Francisco Javier Mendoza vs Duncan Family Farms LLC

Case Number

22CV00779

Case Type

Hearing Date / Time

Fri, 07/19/2024 - 10:00

Nature of Proceedings

CMC; Hearing Final Approval

Tentative Ruling

The Court will grant the motion for final approval of the class action and PAGA settlements.

Background: This is a wage and hour action, filed February 25, 2022, alleging causes of action for (1) failure to pay minimum wages, (2) failure to pay overtime compensation, (3) failure to provide meal periods, (4) failure to authorize and permit rest breaks, (5) failure to indemnify necessary business expenses, (6) failure to timely pay final wages at termination, (7) failure to provide accurate itemized wages statements, and (8) unfair business practices.

After hearing on February 9, 2024, the Court granted plaintiffs’ motion for preliminary approval of class action and PAGA settlement, finding the settlement to be within the range of acceptable settlements. Under the settlement, defendant agreed to pay a gross settlement payment of $300,000, except that, to the extent that any portions of the class members’ settlement payments constitute wages, defendant will also separately be responsible for any employer payroll taxes required by law. The settlement defines the class as “All current and former non-exempt employees of defendant who worked in California during the Class Period” of February 25, 2018 through September 25, 2023. As approved by the court, the net settlement amount for distribution to the class is the gross settlement amount, from which will be deducted attorneys fees not to exceed 33 1/3% of the gross settlement amount ($100,000.00), reasonable litigation costs not to exceed $18,000.00, a Service Payment not to exceed $7,500.00 to be paid to the named plaintiff, a PAGA penalty payment in the amount of $30,000.00 (which is 75% of the total PAGA allocation of the settlement, of $40,000.00; the allocation which will be distributed to the employees will be included in the net settlement amount), and costs of settlement administration, not to exceed $9,000.00. The preliminary approval motion estimated that there were 180 putative class members.

For purposes of the PAGA settlement, the “aggrieved employees” entitled to compensation under the settlement included all current and former non-exempt employees of defendant who worked in California between February 19, 2021 through the sooner of September 25 2023, or the date upon which preliminary approval is granted. There were estimated to be 98 PAGA Employees. Each PAGA employee was to be paid a pro-rata share of the PAGA Employees’ PAGA Settlement Payment; they are not permitted to exclude themselves from this portion of the settlement. The pro-rata share will be determined by comparing the individual employee’s PAGA pay periods during the PAGA period to the total PAGA pay periods of all of the PAGA employees during the PAGA period. The PAGA Settlement Payment shares to PAGA Employees is entirely allocated to penalties.

Plaintiff now moves for final approval of the class action settlement, including the total amount of the settlement, the amount of attorneys’ fees, costs, class representative incentive award, settlement administrator fees, and PAGA payment allocation and payment of 75% thereof to the LWDA, as well as certification of the class for settlement purposes only. The final approval motion notes that while the preliminary approval motion approved reimbursement of costs up to $18,000.00, the actual litigation costs incurred by plaintiff’s counsel is $17,451.76. Further, while cost of settlement administration were approved in an amount not to exceed $9,000.00, actual administration costs total $6,950.00. It further states that the settlement class contains 179 members, who worked 6,121 workweeks, and the PAGA class contains 41 PAGA employees who worked 554 pay periods. Declarations were submitted to support the attorneys’ fee request, the named plaintiff service payments, and the administration of the settlement to date.

Settlement administrator ILYM Group, Inc. submitted evidence that upon receipt of the court-approved text for the class notice packet, it prepared a draft of the formatted notice, which was then approved by counsel. Upon receipt of the class data file from defense counsel, it updated the addresses through use of the National Change of Address database maintained by the U.S. Postal Service, and mailed the notice packets in both English and Spanish too the 179 class members. 45 packets were returned, one with a forwarding address, to which a packet was then mailed. ILYM performed skip trace on the 44 packets which were returned without forwarding address, and obtained 10 updated addresses, to which it remailed notice packets. 34 addresses were deemed undeliverable. It received no request for exclusion, no objections to the settlement, and no disputes from any class member.

ILYM noted that the net settlement amount available to participating class members will be $128,089.24, distributed on a pro rata basis using work weeks worked. ILYM estimates that the highest payment to a class member will be $3,997.18, the average payment will be $715.63, and the lowest payment will be $20.93, all subject to employee-side tax and withholdings. ILYM estimates further that the highest individual PAGA payment to an aggrieved employee will be $794.22, the average payment will be $55.87, and the lowest payment will be $18.05. It confirmed its costs for completion of settlement administration are $6,950.00.

