2014-00161365-CU-OE

Eric Bourland vs. Horizon Personnel Services, Inc.

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

Filed By: Katofsky, Alex P.

Plaintiff Eric Bourland’s (“Plaintiff”) motion for final approval of class action settlement is UNOPPOSED and is GRANTED. C.C.P., sec. 382, California Rules of Court, Rule 3.769. However, as required by the Rule of Court, the court shall conduct a final approval hearing to inquire into the fairness of the proposed settlement. (Cal. Rules of Court, rule 3.769(g).)

On August 13, 2018, the Court entered an order granting preliminary approval of class action settlement, thereby preliminarily approving the terms of the settlement, certifying the class for purposes of settlement only, appointing Plaintiff as class representative, appointing Plaintiff’s counsel as class counsel, and preliminarily approving ILYM Group, Inc. as the settlement administrator. By this motion, Plaintiff now seeks final approval of the settlement.

This is a wage and hour action brought by Plaintiff on behalf of approximately 15,000 purported class members. Plaintiffs’ claims are based on defendant Stay Safe Staffing, Inc.’s (“Defendant”) failure to provide accurate wage statements. Specifically, the wage statements failed to set forth “Stay Safe Staffing, Inc.” and/or its address.

Plaintiff’s Second Amended Complaint (“SAC”) alleged violations of the Labor Code for the alleged failure to pay all wages due, issue accurate itemized wage statements, and other claims against Defendant and Horizon Personnel Services, Inc. (“HSPI”). On April 5, 2016, Plaintiff dismissed HSPI from the action and thereafter dismissed all claims in the SAC other than those related to wage statements.

On December 28, 2015, Defendant and HSPI filed a Cross-Complaint against Vensure HR, Inc. and Vensure Employer Services, Inc. (collectively, “Cross-Defendants”) alleging claims for express indemnity, implied contractual indemnity, breach of contract, intentional misrepresentation, negligent misrepresentation, and declaratory relief. Defendant claims Cross-Defendants, a professional employer organization it retained to perform certain payroll functions on its behalf, is responsible for the alleged wage statement violations.

The parties deny the allegations, but they have been able to reach a partial compromise of Plaintiff’s class action claims and Defendant’s Cross-Complaint against Cross-Defendants for monetary compensation due to informal discovery and three separate mediations over a span of three years. The proposed settlement does not resolve Cross-Defendants Cross-Complaint against Defendant.

The trial court has broad powers to determine whether a proposed settlement in a class action is fair. (Rebney v. Wells Fargo Bank (1990) 220 Cal.App.3d 1117, 1138.) The law favors settlement, particularly in class actions and other complex cases where substantial resources can be conserved by avoiding the time, cost, and rigors of formal litigation. (See Newberg on Class Actions 4th (4th ed. 2002) § 11.41 (and cases cited therein); Class Plaintiffs v. City of Seattle (9th Cir. 1992) 955 F.2d 1268, 1276; Van Bronkhorst v. Safeco Corp. (9th Cir. 1976) 529 F.2d 943, 950; see also Potter v. Pacific Coast Lumber Co. (1951) 37 Cal.2d 592, 602.)

Before approving a class action settlement, the Court must find that the settlement is “fair, adequate, and reasonable.” (Wershba v. Apple Computer (2001) 91 Cal. App. 4th 224, 244-245.) “[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.” (Dunk v. Ford Motor Company (1996) 48 Cal. App. 4th 1794, 1802.) The Court considers such factors 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 class members to the proposed settlement.” (Id. at 1801.)

Here, the essential terms of the settlement provide, among other things, that in order to settle the matter, Defendant and Vensure will pay up to Six Hundred Fifty Thousand Dollars ($650,000.00) (the “Maximum Settlement Amount”). (Settlement Agreement, ¶ 62.) The Maximum Settlement Amount is reversionary. The minimum payment projected to be paid is $338,000, which shall be paid $60,000 no later than 90 days after preliminary approval, $139,000 no later than 12 months after preliminary approval, and $139,000 no later than 21 months after preliminary approval. Cross-Defendant shall pay $160,000, which shall be fully paid at preliminary approval. Defendant’s and Cross-Defendants’ obligations under the Settlement will be fulfilled and satisfied only upon their deposit of all required funds with the settlement administrator. (Settlement Agreement, ¶ 62.)

