SUPERIOR COURT OF CALIFORNIA
COUNTY OF SANTA CLARA

OLIVIA A. SERRATO, on behalf of herself all others similarly situated,

Plaintiff,

vs.

HAEMONETICS CORPORATION, a Massachusetts corporation; HAEMONETICS MANUFACTURING, INC., a Delaware corporation; and DOES 1 through 50, inclusive,

Defendants.
Case No. 2017-1-CV-318729

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 November 15, 2019, at 9:00 a.m. in Department 5. The Court now issues its tentative ruling as follows:

V. INTRODUCTION

This is a putative class action arising out of various alleged Labor Code violations. The Second Amended Complaint, filed on September 18, 2019, sets forth the following causes of action: (1) Failure to Provide Meal Periods; (2) Failure to Provide Rest Periods; (3) Failure to Pay Hourly Wages; (4) Failure to Indemnify; (5) Failure to Provide Accurate Written Wage Statements; (6) Failure to Timely Pay All Final Wages; (7) Unfair Competition; and (8) Civil Penalties.

The parties have reached a settlement. Plaintiff Olivia A. Serrato (“Plaintiff”) now moves for preliminary approval of the settlement.

VI. 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.)

VII. DISCUSSION

A. Provisions of the Settlement

The case has been settled on behalf of the following class:

[A]ll persons who were employed by Defendants in hourly or non-exempt positions from November 6, 2013, through the date of preliminary approval (“Putative Class Period”) at Defendants’ facility in Covina, California; which shall include those individuals indentified in the September 12, 2019 [sic] correspondence to Plaintiff’s counsel, as well as any individual who was hired after the date cut-off period through the end of the Putative Class Period.

(Declaration of Shaun Setareh in Support of Motion for Preliminary Approval of Class Action Settlement, Ex. 1 (“Settlement Agreement”),¶ 2.4.)
Pursuant to the settlement, defendants Haemonetics Corporation and Haemonetics Manufacturing (collectively, “Defendants”) will pay a total non-reversionary amount of $525,000. (Settlement Agreement, ¶ 2.35.) This includes allocations of $175,000 for attorneys’ fees, up to $20,000 in costs, $5,000 for an incentive award, $20,000 for PAGA ($15,000 of which will be paid to the California Labor and Workforce Development Agency), settlement administration costs estimated at $12,000, and the employer-share of payroll taxes for any wage payment made to the class. (Id. at ¶¶ 2.19 and 3.9.)

The Settlement Agreement provides that checks not cashed within 180 days will become void and the funds shall be transmitted to the State of California Controller’s Office, Unclaimed Property Fund, to be held in the class member’s name. (Settlement Agreement, ¶ 3.9.3.) This method of handling unclaimed funds does not comply with Code of Civil Procedure section 384. The parties shall designate a cy pres recipient in compliance with section 384 and notify the Court of their selection prior to the mailing of the class notice. The class notice shall be amended to reflect the change and shall be provided to the Court for approval.

B. Fairness of the Settlement

Plaintiff states the settlement resulted from arm’s-length negotiations with the assistance of a mediator, after sufficient discovery was exchanged to assess the strengths and weaknesses of Plaintiff’s claims. Plaintiff asserts the maximum potential recovery in this case is $1,470,833.12, which means the settlement is 35.7% of the total potential recovery. This is reasonable and falls within the normal range for settlement.

Payments to class members will be calculated pursuant to a formula that assigns one point to every class member for each shift worked during the class period and 1,000 additional points for any class member who separated from employment with Defendants from November 6, 2013, through the preliminary approval date, to compensate for the waiting time penalty claim. (Settlement Agreement, ¶ 3.9.4.) The value of a point will be determined by dividing the net distribution fund by the total number of points available. (Ibid.) Plaintiff states each class member will receive a gross amount of approximately $4,133.85.

Overall, 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

Plaintiff requests a class representative incentive award of $5,000.

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.)

Prior to final approval of the settlement, the class representative must submit a declaration specifically detailing her participation in this action. The Court will make a determination regarding the incentive award 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.) Plaintiff’s counsel requests attorneys’ fees in the amount of $175,000 (1/3 of the total settlement) and costs up to $20,000. Plaintiff’s 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. Plaintiff’s counsel should also submit information regarding actual costs incurred.

D. 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.)

There are approximately 127 class members. Class members can be ascertained from Defendants’ records. There are common issues in this case regarding whether Defendants maintained a policy or practice of failing to provide meal and rest breaks, whether Defendants failed to pay employees for time spent waiting to clock in, and whether Defendants failed to reimburse employees for business expenses. No issue has been raised regarding the typicality or adequacy of Plaintiff as class representative. In sum, the Court finds the proposed class should be conditionally certified.

E. 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 proposed 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. However, the notice states objections must be in writing and they must state whether a class member intends to appear at the final approval hearing. The notice must be changed to state that class members may appear at the final approval hearing to object without mailing any written objection and without providing any advance notice. As stated previously, the amended notice shall be provided to the Court for approval prior to mailing.

F. Conclusion

The motion for preliminary approval of class settlement is GRANTED, subject to the designation of a cy pres and the modifications to the notice. The final approval hearing is set for March 20, 2020, at 9:00 a.m. in Department 5.

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