Olivia Rose Ramirez et al v Wyndham Vacation Ownership Inc

Case Number

20CV01715

Case Type

Hearing Date / Time

Tue, 10/17/2023 - 08:30

Nature of Proceedings

Motion for Preliminary Approval of Class Action Settlement

Tentative Ruling

            This is a class action. Defendant operates a chain of vacation ownership resorts and employed Plaintiff as a non-exempt employee from approximately May 2016 to February 2019. Plaintiff worked in the position of “Housekeeper” and “Guest Services Agent,” primarily answering phones and checking-in guests. The operative pleading is the first amended complaint filed on May 25, 2023, alleging: (1) Failure to Pay All Overtime Wages (Labor Code §§ 204, 510, 558, 1194, 1198); (2) Minimum Wage Violations (Labor Code §§ 1182.12, 1194, 1194.2, 1197); (3) Meal Period Violations (Labor Code §§ 226.7, 512, 558); (4) Rest Period Violations (Labor Code §§ 226.7, 516, 558); (5) Wage Statement Violations (Labor Code § 226 Et Seq.); (6) Waiting Time Penalties (Labor Code §§ 201-203); (7) Unfair Competition (Bus & Prof Code § 17200 et seq.); and and (8) Civil Penalties Under The Private Attorneys General Act (Labor Code § 2698 et seq.).

On Calendar

            Plaintiff seeks Preliminary Approval of a $3,800,000 class action settlement for approximately 2,757 current and former employees from February 5, 2016 until May 23, 2023.

Settlement Details

            The class is defined as:

            All current and former non-exempt housekeeping and guest services employees of Defendant in California who worked at any time between February 5, 2016, and the date the settlement is preliminarily approved, or May 23, 2023, whichever is sooner.

            (Settlement Agreement, attached to Schmidt Decl. as Exh. 1, ¶ 2.)

            It is expected there will be 2,757 members of the class. The gross settlement will be paid into a common fund and reduced as follows:

Gross Settlement Amount                                                 $3,800,000.00

     Class Counsel Fees (1/3)                                                             $1,266,666.67

     Class Counsel Expenses (up to):                                              $   100,000.00

     PAGA Allocation LWDA                                                              $    225,000.00

     PAGA Allocation Aggrieved Employees                                $   75,000.00[1]

     Settlement Administration Costs (up to):                             $   22,500.00

     Plaintiffs Service Award                                                                  $     5,000.00

Net Class Settlement Amount                                         $2,180,833.33

            The amount of the Settlement Share to be paid to each Participating Class Member will be apportioned based on the number of workweeks worked by each of the Participating Class Members. On average, each Class Member will receive a settlement share of approximately $791.02 per Class Member from the Net Settlement Fund.

Settlement Discussion

1.  General Standards for Approval of a Class Action Settlement

            Review of a proposed class action settlement typically involves a two-step process: preliminary approval and a subsequent final approval hearing. (Cellphone Termination Fee Cases (2009) 180 Cal.App.4th 1110, 1118—“Rule 3.769 of the California Rules of Court [CRC] sets forth the procedures for settlement of class actions in California.”)

            Procedurally, a party must move for “preliminary approval of the settlement.” (CRC 3.769(c).) After the hearing, the court makes an order approving or denying “certification of a provisional settlement class.” (CRC 3.769(d).) If the court grants preliminary approval, it must set a final approval hearing, and provide for notice to be given to the class. (CRC 3.769(e).) “The notice must contain an explanation of the proposed settlement and procedures for class members to follow in filing written objections to it and in arranging to appear at the settlement hearing and state any objections to the proposed settlement.” (CRC 3.769(f).) At the final approval hearing, “the court must conduct an inquiry into the fairness of the proposed settlement.” (CRC 3.769(g).) If the court approves the settlement agreement, it enters judgment accordingly. (CRC 3.769(h).) (See Luckey v. Superior Court (2014) 228 Cal.App.4th 81, 93.)

