Cedric A Beaty et al vs Homer T Hayward Lumber Co et al

Case Number

22CV04267

Case Type

Hearing Date / Time

Fri, 08/22/2025 - 10:00

Nature of Proceedings

Motion Preliminary Approval; Motion to Be Relieved as Counsel

Tentative Ruling

For the reasons set forth herein, plaintiffs motion for preliminary approval of class action and PAGA settlement is granted. A hearing date for final approval is scheduled for November 21, 2025, at 10:00 a.m. The court has reviewed the proposed order submitted by plaintiffs and will add the date for hearing on final approval, at paragraph 15 on page 4, and sign it as the order of the court. The order will be filed in both the present case as well as Case No. 22CV04265.

Background:

This action commenced on October 28, 2022, by the filing of a class action complaint by plaintiffs Cedric A. Beaty (“Beaty”) and Jorge L. Zaragoza Valdovinos (“Valdovinos”), against defendants Homer T. Hayward Lumber Company (“HLC”) and United Staffing Associates, LLC (“USA;” collectively “defendants”), setting forth causes of action for: (1) Failure to Pay Minimum and Straight Time Wages; (2) Failure to Pay Overtime Wages; (3) Failure to Provide Meal Periods; (4) Failure to Authorize and Permit Rest Periods; (5) Failure to Timely Pay Final Wages at Termination; (6) Failure to Provide Accurate Itemized Wage Statements; (7) Failure to Indemnify Employees for Expenditures; and (8) Unfair Business Practices. (Case No. 22CV04267 or “Class Action”.)

Plaintiffs allege that during the period of their employment with defendants, defendants systematically violated several provisions of the labor code for which they have set forth their causes of action. There are no Private Attorneys General Act of 2004 (“PAGA”) claims made by why of the class action complaint.

Also on October 28, 2022, Beaty, on behalf of the State of California and other aggrieved persons, filed a PAGA complaint against HLC and USA (Case No. 22CV04265 or “PAGA action”), seeking statutory civil penalties.

Beaty alleges that defendants committed numerous labor code violations during his employment with them.

On March 29, 2024, the PAGA action and the Class Action were ordered related and both cases were assigned to this department. The cases were not consolidated.

On September 19, 2024, by way of mediation, with mediator Steve Cerveris, the parties entered into a settlement agreement.

On March 26, 2025, plaintiffs moved for preliminary approval of the Class Action and the PAGA action. By way of its tentative ruling, the court noted the following:

“However, plaintiffs have only brought the motion in the Class Action, Case No. 22CV04267. As noted, the cases are not consolidated and are proceeding independently of the other. The motion, as it is drafted, purports to resolve both cases. This could result in confusion for others interested in the PAGA action, Case No. 22CV04265.”

“To resolve this issue, and to ensure that proper orders are entered in each of the two cases, plaintiffs will be ordered to file their motion in both cases. The court will reschedule the hearing date so that both motions can be ruled upon at the same time.”

On July 11, 2025, the court ordered:

1. The hearing on plaintiffs’ motion for preliminary approval of class action and PAGA settlement is continued to August 22, 2025, at 10:00 a.m. in this department.
2. Plaintiff, Cedric A. Beaty, shall file and serve the motion, for preliminary approval of class action and PAGA settlement, in Case No. 22CV04265 (the PAGA Action), no later than July 25, 2025, and set the hearing date as August 22, 2025.
3. Plaintiffs shall file a proposed order in each case that cross-references the other case.

Plaintiff has now filed and served the motions in each case as instructed.

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.)

A PAGA action is a type of qui tam action, in which a private party is authorized to bring an action to recover a penalty on behalf of the government and receive part of the recovery as compensation. (Huff v. Securitas Sec. Servs. USA, Inc. (2018) 23 Cal.App.5th 745, 753.) In doing so, the employee acts as proxy for the state labor law enforcement agency; the proceeding is designed to protect the public, not to benefit private parties. (Amalgamated Transit Union, Local 1756, AFL-CIO v. Superior Court (2009) 46 Cal.4th 993, 1003.) The dispute is between the employer and the state. (Kim v. Reins International California, Inc. (2020) 9 Cal.5th 73, 81.) The purpose of PAGA is not to recover damages, restitution, or redress the employees’ injuries, but to recover civil penalties to remediate present violations and deter future ones. (Id. at p. 86.) While a PAGA case is representative in nature, it is not a class action and may be brought without the procedural requirements involved in class actions.

