Judge: Ronald F. Frank, Case: 23TRCV01299, Date: 2024-02-23 Tentative Ruling
Case Number: 23TRCV01299 Hearing Date: February 23, 2024 Dept: 8
Tentative Ruling¿
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HEARING DATE: February 23, 2024¿¿
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CASE NUMBER: 23TRCV01299
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CASE NAME: Patria Sosa, individually and on behalf of
all Aggrieved Employees v. The Sunrider Corporation, et al.
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MOVING PARTY: Plaintiff,
Patria Sosa
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RESPONDING PARTY: Defendants, Sunrider Corporation, Sunrider Manufacturing, LP,
Sunlife Herbal Company, Inc., et al. (No
Opposition)
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TRIAL DATE: Not
Set.
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MOTION:¿ (1) Motion for Preliminary Approval of Class Action Settlement
Tentative Rulings: (1) GRANTED
I. BACKGROUND¿¿
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A.
Factual¿¿
On April 26, 2023, Plaintiff, Patria Sosa,
individually and on behalf of all other aggrieved employees (“Plaintiff”) filed
a Complaint against Defendants, The Sunrider Corporation, a Utah Corporation,
Sunrider Manufacturing, L.P., a California Limited Partnership, Sunlife Herbal
Company, Inc., a California Corporation, and DOES 1 through 50. The Complaint
alleges causes of action for enforcement under the Private Attorneys General
Act, California Labor Code § 2698, et seq..
On January 30, 2024, Plaintiff filed a Motion for
Preliminary Approval of Class Action Settlement. To date, no opposition has
been filed.
On February 9, 2024, the parties filed a Joint
Stipulation for Plaintiff to file a First Amended Complaint, for settlement
purposes.
B.
Summary of Settlement Terms
Under the terms of the fully
executed Settlement Agreement, Defendants have agreed to pay a settlement
amount of $325,151 (“Total Settlement Amount”).
The Net Settlement Amount will be
used to fund payments to Class Members who do not opt out of the Settlement
(“Participating Class Members”). The Net Settlement Amount shall be calculated
by deducting the following amounts from the Gross Settlement Amount, if
approved by this Court: (1) $108,398.49 to Class Counsel for attorneys’ fees;
(2) not to exceed $9,000 to Class Counsel for litigation costs and expenses;
(3) $10,000 of an enhanced reward to Plaintiff for being the Class
Representative as a service award as approved by the Court; (4) $40,000 to the
California Labor and Workforce Development Agency for PAGA Penalties; and (5) $10,500
to the Settlement Administrator to administer the settlement. This leaves
$147,252.51 to be distribution to the class.
The Net Settlement Amount shall be
distributed to Participating Class Members who do not opt out of the
Settlement. No affirmative action is needed by a Class Member to become a
Participating Class Member. The Parties agree that the Net Settlement Amount
shall be used to fund Individual Settlement Payments. The Parties agree that
the Net Settlement Amount shall be divided between all Participating Class
Members based on the number of weeks they worked for Defendant during the Class
Period.
An Individual Class Payment will be
calculated by a pro-rated share of the Net Settlement Amount based on the total
number of weeks worked as a Settlement Class Member any time during the class
period, in relation to the aggregate number of weeks worked by all
participating settlement class members based on the following formula:
Individual Settlement Payment = NSA x (Individual’s Number
of Weeks Worked ÷ Aggregate Weeks Worked by all Participating Settlement Class
Members During the Class Period)
The estimated amount of te
settlement class member’s individual settlement payment will be calculated by
the Settlement Administrator and inserted in the Settlement Class Member’s
individual Notice Packet, together with their aggregate number of Pay Periods worked
during the Class Period and the number of pay periods employed during the PAGA
period.
As to the PAGA Penalties, the
Administrator will calculate each Individual PAGA Payment by receiving a
proportionate share of $10,000 (25% of the PAGA Payment), in addition to the
Individual Settlement Payment, based on the following formula:
Individual PAGA payment = $ 10,000 x (Individual’s Number of
Pay Periods Worked ÷ Aggregate Pay Periods Worked by all PAGA Members During
the PAGA Period)
No amount of the Gross Settlement
Amount shall revert back to Defendant. Each Individual Settlement Payment will
be allocated using the following formula: (1) 20% to wages and reported on an
IRS W-2 basis; (2) 30% to interest to be reported on an IRS form 1099; and (3)
50% to penalties to be reported on an IRS form 1099. Participating Class
Members and Aggrieved Employees assume full responsibility and liability for
any taxes and required withholding owed on their Individual Class Payment and
Individual PAGA Payment received.
