Tentative Ruling: Cedric A Beaty et al vs Homer T Hayward Lumber Co et al

Case Number

22CV04267

Case Type

Hearing Date / Time

Fri, 05/08/2026 - 10:00

Nature of Proceedings

Motion: Approval

Tentative Ruling

For the reasons set forth herein, plaintiffs motion for final approval of class action and PAGA settlement is granted as modified:

1. Attorneys’ Fees are reduced from the requested amount of $400,000.00 to $237,540.00.
2. The $162,460.00 difference between the requested attorney fees and the allowed attorney fees shall be distributed to the Class Members as provided for in the settlement agreement.
3. Final approval is otherwise granted as requested.

Plaintiff shall prepare a revised order, reflecting the rulings herein, serve all other counsel, and file the revised order with the court no later than May 15, 2026. The order is to 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 way 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. On August 22, 2025, the motion for preliminary approval was granted.

Plaintiffs now move for final approval. The motion is unopposed.

Analysis:

“Before final approval, the court must conduct an inquiry into the fairness of the proposed settlement.” (Cal. Rules of Court, rule 3.769(g).)

“At the final approval hearing, ‘the court must conduct an inquiry into the fairness of the proposed settlement.’ [Citation.]” (Luckey v. Superior Court (2014) 228 Cal.App.4th 81, 93.) “Because 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.]” (Id. at pp. 93-94.) “However, other certification issues, ‘those designed to protect absentees by blocking unwarranted or overbroad class definitions’ require heightened scrutiny in the settlement-only class context ‘for a court asked to certify a settlement class will lack the opportunity, present when a case is litigated, to adjust the class, informed by the proceedings as they unfold.’ [Citation.]” (Id. at p. 94.)

“‘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 agreement, 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 filed in support of the preliminary approval set 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.

Pursuant to the ruling granting preliminary approval, Apex received a data file from defense counsel that contained the names, social security numbers, last known mailing addresses, and the total number of relevant Class Workweeks and PAGA Pay Periods worked for 612 individuals. (Shim decl., ¶ 5.) In preparation for the mailing process, all 612 names and addresses listed in the Class List underwent verification and updating against the National Change of Address database maintained by USPS to ensure the accuracy and validity of the Settlement Class Members’ mailing addresses before sending out the Class Notice. (Id. at ¶ 6.) On February 13, 2026, the Class Notice was sent to all 612 individuals listed in the Class List via First Class Mail. (Id. at ¶ 7 & Exh. A.) Apex received 106 returned Class Notices as undeliverable, so Apex conducted a computerized skip trace in an attempt to acquire updated addresses. (Id. at ¶ 8.) The skip trace resulted in obtaining 95 updated addresses, to which Apex promptly re-mailed the Class Notices. (Ibid.) Eleven Class Notices have been deemed undeliverable. (Id. at ¶ 9.)

Apex did not receive any requests for exclusion or objections to the settlement. (Shim decl., ¶¶ 11, 12.) Apex has received one potential dispute from a Class Member and is in the process of obtaining additional information regarding the dispute from the Class Member. (Id. at ¶ 13.)

The total number of workweeks worked by participating Class Members during the Class Period is 38,413 and, to avoid triggering the escalator clause set forth in the settlement agreement, defendant opted to shorten the Class Period end date to July 17, 2023. (Shim decl., ¶ 15.)

The net settlement amount available to participating Class Members is estimated to be $548,871.93 and was calculated by subtracting the Class Counsel Fee, litigation costs, class representative service payments, administration costs, and PAGA penalties. (Shim decl., ¶ 16.)

By way of the motion for final approval, plaintiffs request the following be approved:

1. Defendants shall pay a total of $1,200,000.00 to resolve the action;
2. Individual Settlement Payments are to be paid to the Settlement Class Members as provided for in the settlement;
3. Payment of PAGA civil penalties in the amount of $180,000.00, with 75 percent to be paid to the LWDA and the remaining 25 percent to be distributed to the Aggrieved Employees;
4. Class Representative Service Payments of $15,000.00 to each named plaintiff;
5. Administration fees and expenses of $10,990.00 to be paid to Apex Class Action; and
6. Attorneys’ fees in the amount of $400,000.00 and litigation costs in the amount of $30,138.07.

