SUPERIOR COURT OF CALIFORNIA

COUNTY OF SANTA CLARA

KORBIN WILSON and MATTHEW BURNHAM, as individuals, on behalf of themselves and all others similarly situated, and as the State of California as private attorney generals,

Plaintiffs,

vs.

DGDG 1, LLC; DGDG 2, LLC; DGDG 3, LLC; DGDG 4, LLC; DGDG 5, LLC; DGDG 6, LLC; DGDG 7, LLC; DGDG 8, LLC; DGDG 9, LLC; DGDG 10, LLC; DGDG 11, LLC; DGDG 12, LLC; DGDG 13, LLC; DGDG 14, LLC; DGDG 15, LLC; DGDG 16, LLC; DGDG 17, LLC; DGDG 18, LLC; DGDG MANAGEMENT, LLC; DEL GRANDE ENTERPRISES, INC.,

Defendants.

Case No. 18CV331434

TENTATIVE RULING RE: MOTION FOR FINAL APPROVAL OF CLASS ACTION SETTLEMENT; JUDGMENT

The above-entitled action comes on for hearing before the Honorable Thomas E. Kuhnle on January 17, 2020, 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 Third Amended Class and PAGA Representative Action Complaint, filed on July 22, 2019, sets forth causes of action titled: (1) Failure to Pay for Non-Productive Time; (2) Failure to Provide Paid Rest Periods and Pay Non-Compliant Rest Period Premiums; (3) Failure to Pay Overtime; (4) Meal Period Violations; (5) Violation of Labor Code § 226; (6) Violation of Labor Code §§ 201-203; (7) Violation of Business & Professions Code § 17200; and (8) Penalties Pursuant to Labor Code § 2699.

The parties have reached a settlement. On September 9, 2019, the Court granted preliminary approval of the settlement. 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.
A. Provisions of the Settlement
B.
The case has been settled on behalf of the following class:

All current and former non-exempt employees of Defendants DGDG 1-17, LLC; DGDG 18, LLC; Defendant Del Grande Enterprises, Inc.; and any dealership or other entity within the scope of the group of companies known colloquially as the Del Grande Dealer Group; and any other Released Party (as defined hereon) who were paid, in whole or in part, compensation in the form of commissions for work performed during the period from June 1, 2014, through March 31, 2019.

As discussed in connection with preliminary approval, Defendants will pay a total amount of $875,000. However, pursuant to an “escalator clause” in the settlement, based on an increase in the number of pay periods, the gross settlement amount has been increased to $1,024,963.71. The settlement amount includes attorneys’ fees of $341,654.57, costs of $25,000, service awards of $20,000 ($10,000 per class representative), claims administration expenses of $14,450, and $20,000 in PAGA penalties ($15,000 of which will be paid to the LWDA). The settlement is non-reversionary and the estimated average net settlement payment to each class member is approximately $479.04. Checks not cashed within 180 days from the date of mailing will be distributed to cy pres beneficiary Make-a-Wish Foundation.

On October 23, 2019, the settlement administrator mailed notice packets to all 1,215 class members. (Declaration of Will Henry on Behalf of CPT Group, Inc., With Respect to Notification and Administration, ¶¶ 5 and 7.) Ultimately, 52 notice packets remained undelivered. (Id. at ¶ 8.) There have been no objections. (Id. at ¶ 9.) The settlement administrator has received two requests for exclusion – Mark Portillo and Juan Rico. (Id. at ¶ 10.)

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 class representative incentive awards of $10,000 for each of the two class representatives – Korbin Wilson and Matthew Burnham.

The rationale for making enhancement or incentive awards to named plaintiffs is that they should be compensated for the expense or risk they have incurred in conferring a benefit on other members of the class. An incentive award is appropriate if it is necessary to induce an individual to participate in the suit. Criteria courts may consider in determining whether to make an incentive award include: 1) the risk to the class representative in commencing suit, both financial and otherwise; 2) the notoriety and personal difficulties encountered by the class representative; 3) the amount of time and effort spent by the class representative; 4) the duration of the litigation and; 5) the personal benefit (or lack thereof) enjoyed by the class representative as a result of the litigation. These “incentive awards” to class representatives must not be disproportionate to the amount of time and energy expended in pursuit of the lawsuit.

(Cellphone Termination Fee Cases (2010) 186 Cal.App.4th 1380, 1394-1395, quotation marks, brackets, ellipses, and citations omitted.)

The class representatives have submitted declarations detailing their participation in the lawsuit. Burnham states he provided factual background, reviewed documents, discussed litigation and settlement strategy with class counsel, and participated throughout the litigation and at mediation. (Declaration of Matthew Burnham in Support of Motion for Final Approval of Class Settlement, ¶ 6.) He spent approximately 50 hours on the case. (Ibid.)

Wilson states he communicated with class counsel and also spoke with other employees. (Declaration of Korbin Wilson in Support of Motion for Final Approval of Class Settlement, ¶ 9.) He also gathered and reviewed documents and traveled to meetings. (Id. at ¶ 12.) He spent approximately 25 hours on the case. (Ibid.)

The Court finds incentive awards are warranted and they are approved in the amounts of $10,000 for Burnham and $7,500 for Wilson.

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 $341,654.57 (1/3 of the total settlement amount). Plaintiffs’ counsel provides evidence demonstrating a lodestar of $189,626.25, which results in a multiplier of approximately 1.8. This is reasonable in light of the recovery. The attorneys’ fees are approved.

Plaintiffs request $12,140.16 for actual incurred costs. The requested costs are approved.

The motion for final approval of class action settlement is GRANTED, subject to the reduction in the incentive award.

Pursuant to Rule 3.769, subdivision (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 on July 31, 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 Defendant, 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.