Judge Salvatore Sirna, Case Number: 21PSCV00485, Date: 2023-10-24 Tentative Ruling

Judge: Salvatore Sirna, Case: 21PSCV00485, Date: 2023-10-24 Tentative Ruling

The Court may change tentative rulings at any time. Therefore, counsel are advised to check this website periodically to determine whether any changes or updates have been made to the tentative ruling. Counsel may submit on a tentative ruling by calling the clerk in Department G at (909) 802-1104 prior to 8:30 a.m. the morning of the hearing.

Case Number: 21PSCV00485 Hearing Date: October 24, 2023 Dept: G

Plaintiff Graciela Torres’s Motion for Preliminary Approval of Class Action Settlement

Respondent: NO OPPOSITION

TENTATIVE RULING

Plaintiff Graciela Torres’s Motion for Preliminary Approval of Class Action Settlement is GRANTED with the following modification. To the extent the proposed order states the deadline for the Settlement Administrator to complete the first mailing of the notice packets is within ten (10) days after the receipt of Class Data, the number of days is changed to seven (7) days as stated in the Settlement Agreement.

BACKGROUND

This is a wage and hour action. From 1999 to 2020, Plaintiff Graciela Torres worked as a non-exempt employee for Defendant Pensar Big, Inc. (Pensar Big), a restaurant operator and franchisee of El Pollo Loco chains throughout southern California.

On June 10, 2021, Torres filed a complaint against Pensar Big and Does 1-50, alleging a cause of action pursuant to the Private Attorneys’ General Act (PAGA) for Labor Code violations.

On September 26, 2023, Torres filed a First Amended Complaint (FAC) against the same defendants alleging the following causes of action: (1) failure to pay regular wages, (2) failure to pay minimum wage, (3) failure to pay overtime wages, (4) meal period violations, (5) rest period violations, (6) failure to provide accurate itemized wage statements, (7) failure to pay wages during employment and upon termination of employment, (8) failure to reimburse for business expenses, (9) failure to provide personnel records, (10) failure to provide payroll records, (11) unfair competition, and (12) PAGA penalties.

On October 2, 2023, Torres filed the present motion. A hearing on the motion is set for October 24.

ANALYSIS

Torres moves for an order granting preliminary approval of the proposed settlement with Pensar Big on the terms and conditions set forth in an executed copy of the Settlement Agreement that is attached as Exhibit A to the declaration of Mehrdad Bokhour. (Bokhour Decl., Ex. A.)

Specifically, Torres requests the court: (1) preliminarily approve the Settlement Agreement, (2) conditionally certify the Settlement Class as “all current and former individuals who are or previously were employed by [Pensar Big] in California who were classified as non-exempt employees under California law during the Class Period (i.e., April 8, 2020 through May 15, 2023),” (3) preliminarily appoint Torres as the Class Representative, (4) preliminarily appoint Mehrdad Bokhour, Esq. of Bokhour Law Group, P.C. and Jake Finkel, Esq. of The Finkel Firm as Class Counsel, (5) approve the proposed notice packet attached as Exhibit A to the Settlement Agreement, (6) direct mailing of the notice packet pursuant to the terms of the Settlement Agreement provided the agreement complies with the requirements of due process and appears to be the best notice practicable under the circumstances, (7) preliminarily approves the definition and disposition of the Gross Settlement Amount, (8) confirm the appointment of a settlement administrator, (9) direct Pensar Big to provide class data to settlement administrator, (10) approve the handling of unclaimed funds as set forth in the Settlement Agreement, and (11) set a final approval hearing.

The Proposed Order sets forth the following timeline: (1) within fifteen days after notice of entry of the court’s preliminary approval, Pensar Big shall provide the settlement administrator with the class data, (2) within ten days after receipt of the class data, the settlement administrator shall complete the first mailing of notice packets to all class members, (3) within forty-five days after the mailing of the notice packet, all requests for exclusion and objections to the settlement must be submitted, (4) with at least sixteen court days before the final approval hearing, Torres must file and serve a motion for final approval of settlement (including application for award of attorneys’ fees, costs, and service payment), (5) with at least nine court days before the final approval hearing, any written opposition or response to an objection to the Settlement must be filed, and (6) with at least five court days before the final approval hearing, any written reply to any opposition must be filed.

