Preview
1 Larry W. Lee (State Bar No. 228175)
Max W. Gavron (State Bar No. 291697)
2 DIVERSITY LAW GROUP, P.C.
3 515 S. Figueroa Street, Suite 1250
Los Angeles, CA 90071
4 (213) 488-6555
(213) 488-6554 facsimile
5 lwlee@diversitylaw.com
6 mgavron@diversitylaw.com
7 William L. Marder (State Bar No. 170131)
Polaris Law Group
8 501 San Benito Street, Suite 200
9 Hollister, CA 95023
(831) 531-4214
10 (831) 634-0333 facsimile
bill@polarislawgroup.com
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12 Attorneys for Plaintiff and the Class
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SUPERIOR COURT OF THE STATE OF CALIFORNIA
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FOR THE COUNTY OF SANTA BARBARA
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16 VICTORIA TICE, as an individual and on Case No. 20CV00892
behalf of all others similarly situated,
17 [Assigned to the Honorable Thomas P. Anderle,
Plaintiff, Department 3]
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19 vs. PLAINTIFF’S NOTICE OF MOTION AND
MOTION FOR PRELIMINARY
20 TRADER JOE’S COMPANY, a California APPROVAL OF CLASS ACTION
corporation; and DOES 1 through 50, SETTLEMENT; MEMORANDUM OF
21 inclusive, POINTS AND AUTHORITIES IN
22 SUPPORT THEREOF
Defendants.
23 Date: April 12, 2023
Time: 10:00 A.M.
24 Dept.: 3
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Complaint Filed: February 14, 2020
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PLAINTIFF’S NOTICE OF MOTION AND MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION
SETTLEMENT
1 TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD:
2 PLEASE TAKE NOTICE that on April 12, 2023, at 10:00 A.M., or as soon thereafter as
3 the matter may be heard, before the Honorable Thomas P. Anderle, judge presiding, in Department
4 3 of the above referenced Court, located at 1100 Anacapa Street, Santa Barbara, California 93101,
5 Plaintiff Victoria Tice (“Plaintiff”) will and hereby does move this Court for the following relief
6 with respect to the Joint Stipulation of Class Action Settlement (“Stipulation” or “Settlement
7 Agreement”) entered into by Plaintiff and Defendant Trader Joe’s Company (“Defendant”)
8 (together with Plaintiff, the “Parties”):
9 1. That the Court approve the Settlement Agreement referenced above;
10 2. That the Court conditionally certify the following Class for settlement purposes
11 only:
12 all former employees of Defendant who were employed in the
State of California at any time during the Class Period who
13 received their final wages on a paycard, but for whom Defendants
14 do not currently have a written authorization for payment of final
wages via pay card (the “Class”);
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16 3. That Plaintiff Victoria Tice be appointed as the Class Representative and Larry W.
17 Lee and Max W. Gavron of Diversity Law Group, P.C., and William L. Marder of Polaris Law
18 Group, be appointed as Class Counsel;
19 4. That the Court preliminarily approve the Settlement Agreement and the total Gross
20 Settlement Amount of Three Hundred Forty Thousand Dollars ($340,000.00);
21 5. That the Court finds on a preliminary basis that the Settlement Agreement appears
22 to be within the range of reasonableness of a settlement, including the amount of the PAGA
23 penalties, the incentive payment to the Class Representative, Class Counsel award of attorneys’
24 fees and litigation costs, settlement administration costs, and the allocation of individual settlement
25 payments to Class Members, that could ultimately be given final approval by this Court;
26 6. That the Court approve the mailing of the proposed Notice of Class Action
27 Settlement (“Class Notice”) to be sent to Class Members;
28 7. That the Court appoint Phoenix Settlement Administrators as the Settlement
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PLAINTIFF’S NOTICE OF MOTION AND MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION
SETTLEMENT
1 Administrator; and
2 8. That the Court schedule the matter for a Final Fairness and Final Approval hearing.
3 This motion is made pursuant to Rule 3.769 of the California Rules of Court, which
4 provides for court approval of the settlement of a purported class action and allows the Court to
5 preliminarily certify a class for settlement purposes.
6 The basis for this unopposed motion is that the proposed settlement is fair, adequate, and
7 reasonable, and the procedures proposed by the Parties are adequate to ensure the opportunity of
8 Class Members to participate in, opt-out of, or object to the settlement. This motion is based on
9 the attached Memorandum of Points and Authorities, the Stipulation and the proposed Class
10 Notice, and the supporting Declarations of Larry W. Lee, Max W. Gavron, William L. Marder,
11 and Plaintiff Victoria Tice, upon the oral arguments of counsel (should there be any), and on the
12 complete records and file herein.
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14 DATED: March 9, 2023 DIVERSITY LAW GROUP, P.C.
15
By: __________________________
16 Larry W. Lee
17 Max Gavron
Attorneys for Plaintiff and the Class
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PLAINTIFF’S NOTICE OF MOTION AND MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION
SETTLEMENT
1 TABLE OF CONTENTS
2 Page
3 I. INTRODUCTION ................................................................................................................. 7
4 II. PROCEDURAL HISTORY.................................................................................................. 8
5 III. DISCUSSION ................................................................................................................... 10
A. Proposed Class Definition ............................................................................................... 12
6
B. Settlement Terms and Evaluation .................................................................................. 12
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1. Amount and Manner of Distribution of the Compensation to be Provided to Class
8 Members Including the Amount, or an Estimate, of What Each Class Member Will
9 Receive ................................................................................................................................... 16
10 2. Whether, and Under What Circumstances, Amounts Available for Payment in
Settlement Might Not Be Paid to Class Members or Might Revert to the Defendants .. 16
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3. Scope of the Release of Class Members’ Claims ....................................................... 16
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4. Tax Treatment of Settlement Amounts ...................................................................... 17
13 5. Affirmative Obligations to be Undertaken by Class Members or Class Counsel and
14 the Reasons for Any Such Obligations ................................................................................ 17
15 C. Notice to Class Members ................................................................................................. 18
D. Typicality and Adequacy of Representation ................................................................. 19
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1. Class Representative’s Claims are Typical of the Class ........................................... 19
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2. Class Counsel Has Adequately Represented the Class and Has Experience with
18 Wage and Hour Class Action ............................................................................................... 20
19 E. Costs and Fees .................................................................................................................. 20
20 1. Attorneys’ Fees and Costs ........................................................................................... 20
21 2. Proposed Payment to the Class Representative ........................................................ 22
22 3. Settlement Administration Fees .................................................................................. 22
23 F. Notice to the LWDA......................................................................................................... 23
IV. CONCLUSION AND ACTION REQUESTED AS PART OF THE MOTION FOR
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PRELIMINARY APPROVAL .................................................................................................. 23
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PLAINTIFF’S NOTICE OF MOTION AND MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION
SETTLEMENT
1 TABLE OF AUTHORITIES
2 Page(s)
3 State Cases
4 Amaral v. Cintas Corp. (2008) 163 Cal.App.4th 1157, 1201 ....................................................... 14
5 Barnhill v. Saunders (1981) 125 Cal. App. 3d 1, 7. ..................................................................... 14
6 Carrington v. Starbucks Corp., 30 Cal. App. 5th 504 (2018) ...................................................... 13
7 City and County of San Francisco v. Sweet, 12 Cal.4th 105, 110 (1995)..................................... 20
8 City of San Jose v. Superior Court, 12 Cal. 3d 447, 460 (1974) .................................................. 19
9 Dunk v. Ford Motor Co. (1996) 48 Cal.App.4th 1794, 1803 ....................................................... 11
10 Laffitte v. Robert Half Int’l (2016) 1 Cal.5th 480, 503 ................................................................. 21
11 Richmond v. Dart Industries, Inc., 29 Cal. 3d 462, 473 (1981).................................................... 19
12 Road Sprinklers Fitters Local Union No. 669 v. G & G Fire Sprinklers Inc. (2002) 102 Cal. App.
13 4th 765, 782 ............................................................................................................................... 14
14 Serrano v. Priest, 20 Cal. 3d 25, 34 (1977) .................................................................................. 20
15 Stephens v. Montgomery Ward & Co., 193 Cal. App. 3d 411, 421 (1987) .................................. 19
16 Vasquez v. Superior Court, 4 Cal. 3d 800, 812-13 (1971)............................................................ 19
17 Wershba v. Apple Computer, Inc., 91 Cal. App. 4th 224, 240 (2001) .................................... 11, 20
18
Federal Cases
19 Bellinghausen v. Tractor Supply Co., No. 13-CV-02377-JSC, 2015 WL 1289342, at *6 (N.D.
20 Cal. Mar. 20, 2015) .................................................................................................................... 15
21 Boeing Co. v. Van Gemert, 444 U.S. 472, 478 (1980).................................................................. 20
22 Hammon v. Barry, 752 F.Supp. 1087 (D.D.C. 1990) ................................................................... 12
23 Hanlon v. Chrysler Corp. (1998) 150 F.3d 1011, 1019 ................................................................ 19
24 In re Armored Car Antitrust Litig., 472 F. Supp. 1357 (N.D. Ga. 1979) ..................................... 12
25 In re Baldwin-United Corp. (S.D.N.Y. 1984) 105 F.R.D. 475, 478 ............................................. 11
26 In re Chicken Antitrust Litig., 560 F. Supp. 957, 962 (N.D. Ga. 1980)........................................ 12
27 In re Mego Fin. Corp. Secs. Litig. (9th Cir. 2000) 213 F.3d 454, 459 ......................................... 15
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PLAINTIFF’S NOTICE OF MOTION AND MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION
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1 Mars Steel Corp. v. Continental Illinois Nat’l Bank & Trust Co., 834 F.2d 677, 682 (7th Cir.
