Alberto Gatica-Castro vs Specialty Team Plastering Inc

Case Number

22CV01120

Case Type

Hearing Date / Time

Mon, 10/07/2024 - 10:00

Nature of Proceedings

Motion for Final Approval

Tentative Ruling

Alberto Gatica-Castro v. Specialty Team Plastering, Inc.

Case No. 22CV01120

Hearing Date:         10/7/2024                                                       

HEARING:    Final approval of class action and PAGA settlement

           

ATTORNEYS:           Matthew J. Matern / Matthew W. Gordon / Vanessa M. Rodriguez of Matern Law Group PC for plaintiff and the class    

                                 Kenneth P. Roberts / Ryan P. Tish of K.P. Roberts & Associates for defendant

                       

TENTATIVE RULING:  

The motion is granted, as outlined below.

Background: Defendant Specialty Team Plastering, Inc. (STP) is a construction firm that specializes in drywall, plastering, and other construction services. Plaintiff worked for STP as a non-exempt employee from March 2018 to September 2021. On January 13, 2022, plaintiff gave notice to the California Labor and Workforce Development Agency (LWDA) and to defendant. He subsequently filed this action on March 21, 2022, alleging wage and hour claims against STP including: (1) failure to provide required meal periods, (2) failure to provide required rest periods, (3) failure to pay overtime wages, (4) failure to pay minimum wages, (5) failure to pay all wages due to discharged and quitting employees, (6) failure to furnish accurate itemized wage statements, (7) failure to maintain required records, (8) failure to indemnify employees for necessary expenditures incurred in discharge of duties, and (9) unfair and unlawful business practices; as well as (10) a representative action for penalties under the Private Attorneys General Act.

After hearing on January 22, 2024, the Court granted plaintiff’s motion for preliminary approval of the class action and PAGA settlement, finding the settlement to be within the range of acceptable settlements. The proposed class, for purposes of the class action settlement, is defined as “all current and former non-exempt employees of STP in the State of California at any time within the period from March 21, 2018 through April 17, 2023,” and at the time of preliminary approval was estimated to include 426 class members. For purposes of the settlement of the PAGA claims, “PAGA Employees” is defined to mean all class members that worked through the PAGA Period, from January 15, 2021 through April 17, 2023, and at the time of preliminary approval, there were estimated to be 190 PAGA Employees.

In return for the Release of all Class Member claims and PAGA claims, the settlement requires defendant to pay a non-reversionary Gross Settlement Amount of $645,000, to be funded by defendant by the payment of $400,000 within 15 days after the Effective Date (as defined in the agreement), $150,000 by June 30, 2024, and $95,000 by December 31, 2024. The Gross Settlement Amount will be allocated to (1) individual settlement payments made automatically to all class members who do not timely request to be excluded (totaling approximately $352,500), (2) a class representative service award of $7,500 to plaintiff, for his time and effort in bringing and prosecuting the action, and for his release of all claims against defendant, (3) attorney fees not to exceed one-third of the Gross Settlement Amount ($215,000) and costs not to exceed $25,000; (4) settlement administration costs not to exceed $15,000, (5) PAGA Penalties totaling $30,000, of which 75% ($22,500) shall be paid to the LWDA, and the remaining 25% ($7,500) will be distributed to PAGA employees.

Each class member’s share of the class action settlement will be determined by dividing the Net Settlement Amount by the total number of workweeks worked by settlement class members during the class period, and multiplying the result by each settlement class member’s number of workweeks. The payments will be allocated to 10% wages, subject to and reduced by applicable tax withholdings, and 90% as non-wage penalties and interest not subject to withholding.

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 $25,000.00, the actual litigation costs incurred by plaintiff’s counsel is $19,812.55. It further states that the settlement class contains 407 members, and there are approximately 160 PAGA Employees who worked during the PAGA period. Declarations were submitted to support the attorneys’ fee request, the named plaintiff service payments, and the administration of the settlement to date.

