Case Name: Livier Soriano v. Flagship Facility Services, Inc., et al.
Case No.: 17-CV-316438

This is a putative wage and hour class action on behalf of employees of defendant Flagship Facility Services, Inc. Before the Court is plaintiff’s motion for preliminary approval of a settlement. Also at issue are two motions to intervene by plaintiffs in related wage and hour actions against defendant. The parties oppose the motions to intervene, and the would-be intervenors seek to oppose the motion for preliminary approval.

I. Factual and Procedural Background

Flagship provides janitorial services to clients throughout California. (Complaint, ¶ 9.) Plaintiff alleges that on or about September 1, 2016, she was hired to work for defendant as a non-exempt janitor and “was assigned to Defendant’s client proprieties to perform janitorial services.” (Id. at ¶ 8.) Plaintiff “last worked for Defendant on or about February 8, 2017.” (Ibid.)

Plaintiff alleges that she and other class members were not paid for mandatory onboard training, which lasted a number of hours. (Complaint, ¶ 20.) In addition, plaintiff and other class members were “temporary service employee[s], as defined by California Labor Code § 201.3,” but were paid on a biweekly basis rather than the weekly basis required by that section. (Ibid.) Finally, class members received wage statements that inaccurately failed to reflect their onboard training. (Ibid.)

Plaintiff filed this action on September 28, 2017 on behalf of a putative “Training Time Class” of California non-exempt employees who attended any training and/or onboarding sessions from September 28, 2013 to the present and a “Temporary Service Employee Class” of California non-exempt employees who were assigned to defendant’s customer’s facilities and were paid on a biweekly and/or bimonthly basis from September 28, 2014 to the present. She asserts claims for (1) violation of Labor Code section 226 by failing to provide accurate itemized wage statements; (2) violation of Labor Code sections 1194, 1197, and 1197.1 by failing to pay minimum wages for all hours worked; (3) violation of Labor Code sections 201.3 and 203 by failing to pay temporary service employees on a weekly basis; (4) violation of Labor Code section 2698 et seq. (the Private Attorney General Act or “PAGA”); and (5) violations of Business & Professions Code section 17200 et seq. (the “UCL”).

Flagship demurred to the third cause of action on the ground that, because plaintiff worked for a single client during her employment with defendant, an exception to section 201.3’s weekly pay requirement applies to her claim under that section. On December 27, 2017, the Court overruled Flagship’s demurrer, finding that the complaint did not allege that plaintiff worked for only one client, and Flagship subsequently answered the complaint.
II. Settlement Process

According to a declaration by plaintiff’s counsel filed in support of her motion for preliminary approval, the parties agreed to attempt mediation after defendant’s demurrer to the third cause of action was overruled. Defendant agreed to produce classwide data showing the number of putative class members, their rates of pay, their employment dates, any payments they received for onboarding time, and their client assignments, including the length of the assignments.

Plaintiff discovered that defendant began paying employees for their onboarding time as of May 1, 2017. Defendant’s data also showed that many employees were assigned to client facilities for periods of 90 days and, consequently, an exemption to the weekly pay requirement applied to many class members.

On June 25, 2018, the parties held a mediation with Steven Serratore, Esq. and reached the $1.4 million settlement before the Court.

III. Provisions of the Settlement

The non-reversionary $1.4 million settlement includes a $10,500 payment to the California Labor and Workforce Development Agency associated with plaintiff’s PAGA claim (seventy-five percent of the $14,000 allocated to PAGA penalties). Attorney fees of up to $466,666.67 (one-third of the gross settlement), litigation costs not to exceed $25,000, and administration costs not to exceed $22,000 will also be paid from the gross settlement. The named plaintiff will seek an enhancement award of $10,000.

The settlement provides that the net settlement fund will be divided equally among participating class members, with 10 percent allocated as wages and 90 percent allocated as interest and penalties. Class members will not be required to submit a claim to receive their payments, and plaintiff estimates that the payments to class members will be in the amount of $271.76. Flagship will pay the employer’s share of payroll taxes. Funds associated with checks uncashed after 90 days will be paid to Goodwill of Silicon Valley, Employment Readiness Program.

