Judge Ronald F. Frank, Case Number: 20TRCV00958, Date: 2024-12-03 Tentative Ruling

Judge: Ronald F. Frank, Case: 20TRCV00958, Date: 2024-12-03 Tentative Ruling

Case Number: 20TRCV00958 Hearing Date: December 3, 2024 Dept: 8

Tentative Ruling

HEARING DATE: December 3, 2024

CASE NUMBER: 20TRCV00958

CASE NAME: Chris Wilson, individually, and on behalf of other aggrieved employees pursuant to the California Private Attoreys General Act v. Fox Hills Auto, Inc.., et al.

MOVING PARTY: Plaintiff, Chris Wilson

RESPONDING PARTY: Defendants, Fox Hills Auto, Inc. dba Airoport Marina Ford, Noarus Auto Group, Airport Marina Honda, Marina Del Rey Toyota, Toyota Place (No Opposition.)

TRIAL DATE: Not Set.

MOTION: (1) Plaintiff’s Motion for Approval of PAGA Settlement Agreement

Tentative Rulings: (1) GRANTED pending logistics discussions identified by the Court below, and subject to dates to be proposed by Plaintiff

I. BACKGROUNG

A. Factual

On December 30, 2020, Plaintiff, Chris, individually and on behalf of herself and other aggrieved employees pursuant to the California Private Attorneys General Act (“Plaintiff”) filed a complaint Defendants, Fox Hills Auto, Inc. dba Airport Marina Ford, Noarus Auto Group, Airport Marina Honda, Marina Del Rey Toyota, Toyota Place and DOES 1 through 100. The complaint alleging a cause of action for: (1) Enforcement under the Private Attorneys General Act, California Labor Code section 2698.

Now, Plaintiff has filed a Motion for Approval of PAGA Representative Action Settlement.

B. Procedural

On November 5, 2024, Plaintiff this Motion for Approval of PAGA Settlement Agreement. To date, no opposition has been filed.

II. ANALYSIS

A. Preliminary Approval of Class Action Settlement

As a “fiduciary” of the absent class members, the trial court’s duty is to have before¿it¿sufficient information to determine if the settlement is fair, adequate, and reasonable. (7-Eleven Owners for Fair Franchising v. The Southland Corp.¿(2000) 85 Cal.App.4th¿1135, 1151 [citing¿Dunk v. Ford Motor Co. (1996) 48 Cal.App.4th 1794, 1801, 1802 (“Dunk”)].)

California Rules of Court, rule 3.769 governs settlements of class actions. Any party to a settlement agreement may submit a written notice for preliminary approval of the settlement. The settlement agreement and proposed notice to class members must be filed with the motion, and the proposed order must be lodged with the motion. California Rules of Court, rule 3.769(c).

In determining whether to approve a class settlement, the court’s responsibility is to “prevent fraud, collusion or unfairness to the class” through settlement and dismissal of the class action because the rights of the class members, and even named plaintiffs, “may not have been given due regard by the negotiating parties.” (Consumer Advocacy Group, Inc. v. Kintetsu Enterprises of America¿(2006) 141 Cal.App.4th¿46, 60.)¿

B. Fairness of the Settlement Agreement

In an effort to aid the Court in the determination of the fairness of the settlement, Wershba v. Apple Computer, Inc. (2001) 91 Cal.App.4th 224, 244-45 (“Wershba”), discusses factors that the Court should consider when testing the reasonableness of the settlement.

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. (Wershba at 245, citing Dunk at 1802.) The test is not the maximum amount plaintiff might have obtained at trial on the complaint but, rather, whether the settlement is reasonable under all of the circumstances. (Wershba at 250.)

In making this determination, the Court considers all relevant factors including “the strength of [the] 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.’” (Kullar v. Foot Locker Retail, Inc. (2008) 168 Cal.App.4th 116, 128 (“Kullar”), citing Dunk at 1801.)

