Judge: Teresa A. Beaudet, Case: 21STCV03190, Date: 2023-02-09 Tentative Ruling

Case Number: 21STCV03190    Hearing Date: February 9, 2023    Dept: 50

Superior Court of California

County of Los Angeles

Department 50

            Background

Plaintiff Lourdes Mejias, on behalf of herself and all persons similarly situated (“Plaintiff”) filed this action on January 26, 2021 against Defendant Agile Sourcing Partners, Inc. (“Defendant”). The Complaint asserts causes of action for (1) penalties pursuant to Labor Code § 2699, et seq. for violations of Labor Code §§ 201-203 and 432.5, (2) Unfair Competition Law violations, (3) violation of the Federal Credit Reporting Act, and (4) violation of the Investigative Consumer Reporting Agencies Act.

On August 30, 2022, the Court issued an Order granting Plaintiff’s Motion for Preliminary Approval of Class and Representative Action Settlement.

Plaintiff now moves for an order granting final approval of the proposed class and representative action settlement on the terms and conditions set forth in the Joint Stipulation of Class and PAGA Representative Action Settlement between Plaintiff and Defendant. The motion is unopposed. 

Discussion

As a “fiduciary” for 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. Southland Corp. (2000) 85 Cal.App.4th 1135, 1151, citing Dunk v. Ford Motor Co. (1996) 48 Cal.App.4th 1794, 1802.)

“Before final approval, the court must conduct an inquiry into the fairness of the proposed settlement.” (Cal. Rules of Court, rule 3.769, subd. (g).) “If the court approves the settlement agreement after the final approval hearing, the court must make and enter judgment. The judgment must include a provision for the retention of the court’s jurisdiction over the parties to enforce the terms of the judgment. The court may not enter an order dismissing the action at the same time as, or after, entry of judgment.” (Cal. Rules of Court, rule 3.769, subd. (h).)

            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, 244-245 (disapproved on other grounds), 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.” ((Id. at p. 245.) “[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); (see also Detroit v. Grinnell Corp. (2d Cir. 1974) 495 F.2d 448, 455 [stating that a proposed settlement that amounts to a fraction of the potential recovery does not in itself render the proposed settlement grossly inadequate].) 

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 has already determined on Plaintiff’s motion for preliminary approval of class and representative action settlement that the settlement appears fair and reasonable. Plaintiff asserts that since preliminary approval of the settlement, additional factors militate in favor of granting final approval of the class action settlement.

In support of the instant motion, Plaintiff submits the Declaration of Taylor Mitzner, a Case Manager with the Claims Administrator in the instant action. (Mitzner Decl., ¶ 1.) On September 29, 2022, the Claims Administrator received a data file from defense counsel that  contained names, last known mailing addresses, and Social Security numbers for each Background Check and Waiting Time Settlement Class Member (“Class List”) and each Background Check and Waiting Time PAGA Representative Action Member. (Mitzner Decl., ¶ 3.) On October 27, 2022, the Claims Administrator mailed the Notice of Settlement via U.S. first class mail to all 147 class members on the Class List. (Mitzner Decl., ¶ 5.) The Class Notice informed class members, inter alia, of the settlement terms, including the estimated relief each class member will receive, the amounts to be requested for attorney’s fees and the class representative service award, and the right to opt out of or object to the settlement. (Mitzner Decl., ¶ 5, Ex. A.)

As of the date of the filing of the instant motion (January 18, 2023), four notices of settlement were returned to the Claims Administrator. (Mitzner Decl., ¶ 6.) As to such notices, the Claims Administrator attempted to locate a current mailing address using a comprehensive address database available for skip tracing. (Ibid.) Of the four notices that were skip traced, three updated addresses were obtained, and the Notice of Settlement was promptly re-mailed to those class members via first class mail. (Ibid.) As of the date of the filing of this motion, two Notices of Settlement remain undeliverable, specifically, one is undeliverable since an updated address could not be obtained via skip trace, and another is undeliverable since it was returned by the Post Office after a second mailing. (Mitzner Decl., ¶ 7.)

In addition, as of the date of the filing of the instant motion, the Claims Administrator received zero Requests for Exclusion from class members and zero Notices of Objection from class members. (Mitzner Decl., ¶¶ 8-9.) Based upon the calculations stipulated in the Settlement, the individual settlement shares to be paid are approximately $11.34 each, and the Individual PAGA payments to be paid are approximately $30.53 each. (Mitzner Decl., ¶¶ 12-13.)

