $818.29 will be made to the Settlement Class Members who did not sign a Pick-Up Stix release and/or accept a Pick-Up Stix payment.  These statements are ambiguous, since they don’t say that “each of the” applicable people will be paid approximately $818.29.  And why isn’t the exact amount known?  How many people will receive a True-Up payment, and what is the total amount of the True-Up payments?

Section 1 of the class notice must be corrected in two places to identify the judge as Randall J. Sherman, and once to correct the courtroom to Dept. CX105.

The return address on the envelope for the class notice (p.8) has the wrong case name, Salgado v. McKenna Labs, Inc.

The disclosure of the gross settlement amount in §III of the class notice is misleading, because it fails to explain that $1,173,961.36 is not actually being paid, but in fact only $800,000 in new money is being paid, and the difference has already been paid pursuant to Pick-Up Stix settlements (which should be explained to the class).

The title of §IV, Option 2 of the class notice falsely states, in underline, “If you opt out of the Settlement, you will NOT receive any Settlement payment”, when in fact employees who opt out will receive a PAGA payment.  The opt-out form makes the same mistake.

Plaintiffs do not provide any information as to how attorneys’ fees will be split between the two firms representing plaintiffs and the class.  For final approval, plaintiffs must disclose the proposed split so that the court can approve separate attorneys’ fees awards.  In addition, counsel must explain why they should receive attorneys’ fees for the amount of the settlement that is made up of previously-paid Pick-Up Stix settlement payments.

Section VI of the class notice calls for the final judgment to be communicated to the class by the court posting the final judgment on the court’s website.  However, sending the class members to the court’s website to look at a case file does not satisfy CRC Rule 3.771(b).  Rather, the administrator should post the final judgment on the administrator’s website to satisfy CRC Rule 3.771(b).

Counsel should propose a realistic Final Approval Hearing date, bearing in mind that all papers in support of the Final Approval Hearing, including detailed hourly breakdowns of plaintiffs’ attorneys to support a lodestar cross-check, detailed plaintiff attorney cost breakdowns, an Administrator declaration and invoice, and plaintiffs’ declarations to support the enhancement requests, must be filed at least 16 calendar days before the Final Approval Hearing date, to provide enough time for court review, and must be served in compliance with CCP notice of motion requirements.

Plaintiffs are ordered to give notice of the ruling to the LWDA and to defendants.