Class members who do not opt out of the settlement will release “any and all claims that could have been pled in the complaint arising from the facts alleged in that complaint, including all underlying statutory provisions of the California Labor Code identified in the complaint, PAGA, and all penalty claims, including but not limited to waiting time penalty claims. The release shall include, without limitation, claims of any and every nature based on off-the-clock work, minimum wage, overtime, paycheck-related claims, wage statement claims, and Wage Order claims. The release is to be broadly construed to the extent permitted by law” and “[t]he release period is September 10, 2015 through the date of final approval.” The settlement class is defined as “all persons who were hired or rehired and worked for Defendant in California at least one day as a non-exempt (hourly) employee during the Settlement Class Period,” September 10, 2015 through May 31, 2017.
IV. Motions to Intervene

In two separate motions, the plaintiffs in (1) Ceron de Orozco v. Flagship Facility Services, Inc. (Super. Ct. San Diego County, No. 37-2018-00040481-CU-OE-CTL) and (2) Gonzales v. Flagship Facility Services, Inc. (Super. Ct. Santa Clara County, No. 17-CV-316313) seek leave to intervene in this action. Gonzales also seeks a stay to allow him to file a complaint in intervention and investigate the settlement before the Court. Plaintiff and defendant separately oppose Ceron and Gonzales’s motions.

A. Legal Standard

Intervention is governed by California Code of Civil Procedure section 387. Under subdivision (d)(1)’s mandatory terms, the Court “shall” permit intervention where the proposed intervenor demonstrates in a “timely application” that “[a] provision of law confers an unconditional right to intervene” or “[t]he person seeking intervention claims an interest relating to the property or transaction that is the subject of the action and that person is so situated that the disposition of the action may impair or impede that person’s ability to protect that interest, unless that person’s interest is adequately represented by one or more of the existing parties.” (See Code Civ. Proc., § 387, subd. (d)(1).) Where the would-be intervenor “meets the qualifications for mandatory intervention…, the fact that such intervention would add to the complexity of the action, create delay or adversely affect the original parties is of no moment.” (California Physicians’ Service v. Superior Court (Gilmore) (1980) 102 Cal.App.3d 91, 96.)

Subdivision (d)(2) pertains to permissive intervention. “[F]or permissive intervention, three factors must be established: ‘The intervenor must have a direct interest in the lawsuit, the intervenor must not enlarge the issues raised by the original parties, and the intervenor must not tread on the rights of the original parties to conduct their own lawsuit.’ ” (Lincoln National Life Ins. Co. v. State Bd. of Equalization (1994) 30 Cal.App.4th 1411, 1422, footnote omitted.) “[T]he intervener’s interest in the litigation must be direct and immediate rather than consequential, the issues must not be enlarged by the intervention and the reasons for intervention must outweigh the rights of the original parties to litigate in their own way.” (California Physicians’ Service v. Superior Court, supra, 102 Cal.App.3d at pp. 95-96.) “One cardinal rule which is established by the cases is that an intervener’s interest must be more direct and immediate than that of a simple creditor of one of the parties.” (Ibid.)

“[C]ourts have recognized California Code of Civil Procedure section 387 should be liberally construed in favor of intervention.” (Lincoln National Life Ins. Co. v. State Bd. of Equalization, supra, 30 Cal.App.4th at p. 1423.) “The purpose of allowing intervention is to protect others potentially affected by a judgment, thus obviating delay and multiplicity of suits.” (Catello v. I.T.T. General Controls (1984) 152 Cal.App.3d 1009, 1013.)

B. Analysis

The Ceron and Gonzales actions, like this one, are PAGA and putative wage and hour class actions by employees of Flagship, but they arise from different violations than those alleged here. Ceron, filed on August 13, 2018, alleges a PAGA claim and claims under the Labor Code arising from defendant’s alleged requirement that employees remain on duty during their entire 8 ½ hour shifts, including meal and rest breaks. Ceron alleges that Flagship required employees to be on call during their breaks, failed to reimburse them for expenses related to required cell phone use, and failed to compensate employees for time spent renewing their identification badges. Similarly, Gonzales, filed on September 26, 2017, alleges a PAGA claim and Labor Code claims arising from defendant’s alleged failure to compensate employees for “missed and/or interrupted meal and rest periods.” Gonzales explains that his minimum wage and overtime claims seek recovery for “off-the-clock work, including time spent on-call and time spent working through breaks.”

