Lucia De Jesus v. Frozsun, Inc.
Case No: 1416o723
Hearing Date: Mon Apr 23, 2018 9:30

Nature of Proceedings: Motion for Prelim. Approval of Class Action Settlement/Case Management Conference

Lucia DeJesus and Maria Guillen, etc., v. Frozsun, Inc., Case No. 1416723 (Judge Sterne)

Hearing Date: April 23, 2018

Motion:

Motion for Preliminary Approval of Class Action Settlement

Attorneys:

For Plaintiffs Lucia DeJesus and Maria Guillen and those similarly situated: R. Rex Parris, Kitty K. Szeto, The Parris Firm; Stuart R. Chandler; Corey G. Lee, The Downey Law Firm, LLC

For Defendant Frozsun, Inc., dba Frozsun Foods: Robert L. Wenzel, Scott K. Dauscher, Amber S. Healy, Atkinson, Andelson, Loya, Ruud & Romo

Tentative Ruling:

Subject to resolution of the issues stated herein, the motion for preliminary approval of class action settlement is granted. The parties are to be prepared to discuss at the hearing of this motion the notice issues discussed herein and scheduling issues for providing notice and final approval.

Background:

This is a motion for preliminary approval of a class action settlement. In their complaint, named plaintiffs Lucia DeJesus and Maria Guillen allege that defendant Frozsun, Inc., (Frozsun) required plaintiffs and the putative class to don and doff protective gear before and after their work shifts and has improperly failed to pay plaintiffs and the putative class for the time required to don and doff the gear. Plaintiffs also allege various other wage and hour violations.

On October 12, 2017, the parties mediated this dispute with Hon. Peter D. Lichtman (Ret.) of JAMS in Los Angeles and reached a settlement. (Chandler decl., ¶ 6.) As set forth more specifically in the detailed settlement agreement, the principal terms of the settlement are:

The settlement class consists of all hourly non-exempt production employees of Frozsun from April 19, 2009, through the date of preliminary approval, other than those who opt out. (Settlement, art. II(f) [Chandler decl., exhibit A].)

The class claims settled are all those claims that were or could have been pleaded in this action based on the facts and circumstances alleged, including all claims for failure to pay wages, for failure to pay wages timely, and for failure to maintain records. (Settlement, art. II (h).)

The maximum settlement amount is $5,000,000. (Settlement, art. I.) The maximum settlement amount includes payments to class members, attorney fees, court costs, and settlement administration costs. (Settlement, art. II(t).) The amounts to be paid from the maximum settlement amount are attorney fees not to exceed $1,750,000 (35 percent of the gross settlement), court costs not to exceed $100,000, an enhancement of $5,000 each to be paid to the named plaintiffs, and settlement administration costs of approximately $57,000, leaving net settlement proceeds for distribution to the settlement class of $3,083.000. (Settlement, art. II(u).) The entire maximum settlement amount will be paid out with no residuals to revert to Frozsun. (Settlement, § 3.04(a).) (Note: The Settlement Agreement’s numbering scheme consists of articles, sections (not included in every article), and subsections.)

Claim forms are not required for payment to class members. (Settlement, § 3.04(a).) Class members not opting out will receive a notice identifying the amount of each claim with a check based upon existing employment records subject to objections and standard payroll tax withholdings. (Ibid.) The net settlement amount will be distributed pro rata to class members by eligible workweeks (of which there are approximately 243,593 eligible workweeks during the class period). (Settlement, § 3.06(h)(1).) Amounts unclaimed or uncashed after 180 days would paid to the State and to a nonprofit organization. (Settlement, § 3.06(i).)

The motion includes a proposed notice to class members. A supplemental declaration of counsel provides an alternative notice that was suggested by Frozsun and discussed by the parties. The differences are not highlighted in the version filed with the court and the practical differences are explained only in general terms.

Analysis:

The purpose of the preliminary approval hearing is to determine whether the settlement is within the range of reasonableness for preliminary approval and to approve or deny certification of a provisional settlement class. A full inquiry into the fairness of the proposed settlement occurs at the final approval hearing. (Rules of Court, rule 3.769, subd. (g).)

“Section 382 of the Code of Civil Procedure authorizes class suits in California 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.’” (Linder v. Thrifty Oil Co. (2000) 23 Cal.4th 429, 435.) “Class certification requires proof (1) of a sufficiently numerous, ascertainable class, (2) of a well-defined community of interest, and (3) that certification will provide substantial benefits to litigants and the courts, i.e., that proceeding as a class is superior to other methods. [Citations.] In turn, the ‘community of interest requirement embodies three factors: (1) predominant common 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.’ [Citation.]” (Fireside Bank v. Superior Court (2007) 40 Cal.4th 1069, 1089-1090.)

There appears to be a sufficiently numerous and well-defined community of interest in the settlement class. There are represented to be approximately 10,014 current and former employee-class members comprising approximately 243,593 eligible workweeks based upon employment records. The class is sufficiently numerous and ascertainable. For purposes of settlement, there are predominant common questions, class representatives with claims typical of the class, and class representatives who can adequately represent the class.

The settlement appears to be within the range of reasonableness. The liability at issue is vigorously disputed by defendants and the costs to both sides to proceed in litigation would be substantial. The gross settlement amount is supported by the opinion of counsel as reasonable following a mediation with an experienced and knowledgeable mediator. The approximate net settlement reflects a proposed payment of approximately $12.64 per eligible workweek or $307.87 on average per employee. Based upon the nature of the claims, the risks and disputed liability, the gross settlement amount appears as a reasonable compromise. The costs and expenses, including the attorney fees requested, also appear reasonable given the type and scope of the litigation.

Class counsel presents evidence of their skill and experience sufficient to demonstrate that they can adequately represent the settlement class.

Subject to the notice issue below, the court will grant preliminary approval of the class action settlement as requested. The preliminary approval as it relates to attorney fees and costs is only in amounts up to those stated in the notice and subject to final approval. The court will require the motion for final approval to include all matters necessary for the court to determine these issues (even if redundant to those papers already filed on attorney fees and costs). (See Laffitte v. Robert Half Intern. Inc. (2016) 1 Cal.5th 480, 506 [“We hold further that trial courts have discretion to conduct a lodestar cross-check on a percentage fee, as the court did here; they also retain the discretion to forgo a lodestar cross-check and use other means to evaluate the reasonableness of a requested percentage fee.”].)

There are two notices provided in connection with this motion. The differences are not highlighted and the court requires the parties to be prepared to discuss the practical differences between the notices at the hearing of this motion in order to determine which notice to approve.