Judge: Stephen I. Goorvitch, Case: 21STCV08874, Date: 2022-12-05 Tentative Ruling
Case Number: 21STCV08874 Hearing Date: December 5, 2022 Dept: 39
Jonathan
Casillas v. PHC Service Company, LLC
Case
No. 21STCV08874
Motion
to Certify Class and Approve Settlement
Plaintiff
Jonathan Casillas (“Plaintiff”) sued Defendants PHC Service Co., LLC and
Cameron Wald (collectively “Defendants”) for wage and hour violations,
violations of the Labor Code, and violation of the California Private Attorneys
General Act (“PAGA”). Plaintiff seeks
condition certification of the settlement class, as well as approval of the
class action and PAGA settlements.
The class members
(“Class Members”) consists of all current and former non-exempt employees who
worked for Defendants in California at any time from September 10, 2019 to the
date the Court signs the order for the instant Motion (the “Settlement
Period”). (Declaration of Haig B.
Kazandjian, ¶¶ 1.5, 1.12.) Defendants
represent that approximately 245 persons make up the Class Members. (Id., ¶ 1.5) The Agreement further provides that if the
size of the class increases by more than 7% on or before the Court granting of
this Motion, the Plaintiff may void the Agreement or seek to increase the gross
settlement. (Ibid.) The Court finds that conditional class
certification is appropriate because the class meets all requirements for class
certification under Code of Civil Procedure section 382. (Brinker Restaurant Corp. v. Sup.Ct.
(2012) 53 Cal.4th 1004, 1021.) Based on
the terms set forth above, the class is ascertainable, and its members have a
community of interest that makes class treatment appropriate. Here, the Class Members’ claims arise from
common questions of law and fact regarding Defendants’ violation of the same or
similar employment practices, policies, and procedures against current and
former non-exempt employees. (See
Declaration of Haig B. Kazandjian, ¶¶ 23, 30, 32, 33, 44.)
The parties
propose to settle this action for $300,000 as follows: (1) $140,500 to the class
members; (2) $7,500 to Plaintiff for acting as the class representative; (3)
Attorney’s fees of $100,000; (4) Up to $12,000 for costs and expenses; (5) Up
to $10,000 for the administrator; and (6) A penalty of $30,000 under PAGA, of
which 75% will be paid to the California Labor and Workforce Development
Agency, and 25% will be paid to the class members. The Court preliminarily approves the
settlement with one modification: The Court authorizes a payment for the class
representative of $2,500, and the remaining $5,000 shall be distributed amongst
the class members.
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, citing Dunk, supra, 48
Cal.App.4th at p. 1801.) The Court
notes: (1) the parties participated in arm’s length negotiations concerning
settlement of the claims and participated in extensive settlement negations,
including mediation, over several months; (2) there was sufficient
investigation and discovery, as the parties actively litigated this case from
its filing and participated in extensive discovery, including extensive expert
discovery, and (3) Plaintiff’s Counsel is experienced in wage-and-hour class
actions and PAGA litigation. (Kazandjian
Decl., ¶¶ 3-9, 15-16, 67) Although the
case is being settled for less than Defendants’ maximum exposure, the Court
notes that there is significant litigation risk. “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.”].)
The Court finds that the scope of
the release is reasonable as Plaintiff will release and discharge Defendants from all
claims and PAGA claims that were, or reasonably could have been, alleged from
the facts arising out of or related to the operative complaint.
(Declaration of Haig B. Kazandjian, Exh. 2, Agreement ¶ 5.1-5.4.) Plaintiff also provides a general waiver under
Civil Code section 1542. (Id., ¶
5.1-5.2.) The Agreement also provides a
release by participating class members releasing and discharging
Defendants from
all claims that were, or reasonably could have been, alleged
from the facts arising out of or related to the operative complaint. (Id.. ¶ 5.3.) The Agreement further provides that
non-participating class members who are aggrieved employees are deemed to
release Defendants from all claims for PAGA penalties. (Id., ¶ 5.4.) The release will be operative once Defendants
fully fund the settlement amount and pay their share of payroll taxes. (Id., ¶ 5.)
The Court further finds that the
proposed notice to the class is appropriate because it provides the necessary
information, including a definition of the class, a discussion of the
litigation and the terms of the settlement, the different options for
responding to the notice, and information about when and where the fairness
hearing will be held. (Id., Exh.
2, Agreement, Exh. A.) The class members
are also informed about the attorney’s fees and other deductions that will be
requested from the settlement, and it states the names and contact information
for class counsel. (Ibid.) Within 15 days of the granting of this
Motion, Defendants will deliver the class data to the Administrator. (Id., Exh. 2, Agreement ¶ 4.2) Within 14 days of receiving the class data,
the Administrator will mail the notice to each class member by First-Class U.S.
Mail, using the last known mailing address.
(Id.,
¶ 7.4.2) The deadline by which class members must fax,
email or, mail a request for exclusion, an objection, and/or dispute regarding
his or her workweeks is 30 days from the initial mailing of the notice by the
Administrator. (Id., ¶¶ 7.5.1, 7.6, 7.7.2.) The notice will be in English only, but
Defendants represent that all of their employees can read English. (Id., ¶ 59.)
The original complaint asserted a
single cause of action under PAGA, following which Plaintiff filed a first
amended complaint asserting additional causes of action on behalf of the class
members. Plaintiff’s counsel did so
without leave of the Court. The Court
exercises its discretion and accepts the amended complaint. (See Code Civ. Proc., § 473(a)(1) [“The court
may . . . in its discretion, after notice to the adverse party, allow, upon any
terms as may be just, an amendment to any pleading or proceeding in other particulars.”].) Although the Court discourages this approach
in larger and/or more complicated cases, the instant case is relatively discrete
and straightforward. Requiring Plaintiff
to file a separate class action would not promote judicial economy and would
deplete the settlement proceeds further based upon additional expenses. Therefore, the Court approves this approach
in the instant case.
Based upon the
foregoing, the Court grants preliminary approval of the class action and PAGA
settlement subject to a final hearing, which shall be held on _______, 2022, at
8:30 a.m. The Court orders Plaintiff’s
counsel to file a motion for attorney’s fees and to provide sufficient
information to determine the costs/expenses.
Plaintiff’s counsel shall provide notice and file proof of such with the
Court.