SUPERIOR COURT OF CALIFORNIA
COUNTY OF SANTA CLARA

MEDINA ASALATI, individually and on behalf of all others similarly situated,

Plaintiff,

vs.

INTEL CORPORATION; and DOES 1-50, inclusive,

Defendants.
Case No. 2016-1-CV-302615

TENTATIVE RULING RE: MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT

The above-entitled action comes on for hearing before the Honorable Thomas E. Kuhnle on June 8, 2018, at 9:00 a.m. in Department 5. The Court now issues its tentative ruling as follows:
I. INTRODUCTION

This is a putative class action arising out of various alleged Labor Code violations. The First Amended Complaint (“FAC”), filed on March 17, 2017, sets forth the following causes of action: (1) Failure to Pay for All Hours Worked (Cal. Labor Code §§ 200, 1194, 1198); (2) Failure to Pay Overtime Wages (Cal. Labor Code §§ 200, 510, 1194); (3) Failure to Authorize and Permit and/or Make Available Meal and Rest Periods (Cal. Labor Code §§ 203, 223, 226.7, 512, and 1198); (4) Failure to Reimburse for Necessary Business Expenditures (Cal. Labor Code § 2802); (5) Failure to Maintain Proper Records (Cal. Labor Code § 1174, et seq.); (6) Failure to Provide Accurate Itemized Wage Statements (Cal. Labor Code § 226); (7) Waiting Time Penalties (Cal. Labor Code §§ 201-203); (8) Unlawful Business Practices (Cal. Bus. & Prof. Code § 17200, et seq.); (9) Penalties Pursuant to § 2699(a) of the Cal. Private Attorneys General Act; and (10) Penalties Pursuant to § 2699(f) of the Cal. Private Attorneys General Act. With the assistance of a private mediator, the parties have reached a settlement. Plaintiff Medina Asalati (“Plaintiff”) moves for preliminary approval of the settlement.

II. LEGAL STANDARD

Generally, “questions whether a settlement was fair and reasonable, whether notice to the class was adequate, whether certification of the class was proper, and whether the attorney fee award was proper are matters addressed to the trial court’s broad discretion.” (Wershba v. Apple Computer, Inc. (2001) 91 Cal.App.4th 224, 234-235, citing Dunk v. Ford Motor Co. (1996) 48 Cal.App.4th 1794.)
In determining whether a class settlement is fair, adequate and reasonable, the trial court should consider relevant factors, such as “the strength of 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.”

(Wershba v. Apple Computer, Inc., supra, 91 Cal.App.4th at pp. 244-245, citing Dunk, supra, 48 Cal.App.4th at p. 1801 and Officers for Justice v. Civil Service Com’n, etc. (9th Cir. 1982) 688 F.2d 615, 624.)

“The list of factors is not exclusive and the court is free to engage in a balancing and weighing of factors depending on the circumstances of each case.” (Wershba v. Apple Computer, Inc., supra, 91 Cal.App.4th at p. 245.) The court must examine the “proposed settlement agreement to the extent necessary to reach a reasoned judgment that the agreement is not the product of fraud or overreaching by, or collusion between, the negotiating parties, and that the settlement, taken as a whole, is fair, reasonable and adequate to all concerned.” (Ibid., quoting Dunk, supra, 48 Cal.App.4th at p. 1801 and Officers for Justice v. Civil Service Com’n, etc., supra, 688 F.2d at p. 625, internal quotation marks omitted.)

The burden is on the proponent of the settlement to show that it is fair and reasonable. However “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.”

(Wershba v. Apple Computer, Inc., supra, 91 Cal.App.4th at p. 245, citing Dunk, supra, 48 Cal.App.4th at p. 1802.)

III. DISCUSSION

A. Provisions of the Settlement

The case has settled on behalf of the following class:

[A]ll non-exempt persons employed in California by any of the Released Parties at any time from November 10, 2012 through April 19, 2018.

(Declaration of Carolyn Hunt Cottrell in Support of Plaintiff’s Motion for Preliminary Approval of Class-Action Settlement, Conditional Certification of Settlement Class, Approval of Notice of Settlement, Setting of Hearing for Final Approval, and Leave to Amend Complaint (“Cottrell Decl.”), Ex. 1 (“Settlement Agreement”), ¶ 17.)
The class includes approximately 3,019 class members. (Settlement Agreement, ¶ 9.)

Pursuant to the settlement, defendant Intel Corporation (“Defendant”) will pay a total of $5,000,000. (Settlement Agreement, ¶ 26.) This amount includes attorneys’ fees of up to $1,666,650, costs of up to $25,000 , an LWDA payment of $37,500, an enhancement payment of $15,000 for the class representative, and class administration costs of $45,121. (Cottrell Decl., ¶ 54; Settlement Agreement, ¶¶ 25, 51-52.)

B. Fairness of the Settlement

Plaintiff states the settlement is fair and was reached after extensive investigation, discovery, and analysis of the class claims. Plaintiff asserts the parties had numerous arm’s-length settlement discussions, including mediation.

Plaintiff asserts an analysis of the data in this case indicates the maximum value of the claims is $33,684,479.56 not including damages for derivative or PAGA violations. (Cottrell Decl., ¶ 52.) Including derivative and PAGA claims results in a total of $51,985,949.13. (Ibid.)

Plaintiff contends that, if this case were to go to trial, Plaintiff’s fees and costs would far exceed $2,500,000. (Cottrell Decl., ¶ 85.) Plaintiff argues further that Defendant has legal and factual grounds available to defend the action. (Id. ¶ 86.)

