Preview
BW oN
28
MATERN LAW GROUP
1230 ROSECRANS
AVENUE, STE 200
MANHATTAN
BEACH, CA 90266
MATERN LAW GROUP, PC
MATTHEW J. MATERN (SBN 159798)
JOSHUA D. BOXER (SBN 226712)
1230 Rosecrans Avenue, Suite 200
Manhattan Beach, CA 90266
Telephone: (310) 531-1900
Facsimile: (310) 531-1901
Email: mmatern@maternlawgroup.com
Email: jboxer@maternlawgroup.com
MATERN LAW GROUP, PC
SARA B. TOSDAL (SBN 280322)
One Market Plaza, Spear Tower, Suite 3676
San Francisco, CA 94105
Telephone: (415) 990-8390
Facsimile: (310) 531-1901
Email: stosdal@maternlawgroup.com
Attorneys for Plaintiffs Kathleen Ortiz and
Joanna Ortiz, individually, and on behalf of
others similarly aggrieved
ELECTRONICALLY
FILED
Superior Court of California,
County of San Francisco
04/19/2019
Clerk of the Court
BY: VANESSA WU
Deputy Clerk
SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF SAN FRANCISCO
KATHLEEN ORTIZ, an individual, and
JOANNA ORTIZ, an individual, and on behalf!
of themselves and others similarly aggrieved
Plaintiffs,
vs.
MORGAN STANLEY SMITH BARNEY,
LLC, a Delaware corporation; and DOES 1
through 100, inclusive,
Defendant.
CASE NO.: CGC-17-560139
DECLARATION OF MATTHEW J.
MATERN IN SUPPORT OF PLAINTIFFS’
MOTION FOR PAGA SETTLEMENT
APPROVAL
Date: May 13, 2019
Time: 9:30 a.m.
Dept.: 302
Reservation No.: 04170513-14
DECLARATION OF MATTHEW J. MATERN IN SUPPORT
OF PLAINTIFFS” MOTION FOR SETTLEMENT APPROVALBW oN
27
28
MATERN LAW GROUP.
1230 ROSECRANS,
AVENUE, STE 200
MANHATTAN
BEACH, CA 90266
DECLARATION OF MATTHEW J. MATERN
I, Matthew J. Matern, hereby declare as follows:
1. I am an attorney licensed to practice law in the State of California. I am the
founding attorney of Matern Law Group, PC (“MLG” or “Plaintiffs’ Counsel”), counsel of record
for Plaintiffs Kathleen Ortiz and Joanna Ortiz in the above-entitled action, Ortiz v. Morgan
Stanley Smith Barney, LLC, Case No. CGC-17-560139 in the San Francisco County Superior
Court. I make this declaration in support of Plaintiffs’ Motion for Approval of PAGA Settlement
(“Motion”) based on my personal knowledge unless another source of information or belief
clearly appears from the context, and as to all such matters, I believe them to be true. If called as a
witness, I could and would readily and competently testify to all matters stated within.
Case Background
The Parties and Procedural History
2. Plaintiffs worked for Defendant Morgan Stanley Smith Barney LLC (“Morgan
Stanley” or “Defendant’”) in San Francisco, California. Specifically, Plaintiff Kathleen Ortiz
worked as a registered Client Service Assistant from 2014 to 2016. Plaintiff Joanna Ortiz worked
as an unregistered Client Service Assistant from October 2015 to July 2016.
3. Defendant provides financial services including brokerage and wealth
management services to high-net worth individual investors and institutional clients. During the
timeframe relevant to the Complaint, Defendant conducted business in San Francisco, California.
4. On July 14, 2017, Plaintiffs filed this action in San Francisco Superior Court
against Morgan Stanley Smith Barney, LLC (“Defendant”). Plaintiffs’ Complaint alleged
multiple violations of the California Labor Code, including failure to provide required meal and
rest breaks, failure to pay overtime wages, failure to pay all wages due to discharged and quitting
employees, failure to pay overtime wages, failure to pay all wages due to discharged and quitting
employees, failure to furnish accurate, itemized wage statements, and failure to maintain required
records. From these alleged violations, Plaintiffs asserted a claim for penalties under the
California Private Attorneys General Act of 2004 (“PAGA”) on behalf of themselves, other
aggrieved employees of Defendant, and the State of California.
DECLARATION OF MATTHEW J. MATERN IN SUPPORT
2 OF PLAINTIFFS’ MOTION FOR SETTLEMENT APPROVALBW oN
27
28
MATERN LAW GROUP.
1230 ROSECRANS,
AVENUE, STE 200
MANHATTAN
BEACH, CA 90266
Discovery and Investigation
5. Prior to reaching settlement, Plaintiffs and their counsel conducted an investigation
into the claims alleged, performed legal research, and engaged in substantial informal and formal
discovery with Defendants. This discovery included several sets of interrogatories and document
requests, a deposition of Defendant’s person most knowledgeable (“PMK”), depositions of the
two Plaintiffs, and a comprehensive analysis of a sample of Defendant’s time and payroll records
by our retained expert, which assisted us in preparing a damages model prior to the mediation.
6. Based on this discovery and investigation, we were able to act intelligently and
effectively in negotiating the proposed Settlement.
7. The evidence revealed that Defendant’s practices affected approximately 2,637
aggrieved employees over the course of 55 affected pay periods.
Settlement Negotiations and Terms
8. On September 14, 2018, the Parties engaged in a full day of private mediation in
San Francisco with David Rotman, an experienced wage-and-hour mediator. In advance of the
mediation, Plaintiffs submitted to Mr. Rotman a highly detailed confidential mediation brief. The
brief described the inner-workings of Defendants’ wage payment practices, painting a compelling
picture of Defendants’ liability. The Parties negotiated at arm’s length and, although the Parties
conducted the negotiations in a professional manner, the negotiations were nonetheless
adversarial. Although the Parties entered mediation willing to explore the potential for a
settlement of the dispute, each side was also prepared to litigate its position through trial and
appeal if a settlement had not been reached. At the close of the mediation, the Parties reached
agreement on the material terms of a proposed settlement to resolve the litigation.
9. In the following months, the Parties engaged in further contentious, arm’s-length
negotiations regarding the finer terms of the Settlement, which ultimately resulted in a
Memorandum of Understanding (“MOU”) that memorialized the material terms of the proposed
settlement agreement. The MOU was executed on or around December 17, 2018.
10. During mediation and the subsequent negotiations that led to the final execution of
DECLARATION OF MATTHEW J. MATERN IN SUPPORT
3 OF PLAINTIFFS’ MOTION FOR SETTLEMENT APPROVALBW oN
27
28
MATERN LAW GROUP.
1230 ROSECRANS,
AVENUE, STE 200
MANHATTAN
BEACH, CA 90266
the Settlement Agreement, we considered several factors, including the strengths and weaknesses
of Plaintiffs’ claims, the likelihood of success on the merits, the amount in controversy and the
substantial risks inherent in continued litigation. We specifically took into account the possibility
that if the Parties reached a settlement of some slightly greater amount after additional years of
litigation, the expenses and attorneys’ fees of litigation would most certainly reduce the amount
of funds available to Plaintiffs and aggrieved employees for settlement overall. Moreover,
continued litigation would be expensive, involving dispositive motions, a trial and likely appeals,
and would substantially delay and reduce any recovery for the aggrieved employees.
11. On or around March 26, 2019, Plaintiffs Kathleen Ortiz and Joanna Ortiz executed
the general releases under California Civil Code section 1542 required as part of the terms of the
Agreement.
12. On or around April 2, 2019, the Parties fully executed the Settlement Agreement
(“Agreement”). A true and correct copy of the Agreement is attached hereto as Exhibit A. The
Agreement establishes a common fund of $1,750,000 in satisfaction of Plaintiffs’ claims for
PAGA penalties on behalf of themselves and all other similarly situated aggrieved employees,
including penalties for unpaid wages under Section 558.
a. As a result of this Agreement, the Aggrieved Employees will be unable to
bring a claim under, or recover for any other claim brought under, PAGA for
violations that took place in the State of California at any time from May 2,
2016 to the date of entry of judgment in this matter.
b. Defendant separately agreed to pay Plaintiffs $15,000 each in exchange for
general releases under California Civil Code section 1542 of any and all claims
they may have against Defendant.
c. The Agreement also provides for settlement administration fees with Rust
Consulting, Inc. as the administrator.
d. The Agreement provides for recovery of fees to Plaintiffs’ Counsel in an
amount of $577,500, or one-third of the common fund established by the
Agreement, and no more than $26,000 in costs incurred in the course of the
DECLARATION OF MATTHEW J. MATERN IN SUPPORT
4 OF PLAINTIFFS’ MOTION FOR SETTLEMENT APPROVALBW oN
27
28
MATERN LAW GROUP.
1230 ROSECRANS,
AVENUE, STE 200
MANHATTAN
BEACH, CA 90266
litigation. These cost include copying, postage, mileage, court filing fees, court
reporter fees, and service fees.
13. On or around April 3, 2019, Plaintiffs submitted a copy of the Settlement
Agreement to the Labor and Workforce Development Agency (““LWDA”). A true and correct
copy of the correspondence confirming submission to the LWDA is attached hereto as Exhibit B.
Amount in Controversy and Risks Associated with Proceeding
14. Based on information provided by Defendant and the evidence produced in
discovery, Plaintiffs believe there are approximately 2,637 aggrieved employees. At the time of
the mediation, Plaintiffs calculated the maximum potential recovery of penalties as follows:
15. Between May 30, 2016 and September 14, 2018, there were roughly 2 years, 3
months, 15 days, or 27.5 months. There were 55 semi-monthly pay periods in that period. By the
time of the hearing, there will have been over 72 pay periods. Plaintiffs initially calculated the
penalties as follows:
a. PAGA Penalties for Overtime Violations:
(2,349 employees x $100.00 violation per employee x 1 pay period x 50%
violation rate = $181,900) + (2,349 employees x $200.00 violation per employee
x 54 (number of pay periods throughout the PAGA period — initial pay period) x
50% violation rate = $12,684,600) = $12,802,050
b. PAGA Penalties for Meal Period Violations
(2,349 employees x $100.00 violation per employee x 1 pay period x 50%
violation rate = $181,900) + (2,349 employees x $200.00 violation per employee
x 54 (number of pay periods throughout the PAGA period — initial pay period) x
50% violation rate = $12,684,600) = $12,802,050
c. PAGA Penalties for Rest Period Violations
(2,349 employees x $100.00 violation per employee x 1 pay period x 50%
violation rate = $181,900) + (2,349 employees x $200.00 violation per employee x
54 (number of pay periods throughout the PAGA period — initial pay period) x
50% violation rate = $12,684,600) = $12,802,050
DECLARATION OF MATTHEW J. MATERN IN SUPPORT
5 OF PLAINTIFFS’ MOTION FOR SETTLEMENT APPROVALBW oN
27
28
MATERN LAW GROUP.
1230 ROSECRANS,
AVENUE, STE 200
MANHATTAN
BEACH, CA 90266
d. PAGA Penalties for Minimum Wage Violations
(2,349 employees x $100.00 violation per employee x 1 pay period x 50%
violation rate = $181,900) + (2,349 employees x $200.00 violation per employee x
54 (number of pay periods throughout the PAGA period — initial pay period) x
50% violation rate = $12,684,600) = $12,802,050
e. PAGA Penalties for Failure to Maintain Required Records:
(2,349 employees x $100.00 violation per employee x 1 pay period x 50%
violation rate = $181,900) + (2,349 employees x $200.00 violation per employee x
54 (number of pay periods throughout the PAGA period ~ initial pay period) x
50% violation rate = $12,684,600) = $12,802,050
f. PAGA Penalties for Failure to Maintain Required Records:
(2,349 employees x $100.00 violation per employee x 1 pay period x 50%
violation rate = $181,900) + (2,349 employees x $200.00 violation per employee x
54 (number of pay periods throughout the PAGA period ~ initial pay period) x
50% violation rate = $12,684,600) = $12,802,050
e. Total PAGA Penalties:
Based on the foregoing calculations for penalties for six different types of Labor Code
violations, the total PAGA penalties were as follows: $12,802.050 x 6 = $76,812,300.00
16. While Plaintiffs are confident in the merits of the case, a legitimate controversy
exists as to each alleged wage-and-hour violation. Defendant has denied and continues to deny
each of the claims and contentions alleged by Plaintiffs. Defendant has repeatedly asserted and
continues to assert defenses thereto, and have expressly denied and continues to deny any
wrongdoing or legal liability arising out of any of the facts or conduct alleged. Defendant also
has denied and continues to deny, inter alia, the allegations that the wage statements provided to
Plaintiffs and the aggrieved employees were deficient in any way that would engender liability;
that Defendant engaged in any unlawful conduct as alleged in the complaint; and that Plaintiffs or
the aggrieved employees are entitled to penalties as alleged. Further, the Parties disagree about
whether Defendant complied with California law. Additionally, the Parties disagree about the
DECLARATION OF MATTHEW J. MATERN IN SUPPORT
6 OF PLAINTIFFS’ MOTION FOR SETTLEMENT APPROVALBW oN
27
28
MATERN LAW GROUP.
