SUPERIOR COURT OF CALIFORNIA
COUNTY OF SANTA CLARA

DOANYA PUCCINI, an individual, on behalf of herself, and on behalf of all persons similarly situated,

Plaintiff,

vs.

EARTHBOUND FARM, LLC, a Limited Liability Company; and Does 1 through 50, Inclusive,

Defendants.
Case No. 2017-1-CV-308643

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 June 28, 2017, sets forth the following causes of action: (1) Unfair Competition in Violation of Cal. Bus. & Prof. Code § 17200, et seq.; (2) Failure to Pay Overtime Wages in Violation of Cal. Lab. Code § 510, et seq.; (3) Failure to Provide Accurate Itemized Statements in Violation of Cal. Lab. Code § 226; (4) Failure to Provide Wages When Due in Violation of Cal. Lab. Code §§ 201, 202, and 203; and (5) Violation of the Private Attorneys General Act [Labor Code § 2698, et seq.]. With the assistance of a private mediator, the parties have reached a settlement. Plaintiff Doanya Puccini (“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 been settled on behalf of the following class:

[A]ll individuals who both worked for Earthbound Farm, LLC as non-exempt employees in California at any time from April 17, 2013 to October 9, 2017 and were paid an attendance bonus during that period.

(Declaration of Kyle Nordrehaug in Support of Unopposed Motion for Preliminary Approval of Class Settlement (“Nordrehaug Decl.”), Ex. 1 (“Settlement Agreement”), ¶ I(B).)
Pursuant to the settlement, defendant Earthbound Farm, LLC (“Defendant”) will pay a total of $500,000. (Settlement Agreement, ¶ III(A).) This amount includes attorneys’ fees of up to $125,000, costs of up to $12,000, an LWDA payment of $3,750, an enhancement payment of $10,000 for the class representative, and class administration costs of up to $25,000. (Settlement Agreement, ¶ III(B).)

As part of the settlement, class members are releasing their claims. Certain claims, however, such as meal and rest break claims, are being dismissed without prejudice. (See Settlement Agreement, ¶¶ III(F)(1) and III(I)(18).)

B. Fairness of the Settlement

Plaintiff states the settlement was reached through arm’s-length negotiations, including mediation with a retired judge. Plaintiff asserts an analysis of the data in this case indicates the maximum value of the claims is $911,281. Therefore, the settlement amount is more than 50% of the potential recovery. 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 $10,000.

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 somewhat high. Plaintiff 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 $125,000 (one-fourth of the total settlement fund), plus up to $12,000 for costs. While the requested amount of fees appears reasonable as a percentage of the common fund, Plaintiffs’ 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.)
Class members can be ascertained from Defendant’s records. Plaintiff states there are approximately 941 class members. There are common issues regarding whether Defendant failed to properly calculate overtime, whether wage statements were inaccurate due to attendance bonuses, and whether class members are entitled to penalties. No issue has been raised regarding the typicality or adequacy of Plaintiff as class representative. The Court finds the proposed class should be conditionally certified.

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. However, the notice states that class members who want to object must mail a written objection to the class administrator and to the parties’ counsel. The notice must be changed to make clear that class members may appear at the final approval hearing to make an oral objection even without mailing any written objection and without providing advance notice. The amended notice need not be approved by the Court before mailing, but it should be included in the final approval submissions.

E. Conclusion

Subject to the modification to the notice, the motion for preliminary approval of class action settlement is GRANTED. The final approval hearing is set for October 12, 2018, at 9:00 a.m. in Department 5.

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