2017-00207353-CU-OE

Sean Wilson vs. CTB Elk Grove, LLC

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

Filed By: Shimoda, Galen T.

Motion for Preliminary Approval of Class Action Settlement is unopposed and is granted.

Plaintiff brought this class action lawsuit based on his contention that Defendants’ policies and practices violated California law, including the failure to provide meal and rest periods, failure to provide accurate wage statements, failure to keep accurate records of hours worked, and failure to pay final wages. See generally Exhibit B. Plaintiff further alleged Defendants’ policies and practices resulted in derivative violations and penalties and resulted in unfair competition. See id. Finally, Plaintiff has alleged that the conduct also violated the Private Attorneys General Act of 2004 (“PAGA”). See Exhibit C (Plaintiffs Ltr. to the LWDA Regarding PAGA Claims). Plaintiff contends that he has filed a meritorious class action lawsuit and that this case is appropriate for class certification for settlement purposes as the requisites for class certification in this case can be satisfied. See Exhibits A & B. Defendants have denied all of Plaintiffs allegations in their entirety and any liability or wrongdoing of any kind. Defendants have denied that this case is appropriate for class certification other than for purposes of settlement, that Plaintiff would have difficulty proving class certification

is proper here, and that Plaintiff and the putative class suffered no damages. The prospect of potential class certification issues and the uncertainty of class certification, difficulties of complex litigation, solvency of Defendants, and the lengthy process of establishing specific damages and various possible delays and appeals were carefully considered by Plaintiff and Plaintiffs counsel in agreeing to the proposed settlement. After an analysis of the claims and damages, the parties were able to reach a mutually agreeable settlement after a full-day mediation and numerous discussions with the help of the mediator thereafter.

Under the settlement agreement. Defendants have agreed to the following:

1. The scope of the settlement class will include the following class {See Exhibit A, para 10): All of Defendants’ hourly, non-exempt employees who were or continue to be employed by Defendants from February 1, 2013, to the date that preliminary approval of the class action settlement is granted. 2. Pay the maximum total gross sum of $55,000.00 to resolve the class and representative claims. See id. at ¶ 2.

3. The parties agree that the cost of administering this class action settlement shall be paid from the settlement proceeds. Subject to Court approval, the parties have selected Simpluris, Inc. to act as the class action administrator, who has provided a cost estimate of no more than $5,000.00 to administer the class settlement. See Exhibit D (Simpluris, Inc. Quote). The difference between actual,

lesser costs and $5,000.00, if any, will be paid to the Net Settlement Amount made available to participating class members and which will be paid out on a pro rata basis according to the formula set forth in the Agreement. See Decl. Shimoda, ¶19. 4. The parties agree that One Thousand Dollars and No Cents ($1,000.00) of the settlement proceeds will be allocated to PAGA claims. See Exhibit A. The settlement class will receive 25% of this amount ($250.00), which will be included in the class payout (the “Net Settlement Amount”), and the LWDA will receive 75% of this PAGA penalty ($750.00). See id. at 12.b. 5. The parties agree that up to thirty-five percent (35%) of the total gross settlement, i.e. $19,250.00, will be paid for Plaintiffs attorneys’ fees incurred in the litigation of this case, and Defendants will not oppose any application for attorneys’ fees so long as it is within this threshold. See Exhibit A, 2.c. The parties agree that Plaintiff will also be entitled to costs of no more than $10,000.00. See id. The proposed notices sent to class members will state this information. See Exhibit E.

6. Any class action administrator fees, any amounts paid for attorneys’ fees and costs, the employers’ share of payroll taxes, and payment to the LWDA will be paid out from the maximum settlement sum ( i.e., $55,000.00), not in addition to the settlement sum. See Exhibit A ¶ 2.a. – 2.d. 7. Class members who fail to timely opt out of this settlement will waive any and all claims they have or may have had based on the facts alleged in the Complaint or in Plaintiffs PAGA notice

letter to the LWDA. See id. at ¶ 3.c. 8. The portion of the Net Settlement Amount that is not claimed by participating class members will revert back to Defendants; however, in no event will Defendants pay less than fifty percent (50%) of the Net Settlement Amount. See id. at ¶ 2.f To the extent less than fifty percent (50%) of the Net Settlement Amount is claimed by participating class members, the amounts paid will be redistributed pro rata to class members who have filed valid claims such that at least 50% of the Net Settlement Amount is distributed. See id.
9. For any settlement checks distributed to class members that are not cashed by the check cashing deadline, those funds will be paid to Defendants. See id. at ¶ 6.1. 10. The parties have agreed that Plaintiff will not receive any enhancement award or class member payment from the gross settlement amount. This is because Plaintiff has entered into a separate agreement settling his individual wage and hour claims as well as his wrongful termination and unlawful retaliation claims. See generally Exhibit B;

Exhibit A, ¶ 2.e.

A class action may not be dismissed, compromised, or settled without Court approval and the decision to approve or reject a settlement is committed to the Court’s sound discretion. See Cal. Rules of Court, Rule 3.769; Fed. R. Civ. Proc, Rule 23(e)’; Wershba v. Apple Computer, Inc.(2001) 91 Cal. App. 4th 224, 234-35. Where a settlement is reached on terms agreeable to all parties, a court should disapprove of the settlement “only with considerable circumspection.” Jamison v. Butcher & Sherrerd

, 68 F.R.D. 479, 481 (E.D. Pa. 1975). The law favors settlement of lawsuits, particularly class actions and other complex cases where substantial resources can be conserved by avoiding the time, expense, and rigors of formal litigation. See Neary v. Regents of Univ. of Cal. (1992) 3 Cal. 4th 273, 277-81.

If the Court finds a proposed settlement falls within “the range of reasonableness,” it should grant preliminary approval of the class action settlement. See, e.g., North County Contr. ‘s Assn., Inc. v. Touchstone Ins. Svcs.(1994) 27 Cal. App. 4th 1085, 1089-90. To make the fairness determination, the Court must consider several factors, including: the strength of the 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. However, the Court begins its analysis with a presumption that the proposed settlement is fair. “[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.” Id. at 1802. The Court is persuaded that the settlement was reached through arms length bargaining, that investigation and discovery were sufficient and that counsel is experienced in similar litigation.

The Court preliminarily approves the requested attorneys fees as reasonable. California state and federal courts have recognized that when a litigant’s efforts create or preserve a fund from which others derive benefits, the Court may spread litigation costs proportionally among all the beneficiaries to compensate those who created the fund. See Boeing Co. v. Van Gemert, 444 U.S. 472, 478 (1980) (“[A] lawyer who recovers a common fund for the benefit of persons other than . . . his client is entitled to a reasonable attorney’s fee from the fund as a whole.”); Vincent v. Hughes Air West, Inc., 557 F.2d 759, 769 (9th Cir. 1977); Mills v. Electric Auto-Lite Co., 396 U.S. 375 (1970); see also Serrano v. Priest, 20 Cal.3d 25, 34-35 (1977).Historically, attorneys’ fee awards in common fund cases in general range from 20% to 50% of the fund, depending on the circumstances of the case. See Newberg on Class Actions, (3rd Ed.), 1992, §14.03 (finding 50% to be the upper limit). Awards ranging between 30% and 40% of the fund are generally approved as reasonable in wage and hour settlements below $10 million. In class action litigation, the typical percentage negotiated between parties ranges from thirty to forty percent (30% to 40%) based on the same factors. Plaintiffs request of 35% falls within these typical fee arrangements. See Decl. Shimoda, ¶19.

The Court will sign the proposed order setting the hearing on the final approval for October 9, 2018 in Department 53 at 2:00 pm.