Ceron and Gonzales urge that the release of claims in the settlement before the Court improperly exceeds the scope of plaintiff Soriano’s complaint and encompasses claims asserted in their respective actions. Ceron does not appear to contend that the release would apply to her individual claims, but urges that the settlement class now includes employees who are members of the class she seeks to represent. Gonzales urges that he was not a member of the class as defined in the complaint, but would be a member of the settlement class as redefined by the parties herein. Ceron and Gonzales also raise other issues with the settlement, which they urge the Court not to approve.

In separate oppositions to the motions to intervene, plaintiff and Flagship contend that Ceron and Gonzales are not members of the putative settlement class in this case and consequently have no standing to intervene. They further urge that the release here does not impact the claims in the Ceron and Gonzales actions, and they defend the propriety of the settlement.

While the Court is unaware of any authority directly addressing the application of this principle to non-class members, intervention is a “generally acceptable way[]” for unnamed class members to become parties of record in order to challenge a settlement. (See Hernandez v. Restoration Hardware, Inc. (2018) 4 Cal.5th 260, 267; see also Carter v. City of Los Angeles (2014) 224 Cal.App.4th 808, 821 [“If a class member thinks a release is too broad, he can seek to remedy that problem through objection or intervention, and, if not satisfied with the result, he could appeal.”].) In the Court’s view, it is equally acceptable for putative class representatives in related actions to intervene in order to challenge a settlement that could impact the resolution of their own cases, even if the intervenors are not themselves settlement class members. (See Sutter Health Uninsured Pricing Cases (2009) 171 Cal.App.4th 495, 514 [suggesting motion to intervene or consolidate would be appropriate procedure for non-class member to employ in seeking changes to the scope of a class settlement]; see also Cal. Rules of Court, rule 3.767(a) [court may make orders that “[f]acilitate the management of class actions through … intervention”].) Under these circumstances, the factors for permissive intervention are present: the intervenors have a direct interest in the lawsuit and intervention for the sole purpose of challenging the settlement will not enlarge the issues in the case or interfere with the parties’ right to conduct their own lawsuit. (See Lincoln National Life Ins. Co. v. State Bd. of Equalization, supra, 30 Cal.App.4th at p. 1422.) Finally, it is not necessary for the intervenors to show that their cases will inevitably be affected by the judgment: “It is enough that there be a substantial [p]robability that [their] interests will be so affected.” (Timberidge Enterprises, Inc. v. City of Santa Rosa (1978) 86 Cal.App.3d 873, 881.)

Here, while it appears that Ceron and Gonzales are not themselves members of the settlement class, the unusual wording of the proposed release is arguably broad enough to encompass claims they have alleged on behalf of other employees. There is a substantial probability that the ambiguity or overbreadth of the release will interfere with the prosecution of the related wage and hour lawsuits filed by Ceron and Gonzales. The Court accordingly finds their requests for leave to intervene to be generally appropriate. However, the complaint in intervention proposed by Ceron improperly enlarges the issues in the case by re-asserting the various causes of action alleged in her own lawsuit. Gonzales, for his part, does not submit a proposed complaint in intervention as required by the statute and instead seeks a stay to enable him to “investigate” the settlement before the Court. Particularly considering that Ceron and Gonzales have already filed oppositions to the motion for preliminary approval of the settlement, a stay to enable further investigation of the straightforward agreement at issue is unnecessary. As discussed below, the Court will grant preliminary approval only if the parties address the central issues raised by the would-be intervenors regarding the scope of the release. At the same time, Ceron and Gonzales will be permitted to intervene only if they file appropriately narrow complaints in intervention as required by the statute. The Court will continue their motions for this purpose, but will not stay the proceedings in the meantime. (See Thorman v. Dome Producing & Developing Co. (1942) 50 Cal.App.2d 201, 203 [suggesting that court should permit intervenor an opportunity to amend an insufficient complaint in intervention]; see also Cal. Rules of Court, rule 3.767(a) [court may “[i]mpose conditions on the representative parties or on intervenors” in class actions].)

