Christina Calzada-Guido, individually, and on behalf of all others similarly situated v. Santa Barbara Neighborhood Clinics

Case Number

21CV01162

Case Type

Hearing Date / Time

Wed, 10/18/2023 - 10:00

Nature of Proceedings

Plaintiffs’ Motion for Preliminary Approval of Class Action Settlement

Tentative Ruling

Arby Aiwazian / Yasmin Hosseini for Plaintiff Cristina Calzada-Guido, individually and on behalf of those similarly situated

Nicole Kamm/Rafael Gonzalez for Defendant Santa Barbara Neighborhood Clinics.

                       

RULING

The motion is continued to November 15, 2023. Plaintiff’s counsel shall provide the Court with additional information, as set forth below, no later than October 31, 2023.

Background

Plaintiff Cristina Calzada-Guido filed her complaint on March 18, 2021. The complaint alleges causes of action for: (1) unpaid overtime, (2) unpaid meal period premiums, (3) unpaid rest period premiums, (4) unpaid minimum wages, (5) final wages not timely paid, (6) wages not timely paid during employment, (7) non-compliant wage statements, (8) failure to keep requisite payroll records, (9) unreimbursed business expenses, and (10) violation of California Business & Professions Code section 17200, et seq.

Following extensive settlement negotiations and mediation with Jeffrey Krivis, the parties entered into a settlement of the action, and now seek preliminary Court approval of that settlement, an order provisionally certifying the proposed class for settlement purposes, an order appointing Plaintiff as class representative for the class, an order appointing Plaintiff’s attorneys as class counsel for the class, an order appointing Phoenix Settlement Administrators as the third-party settlement claims administrator, an order approving the Notice being sent to the class, and an order scheduling the hearing for final approval of the settlement, including approval of an incentive award to the representative Plaintiff, settlement administration costs, and fees and costs to class counsel. The motion is supported by the declaration of class counsel Yasmin Hosseini.

The Hosseini declaration establishes that Plaintiff’s counsel has extensively investigated the claims, including formal and informal discovery, production of documents, review of detailed information and payroll data relevant to Plaintiff’s claims, and the analysis by the parties of the class-wide data to investigate the merits of Plaintiff’s claims and the potential liability. In addition, there have been numerous conferences between counsel, review of payroll, time records, and other records produced by Defendant to Plaintiff’s counsel for purposes of litigation and mediation, and extensive discussions between counsel regarding strengths and weaknesses of claims and defenses.

Under the terms of the settlement, Defendants have agreed to pay $250,000.00, on a non-reversionary basis, to settle and release all claims asserted by Plaintiffs in the class action on behalf of the class. The settlement defines the class members as “all current and former non-exempt, hourly employees of SBNC who worked in California during the Class Period.” The settlement class period “means the period from March 18, 2017, through the date of Preliminary Approval.” The “Net Settlement Amount” available for distribution to the class is the Gross Settlement Amount, less the Attorneys’ Fees and Costs (not more than $87,500.00.00 in fees, and not more than $40,000.00 in costs), the Class Representative Incentive Award ($5,000.00 to Plaintiff), Settlement Administration Fees of not more than $10,000.00.

The “Individual Settlement Payment”, i.e., each class member’s share of the net settlement amount, will be calculated and apportioned from the Net Settlement Amount based upon the number of workweeks the member worked during the class period as a non-exempt employee in California. Fifteen percent of each participating class member’s individual settlement share will be allocated to settlement of wage claims and are subject to tax withholding and will be reported on an IRS W-2 form. The administrator will withhold the employee’s share of taxes and withholdings with respect to the wages portion of the individual settlement shares.

The settlement amount was a compromise figure. However, after considering the facts, strengths, and weaknesses of the case, the risks and delays posed by further litigation, and class counsel’s experience, counsel concluded that the recovery for each class member is fair and reasonable, taking into consideration the amounts received in other wage and hour class actions, the inherent risks, and the reasonable tailoring of each member’s claim to the settlement award the member will receive.

The motion seeks conditional certification of the class for settlement purposes only, asserting that the class is easily ascertainable from Defendants’ records, and that there is a well-defined community of interest in the questions of law and fact involving the parties to be represented. Defendants do not dispute these facts, for settlement purposes only. Plaintiffs further contend, and Defendants do not dispute for settlement purposes, that the named Plaintiff’s claims are typical of the class claims, because they arose from the same factual basis and are based upon the same legal theories, and Plaintiffs were employed by Defendants during the class period and subject to the allegedly unlawful policies and practices at issue in the litigation.

The declaration of Yasmin Hosseini attaches the Notice of Proposed Class Action Settlement which will be provided to the class members, which explains the settlement and provides class members with the opportunity to dispute the calculation of their share and produce evidence to support their contention that the information contained in their packet is inaccurate. Defendant’s records will be presumed determinative, in the absence of evidence to rebut their records, but the Settlement Administrator will evaluate the evidence and determine the validity of the evidence. The Notice also explains the manner in which class members may either opt-out from the settlement agreement, or object to the settlement agreement.

The settlement will be administered by Phoenix Class Action Administration Services. The details of the manner in which it will mail the notice, process exclusions and objections, and distribute the settlement funds to class members, is detailed in the settlement agreement.

Analysis

The purpose of the preliminary approval hearing is to determine whether the settlement is within the range of reasonableness for preliminary approval and to approve or deny certification of a provisional settlement class. A full inquiry into the fairness of the proposed settlement occurs at the final approval hearing. (Rules of Court, rule 3.769, subd. (g).)

“‘The Court has a fiduciary responsibility as guardians of the rights of the absentee class members when deciding whether to approve a settlement agreement.’” (Kullar v. Foot Locker Retail, Inc. (2008) 168 Cal.App.4th 116, 129.) The Court has broad discretion to determine whether the settlement is fair. (Dunk v. Ford Motor Co.) (1996) 48 Cal.App.4th 1794, 1801.) “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.’ [Citations.] This list ‘is not exhaustive and should be tailored to each case.’ [Citation.]” (Kullar v. Foot Locker Retail, Inc., supra, 168 Cal.App.4th at p. 128.)

The Court has carefully analyzed the terms of the settlement, including the nature and scope of the release it requires of absent class members and the representative Plaintiffs.

“[A]n informed evaluation of a proposed settlement cannot be made without an understanding of the amount that is in controversy and the realistic range of outcomes of the litigation.” (Clark v. American Residential Services LLC (2009) 175 Cal.App.4^th 785, 801.) Plaintiff’s counsel has not provided any information regarding Defendant’s estimated exposure on the various types of claims asserted in the complaint and has not sufficiently set forth the strengths and weaknesses of the case or the realistic range of outcomes. Without this information, the Court is unable to properly assess whether the settlement is within the range of reasonableness. Additionally, while generally stating various tasks that have been performed in pursuing the action, Plaintiff’s counsel has provided insufficient information regarding the number of hours worked in order for the Court to determine whether the requested attorney’s fee cap is reasonable. Further, the proposed order appears to contain a typographical error. While the body of the motion and the settlement agreement state that costs are not to exceed $40,000.00, the proposed notice states costs are not to exceed $35,000.00. As such, the hearing on the motion will be continued in order for Plaintiff to provide further information and a corrected notice.