2 1987) .......................................................................................................................................... 12
3 Nat’l Rural Telecomms. Coop. v. DIRECTV, Inc., 221 F.R.D. 523, 528 (C.D. Cal. 2004).... 12, 13
4 Priddy v. Edelman, 883 F.2d 438, 447 (6th Cir. 1989)................................................................. 12
5 Sommers v. Abraham Lincoln Federal Sav. & Loan Ass’n, 79 F.R.D. 571 (E.D. Pa. 1978) ....... 12
6 Steinberg v. Carey, 470 F.Supp. 471 (S.D.N.Y. 1979)................................................................. 12
7 Van Ba Ma v. Covidien Holding Inc., U.S. Dist. Ct. Case No. 8:12-cv-02161 (C.D. Cal. 2014) 15
8 Villegas v. J.P. Morgan Chase & Co., No. CV 09-00261 SBA EMC, 2012 WL 5878390, at *6
9 (N.D. Cal. Nov. 21, 2012).......................................................................................................... 15
10 Vincent v. Hughes Air West, Inc., 557 F. 2d 759, 769 (9th Cir. 1997) ......................................... 20
11 Statutes
12 8 Cal. Code Regs. § 13520............................................................................................................ 14
13 California Civil Code § 1542 ........................................................................................................ 22
14 Labor Code § 212.................................................................................................................. 7, 8, 17
15 Labor Code § 213.................................................................................................................. 7, 8, 17
16 Labor Code § 2698, et seq. ....................................................................................................... 9, 17
17 Labor Code § 2699.......................................................................................................................... 8
18 Labor Code § 2699(e)(2) .............................................................................................................. 13
19 Labor Code §§ 201-203 ........................................................................................................ 7, 8, 17
20 Labor Code §§ 201-204 .................................................................................................................. 8
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Other Authorities
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4 Alba Conte & Herbert B. Newberg, Newberg on Class Actions, § 11.26 (4th ed. 2002) .... 10, 11
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California Rule of Civil Procedure section 384 ............................................................................ 16
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4 Alba Conte & Herbert B. Newberg, Newberg on Class Actions, 11.24 .................................... 11
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Manual for Complex Litigation (Third) § 30.41 ........................................................................... 10
26 Newberg on Class Actions, supra, at § 11.47 ............................................................................... 13
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PLAINTIFF’S NOTICE OF MOTION AND MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION
SETTLEMENT
1 I. INTRODUCTION
2 This is a wage and hour class and representative Private Attorneys General Act (“PAGA”)
3 action seeking statutory and civil penalties under the California Labor Code. Plaintiff Victoria Tice
4 (“Plaintiff”) alleges that Defendant Trader Joe’s Company (“Defendant”) issued payment of final
5 wages to employees in the form of a paycard without authorization in violation of Labor Code §§
6 201-203, 212, and 213. Based on these violations, Plaintiff asserts class and PAGA claims for
7 alleged violations of Labor Code §§ 201-203, 212, and 213. The Parties have reached a class and
8 PAGA representative action settlement, the terms of which are reflected in the Parties’ Joint
9 Stipulation of Class Action Settlement (“Stipulation” or “Settlement Agreement”).
10 As this Court will likely recall, prior to the settlement of this action, the Parties thoroughly
11 investigated the facts relating to the class and PAGA claims alleged in this lawsuit and engaged in
12 a thorough study of the legal principles applicable to the claims asserted against Defendant,
13 including significant motion practice. Through the exchange of formal and informal discovery,
14 Defendant provided necessary data pertaining to the number of putative class members as well as
15 documents and information pertaining to Defendant’s policies and practices regarding final wages
16 and use of paycards. The information provided by Defendant allowed Plaintiff to review and
17 analyze the liability and potential exposure. The Parties also attended mediation with experienced
18 wage-and-hour mediator Gig Kyriacou, Esq. and significant subsequent negotiation discussions
19 over the course of two years. After such extended negotiations, the Parties were able to reach the
20 current settlement.
21 The terms of the Settlement Agreement provide that Defendant pay a Gross Settlement
22 Amount of Three Hundred Forty Thousand Dollars ($340,000.00) to resolve the class and PAGA
23 claims in this case. Significantly, this is a non-reversionary settlement, meaning that the entirety
24 of the Gross Settlement Amount will be distributed to the Class, such that no remaining monies
25 will revert to Defendant. Further, no claim forms are required. The following represents the key
26 terms of the Settlement:
27 Gross Settlement Amount of $340,000.00;
28 Estimated class size of 948 individuals in the Class;
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PLAINTIFF’S NOTICE OF MOTION AND MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION
SETTLEMENT
1 Incentive payment to the Class Representative of up to $10,000.00;
2 Class Counsel’s attorneys’ fees of one-third of the Gross Settlement Amount, up
3 to $113,333.33;
4 Class Counsel’s costs associated with prosecution and resolution of this action of
5 up to $55,000.00;
6 Settlement administration costs of up to $11,000.00;
7 Payment to the Labor & Workforce Development Agency of $18,750.00,
8 representing 75% of the total PAGA penalties of $25,000.00;
9 Payment to aggrieved employees of $6,250.00, representing 25% of the total
10 PAGA penalties of $25,000.00, which will be apportioned on a per capita basis;
11 and
12 Net Settlement Amount of approximately $125,666.67, which will be apportioned
13 on a per capita basis.
14 The Parties and their respective counsel believe that the settlement for the consideration
15 and on the terms set forth in the Settlement Agreement is fair, reasonable, and adequate in light of
16 all known circumstances and the expenses and risks inherent in litigation. Although Plaintiff and
17 her counsel are confident that they can prevail on class certification, as well as on the merits, they
18 recognize the inherent risks in drawn-out litigation and the specific risks that the Class might not
19 be certified and/or that Plaintiff could fail to establish liability.
20 Therefore, the Parties respectfully request that the Court grant this Motion for Preliminary
21 Approval of Class Action Settlement.
22 II. PROCEDURAL HISTORY
23 On February 10, 2020, Plaintiff filed her written notice with the California Labor &
24 Workforce Development Agency (“LWDA”), alleging violations of Labor Code §§ 201-204, 212,
25 and 213. pursuant to the PAGA, Labor Code § 2699. Declaration of Max W. Gavron (“Gavron
26 Decl.”) ¶ 2. Thereafter, on February 14, 2020, Plaintiff filed her class and PAGA action Complaint
27 against Defendant in Santa Barbara County Superior Court. Id. The Complaint alleges causes of
28 action for (1) violation of Labor Code §§ 201-203 and (2) violation of the PAGA, Labor Code
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PLAINTIFF’S NOTICE OF MOTION AND MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION
SETTLEMENT
1 § 2698, et seq. Id.
2 Plaintiff’s class and PAGA claims as pled in the Complaint are predicated upon the
3 allegations that Defendant issued payment of final wages to separated employees via a paycard
4 without authorization, which required employees to incur fees to use, was not fully cashable, and
5 was not usable at all financial institutions, resulting in a failure to timely pay all wages owed at
6 the time of separation of employment. As a result of the alleged violations above, Plaintiff seeks
7 statutory and civil penalties under the California Labor Code and the PAGA, as well as attorneys’
8 fees and costs. Gavron Decl. ¶ 4.
9 After the filing of the Complaint and early exchange of written discovery, the Parties
10 agreed to engage in mediation. Gavron Decl. ¶ 5. In connection with mediation, the Parties engaged
11 in informal discovery to allow Plaintiff to assess the claims and liability, as well as analyze the
12 maximum exposure of damages and penalties. Id. Defendant provided Plaintiff’s counsel with
13 informal data and information pertaining to the number of putative class members, as well as
14 documents and information pertaining to Defendant’s policies and practices regarding payment of
15 final wages to separating employees and use of paycards. Id.
16 On November 17, 2020, the Parties attended mediation with Gig Kyriacou, Esq. Despite a
17 full day of arm’s-length negotiations, the Parties were unable to reach an agreement during the
18 mediation and continued litigating the Action. Id. ¶ 6.
19 The Parties engaged in further formal discovery, including the taking of depositions,
20 issuance of third-party subpoenas, and production of documents. The Parties also engaged in
21 substantial motion practice, including a motion for class certification, motion to strike, and
22 litigation regarding Plaintiff’s subpoena to the pay card provider, etc…. Thereafter, the Parties re-
23 engaged Mr. Kyriacou with further settlement discussions.
24 After thorough investigation and evaluation of the facts and claims, and as a result of the
25 arm’s-length negotiations facilitated by Mr. Kyriacou, the Parties and their counsel reached a
26 settlement in principle and entered into a Memorandum of Understanding. Id. The Parties
27 negotiated the terms of the settlement over the course of subsequent months and ultimately entered
28 into the Settlement Agreement in resolution of Plaintiff’s class and PAGA claims in this lawsuit.
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PLAINTIFF’S NOTICE OF MOTION AND MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION
SETTLEMENT
1 A true and correct copy of the Settlement Agreement is attached as Exhibit A to the Declaration
2 of Max W. Gavron. Id.
3 The Parties recognize the risk, expense, and delay in continuing litigation with the class
4 and PAGA claims, and believe the settlement to be fair, reasonable, and adequate. Gavron Decl. ¶
5 9. Accordingly, the Parties desire to settle, compromise, and discharge all disputes and claims
6 arising from or relating to the class and PAGA claims as set forth in the Settlement Agreement.
7 III. DISCUSSION
8 Any settlement of a class action lawsuit must be reviewed and approved by the Court. This
9 is done in two steps: (1) an early (preliminary) review by the trial court, and (2) a final review after
10 notice has been distributed to the class members for their comment or objections. The Manual for
11 Complex Litigation, Third § 30.41 states:
12 Approval of class action settlements involves a two-step process.
First, counsel submits the proposed terms of settlement and the court
13 makes a preliminary fairness evaluation. If the preliminary
14 evaluation of the proposed settlement does not disclose grounds to
doubt its fairness or other obvious deficiencies, such as unduly
15 preferential treatment of class representatives or of segments of the
class, or excessive compensation for attorneys, and appears to fall
16 within the range of possible approval, the court should direct that
17 notice…be given to the class members of a formal fairness hearing,
at which arguments and evidence may be presented in support of
18 and in opposition to the settlement.
19 (Fed. Jud. Ctr., 3rd ed. 1995).
