2016-00203789-CU-OE

Samuel Guerra vs. Graphic Packaging International, Inc.

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

Filed By: Aiwazian, Edwin

Plaintiff Samuel Guerra et al.’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 instant coordinated case involves three separate actions: Colvin v. Graphic Packaging International, Inc., Orange County Superior Court, Case No. 2015-00781730-CU-OE-CXC filed on April 8, 2015 (the “Colvin Action”), Zasonski v. Graphic Packaging International, Inc., Sacramento County Superior Court,

Case No. 34-2015-00180987, filed on June 25, 2015 (the “Zasonski Action”), and Guerra, et al. v. Graphic Packaging International, Inc., Sacramento County Superior Court, Case No. 34-20196-00203789-CU-OE-GDS, filed on November 22, 2016 (the ” Guerra Action” or the “Instant Action”) (collectively the “Actions”). In the Actions, Plaintiffs seek relief on behalf of all current and former hourly-paid or non-exempt individuals employed by Defendants within the State of California at any time during the period from April 8, 2011 to final judgment.

In this wage and hour action, Plaintiffs allege, among other things, that Defendant committed numerous wage and hour violations, failed to pay overtime, failed to pay minimum wage, failed to provide proper meal and rest periods, failed to timely pay wages on termination, failed to provide accurate and complete

wage statements, failed to keep required payroll records, failure to reimburse business expenses and failed to pay for all hours worked. Plaintiff also alleged violations of Bus.

& Prof. Code § 17200, and sought penalties under PAGA. Defendant has denied, and continues to deny, any liability or wrongdoing of any kind associated with any of the allegations in the Settled Actions, and further denies that the Settled Actions are appropriate for class treatment or representative adjudication for any purpose other than for settlement.

The class of seven hundred seventy-six (776) individuals, was certified provisionally and is defined as: “All persons who were directly employed by Defendant in non-exempt or hourly-paid production positions in California at any time during the period from April 8, 2011 to April 26, 2017 (the “Settlement
Class Period”).”

Defendants have agreed to pay a Gross Settlement amount of $4,000,000.00, on a

claims-made basis. From the Gross Settlement, the Net Settlement Fund will be
calculated by deducting (1) attorneys’ fees of up to 35% ($1,400,000.00) of the Gross
Settlement, (2) reimbursement of litigation costs and expenses of up to $50,000.00, (3)
enhancement awards to the plaintiffs in a total amount of up to $30,000.00, (4)
$50,062.50 to the California Labor and Workforce Development Agency for its share of
the PAGA penalties (75% of $66,750) and Administration costs of up to $25,000.00.
The parties have agreed to retain CPT Group as the Settlement Administrator. The
Settlement Administrator will calculate the pro rata share of the New Settlement Fund
that each class member is eligible to claim on a pro rata basis according to the number
of weeks a class member worked during the relevant period from April 8, 2011 to April
26, 2017.

On January 3, 2018, the court preliminarily found that the proposed settlement, reached after mediation, appeared not to be the product of fraud or overreaching and appears to be fair, reasonable, adequate and in the best interests of the

members of the putative class and thereby meets the criteria for preliminary approval. ( Nordstrom Com.Cases (2010) 186 Cal.App.4th 576, 581.)

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 Court-appointed Settlement Administrator, CPT, took all necessary steps to effectuate the notice and settlement administration process, as set forth in the Court’s January 17, 2018 Preliminary Approval Order. The Court approves the Joint Stipulation regarding the procedures undertaken to provide notice to the 17 Additional Class Members identified after the preliminary approval hearing. The Court finds that the Settlement Administrator provided the required notice to all members including the Additional Class Members. No objections to the Settlement have been submitted to the parties or the Settlement Administrator or filed with the Court and no Requests for Exclusion have been submitted to the Settlement Administrator; Ultimately, only six of the 678 notice packets remained undeliverable.

Plaintiffs now seek final approval of the class action settlement including the following:

(1) A Net Settlement Fund of approximately $2,472,252.76 from the gross $4,000,000 settlement amount is available to the Class Members who did not opt out of the Settlement and who submitted timely and valid claims (“Claimants”), subject to a sixty-five percent (65%) guaranteed minimum payment; Included Class Members have claimed approximately 79.98% of the Net Settlement Fund.” Additional Class Members have claimed an additional $63,401.09. In total, approximately 82.56% of the Net Settlement Fund has been claimed – well in excess of the guaranteed minimum payment. The highest gross Settlement Award to be paid Is currently estimated to be at least $5,592.41, and the average gross Settlement Award is currently estimated to be at least $3,998.68. The court finds that the settlement amount is a fair, adequate, and reasonable resolution of the Settled Actions, given the risks inherent in litigating class and representative claims through certification proceedings, trial, and/or appeal.