            The first step is for the court to review the proposed terms of the settlement at a preliminary hearing and make a preliminary determination on the fairness, reasonableness, and adequacy of the settlement terms. (CRC 3.769(c); see also Manual for Complex Litigation, (Federal Judicial Center 4th ed. 2021), § 21.632.)[2] The preliminary evaluation requires the court to address two competing concerns: (1) On the one hand, given that the court would have the opportunity to weigh the settlement's strengths and weaknesses with more information at the final approval hearing, the preliminary approval hearing did not need to substitute for that level of review; (2) On the other hand, sending notice to the class costs money and triggers the need for class members to consider the settlement, actions which are wasteful if the proposed settlement is obviously deficient from the outset. (Newberg on Class Actions, Class Actions in State Courts, Preliminary Approval (4th Ed. 2002) § 13:10; see In re Traffic Executive Association–Eastern Railroads (2d Cir.1980) 627 F.2d 631, 634.) “The judge should raise questions at the preliminary hearing and perhaps seek an independent review if there are reservations about the settlement, such as unduly preferential treatment of class representatives or segments of the class, inadequate compensation or harms to the classes, the need for subclasses, or excessive compensation for attorneys.” (Manual for Complex Litigation, supra, § 21.632.)

            Precertification settlements in class actions should be scrutinized carefully. (Cho v. Seagate Technology Holdings, Inc. (2009) 177 Cal.App.4th 734, 743.) This is accomplished through careful review by the trial court, and precertification settlements are routinely approved where they are found fair, adequate and reasonable. (Ibid; see also Wershba v. Apple Computer, Inc. (2001) 91 Cal.App.4th 224, 240.)

            The well-recognized factors that the trial court should consider in evaluating the reasonableness of a class action settlement agreement include “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 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 (Dunk ).) This list “is not exhaustive and should be tailored to each case.” (Dunk, at p. 1801.) “[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, at p. 1802.)

            This is only an initial presumption; a trial court's ultimate approval of a class action settlement will be vacated if the court “is not provided with basic information about the nature and magnitude of the claims in question and the basis for concluding that the consideration being paid for the release of those claims represents a reasonable compromise.” In short, the trial court may not determine the adequacy of a class action settlement “without independently satisfying itself that the consideration being received for the release of the class members' claims is reasonable in light of the strengths and weaknesses of the claims and the risks of the particular litigation.” (Munoz v. BCI Coca-Cola Bottling Co. of Los Angeles (2010) 186 Cal.App.4th 399, 408.)

            The court undoubtedly gives considerable weight to the competency and integrity of counsel and the involvement of a neutral mediator in assuring itself that a settlement agreement represents an arm's-length transaction entered without self-dealing or other potential misconduct. While an agreement reached under these circumstances presumably will be fair to all concerned, particularly when few of the affected class members express objections, in the final analysis it is the court that bears the responsibility to ensure that the recovery represents a reasonable compromise, given the magnitude and apparent merit of the claims being released, discounted by the risks and expenses of attempting to establish and collect on those claims by pursuing the litigation. The court has a fiduciary responsibility as guardians of the rights of the absentee class members when deciding whether to approve a settlement agreement. (Munoz, supra, 186 Cal.App.4th at p. 408, fn. 6.)

            With these standards in mind, the court must determine whether there are preliminary matters that must be resolved; whether the settlement agreement is fair, adequate, reasonable; whether preliminary certification of the class is appropriate; whether the proposed procedures appear sound; whether attorney’s fees, costs, and settlement administrator and its costs are appropriate; and whether any class representative enhancement as requested is justified

  2.     Is the Class Action Settlement Fair, Adequate and Reasonable?

            a.      Factors Favoring Presumption of Fairness

            As noted, a presumption of fairness exists where the settlement is reached through arm’s length bargaining; investigation and discovery are sufficient to allow counsel and the court to act intelligently; counsel is experienced in similar litigation; and the percentage of objectors is small. (Dunk, supra, at p. 1802.)

            Here, private mediation occurred with Jeffrey Krivis, Esq.,, “a well-respected wage and hour class action mediator.” With the mediator’s assistance, the parties were able to reach the proposed Settlement. (Schmidt Decl. at ¶ 11.) Plaintiff’s counsel, Fletcher Schmidt, states that since 2013, his practice has been solely devoted to litigating plaintiff-side employment related cases in both state and federal court. (Decl. Schmidt, ¶¶ 3-4.) These two factors favor the presumption of fairness.