20 Thus, the preliminary approval by the trial court is simply a conditional finding that the
21 settlement appears to be within the range of acceptable settlements. As Professor Newberg
22 comments, “[t]he strength of the findings made by a judge at a preliminary hearing or conference
23 concerning a tentative settlement proposal may vary. The court may find that the settlement
24 proposal contains some merit, is within the range of reasonableness required for a settlement offer,
25 or is presumptively valid subject only to any objections that may be raised at a final hearing.” Alba
26 Conte & Herbert B. Newberg, 4 Newberg on Class Actions § 11.26 (4th ed. 2002).
27 The procedures for the parties’ submission of a proposed settlement for preliminary
28 approval by the court also are discussed in 4 Newberg on Class Actions:
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PLAINTIFF’S NOTICE OF MOTION AND MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION
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1 When the parties to an action reach a monetary settlement, they will
usually prepare and execute a joint stipulation of settlement, which
2 is submitted to the court for preliminary approval. The stipulation
3 should set forth the central terms of the agreement, including but not
limited to, the amount of settlement, form of payment, manner of
4 determining the effective date of settlement and any recapture
clause.
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6 Id. § 11.24.
7 Here, the Parties have reached such an agreement and have submitted to this Court in
8 connection with this motion a copy of the Settlement Agreement fully setting forth the agreement
9 reached by the Parties. The Settlement Agreement sets forth all terms of the agreement reached by
10 the Parties as to settlement of the class and PAGA claims. Said terms in the Settlement Agreement
11 include, among other things, the method for calculating the Class Members’ individual settlement
12 payments.
13 The parties also may, at the preliminary approval stage, request that the court provisionally
14 approve certification of the class for settlement purposes—conditional upon final approval of the
15 settlement. “[P]re-certification settlements are routinely approved if found to be fair and
16 reasonable.” Wershba v. Apple Computer, Inc., 91 Cal. App. 4th 224, 240 (2001); accord Dunk v.
17 Ford Motor Co., 48 Cal. App. 4th 1794, 1803 (1996) (although the settlement was reached before
18 any “adversary certification,” the court was satisfied that it was “fair, adequate and reasonable”);
19 In re Baldwin-United Corp., 105 F.R.D. 475, 478 (S.D.N.Y. 1984) (“many courts have employed
20 this practice in the name of judicial efficiency in order to facilitate apparently beneficial settlement
21 proposals”). As further explained by Professor Newberg:
22 The strength of the findings made by a judge at a preliminary
hearing or conference concerning a tentative settlement
23 proposal…may be set out in conditional orders granting tentative
24 approval to the various items submitted to the court. Three basic
rulings are often conditionally entered at this preliminary hearing.
25 These conditional rulings may approve a temporary settlement class,
the proposed settlement, and the class counsel’s application for fees
26 and expenses.
27 4 Newberg on Class Actions § 11.26.
28 In addition to such terms as class identification, settlement amount, and payment
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PLAINTIFF’S NOTICE OF MOTION AND MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION
SETTLEMENT
1 procedures, the Settlement Agreement reached by the Parties contains a provision pursuant to
2 which the Parties stipulate to the Court’s provisional certification of the Class for the purposes of
3 this settlement only. See Stipulation ¶ II.1.
4 A. Proposed Class Definition
5 The current settlement is being settled on behalf of the Class of “all former employees of
6 Defendants who were employed in the State of California at any time during the Class Period who
7 received their final wages on a paycard, but for whom Defendants do not currently have a written
8 authorization for payment of final wages via pay card.” See Stipulation ¶ I.2.
9 Pursuant to the Settlement Agreement, Defendant has represented that there are
10 approximately 948 individuals that comprise the Class. See Stipulation ¶ I.17. If the number of
11 those individuals increases above 996, then Defendant has the option to either increase the Gross
12 Settlement Amount by a proportionate amount or cut off the Class Period and PAGA Period so
13 that the number of Class Members will not exceed 996. Id.
14 B. Settlement Terms and Evaluation
15 Courts presume the absence of fraud or collusion in the negotiation of settlement unless
16 evidence to the contrary is offered. Priddy v. Edelman, 883 F.2d 438, 447 (6th Cir. 1989); Mars
17 Steel Corp. v. Continental Illinois Nat’l Bank & Trust Co., 834 F.2d 677, 682 (7th Cir. 1987); In
18 re Chicken Antitrust Litig., 560 F. Supp. 957, 962 (N.D. Ga. 1980). Courts do not substitute their
19 judgment for that of the proponents, particularly where, as here, settlement has been reached with
20 the participation of experienced counsel familiar with the litigation. Nat’l Rural Telecomms. Coop.
21 v. DIRECTV, Inc., 221 F.R.D. 523, 528 (C.D. Cal. 2004); Hammon v. Barry, 752 F.Supp. 1087
22 (D.D.C. 1990); Steinberg v. Carey, 470 F. Supp. 471 (S.D.N.Y. 1979); In re Armored Car Antitrust
23 Litig., 472 F. Supp. 1357 (N.D. Ga. 1979); Sommers v. Abraham Lincoln Federal Sav. & Loan
24 Ass’n, 79 F.R.D. 571 (E.D. Pa. 1978).
25 While the recommendations of counsel proposing the settlement are not conclusive, the
26 Court can properly take them into account, particularly where, as here, they have been involved in
27 informal discovery and negotiations for some period of time, appear to be competent, have
28 experience with this type of litigation, and have exchanged substantial evidence from the opposing
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1 party. See Newberg on Class Actions, supra § 11.47; Nat’l Rural Telecomms. Coop., 221 F.R.D.
2 at p. 528 (“[s]o long as the integrity of the arm’s length negotiation process is preserved, however,
3 a strong initial presumption of fairness attaches to the proposed settlement…[citations] and ‘great
4 weight’ is accorded to the recommendations of counsel, who are most closely acquainted with the
5 facts of the underlying litigation”).
6 Here, both Plaintiff’s and Defendant’s counsel have a great deal of experience in wage and
7 hour class action litigation. Plaintiff’s counsel has been approved as class counsel in a number of
8 wage and hour class actions and have extensive litigation experience. Declaration of Larry W. Lee
9 (“Lee Decl.”) ¶¶ 5-8; Gavron Decl. ¶¶ 27-33; Declaration of William L. Marder (“Marder Decl.”)
10 ¶¶ 5-12. Each side has apprised the other of their respective factual contentions, legal theories, and
11 defenses, resulting in negotiations taking place between the Parties. Gavron Decl. ¶ 10.
12 Based on the class data provided by Defendant, Plaintiff estimated that Defendant would
13 face potential liability of approximately $3,879,216.00 if Plaintiff succeeded at trial. Gavron Decl.
14 ¶ 16. Specifically, Plaintiff calculated waiting time penalties under Labor Code § 203 based on
15 948 putative class members and their average hourly rates of pay (948 employees x [(8 hours x
16 $17.05) x 30 days = $3,879,216.0]). Id.
17 With respect to potential liability of Plaintiff’s PAGA claim, Plaintiff estimated that
18 Defendant could face civil penalties of up to a maximum of $94,800.00 if Plaintiff were to succeed
19 at trial, and the Court awarded a $100 penalty per violation. Gavron Decl. ¶ 17. However, even
20 assuming Plaintiff ultimately prevails on her PAGA claims, the Court still has discretion to reduce
21 any PAGA penalties. Pursuant to Labor Code § 2699(e)(2), the Court can decline to award PAGA
22 penalties where “if, based on the facts and circumstances of the particular case, to do otherwise,
23 would result in an award that is unjust, arbitrary and oppressive, or confiscatory.” Indeed, as shown
24 in the Court of Appeal’s decision in Carrington v. Starbucks Corp., 30 Cal. App. 5th 504 (2018),
25 while the plaintiff prevailed on his PAGA claim upon trial, the trial court reduced the maximum
26 PAGA penalty amount by 90 percent, citing the employer’s good faith attempt at complying with
27 the law. Id. at p. 517. Upon review, the Court of Appeal found such reduction to be proper. Id. at
28 p. 539.
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1 Although Plaintiff believes in the merits of the alleged claims and maintains that there is
2 no reason for reducing PAGA penalties, Plaintiff is aware that Defendant may raise defenses to
3 the claims and further with respect to the reduction of PAGA penalties and that it could be
4 persuasive to the Court. Gavron Decl. ¶ 19. Thus, even if Plaintiff were to successfully prove her
5 claims at trial, there is a possibility that the Court may only award a small percentage of PAGA
6 penalties, as the Court has discretion to do so. The Gross Settlement Amount was premised with
7 this risk in mind, associated with the possibility of the Court significantly reducing Plaintiff’s
8 PAGA penalties, along with other attendant risks, even if Plaintiff was to prevail at trial. Id.
9 Further, Defendant raised several defenses that presented risk. Defendant likely would have
10 argued that any failure to pay wages upon separation of employment was not “willful” within the
11 meaning of Section 203, and thus penalties would not be appropriate. A willful failure to pay wages
12 occurs only when “an employer intentionally fails to pay wages to an employee when those wages
13 are due.” 8 Cal. Code Regs. § 13520. However, when there is a “good faith dispute” as to whether
14 an employee is entitled to additional wages, no waiting time penalties can be awarded. 8 Cal. Code
15 Regs. § 13520; see also Barnhill v. Saunders, 125 Cal. App. 3d 1, 7 (1981). “A ‘good faith dispute’
16 that any wages are due occurs when an employer presents a defense, based in law or fact, which,
17 if successful, would preclude any recovery on the part of the employee”—it is irrelevant whether
18 the defense is ultimately successful. 8 Cal. Code Regs. § 13520(a); Amaral v. Cintas Corp., 163
19 Cal. App. 4th 1157, 1201 (2008) (the “fact that a defense is ultimately unsuccessful will not
20 preclude a finding that a good faith dispute did exist”); Road Sprinklers Fitters Local Union No.
21 669 v. G & G Fire Sprinklers Inc., 102 Cal. App. 4th 765, 782 (2002) (employer’s good faith, yet
22 mistaken, belief that wages are not owed negates finding of willfulness). Defendant also argued,
23 and the Court found that this case was not suitable for class certification.