“The fact that a proposed settlement may only amount to a fraction of the potential recovery does not, in and of itself, mean that the proposed settlement is grossly inadequate and should be disapproved.” (City of Detroit v. Grinnell Corp. (2d Cir. 1974) 495 F.2d 448, 455; see also Linney v. Cellular Alaska Partnership (9th Cir. 1998) 151 F.3d 1234, 1242 [“[I]t is the very uncertainty of outcome in litigation and avoidance of wasteful and expensive litigation that induce consensual settlements. The proposed settlement is not to be judged against a hypothetical or speculative measure of what might have been achieved by the negotiators.”].)

C. Terms of the Settlement Agreement

An executed copy of the Settlement Agreement and Release is attached as Exhibit 2 to the Declaration of Travis J. Maher (“Maher Decl.”).

The Settlement pertains to the following allegedly aggrieved employees: “all current and former hourly-paid or non-exempt employees who worked for Defendant in the State of California during the PAGA Period (the “Aggrieved Employees”). The “PAGA Period” is defined as the period between October 15, 2019 to either (1) approval, or alternatively, (2) the Alternate End Date, which is the date when the total pay periods for the Aggrieved Employees total 10,811. (Maher Decl., ¶ 12.)

The Gross Settlement Amount (GSA) is $325,000. This includes:

· Up to $113,750 of the GSA in attorneys’ fees and up to $25,000 for reimbursement of litigation costs and expenses to Lawyers for Justice, PC;

· General Release Fee of $5,000 to Plaintiff;

· Settlement Administration Cost of up to $10,000 to the PAGA Settlement Administrator. Plaintiff’s counsel only seeks an award of reimbursement of litigation costs and expenses in the amount of $10,196.39, and assuming that the requested Attorneys’ Fees and Costs, general Release Fee, and Settlement Administration Costs, are approved by the court, the Net Settlement Amount will be distributed to the LWDA and the Aggrieved Employees pursuant to California Labor Code section 2699, subdivision (i).

· $142,494.90 to the California Labor and Workforce Development Agency, representing the LWDA’s 75% share of the settlement attributable to PAGA penalties.

· Up to $47,498.31 of the PAGA Penalties fund (25%) will be paid to the Settlement Group Members.

The settlement class is estimated to consist of approximately 193 aggrieved employees who worked Nine Thousand Eight Hundred Twenty-Nine (9,829) Compensable Pay Periods. (Maher Decl., ¶ 12.)

The individual settlement payments will be calculated as follows:

· Individual Settlement Awards will be calculated by dividing the number of Compensable Pay Periods the Aggrieved Employee individually worked by the total aggregate number of Compensable Pay Periods worked by all Aggrieved Employees, and then multiplying this amount by the Employees’ Portion to arrive at each Aggrieved Employee’s Individual Settlement Share. (Maher Decl., Exhibit 2, ¶7(b).)

D. Analysis of Settlement Agreement¿¿

1. Does a Presumption of Fairness Exist?¿

Was the Settlement reached through arm’s-length bargaining?

Yes. The motion contends that the Settlement Agreement is fair, adequate, and reasonable, as it represents a reasoned compromise of a disputed claim that has been reached through arm’s-length negotiations, in light of the risks, complexity, and expense of further litigation, and the strengths of the PAGA claim. (Motion, p. 1.)

Were investigation and discovery sufficient to allow counsel and the Court to act intelligently?

Yes. Plaintiff states the settlement only took place after counsel for the Parties engaged in significant investigation to evaluate the strength and potential value of the PAGA claim, and the risks and expenses of litigating this claim through trial. Plaintiff also asserts that the Parties investigated the veracity, strength, and scope of the PAGA claim and allegations and considered a large volume of information, documents, and data relevant to Plaintiff’s claim and Defendant’s defenses thereto. Plaintiff purports the Parties thoroughly and sufficiently evaluated the PAGA claim and related allegations, including, and not limited to, calculating the potential monetary recovery under PAGA.

