Judge Timothy B. Taylor, Case 37-2020-00022694-CU-OE-CTL 2023-08-04 Tentative Ruling

Judge: Timothy B. Taylor, Case: 37-2020-00022694-CU-OE-CTL, Date: 2023-08-04 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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HALL OF JUSTICE

TENTATIVE RULINGS - August 03, 2023

08/04/2023 01:30:00 PM C-72 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Timothy Taylor

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Civil - Unlimited Other employment Motion Hearing (Civil) 37-2020-00022694-CU-OE-CTL HOUETO VS USA CINEMA SERVICES LLC [IMAGED] CAUSAL DOCUMENT/DATE FILED: Motion for Approval of Class Settlement, 07/13/2023

Tentative Ruling on Motion for Final Approval of Class Action/PAGA Settlement Houeto v. USA Cinema Services, Case No. 2020-22694 August 4, 2023 (continued from March 24, 2023), 1:30 p.m., Dept. 72 1. Overview and Procedural Posture.

This is a class action alleging various wage and hour violations arising out of plaintiff's 2017-2019 employment with defendants (who operate theatres). The complaint, alleging PAGA claims only, was filed July 1, 2020. Defendants answered seasonably. ROA 9. The parties agreed to attend mediation, and the court facilitated this by continuing the CMC. ROA 18. The case did not settle immediately, and at the continued CMC, the court set the case for trial. ROA 28-32. Discovery hearings were calendared, re-calendared, and taken off calendar. ROA 19-23, 33-42.

Apparently the parties began talking again in early 2022. They stipulated to the filing of the FAC, which added class claims (despite the fact that defendants had already settled one class action in LA). ROA 43-48. Defendants answered the FAC. ROA 50.

The parties announced a settlement in July of 2022; they sent down a stipulation, and the court vacated the trial date and set Oct. 21, 2022 for the preliminary approval hearing. ROA 55-56. Following a review of the moving papers (ROA 58-62), the court granted preliminary approval and set March 24, 2023 for the fairness hearing. ROA 66-68. However, when no moving papers seeking final approval were received by March 15, the court published a tentative ruling setting an OSC re sanctions. ROA 69. The parties then sent down a stipulation outlining an error made by a third party vendor named 'EmployStats' in calculating workweek figures: EmployStats realized it had used the wrong start date for the Class and PAGA Periods. ROA 72. This caused the parties to have to re-notice the settlement to the class, which in turn caused delay and the rescheduling of the final approval hearing to today. ROA 73.

The moving papers for final approval of the class action settlement, and for approval of fees, etc., have now been filed. ROA 74-84. There is one opt out and there are no objectors. (Romero Decl., ¶¶ 12-13.) The court has reviewed the papers which, by design, are unopposed.

2. Applicable Standards.

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2953339 50 CASE NUMBER: CASE TITLE: HOUETO VS USA CINEMA SERVICES LLC [IMAGED] 37-2020-00022694-CU-OE-CTL A. The court incorporates part 2 of the minutes for Oct. 21, 2022 (ROA 66).

B. California follows the 'American rule,' under which each party to a lawsuit ordinarily must pay his, her or its own attorney fees. Trope v. Katz (1995) 11 Cal.4th 274, 278; Gray v. Don Miller & Associates, Inc. (1984) 35 Cal.3d 498, 504. Code of Civil Procedure section 1021 codifies the rule, providing that the measure and mode of attorney compensation is left to the agreement of the parties '[e]xcept as attorney's fees are specifically provided for by statute.' Here, fees are sought under the Labor Code, which has several fee-shifting provisions.

C. 'The law empowers the court to set the amount of fees independently without disapproving the entire settlement.' Garabedian v. Los Angeles Cellular Telephone Co. (2004) 118 Cal.App.4th 123, 129. The benchmark for determining attorney fees is reasonableness. Karton v. Ari Design & Construction, Inc.

(2021) 61 Cal.App.5th 734, 744.

In common fund cases, trial courts have discretion to begin with a percentage-of-recovery approach and then to use the 'lodestar' approach to cross-check the reasonableness of the percentage. Laffitte v. Robert Half Internat. Inc. (2016) 1 Cal.5th 480, 503-06. The former method calculates the fee as a percentage share of a recovered common fund or the monetary value of plaintiffs' recovery. Id. at 489.

The latter method calculates the fee by multiplying the number of hours reasonably expended by counsel by a reasonable hourly rate. Id. The lodestar figure may then be adjusted, based on factors specific to the case, to fix the fee at the fair market value for the legal services provided. PLCM Group v. Drexler (2000) 22 Cal.4th 1084, 1095.

3. Discussion and Ruling on Final Approval Motion.

A. Strength of Case: The court incorporates part 3A of the minutes from October 21, 2022 (ROA 66).

B. Avoided Expenses and Other Avoided Risks: The court incorporates part 3B of the minutes from October 21, 2022 (ROA 66).

C. Amount Offered in Settlement/Settlement Fund: Due perhaps to the mistake by EmployStats referenced in part 1 above, the numbers look somewhat different than they did last October at the time of preliminary approval. The total amount offered in settlement remains $600,000.00, with no reversion.