Settlement administrator Xpand submitted evidence that upon receipt of defense counsel’s file containing 413 records, it updated the addresses through the National Change of Address database, discovered that 3 people had duplicate records, and that there were a total of 410 class members. It mailed the class notice to all class members, and received 23 notices as undeliverable without a forwarding address, for which skip-tracing efforts were made, resulting in updated address for 8 persons. One notice was returned with a forwarding address. As a result, 9 notices were remailed, and 15 remained undeliverable. Defendant also confirmed that 4 individuals were inadvertently included in the initial class list, who had not in fact worked during the class period, and Xpand then sent a corrective notice to such persons. Defendant also confirmed that 1 individual was inadvertently omitted form the initial class list, and a class notice was then sent to this individual. Xpand received no workweek disputes, no requests for exclusion, and no objections to the settlement.

Xpand further noted that the final class list comprises 407 class members who worked a total of 17,203 class workweeks, and 160 aggrieved employees who worked a total of 2,631 PAGA pay periods. Once attorneys’ fees of $215,000.00, costs of $19,812.55, class representative payment of $7,500.00, administration costs of $15,000.00, and PAGA payment to the LWDA of $22,500 (75% of the total PAGA payment of $30,000) are deducted, the net settlement amount will be $357,687.45. The estimated class settlement amount per workweek is $20.79, and the estimated amount per PAGA pay period is $2.85. The average gross amount payable to class members is $878.84, and the highest gross amount payable to a class member is $5,322.79. The average PAGA payment to PAGA group members is $46.87, and the highest PAGA payment to a PAGA group member is $153.93. Xpand confirmed receipt of payments to the Qualified Settlement Fund it established for the settlement, of $400,000.00 on March 1, 2024, and $150,000.00 on June 25, 2024.

The Court notes that the final payment by defendant under the settlement, in the amount of $95,000, is due on December 31, 2024, and that plaintiff has represented that all class and PAGA payment will be paid out of the funds already provided by defendant, and that payments to the class need not be delayed until receipt of the final payment by defendant.

ANALYSIS: The Court will grant the motion.

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 will grant the motion for final approval. The Court has certified the class for settlement purposes only. It will further affirm named plaintiff Alberto Gatica-Castro 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 Class Representative Service Payment 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 $30,000.00 of the Gross Settlement Amount to the PAGA claims, and affirms and approves the payment of the amount of $22,500.00 to the LWDA, as required by law.

The Court will also confirm Matern Law Group, PC as Class Counsel. The stipulated settlement provided for an award of attorneys’ fees to Class Counsel of $215,000.00 (one/third of the Gross Settlement Amount), and costs and expenses not to exceed $25,000, and which actually total $19,812.55. Plaintiff presented evidence that the lodestar amount of fees incurred by his attorneys (hours expended times hourly rate) totals $120,487.50, and the total fee award represents the application of a multiplier of 1.79, which plaintiff asserts is reasonable based upon the facts that it took the case on a contingent basis, conferred a significant benefit on the Class and the State of California, displayed skill in achieving a substantial settlement, and provided quality representation. “[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 $215,000.00 fee award and the $19,812.55 cost award.

The Court further affirms payment of administration costs to settlement administrator Xpand Legal, in the amount of $15,000.00.

As requested by the parties, the Court will reserve jurisdiction over the parties for the purposes of implementing, enforcing, and or administering the Settlement or enforcing the terms of the Judgment.

The Court has reviewed the Proposed Order Granting Plaintiff’s Motion for Final Approval of Class Action and PAGA Settlement, and the Proposed Judgment, both submitted by plaintiff, and intends to execute each document.

The Court notes that the Proposed Order contains blank spaces for the scheduling of a final accounting hearing, and the date by which class counsel should file a final accounting report. The Court requests that, at the hearing on this final approval motion, counsel provide it with a date for the final accounting hearing, to be entered in the order prior to its execution, along with a date for filing the final accounting report that falls at least one week prior to the hearing date.