Cody Parker vs The Clary Group LLC et al

Case Number

22CV00417

Case Type

Hearing Date / Time

Mon, 12/16/2024 - 10:00

Nature of Proceedings

Hearing re Class Action Settlement - Attorney's Fees and Costs

Tentative Ruling

Cody Parker v. The Clary Group, L.L.C., et al.                   

Case No. 22CV00417

           

Hearing Date: December 16, 2024                                                     

HEARING:              Motion For Final Approval Of Class Action Settlement

ATTORNEYS:        For Plaintiff Cody Parker: Jonathan Melmed, Kyle D. Smith, Melmed Law Group P.C.

For Defendant The Clary Group, L.L.C.: Douglas J. Farmer, Allison J. Fernandez, Ogletree, Deakins, Nash, Smoak & Stewart, P.C.

For Defendant JBS Energy Solutions California LLC: David D. Cardone, Bradley A. Lebow, Adam J. Yarbrough, Dunn DeSantis Walt & Kendrick

TENTATIVE RULING:

The motion of plaintiff for final approval of class action settlement is granted as to plaintiff’s request for an award of attorney’s fees in the amount of $59,166.67, and costs in the amount of $7,164.52. Counsel shall appear at the hearing of this motion and shall be prepared to discuss any other matters remaining for the Court at this time.

Background:

On October 28, 2022, plaintiff Cody Parker filed his operative second amended complaint (the SAC) against defendants The Clary Group, L.L.C. (Clary Group), and JBS Energy Solutions California LLC (JBS) (collectively, defendants), alleging ten causes of action: (1) failure to provide rest periods and pay missed rest period premiums; (2) failure to provide meal periods and pay missed meal period premiums; (3) failure to pay all wages earned and unpaid at separation; (4) failure to indemnify all necessary business expenditures; (5) failure to furnish accurate itemized wage statements; (6) violations of California’s Unfair Competition Law; (7) violations of Labor Code section 970; (8) wrongful termination; (9) whistleblower retaliation; and (10) penalties pursuant to Labor Code section 2698 et seq. (the Private Attorneys General Act of 2004 or PAGA). As alleged in the SAC:

Plaintiff brings this action on behalf of himself and a class of individuals who are or were employed by defendants as non-exempt employees from four years prior to the filing of the action. (SAC, ¶¶ 2-4 & 14.) Plaintiff also alleges a claim under PAGA on behalf of aggrieved individuals who are or were employed by defendants from February 1, 2021, to the present. (Id. at ¶¶ 5-7 & 16.)

Clary Group is a labor contracting company that placed plaintiff to work running an excavator and other construction equipment at JBS. (SAC, ¶ 17, 25, 27.) Though Clary Group is listed on plaintiff’s paystubs, plaintiff was employed by both Clary Group and by JBS. (Id. at ¶¶ 18, 19.) During the time periods alleged in the complaint, defendants failed to provide rest and meal periods, to pay wages earned and unpaid at separation, to indemnify employees for necessary business expenditures, to furnish itemized wage statements, and violated Business and Professions Code section 17200 et seq. (Id. at ¶ 4.)

On November 29, 2022, JBS answered the SAC by generally denying its allegations and asserting twenty-nine affirmative defenses, and filed a cross-complaint for indemnity and contribution against Clary Group.

On March 6, 2023, Clary Group filed an answer to the SAC generally denying its allegations and asserting thirty-eight affirmative defenses.

On March 11, 2024, after a hearing, the Court granted plaintiff’s motion for preliminary approval of a class action settlement, and preliminarily approved a non-reversionary gross settlement amount of $177,500 (the gross settlement amount) to settle and release all claims asserted by plaintiff on behalf of a class of individuals employed by defendants as non-exempt employees from February 1, 2018, through October 18, 2023, and with respect to the PAGA claims, individuals employed by defendants from February 1, 2021, through October 18, 2023. The court also appointed ILYM Group, Inc. (ILYM) as the settlement administrator, and approved the notice to be provided and distributed to the class members.

The Court set a hearing for final approval of the class action settlement on August 5, 2024, which was continued to October 7, 2024, pursuant to a stipulation of the parties.

On September 13, 2024, plaintiff filed an unopposed motion (the final approval motion) for an order finally and for purposes of settlement: certifying the settlement class as defined in the settlement agreement; approving plaintiff (Cody Parker) as class representative; appointing Jonathan Melmed (Melmed) and Kyle D. Smith (Smith) of Melmed Law Group P.C. (the Melmed Group) as class counsel; finding that the notice of the settlement was properly provided to the class members in accordance with the Court’s preliminary order; approving the settlement as fair, adequate, and reasonable, based upon the terms set forth in the settlement agreement including the payment by defendants of the gross settlement amount plus the employer’s portion of applicable payroll taxes; and approving the allocation for attorneys’ fees of one-third of the gross settlement amount ($59,166.67), plus necessary litigation costs of $7,164.52.

Pursuant to its October 7, 2024, Minute Order (the Minute Order), the Court granted, in part, the final approval motion. For reasons further discussed in the Minute Order, the Court continued the final approval motion as to plaintiff’s request for an award of attorney’s fees and costs, and directed plaintiff to, on or before December 2, 2024, file and serve a supplemental brief addressing the overall reasonableness of the attorney’s fees sought by plaintiff in light of the issues, questions, and concerns raised by the Court in the Minute Order.

