SUPERIOR COURT OF CALIFORNIA
COUNTY OF SANTA CLARA

JOSE MELVIN ALVARADO, on behalf of himself and all others similarly situated,

Plaintiff,

vs.

TIMBERWORKS CONSTRUCTION, INC. and DOES 1 through 100, inclusive,

Defendants.
Case No. 2014-1-CV-272991

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

The above-entitled action comes on for hearing before the Honorable Thomas E. Kuhnle on November 1, 2019, 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. According to the allegations of the Fourth Amended Class Action Complaint (“4AC”), filed on May 9, 2019, plaintiff Jose Melvin Alvarado (“Plaintiff”) worked for defendant Timberworks Construction, Inc. (“Defendant”) as a laborer from March 2013 to December 2014. (4AC, ¶ 6.) Plaintiff alleges Defendant failed to pay Plaintiff and his co-workers overtime and did not have a meal period policy or rest break policy in effect during Plaintiff’s employment. (4AC, ¶¶ 8-12.) Defendant also required that Plaintiff and his co-workers had to sign two documents prior to receiving their paychecks: one document specifying a false number of hours worked (fewer) and one with the correct number of hours. (4AC, ¶ 13.) Defendant did this so it could bill for the actual hours worked, but pay Plaintiff and his co-workers for fewer hours. (4AC, ¶ 13.)

The 4AC sets forth the following causes of action: (1) Violation of Labor Code Sections 510 , 1194, and 1198 – Unpaid Overtime and/or Double Time; (2) Violation of Labor Code Sections 226.7 and 512 – Denied/Unpaid Meal Periods; (3) Violation of Labor Code Section 226.7 – Denied/Unpaid Rest Periods; (4) Violation of Labor Code Section 1194 and 1194.2 – Failure to Pay Minimum Wage; (5) Violation of Labor Code Section 226 – Failure to Provide Accurate Written Itemized Statements of Wages; (6) Violation of Labor Code Section 201, 203, and 218 – Waiting Time Penalties; (7) Violation of California Labor Code Section 2802 – Tool Reimbursement; (8) Violation of Business and Professions Code Sections 17200, et seq. – Unfair Business Practices; and (9) Private Attorney General Act, Labor Code Section 2698, et seq. (“PAGA”).

The parties have reached a settlement. On May 24, 2019, the Court signed an order granting preliminary approval of the settlement. Plaintiff now moves for final approval of the settlement.

II. DISCUSSION

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

[A]ll current and former employees of Timberworks Construction, Inc., who worked in California as non-exempt construction employees at any time between April 17, 2011 and preliminary approval of this Settlement.

As discussed in connection with preliminary approval, Defendant will pay a non-reversionary total of $2,555,000. The payment of the this amount will be made in four installments – a first installment of $750,000 10 days after final approval, and three installments of $600,000, one of which will be made six months after final approval, one 12 months after final approval, and one 18 months after final approval. Payments to class members will be made in two installments – a first payment within seven days of the “Effective Date” equaling approximately 29% of each individual’s total settlement payment and a second payment for the remainder within 14 days after the fourth installment payment of the gross settlement amount. (Settlement Agreement, ¶ VI(A)(8).) If payments uncashed after 90 days total less than 90% of the net settlement fund, the uncashed amounts will be redistributed pro rata to participating class members. If the uncashed payments total 90% or more, the uncashed amounts will be given to a cy pres recipient. However, no cy pres recipient has been named by the parties. The parties shall provide a cy pres recipient to the Court at the hearing in compliance with Code of Civil Procedure section 384.

The total settlement payment from Defendant includes attorneys’ fees of $766,500, costs of up to $36,000, a class representative incentive award of $15,000, and settlement administration costs of $50,000. (Memorandum of Points and Authorities in Support of Plaintiff’s Motion for Conditional Class Certification and Preliminary Approval of Class Action Settlement, p. 3, fn. 3.)

On August 27, 2019, the settlement administrator mailed class notices to the 7,511 class members on the class list. (Declaration of Nathalie Hernandez of ILYM Group, Inc., in Support of Motion for Final Approval of Class Action Settlement, ¶ 7.) Ultimately, 735 notice packets have remained undeliverable. (Id. at ¶ 10.) As of October 29, 2019, there have been no objections and 10 requests for exclusion. (Supplemental Declaration of Nathalie Hernandez of ILYM Group, Inc., in Support of Motion for Final Approval of Class Action Settlement, ¶¶ 3-4.) The individuals requesting exclusion are: Cirilo Arteaga Ramires, Ignacio Basalda Valdez, Austin Cosner, Arturo Guzman, Jose Machuca Olvera, Jose Luis Parra Castillo, Vincente Ramose, Arturo Reyes Santiago, Jose Reyes Santiago, and Ricardo Robles. (Id. at ¶ 3.)

The Court previously found that the proposed settlement is fair and the Court continues to make that finding for purposes of final approval.

Plaintiff requests a service 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 class representative has submitted a declaration in which he states he participated actively in this case – gathering documents, communicating with counsel, and speaking with co-workers. (Declaration of Jose Melvin Alvarado in Support of Plaintiff’s Motion for Final Approval of Class Action Settlement and Request for Attorneys’ Fees, Costs, and Class representative Service Payment, ¶¶ 4-8.) Plaintiff estimates he spent about 108 hours on the case. (Id. at ¶ 9.) The Court finds an incentive award is warranted, but that the requested amount is too high. The Court approves an incentive award in the amount of $10,000.

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 $766,500 (30% of the total settlement amount). Plaintiffs’ counsel provides evidence demonstrating a lodestar of $535,926, which results in a multiplier of 1.43. This is reasonable. The attorneys’ fees are approved.

Plaintiffs request $34,059.06 for actual incurred costs. The requested costs are approved.

The motion for final approval of class action settlement is GRANTED, subject to the reduction in the incentive award and the naming of a cy pres recipient in compliance with Code of Civil Procedure section 384. The parties shall appear in person or by phone to provide the name of the cy pres recipient.

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

The Court will set an interim compliance hearing for May 8, 2020 at 10:00 A.M. in Department 5. At least ten court days before the hearing, class counsel and the settlement administrator shall submit a summary accounting of the net settlement fund identifying distributions made as ordered herein, the number and value of any uncashed checks, amounts remitted to Defendant, the status of any unresolved issues, and any other matters appropriate to bring to the court’s attention. Counsel may appear at the compliance hearing telephonically. The Court will set additional compliance hearings at a later date in connection with additional settlement distributions.

NOTICE: The Court does not provide court reporters for proceedings in the complex civil litigation departments. Parties may arrange for a private court reporter to provide services, but those arrangements must be consistent with the local rules and policies posted on the Court’s website.