Tentative Ruling: Maria Celia Hernandez Campoverde vs Montecito Bank & Trust
Case Number
24CV03118
Case Type
Hearing Date / Time
Mon, 04/06/2026 - 10:00
Nature of Proceedings
CMC; Motion: Approval Final Approval of Class Action Settlement
Tentative Ruling
Campoverde v. Montecito Bank & Trust
Case No. 24CV03118
Hearing Date: April 6, 2026
HEARING: Motion of Plaintiff Maria Celia Hernandez Campoverde for Final Approval of Class Action Settlement and PAGA Settlement
ATTORNEYS: For Plaintiff Maria Celia Hernandez Campoverde: Danny Yadidsion, Labor Law PC
For Defendant Montecito Bank & Trust: Jeffrey A. Dinkin, Jared W. Speier, Lindsay L. Bowden, Stradling Yocca Carlson & Rauth LLP
TENTATIVE RULING:
Plaintiff Maria Celia Hernandez Campoverde’s motion for final approval of class action settlement and PAGA settlement is granted. The court approves the terms set forth in the Settlement Agreement and finds that the Settlement Agreement is, in all respects, fair, adequate, and reasonable. The parties shall effectuate the Settlement Agreement according to its terms. The requested attorney fees are approved in the amount of $208,312.50. The requested reimbursement of litigation costs is approved in the amount of $23,225.12. The requested incentive award to plaintiff is approved in the amount of $12,500. The requested settlement administration costs are approved in the amount of $5,500. Plaintiff Maria Celia Hernandez Campoverde is approved as the representative of the settlement class. Danny Yadidsion of Labor Law PC is approved as counsel for the settlement class. Apex Class Action LLC is approved as the settlement administrator. Plaintiff shall lodge with the court a proposed judgment consistent with this ruling and the parties’ Settlement Agreement.
Background:
On June 4, 2024, plaintiff Maria Celia Hernandez Campoverde (Plaintiff), individually and on behalf of a putative class, filed her original class action complaint against defendant Montecito Bank & Trust (Defendant). The complaint set forth seven causes of action for: (1) failure to pay wages for all hours worked, Labor Code sections 1194 and 1197; (2) failure to pay overtime wages, Labor Code sections 510 and 1194; (3) failure to provide meal periods, Labor Code sections 512 and 226.7; (4) failure to provide rest periods, Labor Code section 226.7; (5) failure to furnish timely and accurate wage statements, Labor Code section 226; (6) failure to pay all compensation due upon discharge, Labor Code sections 201, 202, and 203; and (7) unfair, unlawful, or fraudulent business practices, Business and Professions Code section 17200 et seq.
As alleged in the Complaint: Plaintiff and the putative class members were
not afforded legally compliant meal or rest breaks. (Compl., ¶ 26.) Defendant also did not provide premium pay for missed meal or rest breaks. (Ibid.) In addition, Defendant failed to pay Plaintiff and the putative class wages for all
hours worked, including off-the-clock time and certain overtime pay. (Compl., ¶¶ 27-28.) Defendant provided inaccurate wage statements with inaccurate payment amounts, based on the failure to pay all wages for all hours worked and the failure to pay premium meal and rest break pay. (Compl., ¶ 6.)
On November 8, 2024, Plaintiff filed her first amended complaint, adding an eighth cause of action under the Private Attorneys’ General Act (PAGA), Labor Code section 2698 et seq.
On November 19, 2024, the parties participated in a mediation that resulted in a settlement of this action. (Yadidsion Decl., ¶ 9(a).)
On March 6, 2025, the parties executed a joint stipulation of class action and PAGA settlement and release (Settlement Agreement). (Yadidsion Decl., ¶ 9(a), Ex. 2.)
On July 22, 2025, Plaintiff filed the operative second amended complaint (SAC), which added a tenth cause of action for failure to reimburse business expenses, Labor Code section 2802.
On November 3, 2025, the court granted preliminary approval of the Settlement Agreement, granted certification of a provisional settlement class, approved the proposed notice and other aspects of the Settlement Agreement, and scheduled this final approval hearing on April 6, 2026.
On March 12, 2026, Plaintiff filed her motion for final approval of the Settlement Agreement at issue in this hearing. This motion is unopposed.