1230 ROSECRANS,
AVENUE, STE 200
MANHATTAN
BEACH, CA 90266
extent of Defendant’s liability under PAGA for subsequent wage-and-hour violations.
17. Defendant also disputes whether penalties under Section 558 of the Labor Code
are recoverable in a PAGA suit. Defendant also maintains that Plaintiffs, who held essentially the
same job titles, were not properly suited to represent approximately 2,400 non-exempt employees
holding 75 different job titles in dozens of California branches, all of whom (including Plaintiffs)
are subject to mandatory arbitration provisions. Finally, Defendant contends that any trial on the
contested issues would be unmanageable. Had this case proceeded, Defendant was prepared to
file a motion to strike the representative allegations in Plaintiffs’ complaint, which could have
posed a serious threat to any class-wide PAGA recoveries.
18. Plaintiffs accounted for the fact that continued litigation, involving a trial and
possible appeals, would substantially delay and reduce any recovery to the State and the PAGA
Settlement Members. If the Court approves the Settlement, the aggrieved employees and the State
will receive timely relief and avoid the risk of an unfavorable judgment.
19. Based on a balance of the strengths and weaknesses of Plaintiffs’ claims against
the risks and costs of continued litigation, including the burdens of proof necessary to establish
liability, and the probability of appeals following judgment, Plaintiffs determined a realistic range
of recovery for settling their PAGA claims. The common fund of $1,750,000 is reasonable and in
the best interests of the State and the public.
Incentive Payment to Plaintiffs
20. Both the State of California and the aggrieved employees are beneficiaries of a
settlement that would not have been made possible but for the effort and commitment of
Plaintiffs. The settlement provides that in recognition of Plaintiffs’ extensive efforts and risks in
prosecuting this matter, Plaintiffs shall each be paid a Service Award, or incentive payment, in an
amount not to exceed $15,000.00 each. Settlement Agreement § 1.35(3), 2.9.1. The requested
payment is intended to recognize Plaintiffs’ effort in bringing this action as private attorneys
general under PAGA, assisting counsel with the investigation, litigation, and settlement,
regularly conferring with counsel on the status of the case, engaging in substantial discovery,
DECLARATION OF MATTHEW J. MATERN IN SUPPORT
7 OF PLAINTIFFS’ MOTION FOR SETTLEMENT APPROVALBW oN
27
28
MATERN LAW GROUP.
1230 ROSECRANS,
AVENUE, STE 200
MANHATTAN
BEACH, CA 90266
and reviewing the proposed settlement to ensure that its terms are fair and achieve PAGA’s
objectives.
21. The amount of the requested Service Awards is reasonable in light of other
incentive payments approved in other PAGA and Class settlements. See Campos v. California
Cartage Company, LLC, Case No. BC570310 (L.A. Cnty. Super. Ct. Aug. 10, 2018) (approving
$15,000 service award to each of the three plaintiffs); Blanchard v. BJ's Restaurants, Inc., Case
No. 30-2014-00761961-CU-OE-CX (Orange Cnty. Super. Ct. Sept. 26, 2016) (approving
$10,000 service award); Bui v. Vitamin Shoppe Industries Inc., Case No. BC518486 (L.A. Cnty.
Super. Ct. Aug. 31, 2016) (approving $10,000 service award); Jesus Miranda v.
HomeDeliveryLink, Inc., Case No. CIV DS1505393 (San Bernardino Cnty. Super. Ct. Aug. 9,
2016) (approving $10,000 service award); Mohamad Najjar v. Calop Business Sys., Inc. dlb/a
Ca/op Aeroground Service, Case No. BC582290 (L.A. Cnty. Super. Ct. Apr. 5, 2016)
(approving $10,000 service award); Sheldon v. AHMC Monterey Park Hosp. LP, Case No.
BC440282 (L.A. Cnty. Super. Ct. Mar. 2, 2016) (approving $10,000 service award).
22. During the two years this Action has been pending, Plaintiffs have actively
participated in making decisions in this case, including the decision to settle this case. Plaintiffs
each devoted between 42 and 55 hours of their time to the case. This included consulting with
counsel about their potential claims, reviewing the case materials, responding to three sets of
interrogatories as well as requests for the production of documents, preparing for and sitting for a
full day of deposition, assisting Plaintiffs’ counsel with preparation for the PMK depo, helping to
prepare for the mediation, and evaluating settlement prospects.
23. Plaintiffs put the interests of other aggrieved employees ahead of their own
interests by refusing to settle this action individually. Plaintiffs also faced the real risk that future
employers may not hire them because they lent their name as a PAGA representatives in this case,
and could have been liable for Defendant’s litigation costs if the case went to trial and they lost.
Furthermore, Plaintiffs relinquished more of their rights through a Civil Code section 1542
waiver than the other aggrieved employees. Plaintiffs have agreed that they cannot be rehired by
DECLARATION OF MATTHEW J. MATERN IN SUPPORT
8 OF PLAINTIFFS’ MOTION FOR SETTLEMENT APPROVALBW oN
27
28
MATERN LAW GROUP.
1230 ROSECRANS,
AVENUE, STE 200
MANHATTAN
BEACH, CA 90266
Morgan Stanley, which shows the risks and limitations they accepted for the good of the other
affected employees..
24. In sum, this action would not have been possible without the aid of Plaintiffs, who
put their own time and effort into the litigation, sacrificed the value of their own individual
claims, and placed themselves at risk for the sake of the other PAGA Settlement Members. The
requested incentive award of $15,000.00 to each Plaintiff is therefore reasonable to compensate
Plaintiff for his active participation in this lawsuit.
Plaintiffs’ Attorneys’ Fees and C
25. The Settlement provides for attorney’s fees and costs to MLG in an amount up to one-
third of the Maximum Settlement Amount, for a maximum fees award of $577,500, plus reasonable
and actual litigation expenses not to exceed $26,000, which includes costs for, among other things,
copying and faxing, postage, mileage, court filing and service, expert data analysis, and the mediation.
26. Based on my experience, I believe the fees and costs provision is reasonable. The
fee percentage requested is less than that charged by MLG for other employment cases. MLG
invested significant time and resources into the case, with payment deferred to the end of the
case, and then, of course, contingent on the outcome. MLG’s efforts have resulted in substantial
benefit to the LWDA and PAGA Settlement Members in the form of a significant settlement
funds established to penalize Defendant for the unlawful wage and hour practices. Without
MLG’s efforts, the claims as alleged in the complaint would almost certainly have gone without
remedy.
27. — My 2019 billing rate is $925 per hour. The billing rates for the following attorneys
who worked on this case are as follows: $800 per hour for Joshua D. Boxer, a Senior Associate
Attorney with 16 years of experience; $675 per hour for Corey Bennett, an Associate Attorney
with 8 years of experience; $625 per hour for Sara B. Tosdal, an Associate Attorney with
approximately 7 years of experience; and $575 per hour for Roy Suh, an Associate Attorney with
approximately 6 years of experience.
28. These rates are consistent with current prevailing market rates for attorneys in San
Francisco and Los Angeles who handle complex class actions involving hundreds or thousands of
DECLARATION OF MATTHEW J. MATERN IN SUPPORT
9 OF PLAINTIFFS’ MOTION FOR SETTLEMENT APPROVALBW oN
27
28
MATERN LAW GROUP.
1230 ROSECRANS,
AVENUE, STE 200
MANHATTAN
BEACH, CA 90266
class members. These rates also take into account that my firm forewent payment for our work for
the duration of the case.
29. As of April 3, 2019, MLG’s lodestar is approximately $187,017.50.00
representing approximately 241.5 attorney hours at their customary hourly rates. The total hours
worked by each attorney and their hourly rates are as follows:
Attorney Years in Hours Billed Hourly Rate Total Fee
Practice
Matthew J. Matern | 27 53.3 $925.00 $49,302.50
Joshua D. Boxer 15 109.80 $800.00 $87,840.00
Corey Bennett 9 32.2 $675.00 $21,735.00
Sara Tosdal 7 31.5 $625.00 $19,687.50
Roy Suh 6 14.7 $575.00 $8,452.50
Totals 241.5 $187,017.50
30. Based on my experience in the settlement administration process, I estimate that
MLG will spend another 40 hours on this case, including preparing for and attending the hearing
on Plaintiffs’ Motion, and monitoring settlement administration. Based on my experience, we will
have PAGA Settlement Members calling our office to inquire about the status of the case and to
ask for further information on a nearly daily basis. MLG will also bear the risk of taking
whatever actions are necessary if Defendant fails to pay. At a blended hourly rate of $720 per
hour, this brings our lodestar to 281.5 hours and $215,817.50.
31. MLG expended a significant amount of time efficiently litigating the case to
achieve the excellent result on behalf of the PAGA Settlement Members. These hours were and
are reasonable and necessary to achieve the result reached in this settlement. These hours were
spent on the following tasks: interviewing Plaintiff and other witnesses; legal research regarding
Plaintiffs’ claims and anticipated defenses; reviewing documents provided by Plaintiff; preparing
the complaint; drafting and responding to written discovery requests; meeting and conferring with
Defendant’s counsel to obtain relevant documents and information; reviewing time and payroll
data and other employment records produced by Defendant; preparing Plaintiffs for their
depositions and defending same; preparing for and taking the deposition of Defendant’s PMK;
DECLARATION OF MATTHEW J. MATERN IN SUPPORT
10 OF PLAINTIFFS’ MOTION FOR SETTLEMENT APPROVALBW oN
27
28
MATERN LAW GROUP.
1230 ROSECRANS,
AVENUE, STE 200
MANHATTAN
BEACH, CA 90266
retaining a consultant to analyze the time and payroll data; drafting mediation briefs and
preparing damages analyses; attending private mediation; negotiating, drafting, and revising the
MOU and Stipulation and Notice; and drafting the Motion for Approval of PAGA Settlement.
Plaintiffs’ Counsel’s Qualifications
32. The hourly rates for MLG attorneys are commensurate with their qualifications
and experience.
33. I received a B.A. with honors in 1986 from Tulane University. I received my J.D.
from Southwestern University School of Law in 1991. I became an active member of the State
Bar of California in September 1992, and have been an active member in good standing ever
since then. I have been practicing as a litigation attorney in Los Angeles since 1992, and have
been concentrating on employment litigation since approximately 1997.
34. In 1992, I founded Rastegar & Matern, Attorneys at Law, A Professional
Corporation, the predecessor to my current firm. In 2012, I founded the Law Offices of Matthew
J. Matern, which changed its name to Matern Law Group, PC in January 2014. Since 1992, I have
been heavily, successfully, and continuously involved in active litigation and trial work, including
extensive employment litigation and work in wage-and-hour class actions.
35. My current firm, MLG, is a twenty-two attorney law firm that is actively and
continuously practicing in employment litigation, representing employee plaintiffs in individual
and class actions in state and federal courts throughout the State of California. My firm is
qualified to handle this litigation due to our experience in litigating Labor Code violations in both
individual and class and representative cases. MLG has handled and is currently handling
numerous wage-and-hour class action cases. Over the course of my career, I have been involved
in dozens of class action settlements, with many of them settling in the seven-figure range.
36. Since 1992, I have been heavily, continuously, and successfully involved in active
litigation and trial work, including extensive work in employment litigation and wage and hour
class actions. I have tried approximately twenty-five cases, including approximately twenty jury
trials. Over the course of my career, I have been involved in over 50 class action settlements,
with many of them settling in the seven figure range, including settlements in the amount of $8.5
DECLARATION OF MATTHEW J. MATERN IN SUPPORT
11 OF PLAINTIFFS’ MOTION FOR SETTLEMENT APPROVALBW oN
27
28
MATERN LAW GROUP.