C. Conclusion and Order

The motions for leave to intervene are CONTINUED to January 11, 2019 at 9:00 A.M. in Department 1. By December 21, 2018, Ceron and Gonzales shall file appropriately narrow proposed complaints in intervention addressing without re-alleging their related wage and hour actions against defendant, along with the other facts supporting intervention, and stating their intent to oppose or clarify the scope of the proposed settlement in this case.

Gonzales’s request for a stay is DENIED.

V. Motion for Preliminary Approval

Plaintiff moves for an order preliminarily approving the settlement, provisionally certifying the settlement class, approving the form and method for providing notice to the class, and scheduling a final fairness hearing.

Although Ceron and Gonzales’s motions for leave to intervene have been continued, the Court will address their objections to the proposed settlement now to speed the resolution of the issues they raise. If the parties object to this approach, the Court will continue the hearing on the motion for preliminary approval until a date after the continued hearing on the motions for leave to intervene. While plaintiff contends that Ceron and Gonzales should not be permitted to object to the settlement before putative class members can, the Court’s preferred approach in every case is to resolve any issues with a settlement at preliminary approval. This minimizes the risk of issues arising at final approval that would require modifications to the settlement, which could delay its approval and require additional notice to the class with resulting expense.

A. Request for Judicial Notice

Plaintiff’s request for judicial notice of a settlement agreement in an unrelated case filed by Ceron’s counsel, submitted with her reply brief, is DENIED. Unpublished California opinions “must not be cited or relied on by a court or a party in any other action.” (Cal. Rules of Court, rule 8.1115(a).)

B. Legal Standards for Approving a Class Action/PAGA Settlement

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, disapproved of on other grounds by Hernandez v. Restoration Hardware, Inc., supra, 4 Cal.5th 260.)

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, internal citations and quotations omitted.)

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 v. Ford Motor Co., supra, 48 Cal.App.4th at p. 1801, 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 v. Ford Motor Co., supra, 48 Cal.App.4th at p. 1802.) The presumption does not permit the Court to “give rubber-stamp approval” to a settlement; in all cases, it must “independently and objectively analyze the evidence and circumstances before it in order to determine whether the settlement is in the best interests of those whose claims will be extinguished,” based on a sufficiently developed factual record. (Kullar v. Foot Locker Retail, Inc. (2008) 168 Cal.App.4th 116, 130.)

Finally, Labor Code section 2699, subdivision (l) provides that “[t]he superior court shall review and approve any penalties sought as part of a proposed settlement agreement pursuant to” PAGA. 75 percent of any penalties recovered under PAGA go to the Labor and Workforce Development Agency (“LWDA”), leaving the remaining 25 percent for the aggrieved employees. (Iskanian v. CLS Transp. Los Angeles, LLC, supra, 59 Cal.4th at p. 380.) “[T]here is no requirement that the Court certify a PAGA claim for representative treatment” as in a class action. (Villalobos v. Calandri Sonrise Farm LP (C.D. Cal., July 22, 2015, No. CV122615PSGJEMX) 2015 WL 12732709, at *5.) “[W]hen a PAGA claim is settled, the relief provided … [should] be genuine and meaningful, consistent with the underlying purpose of the statute to benefit the public ….” (Id. at *13.) The settlement must be reasonable in light of the potential verdict value (see O’Connor v. Uber Technologies, Inc. (N.D. Cal. 2016) 201 F.Supp.3d 1110, 1135 [rejecting settlement of less than one percent of the potential verdict]); however, it may be substantially discounted given that courts often exercise their discretion to award PAGA penalties below the statutory maximum even where a claim succeeds a trial (see Viceral v. Mistras Group, Inc. (N.D. Cal., Oct. 11, 2016, No. 15-CV-02198-EMC) 2016 WL 5907869, at *8-9).

C. Fairness of the Settlement

Plaintiff’s counsel declares that there are approximately 3,168 individuals in the putative class. He estimates that the claims for unpaid wages associated with onboarding time are worth $150,000 plus waiting time penalties of $3 million. He estimates that the PAGA penalties associated with Flagship’s alleged failure to pay temporary employees on a weekly basis could total up to $1.5 million. The gross settlement of $1.4 million thus represents around 30 percent of the total maximum liability estimated by plaintiff’s counsel. After accounting for the deductions summarized above, the net recovery of $865,834 will yield an average payment of around $273 per class member.