Analysis:
(1) Procedures for Approval of Class Action Settlement
“Rule 3.769 of the California Rules of Court (CRC) sets forth the procedures for settlement of class actions in California. [Citation.] A two-step process is required. First, the court preliminarily approves the settlement and the class members are notified as directed by the court. [Citation.] ‘The notice must contain an explanation of the proposed settlement and procedures for class members to follow in filing written objections to it and in arranging to appear at the settlement hearing and state any objections to the proposed settlement.’ [Citation.] Second, the court conducts a final approval hearing to inquire into the fairness of the proposed settlement. [Citation.] If the court approves the settlement, a judgment is entered with provision for continued jurisdiction for the enforcement of the judgment. [Citation.]” (Cellphone Termination Fee Cases (2009) 180 Cal.App.4th 1110, 1118; see also Cal. Rules of Court, rule 3.769(c)-(f).)
(2) Preliminary Approval Order
“The court may make an order approving or denying certification of a provisional settlement class after the preliminary settlement hearing.” (Cal. Rules of Court, rule 3.769(d).) “If the court grants preliminary approval, its order must include the time, date, and place of the final approval hearing; the notice to be given to the class; and any other matters deemed necessary for the proper conduct of a settlement hearing.” (Id., rule 3.769(e).)
On November 3, 2025, the court held a preliminary approval hearing and approved, for settlement purposes, the certification of a provisional settlement class consisting of “all current and former hourly-paid, non-exempt employees who worked for Defendant in California from June 4, 2020 through February 17, 2025 (the Class Period).” (Order Granting Preliminary Approval of Class Action Settlement [Preliminary Approval Order], Nov. 3, 2025, at p. 3, ll. 8-11, p. 5, ll. 3-7; see also Minute Order Re Mtn. for Appr., Nov. 3, 2025 [November 3 Minute Order]; Cal. Rules of Court, rule 3.769(d).)
On November 3, 2025, the court further approved, for settlement purposes, the following class of Defendant’s employees for settlement of the PAGA claim: “all current and former hourly paid, non-exempt employees who worked for Defendant in California at any time from June 4, 2023 through February 17, 2025.” (Preliminary Approval Order, p. 5, ll. 3-7; see also November 3 Minute Order.)
The court granted preliminary approval of the terms and conditions contained in the Settlement Agreement. (Preliminary Approval Order, p. 3, ll. 12-15; see also November 3 Minute Order.) The court appointed Campoverde as the class representative, appointed Danny Yadidsion of Labor Law PC as class counsel, and appointed Apex Class Action LLC as the settlement administrator, for the provisional settlement class. (Preliminary Approval Order, p. 4, ll. 1-9.) The court approved the contents of the proposed notice and the notice plan, and directed that notice be distributed in accordance with the Settlement Agreement. (Id., p. 5, l. 17 – p. 6, l. 22.) The court set the final approval hearing on April 6, 2026, to determine whether the proposed settlement of this action is fair, reasonable, and adequate, and should be finally approved, and whether applications for attorney fees and costs and enhancement award to Plaintiff should be granted and, if so, in what amounts. (Id., p. 7, l. 12-18.)
(3) Requirements of Class Certification for Purposes of Settlement
Code of Civil Procedure section 382 authorizes class actions “when the question is one of a common or general interest, of many persons, or when the parties are numerous, and it is impracticable to bring them all before the court, one or more may sue or defend for the benefit of all.” (Code Civ. Proc., § 382.) “Class certification requires proof (1) of a sufficiently numerous, ascertainable class, (2) of a well-defined community of interest, and (3) that certification will provide substantial benefits to litigants and the courts, i.e., that proceeding as a class is superior to other methods. [Citation.]” (Fireside Bank v. Superior Court (2007) 40 Cal.4th 1069, 1089.)
To determine whether a class is ascertainable, the court examines “(1) the class definition, (2) the size of the class, and (3) the means available for identifying class members. [Citation.]” (Reyes v. San Diego County Bd. of Supervisors (1987) 196 Cal.App.3d 1263, 1271.) “A related inquiry is manageability of the proposed class[.]” (Global Minerals & Metals Corp. v. Superior Court (2003) 113 Cal.App.4th 836, 849.) “The community of interest requirement embodies three factors: (1) predominant common questions of law or fact; (2) class representatives with claims or defenses typical of the class; and (3) class representatives who can adequately represent the class.” (Richmond v. Dart Industries, Inc. (1981) 29 Cal.3d 462, 470.)
For the reasons stated herein and in the court’s Preliminary Approval Order and November 3 Minute Order, the court finds that the requirements of Code of Civil Procedure section 382 have been met and this matter is appropriate for resolution on a class basis. (See November 3 Minute Order.) The settlement class is ascertainable from Defendant’s records and is so numerous that joinder of all members is impracticable. (See ibid.) There are questions of law or fact common to the settlement class, and there is a well-defined community of interest among its members with respect to the subject matter of the litigation. (See ibid.) The claims of the Plaintiff are typical of the claims of the settlement class and Plaintiff is an appropriate representative. (See ibid.) Class counsel is experienced and qualified in wage and hour class litigation, and has and will properly and adequately represent the interests of the settlement class. (See ibid.) For all these reasons, the court finds that certification of the class for settlement purposes is appropriate and certifies the settlement class as defined in the Settlement Agreement on this basis. (See ibid.)