The “Net Settlement Amount,” from which individual settlement payments shall be paid, shall be calculated by deducting the following amounts from the Maximum Settlement Amount: (1) up to $227,500 in attorney’s fees (35% of the Maximum Settlement Amount); (2) up to $42,000 in Class Counsel’s costs in prosecuting this

action; (3) an enhancement award to the Named Plaintiff of $10,000; (4) administration costs not to exceed $65,000; and (5) a $8,000 payment to the California Labor Workforce Development Agency relating to the release of the PAGA claims. (Settlement Agreement, ¶ 62.)

Individual settlement payments will be paid out on a pro rata basis to class members who have timely submitted a valid claim form and have not opted-out. Qualified claimants shall be paid based on their individual wage statements issued during the class period compared to the total wage statements issued to all class members who do not opt out. (Settlement Agreement, ¶ 66.)

If less than 50% of the net settlement amount is claimed, each qualified claimant’s settlement share shall be increased on a pro rat basis to meet the 50% floor, so that no less than 50% of the net settlement amount shall be paid by Defendant and Cross-Defendants to qualified claimants. If more than 50% of the net settlement amount is claimed by qualified claimants, Defendant and Cross-Defendants shall have no obligation to fund the unclaimed portion of the net settlement amount in excess of the 50% floor. (Settlement Agreement, ¶ 66.)

If the total financial obligation of Defendant and Cross-Defendants exceeds $498,000, Defendant and Cross-Defendants shall fund any additional required amounts 32.12% by Cross-Defendants and 67.88% by Defendant, up to the Maximum Settlement Amount of $650,000. Cross-Defendant shall pay the entirety of its additional required payment no later than 10 calendar days after final approval and Defendant shall pay its additional payment in two equal installments together with each of the latter two of its three required deposits. (Settlement Agreement, ¶ 66.)

Disbursements to qualified claimants will be made in two installments, the first 12 months after preliminary approval and the second 21 months after preliminary approval (Settlement Agreement, ¶¶ 62, 81.)

The settlement provides that ILYM Group, Inc. will act as the Settlement Administrator, which will provide the Notice of Settlement to the Class via First-Class U.S. Mail. (Settlement Agreement, ¶ 73.)

The Court preliminarily finds, subject to the final fairness hearing, that the settlement is entitled to a presumption of fairness and that all relevant factors support preliminary approval. The settlement provides significant benefits to the class members in the form of timely monetary compensation. Given the sorts of relief sought in the complaint, the Court finds the settlement provides significant value to the class members as it provides them with relief in a manner approximately commensurate with the potential value of their individual claims in light of the risks of continued litigation. The average recovery for the settlement class members is $107.27 each.

The moving papers also demonstrate the settlement was the product of arms-length bargaining between the parties, after three separate mediations with experienced mediators present, and was reached after sufficient informal discovery, which allowed the parties, and, therefore, this Court, to act intelligently with respect to the settlement. (Declaration of Daniel F. Gaines (“Gaines Decl.”) at ¶¶ 18-30.)

Prior to mediation, the parties engaged in substantial discovery, including data and documents related to the size of the class, Defendant’s policies and practices, and the

potential damages and penalties sought. (Gaines Decl. at ¶¶ 20, 26.) Further, Class Counsel is experienced in this type of class action litigation, evaluated the strengths and weaknesses of the case, and views the settlement as favorable to the class. (Gaines Decl. at ¶¶ 2-5, 24, 30.)

The Notice, as approved by the Court, was also mailed to the Settlement Class on September 4, 2018. As of November 29, 2018, no class member has objected and only one opted-out. (Delcaration of Stephanie Molina (“Molina Decl.”) at ¶¶ 6-11.)

Reasonable steps have been taken to ensure that all members of the Settlement Class receive the Notice. Accordingly, the notice process satisfies the “best practicable notice” standard.