As urged by Ceron, counsel’s estimate does not identify the number of individuals impacted by each of the two theories at issue or address the PAGA penalties associated with the claims for unpaid onboarding time. Counsel does not provide the average hourly rate of pay or the amount of training/onboarding time assumed for purposes of his estimate. This information is particularly important here given that the settlement provides for equal payments to each class member, regardless of a class member’s employment status, length of employment, or membership in the putative subclasses defined by the complaint. Ceron rightly points out that the discussion provided by plaintiff’s counsel does not permit the Court, the would-be intervenors, or putative class members to understand counsel’s math. Although the settlement is entitled to a presumption of fairness and appears reasonable to the Court assuming it encompasses only the claims alleged in the complaint, counsel must provide this information to enable the Court’s independent evaluation of the settlement. (See Kullar v. Foot Locker Retail, Inc., supra, 168 Cal.App.4th at p. 130.)

The central issue raised by both Ceron and Gonzales pertains to the scope of the release. Again, the settlement provides that settlement class members will release “any and all claims that could have been pled in the complaint arising from the facts alleged in that complaint, including all underlying statutory provisions of the California Labor Code identified in the complaint, PAGA, and all penalty claims, including but not limited to waiting time penalty claims. The release shall include, without limitation, claims of any and every nature based on off-the-clock work, minimum wage, overtime, paycheck-related claims, wage statement claims, and Wage Order claims. The release is to be broadly construed to the extent permitted by law ….” (Emphasis added.) As urged by Ceron and Gonzales, the proposed release is much broader than the complaint, and plaintiff does not address the value of the released claims beyond those alleged in the complaint.

The parties respond by stating that they did not intend to release claims beyond the scope of the complaint and citing authorities that they maintain limit releases to such claims, no matter how broadly worded. The Court is not satisfied by this response. Contrary to the parties’ argument that the release’s second sentence is limited by its first to claims “that could have been pled in the complaint arising from the facts alleged in that complaint,” the second sentence purports to release wage and hour claims “of any and every nature,” “without limitation.” If, as the parties insist, they do not seek a release of claims beyond the scope of the complaint, there is no reason for them to resist amending the settlement agreement to clarify that the release is limited to these claims. Further, where the parties are aware of related wage and hour actions against the defendant, the release should address its intended application on these actions directly to avoid confusion. Ultimately, the Court will not approve a settlement based on the assumption that the release it effectuates is far narrower than its language suggests.

For these reasons, the Court will deny plaintiff’s motion for preliminary approval without prejudice to its renewal based on a more thorough analysis of the merits of the settlement and/or a narrower release. Still, the Court will address the other aspects of the proposed settlement so that any additional issues are identified early and do not delay approval in the event of a renewed motion.

D. Proposed Settlement Class

Plaintiff requests that the following settlement class be provisionally certified:

All persons who were hired or rehired and worked for Defendant in California at least one day as a non-exempt (hourly) employee during the Settlement Class Period, except for individuals who have waived, released and/or recovered monies upon the claims or any of the claims, in whole or in part, released in this Settlement.

The Settlement Class Period is defined as the period from September 10, 2015 through May 31, 2017.

1. Legal Standard for Certifying a Class for Settlement Purposes

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 the plaintiff to demonstrate by a preponderance of the evidence (1) an ascertainable class and (2) a well-defined community of interest among the class members. (Sav-On Drug Stores, Inc. v. Superior Court (Rocher) (2004) 34 Cal.4th 319, 326, 332.)

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. (Ibid.) “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 (Botney) (1976) 18 Cal.3d 381, 385.)

In the settlement context, “the court’s evaluation of the certification issues is somewhat different from its consideration of certification issues when the class action has not yet settled.” (Luckey v. Superior Court (Cotton On USA, Inc.) (2014) 228 Cal.App.4th 81, 93.) As no trial is anticipated in the settlement-only context, the case management issues inherent in the ascertainable class determination need not be confronted, and the court’s review is more lenient in this respect. (Id. at pp. 93-94.) However, considerations designed to protect absentees by blocking unwarranted or overbroad class definitions require heightened scrutiny in the settlement-only class context, since the court will lack the usual opportunity to adjust the class as proceedings unfold. (Id. at p. 94.)