(4) Notice to Settlement Class Members
“If the court has certified the action as a class action, notice of the final approval hearing must be given to the class members in the manner specified by the court. The notice must contain an explanation of the proposed settlement and procedures for class members to follow in filing written objections to it and in arranging to appear at the settlement hearing and state any objections to the proposed settlement.” (Cal. Rules of Court, rule 3.769(f).)
“The content of the class notice is subject to court approval. If class members are to be given the right to request exclusion from the class, the notice must include the following: [¶] (1) A brief explanation of the case, including the basic contentions or denials of the parties; [¶] (2) A statement that the court will exclude the member from the class if the member so requests by a specified date; [¶] (3) A procedure for the member to follow in requesting exclusion from the class; [¶] (4) A statement that the judgment, whether favorable or not, will bind all members who do not request exclusion; and [¶] (5) A statement that any member who does not request exclusion may, if the member so desires, enter an appearance through counsel.” (Cal. Rules of Court, rule 3.766(d).)
“In determining the manner of the notice, the court must consider: [¶] (1) The interests of the class; [¶] (2) The type of relief requested; [¶] (3) The stake of the individual class members; [¶] (4) The cost of notifying class members; [¶] (5) The resources of the parties; [¶] (6) The possible prejudice to class members who do not receive notice; and [¶] (7) The res judicata effect on class members. (Cal. Rules of Court, rule 3.766(e).)
For the reasons stated herein and in the court’s Preliminary Approval Order and related November 3 Minute Order, the court finds the notice distributed to settlement class members easy to understand, sufficient to apprise the members of the settlement class of their rights and obligations in connection with the proposed settlement, and sufficient to notify those members of their right and opportunity to opt out of or present objections to the settlement. (See Nava Decl., Ex. A.) The notice contains a brief explanation of the case (id. at pp. 1-2), a statement that the court will exclude the member from the class if the member so requests by February 17, 2026 (id. at pp. 2, 5), a procedure for requesting exclusion (ibid.), an explanation that a judgment will be binding on members who do not request exclusion (id. at pp. 1, 2, 4, 10), and an explanation that a that any member who does not request exclusion may object to terms of the Settlement Agreement and enter an appearance through counsel if they desire (id. at pp. 2, 5, 6).
The court has reviewed the qualifications of Apex Class Action, LLC (Apex) and finds Apex is an experienced class action administrator qualified to administer the Settlement Agreement. (Nava Decl., ¶ 2.) On November 3, 2025, class counsel provided Apex with the court-approved content for the notice packet. (Nava Decl., ¶ 4.) Apex then generated a draft of the formatted notice packet, which received approval from counsel before being mailed. (Ibid.)
On December 18, 2025, defense counsel provided Apex with the class data file, comprising the names, social security numbers, last known mailing addresses, hire date, rehire date, termination date, and the number of relevant workweeks and PAGA pay periods worked by each settlement class member. (Nava Decl., ¶ 5.) The data file was successfully uploaded to Apex’s database, where it underwent a thorough review to identify any duplicates or potential inconsistencies. (Ibid.)
The class list consisted of a total of 268 individuals. (Nava Decl., ¶ 5.) In preparation for the mailing process, all 268 names and addresses listed in the class list underwent verification and updating against the national change of address database maintained by the United States Postal Service. (Nava Decl., ¶ 6.)
On January 2, 2026, the notice packet was sent to all 268 individuals using First Class Mail. (Nava Decl., ¶ 7.) Apex received six returned notice packets as undeliverable. (Nava Decl., ¶ 8.) Apex conducted a computerized skip trace on the six returned notice packets in order to acquire updated addresses for the purpose of re-mailing the notice packet. (Ibid.) This skip trace effort resulted in obtaining five updated addresses, to which Apex re-mailed the notice packets via First Class Mail. (Ibid.) One notice packet has been considered undeliverable because no updated address was found despite conducting skip tracing. (Nava Decl., ¶ 10.)
The deadline for submitting requests for exclusion and objections was February 17, 2026. (Nava Decl., ¶¶ 11-12.) Apex has not received any requests for exclusion or objections to the Settlement Agreement. (Nava Decl., ¶ 11.) Apex reports 268 participating class members, constituting 100 percent participation of the settlement class members. (Nava Decl., ¶ 14.) Apex has calculated the estimated individual settlement payments and PAGA payments pursuant to the terms of the Settlement Agreement. (Nava Decl., ¶¶ 15-18.) Apex’s comprehensive fees and costs for administering this Settlement Agreement, covering both incurred and anticipated expenses, amount to $5,500. (Nava Decl., ¶ 19.)
