Case Name: Victor Melendrez Puentes, et al. v. Atlantic Concrete, Inc., et al.
Case No.: 16-CV-293366

This is a putative wage and hour class action by employees of defendant Atlantic Concrete, Inc. The parties have reached a settlement with respect to meal and rest break claims by Concrete Finishrs, which the Court preliminarily approved on June 20, 2017. Plaintiffs now move for final approval of the settlement and approval of their attorney fees, costs, and enhancement awards. Their motion is 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 Settlement

The terms of the settlement are as follows. The $300,000 non-reversionary settlement includes a $3,750 payment to the California Labor and Workforce Development Agency associated with plaintiffs’ PAGA claim. Attorney fees of up to $100,000 (one-third of the gross settlement), litigation costs estimated at $5,330.21, and administration costs estimated at $8,000 will also be paid from the gross settlement. Plaintiffs will seek incentive payments of $6,500 each, for a total of $39,000.

The remaining net settlement will be distributed to class members pro rata based on their wages paid during the class period. Class members who are defendant’s current employees were not required to submit claims; however, former employees were required to submit a claim. At preliminary approval, the Court estimated that the average recovery would be $877.56 to each of the 164 estimated class members. Funds unclaimed after 180 days will be distributed to the Katherine & George Alexander Community Law Center as a cy pres beneficiary.

Class members who do not opt out of the settlement will release “any and all individual and class wage and hour claims, debts, liabilities, demands, obligations, penalties, guarantees, costs, expenses attorneys’ fees, damages, action or causes of action, whether known or unknown, that were actually alleged in the Complaint or could have been brought based on the specific factual allegations contained in the Complaint, and any amendments thereto.”

The notice process has now been completed. There were no objections to the settlement and no requests for exclusion from the class. Of 157 notice packets, 8 were re-mailed to updated addresses located through skip tracing and 3 were ultimately undeliverable. 40 of the 157 class members were current employees who were not required to submit a claim form to receive a payment, and 28 of the remaining 117 former employee class members submitted a claim. The 68 class members who will receive a settlement payment represent 43.31% of the settlement class. The claims administrator estimates that the average class member payment will be $2,087.13, with a maximum payment of $4,989.25.

At preliminary approval, the Court found that the proposed settlement provides a fair and reasonable compromise to plaintiffs’ 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. While the participation rate among former employees is somewhat lower than the Court would have hoped, plaintiffs proposed a claims process for these class members to facilitate administration of the settlement and ensure payment of the settlement fund to participating class members rather than through the cy pres process, given the expected low participation rate among former employees. The notice process was robust, with a 60-day response period, and a Spanish translation of the notice was provided. That result that only 3 notice packets were ultimately undeliverable and 28 claim forms were submitted shows that adequate notice was provided to the class. At the final fairness hearing, counsel should update the Court on the receipt and treatment of any late claim forms in the weeks following the administrator’s execution of his declaration on October 23.

III. Attorney Fees, Costs, and Incentive Award

Plaintiffs seek a fee award of $100,000, or 1/3 of the 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. Plaintiffs also provide a lodestar figure of $116,652.50, based on 171.8 hours expended on the case by two experienced attorneys with billing rates of $575 and $750 per hour. The lodestar does not include approximately 10-20 hours spent on the case by law clerks and administrative support staff and an estimated 20-30 hours that class counsel will spend in connection with final approval and administration of the settlement. The fee request is thus appreciably below the lodestar figure in this case. As a cross-check, the lodestar supports the 1/3 percentage fee requested, particularly given that there are no 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].)

Plaintiffs also request $5,373.06 in costs, almost identical to the $5,330.21 estimate that was provided at preliminary approval. The costs are reasonable based on the summary provided by plaintiffs.

Plaintiffs request $9,995 in administrative costs. While this request does not necessarily appear unreasonable, it significantly exceeds the $8,000 estimate that was provided at preliminary approval. This discrepancy is not addressed in the moving papers, and counsel is accordingly directed to explain it at the hearing.

Finally, the six named plaintiffs request service awards of $6,500 each, for a total of $39,000. To support these requests, they submit declarations describing their efforts on the case and indicating that they each spent approximately 60 hours performing their duties as class representatives. The Court finds that the named plaintiffs are entitled to representative awards, and the amounts requested are reasonable.

IV. Conclusion and Order

Plaintiffs’ motion for final approval is tentatively GRANTED, subject to counsel’s presentation regarding the claims submission process and administrative costs as discussed above.

The following class will be certified for settlement purposes:

All former and current non-exempt employees of Defendant who worked in California under the classification of ‘Concrete Finisher’ during the period from March 30, 2012 through December 31, 2016.

The Court will prepare the order.