1230 ROSECRANS,
AVENUE, STE 200
MANHATTAN
BEACH, CA 90266
million, $7.0 million, $6.0 million, $6.0 million, $5.0 million, $4.5 million, $4.5 million, $4.2
million, $4.2 million, $3.75 million, $3.75 million, $3.6 million, $3.3 million, $3.1 million, $3.0
million, $2.9 million, $2.65 million, $2.5 million, and $2.5 million. I have represented clients in
numerous wage and hour class action lawsuits that settled with per-class-member recoveries in a
range similar to the anticipated per-class-member recovery in the instant case. I have also been
appointed as class counsel in over ten certified wage and hour class action cases.
37. I have been counsel in a number of cases which resulted in published appellate
victories including Franco v. Athens Disposal Company, Inc., 171 Cal. App. 4th 1277 (2009);
Gutierrez v. California Commerce Club, 187 Cal. App. 4th 969 (2010); Pantoja v. Anton, 198
Cal. App. 4th 87 (2011); Fuentes v. AutoZone, Inc., 200 Cal. App. 4th 1221 (2011); Ventura v.
ABM Industries, Inc., 212 Cal. App. 4th 258 (2012); and Franco v. Arakelian Enterprises, Inc.,
211 Cal. App. 4th 314 (2012); and other non-published appellate victories.
38. Of the attorneys at MLG, I am the attorney with the most active trial and pretrial
calendar. I have personally tied approximately twenty jury trials. I personally represented clients
in numerous wage-and-hour class action lawsuits that settled with recovery per class member
being in a similar range to the settlement in the instant case.
39. Joshua D. Boxer is a senior associate at MLG. He graduated from the University
of California, Santa Barbara in 1999 and received his J.D. from University of California, Davis
School of Law in 2003. He has been an active member of the California State Bar in good
standing since November of 2003. Mr. Boxer has over 15 years of experience representing
plaintiffs in employment litigation, including significant experience in wage and hour and
consumer class actions. Mr. Boxer has achieved numerous appellate victories, including Jesus
Mendoza v. Century Fast Foods, No. B267158, 2016 WL 6610287 (Cal. Ct. App. Nov. 9, 2016),
and In re Wal-Mart Wage & Hour Employment Practices Litig., 737 F.3d 1262 (9th Cir. 2013);
reached notable settlements; and obtained a number of favorable jury verdicts, including a jury
verdict of over $25 million in Valladares v. Madera Quality Nut, and a recent (2018) jury verdict
of just under $500,000 in Vilma Aguilar v. Blaze Pizza, LLC et al. He has been appointed class
counsel in numerous cases, as well as Interim Co-Lead Counsel in MDL 2448: In re Anheuser-
DECLARATION OF MATTHEW J. MATERN IN SUPPORT
12 OF PLAINTIFFS’ MOTION FOR SETTLEMENT APPROVALBW oN
27
28
MATERN LAW GROUP.
1230 ROSECRANS,
AVENUE, STE 200
MANHATTAN
BEACH, CA 90266
Busch Beer Labeling Litigation. Mr. Boxer also has the rare experience of trying a wage and
hour class action to a jury.
40. Corey Bennett is an associate at MLG. Mr. Bennett graduated from Northern
Arizona University in 2003, where he was a Dean’s Merit Scholar. He received a Master’s of
Public Administration from the University of Southern California in 2006 and earned his J.D.
from University of San Francisco School of Law in 2009. He has been an active member of the
California State Bar in good standing since November 2009. Mr. Bennett has approximately eight
years of experience representing plaintiffs in employment and consumer litigation, including
wage-and-hour class actions.
41. Roy K. Suh is an associate at MLG who received his B.A. from the University of
California, Berkeley in 2004 in English with Distinction and received his J.D. from the University
of California, Los Angeles School of Law in 2011. He has been an active member of the State
Bar of California in good standing since July 2012 and has been practicing as a litigation attorney
in Los Angeles since then, concentrating exclusively on employment litigation.
42. Sara B. Tosdal is an associate at MLG. She received her B.A. in History, with
minors in English and African/African-American Studies, from Duke University in 2006, where
she achieved Dean’s List honors. She earned her J.D. from the University of California, Hastings
College of the Law in 2011, where she earned the CALI Excellence for the Future Award and the
Witkin Award for Excellence for Federal Courts, served as the Editor-in-Chief of the Hastings
Law Journal, and externed for the Honorable Richard Seeborg of the United States District Court
for the Northern District of California. She has been an active member in good standing with the
California State Bar since November 2011. She has been a practicing litigator for approximately
seven years, representing unions, workers, and employee benefit plans in complex litigation and
in labor and employment matters in both state and federal courts.
MLG’s Hourly Rates Are Reasonable
43. | MLG requests the foregoing billable rates be applied in this case, as the rates are
reasonable for attorneys who handle complex wage and hour litigation. The current prevailing
billing or “market” rates in the Los Angeles and Orange County areas range from $285 to $900
DECLARATION OF MATTHEW J. MATERN IN SUPPORT
13 OF PLAINTIFFS’ MOTION FOR SETTLEMENT APPROVALBW oN
27
28
MATERN LAW GROUP.
1230 ROSECRANS,
AVENUE, STE 200
MANHATTAN
BEACH, CA 90266
per hour. See Bihun v. AT&T Info. Sys., Inc., 13 Cal. App. 4th 976, 1004-05 (1993). These rates
properly take into account the fact that payment will have been delayed for nearly three years.
44.
The hourly rates for MLG attorneys are commensurate with MLG’s experience in
litigating complex cases. Indeed, MLG has been awarded fees by various courts, including this
Court, based on these rates, including in the following cases:
In Campos v. California Cartage Company, LLC, Los Angeles County Superior
Court Case No. BC570310, the Honorable Kenneth Freeman awarded attorneys’
fees to plaintiffs’ counsel at the following 2018 billing rates: Matthew J. Matern,
$875; Joshua Boxer, $750; Corey Bennett, $625.
In Guirola vy. PRRK Holdings, LLC, Case No. BC576524, the Honorable Ann I.
Jones awarded attorneys’ fees, finding that the fee request was “well-supported by
the lodestar,” which was based on the following rates for 2017: Matthew J. Matern,
$850; Launa Adolph, $700; and Deanna Leifer, $575;
In Flint v. Rehrig Pacific Co., LASC Case No. BC595545, the Honorable Carolyn
B. Kuhl awarded attorneys’ fees based on class counsel’s lodestar, with a multiplier
of 2.32, based on the following rates: Matthew J. Matern, $850; Debra Tauger,
$725; Launa Adolph, $700; and Deanna Leifer, $575, finding that “[t]he lodestar
calculation confirm[ed] the reasonableness of the common fund fee methodology;”
In Wilson v. RockTenn, LASC Case No. BC488456, the Honorable Elihu M. Berle,
awarded attorneys’ fees based on class counsel’s lodestar, which was based on the
following rates: Matthew J. Matern, $850; Debra Tauger (admitted 1989), $725;
Launa Adolph, $700; Dalia Khalili (admitted 2007), $625; and Tagore
Subramaniam (admitted 2011), $525; and Daniel Bass (admitted 2012), $475,
finding that “the hourly rates charged [] appear to be reasonable, in line with the
prevailing rates in the community;”
In Lopez v. Delta Air Lines, Inc., C.D. Cal. Case No. 2:15-CV-07302 SVW, the
Honorable Stephen V. Wilson found that the following “hourly rates [were]
reasonable and in line with rates prevailing in the community for attorneys of
DECLARATION OF MATTHEW J. MATERN IN SUPPORT
14 OF PLAINTIFFS’ MOTION FOR SETTLEMENT APPROVALBW oN
27
28
MATERN LAW GROUP.
1230 ROSECRANS,
AVENUE, STE 200
MANHATTAN
BEACH, CA 90266
comparable skill, experience, and reputation:” Matthew J. Matern, $850; Debra
Tauger, $725; Launa Adolph, $700; Dalia Khalili, $625; Matthew Gordon
(admitted 2009), $575; Tagore Subramaniam, $525; and Daniel Bass, $475.
In Munoz v. Dependable Highway Express, Inc., LASC Case No., 535931, the
Honorable Maren E. Nelson awarded attorneys’ fees based on class counsel’s
lodestar, with a multiplier of 1.18, based on the following rates: Matthew J. Matern,
$850; Launa Adolph, $700; Aubry Wand (admitted 2011), $475; and Emma Steiner
(admitted 2013), $450, finding that “the hourly rates used in the lodestar calculation
are reasonable and consistent with prevailing rates in the community;”
In Gutierrez v. Google, Inc., Santa Clara Superior Court Case No. 11-cv-2777104,
the Honorable Brian C. Walsh awarded attorneys’ fees based on class counsel’s
lodestar, with a multiplier of 3.05, based on the following rates: Matthew J. Matern,
$850; Launa Adolph, $700; Dalia Khalili; $625; Daniel Bass, $475; Deanna Leifer,
$575; and Zara Lockshin (admitted 2012), $475;
In Shiferaw v. Sunrise Senior Living Management, Inc., C.D. Cal. Case No. 2:13-
ev-02171-JAK-PLA, the Honorable John A. Kronstadt granted plaintiffs’ motion
for attorneys’ fees, finding that “the proposed rates [were] within the range of
reasonableness,” including the following rates for 2016: Matthew J. Matern, $825;
Launa Adolph, $650; Aubry Wand, $450; Daniel Bass, $450; Emma Steiner, $450;
and Amanda Naoufal (admitted January 2014), $425.
In Noriega v. Arcadia, Inc., LASC Case No. BC536424, the Honorable Ann I.
Jones awarded attorneys’ fees based on class counsel’s lodestar, with a multiplier of
2.097, based on the following rates: Matthew J. Matern, $825; Launa Adolph,
$650; Janette Lee (admitted 2012), $475; and Daniel Bass, $450;
In Zamora v. Cardenas Markets, Inc., LASC Case No. BC505451, the Honorable
Hon. Ann I. Jones awarded attorneys’ fees based on class counsel’s lodestar, with a
multiplier of 1.87, based on the following rates: Matthew J. Matern, $825; Launa
Adolph, $650; Aubry Wand, $450; and Daniel Bass, $450;
DECLARATION OF MATTHEW J. MATERN IN SUPPORT
15 OF PLAINTIFFS’ MOTION FOR SETTLEMENT APPROVALBW oN
27
28
MATERN LAW GROUP.
1230 ROSECRANS,
AVENUE, STE 200
MANHATTAN
BEACH, CA 90266
In Campos v. Southern California Edison Company, LASC Case No. BC499966,
the Honorable Ann I. Jones awarded attorneys’ fees based on class counsel’s
lodestar, with a 1.99 multiplier, based on the following rates: Matthew J. Matern,
$825; Launa Adolph, $650; Dalia Khalili, $575; and Matthew W. Gordon (admitted
2009), $525;
In Rust v. Los Angeles Guild, LLC, LASC Case No. BC548669, the Honorable Ann
I. Jones awarded class counsel attorneys’ fees, finding that the following rates
“appear to be reasonable and in line with prevailing rates in the community”:
Matthew J. Matern, $825; Launa Adolph $650; and Aubry Wand, $450;
In Brueske v. DHSE, Inc., Riverside Superior Court Case No. INC1205382, the
Honorable Craig G. Riemer awarded attorneys’ fees based on the following rates
for 2015: Matthew J. Matern, $775; Launa Adolph, $575; and Emma Steiner, $375;
In Williams v. Success Healthcare, LLC, et al., Los Angeles Superior Court Case
No. BC5333821, the Honorable Amy D. Hogue approved an attorneys’ fee award
finding that the following 2015 rates “appear[ed] to be reasonable and in line with
prevailing rates in the community”: Matthew J. Matern, $775; Launa Adolph $650;
and Janette Lee, $400;
In Villanueva v. P.L.D, Enterprises, LASC Case No. BC506331, the Honorable
Elihu M. Berle awarded class counsel attorneys’ fees, finding that “the hourly rates
charge[d] appear to be reasonable and in line with the prevailing rates in the
community,” including the following hourly rates for 2015: Matthew J. Matern,
$775; Launa Adolph, $575; Janette Lee, $400; and Daniel Bass, $375;
In Alegria v. Student Transportation of America, Inc., et al., Riverside Superior
Court Case No. RIC1209792, the Honorable Sharon J. Waters approved an
attorney’s fees award based on class counsel’s lodestar, with a multiplier of 1.8281,
based, in part, upon my 2015 hourly rate of $775; and
In Bonilla v. Agri-Empire, et al., Riverside Superior Court Case No. RIC1209556,
the Honorable Sharon J. Waters awarded attorneys’ fees based, in part, on my 2015
DECLARATION OF MATTHEW J. MATERN IN SUPPORT
16 OF PLAINTIFFS’ MOTION FOR SETTLEMENT APPROVALBW oN
27
28
MATERN LAW GROUP.
