SUPERIOR COURT OF CALIFORNIA

COUNTY OF SANTA CLARA

MICHAEL SCHMITZ, MIN DUONG, and RYAN WINTERS, individually and on behalf of all others similarly situated,

Plaintiffs,

vs.

HEALTHIQ RE, INC., a California corporation; HI.Q, INC. Which Will do Business in California as Health IQ, a California corporation; and DOES 1 through 25,

Defendants.

Case No. 2018-1-CV-337951

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 October 4, 2019, at 9:00 a.m. in Department 5. The Court now issues its tentative ruling as follows:

I. INTRODUCTION
II.
This is a putative class action arising out of various alleged wage and hour violations. The Complaint, filed on November 13, 2018, sets forth the following causes of action: (1) Violation of Labor Code section 510; (2) Violation of Labor Code sections 226.7(b) and 512(a) and the Applicable Wage Order; (3) Violation of Labor Code section 226; (4) Violation of Labor Code sections 201 and 202; (5) Violation of Labor Code section 2802; and (6) Violation of Business and Professions Code section 17200, et seq.

The parties have reached a settlement. On June 28, 2019, the Court signed an order granting preliminary approval of the settlement. Plaintiffs Michael Schmitz, Min Duong, and Ryan Winters (collectively, “Plaintiffs”) now move for final approval of the settlement.

III. LEGAL STANDARD
IV.
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.)

V. DISCUSSION
VI.
The non-PAGA portion of the case has been settled on behalf of the following class:

[A]ll employees of Defendants who worked as a Sales and/or Operations Person . . . in California at any time during the Non-PAGA Class Period and who have not previously settled and released all wage and hour claims against Defendants.

As discussed in connection with the motion for preliminary approval, defendants HealthIQ Re, Inc. and Hi.Q, Inc. (collectively, “Defendants”) will pay a total amount of $1,000,100.02, plus the employer’s share of payroll taxes. The settlement is split into a PAGA portion and non-PAGA portion. For the non-PAGA portion, Defendants will pay $831,674.54. For the PAGA portion, Defendants will pay $168,425.48. The settlement funds will be paid in two installments, the first 21 days after the “Effective Date” and the second six months later.

Out of the non-PAGA portion of the settlement, disbursements will be made of $5,250 for settlement administration costs, $277,224.85 for attorneys’ fees, up to $5,000 for costs, and $3,500 for each class representative ($10,500 total). Out of the PAGA portion of the settlement, disbursements will be made of $5,250 for settlement administration costs, $56,141.83 for attorneys’ fees, up to $5,000 for costs, and $76,525.24 to the Labor and Workforce Development Agency (“LWDA”).

For checks that are not cashed within 60 days of disbursement, the settlement administrator will attempt to contact each individual to advise them to cash their checks and offer to replace any checks reported as lost or stolen. Checks not cashed within 180 days will be void and the funds represented by the uncashed checks will be disbursed one-half each to Bet Tzedek and the American Diabetes Association as cy pres beneficiaries.

On July 22, 2019, the settlement administrator mailed notice packets to 39 non-PAGA settlement class members. (Declaration of Bryan Valdez on Behalf of CPT Group, Inc. The Settlement Administrator, ¶ 6.) As of September 9, 2019, no notice packets remain undelivered. (Id. at ¶ 7.) There have been no requests for exclusion, objections, or disputes. (Id. at ¶ 8.) The average recovery for non-PAGA settlement class members is $13,684.61 and the highest recovery is $50,003.76. (Id. at ¶ 9.)

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

Plaintiffs request service awards of $3,500 for each class representative. Based on declarations submitted in connection with the motion for preliminary approval, the Court found incentive awards are warranted. The Court continues to make that finding for final approval.

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.) Plaintiffs’ counsel requests attorneys’ fees in the amount of $333,366.68 (one-third of the total settlement) and costs of $2,324.50. Plaintiffs’ counsel provides evidence demonstrating a lodestar of $103,394.97, based on an hourly rate of $550/hour. (Declaration of Jon M. Lebe in Support of Plaintiffs’ Unopposed Motion for Final Approval of Class Action Settlement, ¶ 18.) This results in a multiplier of 3.22. This is a higher multiplier than this Court generally sees. Nevertheless, Plaintiffs’ counsel achieved a very good result for the class and the fees requested comport with the widely accepted common fund approach. The Court approves the fees. The Court approves the incurred costs, which are reasonable.

The motion for final approval of class action settlement is GRANTED.

Pursuant to Rule 3.769(h) of the California Rules of Court, this Court retains jurisdiction over the parties to enforce the terms of the Settlement Agreement, and the final Order and Judgment.

The Court now sets a compliance hearing for April 24, 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 Defendants, 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 prepare the final order and judgment if this tentative ruling is not contested.

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.