2. Ascertainable Class

“The trial court must determine whether the class is ascertainable by examining (1) the class definition, (2) the size of the class and (3) the means of identifying class members.” (Miller v. Woods (1983) 148 Cal.App.3d 862, 873.) “Class members are ‘ascertainable’ where they may be readily identified without unreasonable expense or time by reference to official records.” (Rose v. City of Hayward (1981) 126 Cal.App.3d 926, 932.)

Here, the parties have identified 3,168 putative class members, but the class is not clearly defined. The definition refers to individuals who “were hired or rehired and worked for Defendant in California at least one day as a non-exempt (hourly) employee during the Settlement Class Period,” but it is not clear whether individuals must have been “hired or rehired” during the Settlement Class Period or whether they must simply have worked for defendant for one day during the class period to qualify as class members. Further, it is not clear how the parties define “hired or rehired” in this context.

In addition, as urged by Ceron and Gonzales, plaintiff has not shown that it is appropriate to combine the subclasses defined by the complaint into one settlement class limited to the period from September 10, 2015 through May 31, 2017. While plaintiff explains that Flagship began compensating employees for onboarding time around the end of the class period, this does not address why the May 2017 cutoff is being applied to the pay frequency claims. Notably, the time period of the release is not so limited, but extends to the date of final approval. Further, the “Training Time Class” as defined in the complaint included individuals who attended onboarding from September 28, 2013 to the present, while the penalty period for the Temporary Service Employee Class” was alleged to extend to September 2014. Plaintiff does not explain this limitation on the class period, either, nor does she address whether settlement payments will be fairly allocated between the former subclasses where the settlement provides for a pro rata distribution among the entire class.

In the event that plaintiff renews her motion for preliminary approval, these issues relating to the definition of the settlement class must be addressed.

3. Community of Interest

With respect to the first community of interest factor, “[i]n order to determine whether common questions of fact predominate the trial court must examine the issues framed by the pleadings and the law applicable to the causes of action alleged.” (Hicks v. Kaufman & Broad Home Corp. (2001) 89 Cal.App.4th 908, 916.) The court must also give due weight to any evidence of a conflict of interest among the proposed class members. (See J.P. Morgan & Co., Inc. v. Superior Court (Heliotrope General, Inc.) (2003) 113 Cal.App.4th 195, 215.) The ultimate question is 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. (Lockheed Martin Corp. v. Superior Court, supra, 29 Cal.4th at pp. 1104-1105.) “As a general rule if the defendant’s liability can be determined by facts common to all members of the class, a class will be certified even if the members must individually prove their damages.” (Hicks v. Kaufman & Broad Home Corp., supra, 89 Cal.App.4th at p. 916.)

Here, plaintiff’s claims all arise from defendant’s wage and hour practices applied to the similarly-situated class members, and common issues would appear to predominate. However, any renewed motion for preliminary approval must address the potential conflict between members of the subclasses identified in the complaint.

As to the second factor,

The typicality requirement is meant to ensure that the class representative is able to adequately represent the class and focus on common issues. It is only when a defense unique to the class representative will be a major focus of the litigation, or when the class representative’s interests are antagonistic to or in conflict with the objectives of those she purports to represent that denial of class certification is appropriate. But even then, the court should determine if it would be feasible to divide the class into subclasses to eliminate the conflict and allow the class action to be maintained.

(Medrazo v. Honda of North Hollywood (2008) 166 Cal. App. 4th 89, 99, internal citations, brackets, and quotation marks omitted.)

Like other members of the class, plaintiff was required to attend uncompensated onboard training and was paid on a biweekly rather than a weekly basis. The anticipated defenses are not unique to plaintiff, and there is no indication that plaintiff’s interests are otherwise in conflict with those of the class. The Court is not persuaded by Ceron and Gonzales’s argument that plaintiff’s intent to request a $10,000 incentive payment creates a conflict between her and the class.

Finally, adequacy of representation “depends on whether the plaintiff’s attorney is qualified to conduct the proposed litigation and the plaintiff’s interests are not antagonistic to the interests of the class.” (McGhee v. Bank of America (1976) 60 Cal.App.3d 442, 450.) The class representative does not necessarily have to incur all of the damages suffered by each different class member in order to provide adequate representation to the class. (Wershba v. Apple Computer, Inc. (2001) 91 Cal.App.4th 224, 238.) “Differences in individual class members’ proof of damages [are] not fatal to class certification. Only a conflict that goes to the very subject matter of the litigation will defeat a party’s claim of representative status.” (Ibid., internal citations and quotation marks omitted.)