ANALYSIS: The Court will grant the motion for final approval of the class action and PAGA settlements.

After having given preliminary approval of the class action settlement and provided notice to the class, the final approval hearing is the final step in the approval process. During the final approval hearing, the court conducts a more detailed inquiry into the fairness of the proposed settlement. (Cal. Rules of Court, Rule 3.769(g).) If the court approves the settlement agreement at the final approval hearing, the court must make and enter a judgment that includes a provision for the court to retain jurisdiction over the parties to enforce the terms of the settlement. (Cal. Rules of Court, Rule 3.769(h).)

“[A] trial court has broad powers to determine whether a proposed settlement in a class action is fair.” (Mallick v. Superior Court (1979) 89 Cal.App.3d 434, 438.) A class action settlement is presumptively fair if it was reached through arm’s-length negotiations between experienced counsel after extensive investigation, litigation, and discovery. (Dunk v. Ford Motor Company (1996) 48 Cal.App.4th 1794, 1802; in accord, Wershba v. Apple Computer (2001) 91 Cal.App.4th 224, 245 [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].)

The first three elements for the presumption of fairness were established at the time of the preliminary approval. No evidence has been presented which would alter the court's preliminary determination of each of these elements. With respect to the fourth element, the parties have presented evidence that the settlement administrator received no requests for exclusion from the settlement, and no member of the putative class objected to the class action settlement. As a result, all of the factors are present to give rise to a presumption that the class action settlement was fair, and the Court finds the class action settlement to be fair.

Apart from the presumption of fairness, the court must still determine the adequacy of a class action settlement by 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. (Kullar v. Foot Locker Retail, Inc. (2008) 168 Cal.App.4th 116, 129.) The court has reviewed the evidence and arguments presented, and is satisfied that the settlement is fair and reasonable in light of the strengths and weakness of the claims.

Based upon the totality of the circumstances present here, the Court finds that the stipulated settlement preliminarily approved is fair and reasonable to all concerned, and it will therefore grant the motion for final approval. The Court has certified the class for settlement purposes only. It will further affirm named plaintiff Francisco Javier Mendoza as Class Representative. In light of the time and efforts expended by the Class Representative in assisting Class Counsel in pursuing this matter, at substantial risk should the actions have been unsuccessful and resulted in personal liability for defendant’s costs, and with a small financial interest in the outcome of the litigation, the Court finds the incentive award of $7,500.00 to be paid to the Class Representative to be reasonable, and will approve it.

The Court further affirms and approves the allocation of $40,000 of the Gross Settlement Amount to the PAGA claims, and affirms and approves the payment of the amount of $30,000 to the LWDA, as required by law.

The Court will also affirm Moon Law Group, PC as Class Counsel. The stipulated settlement provided for an award of attorneys’ fees to Class Counsel of $100,000.00, and costs not to exceed $18,000. Plaintiff's motion seeks approval of the fees and costs, noting that the actual costs incurred to date for which they seek reimbursement total $17,451.76. Plaintiff presented evidence that the lodestar amount of fees incurred totals $108,280.00. “[T]he court’s task in a negotiated settlement of fees is to determine if the negotiated fee is fair. That task requires the court to review the settlement as a whole, including the fee award, to ensure that it was fairly and honestly negotiated, is not collusive and adequately protects the interests of the [parties].” (Robbins v. Alibrandi (2005) 127 Cal.App.4th 438, 444.) The Court finds that, under the totality of the circumstances, the attorney’s fees and costs sought by plaintiff’s counsel are fair and reasonable, and the Court will approve the $100,000.00 fee award and the $17,451.76 cost award.

The Court further affirms payment of administration costs to settlement administrator ILYM Group, Inc., in the amount of $6,950.00.

As requested by the parties, the Court will reserve jurisdiction over the terms and conditions of the settlement until all payments and obligations contemplated by the settlement have been fully carried out.

The Court has reviewed the proposed order submitted by the plaintiff, and intends to execute it. The Court requests that the plaintiff provide it with a date for the Compliance Hearing, to be entered in the appropriate blank of the Proposed Order (@ page 7, line 12).