24 Thus, the settlement for each Class Member is fair, reasonable, and adequate, given the
25 inherent risks of litigation, including the substantial risks relative to class certification and the
26 merits of the claims, the costs of pursuing such litigation, and the risks associated with the Court’s
27 discretion to reduce PAGA penalties. The settlement is the result of extensive arm’s-length
28 negotiations between the Parties and their counsel and was facilitated by an experienced and
14
PLAINTIFF’S NOTICE OF MOTION AND MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION
SETTLEMENT
1 neutral mediator.
2 Indeed, numerous courts have held that gross settlements approximating between only 8
3 and 25 percent of the defendant’s potential exposure are fair and reasonable. See, e.g., In re Mego
4 Fin. Corp. Secs. Litig., 213 F.3d 454, 459 (9th Cir. 2000) (holding that class action settlement
5 recovering 16 percent of potential exposure was fair and reasonable; “[i]t is well-settled law that a
6 cash settlement amounting to only a fraction of the potential recovery does not per se render the
7 settlement inadequate or unfair. Rather, the fairness and the adequacy of the settlement should be
8 assessed relative to risks of pursuing the litigation to judgment”; noting that whether the settlement
9 is fair and adequate depends on the “the difficulties in proving the case”); Bellinghausen v. Tractor
10 Supply Co., 2015 WL 1289342, at p.*6 (N.D. Cal. Mar. 20, 2015) (holding that class action
11 settlement recovering between 8.5 percent and 25 percent of the defendant’s potential exposure
12 was fair); Van Ba Ma v. Covidien Holding Inc., U.S. Dist. Ct. Case No. 8:12-cv-02161 (C.D. Cal.
13 2014) (granting preliminary approval of wage and hour class settlement which obtained only 9.1
14 percent of projected damages, given the risks of continued litigation); Villegas v. J.P. Morgan
15 Chase & Co., 2012 WL 5878390, at p.*6 (N.D. Cal. Nov. 21, 2012) (holding that gross class action
16 settlement of approximately 15 percent of the potential recovery was fair and reasonable).
17 Here, the total amount of class and PAGA penalties amount to approximately
18 $3,974,016.00 without discounting for potentially losing on any cause of action. Gavron Decl.
19 ¶ 18. The Gross Settlement Amount is $340,000,000, which is approximately 8.6% of the
20 maximum class and PAGA penalties. Id. Thus, the settlement was negotiated at arm’s length and
21 the high settlement percentage-to-recovery further supports that the settlement is fair and
22 reasonable.
23 Despite the asserted fairness of the settlement terms, as set forth in the Notice of Class
24 Action Settlement (“Class Notice”), should any Class Member wish to pursue his or her own case
25 for the claims being released herein, each Class Member has the right to submit a request for
26 exclusion (i.e., opt-out) from the class action settlement. See Stipulation ¶ III(6)(f). Moreover, as
27 set forth in the Class Notice, Class Members are advised of their right to object to any of the terms
28 contained in the Settlement Agreement and attend the final approval hearing.
15
PLAINTIFF’S NOTICE OF MOTION AND MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION
SETTLEMENT
1 1. Amount and Manner of Distribution of the Compensation to be
Provided to Class Members Including the Amount, or an Estimate, of
2 What Each Class Member Will Receive
3 The Settlement Agreement provides for Three Hundred Forty Thousand Dollars
4 ($340,000.00) as the Gross Settlement Amount. See Stipulation ¶ I.17. The Net Settlement
5 Amount, calculated after deduction of attorneys’ fees (up to $113,333.33), litigation costs (up to
6 $55,000.00), the incentive payment to the Class Representative (up to $10,000.00), payment of
7 PAGA penalties ($25,000.00), and settlement administration costs (up to $11,000.00), is estimated
8 to be approximately $125,666.67. Id. ¶ III.9.
9 Pursuant to the Settlement Agreement, the Net Settlement Amount, or approximately
10 $125,666.67, will be equally apportioned among the Class Members. See Stipulation ¶ III.9.a. In
11 addition, Class Members who also worked during the PAGA Period (or PAGA Members) will be
12 apportioned 25% of the PAGA Payment, or approximately $6,250.00, on a per capita basis. Id. ¶¶
13 I.21, I.24, III.9.a.
14 Based thereon, on a raw average, each Participating Class Member may potentially recover
15 approximately $132.56 ($125,666.67 ÷ 948 Class Members) plus any potential PAGA Payments.
16 Gavron Decl. ¶ 13. The amount actually paid to each Participating Class Member will increase or
17 decrease depending on the number of timely Requests for Exclusion received. Id.
18 Finally, the terms of the settlement provide that uncashed settlement payment checks (upon
19 the expiration date) shall be distributed to the cy pres recipient State Bar Justice Gap Fund,
20 pursuant to California Code of Civil Procedure § 384. See Stipulation ¶ III.10.
21 2. Whether, and Under What Circumstances, Amounts Available for
Payment in Settlement Might Not Be Paid to Class Members or Might
22 Revert to the Defendants
23 This Settlement is non-reversionary, meaning that none of the settlement funds will revert
24 back to Defendant. See Stipulation ¶ III.9.
25 3. Scope of the Release of Class Members’ Claims
26 As a condition of participating in this settlement, Class Members who do not opt out of the
27 Class Action Settlement will provide a limited release of the following claims:
28 all claims, rights, demands, liabilities and causes of action that are
16
PLAINTIFF’S NOTICE OF MOTION AND MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION
SETTLEMENT
1 alleged or could have been alleged based on the facts, allegations
and/or claims asserted in the operative complaint in this action
2 including the following claims: (i) failure to pay wages timely at
3 time of termination or resignation (Labor Code §§ 201-203, 212,
213). This release shall apply to claims arising during the Class
4 Period.
5 See Stipulation ¶ I.30.
6 Aggrieved employees will also provide a limited release of claims under
7 the PAGA:
8 all claims, rights, demands, liabilities and causes of action that are alleged or
could have been alleged based on the facts, allegations, and/or claims asserted in
9
the operative complaint, under the PAGA, Cal. Lab. Code§§ 2698, et seq., which
10 are premised on alleged violations of the California Labor Code for: (i) failure to
pay wages timely at time of termination or resignation (Labor Code§§ 201-203,
11 212,213). This release shall apply to claims arising during the PAGA Period
12
Stipulation ¶ I.25.
13
Given that the releases are tailored to only claims pled in the operative Complaint that
14
pertain to the settlement class, the release is appropriately limited.
15
4. Tax Treatment of Settlement Amounts
16
As this lawsuit seeks statutory and civil penalties as recovery, the Parties have agreed that
17
the entirety of each Individual Settlement Payment to Class Members shall be treated as a payment
18
for penalties and interest and shall be reported by IRS Forms 1099. See Stipulation ¶ III.9.a.
19
5. Affirmative Obligations to be Undertaken by Class Members or Class
20
Counsel and the Reasons for Any Such Obligations
21
As stated above, Class Members do not need to do anything should they wish to receive
22
their share of the settlement funds. In other words, because this is not a claims-made settlement,
23
Class Members will not be required to make a submission to participate in the settlement. No claim
24
forms are required. Thus, this substantially decreases the amount of burden each Class Member
25
must bear in order to receive their share of the settlement funds.
26
However, if a Class Member does not wish to take part in this settlement or be bound by
27
the release, the Class Member must submit a request for exclusion. See Stipulation ¶ III.7.f.
28
17
PLAINTIFF’S NOTICE OF MOTION AND MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION
SETTLEMENT
1 C. Notice to Class Members
2 Should the Court grant the instant motion, Defendant will provide the Settlement
3 Administrator with a list containing each Class Member’s full name, last known home address,
4 last known telephone number, Social Security number, and any other information required by the
5 Settlement Administrator in order to effectuate the terms of the settlement (“Class List”). See
6 Stipulation ¶¶ I.5; III.6.a.
7 Pursuant to the Settlement Agreement, Defendant will provide said Class List within fifteen
8 (15) business days of preliminary approval. See Stipulation ¶ III.6.a. Within ten (10) calendar days
9 of receipt of the Class List from Defendant, the Settlement Administrator will mail the Class Notice
10 to Class Members via regular First-Class U.S. mail. Id. ¶ III.6.b. For any Class Notices returned
11 to the Settlement Administrator as undeliverable, the Settlement Administrator shall conduct a
12 skip trace to locate the correct address based on the National Change of Address Database. Id. ¶
13 III.6.c. If an updated/corrected address can be obtained through skip tracing, the Settlement
14 Administrator will re-mail the Class Notice within five (5) calendar days of receiving notice that
15 said Class Notice was undeliverable. Id. Class Members who receive a re-mailed Class Notice will
16 have their deadline to submit opt-outs, written objections, and/or disputes regarding information
17 pertaining to their individual settlement payments as contained in the Class Notice extended by
18 fifteen (15) calendar days. Id.
19 The Class Notice will advise Class Members of what the lawsuit is about, their rights and/or
20 options under the settlement, the total settlement amount and other terms of the settlement, their
21 expected individual settlement payment share, their opportunity to and procedures to opt out or to
22 object to the settlement, information pertaining to the final approval hearing, and the release of
23 claims. See Class Notice. As set forth in the Class Notice, Class Members will be allowed to opt
24 out of or object to the Settlement by a certain deadline, which is forty-five (45) days after the initial
25 mailing of the Class Notice. See Stipulation ¶ I.33. Class Members who received a re-mailed Class
26 Notice will have that deadline extended by 15 calendar days from the original response deadline.
27 Id. ¶ III.6.c. With respect to objections, Class Members are also informed in the Class Notice that
28 they may object in writing and/or appear at the final approval hearing to present their objections
18
PLAINTIFF’S NOTICE OF MOTION AND MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION
SETTLEMENT
1 to the Court. Id. ¶ III.6.g; see Class Notice.