The settlement will result in an estimated average recovery of $1,065.84 per class member. (Cottrell Decl., ¶ 96.) A settlement at this point in the litigation will prevent the accumulation of additional fees and costs and will eliminate the possibility that Plaintiff and the class could lose at trial. In light of the good faith negotiations in this matter and the significant recovery for the class, the Court finds the settlement is fair.

Plaintiff will seek a class representative incentive award of $15,000.

The rationale for making enhancement or incentive awards to named plaintiffs is that they should be compensated for the expense or risk they have incurred in conferring a benefit on other members of the class. An incentive award is appropriate if it is necessary to induce an individual to participate in the suit. Criteria courts may consider in determining whether to make an incentive award include: 1) the risk to the class representative in commencing suit, both financial and otherwise; 2) the notoriety and personal difficulties encountered by the class representative; 3) the amount of time and effort spent by the class representative; 4) the duration of the litigation and; 5) the personal benefit (or lack thereof) enjoyed by the class representative as a result of the litigation. These “incentive awards” to class representatives must not be disproportionate to the amount of time and energy expended in pursuit of the lawsuit.

(Cellphone Termination Fee Cases (2010) 186 Cal. App. 4th 1380, 1394-1395, quotation marks, brackets, ellipses, and citations omitted.)
The requested incentive award is higher than what is approved in most class action settlements. Although class counsel has provided information regarding Plaintiff’s role in the case (Cottrell Decl., ¶¶ 98-102), Plaintiff herself must submit a declaration detailing her participation in the case prior to the final approval hearing, at which time the Court will decide whether to approve the requested amount or reduce it.

The Court also has an independent right and responsibility to review the requested attorneys’ fees and only award so much as it determines reasonable. (See Garabedian v. Los Angeles Cellular Telephone Co. (2004) 118 Cal.App.4th 123, 127-128.) Plaintiff’s counsel will seek attorneys’ fees of $1,666,650 (one-third of the total settlement fund), plus up to $25,000 for costs. While one-third of the common fund for attorneys’ fees is generally considered reasonable, Plaintiff’s counsel should submit lodestar information (including hourly rates and hours worked) prior to the final approval hearing in this matter so the Court can compare the lodestar information with the requested fees.

C. Conditional Certification of Class

Plaintiff requests the putative class be conditionally certified for purposes of the settlement. Rule 3.769(d) of the California Rules of Court states that “[t]he court may make an order approving or denying certification of a provisional settlement class after [a] preliminary settlement hearing.” California Code of Civil Procedure Section 382 authorizes certification of a class “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 . . . .”

As interpreted by the California Supreme Court, Section 382 requires: (1) an ascertainable class; and (2) a well-defined community of interest among the class members. (Sav-On Drug Stores, Inc. v. Superior Court (2004) 34 Cal.4th 319, 326.) The “community-of-interest” requirement encompasses three factors: (1) predominant questions of law or fact; (2) class representatives with claims or defenses typical of the class; and, (3) class representatives who can adequately represent the class. (Id. at p. 326.) “Other relevant considerations include the probability that each class member will come forward ultimately to prove his or her separate claim to a portion of the total recovery and whether the class approach would actually serve to deter and redress alleged wrongdoing.” (Linder v. Thrifty Oil Co. (2000) 23 Cal.4th 429, 435.) The plaintiff has the burden of establishing that class treatment will yield “substantial benefits” to both “the litigants and to the court.” (Blue Chip Stamps v. Superior Court (1976) 18 Cal.3d 381, 385.)

As explained by the California Supreme Court, The certification question is essentially a procedural one that does not ask whether an action is legally or factually meritorious. A trial court ruling on a certification motion determines whether the issues which may be jointly tried, when compared with those requiring separate adjudication, are so numerous or substantial that the maintenance of a class action would be advantageous to the judicial process and to the litigants.

(Sav-On Drug Stores, Inc. v. Superior Court, supra, 34 Cal.4th at p. 326, internal quotation marks, ellipses, and citations omitted.)

Most of the certification requirements are met here. There are common issues regarding Defendant’s class-wide policies and procedures relating to overtime, timekeeping, payroll, compensation, and meal and rest breaks. No issue has been raised regarding the typicality or adequacy of Plaintiff as class representative.

The Court has some concern, however, regarding the class definition. As the definition includes all “non-exempt” employees without further description, it is not apparent who exactly is included. The parties are ordered to appear (telephonically or in person) to discuss this issue. The parties should be prepared to provide the Court with information about the methodology and search parameters being used to identify and locate class members.

D. Class Notice

The content of a class notice is subject to court approval. “If the court has certified the action as a class action, notice of the final approval hearing must be given to the class members in the manner specified by the court.” (Cal. Rules of Court, rule 3.769(f).)

The notice generally complies with the requirements for class notice. (See Settlement Agreement, Ex. A.) It provides basic information about the settlement, including the settlement terms, and procedures to object or request exclusion. With regard to objections, the notice states each class member may file an objection in writing and also may appear in person at the final approval hearing to discuss objections. The notice should add language making it clear that class members may appear at the final approval hearing to make an oral objection even if no written objection has been submitted. The amended notice need not be approved by the Court before mailing, but it should be included in the final approval submissions.

E. Leave to File Second Amended Class Action Complaint

As part of the settlement, the parties have agreed that Plaintiff is to file an amended complaint in which she adds Fair Labor Standards Act cause of action on behalf of herself and the class members. The purpose of the amendment is to expand the scope of Plaintiff’s claims so they are co-extensive with the claims released by the settlement. Plaintiff’s request for leave to file the Second Amended Class Action Complaint (Cottrell Decl., Ex. 2) is GRANTED.

F. Conclusion

As discussed in connection with conditional certification of the class, the parties are ordered to appear (telephonically or in person) to discuss the class definition.