(Romero Decl., ¶ 15.) The parties intend to allocate these funds as follows: -Attorneys' fees: $200,000.00 in fees to plaintiff's counsel (no change) -Litigation costs: $24,163.36 in costs to plaintiff's counsel (slight reduction) -Costs of administration: no more than $17,500.00 to CPT Group (reduction) -Class rep incentive payment: $10,000.00 (no change) -LWDA Payment: $25,000.00, of which $18,750.00 (75%) will go to the LWDA and $6,250.00 (25%) will go to the aggrieved employees (no change) The foregoing deductions result in a net settlement of amount of $323,336.64 to be distributed among the 1,378 class members. The net settlement is marginally higher and the number of class members meaningfully lower than what was preliminarily approved last October. Based on the court's calculations, the average settlement share per class member (excluding the PAGA allocation to the aggrieved employments) is approximately $234.64.

D. Extent of Discovery: The court incorporates part 3D of the minutes from October 21, 2022 (ROA 66).

E. Experience and Views of Counsel: The court incorporates part 3E of the minutes from October 21, 2022 (ROA 66).

F. Presence of a governmental participant: The court incorporates part 3F of the minutes from October Calendar No.: Event ID: TENTATIVE RULINGS

2953339 50 CASE NUMBER: CASE TITLE: HOUETO VS USA CINEMA SERVICES LLC [IMAGED] 37-2020-00022694-CU-OE-CTL 21, 2022 (ROA 66).

G. Reaction of class members to proposed settlement: As noted above, there no objections and only one request for exclusion. (Romero Decl., ¶¶ 12-13.) There were also 4 'disputes' regarding the number of workweeks in certain class members' packets, all of which were resolved. (Id. at ¶ 14.) H. Form of Notice: On March 31, 2023, the notice of settlement packets were mailed to the class.

(Romero Decl., ¶ 9.) A total of 7 notice packets were deemed undeliverable. (Id. at ¶ 11.) 4. Discussion and Ruling on Fee Application.

A. The court finds that the settlement is fair, reasonable, and adequate. Accordingly, the court approves the parties' proposed settlement, subject to some qualifications discussed below.

B. The litigation costs of $24,163.36, payable to class counsel, and the claims administration costs of $17,500.00, payable to CPT, are reasonable for a case of this type that was filed over three years ago.

Moreover, the costs awarded are less than the amounts originally estimated in the preliminary approval papers ($25,000.00 and $20,000.00, respectively). The costs are therefore approved.

C. The proposed class representative payment of $10,000 is grossly disproportionate when considering that the average recovery for each settling class member is less than $250.00. While the court understands the risks associated with agreeing to be named as a class representative [see Early v. Superior Court (2000) 79 Cal.App.4th 1420, 1433 (cost burden falls on class reps, not absent class members)], the court concludes that $7,500.00 is a reasonable award for plaintiff. The remainder ($2,500.00) will be poured over into the net settlement sum fund for distribution to the class members.

D. Finally, the attorneys' fees proposal of $200,000 represents one-third of the gross settlement fund.

This is not out of line with class action fee awards calculated using the percentage-of-the-benefit method. See Chavez v. Netflix, Inc. (2008) 162 Cal.App.4th 43, 66 fn. 11. In addition, upon performing a 'cross-check' using the lodestar method, the court finds that the requested attorneys' fees are reasonable.

According to the declarations of class counsel, they attorneys assigned to this matter billed a total of 304 hours. (Nordrehaug Decl., ¶ 6.) This results in a blended hourly rate of approximately $657.89 per hour ($200,000 divided by 304), which is reasonable, albeit on the high end, of what the court would expect for attorneys with similar skills and experience in the San Diego community. Moreover, the requested fee award is almost $25,000 less than counsel's theoretical lodestar of $224,234.75 (using their design hourly rates, which are higher than the one calculated by the court immediately above). (See id.) Accepting for these purposes the validity of the blended design rate, the requested fees represent, in effect, a negative multiplier.

The court practiced law in San Diego for 20 years prior to 2005. During this time, the court ran cases, supervised associates, reviewed, sent out and collected bills, and successfully made and resisted fee applications. In addition, since being appointed to the bench in 2005, the undersigned has ruled on hundreds of fee applications in a variety of settings. This experience has allowed the court to gain and retain an understanding of fees charged by attorneys in the community for similar work during the relevant timeframe. Based on this experience, and the evidence submitted with the moving papers, the court finds that the requested fee award of $200,000 is reasonable under the circumstances and is hereby granted. See Nemecek & Cole v. Horn (2012) 208 Cal.App.4th 641, 651 ('The amount to be awarded as attorney fees is left to the sound discretion of the trial court, which is in the best position to evaluate the services rendered by an attorney in his courtroom.'); see also 569 East County Boulevard, LLC v. Backcountry Against the Dump, Inc. (2016) 6 Cal.App.5th 426, 436-37 ('In making its [lodestar] calculation, the court may rely on its own knowledge and familiarity with the legal market, as well as the experience, skill, and reputation of the attorney requesting fees.').

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2953339 50 CASE NUMBER: CASE TITLE: HOUETO VS USA CINEMA SERVICES LLC [IMAGED] 37-2020-00022694-CU-OE-CTL E. Class counsel must prepare and submit a modified proposed order consistent with the foregoing.

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2953339 50