Case Name: Martin Chavez v. George Chiala Farms, Inc., et al.
Case No.: 16-CV-299769

This is a putative wage and hour class action by employees of defendant George Chiala Farms, Inc., alleging that defendant failed to include shift premiums in calculating employees’ overtime and did not provide a second meal period or third rest period for employees who worked over ten hours in a day. The parties have reached a settlement, which the Court preliminarily approved on March 23, 2018. On July 9, the Court approved modifications to the settlement—including an increase in the gross settlement amount—resulting from the discovery of additional class members. The factual and procedural background of the action and the Court’s analysis of the settlement and settlement class are set forth in the Court’s prior orders.

Plaintiff now moves for final approval of the settlement and, separately, for approval of his attorney fees, costs, and enhancement award. Plaintiff’s motions are unopposed.

I. Legal Standard for Approving a Class Action Settlement

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, internal citations and quotations omitted.)

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 v. Ford Motor Co., supra, 48 Cal.App.4th at p. 1801, 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 v. Ford Motor Co., supra, 48 Cal.App.4th at p. 1802.)

The presumption does not permit the Court to “give rubber-stamp approval” to a settlement; in all cases, it must “independently and objectively analyze the evidence and circumstances before it in order to determine whether the settlement is in the best interests of those whose claims will be extinguished,” based on a sufficiently developed factual record. (Kullar v. Foot Locker Retail, Inc. (2008) 168 Cal.App.4th 116, 130.)

II. Terms and Administration of the Settlement

The non-reversionary $1,050,000 settlement will be funded in two payments, with the first to occur within 30 days of the entry of judgment and the second to occur no later than 12 months later. The settlement includes a $11,250 payment to the California Labor and Workforce Development Agency associated with plaintiff’s PAGA claim (seventy-five percent of the $15,000 allocated to PAGA penalties). Attorney fees of up to $343,333.33 (approximately one-third of the original gross settlement), litigation costs not to exceed $15,000, and administration costs of $17,000 will also be paid from the gross settlement, along with an incentive award to the named plaintiff. Defendants will pay their share of any payroll taxes separately, without reducing the settlement fund.

The net settlement will be distributed to class members pro rata based on the number of weeks worked by each class member during the class period. Distribution (as well as the payment of attorney fees and expenses) will occur within 14 days of defendant’s second settlement payment. Class members will not be required to submit a claim to receive their payments. Checks uncashed after 180 days will be voided and the associated funds will be paid 25 percent to the Trial Court Improvement and Modernization Fund, 25 percent to the Equal Access Fund of the Judicial Branch, and 50 percent to Bet Tzedek Legal Services.

Class members who do not opt out of the settlement will release all claims “which were raised, or could have been raised, based upon … the facts, circumstances,” etc. that were or might have been asserted in the operative complaint “and which arise from the facts, circumstances, or legal theories alleged in the operative Complaint …,” including but not limited to specified wage and hour and related claims.

The notice process has now been completed. There were no objections and only four requests for exclusion from the class. Of 1,389 notice packets, 128 were re-mailed to updated addresses and 48 were ultimately undeliverable. The claims administrator estimates that the average class member payment will be $474.18, with a minimum payment of $7.08 and a maximum payment of $1,905.45.

At preliminary approval, the Court found that the proposed settlement provides a fair and reasonable compromise to plaintiff’s claims. It finds no reason to deviate from this finding now, especially considering that there are no objections. The Court consequently finds that the settlement is fair and reasonable for purposes of final approval.

III. Attorney Fees, Costs, and Incentive Award

Plaintiff seeks a fee award of $343,333.33, or 1/3 of the original $1,030,000 gross settlement, which is not an uncommon contingency fee allocation. This award is facially reasonable under the “common fund” doctrine, which allows a party recovering a fund for the benefit of others to recover attorney fees from the fund itself. Plaintiff also provides a lodestar figure of $166,782.50, based on 322.5 hours spent on the case by attorneys with billing rates of $300 to $725 per hour. The fee request results in a reasonable multiplier of 2.06. As a cross-check, the lodestar supports the 1/3 percentage fee requested, particularly given the lack of objections to the attorney fee request. (See Laffitte v. Robert Half Intern. Inc. (Cal. 2016) 1 Cal.5th 480, 488, 503-504 [trial court did not abuse its discretion in approving fee award of 1/3 of the common fund, cross-checked against a lodestar resulting in a multiplier of 2.03 to 2.13].)

Plaintiff also requests $14,181.99 in costs, below the $15,000 estimate provided at preliminary approval. The costs are reasonable based on the summaries provided and are approved. The $17,000 in administrative costs are also approved.

Finally, plaintiff requests a service award of $7,500. To support his request, he submits a declaration in which he describes his efforts on the case. The Court finds that the class representative is entitled to an enhancement award and the amount requested is reasonable.

IV. Conclusion and Order

Plaintiff’s motion for final approval of class settlement is GRANTED. Plaintiff’s motion for final approval of attorney fees and costs is also GRANTED.

The following class is certified for settlement purposes:

All current and former non-exempt hourly employees who were employed by Defendant in California during the Class Period.

The four employees who filed valid and timely requests for exclusion are excluded from the class.

The Court will prepare the order.