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SUPERIOR COURT OF CALIFORNIA,
COUNTY OF SACRAMENTO
GORDON D SCHABER COURTHOUSE
MINUTE ORDER
DATE: 03/10/2022 TIME: 09:00:00 AM DEPT: 54
JUDICIAL OFFICER PRESIDING: Christopher Krueger
CLERK: G. Toda
REPORTER/ERM: None
BAILIFF/COURT ATTENDANT: N. Alvi, J. Reilly
CASE NO: 34-2017-00210560-CU-OE-GDS CASE INIT.DATE: 04/05/2017
CASE TITLE: Spears vs. Health Net of California Inc
CASE CATEGORY: Civil - Unlimited
EVENT TYPE: Motion - Other - Civil Law and Motion
ASSOCIATED CASES: 34-2017-00216685-CU-OE-GDS
APPEARANCES
Nature of Proceeding: Motion for Preliminary Approval of Class Settlement
TENTATIVE RULING
Plaintiffs Andrea Spears and Tomas R. Arana's (collectively, "Plaintiffs") motion for preliminary approval
of class action settlement with defendant Health Net of California, Inc. ("Defendant") is UNOPPOSED
and GRANTED.
On April 5, 2017, plaintiff Spears filed a Complaint against Defendant in the Superior Court of the State
of California, County of Sacramento (the "Spears Action"). Plaintiff Spears asserted the following claims
against Defendant: (1) unfair competition in violation of Cal. Bus & Prof. Code §§ 17200, et seq.; (2)
failure to pay overtime wages in violation of Cal. Labor Code § 510; (3) failure to provide accurate
itemized wage statements in violation of California Labor Code § 226; and, (4) failure to provide wages
at termination in violation of Cal. Lab. Code § 201, 202, and 203. On June 29, 2017, Plaintiff Andrea
Spears filed a First Amended Complaint in the Spears Action which added a claim for violation of the
Private Attorney General Act, Cal. Labor Code §§ 2698, et seq. ("PAGA"). (Nordrehaug Decl. ¶ 7.)
On August 1, 2017, plaintiff Arana filed a Complaint against Defendant in the Superior Court of the State
of California, County of Sacramento (the ''Arana Action"). Plaintiff Arana asserted claims that Defendant:
(1) failed to Provide Meal Periods in violation of California Labor Code §§ 204, 223, 226.7, 512, and
1198; (2) failed to Provide Rest Periods in violation of California Labor Code §§ 204, 223, 226.7, and
1198; (3) failed to Pay Hourly Wages in violation of California Labor Code §§ 223, 510, 1194, 1194.2,
1197, 1197.1 and 1198; (4) failed to Provide Accurate Written Wage Statements in violation of California
Labor Code § 226(a); (5) failed to Timely Pay All Final Wages in violation of California Labor Code §§
201-203; and, (6) violated California Business and Professions Code §§ 17200, et seq. On October 3,
2017, plaintiff Arana filed a First Amended Complaint which added a claim against Defendant for
violation of the PAGA in the Arana Action. (Nordrehaug Decl. ¶ 8.)
On October 11, 2017, the Court consolidated the Spears Action and the Arana Action. On December 21,
2017, Plaintiffs filed a Consolidated Complaint against Defendant asserting claims that Defendant: (1)
failed to Provide Meal Periods in violation of California Labor Code §§ 204, 223, 226.7, 512, and 1198;
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DEPT: 54 Calendar No.
CASE TITLE: Spears vs. Health Net of California Inc CASE NO: 34-2017-00210560-CU-OE-GDS
(2) failed to Provide Rest Periods in violation of California Labor Code §§ 204, 223, 226.7, and 1198; (3)
failed to Pay Hourly Wages in violation of California Labor Code §§ 223, 510, 1194, 1194.2, 1197,
1197.1 and 1198; (4) failed to Provide Accurate Written Wage Statements in violation of California Labor
Code § 226(a); (5) failed to Timely Pay All Final Wages in violation of California Labor Code §§ 201-203;
(6) violated California Business and Professions Code §§ 17200, et seq.; and, (7) violated PAGA.
(Nordrehaug Decl. ¶ 9.)
On October 23, 2018, the Court denied in part and granted in part Defendant's Motion for Summary
Adjudication in the Action. On February 26, 2019, the Court denied Defendant's Renewed Motion for
Summary Adjudication in the Action. On or around March 25, 2019, Defendant filed a Petition for Writ of
Mandate, Prohibition, Certiorari, or Other Appropriate Relief regarding the Court's order denying
Defendant's Renewed Motion for Summary Adjudication. On April 25, 2019, the California Court of
Appeal, Third Appellate District denied Defendant's Petition for Writ of Mandate, Prohibition, Certiorari,
or Other Appropriate Relief. On September 30, 2019, the Court denied Defendant's Motion for Why
Plaintiffs Spears and Arana's Cases Should Not Proceed as PAGA Representative Actions. (Nordrehaug
Decl. ¶ 10.)
On October 8, 2019, the Court granted class certification in the Action. On October 22, 2020, the Court
denied Defendant's Motion for an Order to Strike Plaintiff Tomas R. Arana's claims and Motion for an
Order to Strike Plaintiff Spears' Claims. (Nordrehaug Decl. ¶ 11.)
Defendants deny the allegations, but the parties have been able to reach a compromise. On June 8,
2021, the parties participated in an all-day mediation conducted by Tripper Ortman, Esq. Following the
conclusion of the mediation, the parties reached an agreement based upon a mediator's proposal.
(Nordrehaug Decl. ¶ 5.)