2 If Class Members need further information about the settlement and/or the lawsuit, Class
3 Members are provided with Class Counsel’s contact informat
Preview
1 Larry W. Lee (State Bar No. 228175) Max W. Gavron (State Bar No. 291697) 2 DIVERSITY LAW GROUP, P.C. 3 515 S. Figueroa Street, Suite 1250 Los Angeles, CA 90071 4 (213) 488-6555 (213) 488-6554 facsimile 5 lwlee@diversitylaw.com 6 mgavron@diversitylaw.com 7 William L. Marder (State Bar No. 170131) Polaris Law Group 8 501 San Benito Street, Suite 200 9 Hollister, CA 95023 (831) 531-4214 10 (831) 634-0333 facsimile bill@polarislawgroup.com 11 12 Attorneys for Plaintiff and the Class 13 SUPERIOR COURT OF THE STATE OF CALIFORNIA 14 FOR THE COUNTY OF SANTA BARBARA 15 16 VICTORIA TICE, as an individual and on Case No. 20CV00892 behalf of all others similarly situated, 17 [Assigned to the Honorable Thomas P. Anderle, Plaintiff, Department 3] 18 19 vs. PLAINTIFF’S NOTICE OF MOTION AND MOTION FOR PRELIMINARY 20 TRADER JOE’S COMPANY, a California APPROVAL OF CLASS ACTION corporation; and DOES 1 through 50, SETTLEMENT; MEMORANDUM OF 21 inclusive, POINTS AND AUTHORITIES IN 22 SUPPORT THEREOF Defendants. 23 Date: April 12, 2023 Time: 10:00 A.M. 24 Dept.: 3 25 Complaint Filed: February 14, 2020 26 27 28 1 PLAINTIFF’S NOTICE OF MOTION AND MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT 1 TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD: 2 PLEASE TAKE NOTICE that on April 12, 2023, at 10:00 A.M., or as soon thereafter as 3 the matter may be heard, before the Honorable Thomas P. Anderle, judge presiding, in Department 4 3 of the above referenced Court, located at 1100 Anacapa Street, Santa Barbara, California 93101, 5 Plaintiff Victoria Tice (“Plaintiff”) will and hereby does move this Court for the following relief 6 with respect to the Joint Stipulation of Class Action Settlement (“Stipulation” or “Settlement 7 Agreement”) entered into by Plaintiff and Defendant Trader Joe’s Company (“Defendant”) 8 (together with Plaintiff, the “Parties”): 9 1. That the Court approve the Settlement Agreement referenced above; 10 2. That the Court conditionally certify the following Class for settlement purposes 11 only: 12 all former employees of Defendant who were employed in the State of California at any time during the Class Period who 13 received their final wages on a paycard, but for whom Defendants 14 do not currently have a written authorization for payment of final wages via pay card (the “Class”); 15 16 3. That Plaintiff Victoria Tice be appointed as the Class Representative and Larry W. 17 Lee and Max W. Gavron of Diversity Law Group, P.C., and William L. Marder of Polaris Law 18 Group, be appointed as Class Counsel; 19 4. That the Court preliminarily approve the Settlement Agreement and the total Gross 20 Settlement Amount of Three Hundred Forty Thousand Dollars ($340,000.00); 21 5. That the Court finds on a preliminary basis that the Settlement Agreement appears 22 to be within the range of reasonableness of a settlement, including the amount of the PAGA 23 penalties, the incentive payment to the Class Representative, Class Counsel award of attorneys’ 24 fees and litigation costs, settlement administration costs, and the allocation of individual settlement 25 payments to Class Members, that could ultimately be given final approval by this Court; 26 6. That the Court approve the mailing of the proposed Notice of Class Action 27 Settlement (“Class Notice”) to be sent to Class Members; 28 7. That the Court appoint Phoenix Settlement Administrators as the Settlement 2 PLAINTIFF’S NOTICE OF MOTION AND MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT 1 Administrator; and 2 8. That the Court schedule the matter for a Final Fairness and Final Approval hearing. 3 This motion is made pursuant to Rule 3.769 of the California Rules of Court, which 4 provides for court approval of the settlement of a purported class action and allows the Court to 5 preliminarily certify a class for settlement purposes. 6 The basis for this unopposed motion is that the proposed settlement is fair, adequate, and 7 reasonable, and the procedures proposed by the Parties are adequate to ensure the opportunity of 8 Class Members to participate in, opt-out of, or object to the settlement. This motion is based on 9 the attached Memorandum of Points and Authorities, the Stipulation and the proposed Class 10 Notice, and the supporting Declarations of Larry W. Lee, Max W. Gavron, William L. Marder, 11 and Plaintiff Victoria Tice, upon the oral arguments of counsel (should there be any), and on the 12 complete records and file herein. 13 14 DATED: March 9, 2023 DIVERSITY LAW GROUP, P.C. 15 By: __________________________ 16 Larry W. Lee 17 Max Gavron Attorneys for Plaintiff and the Class 18 19 20 21 22 23 24 25 26 27 28 3 PLAINTIFF’S NOTICE OF MOTION AND MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT 1 TABLE OF CONTENTS 2 Page 3 I. INTRODUCTION ................................................................................................................. 7 4 II. PROCEDURAL HISTORY.................................................................................................. 8 5 III. DISCUSSION ................................................................................................................... 10 A. Proposed Class Definition ............................................................................................... 12 6 B. Settlement Terms and Evaluation .................................................................................. 12 7 1. Amount and Manner of Distribution of the Compensation to be Provided to Class 8 Members Including the Amount, or an Estimate, of What Each Class Member Will 9 Receive ................................................................................................................................... 16 10 2. Whether, and Under What Circumstances, Amounts Available for Payment in Settlement Might Not Be Paid to Class Members or Might Revert to the Defendants .. 16 11 3. Scope of the Release of Class Members’ Claims ....................................................... 16 12 4. Tax Treatment of Settlement Amounts ...................................................................... 17 13 5. Affirmative Obligations to be Undertaken by Class Members or Class Counsel and 14 the Reasons for Any Such Obligations ................................................................................ 17 15 C. Notice to Class Members ................................................................................................. 18 D. Typicality and Adequacy of Representation ................................................................. 19 16 1. Class Representative’s Claims are Typical of the Class ........................................... 19 17 2. Class Counsel Has Adequately Represented the Class and Has Experience with 18 Wage and Hour Class Action ............................................................................................... 20 19 E. Costs and Fees .................................................................................................................. 20 20 1. Attorneys’ Fees and Costs ........................................................................................... 20 21 2. Proposed Payment to the Class Representative ........................................................ 22 22 3. Settlement Administration Fees .................................................................................. 22 23 F. Notice to the LWDA......................................................................................................... 23 IV. CONCLUSION AND ACTION REQUESTED AS PART OF THE MOTION FOR 24 PRELIMINARY APPROVAL .................................................................................................. 23 25 26 27 28 4 PLAINTIFF’S NOTICE OF MOTION AND MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT 1 TABLE OF AUTHORITIES 2 Page(s) 3 State Cases 4 Amaral v. Cintas Corp. (2008) 163 Cal.App.4th 1157, 1201 ....................................................... 14 5 Barnhill v. Saunders (1981) 125 Cal. App. 3d 1, 7. ..................................................................... 14 6 Carrington v. Starbucks Corp., 30 Cal. App. 5th 504 (2018) ...................................................... 13 7 City and County of San Francisco v. Sweet, 12 Cal.4th 105, 110 (1995)..................................... 20 8 City of San Jose v. Superior Court, 12 Cal. 3d 447, 460 (1974) .................................................. 19 9 Dunk v. Ford Motor Co. (1996) 48 Cal.App.4th 1794, 1803 ....................................................... 11 10 Laffitte v. Robert Half Int’l (2016) 1 Cal.5th 480, 503 ................................................................. 21 11 Richmond v. Dart Industries, Inc., 29 Cal. 3d 462, 473 (1981).................................................... 19 12 Road Sprinklers Fitters Local Union No. 669 v. G & G Fire Sprinklers Inc. (2002) 102 Cal. App. 13 4th 765, 782 ............................................................................................................................... 14 14 Serrano v. Priest, 20 Cal. 3d 25, 34 (1977) .................................................................................. 20 15 Stephens v. Montgomery Ward & Co., 193 Cal. App. 3d 411, 421 (1987) .................................. 19 16 Vasquez v. Superior Court, 4 Cal. 3d 800, 812-13 (1971)............................................................ 19 17 Wershba v. Apple Computer, Inc., 91 Cal. App. 4th 224, 240 (2001) .................................... 11, 20 18 Federal Cases 19 Bellinghausen v. Tractor Supply Co., No. 13-CV-02377-JSC, 2015 WL 1289342, at *6 (N.D. 20 Cal. Mar. 20, 2015) .................................................................................................................... 15 21 Boeing Co. v. Van Gemert, 444 U.S. 472, 478 (1980).................................................................. 20 22 Hammon v. Barry, 752 F.Supp. 1087 (D.D.C. 1990) ................................................................... 12 23 Hanlon v. Chrysler Corp. (1998) 150 F.3d 1011, 1019 ................................................................ 19 24 In re Armored Car Antitrust Litig., 472 F. Supp. 1357 (N.D. Ga. 1979) ..................................... 12 25 In re Baldwin-United Corp. (S.D.N.Y. 1984) 105 F.R.D. 475, 478 ............................................. 11 26 In re Chicken Antitrust Litig., 560 F. Supp. 957, 962 (N.D. Ga. 1980)........................................ 12 27 In re Mego Fin. Corp. Secs. Litig. (9th Cir. 2000) 213 F.3d 454, 459 ......................................... 15 28 5 PLAINTIFF’S NOTICE OF MOTION AND MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT 1 Mars Steel Corp. v. Continental Illinois Nat’l Bank & Trust Co., 834 F.2d 677, 682 (7th Cir. 2 1987) .......................................................................................................................................... 