Judge Thomas D. Long, Case Number: 21STCV19591, Date: 2024-11-19 Tentative Ruling

On December 9, 2022, Plaintiff filed a first amended complaint (“FAC”) against Defendants, alleging (1) failure to pay minimum wages under the Labor Code; (2) failure to pay minimum wages under the Fair Labor Standards Act; (3) failure to pay daily overtime under the Labor Code; (4) failure to pay daily overtime under the Fair Labor Standards Act; (5) failure to permit meal periods; (6) failure to permit rest periods; (7) failure to indemnify losses/expenditures; (8) unlawful deductions; (9) failure to timely pay wages; (10) failure to provide wage statements; (11) failure to timely pay wages at separation of employment; (12) unfair business practices; and (13) civil penalties under the Private Attorney General Act (“PAGA”). Plaintiff brings the action as a class and representative action on behalf of current, former, and/or future employees of Defendants who work as hourly nonexempt employees. (FAC ¶ 3.)

On August 15, 2023, the Court granted preliminary approval of the class action settlement.

A class action is proper “when the question is one of a common or general interest, of many persons, or when the parties are numerous, and it is impracticable to bring them all before the court.” (Code Civ. Proc., § 382.) The party seeking certification bears the burden of establishing the existence of an ascertainable class and a well-defined community of interest among class members. (Dunk v. Ford Motor Co. (1996) 48 Cal.App.4th 1794, 1806 (Dunk).)

The proposed class consists of 1,490 Class Members from August 15, 2017, to November 23, 2021. (Howe Decl. ¶¶ 3, 11.) As the Court found for preliminary approval, these class members share common questions that predominate this action, including the same violations of failure to pay wages for all hours worked at minimum wage; failure to pay proper overtime wages for daily overtime worked; failure to authorize or permit meal periods; failure to authorize or permit rest periods; failure to pay meal period premium wages for missed meal periods; failure to pay rest period premium wages for missed rest periods; failure to indemnify for employment-related losses/expenditures; unlawful deductions; failure to timely pay earned wages during employment; failure to provide complete and accurate wage statements; failure to pay all wages due upon separation of employment; and unfair business practices. Based on the commonality of issues and numerosity of class members, class resolution is a superior method of adjudication.

Plaintiff’s claims, as alleged in the FAC, are typical of the class and arise from the same common questions, and Plaintiff is an adequate representative whose interests align with the class. Additionally, the class counsel is adequate and qualified to represent the class, with extensive experience in labor and employment law. (Howe Decl. ¶¶ 18-22.)

A court must review and approve any PAGA penalties sought as part of a proposed settlement agreement. (Lab. Code § 2699, subd. (l).) “[C]ivil penalties recovered by aggrieved employees shall be distributed as follows: 75 percent to the Labor and Workforce Development Agency for enforcement of labor laws and education of employers and employees about their rights and responsibilities under this code, to be continuously appropriated to supplement and not supplant the funding to the agency for those purposes; and 25 percent to the aggrieved employees.” (Lab. Code, § 2699, subd. (i).) The PAGA penalties here comply with this requirement. (See Howe Decl. ¶ 13.) Additionally, a proposed PAGA settlement must be submitted to LWDA at the same time that it is submitted to the court for review and approval. (Lab. Code § 2699, subd. (l)(2).) A copy of the settlement was sent to LWDA when filing for preliminary approval.

Accordingly, the PAGA penalties are appropriate, subject to a finding that the settlement is fair.

Settlement of a class action requires court approval to prevent fraud, collusion, or unfairness to the class. (Dunk, supra, 48 Cal.App.4th at pp. 1800-1801.) In making the fairness determination, “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. 1802.)

The proposed settlement was reached as a result of arm’s-length negotiations. (Howe Decl. ¶ 12.) The parties engaged in significant informal discovery and Defendants produced a sampling of time and pay data which Plaintiff and Plaintiff’s expert analyzed. (Howe Decl. ¶ 13.) The parties considered Plaintiff’s likelihood of prevailing and the strength of Defendant’s defenses. (Howe Decl. ¶ 14.) The settlement was therefore reached through arm’s-length bargaining with sufficient investigation to allow counsel and the Court to act intelligently.

Defendants will pay a gross settlement amount of $500,000.00. (Howe Decl. ¶ 12.) Of this amount, $7,500.00 will be paid to Plaintiff as a class representative service award, $166,666.67 (one-third) will be paid as attorney fees, $13,378.70 will be paid towards costs, $16,000.00 will be paid for settlement administration, and $20,000.00 will be paid for PAGA penalties. (Howe Decl. ¶ 12.) Of the PAGA payment, $15,000.00 (75%) will be paid to the LWDA and $5,000.00 (25%) will be paid to class members. (Howe Decl. ¶ 14.)

After making the above deductions, the Administrator will distribute the rest of the Gross Settlement (the “Net Settlement”) by making Individual Class Payments to Participating Class Members based on their Class Period Workweeks. (See Howe Decl., Ex. 1, ¶¶ 1.29, 3.2.2.)

Class members’ individual payments will be based on their number of workweeks during the class period, with each week valued at approximately $8.95. (See Howe Decl. ¶ 11.)

Plaintiff estimates that class members will receive an average settlement payment of approximately $185.61. (Howe Decl. ¶ 17.) The highest payment is approximately $474.29, and the lowest payment is approximately $8.95. (Howe Decl. ¶ 13.)

Incentive payments are based on the expense and risk undertaken by named plaintiffs for the benefit of other class members. (Munoz v. BCI Coca-Cola Bottling Co. of Los Angeles (2010) 186 Cal.App.4th 399, 412.) Based on Plaintiff’s involvement in this action, a $7,500.00 payment to Plaintiff is reasonable. (See Howe Decl. ¶ 23.)

The requested $166,666.67 in attorney fees is reasonable and consistent with fee awards in class actions. (See Chavez v. Netflix, Inc. (2008) 162 Cal.App.4th 43, 66, fn. 11 [“Empirical studies show that, regardless whether the percentage method or the lodestar method is used, fee awards in class actions average around one-third of the recovery,” internal quotation marks omitted].) Additionally, the requested $13,378.70 in costs is reasonable and less than what was proposed for preliminary approval.

The parties agreed to recommend Phoenix Settlement Administrators (“Phoenix”) as the settlement administrator. Based on the Court’s experience, the $16,000.00 fee is reasonable.

There are no objectors to the settlement, so the proposed settlement is entitled to a presumption of fairness.

Based on the Court’s original findings for preliminary approval and the information submitted for final approval, the motion for final approval of class action settlement is GRANTED.

The administrator is ordered to file a declaration no later than May 19, 2025 confirming the execution of the terms of the settlement and payments to class members. The Court sets an Order to Show Cause Re: Dismissal Pursuant to Settlement for May 23, 2025 at 8:30 a.m.

Parties who intend to submit on this tentative must send an email to the Court at SMCDEPT48@lacourt.org indicating intention to submit. If all parties in the case submit on the tentative ruling, no appearances before the Court are required unless a companion hearing (for example, a Case Management Conference) is also on calendar.

Hon. Thomas D. Long

Judge of the Superior Court