Judge: Ronald F. Frank, Case: 21TRCV00543, Date: 2024-11-05 Tentative Ruling
Case Number: 21TRCV00543 Hearing Date: November 5, 2024 Dept: 8
Tentative
Ruling¿
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HEARING DATE: November 5, 2024
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CASE NUMBER: 21TRCV00543
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CASE NAME: Tenaya Jackson individually, and on behalf
of other aggrieved employees pursuant to the California Private Attoreys
General Act v. CBRE, Inc., et al.
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MOVING PARTY: Plaintiff,
Tenaya Jackson
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RESPONDING PARTY: Defendants,
CBRE Inc., and CBRE Group, Inc. (No Opposition.)
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TRIAL DATE: Not
Set.
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MOTION:¿ (1) Plaintiff’s Motion for Approval of PAGA Settlement Agreement
Tentative Rulings: (1) GRANTED pending logistics discussions identified by the Court
below.
I. BACKGROUNG
A.
Factual
On July 26, 2021, Plaintiff, Tenaya
Jackson, individually and on behalf of herself and other aggrieved employees
pursuant to the California Private Attorneys General Act (“Plaintiff”) filed a complaint
against Defendants, CBRE, Inc. CBRE Group, Inc., 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. Plaintiff alleges that
Defendant failed to pay minimum wages; failed to pay overtime owed; failed to
provide lawful meal periods; failed to provide rest periods; failed to pay
wages upon termination; failure to timely pay wages during employment; failure
to provide complete and accurate wage statements and payroll records; and
failure to reimburse necessary business-related expenses and costs.
Now, Plaintiff filed a Motion for Approval of PAGA
Representative Action Settlement.
B.
Procedural
On October 14, 2024, Plaintiff this
Motion for Approval of PAGA Settlement Agreement. To date, no opposition has
been filed.
I.
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 Tara
Zabehi. (“Zabehi Decl.”). (Zabehi Decl., ¶ 13, Exhibit
2.)
Plaintiff seeks to provisionally certify
the following class for settlement purposes: “all current and former
hourly-paid or non-exempt employees who worked for Defendant in the State of
California during the PAGA Period.” (Zabehi Decl., ¶ 14, Exhibit 2.) The “PAGA
Period” is defined as the period between May 20, 2020 through October 12, 2022.
(Zabehi Decl., ¶ 14, Exhibit 2.)
The Gross Settlement Amount (GSA) is $2,190,000.
This includes:
·
Up
to $876,000 of the GSA in attorneys’ fees. (Zabehi
Decl., ¶ 15.)
· Up to $50,000 in litigation costs. (Zabehi
Decl., ¶ 15.)
o
Plaintiff’s counsel
indicates it is only seeking an award of reimbursement of litigation costs and
expenses in the amount of $9,488.24.
·
Up
to $12,500 Service Payment to Plaintiff as Class Representative. (Zabehi
Decl., ¶ 15.)
·
$20,000
in Settlement Administration Fees and Costs.
·
$954,009.82
to the California Labor and Workforce Development Agency, representing the
LWDA’s 75% share of the settlement attributable to PAGA penalties.
·
Up to $318,002.82 of the PAGA Penalties
fund (25%) will be paid to the Settlement Group Members.
The settlement class is estimated to
consist of approximately 4,312 aggrieved employees who worked One Hundred
Twenty-Five Thousand Compensable Pay Periods. (Zabehi
Decl., ¶ 14.)
The individual settlement payments will
be calculated as follows:
·
Individual
Settlement Awards will be calculated based on the Settlement Group Members’
number of pay periods worked during the PAGA Period.
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 notes 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.
Is counsel experienced in similar
litigation?
Yes. Counsels have extensive experience
with class and PAGA actions. (Zabehi Decl., ¶¶ 2-12.)
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 notes 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. (Zabehi Decl., ¶ 31.) Additionally,
the Zebehi declaration outlines the relative strengths and weaknesses of the
PAGA claim and the range of the possible outcomes in the litigation. (Zabehi Decl., ¶¶ 21-31.)
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 Defendants’ 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 Tara Zabehi.
Amount offered in settlement.
As indicated above, Defendant has offered
to pay a total Settlement Amount (GSA) is $2,190,000. This includes: up to $876,000
of the GSA in attorneys’ fees; up to $50,000 in litigation costs, but plaintiff’s
counsel indicates it is only seeking an award of reimbursement of litigation
costs and expenses in the amount of $9,488.24; up to
$12,500 Service Payment to Plaintiff as Class Representative; $20,000 in
Settlement Administration Fees and Costs; $954,009.82 to the California Labor
and Workforce Development Agency, representing the LWDA’s 75% share of the
settlement attributable to PAGA penalties; and up to $318,002.82 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.
As stated above, 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.¿
II.
Scope
of Release¿
Release of Claims¿¿
The Agreement and the judgment to be
entered by this court would include a release of claims by Plainitff, Aggrieved
Employees, and the State of California, stating: Plaintiff and the State of
California with respect to Aggrieved Emloyees, will be deemed to have knowingly
and voluntarily released and forever discharged Defendants, including
Defendants’ parent corporation, affiliates, subsidiaries, divisions,
predecessors, insurers, successors and assignes, 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, to the full extent permitted by law, of and from the Action and from
any and all claims, arising uduring the PAGA Period, for civil penalties under
California Labor Code section 2698, et seq. (“PAGA”) as well as any
interest, fees, and costs available under PAGA, based on or arising out of the
factual allegations in the Operative Complaint or the PAGA notice, including…”
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.
III.
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¿4,312 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 noted
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 her 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 notes that the action was filed on behalf of herself 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 notes she and her counsel are
aware of the burdens of proof necessary to establish liability and the
difficulties in establishing liability for penalties.
IV.
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 Court will inquire at
the hearing as to whether there is any method of notifying unnamed employees so
they can participate in the settlement.
C.
Method
of Notice
Within fifteen (15) days after the Court grants preliminary approval
of the settlement, Defendant will provide the Class 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)). While the
settlement terms indicate that the checks will be sent via first class mail, the
motion and proposed order do not state how notice will be sent.
V.
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 $876,000 will be addressed at the fairness hearing
when class counsel brings a noticed motion for attorney fees. The Court notes a 40% ratio of attorney’s
fees to the total settlement amount. 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 needs to be
discussed at the hearing:¿
¿
Preliminary Approval Hearing: ________,
2025
¿
Deadline for Serving Notices to Class
Members: _________, 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
VI.
CONCLUSION
Based on the foregoing, the motion for
Preliminary Approval of Class Action Settlement is tentatively GRANTED.