SUPERIOR COURT OF CALIFORNIA
COUNTY OF SANTA CLARA

ADRIANA MAYELA ELIAS and CINTHYA CAMACHO, on behalf of themselves and all others similarly situated,

Plaintiffs,

vs.

PEDRO’S RESTAURANT AND CANTINA; GOLDEN STATE RESTAURANTS, INC.; JAGJEET SINGH KAPOOR; and DOES 1 through 100, inclusive,

Defendants.
Case No. 2015-1-CV-282195

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 March 29, 2019, at 9:00 a.m. in Department 5. The Court now issues its tentative ruling as follows:

I. INTRODUCTION

This is a certified class action arising out of various alleged wage and hour violations. The Third Amended Class Action Complaint, filed on April 25, 2018, sets forth the following causes of action: (1) Failure to Pay Overtime; (2) Breach of Contract; (3) Minimum Wages; (4) Withholding of Wages; (5) Meal Period Violations; (6) Rest Period Violations; (7) Waiting Time Penalties; (8) Record-Keeping Violations; (9) Unlawful Business Practices; (10) Termination in Violation of Public Policy; and (11) Private Attorney General Act (PAGA). The first through ninth causes of action are asserted as class claims and the tenth cause of action is an individual claim. The parties have reached a settlement. Plaintiffs now move 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 been settled on behalf of the following class:

All hourly, non-exempt employees of Pedro’s Restaurant in the State of California from June 22, 2011 through September 1, 2018.

(Declaration of Steven M. Tindall in Support of Motion for Preliminary Approval of Class Action Settlement (“Tindall Decl.”), Ex. A (“Settlement Stipulation”), ¶ 5.)

Pursuant to the settlement, defendants Pedro’s Restaurant and Cantina, Golden State Restaurants, Inc., and Jagjeet Singh Kapoor (collectively, “Defendants”) will pay a non-reversionary total of $925,000, which will be paid through an initial lump-sum payment of $325,000, plus $25,000 per month for 24 months. (Settlement Stipulation, ¶ 10(f).) The settlement payment includes incentive awards of $15,000 for plaintiff Elias and $10,000 for plaintiff Camacho and settlement administration expenses estimated to be $14,630.75, but which fees shall not exceed $12,000. (Id. at ¶¶ 12(e), 13.) It also includes attorneys’ fees up to $277,500, approximately $36,000 in costs, and a PAGA allocation of $20,000 ($15,000 of which will be paid to the LWDA). (Id. at ¶¶ 12(g), 28.)
For checks that are not cashed within 90 days, if the total amount cashed does not equal or exceed 90% of the net settlement fund, the uncashed payments will be distributed pro rate to participating class members. (Settlement Stipulation, ¶ 27(a).) If the total amount cashed equals or exceeds 90% of the net settlement fund, uncashed funds will be distributed to a cy pres recipient – Legal Aid at Work. (Id. at ¶ 27(b).)

Payments to class members will be made based on numbers of weeks worked. There will be two installments – one payment after final approval and the second after the 24 monthly settlement payments are complete.

B. Fairness of the Settlement

Plaintiffs assert the settlement is the product of informed and arm’s-length negotiations conducted by experienced counsel. Settlement negotiations took place during three all-day mediation sessions with three experienced mediators. Plaintiffs state there was a possibility they might not be able to establish classwide liability against Pedro’s and that the class could be decertified.
The Court finds the settlement is fair. It provides for some recovery for each class member and eliminates the risk and expense of further litigation.

C. Incentive Award, Fees, and Costs

Plaintiffs request class representative incentive awards of $15,000 for plaintiff Elias and $10,000 for plaintiff Camacho.

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.)

Prior to final approval of the settlement, the class representatives must submit declarations specifically detailing their participation in this action. The Court will make a determination regarding the incentive awards at that time.

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.) Plaintiffs’ counsel requests attorneys’ fees in the amount of $277,500 (30% of the total settlement) and costs of approximately $32,000. Plaintiffs’ counsel should submit lodestar information (including hourly rates and hours worked) prior to the final approval hearing so the Court can compare the lodestar information with the requested fees. Plaintiffs’ counsel should also submit information regarding actual costs incurred.

D. Class Notice

The content of a class notice is subject to court approval. (Cal. Rules of Court, rule 3.769(f).) The notice generally complies with the requirements for class notice. (See Tindall Decl., Ex. E.) It provides basic information about the settlement, including the settlement terms, and procedures to object or request exclusion. However, the notice states class members who want to speak at the final fairness hearing must submit a “Notice of Intent to Appear.” The notice must be changed to make clear that class members may appear at the final approval hearing to object without filing or serving any papers and without providing any advance notice. The amended notice shall be provided to the Court for approval prior to its mailing.

E. Conclusion

The motion for preliminary approval of class settlement is GRANTED, subject to the modification to the notice. The final approval hearing is set for July 26, 2019, at 9:00 a.m. in Department 5.

The Court will prepare the final order if this tentative ruling is not contested.