The court finds that the contents and procedures for notice were reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections or request exclusion. (See Cal. Rules of Court, rule 3.769 (f).) The notice meets the statutory requirements. (See id., rule 3.766(d)-(f).) The court finds that the notice procedures set forth in the Settlement Agreement and effectuated pursuant to the Preliminary Approval Order constitute the best notice practicable under the circumstances. The evidence demonstrates that the notice procedures set forth in the Settlement Agreement have been implemented by Apex. (Nava Decl., ¶¶ 3-18; Yadidsion Decl., ¶ 10.) For all these reasons, the court finds that the proposed class notice complies with due process as to the settlement class. (See Martorana v. Marlin & Saltzman (2009) 175 Cal.App.4th 685, 694-695.)
(5) Fairness of Class Action Settlement
“Before final approval, the court must conduct an inquiry into the fairness of the proposed settlement.” (Cal. Rules of Court, rule 3.769.) “The trial court has broad discretion to determine whether the settlement is fair. [Citation.] It should consider relevant factors, such as 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 the 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. [Citation.] The list of factors is not exhaustive and should be tailored to each case. Due regard should be given to what is otherwise a private consensual agreement between the parties. The inquiry ‘must be limited to the extent necessary to reach a reasoned judgment that the agreement is not the product of fraud or overreaching by, or collusion between, the negotiating parties, and that the settlement, taken as a whole, is fair, reasonable and adequate to all concerned.’ ” (Dunk v. Ford Motor Co. (1996) 48 Cal.App.4th 1794, 1801 (Dunk).) “[A] 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.” (Id. at p. 1802.)
This is a non-revisionary class settlement. (Yadidsion Decl., Ex. 2 at ¶ 47.) The gross settlement amount is $625,000. (Id. at ¶ 11.) The estimated net settlement amount to distribute to settlement class members is $350,441.57. (Nava Decl., ¶ 15.) The net settlement amount will be apportioned pursuant to the class member’s pro rata share based on the relative number of workweeks worked by each member. (Yadidsion Decl., Ex. 2 at ¶ 16.) The average individual settlement payment is estimated to be $1,307.62. (Nava Decl., ¶ 16.) The highest individual settlement payment is estimated to be $3,328.52. (Id.) The lowest individual settlement payment is estimated to be $13.53. (Id.)
The evidence demonstrates the Settlement Agreement is the result of arm’s length negotiations informed by adequate factual and legal investigations. (Yadidsion Decl., ¶¶ 12-14.) The Settlement Agreement was reached with the participation and the assistance of an experienced class action mediator. (Yadidsion Decl., ¶ 13(a)-(b).) The involvement of a mediator strongly weighs in favor of finding that the Settlement Agreement represents a non-collusive and arm’s-length agreement. (See Kullar v. Foot Locker Retail, Inc. (2008) 168 Cal.App.4th 116, 128-129.) “The court undoubtedly should give considerable weight to the competency and integrity of counsel and the involvement of a neutral mediator in assuring itself that a settlement agreement represents an arm’s length transaction entered without self-dealing or other potential misconduct.” (Id. at p. 129.)
Class counsel has substantial experience and expertise in this area of law. (Yadidsion Decl., ¶¶ 3-6.) No objections or requests for exclusion have been received by Apex. (Nava Decl., ¶¶ 11-12.) Under these circumstances, a presumption of fairness exists as to the Settlement Agreement. (See Dunk, supra, 48 Cal.App.4th at p. 1802.)
Class counsel’s evaluation and consideration of the Settlement was based on their own investigation, as well as the input and analysis of a statistical damages expert, Peregrine Economics. (Yadidsion Decl., ¶ 12(b).) Class counsel estimates Defendant’s total potential exposure in this action at $3,550,502. (Yadidsion Decl., ¶ 14(d).) The gross settlement amount is $625,000. (Yadidsion Decl., ¶¶ 14, 16.) The gross settlement amount represents approximately 17.6 percent of Defendant’s maximum potential exposure. (Yadidsion Decl., ¶ 14(e).)
The court notes there are risks involved in litigating this action through trial, including that class certification might be denied or only partially granted, or class-wide liability might be substantially less than the maximum potential exposure.