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. Any checks that are
not cashed upon the expiration of that 180-day time period will be sent to the
California Controller’s Unclaimed Property Fund in the same name of the
Participating Settlement Class Members who did not cash their checks until such
time that they claim their property.
II. ANALYSIS
A.
Legal
Standard
California Rules of Court,
rule 3.769(a) provides: “A settlement or compromise of an entire class action,
or of a cause of action in a class action, or as to a party, requires the
approval of the court after hearing.” “Any party to a settlement agreement
may serve and file a written notice of motion 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.” (See Cal. Rules of Court, rule 3.769(c).)
“In a class action lawsuit,
the court undertakes the responsibility to assess fairness in order to prevent
fraud, collusion or unfairness to the class, the settlement or dismissal of a
class action. The purpose of the requirement [of court review] is the
protection of those class members, including the named plaintiffs, whose rights
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 [internal quotation marks omitted]; Wershba v. Apple Computer, Inc.
(2001) 91 Cal.App.4th 224, 245, disapproved on another ground in Hernandez
v. Restoration Hardware, Inc. (2018) 4 Cal. 5th 260 (“Wershba”), [Court needs to
“scrutinize the proposed settlement agreement to the extent necessary to
reach a reasoned judgment that the agreement is not the product of fraud or
overreaching by, or collusion between, the negotiating parties, and that the settlement,
taken as a whole, is fair, reasonable and adequate to all concerned.”]
[internal quotation marks omitted]. )
“The burden is on the
proponent of the settlement to show that it is fair and reasonable. However, “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, 91 Cal. App. 4th
at 245 [citing Dunk v. Ford Motor Co. (1996) 48 Cal.App.4th 1794, 1802 ]. )
Notwithstanding an
initial presumption of fairness, “the court should not give rubber-stamp
approval.” (Kullar v. Foot Locker Retail, Inc. (2008) 168
Cal.App.4th 116, 130 (“Kullar”).) “[W]hen class certification is
deferred to the settlement stage, a more careful scrutiny of the fairness of
the settlement is required.” (Carter v. City of Los Angeles (2014)
224 Cal.App.4th 808, 819.) “To protect the interests of absent class members,
the court must independently and objectively analyze the evidence and
circumstances before it in order to determine whether the settlement is in the
best interests of those whose claims will be extinguished.” (Kullar,
168 Cal. App. 4th at 130.) In that determination, the court should
consider 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 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.” (Id. at 128.) “Th[is]
list of factors is not exclusive and the court is free to
engage in a balancing and weighing of factors depending on the circumstances of
each case.” (Wershba, 91 Cal. App. 4th at 245.)
At the same
time, “[a] settlement need not obtain 100 percent of the damages sought in
order to be fair and reasonable. Compromise is inherent and necessary in
the settlement process. Thus, even if ‘the relief afforded by the
proposed settlement is substantially narrower than it would be if the suits
were to be successfully litigated,’ this is no bar to a class settlement
because ‘the public interest may indeed be served by a voluntary settlement in
which each side gives ground in the interest of avoiding litigation.’” (Id.
at 250.)
B.
Discussion
1.
Presumption
of Fairness
The settlement is entitled to a
presumption of fairness for the following reasons: (1) the settlement was
reached through arm’s length bargaining; (2) The investigation and discovery
were sufficient; and (3) Counsel is experienced in similar litigation. At this time, the Court lacks any data on the
4th factor, the Percentage of the class objecting.
First, Plaintiff notes that this
settlement was reached through serious, arms-length negotiations facilitated by
mediator, Scott Markus, Esq., who has extensive experience mediating wage and
hour class actions.
Next, Plaintiff argues that the
proposed settlement in this case warrants preliminary approval under the
liberal standard as it is fair, reasonable, and adequate under all
circumstances, and represents a favorable result for the class. Plaintiff’s
moving papers indicate that the settlement is a product of Plaintiff’s pre- and
post-filing investigation, a pre-mediation exchange of information, and
arms-length and adversarial negotiations at, and after mediation overseen by
experienced and well-regarded mediator, Scott Markus, Esq., on October 6, 2023.
Plaintiff’s moving papers further indicate that the parties have engaged in
significant informal discovery to facilitate an exchange of information
necessary to meaningly engage in mediation. As a result, Plaintiff contends
that she has reviewed documents and information regarding Defendants’ payroll
practices, pay stubs and time records for a sampling of class members, meal and
rest break policies, etc., and information from Defendants regarding class size
and breakdown, work weeks, rates of pay, and other information used to
formulate a damages model with the assistance of a consulting expert
Plaintiff’s counsel is confident they obtained sufficient information to enable
them to understand the law and facts of this case and make an informed decision
regarding the proposed settlement and whether it is in the best interests of
the class. (Declaration of Haig B. Kazandjian (“Kazandjian Decl.”), ¶¶ 8, 24; Declaration
of Patria Sosa (“Sosa Decl.”), ¶¶ 4-6.)