12 3 Nat’l Rural Telecomms. Coop. v. DIRECTV, Inc., 221 F.R.D. 523, 528 (C.D. Cal. 2004).... 12, 13 4 Priddy v. Edelman, 883 F.2d 438, 447 (6th Cir. 1989)................................................................. 12 5 Sommers v. Abraham Lincoln Federal Sav. & Loan Ass’n, 79 F.R.D. 571 (E.D. Pa. 1978) ....... 12 6 Steinberg v. Carey, 470 F.Supp. 471 (S.D.N.Y. 1979)................................................................. 12 7 Van Ba Ma v. Covidien Holding Inc., U.S. Dist. Ct. Case No. 8:12-cv-02161 (C.D. Cal. 2014) 15 8 Villegas v. J.P. Morgan Chase & Co., No. CV 09-00261 SBA EMC, 2012 WL 5878390, at *6 9 (N.D. Cal. Nov. 21, 2012).......................................................................................................... 15 10 Vincent v. Hughes Air West, Inc., 557 F. 2d 759, 769 (9th Cir. 1997) ......................................... 20 11 Statutes 12 8 Cal. Code Regs. § 13520............................................................................................................ 14 13 California Civil Code § 1542 ........................................................................................................ 22 14 Labor Code § 212.................................................................................................................. 7, 8, 17 15 Labor Code § 213.................................................................................................................. 7, 8, 17 16 Labor Code § 2698, et seq. ....................................................................................................... 9, 17 17 Labor Code § 2699.......................................................................................................................... 8 18 Labor Code § 2699(e)(2) .............................................................................................................. 13 19 Labor Code §§ 201-203 ........................................................................................................ 7, 8, 17 20 Labor Code §§ 201-204 .................................................................................................................. 8 21 Other Authorities 22 4 Alba Conte & Herbert B. Newberg, Newberg on Class Actions, § 11.26 (4th ed. 2002) .... 10, 11 23 California Rule of Civil Procedure section 384 ............................................................................ 16 24 4 Alba Conte & Herbert B. Newberg, Newberg on Class Actions, 11.24 .................................... 11 25 Manual for Complex Litigation (Third) § 30.41 ........................................................................... 10 26 Newberg on Class Actions, supra, at § 11.47 ............................................................................... 13 27 28 6 PLAINTIFF’S NOTICE OF MOTION AND MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT 1 I. INTRODUCTION 2 This is a wage and hour class and representative Private Attorneys General Act (“PAGA”) 3 action seeking statutory and civil penalties under the California Labor Code. Plaintiff Victoria Tice 4 (“Plaintiff”) alleges that Defendant Trader Joe’s Company (“Defendant”) issued payment of final 5 wages to employees in the form of a paycard without authorization in violation of Labor Code §§ 6 201-203, 212, and 213. Based on these violations, Plaintiff asserts class and PAGA claims for 7 alleged violations of Labor Code §§ 201-203, 212, and 213. The Parties have reached a class and 8 PAGA representative action settlement, the terms of which are reflected in the Parties’ Joint 9 Stipulation of Class Action Settlement (“Stipulation” or “Settlement Agreement”). 10 As this Court will likely recall, prior to the settlement of this action, the Parties thoroughly 11 investigated the facts relating to the class and PAGA claims alleged in this lawsuit and engaged in 12 a thorough study of the legal principles applicable to the claims asserted against Defendant, 13 including significant motion practice. Through the exchange of formal and informal discovery, 14 Defendant provided necessary data pertaining to the number of putative class members as well as 15 documents and information pertaining to Defendant’s policies and practices regarding final wages 16 and use of paycards. The information provided by Defendant allowed Plaintiff to review and 17 analyze the liability and potential exposure. The Parties also attended mediation with experienced 18 wage-and-hour mediator Gig Kyriacou, Esq. and significant subsequent negotiation discussions 19 over the course of two years. After such extended negotiations, the Parties were able to reach the 20 current settlement. 21 The terms of the Settlement Agreement provide that Defendant pay a Gross Settlement 22 Amount of Three Hundred Forty Thousand Dollars ($340,000.00) to resolve the class and PAGA 23 claims in this case. Significantly, this is a non-reversionary settlement, meaning that the entirety 24 of the Gross Settlement Amount will be distributed to the Class, such that no remaining monies 25 will revert to Defendant. Further, no claim forms are required. The following represents the key 26 terms of the Settlement: 27 Gross Settlement Amount of $340,000.00; 28 Estimated class size of 948 individuals in the Class; 7 PLAINTIFF’S NOTICE OF MOTION AND MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT 1 Incentive payment to the Class Representative of up to $10,000.00; 2 Class Counsel’s attorneys’ fees of one-third of the Gross Settlement Amount, up 3 to $113,333.33; 4 Class Counsel’s costs associated with prosecution and resolution of this action of 5 up to $55,000.00; 6 Settlement administration costs of up to $11,000.00; 7 Payment to the Labor & Workforce Development Agency of $18,750.00, 8 representing 75% of the total PAGA penalties of $25,000.00; 9 Payment to aggrieved employees of $6,250.00, representing 25% of the total 10 PAGA penalties of $25,000.00, which will be apportioned on a per capita basis; 11 and 12 Net Settlement Amount of approximately $125,666.67, which will be apportioned 13 on a per capita basis. 14 The Parties and their respective counsel believe that the settlement for the consideration 15 and on the terms set forth in the Settlement Agreement is fair, reasonable, and adequate in light of 16 all known circumstances and the expenses and risks inherent in litigation. Although Plaintiff and 17 her counsel are confident that they can prevail on class certification, as well as on the merits, they 18 recognize the inherent risks in drawn-out litigation and the specific risks that the Class might not 19 be certified and/or that Plaintiff could fail to establish liability. 20 Therefore, the Parties respectfully request that the Court grant this Motion for Preliminary 21 Approval of Class Action Settlement. 22 II. PROCEDURAL HISTORY 23 On February 10, 2020, Plaintiff filed her written notice with the California Labor & 24 Workforce Development Agency (“LWDA”), alleging violations of Labor Code §§ 201-204, 212, 25 and 213. pursuant to the PAGA, Labor Code § 2699. Declaration of Max W. Gavron (“Gavron 26 Decl.”) ¶ 2. Thereafter, on February 14, 2020, Plaintiff filed her class and PAGA action Complaint 27 against Defendant in Santa Barbara County Superior Court. Id. The Complaint alleges causes of 28 action for (1) violation of Labor Code §§ 201-203 and (2) violation of the PAGA, Labor Code 8 PLAINTIFF’S NOTICE OF MOTION AND MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT 1 § 2698, et seq. Id. 2 Plaintiff’s class and PAGA claims as pled in the Complaint are predicated upon the 3 allegations that Defendant issued payment of final wages to separated employees via a paycard 4 without authorization, which required employees to incur fees to use, was not fully cashable, and 5 was not usable at all financial institutions, resulting in a failure to timely pay all wages owed at 6 the time of separation of employment. As a result of the alleged violations above, Plaintiff seeks 7 statutory and civil penalties under the California Labor Code and the PAGA, as well as attorneys’ 8 fees and costs. Gavron Decl. ¶ 4. 9 After the filing of the Complaint and early exchange of written discovery, the Parties 10 agreed to engage in mediation. Gavron Decl. ¶ 5. In connection with mediation, the Parties engaged 11 in informal discovery to allow Plaintiff to assess the claims and liability, as well as analyze the 12 maximum exposure of damages and penalties. Id. Defendant provided Plaintiff’s counsel with 13 informal data and information pertaining to the number of putative class members, as well as 14 documents and information pertaining to Defendant’s policies and practices regarding payment of 15 final wages to separating employees and use of paycards. Id. 16 On November 17, 2020, the Parties attended mediation with Gig Kyriacou, Esq. Despite a 17 full day of arm’s-length negotiations, the Parties were unable to reach an agreement during the 18 mediation and continued litigating the Action. Id. ¶ 6. 19 The Parties engaged in further formal discovery, including the taking of depositions, 20 issuance of third-party subpoenas, and production of documents. The Parties also engaged in 21 substantial motion practice, including a motion for class certification, motion to strike, and 22 litigation regarding Plaintiff’s subpoena to the pay card provider, etc…. Thereafter, the Parties re- 23 engaged Mr. Kyriacou with further settlement discussions. 24 After thorough investigation and evaluation of the facts and claims, and as a result of the 25 arm’s-length negotiations facilitated by Mr. Kyriacou, the Parties and their counsel reached a 26 settlement in principle and entered into a Memorandum of Understanding. Id. The Parties 27 negotiated the terms of the settlement over the course of subsequent months and ultimately entered 28 into the Settlement Agreement in resolution of Plaintiff’s class and PAGA claims in this lawsuit. 9 PLAINTIFF’S NOTICE OF MOTION AND MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT 1 A true and correct copy of the Settlement Agreement is attached as Exhibit A to the Declaration 2 of Max W. Gavron. Id. 3 The Parties recognize the risk, expense, and delay in continuing litigation with the class 4 and PAGA claims, and believe the settlement to be fair, reasonable, and adequate. Gavron Decl. ¶ 5 9. Accordingly, the Parties desire to settle, compromise, and discharge all disputes and claims 6 arising from or relating to the class and PAGA claims as set forth in the Settlement Agreement. 7 III. DISCUSSION 8 Any settlement of a class action lawsuit must be reviewed and approved by the Court. This 9 is done in two steps: (1) an early (preliminary) review by the trial court, and (2) a final review after 10 notice has been distributed to the class members for their comment or objections. The Manual for 11 Complex Litigation, Third § 30.41 states: 12 Approval of class action settlements involves a two-step process. First, counsel submits the proposed terms of settlement and the court 13 makes a preliminary fairness evaluation. If the preliminary 14 evaluation of the proposed settlement does not disclose grounds to doubt its fairness or other obvious deficiencies, such as unduly 15 preferential treatment of class representatives or of segments of the class, or excessive compensation for attorneys, and appears to fall 16 within the range of possible approval, the court should direct that 17 notice…be given to the class members of a formal fairness hearing, at which arguments and evidence may be presented in support of 18 and in opposition to the settlement. 