For the following reasons, the court GRANTS Torres’ motion.

Legal Standard

California Rules of Court Rule 3.769, subdivision (g) provides that the court must conduct an inquiry into the fairness of a proposed class action settlement prior to final approval. The court has broad powers to determine whether a proposed settlement is fair. (Mallick v. Superior Court (1979) 89 Cal.App.3d 434, 438.) The standard for approval of class settlements is that the settlement be fair, reasonable, and adequate for class members overall. (Dunk v. Ford Motor Co. (1996) 48 Cal.App.4th 1794, 1801 (Dunk).)

To determine the fairness of a settlement, the court must consider certain factors, as set forth in Wershba v. Apple Computer, Inc. (2001) 91 Cal.App.4th 224, 244-45 (Wershba), disapproved on other grounds by Hernandez v. Restoration Hardware, Inc. (2018) 4 Cal.5th 260, 270). “[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.” (Id., at p. 245, quoting Dunk, supra, 48 Cal.App.4th at p. 1802.) “[T]he test is not the maximum amount plaintiffs might have obtained at trial on the complaint, but rather whether the settlement is reasonable under all of the circumstances.” (Id., at p. 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.) The recovery should represent a “reasonable compromise, given the magnitude and apparent merit of the claims being released, discounted by the risks and expenses of attempting to establish and collect on those claims by pursuing the litigation.” (Id., at p. 129.) Nevertheless, the strength of the case on the merits for the plaintiff is the most important factor, “balanced against the amount offered in settlement.” (Id., at p. 130, quoting City of Detroit v. Grinnell Corp. (2d Cir. 1974) 495 F.2d 448, 455.)

Discussion

Terms of the Settlement Agreement

An executed copy of the Settlement Agreement is attached as Exhibit A to the declaration of Mehrdad Bokhour. (Bokhour Decl., Ex. A.) Each member, including Torres, agreed to release all Released Class Claims against any Released Party during the Class Release Period. (Bokhour Decl., Ex. A, ¶ 52-53.) Notice will be given to each member. (Bokhour Decl., Ex. A, ¶ 66.) The release included any claim pled in the operative complaint. (Bokhour Decl., Ex. A, ¶ 4.) The release also included any PAGA claims based on allegations stated in the PAGA notice and any that were or could have been pled in the FAC based on the facts alleged. (Bokhour Decl., Ex. A, ¶ 22, 59.)

The Gross Settlement Amount (GSA) is $240,000, not including payroll taxes. (Bokhour Decl., Ex. A, ¶ 48(a).) Uncashed checks will be sent to the Unclaimed Property Fund. (Bokhour Decl., Ex. A, ¶ 75.) The settlement is to be apportioned as follows: up to $80,000 in attorney fees from the GSA not to exceed one-third of the GSA (Bokhour Decl., Ex. A, ¶ 48(g)); up to $15,000 in litigation costs (Bokhour Decl., Ex. A, ¶ 48(g)); up to $7,500 in settlement administration fees and costs (Bokhour Decl., Ex. A, ¶ 48(h)); up to $10,000 as a service award for Torres (Bokhour Decl., Ex. A, ¶ 48(f)); a $10,000 PAGA payment with $7,500 (75%) going to the LWDA and $2,500 (25%) going to eligible aggrieved employees (Bokhour Decl., Ex. A, ¶ 48(d)(i).); and the remaining net settlement amount to class members.

Including PAGA payments, the final net settlement amount is $120,000. (Bokhour Decl., ¶ 11.) The settlement class consists of 238 individuals. (Bokhour Decl., ¶ 12.) Individual settlement payments will be paid on a pro-rata basis that considers the number of compensable work weeks worked during the class period. (Bokhour Decl., ¶ 12.) The final average settlement payment per class member is $505 with an estimated highest payment being $1,453. (Bokhour Decl., ¶ 12.) Pensar Big is responsible for any employer payroll taxes. (Bokhour Decl., ¶ 48(a).)

The parties stipulate to the selection of ILYM Group, Inc. (ILYM) as settlement administrator. (Bokhour Decl., ¶ 59.) Within fifteen calendar days of the court’s preliminary approval of this settlement, Pensar Big will provide class data to ILYM and ILYM will provide notice to the class members within seven days after that data is received. (Bokhour Decl., Ex. A, ¶ 65-66.)