            The Parties engaged in substantial discovery and information exchange prior to mediation. (Schmidt Decl., ¶ 10.) Defendant provided Plaintiff with electronic timekeeping records and corresponding payroll records for all Settlement Class Members who worked during the relevant time period. Through formal discovery, Defendant produced thousands of pages of policies, handbooks, bonus plans, and other relevant documents in effect during the relevant time period. Plaintiff retained an expert with a Ph.D. in economics to analyze the data and create a class-wide exposure model for the claims at issue. (Schmidt Decl., ¶ 10.)

            Finally, the court must consider the reaction of the class members to the proposed settlement. As this is a request for preliminary approval, there has been no opportunity for the proposed class members to react.

      b.            Strength of the Case

            The above factors favor a presumption of fairness. However, the most important factor is the strength of the case for plaintiffs on the merits, balanced against the amount offered in settlement. While the court “must stop short of the detailed and thorough investigation that it would undertake if it were actually trying the case,” it must eschew any rubber stamp approval in favor of an independent evaluation. (Munoz v. BCI Coca-Cola Bottling Co. of Los Angeles (2010) 186 Cal.App.4th 399, 407-408 (Munoz).) To perform this balance, the trial court must have “a record which allows ‘an understanding of the amount that is in controversy and the realistic range of outcomes of the litigation.’ ” (Munoz, supra, at p. 409; see Clark v. American Residential Services LLC (2009) 175 Cal.App.4th 785, 801; Kullar v. Foot Locker Retail, Inc. (2008) 168 Cal.App.4th 116, 120.)

            The data provided during informal discovery was analyzed and plaintiff concludes:

“Using these estimated figures, Plaintiff estimated that a potential recovery for the Settlement Class would be approximately $4,828,900. Thus, the proposed recovery to the Settlement Class of $3,800,000 represents approximately 78.7% of Plaintiff’s potential class-wide recovery, which is well within the range approved by courts as being fair, reasonable and adequate, while also avoiding further expense and risk of proceeding towards class certification and trial.

(Schmidt Decl., ¶ 25.)

            The preceding paragraphs describe in detail the basis for this analysis per claim. It’s important to note, however, that plaintiff reaches this result after the maximum exposure calculation has already discounted. For example, with respect to the meal periods calculation, plaintiff states:

“Plaintiff discounted Defendant’s maximum exposure by 50% for the risk of non-certification and 50% for the risk of being unsuccessful on the merits or obtaining reduced damages, to arrive at an estimated exposure of $978,913.”

(See Schmidt Decl., ¶¶ 12-25.)

          A settlement need not obtain 100 percent of the damages sought in order to be fair and reasonable. As the Wershba court stated “Compromise is inherent and necessary in the settlement process. Thus, even if the relief afforded by the proposed settlement is substantially narrower than it would be if the suits were to be successfully litigated, this is no bar to a class settlement because the public interest may indeed be served by a voluntary settlement in which each side gives ground in the interest of avoiding litigation.” (Wershba v. Apple Computer, Inc. (2001) 91 Cal.App.4th 224, 250.) The settlement may also be discounted by the risks and expenses of attempting collect on those claims by pursuing the litigation. The risks of establishing the claim have been analyzed by the plaintiff. The risks of collecting the claim might account for the remaining difference.

        There is considerable risk in any litigation, and based on Attorney Schmidt’s assessment, this seems a reasonable recovery under the circumstances, given 1) extensive discovery remains, meaning a number of discover disputes would require resolution; and 2) there will be a lengthy class certification process, in which plaintiff is uncertain of victory.  (Clark v. American Residential Services, LLC (2009) 175 Cal.App.4th 785, 801.) Plaintiff has adequately addressed the propriety of the settlement amount and appropriately outlined counsels’ thought processes in reaching the settlement decision.

          The court may find the class action settlement to be fair, adequate and reasonable.