(2) Attorneys’ fees in the amount of $1,400,000.00 to Lawyers for Justice, PC and Adept Employment Law, APC (“Class Counsel”), representing thirty-five percent (35%) of the Gross Settlement Fund, which the Court finds is a reasonable and justified on a percentage-basis and also based on a lodestar cross-check. Two (2) law firms combined their experience and skills, and dedicated the full extent of
resources, to litigate and bring this matter to a successful conclusion on behalf of the Class. Lawyers for Justice, PC has spent 1,370.30 hours and Adept

Employment Law, APC has spent 927.15 hours performing tasks on behalf of Plaintiffs and the Class.” Collectively, Class Counsel have spent a total of 2,297.45 hours on the case.

The Court finds that the attorneys fees are reasonable. Settlement Class Counsel is experienced in wage-and-hour class action litigation and used that experience to obtain a good result for the Settlement Class. The skill that Settlement Class Counsel has shown, along with the results obtained, justify the requested Attorneys’ Fees and reimbursement of Litigation Costs, considering the amounts requested, the work performed, and the risks incurred.

Plaintiffs entered into a contingency-fee agreement with Settlement Class Counsel, and the representation of the Settlement Class provided by Settlement Class Counsel has been wholly contingent. Settlement Class Counsel took on the cases without knowing whether any recovery would be obtained. Together, the Settlement Class

Counsel has invested 2,297.45 hours of time to obtain relief on behalf of Plaintiffs and the Settlement Class.

“The ultimate goal… is the award of a ‘reasonable’ fee to compensate counsel for their efforts, irrespective of the method of calculation.” Consumer Privacy Cases (2009) 175 Cal.App,4th 545, 557-58 (quoting Apple Computer, Inc. v. Superior Court, supra, 126 Cal.App,4th at 1270),Trial courts have “wide latitude” in assessing the value of attorneys’ fees and their decisions will “‘not be disturbed on appeal absent a manifest abuse of discretion.'” Lealao v.Beneficial Cal., Inc. (2000) 82 Cal.App.4tii 19, 41; Ketchum v. Moses (2001) 24 Cal.4th 1122, 1132 (The “experienced trial judge is the best judge of the value of professional services rendered in his court[.]”) Cellphone Termination Fee Cases (2009) 180 Cal.App.4th 1110,1118. Where the amount of a settlement is a “certain easily calculable sum of money,” California courts may calculate attorneys’ fees as a reasonable percentage of the settlement created, Weil and Brown, California Practice Guide. Civil Procedure Before Trial, Chapter 14, section 14:145; Dunk, supra, 48 Cal,App,4th at 1808, The percentage-of-the-benefit approach is preferred in class and representative actions because “it better approximates, the workings of the marketplace than the lodestar approach.” Lealao, supra, 82 Cal.App,4th at 49.

California and federal courts have long recognized that an appropriate method for determining the award of attorneys’ fees is based on a percentage of the total value of benefits made available to class members by the settlement. Boeing Co. v. Van Gemert (1980) 444 U.S. 472, 478; Paul, Johnson. Alston & Hunt v. Graulty (9th Cir. 1989) 886 F.2d 268, 272; Vincent v. Hughes Air West, Inc. (9th Cir. 1977) 557 F.2d 759, 769; Serrano v. Priest (1977) 20 Cal.3d 25 34. The purpose of this equitable doctrine is to spread litigation costs proportionally among all the beneficiaries so that the active beneficiary does not bear the entire burden alone. See Vincent, supra, 557 F.2d at 769.

While the percentage-of-the-benefit approach is endorsed as the better approximation of the workings of the marketplace than the lodestar approach, courts may also use the lodestar method to “cross-check” the results of the other. See Laffitte, supra, 1 Cal.5th at 505 (explaining that “[a] lodestar cross-check is simply a quantitative method for bringing a measure of the time spent by counsel into the trial court’s reasonableness determination”); see also, e.g., Vizcaino,

290 F.3d at 1050 (“[W]hile the primary basis of the fee award remains the percentage method, the lodestar may provide a useful perspective on the reasonableness of a given percentage award.”). Importantly, “the lodestar calculation . . . does not override the trial court’s primary determination of the fee as a percentage” of the settlement fund and “does not impose an absolute maximum or minimum on the potential fee award.” Laffitte, supra, 1 Cal.5th at 505. The lodestar is calculated based on reasonable hours at reasonable prevailing hourly rates for the attorneys. Ketchum, supra, 24 Cal,4th at 1131-32. Under California law, counsel is entitled to compensation for every hour reasonably spent on the matter. Id at 1133.