1230 ROSECRANS,
AVENUE, STE 200
MANHATTAN
BEACH, CA 90266
billing rate of $775.
45. | MLG’s hourly rates are also in line with the hourly rates approved in other cases.
See Roberti v. OSI Sys., Inc., No. CV1309174MWFMRW, 2015 WL 8329916, at *7 (C.D. Cal.
Dec. 8, 2015) (“Lead Counsel’s attorney rates—between $525 to $975—are reasonable given that
each has at least 15 years of litigation experience..”); Kearney v. Hyundai Motor Am., No. SACV
09-1298-JST, 2013 WL 3287996 (C.D. Cal. June 28, 2013) (approving rates between $100 and
$800); Moore v. PetSmart, Inc., No. 5:12-CV-03577-EJD, 2015 WL 5439000, at *12 (N.D. Cal.
Aug. 4, 2015) (finding rates of $720 for partner, $520-$670 for senior counsel, and $375-$480 for
associates reasonable).
MLG Accepted this Case on a Contingency Basis
46. My office took this case on a contingent basis and has put a substantial amount of
time and energy into litigating this case, all while receiving no payment. The risk to my office
has been significant, particularly if we would not be successful in pursuing this class action. In
that case, we would have been left with no compensation for all the time taken in litigating this
case.
47. MLG took this case on a contingency basis with no guarantee of being paid,
against a large, well-financed company that was defended by an experienced defense team. MLG
assumes a great deal of contingent risk in litigating wage and hour actions. For instance, in
Hernandez v. Chipotle Mexican Grill, Inc. (LASC Case No. BC373759), the Court of Appeal
affirmed the trial court’s order denying certification in an action alleging that defendant failed to
provide its restaurant workers with uninterrupted, 30-minute off-duty meal breaks in a pair of
depublished opinions: Hernandez v. Chipotle Mexican Grill, Inc., 208 Cal. App. 4th 1487 (2012)
and Hernandez v. Chipotle Mexican Grill, 189 Cal. App. 4th 751 (2010). Similarly, in Gonzalez
v. OfficeMax N. Am. (C.D. Cal., Case No. CV-07-00452), the court issued an order denying
certification of plaintiffs’ meal and rest break claims, finding that the reason any particular
employee missed any particular break required individualized fact finding. See Gonzalez v.
OfficeMax N. Am. (C.D. Cal. Nov. 5, 2012) 2012 U.S. Dist. LEXIS 163853. In each of these
cases, Class Counsel incurred over $100,000.00 in costs, and over 5,000 hours in attorney time
DECLARATION OF MATTHEW J. MATERN IN SUPPORT
17 OF PLAINTIFFS’ MOTION FOR SETTLEMENT APPROVALBW oN
28
MATERN LAW GROUP.
1230 ROSECRANS,
AVENUE, STE 200
MANHATTAN
BEACH, CA 90266
was expended, only to have class certification denied. Moreover, courts frequently dismiss class
and representative allegations and compel arbitration in similar cases, as evidenced in several
recent cases litigated by Class Counsel: Chico v. Hilton Worldwide, Inc., et al. (C.D. Cal. Case
No. CV-14-5750) (compelling plaintiff's individual claims to arbitration and dismissing
plaintiff's class allegations and representative PAGA claims) and Tapia v. Macy’s, Inc. (C.D. Cal.
CV-14-05163) (same).
48. Because most individuals cannot afford to pay for representation in litigation on an
hourly basis, MLG represents virtually all of its employment law clients on a contingency fee
basis. Pursuant to this arrangement, we are not compensated for our time unless we prevail at
trial or successfully settle our clients’ cases. Because the firm is taking the risk that we will not
be reimbursed for our time unless our client settles or wins his or her case, we cannot afford to
represent an individual employee on a contingency basis if, at the end of our representation, all
we are to receive is our regular hourly rate for services. It is essential that we recover more than
our regular hourly rate when we win if we are to remain in practice so as to be able to continue
representing other individuals in employment disputes.
49. | My office’s efforts have resulted in substantial benefits to the aggrieved
employees, in the form of a substantial settlement fund established to compensate them for
missed meal periods and rest breaks, among the other wage and hour violations noted above. I
am informed and believe that, without the efforts of my office, the Labor Code and wage order
violations alleged in the complaint would have gone without remedy.
50. | The Agreement provides for attorney’s fees and costs to Plaintiffs’? Counsel in an
amount up to one-third (33.33%) of the Maximum Settlement Amount, for an attorney’s fees award
of $577,500, plus reasonable and actual litigation expenses not to exceed $26,000, which includes
costs for, among other things, copying and faxing, mileage, research services, court filings and
service, deposition transcripts, expert services, and mediation.
MLG’s Costs Are Reasonable
51. My firm’s billing records show that our expenses incurred total $22,245.28. These
costs include court and LWDA filing fees, service of process costs, copy costs, court reporter
DECLARATION OF MATTHEW J. MATERN IN SUPPORT
18 OF PLAINTIFFS’ MOTION FOR SETTLEMENT APPROVALBW oN
27
28
MATERN LAW GROUP.
1230 ROSECRANS,
AVENUE, STE 200
MANHATTAN
BEACH, CA 90266
fees, and mediator costs, as well as travel costs and other expenses reasonably and necessarily
incurred in the litigation. Attached hereto as Exhibit C is a true and correct copy of our cost
report as of April 18, 2019. These costs were reasonably and necessarily incurred in prosecuting
this case.
I declare under penalty of perjury under the laws of the State of California that the
foregoing is true and correct.
Executed on this 19th day of April, 2019, in Manhattan Beach, California
WEOL.
Matthew J. Matern
DECLARATION OF MATTHEW J. MATERN IN SUPPORT
19 OF PLAINTIFFS’ MOTION FOR SETTLEMENT APPROVALEXHIBIT A
MATERN LAW GROUP, PC
1230 ROSECRANS AVENUE.
‘SUITE 200
MANHATTAN BEACH, CA 90266MATERN LAW GROUP, PC
Matthew J. Matern (SBN 159798)
Joshua D. Boxer (SBN 226712)
Roy K. Suh (SBN 283988)
1230 Rosecrans Avenue, Suite 200
Manhattan Beach, CA 90266
Tel: (310) 531-1900
Facsimile: (310) 531-1901
Attorneys for PLAINTIFFS
TERRY E. SANCHEZ (State Bar No. 101318)
terry.sanchez@mto.com
MUNGER, TOLLES & OLSON LLP
350 South Grand Avenue
Fiftieth Floor
Los Angeles, California 90071
Telephone: (213) 683-9100
Facsimile: (213) 683-4015
Attorneys for DEFENDANT
[Additional counsel listed on following page.]
SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF SAN FRANCISCO
KATHLEEN ORTIZ and JOANNA ORTIZ, Case No. CGC-17-560139
individually, and on behalf of others similarly
situated, STIPULATION RE: SETTLEMENT
OF REPRESENTATIVE PAGA
Plaintiffs, ACTION;
vs. [PROPOSED] LETTER TO
AGGRIEVED EMPLOYEES
MORGAN STANLEY SMITH BARNEY (EXHIBIT 1);
LLC, a Delaware corporation; and DOES 1-
100, inclusive, [PROPOSED] JUDGMENT (EXHIBIT
2»
Defendants.
STIPULATION RE: SETTLEMENT OF REPRESENTATIVE PAGA ACTIONAdditional Counsel
MALCOLM A. HEINICKE (State Bar No. 194174)
malcolm.heinicke@mto.com
MARJA-LISA OVERBECK (State Bar No. 261707)
mari.overbeck@mto.com
NICHOLAS D. FRAM (State Bar No. 288293)
nicholas. fram@mto.com
MUNGER, TOLLES & OLSON LLP
560 Mission Street
Twenty-Seventh Floor
San Francisco, California 94105
Telephone: (415) 512-4000
Facsimile: (415) 512-4077
Attorneys for DEFENDANT
--
STIPULATION RE: SETTLEMENT OF REPRESENTATIVE PAGA ACTIONIT IS HEREBY AGREED by and between Kathleen Ortiz and Joanna Ortiz
(“PAGA Representatives” or “Plaintiffs”), on behalf of themselves and as deputized
representatives of the State of California on behalf of all other allegedly Aggrieved Employees as
defined below, on the one hand, and Defendant Morgan Stanley Smith Barney LLC (herein
“Morgan Stanley” or “Defendant” or the “Company’”), on the other hand, as set forth below:
L The Conditional Nature of this Settlement.
This Stipulation re: Settlement of Representative PAGA Action, including all
associated exhibits or attachments (herein “Stipulation” or “Settlement”), is made for the sole
purpose of attempting to consummate settlement of this Litigation on a representative basis under
the California Labor Code Private Attorneys General Act of 2004, codified at California Labor
Code section 2698 ef seq., and is entered into in compromise of disputed claims. Because this
Litigation involves a representative action brought under California’s Private Attorneys General
Act (“PAGA”), this Settlement must receive approval from the Court pursuant to Labor Code
section 2699(1). Accordingly, Defendant enters into this Settlement on a conditional basis. In the
event that the Court does not enter the Judgment, or in the event that the associated Judgment does
not become Final for any reason, this Stipulation shall be deemed null and void ab initio, it shall
be of no force or effect whatsoever, it shall not be referred to or utilized for any purpose
whatsoever, and the negotiation, terms and entry of it shall remain subject to the provisions of
California Evidence Code sections 1119 and 1152, and similar rules of other jurisdictions.
Defendant denies any wrongdoing and denies that it is in any way liable to the
PAGA Representatives and/or the Aggrieved Employees. Morgan Stanley has agreed to resolve
this Litigation via this Stipulation, but to the extent this Stipulation is deemed void or does not
take effect, Morgan Stanley does not waive, but rather expressly reserves, all rights to challenge
all such claims and allegations in the Litigation upon all procedural and factual grounds, including
without limitation the ability to challenge the right to bring a representative action, on any
grounds, or to assert any and all defenses or privileges. Plaintiffs agree that Morgan Stanley
retains and reserves these rights, and agree not to take a position to the contrary; specifically,
Plaintiffs and Plaintiffs’ Counsel waive, and agree not to argue or present, any argument that
-2-
STIPULATION RE: SETTLEMENT OF REPRESENTATIVE PAGA ACTIONMorgan Stanley could not contest representative status simply because Morgan Stanley entered
into this Stipulation should this Litigation proceed.
I. The Parties to this Settlement.
This Settlement (with the associated exhibits) is made and entered into by and
among the following Settling Parties: (i) Plaintiffs (on behalf of themselves, and as deputized
representatives of the State of California on behalf of all Aggrieved Employees), with the
assistance and approval of Plaintiffs’ Counsel; and (ii) Morgan Stanley, with the assistance of its
counsel of record in the Litigation. The Stipulation is intended by the Settling Parties to result in
the final resolution of the Litigation with prejudice pursuant to the Judgment and to fully, finally
and forever resolve, discharge and settle the Resolved Claims upon and subject to the terms and
conditions herein.
Il. The Litigation.
Plaintiffs submitted letters to the California Labor and Workforce Development
Agency (“LWDA”) identifying their claims on May 2, 2017. Specifically, Plaintiffs stated that
they planned to pursue claims under PAGA against Morgan Stanley for various alleged wage and
hour violations. The LWDA did not respond to their letters.
Plaintiffs filed the instant action as private attorneys general on July 14, 2017.