3.   Preliminary Certification of Class

            Class action certification questions are essentially procedural, and involve an assessment of whether there is a common or general interest between numerous people. The burden is on the proponent to show an ascertainable class with a well-defined community interest, meaning predominant commons question of law or fact, class representatives with claims or defenses typical of class, and class representatives who can adequately represent the class. (Sav-On Drug Stores, Inc. v. Superior Court (2004) 34 Cal.4th 319, 326.)  

            There has been a sufficient preliminary showing of numerosity, ascertainability, and predominance of commonality.  The class is large – 2,757 former and current employees, and easily identifiable with names obtained through existing employment records.  It appears the claims are sufficiently similar, subject to the same policies or practices, with similar job duties and universal formula. It also appears class representative have typical claims of the class as a whole. A class action appears the superior way to a fair and efficient adjudication of the lawsuit. Certification of the class seems appropriate.

4.       Notice Procedures for the Claim Forms and Opt-Out

          The class notice and claim form instructions are attached as Exhibit 2 to the Schmidt Declaration. It properly details the nature of the lawsuit and identifies the proposed class. It provides the nature of the class claims; who may be eligible; the settlement amount of $3,800,000 minus the deductions detailed above. It explains the terms of the class action settlement, and notably how an individual class member’s award will be calculated (i.e., based on the total number of workweeks they were employed by defendant). It indicates that class members need not do anything to be deemed part of the class, what this means, and the nature of the general release required. The notices also explain what the class member can do if he or she does not want to participate (opt out), or if they simply want to object. It explains the nature of the preliminary approval process, culminating in the final approval hearing. The notice also gives a contact number for questions, including plaintiff’s class counsel. The procedures seem standard.  The times frames discussed in the notices and implementation procedures outline in the order are appropriate. The Settlement Agreement provides that the Class Notice shall be provided to each Class Member in English and Spanish.

            The court is satisfied that the notice procedures are sufficiently clear and adequate.

5.       Settlement Administrator Fees and Costs

          CPT Group has been selected by the Parties to administer the Settlement, with the reasonable costs of administration estimated to be within $22,500, to be paid from the Gross Settlement Amount. This is supported by a work order from CPT that suggests the entire project will be $32,779.98 (Green Decl., Exh. 2) but that CPT Group will perform the work for a flat rate of $22,500. The Notice advises: “The Court has approved setting aside up to $22,500.00 from the Maximum Settlement Amount to pay the Settlement administration costs.”

            This is adequate for a preliminary finding, while the court retains flexibility to reduce if the showing at the final hearing is inadequate.

6.       Class Counsel’s Request for Fees and Costs

          Counsel asks the court to preliminary approve fees of up to $1,266,666.67 (which is 33.3333% of the settlement amount), along with litigation costs of up to $100,000.

            CRC 3.769(b) requires that any attorney fee agreement, express or implied, that has been entered into with respect to payment of attorney’s fees or the submission of an application for the approval of attorney’s fees must be set forth in full in any application for approval of the of the settlement that has been certified as a class action. There does not seem to be a copy of the fee agreement submitted. This should be provided at or before the final approval hearing.  

            On the merits, the attorney fee amount seems appropriate. (See, e.g., Graham v. DaimlerChrysler Corp. (2004) 34 Cal.4th 553, 578 [it is well settled that attorney fees under CCP § 1021.5 may be awarded for class action suits benefiting a large number of people]; see also Clark, supra, 175 Cal.App.4th at p. 791.) The court has a duty to review and approve attorney’s fees, even where the parties agree on the amount. (Garabedian v. Los Angeles Cellular Telephone Co. (2004) 118 Cal.App.4th 123, 127-128.) Use of the percentage method in common fund cases is permissible, although there must be evidence that the parties intended the attorney fees would be paid out of any common fund that had been created. That appears to be the case here. Further, the method is permissible when the amount is certain or easily calculable sum, as it is here. (Dunk v. Ford Motor Co., supra, at p. 1809.)

            Counsel has reviewed its efforts in this matter in his declaration in an exceedingly perfunctory fashion. (Schmidt Decl., ¶ 27-28.) These are undoubtedly form paragraphs that are included in each motion. Although in theory that the requested fee is authorized by law, additional effort must be made to support the requested amount. Moreover, the court will want to a detailed costs’ explanation. This documentation must be submitted at or before the final approval hearing.  