Based on the foregoing, and based on the reasoning set forth in the Court’s order granting preliminary approval of the class and representative action settlement, the Court finds that Plaintiff has established that the settlement is fair, adequate, and reasonable. The Court also approved conditional certification of the class for purposes of settlement in its order granting preliminary approval of the settlement. (See Dunk v. Ford Motor Co., supra, 48 Cal.App.4th at 1807, fn. 19 [finding that the Court may use a lesser standard to determine the appropriateness of a settlement class for settlement purposes].)

Attorney’s Fees and Costs

California Rules of Court, rule 3.769, subdivision (b) states: “Any agreement, express or implied, that has been entered into with respect to the payment of attorney’s fees or the submission of an application for the approval of attorney’s 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.”

Ultimately, the award of attorney fees is made by the Court at the fairness hearing, using the lodestar method with a multiplier, if appropriate. ((Ketchum v. Moses (2001) 24 Cal.4th 1122, 1132-1136); (PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1095-1096); (Ramos v. Countrywide Home Loans, Inc. (2000) 82 Cal.App.4th 615, 625-626.) Despite any agreement by the parties to the contrary, the Court has an independent responsibility to review the attorney fee provision of the settlement agreement and award an amount that it determines to be reasonable.  ((Garabedian v. Los Angeles Cellular Telephone Co. (2004) 118 Cal.App.4th 123, 128.)

“[T]he fee setting inquiry in California ordinarily begins with the ‘lodestar,’ i.e., the number of hours reasonably expended multiplied by the reasonable hourly rate. … The reasonable hourly rate is that prevailing in the community for similar work. The lodestar figure may then be adjusted, based on consideration of factors specific to the case, in order to fix the fee at the fair market value for the legal services provided.” ((PLCM Group, Inc. v. Drexler, supra, at p. 1095 [internal citations omitted].)

The primary factor for determining the fairness of fees is “whether the fees bear a reasonable relationship to the value of the attorneys’ work.” ((Robbins v. Alibrandi (2005) 127 Cal.App.4th 438, 451.) Courts have adopted a practice of cross-checking the lodestar against the value of the class recovery because the award is then “anchored” in the time spent by counsel.  ((Lealao v. Beneficial California, Inc. (2000) 82 Cal.App.4th 19, 45.) 

Here, counsel for Plaintiff seeks $13,333.33 in attorney’s fees, constituting 1/3 of the settlement fund of $40,000.00 (Treglio Decl., ¶ 11.) However, Plaintiff’s counsel’s supporting declaration does not provide any information regarding the hours expended on this matter, and no billing records are attached to the declaration. In addition, Plaintiff’s counsel’s declaration does not set forth Plaintiff’s counsel’s requested hourly rate(s). Plaintiff also seeks $3,000.00 in litigation costs (Treglio Decl., ¶ 11), but no evidence was provided justifying the requested costs.

As set forth in the Court’s August 30, 2022 Order granting Plaintiff’s motion for preliminary approval of class and representative action settlement, “Counsel is advised that they must provide the Court with sufficient evidence so that it can properly apply the lodestar method and indicate what modifier they are seeking as to each counsel. Counsel must also give a brief summary, in chart form, of their billing records by indicating how much time was spent on discovery, motion preparation, research, etc. by each attorney or paralegal who worked on this matter. Counsel also should be prepared to justify any costs sought by detailing how such costs were incurred.” (August 30, 2022 Order at p. 12:4-12.) 

Service Award to Class Representative

The Settlement Agreement provides for a service award of $1,000.00 for Plaintiff. The Court notes that Plaintiff has not submitted any declaration attesting to why she should be entitled to an enhancement award in the proposed amount. As set forth in the Court’s August 30, 2022 Order, “[i]n connection with the final fairness hearing, Plaintiff must submit her declaration attesting to why she should be entitled to an enhancement award in the proposed amount. ((See Clark v. American Residential Services LLC (2009) 175 Cal.App.4th 785, 806.)” (August 30, 2022 Order at p. 12:15-17.)  

Claims Administrator Costs

Finally, the Court finds that the request for costs for the Claims Administrator (Phoenix Settlement Administrators) in the amount of $5,000.00 is sufficiently supported by the Declaration of Taylor Mitzner. (Mitzner Decl., ¶ 14, Ex. B.)

Conclusion

Based on the foregoing, Plaintiff’s Motion for Final Approval of Class and Representative Action Settlement is denied without prejudice.  

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Plaintiff is ordered to provide notice of this Order.

DATED:  February 9, 2023                            ________________________________

Hon. Teresa A. Beaudet

Judge, Los Angeles Superior Court