Plaintiffs are represented by Matern Law Group, PC. On behalf of themselves and other
Aggrieved Employees, Plaintiffs seek penalties pursuant to PAGA (Labor Code § 2698 ef seg.)
against Morgan Stanley based on the following alleged wage and hour violations: (1) failure to
provide legally compliant meal periods during all eligible work shifts, or compensation in lieu
thereof (Labor Code §§ 512 and 226.7); (2) failure to provide legally compliant rest periods during
all eligible work shifts, or compensation in lieu thereof (Labor Code §§ 512, 226.7); (3) failure to
pay and/or properly calculate overtime compensation (Labor Code §§ 510, 1194); (4) furnishing
illegal wage statements (Labor Code § 226); (5) failure to timely pay all wages owed (Labor Code
§ 204); (6) failure to pay all final wages due upon ending employment (Labor. Code §§ 201-203);
(7) f
Preview
BW oN 28 MATERN LAW GROUP 1230 ROSECRANS AVENUE, STE 200 MANHATTAN BEACH, CA 90266 MATERN LAW GROUP, PC MATTHEW J. MATERN (SBN 159798) JOSHUA D. BOXER (SBN 226712) 1230 Rosecrans Avenue, Suite 200 Manhattan Beach, CA 90266 Telephone: (310) 531-1900 Facsimile: (310) 531-1901 Email: mmatern@maternlawgroup.com Email: jboxer@maternlawgroup.com MATERN LAW GROUP, PC SARA B. TOSDAL (SBN 280322) One Market Plaza, Spear Tower, Suite 3676 San Francisco, CA 94105 Telephone: (415) 990-8390 Facsimile: (310) 531-1901 Email: stosdal@maternlawgroup.com Attorneys for Plaintiffs Kathleen Ortiz and Joanna Ortiz, individually, and on behalf of others similarly aggrieved ELECTRONICALLY FILED Superior Court of California, County of San Francisco 04/19/2019 Clerk of the Court BY: VANESSA WU Deputy Clerk SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SAN FRANCISCO KATHLEEN ORTIZ, an individual, and JOANNA ORTIZ, an individual, and on behalf! of themselves and others similarly aggrieved Plaintiffs, vs. MORGAN STANLEY SMITH BARNEY, LLC, a Delaware corporation; and DOES 1 through 100, inclusive, Defendant. CASE NO.: CGC-17-560139 DECLARATION OF MATTHEW J. MATERN IN SUPPORT OF PLAINTIFFS’ MOTION FOR PAGA SETTLEMENT APPROVAL Date: May 13, 2019 Time: 9:30 a.m. Dept.: 302 Reservation No.: 04170513-14 DECLARATION OF MATTHEW J. MATERN IN SUPPORT OF PLAINTIFFS” MOTION FOR SETTLEMENT APPROVALBW oN 27 28 MATERN LAW GROUP. 1230 ROSECRANS, AVENUE, STE 200 MANHATTAN BEACH, CA 90266 DECLARATION OF MATTHEW J. MATERN I, Matthew J. Matern, hereby declare as follows: 1. I am an attorney licensed to practice law in the State of California. I am the founding attorney of Matern Law Group, PC (“MLG” or “Plaintiffs’ Counsel”), counsel of record for Plaintiffs Kathleen Ortiz and Joanna Ortiz in the above-entitled action, Ortiz v. Morgan Stanley Smith Barney, LLC, Case No. CGC-17-560139 in the San Francisco County Superior Court. I make this declaration in support of Plaintiffs’ Motion for Approval of PAGA Settlement (“Motion”) based on my personal knowledge unless another source of information or belief clearly appears from the context, and as to all such matters, I believe them to be true. If called as a witness, I could and would readily and competently testify to all matters stated within. Case Background The Parties and Procedural History 2. Plaintiffs worked for Defendant Morgan Stanley Smith Barney LLC (“Morgan Stanley” or “Defendant’”) in San Francisco, California. Specifically, Plaintiff Kathleen Ortiz worked as a registered Client Service Assistant from 2014 to 2016. Plaintiff Joanna Ortiz worked as an unregistered Client Service Assistant from October 2015 to July 2016. 3. Defendant provides financial services including brokerage and wealth management services to high-net worth individual investors and institutional clients. During the timeframe relevant to the Complaint, Defendant conducted business in San Francisco, California. 4. On July 14, 2017, Plaintiffs filed this action in San Francisco Superior Court against Morgan Stanley Smith Barney, LLC (“Defendant”). Plaintiffs’ Complaint alleged multiple violations of the California Labor Code, including failure to provide required meal and rest breaks, failure to pay overtime wages, failure to pay all wages due to discharged and quitting employees, failure to pay overtime wages, failure to pay all wages due to discharged and quitting employees, failure to furnish accurate, itemized wage statements, and failure to maintain required records. From these alleged violations, Plaintiffs asserted a claim for penalties under the California Private Attorneys General Act of 2004 (“PAGA”) on behalf of themselves, other aggrieved employees of Defendant, and the State of California. DECLARATION OF MATTHEW J. MATERN IN SUPPORT 2 OF PLAINTIFFS’ MOTION FOR SETTLEMENT APPROVALBW oN 27 28 MATERN LAW GROUP. 1230 ROSECRANS, AVENUE, STE 200 MANHATTAN BEACH, CA 90266 Discovery and Investigation 5. Prior to reaching settlement, Plaintiffs and their counsel conducted an investigation into the claims alleged, performed legal research, and engaged in substantial informal and formal discovery with Defendants. This discovery included several sets of interrogatories and document requests, a deposition of Defendant’s person most knowledgeable (“PMK”), depositions of the two Plaintiffs, and a comprehensive analysis of a sample of Defendant’s time and payroll records by our retained expert, which assisted us in preparing a damages model prior to the mediation. 6. Based on this discovery and investigation, we were able to act intelligently and effectively in negotiating the proposed Settlement. 7. The evidence revealed that Defendant’s practices affected approximately 2,637 aggrieved employees over the course of 55 affected pay periods. Settlement Negotiations and Terms 8. On September 14, 2018, the Parties engaged in a full day of private mediation in San Francisco with David Rotman, an experienced wage-and-hour mediator. In advance of the mediation, Plaintiffs submitted to Mr. Rotman a highly detailed confidential mediation brief. The brief described the inner-workings of Defendants’ wage payment practices, painting a compelling picture of Defendants’ liability. The Parties negotiated at arm’s length and, although the Parties conducted the negotiations in a professional manner, the negotiations were nonetheless adversarial. Although the Parties entered mediation willing to explore the potential for a settlement of the dispute, each side was also prepared to litigate its position through trial and appeal if a settlement had not been reached. At the close of the mediation, the Parties reached agreement on the material terms of a proposed settlement to resolve the litigation. 9. In the following months, the Parties engaged in further contentious, arm’s-length negotiations regarding the finer terms of the Settlement, which ultimately resulted in a Memorandum of Understanding (“MOU”) that memorialized the material terms of the proposed settlement agreement. The MOU was executed on or around December 17, 2018. 10. During mediation and the subsequent negotiations that led to the final execution of DECLARATION OF MATTHEW J. MATERN IN SUPPORT 3 OF PLAINTIFFS’ MOTION FOR SETTLEMENT APPROVALBW oN 27 28 MATERN LAW GROUP. 1230 ROSECRANS, AVENUE, STE 200 MANHATTAN BEACH, CA 90266 the Settlement Agreement, we considered several factors, including the strengths and weaknesses of Plaintiffs’ claims, the likelihood of success on the merits, the amount in controversy and the substantial risks inherent in continued litigation. We specifically took into account the possibility that if the Parties reached a settlement of some slightly greater amount after additional years of litigation, the expenses and attorneys’ fees of litigation would most certainly reduce the amount of funds available to Plaintiffs and aggrieved employees for settlement overall. Moreover, continued litigation would be expensive, involving dispositive motions, a trial and likely appeals, and would substantially delay and reduce any recovery for the aggrieved employees. 11. On or around March 26, 2019, Plaintiffs Kathleen Ortiz and Joanna Ortiz executed the general releases under California Civil Code section 1542 required as part of the terms of the Agreement. 12. On or around April 2, 2019, the Parties fully executed the Settlement Agreement (“Agreement”). A true and correct copy of the Agreement is attached hereto as Exhibit A. The Agreement establishes a common fund of $1,750,000 in satisfaction of Plaintiffs’ claims for PAGA penalties on behalf of themselves and all other similarly situated aggrieved employees, including penalties for unpaid wages under Section 558. a. As a result of this Agreement, the Aggrieved Employees will be unable to bring a claim under, or recover for any other claim brought under, PAGA for violations that took place in the State of California at any time from May 2, 2016 to the date of entry of judgment in this matter. b. Defendant separately agreed to pay Plaintiffs $15,000 each in exchange for general releases under California Civil Code section 1542 of any and all claims they may have against Defendant. c. The Agreement also provides for settlement administration fees with Rust Consulting, Inc. as the administrator. d. The Agreement provides for recovery of fees to Plaintiffs’ Counsel in an amount of $577,500, or one-third of the common fund established by the Agreement, and no more than $26,000 in costs incurred in the course of the DECLARATION OF MATTHEW J. MATERN IN SUPPORT 4 OF PLAINTIFFS’ MOTION FOR SETTLEMENT APPROVALBW oN 27 28 MATERN LAW GROUP. 1230 ROSECRANS, AVENUE, STE 200 MANHATTAN BEACH, CA 90266 litigation. These cost include copying, postage, mileage, court filing fees, court reporter fees, and service fees. 13. On or around April 3, 2019, Plaintiffs submitted a copy of the Settlement Agreement to the Labor and Workforce Development Agency (““LWDA”). A true and correct copy of the correspondence confirming submission to the LWDA is attached hereto as Exhibit B. Amount in Controversy and Risks Associated with Proceeding 14. Based on information provided by Defendant and the evidence produced in discovery, Plaintiffs believe there are approximately 2,637 aggrieved employees. At the time of the mediation, Plaintiffs calculated the maximum potential recovery of penalties as follows: 15. Between May 30, 2016 and September 14, 2018, there were roughly 2 years, 3 months, 15 days, or 27.5 months. There were 55 semi-monthly pay periods in that period. By the time of the hearing, there will have been over 72 pay periods. Plaintiffs initially calculated the penalties as follows: a. PAGA Penalties for Overtime Violations: (2,349 employees x $100.00 violation per employee x 1 pay period x 50% violation rate = $181,900) + (2,349 employees x $200.00 violation per employee x 54 (number of pay periods throughout the PAGA period — initial pay period) x 50% violation rate = $12,684,600) = $12,802,050 b. PAGA Penalties for Meal Period Violations (2,349 employees x $100.00 violation per employee x 1 pay period x 50% violation rate = $181,900) + (2,349 employees x $200.00 violation per employee x 54 (number of pay periods throughout the PAGA period — initial pay period) x 50% violation rate = $12,684,600) = $12,802,050 c. PAGA Penalties for Rest Period Violations (2,349 employees x $100.00 violation per employee x 1 pay period x 50% violation rate = $181,900) + (2,349 employees x $200.00 violation per employee x 54 (number of pay periods throughout the PAGA period — initial pay period) x 50% violation rate = $12,684,600) = $12,802,050 DECLARATION OF MATTHEW J. MATERN IN SUPPORT 5 OF PLAINTIFFS’ MOTION FOR SETTLEMENT APPROVALBW oN 27 28 MATERN LAW GROUP. 