19 (Fed. Jud. Ctr., 3rd ed. 1995). 20 Thus, the preliminary approval by the trial court is simply a conditional finding that the 21 settlement appears to be within the range of acceptable settlements. As Professor Newberg 22 comments, “[t]he strength of the findings made by a judge at a preliminary hearing or conference 23 concerning a tentative settlement proposal may vary. The court may find that the settlement 24 proposal contains some merit, is within the range of reasonableness required for a settlement offer, 25 or is presumptively valid subject only to any objections that may be raised at a final hearing.” Alba 26 Conte & Herbert B. Newberg, 4 Newberg on Class Actions § 11.26 (4th ed. 2002). 27 The procedures for the parties’ submission of a proposed settlement for preliminary 28 approval by the court also are discussed in 4 Newberg on Class Actions: 10 PLAINTIFF’S NOTICE OF MOTION AND MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT 1 When the parties to an action reach a monetary settlement, they will usually prepare and execute a joint stipulation of settlement, which 2 is submitted to the court for preliminary approval. The stipulation 3 should set forth the central terms of the agreement, including but not limited to, the amount of settlement, form of payment, manner of 4 determining the effective date of settlement and any recapture clause. 5 6 Id. § 11.24. 7 Here, the Parties have reached such an agreement and have submitted to this Court in 8 connection with this motion a copy of the Settlement Agreement fully setting forth the agreement 9 reached by the Parties. The Settlement Agreement sets forth all terms of the agreement reached by 10 the Parties as to settlement of the class and PAGA claims. Said terms in the Settlement Agreement 11 include, among other things, the method for calculating the Class Members’ individual settlement 12 payments. 13 The parties also may, at the preliminary approval stage, request that the court provisionally 14 approve certification of the class for settlement purposes—conditional upon final approval of the 15 settlement. “[P]re-certification settlements are routinely approved if found to be fair and 16 reasonable.” Wershba v. Apple Computer, Inc., 91 Cal. App. 4th 224, 240 (2001); accord Dunk v. 17 Ford Motor Co., 48 Cal. App. 4th 1794, 1803 (1996) (although the settlement was reached before 18 any “adversary certification,” the court was satisfied that it was “fair, adequate and reasonable”); 19 In re Baldwin-United Corp., 105 F.R.D. 475, 478 (S.D.N.Y. 1984) (“many courts have employed 20 this practice in the name of judicial efficiency in order to facilitate apparently beneficial settlement 21 proposals”). As further explained by Professor Newberg: 22 The strength of the findings made by a judge at a preliminary hearing or conference concerning a tentative settlement 23 proposal…may be set out in conditional orders granting tentative 24 approval to the various items submitted to the court. Three basic rulings are often conditionally entered at this preliminary hearing. 25 These conditional rulings may approve a temporary settlement class, the proposed settlement, and the class counsel’s application for fees 26 and expenses. 27 4 Newberg on Class Actions § 11.26. 28 In addition to such terms as class identification, settlement amount, and payment 11 PLAINTIFF’S NOTICE OF MOTION AND MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT 1 procedures, the Settlement Agreement reached by the Parties contains a provision pursuant to 2 which the Parties stipulate to the Court’s provisional certification of the Class for the purposes of 3 this settlement only. See Stipulation ¶ II.1. 4 A. Proposed Class Definition 5 The current settlement is being settled on behalf of the Class of “all former employees of 6 Defendants who were employed in the State of California at any time during the Class Period who 7 received their final wages on a paycard, but for whom Defendants do not currently have a written 8 authorization for payment of final wages via pay card.” See Stipulation ¶ I.2. 9 Pursuant to the Settlement Agreement, Defendant has represented that there are 10 approximately 948 individuals that comprise the Class. See Stipulation ¶ I.17. If the number of 11 those individuals increases above 996, then Defendant has the option to either increase the Gross 12 Settlement Amount by a proportionate amount or cut off the Class Period and PAGA Period so 13 that the number of Class Members will not exceed 996. Id. 14 B. Settlement Terms and Evaluation 15 Courts presume the absence of fraud or collusion in the negotiation of settlement unless 16 evidence to the contrary is offered. Priddy v. Edelman, 883 F.2d 438, 447 (6th Cir. 1989); Mars 17 Steel Corp. v. Continental Illinois Nat’l Bank & Trust Co., 834 F.2d 677, 682 (7th Cir. 1987); In 18 re Chicken Antitrust Litig., 560 F. Supp. 957, 962 (N.D. Ga. 1980). Courts do not substitute their 19 judgment for that of the proponents, particularly where, as here, settlement has been reached with 20 the participation of experienced counsel familiar with the litigation. Nat’l Rural Telecomms. Coop. 21 v. DIRECTV, Inc., 221 F.R.D. 523, 528 (C.D. Cal. 2004); Hammon v. Barry, 752 F.Supp. 1087 22 (D.D.C. 1990); Steinberg v. Carey, 470 F. Supp. 471 (S.D.N.Y. 1979); In re Armored Car Antitrust 23 Litig., 472 F. Supp. 1357 (N.D. Ga. 1979); Sommers v. Abraham Lincoln Federal Sav. & Loan 24 Ass’n, 79 F.R.D. 571 (E.D. Pa. 1978). 25 While the recommendations of counsel proposing the settlement are not conclusive, the 26 Court can properly take them into account, particularly where, as here, they have been involved in 27 informal discovery and negotiations for some period of time, appear to be competent, have 28 experience with this type of litigation, and have exchanged substantial evidence from the opposing 12 PLAINTIFF’S NOTICE OF MOTION AND MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT 1 party. See Newberg on Class Actions, supra § 11.47; Nat’l Rural Telecomms. Coop., 221 F.R.D. 2 at p. 528 (“[s]o long as the integrity of the arm’s length negotiation process is preserved, however, 3 a strong initial presumption of fairness attaches to the proposed settlement…[citations] and ‘great 4 weight’ is accorded to the recommendations of counsel, who are most closely acquainted with the 5 facts of the underlying litigation”). 6 Here, both Plaintiff’s and Defendant’s counsel have a great deal of experience in wage and 7 hour class action litigation. Plaintiff’s counsel has been approved as class counsel in a number of 8 wage and hour class actions and have extensive litigation experience. Declaration of Larry W. Lee 9 (“Lee Decl.”) ¶¶ 5-8; Gavron Decl. ¶¶ 27-33; Declaration of William L. Marder (“Marder Decl.”) 10 ¶¶ 5-12. Each side has apprised the other of their respective factual contentions, legal theories, and 11 defenses, resulting in negotiations taking place between the Parties. Gavron Decl. ¶ 10. 12 Based on the class data provided by Defendant, Plaintiff estimated that Defendant would 13 face potential liability of approximately $3,879,216.00 if Plaintiff succeeded at trial. Gavron Decl. 14 ¶ 16. Specifically, Plaintiff calculated waiting time penalties under Labor Code § 203 based on 15 948 putative class members and their average hourly rates of pay (948 employees x [(8 hours x 16 $17.05) x 30 days = $3,879,216.0]). Id. 17 With respect to potential liability of Plaintiff’s PAGA claim, Plaintiff estimated that 18 Defendant could face civil penalties of up to a maximum of $94,800.00 if Plaintiff were to succeed 19 at trial, and the Court awarded a $100 penalty per violation. Gavron Decl. ¶ 17. However, even 20 assuming Plaintiff ultimately prevails on her PAGA claims, the Court still has discretion to reduce 21 any PAGA penalties. Pursuant to Labor Code § 2699(e)(2), the Court can decline to award PAGA 22 penalties where “if, based on the facts and circumstances of the particular case, to do otherwise, 23 would result in an award that is unjust, arbitrary and oppressive, or confiscatory.” Indeed, as shown 24 in the Court of Appeal’s decision in Carrington v. Starbucks Corp., 30 Cal. App. 5th 504 (2018), 25 while the plaintiff prevailed on his PAGA claim upon trial, the trial court reduced the maximum 26 PAGA penalty amount by 90 percent, citing the employer’s good faith attempt at complying with 27 the law. Id. at p. 517. Upon review, the Court of Appeal found such reduction to be proper. Id. at 28 p. 539. 13 PLAINTIFF’S NOTICE OF MOTION AND MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT 1 Although Plaintiff believes in the merits of the alleged claims and maintains that there is 2 no reason for reducing PAGA penalties, Plaintiff is aware that Defendant may raise defenses to 3 the claims and further with respect to the reduction of PAGA penalties and that it could be 4 persuasive to the Court. Gavron Decl. ¶ 19. Thus, even if Plaintiff were to successfully prove her 5 claims at trial, there is a possibility that the Court may only award a small percentage of PAGA 6 penalties, as the Court has discretion to do so. The Gross Settlement Amount was premised with 7 this risk in mind, associated with the possibility of the Court significantly reducing Plaintiff’s 8 PAGA penalties, along with other attendant risks, even if Plaintiff was to prevail at trial. Id. 9 Further, Defendant raised several defenses that presented risk. Defendant likely would have 10 argued that any failure to pay wages upon separation of employment was not “willful” within the 11 meaning of Section 203, and thus penalties would not be appropriate. A willful failure to pay wages 12 occurs only when “an employer intentionally fails to pay wages to an employee when those wages 13 are due.” 8 Cal. Code Regs. § 13520. However, when there is a “good faith dispute” as to whether 14 an employee is entitled to additional wages, no waiting time penalties can be awarded. 8 Cal. Code 15 Regs. § 13520; see also Barnhill v. Saunders, 125 Cal. App. 3d 1, 7 (1981). “A ‘good faith dispute’ 16 that any wages are due occurs when an employer presents a defense, based in law or fact, which, 17 if successful, would preclude any recovery on the part of the employee”—it is irrelevant whether 18 the defense is ultimately successful. 