Third, Plaintiff notes that
Plaintiff’s counsel is well experienced in wage and hour class action
litigation as well as PAGA litigation. The Kazandjian declaration confirms that
counsel has worked on numerous cases involving wage and hour class action litigation
as well as PAGA litigation. (Kazandjian Decl., ¶¶ 37-39.)
As such, Plaintiff has demonstrated
all factors besides the percentage of the class objecting. There is no evidence
before the Court of any objections to the proposed settlement at this time,
subject to future distribution of notices to class members.
2.
The
settlement may preliminarily be considered fair, adequate, and reasonable.
Notwithstanding
a presumption of fairness, the settlement must be evaluated in its
entirety. The evaluation of any settlement requires factoring
unknowns. “As the court does when it approves a settlement as in good
faith under Code of Civil Procedure section 877.6, the court must at least
satisfy itself that the class settlement is within the ‘ballpark’ of
reasonableness. (See Tech-Bilt, Inc. v. Woodward-Clyde & Associates
(1985) 38 Cal.3d 488, 499–500.) While the court is not to try the case, it is
‘called upon to consider and weigh the nature of the claim, the possible
defenses, the situation of the parties, and the exercise of business judgment
in determining whether the proposed settlement is reasonable.’ (City of
Detroit v. Grinnell Corporation, (1974) 495 F.2d 448, 462,”) Kullar,
168 Cal.App.4th at 133 (emphasis in original).)
First, the
most important factor in the strength of the case for Plaintiff on the merits,
balanced against the amount offered in settlement. Here the proposed settlement
is for $325,151. Plaintiff contends the proposed
Settlement was calculated using information and data uncovered through informal
discovery, including: information regarding Defendants’ payroll practices, pay
stubs and time records for a sampling of class members, meal and rest break
policies, etc., and information from Defendants regarding class size and
breakdown, work weeks, rates of pay, and other information used to formulate a
damages model with the assistance of a consulting expert Plaintiff’s counsel is
confident they obtained sufficient information to enable them to understand the
law and fact of this case and make an informed decision regarding the proposed
settlement and whether it is in the best interests of the class. (Kazandjuan
Decl., ¶¶ 8, 24; Sosa Decl., ¶¶ 4-6.) Plaintiff’s moving papers also indicate
that the settlement is a significant result given the potential risks inherent
in this matter.
Plaintiff notes that based on a
review of its records to date, the Plaintiff estimates there are 650 Class
Members who collectively worked approximately 28,274 work weeks between
February 17, 2019 and October 6, 2023. Additionally, Plaintiff notes that PAGA
members will also receive their pro rate portion of the $40,000 allocated to
aggrieved employees that are members of the PAGA group. Each Participating
Class Member’s share of the Net Settlement Amount will be based upon the number
of weeks worked during the Class Period. There is no reason to doubt the
fairness of the proposed plan of allocation of the settlement funds for
purposes of preliminary approval. Even at the final approval stage, “[a]n
allocation formula need only have a reasonable, rational basis [to warrant
approval], particularly if recommended by experienced and competent class
counsel.” (In re American Bank Note Holographies, Inc., Securities
Litigation (S.D.N.Y. 2001) 127 F.Supp.2d 418, 429-30.)
Plaintiff notes that n light of the
above considerations, Class Counsel believes that the proposed Settlement as a
whole is fair, reasonable, and in the best interest of the Class Members. (Barrera
Decl., ¶¶ 22, 57.) This Court notes that although the recommendations of Class
Counsel are not conclusive, the Court can properly take them into account,
particularly if Class Counsel appears to be competent, has experience with this
type of litigation, and significant discovery and investigation has been
completed. (Newberg §11.47.) Accordingly, Plaintiff requests this Court
grant preliminary approval.
3.
Certification
of The Settlement Class
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. 591, 620, 622-627.) The party
advocating class treatment must demonstrate the existence of an ascertainable
and sufficiently numerous class, a well-defined community of interest, and
substantial benefits from certification that render proceeding as a class
superior to the alternatives.” (Brinker Restaurant Corp. v. Superior Court
(2012) 53 Cal.4th 1004, 1021.)
Plaintiff notes that the parties
agree that Plaintiff’s motion for preliminary approval of the settlement
seeking certification of a class action and Defendants’ agreement thereto is
for purposes of the settlement only. The parties agree that certification for
purposes of the Settlement is in no way an admission that class certification
or conditional certification of a collective action is proper under the
standard applied to contested certification motions and that this agreement
will not be admissible in this or any other proceeding to evidence that: (a) a
class or representative action should be certified as Plaintiff proposed; or
(b) Defendants are liable to Plaintiff or the Settlement Class Members as
Plaintiff alleged.
