2017-00221627-CU-OE

Juan Garcia vs. Royal Plywood Company, LLC

Nature of Proceeding: Motion for Final Approval of Class Action Settlement

Filed By: Rodriguez, Justin P.

Plaintiff Juan Garcia’s unopposed motion for final approval of class action settlement is tentatively granted pending the final fairness hearing to be held on this date. (Code of Civil Procedure § 382, California Rules of Court, Rule 3.769.)

The trial court has broad discretion to determine whether a proposed settlement in a class action is fair. (Rebney v. Wells Fargo Bank (1990) 220 Cal. App. 3rd 1117, 1138.)

The law favors settlement, particularly in class actions and other complex cases where substantial resources can be conserved by avoiding the time, cost, and rigors of formal litigation. (See Newberg on Class Actions 4th (4th ed. 2002) § 11.41 (and cases cited therein); Class Plaintiffs v. City of Seattle (9th Cir. 1992) 955 F.2d 1268, 1276; Van Bronkhorst v. Safeco Corp. (9th Cir. 1976) 529 F.2d 943, 950; see also Potter v. Pacific Coast Lumber Co. (1951) 37 Cal.2d 592, 602.) The trial court has broad powers to determine whether a proposed settlement in a class action is fair. (Rebney v. Wells Fargo Bank (1990) 220 Cal. App. 3d 1117, 1138.) In approving a class action settlement, the Court must “satisfy itself that the class settlement is within the ‘ballpark’ of reasonableness.” (Kullar v. Foot Locker Retail, Inc., (2008) 168 Cal.App.4th 116, 133.) In making its fairness determination, the Court should consider the relevant factors, such as the strength of the Plaintiffs’ case, the risk, expenses, 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, and the experience and views of counsel. (Dunk v. Ford Motor Co. (1996) 48 Cal. App. 4th 1794,1801.)

While the Court’s ruling indicates that it will give its final approval to the class action settlement and approve class counsel’s fee requests and the class representative service fee, the Court must still hold the final fairness hearing to allow potential class members the opportunity to be heard. (Dunk, supra, 48 Cal.App.4th at p. 1802.)

In this wage and hour action Plaintiff alleges, among other things, that Defendants Royal Plywood Company, LLC, et al. committed numerous wage and hour violations, failed to provide proper meal and rest periods, failed to pay premiums for any missed meal and rest periods and failed to provide compliant wage statements. Plaintiff also alleges that Defendants violated Bus. & Prof. Code § 17200 and seek penalties pursuant to PAGA.

The Court preliminarily approved the class action settlement on September 21, 2018. Consistent with the Court’s order, notice of settlement was provided to 196 class members. After receiving 8 undeliverable notice packets, the Claims Administrator performed additional research to obtain updated addresses and re-mailed notice packets. To date, 2 Notice Packets have remained undeliverable. (Kincannon Decl. ¶ 5.)

Pursuant to the proposed settlement, Defendants have agreed to pay a gross settlement of $525,000 to “[a]ll individuals who have, or continue to, perform work for Defendants within California as non-exempt, hourly employees between November 1, 2013 and the date the Court enters an order preliminarily approving the class settlement.” Payments will be allocated to class members on a pro rata basis based on the total workweeks worked.

The settlement also includes a $15,000 service award to Plaintiff Juan Garcia and allows Plaintiff’s counsel to seek fees up to $183,750 (35% of the gross settlement) and up to $15,000 in costs, all of which will be deducted from the gross settlement amount. The settlement also provides that class administration fees of up to $10,000 will be deducted from the gross settlement amount. The settlement also provides for a $11,250 payment to the California Labor and Workforce Development Agency in connection with the PAGA claim (75% of the $15,000 PAGA settlement) pursuant to Labor Code § 2698.

Before finally approving a class action settlement, the Court must find that the settlement is “fair, adequate, and reasonable.” (Wershba v. Apple Computer (2001) 91 Cal.App.4th 224, 244, 245.) “[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.” (Dunk v. Ford Motor Company (1996) 48 Cal.App.4th 1794, 1802.) The Court considers such factors 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 class members to the proposed settlement.” (Id. at 1801.)

Here, the Court tentatively finds that the settlement reached after mediation, is entitled to final approval. The moving papers demonstrate that the settlement was the product of arms-length bargaining between the parties and was reached after sufficient discovery and investigation which allowed the parties, and therefore, this Court, to act intelligently with respect to the settlement. (Shimoda Decl. ¶¶ 6-9) Further, class counsel is experienced in wage and hour class action litigation, having litigated numerous wage and hour class actions and believes that the settlement is fair and in the best interests of the class. (Id. ¶¶ 9-15) Moreover, the class reaction is overwhelmingly positive as no opt outs and no objections were received. (Kincannon Decl. ¶¶ 6, 7.)

The settlement in this action provides value to the class members as it provides them monetary compensation in a manner approximately commensurate with the potential value of their individual claims in light of the risks of continued litigation. (Shimoda Decl. ¶ 9.) Class members will receive an average of $1,442.03. (Kincannon Decl. ¶ 8.)

In addition, the Court tentatively approves Class Counsel’s request for attorneys’ fees and costs. Specifically, the Court approves Counsel’s request for attorneys’ fees in the amount of $183,750 [35% of settlement amount] and costs in the amount of $8,946.56 [the settlement allowed for up to $15,000]. Given that these amounts were disclosed in the class notice, no objections to these amounts were received, and the contingent nature of class counsel’s representation and the associated risks, the Court finds the

requested fees and costs to be an appropriate award. The Court also tentatively

approves the claims administration fees of $6,500. The Court also approves the $15,000 PAGA settlement and the $11,259 (75%) payment to the California Labor and

Workforce Development Agency in connection with Labor Code § 2698.

Finally, the Court tentatively approves the of $15,000 class representative fee for Plaintiff Juan Garcia for his time and effort serving as class representative. This is an appropriate award.

In sum, and subject to the final fairness hearing, the Court concludes that the class shall be certified for settlement purposes, that the settlement is entitled to final approval and that the various fee requests are appropriate and also entitled to approval.

The Court anticipates that it will sign the proposed final order approving class action settlement at the conclusion of the final fairness hearing in the event that it adopts the findings set forth above which given the above the Court anticipates it will do.