Fairness and Reasonableness of the Settlement

The parties engaged in mediation on December 9, 2022, with Gail Glick and negotiated a settlement agreement. (Bokhour Decl., ¶ 19.) At times, the parties’ negotiations were adversarial and non-collusive and were the result of extensive arm’s length negotiations. (Bokhour Decl., ¶ 48.) The settlement occurred after parties participated in informal discovery where information was exchanged relating to applicable policies and procedures, payroll and time keeping records, class size, compensation policies and practices, and potential value of the case. (Bokhour Decl., ¶ 18.) Taking into account Pensar Big’s defenses and the risks of ongoing litigation, Torres’ counsel estimates the total risk-adjusted penalties and damages amount to $286,128. (Bokhour Decl., ¶ 47.) Torres’ counsel are also experienced in wage and hour litigation. (Bokhour Decl., ¶ 3-9; Finkel Decl., ¶ 3-9.) Accordingly, the court finds the proposed settlement of $240,000 is adequate, fair, reasonable, and follows sufficient investigation and discovery.

Conditional Certification of Settlement Class

“[T]wo requirements must be met in order to sustain any class action: (1) there must be an ascertainable class [Citations]; and (2) there must be a well-defined community of interest in the questions of law and fact involved affecting the parties to be represented [Citations].” (Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 704.) “The community of interest requirement embodies 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.” (Richmond v. Dart Industries, Inc. (1981) 29 Cal.3d 462, 470.)

In this case, there is an ascertainable class in the form of 238 non-exempt employees who worked for Pensar Big during the class period from April 8, 2020 to May 15, 2023 in California. (Bokhour Decl., ¶ 12, Ex. A, ¶ 7.) There is also a well-defined community of interest as the members of the class were subject to common policies and practices relating to the provision of meals and rest periods as well as the payment of wages. Accordingly, the court grants Torres’ request for conditional certification of the settlement class.

Approval of Notice Packet and Procedures

Content of Notice

The content of the proposed Class Notice filed with the court on October 2, 2023, as Exhibit B to the declaration of Mehrdad Bokhour appears to be acceptable. It includes the following: a summary of the litigation; the nature of the settlement; the terms of the settlement agreement; the proposed deductions from the gross settlement amount (attorney fees and costs, PAGA penalties, service payment, and claims administration costs); the procedures and deadlines for participating in, opting out of, or objecting to, the settlement; the consequences of participating in, opting out of, or objecting to, the settlement; and the date, time, and place of the final approval hearing.

Method of Notice

Notice will be sent by first class mail in English and Spanish. (Bokhour Decl., Ex. A, ¶ 66.) No more than fifteen calendar days after entry of the Preliminary Approval Order, Pensar Big will provide the Settlement Administrator with the Class Data. (Bokhour Decl., Ex. A, ¶ 65.) After receiving the Class Data, the Settlement Administrator will perform a check on the United States Postal Service’s National Change of Address List to update the Class Members’ addresses. (Bokhour Decl., Ex. A, ¶ 65.) No more than seven calendar days after receiving the Class Data from Pensar Big, the Settlement Administrator will mail copies of the Class Notice to all Class Members and PAGA Members by first class mail. (Bokhour Decl., Ex. A, ¶ 66.) If any envelopes are returned, the Settlement Administrator will use standard devices to obtain forwarding information, including a skip trace. (Bokhour Decl., Ex. A, ¶ 66-67.) It an envelope has not been returned within thirty days of mailing, it will be presumed that the Class Member received notice. (Bokhour Decl., Ex. A, ¶ 68.) The court finds the notice procedure proper.

CONCLUSION

Based on the foregoing, the court GRANTS Torres’ Motion for Preliminary Approval of Class Action Settlement as discussed above and as provided in the Proposed Order with the following modification. To the extent the proposed order states the deadline for the Settlement Administrator to complete the first mailing of the notice packets is within ten days after the receipt of Class Data, the number of days is changed to seven days as stated in the Settlement Agreement. (Compare Proposed Order, ¶ 15, with Bokhour Decl., Ex. A, ¶ 66.)