Plaintiff has the same interest in maintaining this action as any class member would have. Further, she has hired experienced counsel. Again, Ceron and Gonzale’s argument that plaintiff’s counsel has a conflict with the class lacks merit. The Court is unaware of any authority suggesting that plaintiff’s counsel cannot represent employers in wage and hour actions without creating a conflict in representing plaintiffs in unrelated actions. In short, plaintiff has sufficiently demonstrated adequacy of representation.

4. Substantial Benefits of Class Certification

“[A] class action should not be certified unless substantial benefits accrue both to litigants and the courts. . . .” (Basurco v. 21st Century Ins. (2003) 108 Cal.App.4th 110, 120, internal quotation marks omitted.) The question is whether a class action would be superior to individual lawsuits. (Ibid.) “Thus, even if questions of law or fact predominate, the lack of superiority provides an alternative ground to deny class certification.” (Ibid.) Generally, “a class action is proper where it provides small claimants with a method of obtaining redress and when numerous parties suffer injury of insufficient size to warrant individual action.” (Id. at pp. 120-121, internal quotation marks omitted.)

Here, there are an estimated 3,168 members of the proposed class. It would be inefficient for the Court to hear and decide the same issues separately and repeatedly for each class member. Further, it would be cost prohibitive for each class member to file suit individually, as each member would have the potential for little to no monetary recovery. It is clear that a class action provides substantial benefits both to the litigants and the Court in this case.

5. Conclusion

In the event that plaintiff renews her motion for preliminary approval, it is likely that she will be able to show this action is appropriate for class treatment. However, she must address the issues identified above with regard to the class definition, as well as the potential conflict between members of the subclasses identified in the complaint.

E. Notice

The content of a class notice is subject to court approval. (Cal. Rules of Court, rule 3.769(f).) “The notice must contain an explanation of the proposed settlement and procedures for class members to follow in filing written objections to it and in arranging to appear at the settlement hearing and state any objections to the proposed settlement.” (Ibid.) In determining the manner of the notice, the court must consider: “(1) The interests of the class; (2) The type of relief requested; (3) The stake of the individual class members; (4) The cost of notifying class members; (5) The resources of the parties; (6) The possible prejudice to class members who do not receive notice; and (7) The res judicata effect on class members.” (Cal. Rules of Court, rule 3.766(e).)

Here, the notice describes the lawsuit, explains the settlement, and instructs class members that they may opt out of the settlement or object. The notice is clear that class members may appear at the final fairness hearing to make an objection without submitting a written objection. The gross settlement amount and estimated deductions (other than the administrative fees) are provided, along with the estimated payment per class member. Class members are instructed to provide documentation if they dispute their dates of employment as reflected on the notice. Class members are given 45 days to request exclusion from the class.

The notice is generally adequate, but would need to be modified to explain the two theories underlying the complaint rather than simply listing the wage and hour causes of action alleged. The notice must also specify the estimated administrative fees. The class definition provided on page three of the notice makes no reference to hiring or rehiring during the class period, which is not consistent with how the class is currently defined in the settlement agreement. The deadlines for filing a written objection and disputing employment dates are not provided. Finally, the parties do not address whether notice should be provided in Spanish. These issues must be addressed in connection with any renewed motion for preliminary approval.

Turning to the notice procedure, the parties have selected Simpluris, Inc. as the settlement administrator. The administrator will mail the notice packet within 15 business days of preliminary approval, after updating class members’ addresses using the National Change of Address database. Any notice packets returned as undeliverable will be re-mailed to any forwarding address provided or updated address located through skip tracing. Class members whose notices are re-mailed will have until at least 15 calendar days after re-mailing to respond. These notice procedures are appropriate, and the Court anticipates they would be approved upon a renewed motion for preliminary approval.

F. Conclusion and Order

Plaintiff’s motion for preliminary approval is DENIED WITHOUT PREJUDICE to its renewal based on a more thorough analysis of the merits of the settlement and/or a narrower release. Any renewed motion shall address each of the various issues raised by the Court in this order.

The Court will prepare the order.