Judge: Ronald F. Frank, Case: 21STCV38784, Date: 2023-08-31 Tentative Ruling

Case Number: 21STCV38784    Hearing Date: August 31, 2023    Dept: 8

Tentative Ruling¿ 

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HEARING DATE:                 August 31, 2023¿¿ 

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CASE NUMBER:                  21STCV38784

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CASE NAME:                        Ulysses A. Rivas v. City of Manhattan Beach, et al. 

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MOVING PARTY:                Plaintiff, Ulysses A. Rivas

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RESPONDING PARTY:       Defendant, City of Manhattan Beach (No Opposition)

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TRIAL DATE:                        Not Set.

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MOTION:¿                              (1) Motion for Final Approval of Class Action and PAGA Settlement

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Tentative Rulings:                  (1) APPROVED

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I. BACKGROUNG

A.    Factual

Plaintiff Ulysses A. Rivas (“Plaintiff”) seeks final approval of the proposed $105,000 class action settlement. Plaintiff notes the class members were given notice on May 26, 2023 by U.S. mail. The deadline for responding to the Class Notice expired on July 25, 2023, and to date, there have been no objections to the settlement. Plaintiff further notes there have been no opt outs.

B.     Procedural

On August 10, 2023, Plaintiff filed a Motion for Final Approval of Class Action Settlement. To date, no opposition has been filed.

II.                ANALYSIS¿ 

A.    Settlement Class Definition

Plaintiff has certified the following Class for settlement purposes, consisting of thirteen (13) class members, which Defendant also does not oppose: All persons employed by the City who worked as a Dial-a-Ride driver in California for the City from October 20, 2018 to March 10, 2023 (the “Class Period”)

B.     Summary of Settlement Terms

The essential terms of the settlement are as follows:

·         The Gross Settlement Amount (“GSA”) is $105,000, with no reversion.

·         The Net Settlement Fund (“NSF”) shall be calculated by deducting the following amounts from the GSA:

o   $40,000 to Class Counsel for attorneys’ fees;

o   $10,000 to Class Counsel for litigation costs and expenses;

o   $15,000 to the Class Representatives as a service award as approved by the Court;

o   $3,750 to the California Labor and Workforce Development Agency for PAGA Penalties; and

o   $2,500 to the Settlement Administrator to administer the settlement

§  Plaintiff notes that no affirmative action was needed by a Class Member to become a Participating Class Member;

§  No portion of the Total Settlement Amount will revert to Defendant;

§  The Parties agree that the Net Settlement Fund shall be used to fund Individual Settlement Payments to Participating Class Members;

§  The Parties agree that the Net Settlement Fund shall be divided between all Participating Class Members based on the number of Shifts they worked for Defendant as Dial-a-ride drivers during the Class Period.

·         Each Individual Settlement Payment will be allocated using the following formula:

o   25% of each Individual Settlement Payment will be treated as wages and subject to normal tax withholding and shall be reported to taxing authorities on an IRS Form W-2 and the remaining 75% of each Individual Settlement Payment will be treated as prejudgment interest, penalties and statutory non-wage payments on which there will be no tax withholding and for which an IRS Form 1099 (marked “Other Income”) shall be issued if the payment is above the minimum threshold required for the issuance of a Form 1099.

o   The employer’s share of payroll taxes will be paid by Defendant’s separate and apart from the Total Settlement Amount.

o   Participating Class Members and Aggrieved Employees assume full responsibility and liability for any taxes owed on their Individual Class Payment and Individual PAGA Payment received.

·         Lastly, Plaintiff notes that participating Class Members shall have one hundred eighty (180) days from the date their Individual Settlement Payment checks are dated to cash their settlement checks. If a check is returned to the Settlement Administrator as undeliverable, the Settlement Administrator shall conduct one change of address search and resend the payment to the newly identified address, and also provide a report of such returned or unmailed payments to Plaintiff’s and Defendant’s counsel.

·         Any checked that are not cashed upon the expiration of that 180-day time period will be distributed to the State of California State Controller’s Office of Unclaimed Property Fund in the name and for the benefit of the individual Class Member. The Total Settlement Amount is not reversionary. No portion of the Total Settlement Amount will revert to Defendant.

C.    Whether a Presumption of Fairness Exists

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.”].)   

1. Does a Presumption of Fairness Exist?¿ 

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

Yes. Plaintiff notes the parties have actively litigated the case, engaged in investigations and exchange of informal discovery and documents, engaged in mediation with Steve Pearl, Esq.. (Barrera Decl., ¶¶ 15-22.) Plaintiff also notes the parties were well aware of all aspects of the case including the risks and delays of further litigation, the risk to both parties of proceeding with class certification, the law relating to the subject claims, the evidence produced and analyzed, and the possibility of appeals, among other things. Plaintiff maintains the parties conducted their negotiations at arms’ length in an adversarial position. (Barrera Decl., ¶ 2.)