Nonetheless, Plaintiff notes that
the proposed class is easily ascertainable. (Kazandjian Decl., ¶ 76.) Plaintiff
also contends that the potential members of the class are as defined are so
numerous that joinder of all the members of the class is impracticable (noting
the current estimated class members are 650 members). Plaintiff reiterates that
these numerous individuals are ascertainable by reference to Defendants’
personnel and payroll records. (Kazandjian Decl., ¶ 20.) Next, Plaintiff
asserts that there are common questions of law and fact that predominate in
this case – particularly for purposes of a settlement class – as the Class
members all were subject to the same break policy, were subject to same
rounding and auto deduct policies, and received the same type of wage
statements. Further, Plaintiff notes that as class representative, plaintiff’s
claims are typical given she is a member of the class and her claims arise from
the same employment practices and course of conduct giving rise to the claims
of the other class members. (Kazandjian Decl., ¶ 21.)
Plaintiff’s claims are typical of
the claims of the Class Members, a class action is superior to other available
means for the fair and efficient resolution of the case, Class Counsel will
fairly and adequately protect the interests of the Settlement Class, and that
the implementation of separate actions by individual members of the Settlement
Class would create the risk of inconsistent or varying results, especially with
how many members of the class are predicted to be in the class member group.
A.
Numerosity
There are a projected 650 class
members involved in this settlement. 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].)
B.
Ascertainability
This class definition “is precise,
objective and presently ascertainable.” (Sevidal¿v. Target Corp.¿(2010)
189 Cal.App.4th 905, 919.) Plaintiff notes that Class Members can and will be easily
identified by Defendant’s personnel and payroll records, and that the
Settlement Administrator (the parties have agreed on Simpluris, Inc.)
C.
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.)
First, Plaintiff contends that there are common
issues of fact and law sufficiently predominate for purposes of settlement. The
settlement involves certain employment policies and practices that Plaintiff
contends applied to all Class Members. Plaintiff argues that whether Defendant’
rounding and auto deduct policies resulted in unpaid wages raises common
questions applicable to all class members, and that regardless of the outcome,
determining these questions will decide liability for all class members one way
or another.
Second, as noted above, Plaintiff
contends that as class representative, her claims are typical given she is a
member of the class and her claims arise from the same employment practices and
course of conduct giving rise to the claims of the other class members.
(Kazandjian Decl., ¶ 21.) For these reasons, this case is readily amenable to
class certification in the settlement context and the Court should
provisionally certify the Class for settlement purposes.
Lastly,
Plaintiff, as class representative, asserts she can adequately represent the
class, as her claims do not conflict with and are not antagonistic to the
claims of the other class members. Again, Plaintiff reiterates that her claims
against Defendant are typical and possess common questions of law and fact as
the rest of the class members, and Plaintiff also assets she can adequately
represent the class because her counsel is experienced and adequate as a class
counsel.
D.
Adequacy of
Class Counsel
As indicated above, and in the declaration, counsel is
experienced in class actions.
E.
Superiority
Plaintiff asserts that a class
action is superior to other available means for the fair and efficient
resolution of the case.
4.
Class Notice
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.”
Plaintiff notes that the
proposed Class Notice attached as Exhibit “A” to the Settlement Agreement
attached to the Kazandjian Declaration, and provides information about this
case and explains the basic settlement terms in plain language. (Kazandjian
Decl., ¶ 15.) Plaintiff also asserts that the notice sets forth the
individualized information used to calculate Class Members’ Individual Settlement Shares and each Class Member’s
estimated settlement award. The notice further details the procedures for class
members to dispute their individual information, the procedure for submitting
an objection to the settlement, and the procedure to request exclusion. In sum,
Plaintiff contends that notice provides the class members with the information
necessary to evaluate the settlement and provides fair opportunity to
participate in, opt out of, or object to the proposed settlement. (Kazandjian
Decl., ¶ 15.)
The
Court has reviewed this proposed class notice and agrees that it is appropriate.
5.
Attorney’s
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 $108,398.49 will be addressed at the fairness hearing when Class Counsel
brings a noticed motion for attorneys’ 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.)
6. Approval of Service Award
Plaintiff also requests that the Court
preliminarily approve a service award (identified in the moving papers as
“Plaintiff Enhancement Award”) for the Named Plaintiff, Patria Sosa in the
amount of $10,000 payable from the Total Settlement Amount. This issue will
also be addressed in the fairness hearing.
III.
CONCLUSION
Based on the foregoing,
the motion for Preliminary Approval of Class Action Settlement is GRANTED