Class Counsel’s reasonable hourly rate of $600 when multiplied with the number of hours spent, equals $1,378,470 is just under the $1.4 million fee award.

In Camden I Condominium Association, Inc. v. Dunkel, the court identified twelve factors to be considered in determining whether fee awards are reasonable: (1) the time and labor required; (2) the novelty and difficulty of the questions involved; (3) the

skill required to perform the legal services properly; (4) the preclusion of other employment by the attorney due to the acceptance of the case; (5) the customary fee;

(6) whether the fee is fixed or contingent; (7) time limitation imposed by the client or the circumstances; (8) the amount involved and results obtained; (9) the experience, reputation and ability of the attorney; (10) the undesirability of the case; (11) the nature and length of the professional relationship with the client; and (12) awards in similar cases. Camden I Condominium Association, Inc. v. Dunkel (11th Cur. 1991) 946 F.2d 768,772.

Viewing all the above factors together, the requested fees are reasonable.

(3) Payment In the amount of $28,268.74 to Class Counsel for reimbursement of litigation costs and expenses;

The Settlement provides for reimbursement of litigation costs and expenses of up to $50,000. As set forth in the Declarations of Edwin Aiwazian and Gregory P. Wong, Class Counsel have collectively incurred a total of $28,268.74 in litigation costs and expenses.” This amount was reasonable and necessary in the prosecution of the cases and to obtain the Settlement and is less than the maximum amount allocated under the Settlement Agreement

(4) Enhancement awards in the amount of $7,500.00 each to Plaintiffs Samuel Guerra, Vince Zasonsld, Mario Colvin, and Matthew Hemandez (for a combined amount of $30,000) for their time and effort in representing the Class; These requested enhancement awards are both common and reasonable, and are properly awarded to compensate Plaintiffs for the time and effort that they expended on behalf of the Class.

(5) Payment to the Settlement Administrator, CPT Group, Inc., for Administration Costs in the amount of $19,416.00; The Court finds these costs to be reasonable based on the services provided by CPT.

(6) Allocation of the penalties under the Private Attorneys General Act of 2004, pursuant to California Labor Code section 2698, et seq., in the amount of $66,750.00, of which seventy-five percent (75%), or $50,062.50, will be paid to the California Labor and Workforce Development Agency and twenty-five percent (25%), or $16,687.50, will be a part of the Net Settlement Fund for distribution to the Claimants.

The trial court has broad discretion to determine whether a class action settlement is fair and reasonable. Chavez v. Netflix, Inc. (2008) 162 Cal.App.4tii 43, 52. To determine whether the settlement is fair and reasonable, courts 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. Dunk v. Ford Motor Co. (1996) 48 Cal.App.4th 1794,1801. “The list of factors is not exclusive and the court is free to engage in a balancing and weighing of the factors depending on the circumstances of each case.” Wershba v. Apple Computer, Inc. (2001) 91 Cal.App.4th 224,245.

“Due regard should be given to what is otherwise a private consensual agreement between the parties.” Dunk, supra, 48 CaI.App.4th at 1801. The proponent of the settlement has the burden to show that it is fair and reasonable. Wershba, supra, 91

Cal.App.4th at 245. At the final approval stage, a presumption of fairness

exists where, as here: “(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, supra, 48 Cal.App.4th at 1802. In reviewing a class settlement, the court need not reach any ultimate conclusions on the issues of fact and law that underlie the merits of the dispute. 7-Eleven Owners for Fair Franchising v. Southland Corp. (2000) 85 Cal.App.4th 1135, 1146,

The inquiry is not whether the settlement agreement is the best one that class members could have possibly obtained, but whether the settlement taken as a whole is “fair, adequate, and reasonable.” Chavez v. Netflix, Inc. (2008) 162 Cal.App.4th 43, 55. A settlement need not obtain 100 percent of the damages sought in order to be fair, reasonable, and ultimately, meaningful. Wershba, supra, 91 Cal.App,4th at 251. Even if the proposed settlement affords relief that is substantially narrower than it would be if the lawsuit was to be successfully

litigated, that is no bar to a class settlement because the public interest may indeed be served by a voluntary settlement in which each side gives ground in the interest of avoiding prolonged litigation. Id. The Court orders the final approval of the class action settlement under these principals.

The Court will sign the proposed order.