            The court preliminarily finds the attorney’s fees and litigation costs are reasonable and reserves it’s right to reduce the requested fees and costs based on the evidence submitted at the hearing for final approval.

7.       Enhancement for Class Representative

            Class counsel asks for an enhancement for plaintiff of $5,000. It is established that a named plaintiff is eligible for reasonable incentive payments to compensate him or her for the expense or risk they have incurred in conferring benefit on other members of the class. (Munoz, supra, 186 Cal.App.4th at p. 412.) Relevant factors include actions the plaintiff has taken to protect the interests of the class, the degree to which the class had benefited from those actions, the amount of time and effort the plaintiff has expended, the risk to the class representative of commencing suit, the notoriety and personal difficulties encountered by the class representative, the duration of the litigation, and the personal benefit enjoyed by the class representative. (Clark, supra, 175 Cal.App.4th at p. 804.)  The rationale in the end is to compensate class representatives for the expense or risk they have incurred in conferring a benefit on other members of the class. (Id. at p. 806.)  Specificity, however, is required. (Id. at p. 807; Cellphone Termination Fee Cases (2010) 186 Cal.App.4th 1380, 1395 [these “incentive awards” to class representatives must not be disproportionate to the amount of time and energy expended in pursuit of the lawsuit].)

            Plaintiff Rose Ramirez states: “Some of the tasks I performed include, gathering and reviewing relevant employee policy documents and wage statements for use in the lawsuit, providing information about Wyndham’s policies and practices at my resort, including the timekeeping and bonus programs, and helping identify other employees who also experienced the same issues that I did. I also made myself available the entire day of mediation to answer my attorneys’ questions. I estimate that I have spent at least 15 total hours on these activities.” (Ramirez Decl., ¶ 4.) Assuming Ramirez spent 15 hours on these activities, this amounts to $333/hour.

            Case law has expressed concern when there is a large disparity between an incentive award and the recovery of individual class members. (Clark, supra, 175 Cal.App.4th at p. 806, fn. 14, citing Alberto v. GMRI, Inc. (2008) 252 F.R.D. 652, 669 [given a proposed $5,000 incentive aware and an average $24.17 recovery (a multiple of just over 20), when there was no evidence demonstrating the quality of plaintiff’s representative service; plaintiff should be prepared to present evidence of the named plaintiff’s “substantial efforts” as class representative to justify the discrepancy between the award and those of the unnamed plaintiffs”]; see also Stanton v. Boeing Co. (9th Cir, 2003) 327 F.3d 938, 975 [condemning a class enhancement of $30,000 when average payout was $1,000, a multiplier of 30]; compare with Munoz, supra, 186 Cal.App.4th at p. 412 [noting there that class representatives would receive more than twice as much as the average payment to class members, in contrast to the multipliers of 30 and 44 in Stanton and Clark, respectively].)

            On average, each Class Member will receive a settlement share of approximately $791.02 per Class Member from the Net Settlement Fund. Here, the multiple is between 6, which is not a “large disparity.”

            In any event, an enhancement is appropriate but an enhancement of $5,000 is not supported by a more persuasive record of activities.

8.       General Standards for PAGA Settlement

            Procedurally, section 2699, subdivision (l)(2) provides that the “the superior court shall review and approve any civil action filed pursuant to this part.  The proposed settlement shall be submitted to the agency at the same time that it is submitted to the court.” (See also Correia v. NB Baker Electric, Inc. (2019) 32 Cal.App.5th 602, 615.) Plaintiff provides evidence that this proposed settlement was served on the LWDA. (Schmidt Decl., Ex. 2.)