The court has considered potential defenses to liability including that the Defendant may argue it acted in good faith as to the alleged wage violations. “[W]hen an employer shows that it reasonably and in good faith, albeit mistakenly, believed that it complied with section 226, subdivision (a), that employer’s failure to comply with wage statement requirements is not ‘knowing and intentional,’ and the employer is therefore not subject to penalties under section 226, subdivision (e)(1).” (Naranjo v. Spectrum Security Services, Inc. (2024) 15 Cal.5th 1056, 1090.)
The court has also considered the likely duration of litigating this action through trial and a potential recovery that is less than the maximum amount of liability. The court has considered the views of experienced class counsel regarding such risks and the relative certainty of settlement compared to continued litigation. The court has considered the benefits to the settlement class if the Settlement Agreement is approved compared to potential benefits if the litigation continues. The court has also considered the absence, to date, of any objections from settlement class members and the absence of any requests for exclusion.
Based on all these circumstances, the court concludes that the Settlement Agreement is not the product of fraud or overreaching by, or collusion between, the negotiating parties, and that the Settlement Agreement, taken as a whole, is fair, reasonable and adequate to all concerned. (See Dunk, supra, 48 Cal.App.4th at pp. 1801-1802.)
(6) Scope of Class Release
“A class action settlement must be approved by the court to protect ‘class members ... whose rights may not have been given due regard by the negotiating parties.’ [Citation.] Consequently, courts must remain vigilant and ensure that class releases do not extend to claims that are beyond the scope of the allegations in the complaint. Releases must be appropriately tethered to the complaint’s factual allegations. … Requiring a reasonable connection prevents the release from extending to claims that are only remotely related to the allegations in the complaint.” (Amaro v. Anaheim Arena Management, LLC (2021) 69 Cal.App.5th 521, 538 (Amaro).)
Upon Defendant fully funding the Settlement Agreement, the settlement class members will “finally and forever release, settle, compromise, relinquish, and discharge Defendant and all of the Released Parties from any and all claims, rights, demands, liabilities, and causes of action of every nature and description, arising during the Class Period, including statutory, contractual, or common law claims for wages, damages, penalties, liquidated damages, interest, attorneys’ fees, litigation costs, restitution, or equitable relief … that were or could have been alleged based on the factual allegations in Plaintiff’s operative Complaints herein ….” (Yadidsion Decl., Ex. 2 at ¶ 20.)
The Released Parties “means Defendant and all of its former and present parents,
corporate members, subsidiaries, divisions, and affiliated companies, and their respective officers, directors, employees, partners, shareholders, agents, insurers, successors, assigns, and legal representatives.” (Yadidsion Decl., Ex. 2 at p. 7, ll. 1-4.) Defendant is defined as Defendant Montecito Bank & Trust. (Id. at p. 3, ll. 6-7.)
For all these reasons, the court finds that the class release in the Settlement Agreement is appropriately tethered to the factual allegations contained in Plaintiff’s SAC. The release does not extend beyond the scope of the allegations in the SAC. The release is reasonably connected to the factual allegations and legal theories alleged in the SAC, and the released claims involve the same primary rights being litigated in this action. (See Amaro, supra, 69 Cal.App.5th at p. 538.)
(7) Fairness of PAGA Settlement
PAGA is set forth in Labor Code sections 2698 through 2699.8. 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 bringing such an action, the aggrieved employee acts as the proxy or agent of state labor law enforcement agencies, representing the same legal right and interest as those agencies, in a proceeding that 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.) “Of the civil penalties recovered, 75 percent goes to the Labor and Workforce Development Agency [LWDA], leaving the remaining 25 percent for the ‘aggrieved employees.’ ” (Ibid.) Although this allocation has been changed by amendment, the 75/25 allocation still applies to this action since the PAGA notice was submitted on February 26, 2024. (See Lab. Code, § 2699, subd. (v); Yadidsion Decl., ¶ 12(d).)
“The superior court shall review and approve any settlement of any civil action filed pursuant to this part. The proposed settlement shall be submitted to the [LWDA] at the same time that it is submitted to the court.” (Lab. Code, § 2699, subd. (s)(2).) “A copy of the superior court’s judgment in any civil action filed pursuant to this part and any other order in that action that either provides for or denies an award of civil penalties under this code shall be submitted to the agency within 10 days after entry of the judgment or order.” (Id., subd. (s)(3).) Here, the Settlement Agreement was submitted to the LWDA on July 18, 2025, and the Preliminary Approval Order was submitted to the LWDA on January 1, 2026. (Yadidsion Decl., ¶ 26, Exs. 8-9.) There has been no appearance by the LWDA in this action.