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

Yes. Plaintiff notes that arriving at a settlement that was acceptable to both parties was not easy, and that Defendant and their counsel felt very strongly about its ability to prevail on the merits and at certification. Plaintiff and Class Counsel believed that they would have obtained class certification and prevailed at trial. (Id., ¶¶ 10.) Plaintiff contends that the parties litigated the case up until the settlement in January 2023. Plaintiff opines that after much consideration by the parties as to their respective positions and risks in continued litigation, the parties agreed that this case was well suited for settlement given the legal issues relating to Plaintiff’s claims, as well as the costs and risks to both sides that would attend further litigation. (Barrera Decl., ¶¶ 20-22.) Plaintiff maintains that the proposed Settlement takes into account the strengths and weaknesses of each side’s position and the uncertainty of how the case might have concluded at certification and/or trial. (Barrera Decl., ¶¶ 23-49.) Class Counsel also notes that he reviewed hundreds of pages of documents produced by Defendant and provided by the Named Plaintiff and other putative class members, and performed significant research into the law concerning Defendant’s defenses. (Barrera Decl. ¶¶ 9- 16.) As such, Plaintiff notes that the proposed Settlement was based on this large volume of facts, evidence, and investigation. (Barrera Decl., ¶¶ 9-49.)

Is counsel experienced in similar litigation?

Yes. Class Counsel has extensive experience in employment class actions, including extensive experience in California wage-and-hour litigation. (Barrera Decl., ¶¶ 4-8.)

What percentage of class has objected?

No class member has objected or opted out.

Section Conclusion

            Based on the above, the settlement is entitled to a presumption of fairness.

D.    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. (2008) 168 Cal.App.4th 116, 130.) Here, the Court finds that Plaintiff’s Counsel’s declaration sufficiently analyzes the strength of Plaintiffs case on the merits, and balances it based on the amount offered in settlement.

Risk, expense, complexity and likely duration of further litigation

            As noted above, Plaintiff discussed the risk, expense, complexity, and likely duration of further litigation.

Risk of maintaining class action status through trial

This factor did not weigh in the Court’s calculus.

Amount offered in settlement

            The offered amount was the $105,000 gross settlement amount. 

Extent of discovery completed and stage of the proceedings

            As noted above, the parties engaged in sufficient discovery exchange.

Experience and Views of Counsel

            Plaintiff’s counsel notes that he and his firm are well qualified because of their experience, knowledge, and resources to act as counsel and represent Plaintiff and the putative class in this action. (Barrera Decl., ¶ 19.) Plaintiff’s Counsel notes that he has represented employees in numerous class-action lawsuits involving wage and hour violations in California. (Barrera Decl., ¶ 19.) Plaintiff’s counsel further notes that a significant percentage of his firm’s practice is devoted to litigating wage and hour violations, and the bulk of these cases are class actions. (Barrera Decl., ¶ 19.)  Lastly, he notes that he have obtained favorable settlements against a range of defendants in wage and hour class action. (Barrera Decl., ¶ 19.)

            Further, Plaintiff’s Counsel contends that Barrera & Associates is actively involved in both class action and individual employment litigation matters on an ongoing basis. (Barrera Decl., ¶ 20.) He claims his firm deals regularly with class action litigation and individual employment litigation, many of which also involve wage and hour components. (Barrera Decl., ¶ 20.) Plaintiff’s Counsel opines that his experience is helpful in assessing the reasonableness of settlements such as the one at issue here; and from this experience Plaintiff’s Counsel concludes that this lawsuit could not have been settled on better terms than provided under the present settlement agreement. (Barrera Decl., ¶ 20.)

Presence of a Governmental Participant

            This factor is not applicable here, other than the fact that a city was the named defendant..

Reaction of the Class Members to the Proposed Settlement

            Plaintiff noted in his motion that there were 13 class members. The declaration does not note whether there were undeliverable notices. However, Plaintiff notes there were no objections and no opt-outs.

Section Conclusion

            The settlement can be preliminarily deemed “fair, adequate, and reasonable.”

E.     Attorneys Fees and Costs

Class Counsel, Barrera & Associates, requests $40,000 in attorneys’ fees, 38.1% of the GSA. The Settlement provides for attorney’s fees up to $40,000 and costs up to $10,000. The class was provided notice of the requested award and none objected.

“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 as crosschecked by lodestar. (Motion ISO Final, pgs. 11-18.)  

 The fee request represents 38.1% of the gross settlement amount. The Court notes that 33% of the GSA is the average generally awarded in class actions. (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.”].)    

Counsel has provided the following lodestar information:  

(Barrera Decl., ¶ 37.)

            Based on this, counsel has a lodestar of approximately $95,799, which requires a negative multiplier to arrive at the requested award. The hourly rates appear to be reasonable, as do the amount of time spent on litigation tasks.

            As for costs, class counsel has incurred $10,057.80 and anticipates incurring $400 more for a total of $10,457.80, but the costs are capped at $10,000.   

F.     Incentive Award to Class Representative

The settlement provides for a $15,000 incentive award to the named Plaintiff. The class was provided notice of the requested incentive award and none objected. The Court agrees and believes this is reasonable.

G.    Claims Administration Costs

Lastly, the claims administrator, Pheonix Action Administration and the parties have requested $2,500 to be paid for their services in this matter. The Court contends that this amount is fair and reasonable.

III.             CONCLUSION 

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