1230 ROSECRANS, AVENUE, STE 200 MANHATTAN BEACH, CA 90266 d. PAGA Penalties for Minimum Wage Violations (2,349 employees x $100.00 violation per employee x 1 pay period x 50% violation rate = $181,900) + (2,349 employees x $200.00 violation per employee x 54 (number of pay periods throughout the PAGA period — initial pay period) x 50% violation rate = $12,684,600) = $12,802,050 e. PAGA Penalties for Failure to Maintain Required Records: (2,349 employees x $100.00 violation per employee x 1 pay period x 50% violation rate = $181,900) + (2,349 employees x $200.00 violation per employee x 54 (number of pay periods throughout the PAGA period ~ initial pay period) x 50% violation rate = $12,684,600) = $12,802,050 f. PAGA Penalties for Failure to Maintain Required Records: (2,349 employees x $100.00 violation per employee x 1 pay period x 50% violation rate = $181,900) + (2,349 employees x $200.00 violation per employee x 54 (number of pay periods throughout the PAGA period ~ initial pay period) x 50% violation rate = $12,684,600) = $12,802,050 e. Total PAGA Penalties: Based on the foregoing calculations for penalties for six different types of Labor Code violations, the total PAGA penalties were as follows: $12,802.050 x 6 = $76,812,300.00 16. While Plaintiffs are confident in the merits of the case, a legitimate controversy exists as to each alleged wage-and-hour violation. Defendant has denied and continues to deny each of the claims and contentions alleged by Plaintiffs. Defendant has repeatedly asserted and continues to assert defenses thereto, and have expressly denied and continues to deny any wrongdoing or legal liability arising out of any of the facts or conduct alleged. Defendant also has denied and continues to deny, inter alia, the allegations that the wage statements provided to Plaintiffs and the aggrieved employees were deficient in any way that would engender liability; that Defendant engaged in any unlawful conduct as alleged in the complaint; and that Plaintiffs or the aggrieved employees are entitled to penalties as alleged. Further, the Parties disagree about whether Defendant complied with California law. Additionally, the Parties disagree about the DECLARATION OF MATTHEW J. MATERN IN SUPPORT 6 OF PLAINTIFFS’ MOTION FOR SETTLEMENT APPROVALBW oN 27 28 MATERN LAW GROUP. 1230 ROSECRANS, AVENUE, STE 200 MANHATTAN BEACH, CA 90266 extent of Defendant’s liability under PAGA for subsequent wage-and-hour violations. 17. Defendant also disputes whether penalties under Section 558 of the Labor Code are recoverable in a PAGA suit. Defendant also maintains that Plaintiffs, who held essentially the same job titles, were not properly suited to represent approximately 2,400 non-exempt employees holding 75 different job titles in dozens of California branches, all of whom (including Plaintiffs) are subject to mandatory arbitration provisions. Finally, Defendant contends that any trial on the contested issues would be unmanageable. Had this case proceeded, Defendant was prepared to file a motion to strike the representative allegations in Plaintiffs’ complaint, which could have posed a serious threat to any class-wide PAGA recoveries. 18. Plaintiffs accounted for the fact that continued litigation, involving a trial and possible appeals, would substantially delay and reduce any recovery to the State and the PAGA Settlement Members. If the Court approves the Settlement, the aggrieved employees and the State will receive timely relief and avoid the risk of an unfavorable judgment. 19. Based on a balance of the strengths and weaknesses of Plaintiffs’ claims against the risks and costs of continued litigation, including the burdens of proof necessary to establish liability, and the probability of appeals following judgment, Plaintiffs determined a realistic range of recovery for settling their PAGA claims. The common fund of $1,750,000 is reasonable and in the best interests of the State and the public. Incentive Payment to Plaintiffs 20. Both the State of California and the aggrieved employees are beneficiaries of a settlement that would not have been made possible but for the effort and commitment of Plaintiffs. The settlement provides that in recognition of Plaintiffs’ extensive efforts and risks in prosecuting this matter, Plaintiffs shall each be paid a Service Award, or incentive payment, in an amount not to exceed $15,000.00 each. Settlement Agreement § 1.35(3), 2.9.1. The requested payment is intended to recognize Plaintiffs’ effort in bringing this action as private attorneys general under PAGA, assisting counsel with the investigation, litigation, and settlement, regularly conferring with counsel on the status of the case, engaging in substantial discovery, DECLARATION OF MATTHEW J. MATERN IN SUPPORT 7 OF PLAINTIFFS’ MOTION FOR SETTLEMENT APPROVALBW oN 27 28 MATERN LAW GROUP. 1230 ROSECRANS, AVENUE, STE 200 MANHATTAN BEACH, CA 90266 and reviewing the proposed settlement to ensure that its terms are fair and achieve PAGA’s objectives. 21. The amount of the requested Service Awards is reasonable in light of other incentive payments approved in other PAGA and Class settlements. See Campos v. California Cartage Company, LLC, Case No. BC570310 (L.A. Cnty. Super. Ct. Aug. 10, 2018) (approving $15,000 service award to each of the three plaintiffs); Blanchard v. BJ's Restaurants, Inc., Case No. 30-2014-00761961-CU-OE-CX (Orange Cnty. Super. Ct. Sept. 26, 2016) (approving $10,000 service award); Bui v. Vitamin Shoppe Industries Inc., Case No. BC518486 (L.A. Cnty. Super. Ct. Aug. 31, 2016) (approving $10,000 service award); Jesus Miranda v. HomeDeliveryLink, Inc., Case No. CIV DS1505393 (San Bernardino Cnty. Super. Ct. Aug. 9, 2016) (approving $10,000 service award); Mohamad Najjar v. Calop Business Sys., Inc. dlb/a Ca/op Aeroground Service, Case No. BC582290 (L.A. Cnty. Super. Ct. Apr. 5, 2016) (approving $10,000 service award); Sheldon v. AHMC Monterey Park Hosp. LP, Case No. BC440282 (L.A. Cnty. Super. Ct. Mar. 2, 2016) (approving $10,000 service award). 22. During the two years this Action has been pending, Plaintiffs have actively participated in making decisions in this case, including the decision to settle this case. Plaintiffs each devoted between 42 and 55 hours of their time to the case. This included consulting with counsel about their potential claims, reviewing the case materials, responding to three sets of interrogatories as well as requests for the production of documents, preparing for and sitting for a full day of deposition, assisting Plaintiffs’ counsel with preparation for the PMK depo, helping to prepare for the mediation, and evaluating settlement prospects. 23. Plaintiffs put the interests of other aggrieved employees ahead of their own interests by refusing to settle this action individually. Plaintiffs also faced the real risk that future employers may not hire them because they lent their name as a PAGA representatives in this case, and could have been liable for Defendant’s litigation costs if the case went to trial and they lost. Furthermore, Plaintiffs relinquished more of their rights through a Civil Code section 1542 waiver than the other aggrieved employees. Plaintiffs have agreed that they cannot be rehired by DECLARATION OF MATTHEW J. MATERN IN SUPPORT 8 OF PLAINTIFFS’ MOTION FOR SETTLEMENT APPROVALBW oN 27 28 MATERN LAW GROUP. 1230 ROSECRANS, AVENUE, STE 200 MANHATTAN BEACH, CA 90266 Morgan Stanley, which shows the risks and limitations they accepted for the good of the other affected employees.. 24. In sum, this action would not have been possible without the aid of Plaintiffs, who put their own time and effort into the litigation, sacrificed the value of their own individual claims, and placed themselves at risk for the sake of the other PAGA Settlement Members. The requested incentive award of $15,000.00 to each Plaintiff is therefore reasonable to compensate Plaintiff for his active participation in this lawsuit. Plaintiffs’ Attorneys’ Fees and C 25. The Settlement provides for attorney’s fees and costs to MLG in an amount up to one- third of the Maximum Settlement Amount, for a maximum fees award of $577,500, plus reasonable and actual litigation expenses not to exceed $26,000, which includes costs for, among other things, copying and faxing, postage, mileage, court filing and service, expert data analysis, and the mediation. 26. Based on my experience, I believe the fees and costs provision is reasonable. The fee percentage requested is less than that charged by MLG for other employment cases. MLG invested significant time and resources into the case, with payment deferred to the end of the case, and then, of course, contingent on the outcome. MLG’s efforts have resulted in substantial benefit to the LWDA and PAGA Settlement Members in the form of a significant settlement funds established to penalize Defendant for the unlawful wage and hour practices. Without MLG’s efforts, the claims as alleged in the complaint would almost certainly have gone without remedy. 27. — My 2019 billing rate is $925 per hour. The billing rates for the following attorneys who worked on this case are as follows: $800 per hour for Joshua D. Boxer, a Senior Associate Attorney with 16 years of experience; $675 per hour for Corey Bennett, an Associate Attorney with 8 years of experience; $625 per hour for Sara B. Tosdal, an Associate Attorney with approximately 7 years of experience; and $575 per hour for Roy Suh, an Associate Attorney with approximately 6 years of experience. 28. These rates are consistent with current prevailing market rates for attorneys in San Francisco and Los Angeles who handle complex class actions involving hundreds or thousands of DECLARATION OF MATTHEW J. MATERN IN SUPPORT 9 OF PLAINTIFFS’ MOTION FOR SETTLEMENT APPROVALBW oN 27 28 MATERN LAW GROUP. 1230 ROSECRANS, AVENUE, STE 200 MANHATTAN BEACH, CA 90266 class members. These rates also take into account that my firm forewent payment for our work for the duration of the case. 29. As of April 3, 2019, MLG’s lodestar is approximately $187,017.50.00 representing approximately 241.5 attorney hours at their customary hourly rates. The total hours worked by each attorney and their hourly rates are as follows: Attorney Years in Hours Billed Hourly Rate Total Fee Practice Matthew J. Matern | 27 53.3 $925.00 $49,302.50 Joshua D. Boxer 15 109.80 $800.00 $87,840.00 Corey Bennett 9 32.2 $675.00 $21,735.00 Sara Tosdal 7 31.5 $625.00 $19,687.50 Roy Suh 6 14.7 $575.00 $8,452.50 Totals 241.5 $187,017.50 30. Based on my experience in the settlement administration process, I estimate that MLG will spend another 40 hours on this case, including preparing for and attending the hearing on Plaintiffs’ Motion, and monitoring settlement administration. Based on my experience, we will have PAGA Settlement Members calling our office to inquire about the status of the case and to ask for further information on a nearly daily basis. MLG will also bear the risk of taking whatever actions are necessary if Defendant fails to pay. At a blended hourly rate of $720 per hour, this brings our lodestar to 281.5 hours and $215,817.50. 31. MLG expended a significant amount of time efficiently litigating the case to achieve the excellent result on behalf of the PAGA Settlement Members. These hours were and are reasonable and necessary to achieve the result reached in this settlement. These hours were spent on the following tasks: interviewing Plaintiff and other witnesses; legal research regarding Plaintiffs’ claims and anticipated defenses; reviewing documents provided by Plaintiff; preparing the complaint; drafting and responding to written discovery requests; meeting and conferring with Defendant’s counsel to obtain relevant documents and information; reviewing time and payroll data and other employment records produced by Defendant; preparing Plaintiffs for their depositions and defending same; preparing for and taking the deposition of Defendant’s PMK; DECLARATION OF MATTHEW J. MATERN IN SUPPORT 10 OF PLAINTIFFS’ MOTION FOR SETTLEMENT APPROVALBW oN 27 28 MATERN LAW GROUP. 1230 ROSECRANS, AVENUE, STE 200 MANHATTAN BEACH, CA 90266 retaining a consultant to analyze the time and payroll data; drafting mediation briefs and preparing damages analyses; attending private mediation; negotiating, drafting, and revising the MOU and Stipulation and Notice; and drafting the Motion for Approval of PAGA Settlement. Plaintiffs’ Counsel’s Qualifications 32. The hourly rates for MLG attorneys are commensurate with their qualifications and experience. 33. I received a B.A. with honors in 1986 from Tulane University. I received my J.D. from Southwestern University School of Law in 1991. I became an active member of the State Bar of California in September 1992, and have been an active member in good standing ever since then. I have been practicing as a litigation attorney in Los Angeles since 1992, and have been concentrating on employment litigation since approximately 1997. 34. In 1992, I founded Rastegar & Matern, Attorneys at Law, A Professional Corporation, the predecessor to my current firm. In 2012, I founded the Law Offices of Matthew J. Matern, which changed its name to Matern Law Group, PC in January 2014. Since 1992, I have been heavily, successfully, and continuously involved in active litigation and trial work, including extensive employment litigation and work in wage-and-hour class actions. 