8 Cal. Code Regs. § 13520(a); Amaral v. Cintas Corp., 163 19 Cal. App. 4th 1157, 1201 (2008) (the “fact that a defense is ultimately unsuccessful will not 20 preclude a finding that a good faith dispute did exist”); Road Sprinklers Fitters Local Union No. 21 669 v. G & G Fire Sprinklers Inc., 102 Cal. App. 4th 765, 782 (2002) (employer’s good faith, yet 22 mistaken, belief that wages are not owed negates finding of willfulness). Defendant also argued, 23 and the Court found that this case was not suitable for class certification. 24 Thus, the settlement for each Class Member is fair, reasonable, and adequate, given the 25 inherent risks of litigation, including the substantial risks relative to class certification and the 26 merits of the claims, the costs of pursuing such litigation, and the risks associated with the Court’s 27 discretion to reduce PAGA penalties. The settlement is the result of extensive arm’s-length 28 negotiations between the Parties and their counsel and was facilitated by an experienced and 14 PLAINTIFF’S NOTICE OF MOTION AND MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT 1 neutral mediator. 2 Indeed, numerous courts have held that gross settlements approximating between only 8 3 and 25 percent of the defendant’s potential exposure are fair and reasonable. See, e.g., In re Mego 4 Fin. Corp. Secs. Litig., 213 F.3d 454, 459 (9th Cir. 2000) (holding that class action settlement 5 recovering 16 percent of potential exposure was fair and reasonable; “[i]t is well-settled law that a 6 cash settlement amounting to only a fraction of the potential recovery does not per se render the 7 settlement inadequate or unfair. Rather, the fairness and the adequacy of the settlement should be 8 assessed relative to risks of pursuing the litigation to judgment”; noting that whether the settlement 9 is fair and adequate depends on the “the difficulties in proving the case”); Bellinghausen v. Tractor 10 Supply Co., 2015 WL 1289342, at p.*6 (N.D. Cal. Mar. 20, 2015) (holding that class action 11 settlement recovering between 8.5 percent and 25 percent of the defendant’s potential exposure 12 was fair); Van Ba Ma v. Covidien Holding Inc., U.S. Dist. Ct. Case No. 8:12-cv-02161 (C.D. Cal. 13 2014) (granting preliminary approval of wage and hour class settlement which obtained only 9.1 14 percent of projected damages, given the risks of continued litigation); Villegas v. J.P. Morgan 15 Chase & Co., 2012 WL 5878390, at p.*6 (N.D. Cal. Nov. 21, 2012) (holding that gross class action 16 settlement of approximately 15 percent of the potential recovery was fair and reasonable). 17 Here, the total amount of class and PAGA penalties amount to approximately 18 $3,974,016.00 without discounting for potentially losing on any cause of action. Gavron Decl. 19 ¶ 18. The Gross Settlement Amount is $340,000,000, which is approximately 8.6% of the 20 maximum class and PAGA penalties. Id. Thus, the settlement was negotiated at arm’s length and 21 the high settlement percentage-to-recovery further supports that the settlement is fair and 22 reasonable. 23 Despite the asserted fairness of the settlement terms, as set forth in the Notice of Class 24 Action Settlement (“Class Notice”), should any Class Member wish to pursue his or her own case 25 for the claims being released herein, each Class Member has the right to submit a request for 26 exclusion (i.e., opt-out) from the class action settlement. See Stipulation ¶ III(6)(f). Moreover, as 27 set forth in the Class Notice, Class Members are advised of their right to object to any of the terms 28 contained in the Settlement Agreement and attend the final approval hearing. 15 PLAINTIFF’S NOTICE OF MOTION AND MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT 1 1. Amount and Manner of Distribution of the Compensation to be Provided to Class Members Including the Amount, or an Estimate, of 2 What Each Class Member Will Receive 3 The Settlement Agreement provides for Three Hundred Forty Thousand Dollars 4 ($340,000.00) as the Gross Settlement Amount. See Stipulation ¶ I.17. The Net Settlement 5 Amount, calculated after deduction of attorneys’ fees (up to $113,333.33), litigation costs (up to 6 $55,000.00), the incentive payment to the Class Representative (up to $10,000.00), payment of 7 PAGA penalties ($25,000.00), and settlement administration costs (up to $11,000.00), is estimated 8 to be approximately $125,666.67. Id. ¶ III.9. 9 Pursuant to the Settlement Agreement, the Net Settlement Amount, or approximately 10 $125,666.67, will be equally apportioned among the Class Members. See Stipulation ¶ III.9.a. In 11 addition, Class Members who also worked during the PAGA Period (or PAGA Members) will be 12 apportioned 25% of the PAGA Payment, or approximately $6,250.00, on a per capita basis. Id. ¶¶ 13 I.21, I.24, III.9.a. 14 Based thereon, on a raw average, each Participating Class Member may potentially recover 15 approximately $132.56 ($125,666.67 ÷ 948 Class Members) plus any potential PAGA Payments. 16 Gavron Decl. ¶ 13. The amount actually paid to each Participating Class Member will increase or 17 decrease depending on the number of timely Requests for Exclusion received. Id. 18 Finally, the terms of the settlement provide that uncashed settlement payment checks (upon 19 the expiration date) shall be distributed to the cy pres recipient State Bar Justice Gap Fund, 20 pursuant to California Code of Civil Procedure § 384. See Stipulation ¶ III.10. 21 2. Whether, and Under What Circumstances, Amounts Available for Payment in Settlement Might Not Be Paid to Class Members or Might 22 Revert to the Defendants 23 This Settlement is non-reversionary, meaning that none of the settlement funds will revert 24 back to Defendant. See Stipulation ¶ III.9. 25 3. Scope of the Release of Class Members’ Claims 26 As a condition of participating in this settlement, Class Members who do not opt out of the 27 Class Action Settlement will provide a limited release of the following claims: 28 all claims, rights, demands, liabilities and causes of action that are 16 PLAINTIFF’S NOTICE OF MOTION AND MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT 1 alleged or could have been alleged based on the facts, allegations and/or claims asserted in the operative complaint in this action 2 including the following claims: (i) failure to pay wages timely at 3 time of termination or resignation (Labor Code §§ 201-203, 212, 213). This release shall apply to claims arising during the Class 4 Period. 5 See Stipulation ¶ I.30. 6 Aggrieved employees will also provide a limited release of claims under 7 the PAGA: 8 all claims, rights, demands, liabilities and causes of action that are alleged or could have been alleged based on the facts, allegations, and/or claims asserted in 9 the operative complaint, under the PAGA, Cal. Lab. Code§§ 2698, et seq., which 10 are premised on alleged violations of the California Labor Code for: (i) failure to pay wages timely at time of termination or resignation (Labor Code§§ 201-203, 11 212,213). This release shall apply to claims arising during the PAGA Period 12 Stipulation ¶ I.25. 13 Given that the releases are tailored to only claims pled in the operative Complaint that 14 pertain to the settlement class, the release is appropriately limited. 15 4. Tax Treatment of Settlement Amounts 16 As this lawsuit seeks statutory and civil penalties as recovery, the Parties have agreed that 17 the entirety of each Individual Settlement Payment to Class Members shall be treated as a payment 18 for penalties and interest and shall be reported by IRS Forms 1099. See Stipulation ¶ III.9.a. 19 5. Affirmative Obligations to be Undertaken by Class Members or Class 20 Counsel and the Reasons for Any Such Obligations 21 As stated above, Class Members do not need to do anything should they wish to receive 22 their share of the settlement funds. In other words, because this is not a claims-made settlement, 23 Class Members will not be required to make a submission to participate in the settlement. No claim 24 forms are required. Thus, this substantially decreases the amount of burden each Class Member 25 must bear in order to receive their share of the settlement funds. 26 However, if a Class Member does not wish to take part in this settlement or be bound by 27 the release, the Class Member must submit a request for exclusion. See Stipulation ¶ III.7.f. 28 17 PLAINTIFF’S NOTICE OF MOTION AND MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT 1 C. Notice to Class Members 2 Should the Court grant the instant motion, Defendant will provide the Settlement 3 Administrator with a list containing each Class Member’s full name, last known home address, 4 last known telephone number, Social Security number, and any other information required by the 5 Settlement Administrator in order to effectuate the terms of the settlement (“Class List”). See 6 Stipulation ¶¶ I.5; III.6.a. 7 Pursuant to the Settlement Agreement, Defendant will provide said Class List within fifteen 8 (15) business days of preliminary approval. See Stipulation ¶ III.6.a. Within ten (10) calendar days 9 of receipt of the Class List from Defendant, the Settlement Administrator will mail the Class Notice 10 to Class Members via regular First-Class U.S. mail. Id. ¶ III.6.b. For any Class Notices returned 11 to the Settlement Administrator as undeliverable, the Settlement Administrator shall conduct a 12 skip trace to locate the correct address based on the National Change of Address Database. Id. ¶ 13 III.6.c. If an updated/corrected address can be obtained through skip tracing, the Settlement 14 Administrator will re-mail the Class Notice within five (5) calendar days of receiving notice that 15 said Class Notice was undeliverable. Id. Class Members who receive a re-mailed Class Notice will 16 have their deadline to submit opt-outs, written objections, and/or disputes regarding information 17 pertaining to their individual settlement payments as contained in the Class Notice extended by 18 fifteen (15) calendar days. Id. 19 The Class Notice will advise Class Members of what the lawsuit is about, their rights and/or 20 options under the settlement, the total settlement amount and other terms of the settlement, their 21 expected individual settlement payment share, their opportunity to and procedures to opt out or to 22 object to the settlement, information pertaining to the final approval hearing, and the release of 23 claims. See Class Notice. As set forth in the Class Notice, Class Members will be allowed to opt 24 out of or object to the Settlement by a certain deadline, which is forty-five (45) days after the initial 25 mailing of the Class Notice. See Stipulation ¶ I.33. Class Members who received a re-mailed Class 26 Notice will have that deadline extended by 15 calendar days from the original response deadline. 27 Id. ¶ III.6.c. With respect to objections, Class Members are also informed in the Class Notice that 28 they may object in writing and/or appear at the final approval hearing to present their objections 18 PLAINTIFF’S NOTICE OF MOTION AND MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT 1 to the Court. Id. ¶ III.6.g; see Class Notice. 2 If Class Members need further information about the settlement and/or the lawsuit, Class 3 Members are provided with Class Counsel’s contact informat