Is counsel experienced in similar litigation?

Yes. Counsels have extensive experience with class and PAGA actions. (Maher Decl., ¶¶ 2-6.)

What percentage of class has objected?

This cannot be determined until the fairness hearing. (See Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2011) ¶ 14:139.18 [“Should the court receive objections to the proposed settlement, it will consider and either sustain or overrule them at the fairness hearing.”].) However, Plaintiff confirms that the parties have agreed that unnamed employees need not be given notice of the PAGA claim, nor do they have the ability to opt-out of the representative PAGA claim. (Motion, p. 4.)

2. Is the settlement fair, adequate, and reasonable?

Strength of Plaintiff’s case.

“The most important factor is the strength of the case for plaintiffs on the merits, balanced against the amount offered in settlement.” (Kullar v. Foot Locker Retail, Inc., 168 Cal.App.4th 116,¿130). Plaintiff contends that the parties had the opportunity to review extensive information, documents, and data regarding Plaintiff’s and Aggrieved Employees’ employment with Defendants in an effort to determine the potential value and strength of the PAGA claims. (Maher Decl., ¶ 15.) Maher contends these efforts included participating in a full-day mediation on April 2, 2024, conducted by Tagore Subramaniam, Esq., a well-respected mediator experienced in mediating complex labor and employment matters. (Maher Decl., ¶ 15.) In the course of mediation and settlement discussions, the parties discussed all aspects of the case,

including the risks and delays of further litigation and proceeding with trial, as well as the law relating to representative PAGA actions, off-the-clock theory, meal and rest periods, meal waivers, regular rate of pay calculations, reporting time pay, Industrial Welfare Commission Wage Orders, arbitration agreements, wage-and-hour enforcement, the evidence produced and analyzed, and the possibility of bifurcation of discovery and/or trial and appeals, among other things. (Maher Decl., ¶ 15.)

Additionally, the Maher declaration outlines the relative strengths and weaknesses of the PAGA claim and the range of the possible outcomes in the litigation. (Maher Decl., ¶¶ 16-18.)

The Court concludes that a settlement would be appropriate, and that the proposed settlement is fair, adequate, and reasonable.

Risk, expense, complexity and likely duration of further litigation & Risk of maintaining class action status through trial

Here, Plaintiff states that prior to reaching the Settlement, the Parties investigated the veracity, strength, and scope of the PAGA claim and allegations and considered a large volume of information, documents and data relevant to Plaintiff’s claim and Defendant’s defenses thereto. Plaintiff further asserts that the Parties thoroughly and sufficiently evaluated the PAGA claim and related allegations, including, and not limited to, calculating the potential monetary recovery under PAGA. Plaintiff's Counsel performed other work as well, which is discussed in the Declaration of Maher. (Maher Decl., ¶ 16.)

Amount offered in settlement.

As indicated above, Defendant has offered to pay a total Settlement Amount (GSA) is $325,000. This includes: up to $113,750 of the GSA in attorneys’ fees and up to $25,000 for reimbursement of litigation costs and expenses to Lawyers for Justice, PC; General Release Fee of $5,000 to Plaintiff; Settlement Administration Cost of up to $10,000 to the PAGA Settlement Administrator. Plaintiff’s counsel only seeks an award of reimbursement of litigation costs and expenses in the amount of $10,196.39, and assuming that the requested Attorneys’ Fees and Costs, general Release Fee, and Settlement Administration Costs, are approved by the court, the Net Settlement Amount will be distributed to the LWDA and the Aggrieved Employees pursuant to California Labor Code section 2699, subdivision (i); $142,494.90 to the California Labor and Workforce Development Agency, representing the LWDA’s 75% share of the settlement attributable to PAGA penalties; and up to $47,498.31 of the PAGA Penalties fund (25%) will be paid to the Settlement Group Members.

Extent of discovery completed and the stage of the proceedings.

As stated above, it appears that Plaintiff has completed sufficient discovery in order to make an informed decision.¿

Experience and views of counsel.