            On the merits, the court’s gatekeeping function in the class action context differs from its role in reviewing PAGA settlements. In class actions, courts have a fiduciary duty to protect the interests of absent class members, whose individual claims for wrongfulness will be discharged. (Kullar v. Foot Locker Retail, Inc. (2008) 168 Cal.App.4th 116, 129 [court acts as guardian of rights of absentee class members].)  A PAGA representative action, however, is “not akin to a class action”; it “is a species of qui tam action.” When reviewing a PAGA settlement, courts do not consider the value of individuals' claims for damages because a PAGA settlement does not release those claims. (Kim v. Reins International California, Inc. (2020) 9 Cal.5th 73 87 [PAGA claims have no individual component]; ZB, N.A. v. Superior Court (2019) 8 Cal.5th 175, 197-198 [PAGA damages limited to civil penalties].) “The state's interest in such an action is to enforce its laws, not to recover damages on behalf of a particular individual.” (Huff, supra, 23 Cal.App.5th at p. 760.) Instead of focusing on fair recovery for individual claims, the goal of PAGA enforcement is to achieve “maximum compliance with state labor laws.” (Huff, at p. 756.) 

            That being said, “section 2699, subdivision (l)(2) requires the trial court to review and approve any PAGA settlement,” and in so doing, the court “ensur[es] that any negotiated resolution is fair to those affected.” (Williams v. Superior Court (2017) 3 Cal.5th 531, 549.)  Until recently, no published California case authority explored the standard a trial court should employ in evaluating a PAGA settlement. (See Moniz v. Adecco USA, Inc. (2021) 72 Cal.App.5th 56 [“[N]either the Legislature, nor any published California authority has provided a definitive answer to this question. [] We do so now.”]; see also Flores v. Starwood Hotels & Resorts Worldwide (C.D. Cal. 2017) 253 F.Supp.3d 1074, 1075.) 

            When evaluating the fairness, adequacy, and reasonableness of a PAGA penalty, courts compare the potential penalty amount (its verdict value, as some courts refer to it) with the actual recovery under the settlement. (See Moniz, 72 Cal. App. 5th at 87—“In estimating the potential recovery in the case to evaluate the fairness of the settlement, the trial court assumed one violation [ ] per employee”). There is no express or even baseline percentage of recovery required. Under the express terms of the PAGA, a verdict value is not guaranteed even if the plaintiff prevails, as courts have discretion to lower the amount of penalties based on the circumstances of a particular case. (Lab. Code § 2699(e)(2).) No such evaluation has been performed.

“[A] trial court should evaluate a PAGA settlement to determine whether it is fair, reasonable, and adequate in view of PAGA's purposes to remediate present labor law violations, deter future ones, and to maximize enforcement of state labor laws.” (Moniz, supra, 72 Cal.App.5^th at 76.) The court also indicated: “Because many of the factors used to evaluate class action settlements bear on a settlement's fairness—including the strength of the plaintiff's case, the risk, the stage of the proceeding, the complexity and likely duration of further litigation, and the settlement amount—these factors can be useful in evaluating the fairness of a PAGA settlement.” (Ibid.)  “Given PAGA's purpose to protect the public interest, we also agree with the LWDA and federal district courts that have found it appropriate to review a PAGA settlement to ascertain whether a settlement is fair in view of PAGA's purposes and policies.”  (Ibid.) “We therefore hold that a trial court should evaluate a PAGA settlement to determine whether it is fair, reasonable and adequate in view of the PAGA’s purposes to remediate present labor law violations, deter future ones, and to maximize enforcement of state labor laws.”  (Ibid.)  Once approved, 75% of civil penalties recovered go to the state, while 25% go to the PAGA class.

            Thus, the court must consider whether the $300,000 settlement is “is fair, reasonable and adequate in view of the PAGA’s purposes to remediate present labor law violations, deter future ones, and to maximize enforcement of state labor laws.”

            Here, there is no analysis in the memo regarding the reasonableness of the PAGA settlement.