There is nothing before the Court which would overcome the presumption of fairness. ( Dunk, 48 Cal.App.4th at 1802.) Indeed, the settlement provides value to the Class Members as it provides them with monetary compensation in a manner approximately commensurate with the potential value of their individual claims in light of the risks of continued litigation.

The Court anticipates that it will sign the proposed final order approving class action settlement and judgment at the conclusion of the final fairness hearing in the event that it adopts the findings set forth above which, given the lack of objections to the settlement, the Court anticipates it will do. While the Court anticipates that neither Plaintiffs nor Defendants will request oral argument, and while no class member has indicated any intent to appear at the hearing, this does not relieve the parties from appearing at the final fairness hearing or otherwise render the instant ruling final in the event oral argument is not requested. The Court will not render a final ruling until it holds the final fairness hearing.

The minute order is effective immediately. No formal order pursuant to CRC Rule 3.1312 or further notice is required.

Item 2 2014-00161365-CU-OE

Eric Bourland vs. Horizon Personnel Services, Inc.

Nature of Proceeding: Motion for Attorney Fees

Filed By: Katofsky, Alex P.

Plaintiff Eric Bourland’s (“Plaintiff”) application for approval of attorneys’ fees and costs, claims administration fees, and class representative’s service payment is UNOPPOSED and is GRANTED. This motion is being heard in conjunction this date with the related motion for final approval of class action.

On August 13, 2018, the Court entered an order granting preliminary approval of class action settlement, thereby preliminarily approving the terms of the settlement, certifying the class for purposes of settlement only, appointing Plaintiff as class representative, appointing Plaintiff’s counsel as class counsel, and preliminarily approving ILYM Group, Inc. as the settlement administrator.

By this motion, Plaintiff now seeks final approval of: (1) awarding class counsel’s attorneys’ fees in the total amount of $227,500 (35% of the maximum settlement award), (2) awarding class counsel litigation costs in the total amount of $39,956.84,

(3) a service payment in the amount of $10,000 to Plaintiff, and (4) a claims administration fee payment of $65,000.

This is a wage and hour action brought by Plaintiff on behalf of approximately 15,000 purported class members. Plaintiffs’ claims are based on defendant Stay Safe Staffing, Inc.’s (“Defendant”) failure to provide accurate wage statements. Specifically, the wage statements failed to set forth “Stay Safe Staffing, Inc.” and/or its address.

Plaintiff’s Second Amended Complaint (“SAC”) alleged violations of the Labor Code for the alleged failure to pay all wages due, issue accurate itemized wage statements, and other claims against Defendant and Horizon Personnel Services, Inc. (“HSPI”). On April 5, 2016, Plaintiff dismissed HSPI from the action and thereafter dismissed all claims in the SAC other than those related to wage statements.

On December 28, 2015, Defendant and HSPI filed a Cross-Complaint against Vensure HR, Inc. and Vensure Employer Services, Inc. (collectively, “Cross-Defendants”) alleging claims for express indemnity, implied contractual indemnity, breach of contract, intentional misrepresentation, negligent misrepresentation, and declaratory relief. Defendant claims Cross-Defendants, a professional employer organization it retained to perform certain payroll functions on its behalf, is responsible for the alleged wage statement violations.

The parties deny the allegations, but they have been able to reach a partial compromise of Plaintiff’s class action claims and Defendant’s Cross-Complaint against Cross-Defendants for monetary compensation due to informal discovery and three separate mediations over a span of three years. The proposed settlement does not resolve Cross-Defendants Cross-Complaint against Defendant.

The trial court has broad powers to determine whether a proposed settlement in a class action is fair. (Rebney v. Wells Fargo Bank (1990) 220 Cal.App.3d 1117, 1138.) The law favors settlement, particularly in class actions and other complex cases where substantial resources can be conserved by avoiding the time, cost, and rigors of formal litigation. (See Newberg on Class Actions 4th (4th ed. 2002) § 11.41 (and cases cited therein); Class Plaintiffs v. City of Seattle (9th Cir. 1992) 955 F.2d 1268, 1276; Van Bronkhorst v. Safeco Corp. (9th Cir. 1976) 529 F.2d 943, 950; see also Potter v. Pacific Coast Lumber Co. (1951) 37 Cal.2d 592, 602.)