Per the Maher Declaration, Class Counsel has extensive experience in labor and employment class actions.¿

Presence of a governmental participant.

This factor is not applicable here.

Reaction of the class members to the proposed settlement.

The class members’ reactions will not be known until they receive notice and are afforded an opportunity to object or opt out. This factor becomes relevant during the fairness hearing.¿ However, as discussed, the unnamed employees are not given the ability to opt-out of the representative PAGA claim.

I. Scope of Release

Release of Claims

The Agreement and the judgment to be entered by this court would include a release of claims by Plaintiff, and the State of California with respect to Aggrieved Employees, will be deemed to have knowingly and voluntarily released and forever discharged Defendant, including Defendant’s parent corporation, affiliates, subsidiaries, divisions, predecessors, insurers, successors and assigns, and their current and former employees, attorneys, officers, directors and agents thereof, both individually and in their business capacities and their employee benefit plans and programs and the trustees, administrators, fiduciaries and insurers of such plans and programs (collectively, the “Released Parties”), to the full extent permitted by law, and from the action and from any and all claims, arising during the PAGA Period, for civil penalties under California Labor Code section 2698, et seq. (“PAGA”) as well as any interests, fees, and costs available under PAGA, based on the factual allegations in the Operative Complaint, including but not limited to, for failure to pay minimum, regular, and overtime wages, failure to provide complaint meal periods and associated premiums, failure to provide compliant rest periods and associated premiums, failure to timely pay wages during employment, failure to timely pay wages upon termination, failure to provide compliant and accurate wage statements, failure to maintain complete and accurate payroll records, and failure to reimburse necessary business-related expenses and costs.

The court finds the scope of release to be permissible because it is limited to claims arising from the facts alleged in the complaint, the Settled Claims.

II. Conditional Class Certification

A. Standards

A detailed analysis of the elements required for class certification is not required, but it is advisable to review each element when a class is being conditionally certified (Amchem¿Products, Inc. v. Winsor¿(1997) 521 U.S. 620, 622-627.) The trial court can appropriately utilize a different standard to determine the propriety of a settlement class as

opposed to a litigation class certification. Specifically, a lesser standard of scrutiny is used for settlement cases. (Dunk¿at 1807, FN19.) Because a settlement eliminates the need for a trial, when considering whether to certify a settlement class, the court is not faced with the case management issues present in certification of a litigation class. (Global Minerals & Metals Corp. v. Superior Court¿(2003) 113 Cal.App.4th¿836, 859.) Finally, the Court is under no “ironclad requirement” to conduct an evidentiary hearing to consider whether the prerequisites for class certification have been satisfied. (Wershba¿at 240.)¿

B. Analysis

1.¿Numerosity.

There are approximately¿193 aggrieved employees class members. Thus, numerosity has been sufficiently established. (See¿Rose v. City of Hayward¿(1981) 126 Cal.App.3d 926, 934 [stating that “[n]o set number is required as a matter of law for the maintenance of a class action” and citing examples wherein classes of 10 [Bowles v. Superior Court¿(1955) 44 Cal.2d 574] and 28 [Hebbard¿v.¿Colgrove¿(1972) 28 Cal.App.3d 1017]¿were upheld].) Defendant will provide a list of Class Members and PAGA Members, with a list of: first and last name, last known address, last known telephone number, social security number, and compensable pay periods. Agreement, ¶ 7(c)(1))

2. Ascertainability.

This class definition “is precise, objective and presently ascertainable.” (Sevidal¿v. Target Corp.¿(2010) 189 Cal.App.4th 905, 919.) Here, the Class definition is sufficiently defined, as noted above.

3. Community of interest.

“The community of interest requirement involves three factors: ‘(1) predominant common questions of law or fact; (2) class representatives with claims or defenses typical of the class; and (3) class representatives who can adequately represent the class.’” (Linder v. Thrifty Oil Co. (2000) 23 Cal.4th 429, 435.)