The court finds: (1) the notice procedure afforded adequate protections to Class Members; (2) the members of the Class are ascertainable and so numerous that joinder of all members is impracticable; (3) there are questions of law and fact common to the Class, as well as a well-defined community of interest among members of the Class with respect to the subject matter of this action; (4) the claims of the class representatives are typical of the claims of the other Class Members; (5) the class representatives have fairly and adequately protected the interests of the Class; and (6) counsel of record for the class representatives are qualified to serve as class counsel.

Generally, the court finds that the terms of the settlement are fair, reasonable, and adequate. Other than as discussed below, the parties will be directed to effectuate the settlement according to its terms.

By way of declaration, one of plaintiffs’ counsel declares that five attorneys spent 395.9 collective hours working on this matter. The stated fees for the attorneys range from $500 per hour to $1,500 per hour. (Yslas decl., ¶ 20.)

“The choice of a fee calculation method is generally one within the discretion of the trial court, the goal under either the percentage or lodestar approach being the award of a reasonable fee to compensate counsel for their efforts.” (Laffitte v. Robert Half Internat. Inc. (2016) 1 Cal.5th 480, 504.)

“The “ ‘experienced trial judge is the best judge of the value of professional services rendered in his court, and while his judgment is of course subject to review, it will not be disturbed unless the appellate court is convinced that it is clearly wrong.’ ” [Citations.]” (Serrano v. Priest (1977) 20 Cal.3d 25, 49.)

The primary problem with using a percentage in this case is that a PAGA action operates differently than a class action, namely in that it does not create a common fund with which to determine fees as a percentage of the recovery. Rather, the lodestar approach is more appropriate for a case such as this where there is both a class action and a PAGA action. This is especially true where counsel has not differentiated between time spent on the class action as opposed to the PAGA action.

While counsel does not set forth the time expended in great detail, the time spent is not challenged, and the court will accept the representation of time spent as true and reasonable. However, the requested fee is excessive.

“The trial court makes its determination after consideration of a number of factors, including the nature of the litigation, its difficulty, the amount involved, the skill required in its handling, the skill employed, the attention given, the success or failure, and other circumstances in the case.” (Melnyk v. Robledo (1976) 64 Cal.App.3d 618, 623-624.)

“The reasonable hourly rate is that prevailing in the community for similar work.” (PLCM Group v. Drexler (2000) 22 Cal.4th 1084, 1095.)

While the court does not question counsels’ training, experience, or skill level, $1,500.00 per hour is not a prevailing rate in the community of Santa Barbara County. The 2025 “Real Rates” report attached to counsel’s declaration is for the County of Los Angeles and sets forth rates from the low of $485 per hour to a high of $1,365 per hour. It then lists rates for employment and labor attorneys with the low being $384 per hour and the high being $1,252 per hour. The rates for pre-litigation work are even lower. Thus, even in Los Angeles County the prevailing rates, and even the highest rates, are lower than the rate counsel seeks.

In this case, there is no explanation of why the attorney claiming a rate of $1,500 per hour billed more than twice as many hours as the next highest paid attorney, at $900 per hour. And there is no explanation why the $900 per hour attorney billed more than twice as many hours as any other of the billing attorneys. This does not appear to have been a particularly novel or difficult case and many, if not most, tasks should have been delegated to less senior attorneys.

The court will use the reasonable Santa Barbara County “blended” rate of $600 per hour for all attorneys (see 569 East County Boulevard LLC v. Backcountry Against the Dump, Inc. (2016) 6 Cal.App.5^th 426, 439 fn. 16), resulting in total attorneys’ fees approved of $237,540.00.