In response to the Minute Order, plaintiff filed a supplemental declaration of Smith on December 2, 2024.

Analysis:

As a preliminary matter, the Court will confirm Smith’s understanding that, at the hearing on the final approval motion, the Court elected not to set an order to show re sanctions as outlined in the Court’s tentative ruling on that motion.

As further discussed in the Minute Order, the Court questions the overall reasonableness of the amount of attorney’s fees requested by plaintiff in the final approval motion, which represent one-third of the gross settlement amount approved by the Court. The questions and concerns raised by the Court in the Minute Order arose from the unapproved submission by plaintiff of a 27-page memorandum in excess of the page limit stated under California Rules of Court, rule 3.1113(d), in which plaintiff asserted what appear to be unnecessarily duplicative and repetitive factual and legal arguments in the absence of any information or evidence showing that the final approval motion or this litigation implicated or raised difficult, novel, or time consuming issues of fact or law.

In response to the Court’s questions and concerns, Smith contends in his supplemental declaration that the motion is governed by California Rules of Court, rule, 3.764, which provides that an opening memorandum filed in support of a motion for class certification must not exceed 20 pages. (Smith Decl., ¶ 7; Cal. Rules of Court, rule 3.764(c)(2).) (Note: Undesignated rule references shall be to the California Rules of Court.) Notwithstanding that Smith misconstrues the nature and purpose of the final approval motion which, as further discussed below, does not constitute a motion for class certification as described in rule 3.764, Smith also concedes that the opening memorandum submitted in support of the final approval motion also exceeds the page limit set forth in rule 3.764. (Id. at ¶ 8.)

Moreover, “[b]ecause a court evaluating certification of a class action that settled prior to certification is considering certification only in the context of settlement, the court’s evaluation of the certification issues is somewhat different from its consideration of certification issues when the class action has not yet settled. In some ways, the court’s review of certification of a settlement-only class is lessened; as no trial is anticipated in a settlement-only class case, ‘the case management issues inherent in the ascertainable class determination need not be confronted. [Citation.]” (Luckey v. Superior Court (2014) 228 Cal.App.4th 81, 93-94.) Smith appears to conflate the court’s evaluation of certification issues which may arise when a class action settles with the court’s consideration of certification issues that arise when a class action has not settled. For these reasons, the arguments offered by Smith are not persuasive and do not address or resolve the Court’s questions regarding whether the attorney’s fees requested by plaintiff reflect inefficient or duplicate efforts which are not subject to compensation. (See Ketchum v. Moses (2001) 24 Cal.4th 1122, 1132.)

Smith further asserts that class actions are complex under rule 3.400(c)(6), and that, generally, final approval motions require the moving party to brief numerous factual and legal issues as reflected in checklists adopted by the Superior Courts of Sacramento, Orange, Los Angeles, San Bernardino, and Santa Cruz Counties. (Smith Decl., ¶¶ 9-10.) Smith also contends that, in his experience, courts expect and routinely grant requests to file overlength briefs in uncontested approval motions. (Id. at ¶ 13.)

Notwithstanding whether courts may routinely grant requests to file overlength briefs, plaintiff did not make an appropriate request in this action as further discussed in the Minute Order. In addition, the Court has reviewed the checklists issued by other courts further described above, which merely set forth information that must be included in a motion for preliminary approval of a class action settlement and which do not appear to apply to motions for final approval such as the motion at issue here. Moreover, nothing in these checklists demonstrates that motions for approvals of class action settlements necessarily implicate difficult, novel, or time consuming factual or legal issues. For these reasons, and also notwithstanding that claims involving class actions are provisionally deemed complex, Smith’s contentions do not address whether the attorney’s fees requested in the final approval motion reflect non-compensable efforts or are otherwise reasonable.

Smith also provides a chart setting forth the hours expended by Smith and other attorneys in this litigation, and the hourly rates charged by each attorney. (Smith Decl., ¶¶ 18-20.) Though plaintiff’s request for an award of attorney’s fees is made under the common fund doctrine, the Court may “double check the reasonableness of the percentage fee through a lodestar calculation.” (Laffitte v. Robert Half Internat. Inc. (2016) 1 Cal.5th 480, 504.)

The lodestar calculation provided by Smith shows that the attorney’s fees incurred by plaintiff in this litigation total $51,706.80, and that the fees requested in the final approval motion reflect a lodestar multiplier of approximately 1.14. Considering equitable principles including the contingent nature of counsel’s employment and the public nature of plaintiff’s position in this action, the lodestar calculation provided in the Smith declaration indicates that the attorney’s fees requested in the final approval motion are reasonable. The fees are also within the range of an appropriate award from a common fund. Therefore, and notwithstanding that the Smith declaration otherwise fails to sufficiently address the concerns and questions raised by the Court in the Minute Order, the Court will grant the final approval motion as to plaintiff’s request for an award of attorney’s fees in the amount of $59,166.67, and litigation costs in the amount of $7,164.52.