35. My current firm, MLG, is a twenty-two attorney law firm that is actively and continuously practicing in employment litigation, representing employee plaintiffs in individual and class actions in state and federal courts throughout the State of California. My firm is qualified to handle this litigation due to our experience in litigating Labor Code violations in both individual and class and representative cases. MLG has handled and is currently handling numerous wage-and-hour class action cases. Over the course of my career, I have been involved in dozens of class action settlements, with many of them settling in the seven-figure range. 36. Since 1992, I have been heavily, continuously, and successfully involved in active litigation and trial work, including extensive work in employment litigation and wage and hour class actions. I have tried approximately twenty-five cases, including approximately twenty jury trials. Over the course of my career, I have been involved in over 50 class action settlements, with many of them settling in the seven figure range, including settlements in the amount of $8.5 DECLARATION OF MATTHEW J. MATERN IN SUPPORT 11 OF PLAINTIFFS’ MOTION FOR SETTLEMENT APPROVALBW oN 27 28 MATERN LAW GROUP. 1230 ROSECRANS, AVENUE, STE 200 MANHATTAN BEACH, CA 90266 million, $7.0 million, $6.0 million, $6.0 million, $5.0 million, $4.5 million, $4.5 million, $4.2 million, $4.2 million, $3.75 million, $3.75 million, $3.6 million, $3.3 million, $3.1 million, $3.0 million, $2.9 million, $2.65 million, $2.5 million, and $2.5 million. I have represented clients in numerous wage and hour class action lawsuits that settled with per-class-member recoveries in a range similar to the anticipated per-class-member recovery in the instant case. I have also been appointed as class counsel in over ten certified wage and hour class action cases. 37. I have been counsel in a number of cases which resulted in published appellate victories including Franco v. Athens Disposal Company, Inc., 171 Cal. App. 4th 1277 (2009); Gutierrez v. California Commerce Club, 187 Cal. App. 4th 969 (2010); Pantoja v. Anton, 198 Cal. App. 4th 87 (2011); Fuentes v. AutoZone, Inc., 200 Cal. App. 4th 1221 (2011); Ventura v. ABM Industries, Inc., 212 Cal. App. 4th 258 (2012); and Franco v. Arakelian Enterprises, Inc., 211 Cal. App. 4th 314 (2012); and other non-published appellate victories. 38. Of the attorneys at MLG, I am the attorney with the most active trial and pretrial calendar. I have personally tied approximately twenty jury trials. I personally represented clients in numerous wage-and-hour class action lawsuits that settled with recovery per class member being in a similar range to the settlement in the instant case. 39. Joshua D. Boxer is a senior associate at MLG. He graduated from the University of California, Santa Barbara in 1999 and received his J.D. from University of California, Davis School of Law in 2003. He has been an active member of the California State Bar in good standing since November of 2003. Mr. Boxer has over 15 years of experience representing plaintiffs in employment litigation, including significant experience in wage and hour and consumer class actions. Mr. Boxer has achieved numerous appellate victories, including Jesus Mendoza v. Century Fast Foods, No. B267158, 2016 WL 6610287 (Cal. Ct. App. Nov. 9, 2016), and In re Wal-Mart Wage & Hour Employment Practices Litig., 737 F.3d 1262 (9th Cir. 2013); reached notable settlements; and obtained a number of favorable jury verdicts, including a jury verdict of over $25 million in Valladares v. Madera Quality Nut, and a recent (2018) jury verdict of just under $500,000 in Vilma Aguilar v. Blaze Pizza, LLC et al. He has been appointed class counsel in numerous cases, as well as Interim Co-Lead Counsel in MDL 2448: In re Anheuser- DECLARATION OF MATTHEW J. MATERN IN SUPPORT 12 OF PLAINTIFFS’ MOTION FOR SETTLEMENT APPROVALBW oN 27 28 MATERN LAW GROUP. 1230 ROSECRANS, AVENUE, STE 200 MANHATTAN BEACH, CA 90266 Busch Beer Labeling Litigation. Mr. Boxer also has the rare experience of trying a wage and hour class action to a jury. 40. Corey Bennett is an associate at MLG. Mr. Bennett graduated from Northern Arizona University in 2003, where he was a Dean’s Merit Scholar. He received a Master’s of Public Administration from the University of Southern California in 2006 and earned his J.D. from University of San Francisco School of Law in 2009. He has been an active member of the California State Bar in good standing since November 2009. Mr. Bennett has approximately eight years of experience representing plaintiffs in employment and consumer litigation, including wage-and-hour class actions. 41. Roy K. Suh is an associate at MLG who received his B.A. from the University of California, Berkeley in 2004 in English with Distinction and received his J.D. from the University of California, Los Angeles School of Law in 2011. He has been an active member of the State Bar of California in good standing since July 2012 and has been practicing as a litigation attorney in Los Angeles since then, concentrating exclusively on employment litigation. 42. Sara B. Tosdal is an associate at MLG. She received her B.A. in History, with minors in English and African/African-American Studies, from Duke University in 2006, where she achieved Dean’s List honors. She earned her J.D. from the University of California, Hastings College of the Law in 2011, where she earned the CALI Excellence for the Future Award and the Witkin Award for Excellence for Federal Courts, served as the Editor-in-Chief of the Hastings Law Journal, and externed for the Honorable Richard Seeborg of the United States District Court for the Northern District of California. She has been an active member in good standing with the California State Bar since November 2011. She has been a practicing litigator for approximately seven years, representing unions, workers, and employee benefit plans in complex litigation and in labor and employment matters in both state and federal courts. MLG’s Hourly Rates Are Reasonable 43. | MLG requests the foregoing billable rates be applied in this case, as the rates are reasonable for attorneys who handle complex wage and hour litigation. The current prevailing billing or “market” rates in the Los Angeles and Orange County areas range from $285 to $900 DECLARATION OF MATTHEW J. MATERN IN SUPPORT 13 OF PLAINTIFFS’ MOTION FOR SETTLEMENT APPROVALBW oN 27 28 MATERN LAW GROUP. 1230 ROSECRANS, AVENUE, STE 200 MANHATTAN BEACH, CA 90266 per hour. See Bihun v. AT&T Info. Sys., Inc., 13 Cal. App. 4th 976, 1004-05 (1993). These rates properly take into account the fact that payment will have been delayed for nearly three years. 44. The hourly rates for MLG attorneys are commensurate with MLG’s experience in litigating complex cases. Indeed, MLG has been awarded fees by various courts, including this Court, based on these rates, including in the following cases: In Campos v. California Cartage Company, LLC, Los Angeles County Superior Court Case No. BC570310, the Honorable Kenneth Freeman awarded attorneys’ fees to plaintiffs’ counsel at the following 2018 billing rates: Matthew J. Matern, $875; Joshua Boxer, $750; Corey Bennett, $625. In Guirola vy. PRRK Holdings, LLC, Case No. BC576524, the Honorable Ann I. Jones awarded attorneys’ fees, finding that the fee request was “well-supported by the lodestar,” which was based on the following rates for 2017: Matthew J. Matern, $850; Launa Adolph, $700; and Deanna Leifer, $575; In Flint v. Rehrig Pacific Co., LASC Case No. BC595545, the Honorable Carolyn B. Kuhl awarded attorneys’ fees based on class counsel’s lodestar, with a multiplier of 2.32, based on the following rates: Matthew J. Matern, $850; Debra Tauger, $725; Launa Adolph, $700; and Deanna Leifer, $575, finding that “[t]he lodestar calculation confirm[ed] the reasonableness of the common fund fee methodology;” In Wilson v. RockTenn, LASC Case No. BC488456, the Honorable Elihu M. Berle, awarded attorneys’ fees based on class counsel’s lodestar, which was based on the following rates: Matthew J. Matern, $850; Debra Tauger (admitted 1989), $725; Launa Adolph, $700; Dalia Khalili (admitted 2007), $625; and Tagore Subramaniam (admitted 2011), $525; and Daniel Bass (admitted 2012), $475, finding that “the hourly rates charged [] appear to be reasonable, in line with the prevailing rates in the community;” In Lopez v. Delta Air Lines, Inc., C.D. Cal. Case No. 2:15-CV-07302 SVW, the Honorable Stephen V. Wilson found that the following “hourly rates [were] reasonable and in line with rates prevailing in the community for attorneys of DECLARATION OF MATTHEW J. MATERN IN SUPPORT 14 OF PLAINTIFFS’ MOTION FOR SETTLEMENT APPROVALBW oN 27 28 MATERN LAW GROUP. 1230 ROSECRANS, AVENUE, STE 200 MANHATTAN BEACH, CA 90266 comparable skill, experience, and reputation:” Matthew J. Matern, $850; Debra Tauger, $725; Launa Adolph, $700; Dalia Khalili, $625; Matthew Gordon (admitted 2009), $575; Tagore Subramaniam, $525; and Daniel Bass, $475. In Munoz v. Dependable Highway Express, Inc., LASC Case No., 535931, the Honorable Maren E. Nelson awarded attorneys’ fees based on class counsel’s lodestar, with a multiplier of 1.18, based on the following rates: Matthew J. Matern, $850; Launa Adolph, $700; Aubry Wand (admitted 2011), $475; and Emma Steiner (admitted 2013), $450, finding that “the hourly rates used in the lodestar calculation are reasonable and consistent with prevailing rates in the community;” In Gutierrez v. Google, Inc., Santa Clara Superior Court Case No. 11-cv-2777104, the Honorable Brian C. Walsh awarded attorneys’ fees based on class counsel’s lodestar, with a multiplier of 3.05, based on the following rates: Matthew J. Matern, $850; Launa Adolph, $700; Dalia Khalili; $625; Daniel Bass, $475; Deanna Leifer, $575; and Zara Lockshin (admitted 2012), $475; In Shiferaw v. Sunrise Senior Living Management, Inc., C.D. Cal. Case No. 2:13- ev-02171-JAK-PLA, the Honorable John A. Kronstadt granted plaintiffs’ motion for attorneys’ fees, finding that “the proposed rates [were] within the range of reasonableness,” including the following rates for 2016: Matthew J. Matern, $825; Launa Adolph, $650; Aubry Wand, $450; Daniel Bass, $450; Emma Steiner, $450; and Amanda Naoufal (admitted January 2014), $425. In Noriega v. Arcadia, Inc., LASC Case No. BC536424, the Honorable Ann I. Jones awarded attorneys’ fees based on class counsel’s lodestar, with a multiplier of 2.097, based on the following rates: Matthew J. Matern, $825; Launa Adolph, $650; Janette Lee (admitted 2012), $475; and Daniel Bass, $450; In Zamora v. Cardenas Markets, Inc., LASC Case No. BC505451, the Honorable Hon. Ann I. Jones awarded attorneys’ fees based on class counsel’s lodestar, with a multiplier of 1.87, based on the following rates: Matthew J. Matern, $825; Launa Adolph, $650; Aubry Wand, $450; and Daniel Bass, $450; DECLARATION OF MATTHEW J. MATERN IN SUPPORT 15 OF PLAINTIFFS’ MOTION FOR SETTLEMENT APPROVALBW oN 27 28 MATERN LAW GROUP. 1230 ROSECRANS, AVENUE, STE 200 MANHATTAN BEACH, CA 90266 In Campos v. Southern California Edison Company, LASC Case No. BC499966, the Honorable Ann I. Jones awarded attorneys’ fees based on class counsel’s lodestar, with a 1.99 multiplier, based on the following rates: Matthew J. Matern, $825; Launa Adolph, $650; Dalia Khalili, $575; and Matthew W. Gordon (admitted 2009), $525; In Rust v. Los Angeles Guild, LLC, LASC Case No. BC548669, the Honorable Ann I. Jones awarded class counsel attorneys’ fees, finding that the following rates “appear to be reasonable and in line with prevailing rates in the community”: Matthew J. Matern, $825; Launa Adolph $650; and Aubry Wand, $450; In Brueske v. DHSE, Inc., Riverside Superior Court Case No. INC1205382, the Honorable Craig G. Riemer awarded attorneys’ fees based on the following rates for 2015: Matthew J. Matern, $775; Launa Adolph, $575; and Emma Steiner, $375; In Williams v. Success Healthcare, LLC, et al., Los Angeles Superior Court Case No. BC5333821, the Honorable Amy D. Hogue approved an attorneys’ fee award finding that the following 2015 rates “appear[ed] to be reasonable and in line with prevailing rates in the community”: Matthew J. Matern, $775; Launa Adolph $650; and Janette Lee, $400; In Villanueva v. P.L.D, Enterprises, LASC Case No. BC506331, the Honorable Elihu M. Berle awarded class counsel attorneys’ fees, finding that “the hourly rates charge[d] appear to be reasonable and in line with the prevailing rates in the community,” including the following hourly rates for 2015: Matthew J. Matern, $775; Launa Adolph, $575; Janette Lee, $400; and Daniel Bass, $375; In Alegria v. Student Transportation of America, Inc., et al., Riverside Superior Court Case No. RIC1209792, the Honorable Sharon J. Waters approved an attorney’s fees award based on class counsel’s lodestar, with a multiplier of 1.8281, based, in part, upon my 2015 hourly rate of $775; and In Bonilla v. Agri-Empire, et al., Riverside Superior Court Case No. RIC1209556, the Honorable Sharon J. Waters awarded attorneys’ fees based, in part, on my 2015 DECLARATION OF MATTHEW J. MATERN IN SUPPORT 16 OF PLAINTIFFS’ MOTION FOR SETTLEMENT APPROVALBW oN 27 28 MATERN LAW GROUP. 