Judge: Virginia Keeny, Case: 23STCV19730, Date: 2025-05-06 Tentative Ruling

Case Number: 23STCV19730    Hearing Date: May 6, 2025    Dept: 45

ALEXANDER MONTOYA VS MNE CONGLOMERATE, INC., ET AL.

plaintiff’s motion for final approval of class and representative action settlement and motion for award of attorney’s fees, reimbursement of costs, and service playment to plaintiff

Date of Hearing:        May 6, 2025                           Trial Date:       August 18, 2025

Department:              45                                            Case No.:        23STCV19730

Moving Party:            Plaintiff Alexander Montoya

Responding Party:     No opposition.

BACKGROUND

On August 17, 2023, Plaintiff Alexander Montoya, on behalf of the general public and other “aggrieved employees” (“Plaintiff”) filed a representative action complaint against Defendants MNE Conglomerate, Inc., ENW Trucking, LLC, and Does 1 through 10 (collectively “Defendants”).

On March 5, 2024, Plaintiff filed a First Amended class and representative action complaint against Defendants for (1) knowing and intentional failure to comply with itemized employee wage statement provisions (Labor Code § 226(a), (e), 1174(d)); (2) failure to timely pay wages due at termination (Labor Code §§ 201-203); (3) failure to timely pay employees in violation of Labor Code § 204(a)(b); (4) failure to reimburse for business expenses in violation of Labor Code § 2802; (5) violation of Business and Professions Code § 17200; and (6) penalties pursuant to Labor Code § 2699(f) for violations of Labor Code §§ 226(a),(e) 1174(d), 201- 203, 204(a)(b), 2802.

The operative complaint alleges the following. Plaintiff was employed by Defendants as a non-exempt, hourly employee in California, including in and around the city of Wilmington, County of Los Angeles. During Plaintiff’s employment: (1) Plaintiff did not receive final wages upon termination; (2) Plaintiff and the Class were not paid in a timely manner pertaining to the waiting time penalties in accordance with Labor Code §8§ 201-203; (3) Plaintiff was forced to receive inaccurately itemized and deficient wage statements, in violation of Labor Code § 226(a); (4) Plaintiff did not receive his compensation in accordance with Labor Code Section 204 in that Defendant failed to issues wages to its employees within seven (7) calendar days after the pay period ended; and (5) Defendant also failed to reimburse Plaintiff and Defendant’s California employees for reasonable and necessary expenses in the course of their job duties, in violation of Labor Code § 2802. On June 26, 2024, the parties participated in a Mandatory Settlement Conference with Joshua Boxer of Resolve Law LA, which resulted in the proposed settlement as outlined in the Class Action and PAGA Settlement Agreement (the “Settlement Agreement”) attached to the Declaration of Roman Otkupman as Exhibit B.

[Tentative] Ruling

Motion for Final Approval of Class and Representative Action Settlement and Motion for Award of Attorney’s Fees, Reimbursement of Costs, and Service Payment to Plaintiff is GRANTED.

DISCUSSION

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 trial 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 in California 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.) 

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 as stated in 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.)  “[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 City of Detroit v. Grinnell Corp. (2d Cir. 1974) 495 F.2d 448, 455 (City of Detroit) [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 (Kullar).)  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.) 

In granting the preliminary approval of class and PAGA settlement, the court has already considered and determined that many of the factors establish that the settlement is fair.  With respect to factors that the court could not determine at the time of the preliminary approval, Plaintiff has provided that no objections have been received and there were no Opt-Outs. (Otkupman Decl. ¶20.) Thus, the total amount of class members participating in this class amounts to 67, which amounts to a 100% participation rate. (Otkupman Decl. ¶20.) Apex Class Action, LLC processed the Notice Packet as instructed by the court . (McNamee Decl. ¶3.) On December 18, 2024, The Notice Packet was sent to all 67 individuals listed in the Class List. (McNamee Decl. ¶7.) Apex has provided their office has received 2 returned Notice Packets as undeliverable and Apex conducted a computerized skip trace on the 2 returned Notice Packets which resulted in updated addressed, to which Apex promptly re-mailed. (McNamee ¶¶8-10.) Apex has not received any requests for exclusion, objections or disputes. (McNamee ¶¶11-13.)

Considering all the factors discussed above, the court finds Plaintiff has established that the settlement is fair, adequate, and reached in arms-length bargaining.  After engaging in discovery, the parties agreed to engage in a Mandatory Settlement Conference. (Otkupman Decl. ¶16.)  On June 26, 2024, the Parties participated in a Mandatory Settlement Conference where the Parties came to an arm’s length mutually agreed upon settlement as outlined in the Class Action and PAGA Settlement Agreement. (Otkupman Decl. ¶18.) Plaintiff’s counsel has experience with class actions and wage and hour claims.  (Otkupman Decl. ¶¶2-10.)  With respect to the $30,000 in PAGA penalties, the court finds the penalties comply with Labor Code section 2699(i), which requires 75 percent of the amount to be paid to the LWDA and 25 percent of the amount to be paid to the aggrieved employees.  (Settlement Agreement ¶¶ 1.34, 3.2.5.)

Given the lack of objections, the court finds that it is appropriate to approve the settlement. 

B.      Attorney’s Fees 

The award of attorney fees is made by the court at the fairness hearing using the lodestar method with a multiplier, if appropriate.  (Ketchum III v. Moses (2000) 24 Cal.4th 1122, 1132-36.)  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 (2000) 22 Cal.4th 1084, 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.)   

Plaintiff’s counsel seeks attorney’s fees in the amount of $66,600.00, representing 33.3% of the gross settlement amount of $200,000.00.  Counsel has set forth their experience and the actions taken in litigating this case.  (Otkupman Decl. ¶¶2-10.)  Counsel has indicated their office spent 88.70 hours litigating this case and that their hourly rate is $950.00. (Otkupman Decl. ¶36.) The lodestar amount is thus $84,265.00. (Otkupman Decl. ¶36.) Based on this, the court finds the requested $66,600.00 in attorney’s fees is reasonable and proper in this case after accounting for the time spent, counsel’s experience, and the results achieved by this litigation. 

C.      Litigation Costs 

Plaintiff requests litigation costs in the amount of $1,185.91. Plaintiff’s counsel has sufficiently justified the costs.  (Otkupman Decl. ¶46, Exh. D.)  The court thus finds the requested costs are reasonable. 

D.     Settlement Administration Costs 

Plaintiff requests settlement administration costs in the amount of $10,000.00.  Plaintiff has provided a declaration from settlement administrator Apex Class Action LLC’s Case Manager, Ryan McNamee, justifying these costs.  (McNamee Decl., ¶ 19.)  The court thus finds the requested amount for settlement administration costs is reasonable. 

E.      Enhancement Award 

Plaintiff requests an enhancement award in the amount of $10,000.00.  Plaintiff has submitted a declaration attesting to why they should be entitled to this enhancement award.  (Montoya Decl. ¶¶5-11.) Clark v. American Residential Services LLC (2009) 175 Cal.App.4th 785, 806.)  The court finds Plaintiff’s declaration is sufficient to justify the reasonableness of such an award and thus approves the award. 

¿ 

Accordingly, the Motion for Final Approval of Class and Representative Action Settlement and Motion for Award of Attorney’s Fees, Reimbursement of Costs, and Service Payment to Plaintiff is GRANTED. Defendants MNE Conglomerate, Inc. and ENW Trucking, LLC filed a Notice of Non-Opposition.