Jose Frausto Villegas and Jose Manuel Barragan Aguilar, individually, and on behalf of all others similarly situated v. DLP Management Co., Inc. et al

Case Number

21CV04500

Case Type

Hearing Date / Time

Wed, 10/02/2024 - 10:00

Nature of Proceedings

Plaintiffs’ Motion for Preliminary Approval of Class Action Settlement

Tentative Ruling

For Plaintiffs Jose Angel Frausto Villegas and Jose Manuel Barragan Aguilar: David Glenn Spivak, Louis M. Benowitz                            

For Defendants DLP Management Co., Inc. and Dario L. Pini: Paul R. Burns

                                               

RULING

The motion for preliminary approval of class action settlement is granted as follows:

The Court has reviewed the proposed order submitted with the motion and intends on signing the same after the addition of the date for the hearing on final approval in paragraph 29 of the proposed order and the addition of the date for filing and service of the documents related to final approval. The relevant terms include:

1. Preliminary approval of the settlement set forth in the Class Action Settlement Agreement is granted;
2. The proposed settlement class is provisionally certified for purposes of settlement only;
3. Jose Frausto Villegas and Jose Manuel Barragan are provisionally appointed as the representatives of the settlement class;
4. David G. Spivak of The Spivak Law Firm and Louis M. Benowitz of Benowitz Law Corporation are appointed as class counsel;
5. Distribution of the proposed notice of class action settlement to the settlement class is approved;
6. ILYM Group, Inc. is appointed as the third-party settlement administrator;
7. Counsel is ordered to appear at the hearing on this matter, either in-person or remotely, to determine a date for hearing on Final Approval of Class Action Settlement.
   1. All documents related to the final approval, fees, costs, and enhancement award, shall be filed no later than 16 court days prior to the final approval hearing date.

The hearing for final approval will take place on ______________________

Background

Plaintiff Jose Frausto Villegas (“Villegas”), on behalf of himself and all others similarly situated, filed his complaint against Defendant DLP Management Co., Inc. (“DLP”) on November 12, 2021. The complaint alleges causes of action for: (1) Failure to pay all wages earned for all hours worked, (2) failure to provide rest periods, (3) failure to provide meal periods, (4) failure to reimburse for expenses, (5) waiting time penalties, and (6) unfair competition. The complaint alleges that Villegas was a maintenance worker for DLP from approximately 2009 to January 2020.

DLP filed its answer to the complaint on April 14, 2022, asserting a general denial and 16 affirmative defenses.

Plaintiff Jose Manuel Barragan (“Barragan”), on behalf of himself and all others similarly situated, filed a substantially similar complaint, alleging the identical causes of action, on April 11, 2022. The Barragan complaint named Dario L. Pini (“Pini”) as a Defendant as well as DLP (collectively “Defendants”). The complaint alleges that Barragan was a maintenance worker for DLP and Pini from approximately 2008 to April 13, 2019.

On June 8, 2022, the Barragan action was consolidated with the Villegas action, with the Villegas action being designated the lead case.

Pini filed his answer to the Barragan complaint on December 7, 2022, asserting a general denial and 16 affirmative defenses.

Following extensive settlement negotiations and mediation with Henry J. Bongiovi on September 26, 2023, 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 Plaintiffs as class representatives for the class, an order appointing Plaintiffs’ attorneys as class counsel for the class, an order appointing ILYM Group, Inc. 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 proposed class counsel David Spivak and Louis M. Benowitz.

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

Under the terms of the settlement, Defendants have agreed to pay $750,000.00, 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 identifies the class members as “either a Participating Class Member or Non-Participating Class Member.” The settlement class period is “the period from November 12, 2017 to the date of preliminary Court approval of the Settlement.” The “Net Settlement Amount” available for distribution to the class is the Gross Settlement Amount, less the Attorneys’ Fees and Costs (not more than $250,000.00 in fees and not more than $20,000.00 in costs), the Class Representative Incentive Award ($15,000.00 each to Plaintiffs), and 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. 33.33 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. Participating class members assume full responsibility and liability for any employee taxes owed on their individual class payment.

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. Plaintiffs further contend that the named Plaintiffs’ 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  Spivak attaches the Notice of Proposed Class Action Settlement which will be provided to the class members. The notice explains the settlement and provides class members with the opportunity to dispute the calculation of their share and produce evidence to support any contention that the information contained in their packet is inaccurate. Defendants’ 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 ILYM Group, Inc. 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 as well as the notice to class members.

It appears to the Court that the claims of the Class Representatives are typical of the claims of the members of the proposed class, and that they fairly and adequately protect the interests of the class members. It also appears to the Court that proposed class counsel is experienced and qualified in wage and hour class litigation and will properly and adequately represent the interests of the absent class.

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, and finds it sufficient. Given the potential exposure of Defendants and the strengths and weaknesses of Plaintiffs’ claims, the total gross settlement of $750,000.00 is within the reasonable range. Class counsel’s request that Attorneys’ Fees and Costs (not more than $250,000.00.00 in fees, and not more than $20,000.00 in costs) be preliminarily approved is reasonable given the hours of work they have performed to date. The request for settlement administration costs, to ILYM Group, Inc., of not more than $10,000.00 is preliminarily approved. Class representative service payments, payable to the named Plaintiffs, of up to $15,000.00 each, is preliminarily approved.

The motion further seeks approval of the proposed Notice of Proposed Class Action Settlement to be provided to the absent class members. As noted above, the proposed Notice is attached to the Spivak declaration. Under Trotsky v. Los Angeles Fed. Sav. & Loan Assn. (1975) 48 Cal.App.3d 134, 151-152, the notice provided to a class must fairly apprise the class members of the terms of the proposed compromise and of the options open to dissenting class members. The Court has analyzed the contents of the Notice and finds that it meets the standards for approval in clearly outlining the terms of the settlement, what the recipient must do in order to object to the settlement, or to opt out of the settlement, and the time within which each must be accomplished. The Notice of Proposed Class Action Settlement is therefore approved.

The motion seeks a hearing date for the court’s consideration of final approval of the settlement, as well as counsels’ application for an award of attorneys’ fees and reimbursement of costs, and the incentive awards to the representative Plaintiffs. The court will set the hearing for final approval to take place on a date to be discussed at the hearing on this preliminary approval. All documents related to the final approval, fees, costs, and enhancement award, shall be filed no later than 16 court days prior to the final approval hearing date.