1230 ROSECRANS, AVENUE, STE 200 MANHATTAN BEACH, CA 90266 billing rate of $775. 45. | MLG’s hourly rates are also in line with the hourly rates approved in other cases. See Roberti v. OSI Sys., Inc., No. CV1309174MWFMRW, 2015 WL 8329916, at *7 (C.D. Cal. Dec. 8, 2015) (“Lead Counsel’s attorney rates—between $525 to $975—are reasonable given that each has at least 15 years of litigation experience..”); Kearney v. Hyundai Motor Am., No. SACV 09-1298-JST, 2013 WL 3287996 (C.D. Cal. June 28, 2013) (approving rates between $100 and $800); Moore v. PetSmart, Inc., No. 5:12-CV-03577-EJD, 2015 WL 5439000, at *12 (N.D. Cal. Aug. 4, 2015) (finding rates of $720 for partner, $520-$670 for senior counsel, and $375-$480 for associates reasonable). MLG Accepted this Case on a Contingency Basis 46. My office took this case on a contingent basis and has put a substantial amount of time and energy into litigating this case, all while receiving no payment. The risk to my office has been significant, particularly if we would not be successful in pursuing this class action. In that case, we would have been left with no compensation for all the time taken in litigating this case. 47. MLG took this case on a contingency basis with no guarantee of being paid, against a large, well-financed company that was defended by an experienced defense team. MLG assumes a great deal of contingent risk in litigating wage and hour actions. For instance, in Hernandez v. Chipotle Mexican Grill, Inc. (LASC Case No. BC373759), the Court of Appeal affirmed the trial court’s order denying certification in an action alleging that defendant failed to provide its restaurant workers with uninterrupted, 30-minute off-duty meal breaks in a pair of depublished opinions: Hernandez v. Chipotle Mexican Grill, Inc., 208 Cal. App. 4th 1487 (2012) and Hernandez v. Chipotle Mexican Grill, 189 Cal. App. 4th 751 (2010). Similarly, in Gonzalez v. OfficeMax N. Am. (C.D. Cal., Case No. CV-07-00452), the court issued an order denying certification of plaintiffs’ meal and rest break claims, finding that the reason any particular employee missed any particular break required individualized fact finding. See Gonzalez v. OfficeMax N. Am. (C.D. Cal. Nov. 5, 2012) 2012 U.S. Dist. LEXIS 163853. In each of these cases, Class Counsel incurred over $100,000.00 in costs, and over 5,000 hours in attorney time DECLARATION OF MATTHEW J. MATERN IN SUPPORT 17 OF PLAINTIFFS’ MOTION FOR SETTLEMENT APPROVALBW oN 28 MATERN LAW GROUP. 1230 ROSECRANS, AVENUE, STE 200 MANHATTAN BEACH, CA 90266 was expended, only to have class certification denied. Moreover, courts frequently dismiss class and representative allegations and compel arbitration in similar cases, as evidenced in several recent cases litigated by Class Counsel: Chico v. Hilton Worldwide, Inc., et al. (C.D. Cal. Case No. CV-14-5750) (compelling plaintiff's individual claims to arbitration and dismissing plaintiff's class allegations and representative PAGA claims) and Tapia v. Macy’s, Inc. (C.D. Cal. CV-14-05163) (same). 48. Because most individuals cannot afford to pay for representation in litigation on an hourly basis, MLG represents virtually all of its employment law clients on a contingency fee basis. Pursuant to this arrangement, we are not compensated for our time unless we prevail at trial or successfully settle our clients’ cases. Because the firm is taking the risk that we will not be reimbursed for our time unless our client settles or wins his or her case, we cannot afford to represent an individual employee on a contingency basis if, at the end of our representation, all we are to receive is our regular hourly rate for services. It is essential that we recover more than our regular hourly rate when we win if we are to remain in practice so as to be able to continue representing other individuals in employment disputes. 49. | My office’s efforts have resulted in substantial benefits to the aggrieved employees, in the form of a substantial settlement fund established to compensate them for missed meal periods and rest breaks, among the other wage and hour violations noted above. I am informed and believe that, without the efforts of my office, the Labor Code and wage order violations alleged in the complaint would have gone without remedy. 50. | The Agreement provides for attorney’s fees and costs to Plaintiffs’? Counsel in an amount up to one-third (33.33%) of the Maximum Settlement Amount, for an attorney’s fees award of $577,500, plus reasonable and actual litigation expenses not to exceed $26,000, which includes costs for, among other things, copying and faxing, mileage, research services, court filings and service, deposition transcripts, expert services, and mediation. MLG’s Costs Are Reasonable 51. My firm’s billing records show that our expenses incurred total $22,245.28. These costs include court and LWDA filing fees, service of process costs, copy costs, court reporter DECLARATION OF MATTHEW J. MATERN IN SUPPORT 18 OF PLAINTIFFS’ MOTION FOR SETTLEMENT APPROVALBW oN 27 28 MATERN LAW GROUP. 1230 ROSECRANS, AVENUE, STE 200 MANHATTAN BEACH, CA 90266 fees, and mediator costs, as well as travel costs and other expenses reasonably and necessarily incurred in the litigation. Attached hereto as Exhibit C is a true and correct copy of our cost report as of April 18, 2019. These costs were reasonably and necessarily incurred in prosecuting this case. I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. Executed on this 19th day of April, 2019, in Manhattan Beach, California WEOL. Matthew J. Matern DECLARATION OF MATTHEW J. MATERN IN SUPPORT 19 OF PLAINTIFFS’ MOTION FOR SETTLEMENT APPROVALEXHIBIT A MATERN LAW GROUP, PC 1230 ROSECRANS AVENUE. ‘SUITE 200 MANHATTAN BEACH, CA 90266MATERN LAW GROUP, PC Matthew J. Matern (SBN 159798) Joshua D. Boxer (SBN 226712) Roy K. Suh (SBN 283988) 1230 Rosecrans Avenue, Suite 200 Manhattan Beach, CA 90266 Tel: (310) 531-1900 Facsimile: (310) 531-1901 Attorneys for PLAINTIFFS TERRY E. SANCHEZ (State Bar No. 101318) terry.sanchez@mto.com MUNGER, TOLLES & OLSON LLP 350 South Grand Avenue Fiftieth Floor Los Angeles, California 90071 Telephone: (213) 683-9100 Facsimile: (213) 683-4015 Attorneys for DEFENDANT [Additional counsel listed on following page.] SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SAN FRANCISCO KATHLEEN ORTIZ and JOANNA ORTIZ, Case No. CGC-17-560139 individually, and on behalf of others similarly situated, STIPULATION RE: SETTLEMENT OF REPRESENTATIVE PAGA Plaintiffs, ACTION; vs. [PROPOSED] LETTER TO AGGRIEVED EMPLOYEES MORGAN STANLEY SMITH BARNEY (EXHIBIT 1); LLC, a Delaware corporation; and DOES 1- 100, inclusive, [PROPOSED] JUDGMENT (EXHIBIT 2» Defendants. STIPULATION RE: SETTLEMENT OF REPRESENTATIVE PAGA ACTIONAdditional Counsel MALCOLM A. HEINICKE (State Bar No. 194174) malcolm.heinicke@mto.com MARJA-LISA OVERBECK (State Bar No. 261707) mari.overbeck@mto.com NICHOLAS D. FRAM (State Bar No. 288293) nicholas. fram@mto.com MUNGER, TOLLES & OLSON LLP 560 Mission Street Twenty-Seventh Floor San Francisco, California 94105 Telephone: (415) 512-4000 Facsimile: (415) 512-4077 Attorneys for DEFENDANT -- STIPULATION RE: SETTLEMENT OF REPRESENTATIVE PAGA ACTIONIT IS HEREBY AGREED by and between Kathleen Ortiz and Joanna Ortiz (“PAGA Representatives” or “Plaintiffs”), on behalf of themselves and as deputized representatives of the State of California on behalf of all other allegedly Aggrieved Employees as defined below, on the one hand, and Defendant Morgan Stanley Smith Barney LLC (herein “Morgan Stanley” or “Defendant” or the “Company’”), on the other hand, as set forth below: L The Conditional Nature of this Settlement. This Stipulation re: Settlement of Representative PAGA Action, including all associated exhibits or attachments (herein “Stipulation” or “Settlement”), is made for the sole purpose of attempting to consummate settlement of this Litigation on a representative basis under the California Labor Code Private Attorneys General Act of 2004, codified at California Labor Code section 2698 ef seq., and is entered into in compromise of disputed claims. Because this Litigation involves a representative action brought under California’s Private Attorneys General Act (“PAGA”), this Settlement must receive approval from the Court pursuant to Labor Code section 2699(1). Accordingly, Defendant enters into this Settlement on a conditional basis. In the event that the Court does not enter the Judgment, or in the event that the associated Judgment does not become Final for any reason, this Stipulation shall be deemed null and void ab initio, it shall be of no force or effect whatsoever, it shall not be referred to or utilized for any purpose whatsoever, and the negotiation, terms and entry of it shall remain subject to the provisions of California Evidence Code sections 1119 and 1152, and similar rules of other jurisdictions. Defendant denies any wrongdoing and denies that it is in any way liable to the PAGA Representatives and/or the Aggrieved Employees. Morgan Stanley has agreed to resolve this Litigation via this Stipulation, but to the extent this Stipulation is deemed void or does not take effect, Morgan Stanley does not waive, but rather expressly reserves, all rights to challenge all such claims and allegations in the Litigation upon all procedural and factual grounds, including without limitation the ability to challenge the right to bring a representative action, on any grounds, or to assert any and all defenses or privileges. Plaintiffs agree that Morgan Stanley retains and reserves these rights, and agree not to take a position to the contrary; specifically, Plaintiffs and Plaintiffs’ Counsel waive, and agree not to argue or present, any argument that -2- STIPULATION RE: SETTLEMENT OF REPRESENTATIVE PAGA ACTIONMorgan Stanley could not contest representative status simply because Morgan Stanley entered into this Stipulation should this Litigation proceed. I. The Parties to this Settlement. This Settlement (with the associated exhibits) is made and entered into by and among the following Settling Parties: (i) Plaintiffs (on behalf of themselves, and as deputized representatives of the State of California on behalf of all Aggrieved Employees), with the assistance and approval of Plaintiffs’ Counsel; and (ii) Morgan Stanley, with the assistance of its counsel of record in the Litigation. The Stipulation is intended by the Settling Parties to result in the final resolution of the Litigation with prejudice pursuant to the Judgment and to fully, finally and forever resolve, discharge and settle the Resolved Claims upon and subject to the terms and conditions herein. Il. The Litigation. Plaintiffs submitted letters to the California Labor and Workforce Development Agency (“LWDA”) identifying their claims on May 2, 2017. Specifically, Plaintiffs stated that they planned to pursue claims under PAGA against Morgan Stanley for various alleged wage and hour violations. The LWDA did not respond to their letters. Plaintiffs filed the instant action as private attorneys general on July 14, 2017. Plaintiffs are represented by Matern Law Group, PC. On behalf of themselves and other Aggrieved Employees, Plaintiffs seek penalties pursuant to PAGA (Labor Code § 2698 ef seg.) against Morgan Stanley based on the following alleged wage and hour violations: (1) failure to provide legally compliant meal periods during all eligible work shifts, or compensation in lieu thereof (Labor Code §§ 512 and 226.7); (2) failure to provide legally compliant rest periods during all eligible work shifts, or compensation in lieu thereof (Labor Code §§ 512, 226.7); (3) failure to pay and/or properly calculate overtime compensation (Labor Code §§ 510, 1194); (4) furnishing illegal wage statements (Labor Code § 226); (5) failure to timely pay all wages owed (Labor Code § 204); (6) failure to pay all final wages due upon ending employment (Labor. Code §§ 201-203); (7) f