The first factor is met because the PAGA Settlement Members is sufficiently defined.

The second factor is met because as stated in the Motion, Plaintiff’s interests are not averse to the Settlement Group Members. As such, this Court is inclined to believe that Plaintiff, as the class representative has claims typical of the class, as his claims are based on the same legal theories and arise out of the same allegedly unlawful policies and practices.

The third factor is met because the named Plaintiff asserts that the action was filed on behalf of himself and on behalf of the aggrieved employees pursuant to the PAGA.

4. Adequacy of class counsel.

As indicated above, counsel is experienced in class actions, including cases involving wage and hour violations.

5. Superiority.

Plaintiff claims that proceeding as a class action is a superior means of resolving this dispute, as the risk of litigation was an uncertain route. Plaintiff confirms he and his counsel are aware of the burdens of proof necessary to establish liability and the difficulties in establishing liability for penalties.

III. NOTICE TO CLASS

A. Standard

California Rules of Court, rule 3.769(e) provides: “If the court grants preliminary approval, 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.” Additionally, rule 3.769(f) states: “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.”

B. Form of Notice

The motion indicates that unnamed employees need not be given notice of the PAGA claim. The Declaration of Travis J. Maher includes, as Exhibit 1, the PAGA Notice. (Maher Decl., ¶ 8, Exhibit 1.)

C. Method of Notice

Within fourteen (14) days after the Settlement Effective Date, Defendant will provide the Aggrieved Employee List to the Settlement Administrator including the following information about each Settlement Class Member: first and last name, last known address, last known telephone number, social security number, and compensable pay periods. (Agreement, ¶ 7(c)(1).) The Administrator shall mail the agreed-upon cover letter and individual settlement share checks to all Aggrieved Employees by first-class United States mail.

IV. ATTORNEY FEES AND COSTS

California Rules of Court, rule 3.769(b) states: “Any agreement, express or implied, that has been entered into with respect to the payment of attorney fees or the submission of an application for the approval of attorney 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 fees is made by the Court at the fairness hearing. (Laffitte v. Robert Half Intern., Inc. (2016) 1 Cal.5th 480.) 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 determined reasonable.” (Garabedian v. Los Angeles Cellular Telephone Co. (2004) 118 Cal.App.4th 123, 128.)

Accordingly, the question of whether class counsel is entitled to $113,750 as compensation for reasonable attorneys’ fees and $10,196.39 for reimbursement of litigation costs and expenses will be addressed at the fairness hearing when class counsel brings a noticed motion for attorney fees. With the motion, counsel must provide an overall summary of the time spent by each attorney or paralegal who worked on this matter. (Laffitte v. Robert Half Intern., Inc. (2016) 1 Cal.5th 480, 505 (“The trial court in the present case exercised its discretion in this manner, performing the cross-check using counsel declarations summarizing overall time spent, rather than demanding and scrutinizing daily time sheets in which the work performed was broken down by individual task.”).)

Furthermore, any agreement about how attorney fees will be paid, including fee splitting and whether the client has given written approval, should be provided. (Mark v. Spencer (2008) 166 Cal.App.4th 219; Ca. Rules of Professional Conduct, §2-200; Ca. Rules of Court, Rule 3.769.)

The following schedule is proposed by the Court:¿

Preliminary Approval Hearing: May 27, 2025

Deadline for Serving Notices to Class Members: April 28, 2025 (within 30 days of preliminary approval date)

Deadline for Objecting or Opting Out: ________, 2025 (45 calendar days from the date the Notice Packets are mailed to class members)

Deadline for Class Counsel to File Motion for Final Approval of Settlement and Motion for Attorney Fees (and respond to any objections): _____________________________, 2025

(16 court days prior to hearing)

Final Fairness Hearing and Final Approval: ______________________________, 2025

V. CONCLUSION

Based on the foregoing, the motion for Preliminary Approval of Class Action Settlement is GRANTED.