Before approving a class action settlement, the Court must find that the settlement is “fair, adequate, and reasonable.” (Wershba v. Apple Computer (2001) 91 Cal. App. 4th 224, 244-245.) “[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.” (Dunk v. Ford Motor Company (1996) 48 Cal. App. 4th 1794, 1802.) The Court considers such factors 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 class members to the proposed settlement.” (Id. at 1801.)

Plaintiffs’ request for $227,500 (35%) in attorney’s fees and $39,956.84 in costs is granted.

Trial courts have “wide latitude in assessing” the value of attorneys’ fees and decisions will not “be disturbed on appeal absent a manifest abuse of discretion.” (Lealao v. Beneficial Cal. Inc. (2000) 82 Cal.App.4th 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[,]”).) 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, 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, at 49.) “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.) It is not an abuse of discretion to choose one method over another as long as the method chosen is applied consistently using percentage figures that accurately reflect the marketplace. In cases where class members present claims against a maximum settlement fund and the settlement agreement provides that the defendant agrees to paying the attorneys a percentage of the same, use of that percentage method is appropriate. (Laffitte v. Robert Half International, Inc. (2016) 1 Cal.5th 480, 503-504; Lealao, supra, at 32.) “[T]rial courts have discretion to conduct a lodestar cross-check on a percentage fee” but “also retain the discretion to forego a lodestar cross-check and use other means to evaluate the reasonableness of a requested percentage fee.” (Laffitte, supra, at 504.)

Plaintiffs have submitted evidence that class counsel has extensive experience in wage and hour class actions. (Gaines Decl. at ¶¶ 2-5; Katofsky Decl. ¶¶ 205.) Both parties’ counsel were capable of assessing the strengths and weaknesses of the claims and the benefits of the proposed settlement under the circumstances of the case and in the context of a private, consensual settlement agreement.

The Court approves the requested attorneys’ fees and costs. The Court has reviewed the declaration of Mr. Gaines in support of the requested $227,500 in attorneys’ fees and $39,956.84 in litigation costs. The attorneys’ fees represent 35% of the maximum settlement amount and are fully supported by the use of the percentage-fee method.

This is reasonable for the nature and the quality of the work performed based on class counsel’s experience. Class counsel has also incurred approximately $39,956.84 in costs.

Given these amounts were disclosed in the class notice, no objections to the settlement were received, and the contingent nature of class counsel’s representation and the associated risks, the requested fees and costs are an appropriate award.

Plaintiffs’ request for a service award to the named Plaintiff is granted in the amount of $10,000.

The Court has reviewed Mr. Bourland’s declaration in support of this motion and determines that $10,000 is a fair amount for a service award for Mr. Bourland in this case. Accordingly, the Court approves a service award of $10,000 to named plaintiff Eric Bourland. The award is reasonable in light of the efforts and risks he undertook and the benefits conferred on the class members in connection with his serving as the class representative.

Plaintiffs’ request for $65,000 in claim administration costs is granted.

The Court-appointed settlement administrator, ILYM Group, Inc. took all necessary steps to effectuate the distribution of the notice to the 15,132 class members and to facilitate the settlement administration process, as set forth in the Court’s August 13, 2018 Order. There were no objections and one request for exclusion. The settlement administration fees of up to $65,000 are approved to be paid to ILYM Group, Inc.

Conclusion

In sum, and subject to the final fairness hearing, the Court concludes the various fee requests are appropriate and entitled to approval. While the Court anticipates that neither Plaintiffs nor Defendants will request oral argument, and while no class member has indicated any intent to appear at the hearing, this does not relieve the parties from appearing at the final fairness hearing or otherwise render the instant ruling final in the event oral argument is not requested. The Court will not render a final ruling until it holds the final fairness hearing.