            The court must wrestle with the fact defendants admit no liability. (Settlement Agreement, ¶ 13—"Non-Admission of Liability. Nothing in this Settlement Agreement shall operate or be construed as an admission of any liability or that class certification is appropriate in any context other than this Settlement. Each of the Parties has entered into this Settlement Agreement to avoid the burden and expense of further litigation.”)[3] There is no evidence suggesting defendants’ employment practices will change or be altered in the future in any way, thus ensuring maximum future compliance with the labor laws, an express component of the PAGA statutory scheme. The settlement agreement contemplates no nonmonetary relief, a factor identified by recent federal district courts as relevant in this calculus. (Boddie v. Signature Flight Support Corporation (N.D. Cal., June 28, 2021, No. 19-CV-03044-DMR) 2021 WL 2651369, at *8 [“Additionally, the settlement provides for injunctive relief by which Defendants will modify their rest break policy for California employees and distribute and post the modified policy in the workplace. Although the court does not find that the injunctive relief is ‘significant,’ the modified policy makes clear to employees that rest breaks must be duty-free and shall be in the middle of each work period where feasible, and that employees are entitled to cool down periods in addition to rest breaks”]; see Manuel Perez and Macario Perez v. All AG, Inc. (E.D. Cal., July 23, 2021, No. 118CV00927 DADEPG) 2021 WL 3129602, at *3 [“in light of the substantial amount of penalties to be paid under the PAGA fund distribution, the inclusion of non-monetary relief in the PAGA Agreement, the lack of objection from the LWDA despite being provided timely notice of the terms of this proposed settlement, and the fact that the individual PAGA group members are not precluded from bringing actions against defendants to seek recovery, . . . the court concludes the parties PAGA agreement is [] fair, reasonable, and adequate in view of the PAGA’s public policy goals”].)

            The Settlement Agreement thus contains no representation that defendant has or will change its labor practices as result of this litigation. It would seem, then, that if the settlement doesn’t serve the purpose of remediation it must serve the purpose of deterrence. That usually occurs only if the amount allocated is significant. (See Manuel Perez and Macario Perez v. All AG, Inc. (E.D. Cal., July 23, 2021, No. 118CV00927 DADEPG) 2021 WL 3129602, at *3—referring to the “substantial amount of penalties to be paid . . .”)

            The PAGA allocation of $300,000 is likely a sufficient deterrence. Plaintiff is directed to address this in the petition for final approval.

Ruling        

• The requested enhancement to class plaintiffs. The present record does not justify the amount requested and although the court preliminarily grants the request for fees up to the requested amount, a more robust showing must be made before fees will finally be approved.
• The court agrees in theory that the requested attorney fee is authorized by law and an amount up to that amount can be preliminarily approved, however additional effort must be made to support the requested amount before the fees will finally be approved. Moreover, the court will want to a detailed costs’ explanation. This documentation should be submitted at or before the final approval hearing. 
• The reasonableness of the PAGA has not been discussed. The court finds it to be reasonable for purposes of preliminary approval. However, the court expects a discussion of its reasonableness pursuant to the principles announced in Moniz v. Adecco USA, Inc. (2021) 72 Cal.App.5th 56, particularly in light of the fact defendants admitted no liability and denied any wrongdoing, in the application for final approval.
• Subject to these conditions, the motion for preliminary approval is granted. The stipulation of settlement is preliminarily approved. The identified settlement class is provisionally certified with Olivia Ramirez as the class representative and Paul K. Haines, Fletcher W. Schmidt, and Andrew J.Rowbotham of Haines Law Group, APC as Class Counsel. CPT Group is appointed as the third-party settlement administrator. The proposed Class Notice and Notice of Settlement Payment is approved.
• Appearances are required to discuss setting the date for the final approval hearing pursuant to Calif. Rules of Court, rule 3.769 (e).

  

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[1] For demonstrative purposes only, the above calculation lists the PAGA allocation to the aggrieved employees as a separate line item. This amount, however, was not deducted from the Net Class Settlement Amount.

[2]  The Manual for Complex Litigation is widely relied upon by federal judges as well as practitioners regarding the organization and administration of class actions and other complex litigation matters. (Parris v. Superior Court (2003) 109 Cal.App.4th 285, 298.) The Manual does not have the force of law, but in federal court it does “provide a rough guide by which to measure whether the trial judge acted within his discretion.” (In re General Motors Corp. Engine Interchange Litigation (7th Cir.1979) 594 F.2d 1106, 1124, fn. 22.) The court relies on it here for its useful description of the relative scope of the preliminary approval and final approval process for class settlements.

[3] It does not appear this point was presented to the Moniz court. Nevertheless, several federal court cases consider the issue and provide guidance.