Labor Code section 2699(k) mandates that PAGA civil penalties be allocated 75% to the LWDA, for enforcement of labor laws and education of employers and employees about their rights and responsibilities under the code, and 25% to the aggrieved employees. Section 2699(l)(2) requires that the superior court review and approve any penalties sought as part of a proposed settlement agreement, pursuant to that part of the code.

Under the terms of the settlement, defendant has agreed to pay a gross settlement amount of $1,200,000.00, on a non-reversionary basis, to settle and release all claims asserted by plaintiffs in the class action on behalf of the class, as well as the PAGA action on behalf of the State of California. The settlement defines the Class as “all non-exempt, hourly employees who have, or continue to, work for Defendants in California from May 3, 2018 through September 1, 2024.” The settlement defines Aggrieved Employee as “all persons employed by Defendants as hourly-paid or non-exempt employees in the State of California from August 24, 2021 through September 1, 2024 (the ‘PAGA Period’).” There are approximately 731 Class Members who collectively worked approximately 35,189 workweeks, and 469 Aggrieved Employees who worked a total 9,837 PAGA Pay Periods. The “Net Settlement Amount” available for distribution to the class is the Gross Settlement Amount, less the Attorneys’ Fees and Costs (not more than $400,000.00 in fees, and not more than the actual amount of costs not to exceed $35,000.00), the Class Representatives Incentive Award ($15,000.00 to each plaintiff), Settlement Administration Fees (not more than $10,990.00), 75% of the LWDA payment (a total of $135,000.00, which is 75% of the total PAGA settlement of $180,000.00), and 25% to be paid to the Aggrieved Employees ($45,000.00).

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. 20% of individual class payments shall be allocated to wages and defendants will pay any and all employer payroll taxes owed on the wage positions of the individual class payments separate from the Gross Settlement Amount. The remainder of the individual class payments shall be allocated to interest and penalties and subject to IRS Form 1099 reporting.

Counsel Yslas’ declaration sets forth defendant’s estimated exposure on the various types of claims, including the PAGA and unfair business practices claims, and notes the evidentiary difficulties of each of the types of claims, the difficulty in certifying a class for the various claims and maintaining certification through trial, and taking into account defendant’s defenses, and that the total amount of damages the class could reasonably expect to be awarded could be significantly less than the maximum exposure.

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 counsels’ 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 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 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 Yslas declaration attaches the Notice of Proposed Class Action Settlement, as exhibit 1A to the settlement agreement, 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 their 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 Apex Class Action. 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. If any settlement checks sent to class members are left uncashed and cancelled after the void date, the Administrator shall transmit the funds to the California Controller’s Unclaimed Property Fund in the name of the Class Member pursuant to Code of Civil Procedure section 384, subdivision (b)

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. The Court finds that it is within the range of acceptable settlements.

Substantial investigation and discovery were conducted, giving rise to an informed settlement, in light of the risks of further litigating the action through trial. The case involves experienced class counsel, who believe the settlement is fair, reasonable, and in the best interests of the class members. The settlement was achieved through extensive arms’-length negotiations and was not collusive.

The motion asks the Court for an order certifying the settlement class. The Court finds that certification of the class for settlement purposes is appropriate and will grant the motion to provisionally certify the proposed class for settlement purposes. The class is ascertainable from defendants’ records and is so numerous that joinder of all members is impracticable. There are questions of law or fact common to the proposed class, and there is a well-defined community of interest among its members with respect to the subject matter of the litigation.

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 can 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 further approves the PAGA Aggrieved Employee class and approves the PAGA Settlement Payment, finding that the terms of the PAGA settlement are fair and reasonable.

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 Notice is attached as Exhibit 1A to the settlement agreement, which is attached to the Yslas 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 standard for approval in clearly outlining 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 counsel’s application for an award of attorneys’ fees and reimbursement of costs, and the incentive award to the representative plaintiff. The court will set the hearing for final approval to take place on November 21, 2025, at 10:00 a.m. 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.