SUPERIOR COURT OF CALIFORNIA

COUNTY OF SANTA CLARA

TED STILWELL and STEWART ROSS, on behalf of themselves and all others similarly situated,

Plaintiffs,

vs.

FIRST ALARM, and Does 1 through 50,

Defendants.

And related cross-complaints.

Case No. 2015-1-CV-281763

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 May 10, 2019, at 9:00 a.m. in Department 5. The Court now issues its tentative ruling as follows:

I. INTRODUCTION
II.
This is a class action lawsuit arising from various alleged wage and hour violations. Plaintiffs Ted Stilwell and Stewart Ross (collectively, “Plaintiffs”) allege defendant First Alarm (“Defendant”) failed to reimburse its California employees for all work-related expenses incurred in driving personal vehicles for work, failed to provide employees with signed commission plans and obtain signed receipts for the commission plans, and failed to furnish employees with accurate wage statements. (Third Amended Complaint (“TAC”), ¶ 5.)

The TAC, filed on September 9, 2016, sets forth the following causes of action: (1) Failure to Reimburse for Work-Related Expenses in Violation of Labor Code § 2802; (2) Violation of California Labor Code § 226; (3) Unlawful, Unfair and Fraudulent Business Practices Pursuant to Business & Professions Code § 17200, et seq.; and (4) Private Attorneys General Act of 2004: Labor Code Section 2698.

The parties have reached a settlement. Plaintiffs now move for preliminary approval of the settlement.

III. REQUEST FOR JUDICIAL NOTICE
IV.
Plaintiffs request judicial notice of the Declaration of David Hood in Support of Defendant First Alarm’s Motion for Summary Judgment. The request is GRANTED. (Evid. Code, § 452, subd. (d).)

V. DISCUSSION
VI.
A. Provisions of the Settlement
B.
The case has been settled on behalf of the following class:

[A]ll individuals who are currently or were formerly employed as sales representatives for First Alarm during the class period and who have not opted out of the class.

(Decl. of Robin G. Workman (“Workman Decl.”), Ex. D (“Settlement Agreement”), p. 3:1-3.) The class period is June 11, 2011, to March 31, 2019. (Settlement Agreement, p. 2:27.)

Pursuant to the settlement, defendant First Alarm (“Defendant”) will pay a non-reversionary total of $275,000. (Settlement Agreement, p. 3:19-22.) The settlement payment includes incentive awards of $20,000 for plaintiff Stilwell and $7,500 for plaintiff Ross. (Id. at pp. 8:25-9:1.) It also encompasses attorneys’ fees and costs of $100,000, settlement administration costs of $7,000, and a PAGA allocation of $5,000 ($3,750 of which will be paid to the LWDA). (Id. at pp. 8:18-22 and 9:8-21.) For checks that are not cashed within six months, the funds will be distributed to a cy près recipient – Legal Aid at Work. (Id. at p. 15:10 17.) Payments to class members will be made based on workweeks.

C. Fairness of the Settlement
D.
Plaintiffs assert the settlement is a product of arms’-length negotiations conducted between the parties and facilitated by a day-long settlement conference. Plaintiffs state the $275,000 settlement constitutes around 30% of an estimated potential value of $881,164 for the claims presented. There are approximately 45 class members and each will receive an average payment of about $3,000.

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.

E. Incentive Award, Fees, and Costs
F.
Plaintiffs request class representative incentive awards of $20,000 for plaintiff Stilwell and $7,500 for plaintiff Ross.

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.)

Plaintiffs have filed a declaration from Stilwell detailing his participation in the case. Prior to final approval of the settlement, Ross must also submit a declaration regarding his participation. The Court will make a determination regarding the incentive awards at that time. The Court notes the amount requested for Stilwell – $20,000 – is significantly higher than is normally awarded, and is approximately seven times greater than the average payment to class members.

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 and costs in the amount of $100,000. Plaintiffs’ counsel shall 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 shall also submit information regarding actual costs incurred.

G. Class Notice
H.
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. (Settlement Agreement, Ex. A.) 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 object to the settlement must mail a written objection to the settlement administrator. 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.

I. Conclusion
J.
The motion for preliminary approval of class settlement is GRANTED, subject to the modification to the notice. The final approval hearing is set for August 16, 2019, at 9:00 a.m. in Department 5.

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