“Because many of the factors used to evaluate class action settlements bear on a settlement’s fairness—including the strength of the plaintiff’s case, the risk, the stage of the proceeding, the complexity and likely duration of further litigation, and the settlement amount—these factors can be useful in evaluating the fairness of a PAGA settlement. [¶] Given PAGA’s purpose to protect the public interest, we also agree with the LWDA and federal district courts that have found it appropriate to review a PAGA settlement to ascertain whether a settlement is fair in view of PAGA’s purposes and policies. [Citations.] We therefore hold that a trial court should evaluate a PAGA settlement to determine whether it is fair, reasonable, and adequate in view of PAGA’s purposes to remediate present labor law violations, deter future ones, and to maximize enforcement of state labor laws.” (Moniz v. Adecco USA, Inc. (2021) 72 Cal.App.5th 56, 77 (Moniz), disapproved on other grounds in Turrieta v. Lyft, Inc. (2024) 16 Cal.5th 664, 710.)
Assuming no stacking of penalties or finding of fraud, malice or oppression, the PAGA penalties at issue in this action carry a potential $100 penalty for each aggrieved employee per pay period. (See Lab. Code, § 2699, subd. (f)(2)(A).) There are 183 PAGA members eligible to participate in the PAGA settlement who worked a total of 4,375 pay periods during the PAGA period. (Yadidsion Decl., ¶ 9(m).) Assuming a $100 penalty for each pay period, the estimated, potential high-end PAGA civil penalties would total $437,500. (See Lab. Code, § 2699, subd. (f)(2)(A).) However, the court has discretion to “award a lesser amount than the maximum civil penalty amount specified by this part … if, based on the facts and circumstances of the particular case, to do otherwise would result in an award that is unjust, arbitrary and oppressive, or confiscatory.” (Lab. Code, § 2699, subd. (e)(2).)
Here, the agreed upon PAGA penalties are $25,000. (Yadidsion Decl., ¶ 9(f), Ex. 2 at p. 6, ll. 13-20.) $6,250 will be paid to the eligible PAGA members based on their proportional share of the workweeks and $18,750 will be paid to the LWDA. (Yadidsion Decl., Ex. 2 at p. 6, ll. 13-20 & ¶ 17.) The issues addressed by the PAGA penalties substantially overlap with the violations addressed by the proposed class settlement. (See SAC, ¶ 40-90.) Under these circumstances, the court finds that the purposes of PAGA to remediate prior violations and deter future ones is largely achieved by the proposed class settlement. For all these reasons, the court concludes that the PAGA penalties in the Settlement Agreement as part of the overall settlement structure appears reasonable, fair, and adequate. (See Davis v. Brown Shoe Company, Inc. (E.D. Cal., Nov. 3, 2015) 2015 WL 6697929, at *12 [$5,000 in PAGA penalties in a $1.5 million class settlement]); Lusby v. GameStop Inc. (N.D. Cal., Mar. 31, 2015) 2015 WL 1501095, at *2 [$5,000 in PAGA penalties in a $750,000 class settlement].)
(8) Scope of PAGA Release
“Taken together, PAGA’s statutory scheme and the principles of preclusion allow, or ‘authorize,’ a PAGA plaintiff to bind the state to a judgment through litigation that could extinguish PAGA claims that were not specifically listed in the PAGA notice where those claims involve the same primary right litigated. Because a PAGA plaintiff is authorized to settle a PAGA representative action with court approval [citation], it logically follows that he or she is authorized to bind the state to a settlement releasing claims commensurate with those that would be barred by res judicata in a subsequent suit had the settling suit been litigated to judgment by the state.” (Moniz, supra, 72 Cal.App.5th at p. 83.)
Under the Settlement Agreement, when the settlement is fully funded by Defendant, the PAGA members “shall release Defendant and all of the Released Parties from any and all claims for PAGA civil penalties arising during the PAGA Period out of the California Private Attorneys General Act of 2004, Labor Code §§ 2698 et seq., 2699 et seq., and 2699.3, based on any of the underlying claims and factual allegations that were alleged, or reasonably could have been alleged in Plaintiff’s operative Complaint and/or in Plaintiff’s notice letter provided to the LWDA ….” (Yadidsion Decl., Ex. 2 at ¶ 21.) The Released Parties “means Defendant and all of its former and present parents, corporate members, subsidiaries, divisions, and affiliated companies, and their respective officers, directors, employees, partners, shareholders, agents, insurers, successors, assigns, and legal representatives.” (Yadidsion Decl., Ex. 2 at p. 7, ll. 1-4.) Defendant is defined as Defendant Montecito Bank & Trust. (Id. at p. 3, ll. 6-7.)
For all these reasons, the court finds that the PAGA release in the Settlement Agreement is appropriately tethered to the factual allegations contained in Plaintiff’s SAC. The release does not extend beyond the scope of the allegations in the SAC. The release is reasonably connected to the factual allegations and legal theories alleged in the SAC, and the released claims involve the same primary rights being litigated in this action. (See Amaro, supra, 69 Cal.App.5th at p. 538; Moniz, supra, 72 Cal.App.5th at p. 83.)
(9) Attorney Fees
Recovery of attorney fees and costs are available to a prevailing plaintiff under statues applicable to claims asserted in the SAC. (See Labor Code §§ 218.5, 218.6, 226, subd. (h), 1194, subd. (a), 2699, subd. (k)(1).) The Settlement Agreement permits Plaintiff to seek recovery of attorney fees in the amount not to exceed $208,333.31. (Yadidsion Decl., Ex. 2 at ¶ 12.) The court must approve the attorney fee component of a class action or PAGA settlement. (Cal. Rules of Court, rule 3.769(b); Lab. Code, § 2699, subd. (s)(2).)
Class counsel is seeking attorney fees equal to one-third or 33.33 percent of the total settlement amount of $625,000, or $208,333.31. However, 33.33 percent of the total settlement amount of $625,000 is $208,312.50 ($625,000 x .3333). The requested attorney fees are within the range of approval. “Empirical studies show that, regardless whether the percentage method or the lodestar method is used, fee awards in class actions average around one-third of the recovery.” (Chavez v. Netflix, Inc. (2008) 162 Cal.App.4th 43, 66, fn 11.) “We join the overwhelming majority of federal and state courts in holding that when class action litigation establishes a monetary fund for the benefit of the class members, and the trial court in its equitable powers awards class counsel a fee out of that fund, the court may determine the amount of a reasonable fee by choosing an appropriate percentage of the fund created.” (Laffitte v. Robert Half Internat. Inc. (2016) 1 Cal.5th 480, 503-506 (Laffitte) [affirming attorney fee award of one-third of common fund class action settlement with lodestar cross-check].)
“Under the lodestar [cross-check] method, attorney’s fees are calculated by first multiplying the number of hours reasonably expended on the litigation by a reasonable hourly rate of compensation.” (Syers Properties III, Inc. v. Rankin (2014) 226 Cal.App.4th 691, 697.) “[T]he lodestar is the basic fee for comparable legal services in the community; it may be adjusted by the court based on factors including, as relevant herein, (1) the novelty and difficulty of the questions involved, (2) the skill displayed in presenting them, (3) the extent to which the nature of the litigation precluded other employment by the attorneys, (4) the contingent nature of the fee award.” (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1132.) “The purpose of such adjustment is to fix a fee at the fair market value for the particular action. In effect, the court determines, retrospectively, whether the litigation involved a contingent risk or required extraordinary legal skill justifying augmentation of the unadorned lodestar in order to approximate the fair market rate for such services.” (Ibid.)
“A lodestar cross-check is simply a quantitative method for bringing a measure of the time spent by counsel into the trial court’s reasonableness determination; as such, it is not likely to radically alter the incentives created by a court’s use of the percentage method. … the lodestar calculation, when used in this manner, does not override the trial court’s primary determination of the fee as a percentage of the common fund and thus does not impose an absolute maximum or minimum on the potential fee award.” (Laffitte, supra, 1 Cal.5th at p. 505.)
Based on class counsel’s declaration, counsel’s current lodestar reflects approximately 192 hours of work at the rate of $1,019, resulting in $195,648.00 in lodestar fees. (Yadidsion Decl., ¶ 19.) This amount is exclusive of time that will be incurred in connection with the final approval hearing and post-final approval settlement administration. (Ibid.) Class counsel will continue to work on this matter for at least the next several months until settlement funds are distributed and administration is completed. (Ibid.)
Class counsel supports the rate of $1,019 based on his status as a 17-year attorney under the Laffey Matrix. (Yadidsion Decl., ¶ 7, Ex. 1.) Class counsel notes that this matter was taken on a pure contingency arrangement, with no guarantee of any payment. (Yadidsion Decl., ¶ 20.) As part of this contingency risk, class counsel incurred significant, out-of-pocket expenses on behalf of the settlement class in the amount of $23,225.12. (Yadidsion Decl., ¶¶ 21-25, Exs. 4-7.)
Based on the above and the positive result of the Settlement Agreement, the court will approve attorney fees payable to Labor Law PC in the amount $208,312.50, or 33.33 percent of the total settlement amount of $625,000. (See Yadidsion Decl., Ex. 2 at ¶ 12.) Considering all the circumstances, the court finds this amount reasonable and consistent with the community standards in light of all the relevant circumstances. (See Laffitte, supra, 1 Cal.5th 480 at pp. 503-506.)
(10) Litigation Costs
Class counsel incurred out-of-pocket litigation costs of $23,225.12. (Yadidsion Decl., ¶¶ 21-25, Exs. 4-7.) These costs include $14,000 in mediation fees, $6,940 for the expert damages analysis, $2,210.12 in court-related fees, and $75.00 in PAGA filing fees with the LWDA. The court finds these amounts reasonable and necessary costs pertaining to the litigation. The court will approve out-of-pocket litigation costs payable to Labor Law PC in the amount of $23,225.12. (See Yadidsion Decl., Ex. 2 at ¶ 12.)
(11) Incentive Award
An “incentive award is appropriate ‘if it is necessary to induce an individual to participate in the suit,’ and have noted ‘relevant factors’ to consider in deciding whether such an award is warranted. [Citation.] Those factors include ‘the actions the plaintiff has taken to protect the interests of the class, the degree to which the class has benefitted from those actions, and the amount of time and effort the plaintiff expended in pursuing the litigation.’ [Citation.] Federal district courts have identified other factors as well, including ‘the risk to the class representative in commencing suit, both financial and otherwise,’ ‘the notoriety and personal difficulties encountered by the class representative,’ the duration of the litigation, and ‘the personal benefit (or lack thereof) enjoyed by the class representative as a result of the litigation.” (Clark v. American Residential Services LLC (2009) 175 Cal.App.4th 785, 804 (Clark).)
Plaintiff’s motion seeks approval of an incentive award payable to the named Plaintiff in the amount of $12,500. Plaintiff took unique risks to act as the class representative in this action including potential retaliation from future employers. (Yadidsion Decl., ¶ 28; Campoverde Decl., ¶¶ 6-19.) Plaintiff was the only class representative. Without Plaintiff’s participation, the Settlement Agreement would not have been possible. The Settlement Agreement will confer substantial benefits on Plaintiff’s former colleagues and members of the settlement class. No class member has objected to the requested incentive award. (Nava Decl., ¶ 12.)
Plaintiff’s declaration indicates that she spent approximately six hours participating in initial interviews with class counsel regarding background facts, five hours gathering and reviewing pertinent documents, three hours pertaining to the identification of potential witnesses and Defendant’s wage and hour practices, three hours assisting with discovery matters, two hours pertaining to the settlement, and ten hours pertaining to overall litigation support and case management. (Campoverde Decl., ¶ 12.) Class counsel has confirming Plaintiff’s substantial participation and support. (Yadidsion Decl., ¶¶ 28-30.)
There is a dearth of California appellate case law addressing incentive awards in class actions. One court has disapproved of an incentive award when the award is 44 times the average class member recovery. (See Clark, supra, 175 Cal.App.4th at pp. 804-805) Another has approved an incentive award approximately twice the average class member recovery. (See Munoz v. BCI Coca-Cola Bottling Co. of Los Angeles (2010) 186 Cal.App.4th 399, 412.) Here, the requested incentive award represents a multiple of a little over nine times the estimated average class member recovery. (See Nava Decl., ¶¶ 16, 18.)
Considering all the circumstances, the court will approve the requested incentive award of $12,500 payable to Plaintiff Maria Celia Hernandez Campoverde. (See Yadidsion Decl., Ex. 2 at ¶ 13.) The court finds that this incentive award is appropriate in light of the time and effort she dedicated to this action, the personal risks associated with her participation, the reasonable amount necessary to incentivize her participation in this action, and the substantial benefits conferred on the settlement class.
(12) Settlement Administrator Costs
The court has reviewed the costs associated with administering the Settlement Agreement, including providing notice to the settlement class members, calculating the individual payments, processing and distributing these payments after the Settlement Agreement is funded, and reporting such efforts to the court. (See Nava Decl., ¶¶ 3-18.) Apex’s comprehensive fees and costs for administering this Settlement, covering both incurred and anticipated expenses, amount to $5,500. (See Nava Decl., ¶ 19.) The court finds that these costs are reasonable in light of the experience and qualifications of Apex and the tasks Apex has agreed to undertake in this action. For all these reasons, the court will approve the settlement administration costs in the amount of $5,500 payable to Apex Class Action, LLC. (See Yadidsion Decl., Ex. 2 at ¶ 14.)
(13) Entry of Judgment by Separate Order
“If the court approves the settlement agreement after the final approval hearing, the court must make and enter judgment. The judgment must include a provision for the retention of the court's jurisdiction over the parties to enforce the terms of the judgment. The court may not enter an order dismissing the action at the same time as, or after, entry of judgment.” (Cal. Rules of Court, rule 3.769(h).) Plaintiff shall lodge with the court a proposed judgment consist with this ruling and the parties’ Settlement Agreement.