This ruling incorporates by reference the definitions in the Class Action Settlement Agreement (the
"Agreement") and all capitalized terms defined therein shall have the same meaning in this ruling as set
forth in the Agreement.
Settlement Class Definition
This Court previously certified the classes of "All individuals who are or previously
were employed by Defendant in California and classified as non-exempt and received "MedFlxWave"
payments, "DenFlxWave" payments, SPOT Awards, ACA Incentive payments and/or Wellness Incentive
payments during the period of April 5, 2013 to December 31, 2016" and all individuals who are or
previously were employed by Defendant in California as non-exempt or hourly employees who manually
entered their start time using Defendant's time keeping system during the period between April 5, 2013
and October 8, 2019.
For purposes of settlement, Plaintiff seeks to confirm certification of the following proposed class:
"All individuals who are or previously were employed by Defendant in California and who were classified
as non-exempt employees at any time during the Class Period and who did not previously opt out of the
Class post-Class Certification."
The class is estimated to consist of 5,158 members. (Agreement ¶ III(C)(5).)
Class Representatives
Plaintiffs are preliminarily appointed as class representatives ("Named Plaintiffs").
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CASE TITLE: Spears vs. Health Net of California Inc CASE NO: 34-2017-00210560-CU-OE-GDS
Class Counsel
Norman B. Blumenthal, Kyle R. Nordrehaug, Aparajit Bhowmik, Piya Mukherjee, Victoria Rivapalacio,
and Charlotte James of Blumenthal Nordrehaug Bhowmik De Blouw LLP; and Shaun Setareh and
William M. Pao of Setareh Law Group are preliminarily appointed as class counsel for purposes of
settlement only ("Class Counsel").
Fair, Adequate, and Reasonable Settlement
Before approving a class action settlement, the Court must find that the settlement is "fair, adequate,
and reasonable." (Wershba v. Apple Computer (2001) 91 Cal.App.4th 224, 244-245.) The Court
considers such factors as "the strength of plaintiffs' case, the risk, expense, complexity and likely
duration of further litigation, the risk of maintaining class action status through trial, the amount offered in
settlement, the extent of discovery completed and the stage of the proceedings, the experience and
views of counsel, the presence of a governmental participant, and the reaction of class members to the
proposed settlement." (Dunk v. Ford Motor Company (1996) 48 Cal.App.4th 1794, 1801.) "[A]
presumption of fairness exists where: (1) the settlement is reached through arm's-length bargaining; (2)
investigation and discovery are sufficient to allow counsel and the court to act intelligently; (3) counsel is
experienced in similar litigation; and (4) the percentage of objectors is small." (Id. at 1802.)
Here, the settlement provides, among other things, that in order to settle the matter, Defendant will pay
the non-reversionary Gross Settlement Amount of $5,000,000, which includes the following: (1)
individual settlement payments to the Class Members; (2) Class Counsel fees not to exceed one-third of
the Gross Settlement Amount ($1,666,666,67) and expenses not to exceed $140,000; (3) settlement
administration expenses not to exceed $55,000; (4) a service payment to the Named Plaintiffs of
$10,000 each; and (5) the PAGA payment of $150,000, 75% of which will be allocated to the LWDA and
25% of which will be distributed to the Aggrieved Employees. (Agreement ¶¶ I(S), III(B); Nordrehaug
Decl. ¶ 25.) The Gross Settlement Amount does not include the employer's share of payroll taxes, which
will be separately paid by Defendants. (Agreement ¶ I(S); Nordrehaug Decl. ¶ 19.)
Individual settlement shares will be calculated as follows: (1) the settlement administrator will divide the
Net Settlement Amount by the total number of weeks included in the dates of employment to determine
a dollar amount per week ("Weekly Rate"); and (2) the settlement administrator will then take the
number of weeks worked by each Participating Class Member and multiply it by the Weekly Rate to
calculate their settlement share. (Agreement ¶ III(44)(a-b).) Class Members will have the right to
challenge the number of workweeks. Any dispute shall be decided by the Settlement Administrator.
(Nordrehaug Decl. ¶ 21.)
Class Members may opt-out of the settlement by following the procedures set forth in the notice. All
Class Members who do not opt-out will be deemed Participating Class Members who will be bound by
the settlement and entitled to receive a settlement share. Aggrieved Employees who opt out will still be
paid their allocation of the PAGA payment and will remain bound by the release of the Released PAGA
Claims. The notice will also advise Class Members of their right to object to the settlement and/or
dispute their workweeks. (Agreement ¶ III(E)(3).)
The Gross Settlement Amount provides an average value of $969 per Class Member and $6.92 per
workweek, and after deductions, the Net Settlement Amount provides an average recovery of $575 per
Class Member and $4.11 per work week. (Nordrehaug Decl. ¶ 6.)
Participating Class Members must cash a settlement check within 180 days after it is mailed. Any
settlement check not cased within 180 days will be paid to the California State Controller's Unclaimed
Property Fund in the name of the Participating Class Member. (Agreement ¶ III(E)(8).)
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CASE TITLE: Spears vs. Health Net of California Inc CASE NO: 34-2017-00210560-CU-OE-GDS
The parties have agreed to use ILYM Group ("ILYM") as the settlement administrator who will
disseminate the notice of settlement to all class members. (Agreement ¶ III(D).)
The LWDA has been served with this motion and Agreement. (Nordrehaug Decl. ¶ 26.)
The Court preliminarily finds, subject to the final fairness hearing, that the settlement, including the
PAGA settlement, is entitled to a presumption of fairness and that all relevant factors support preliminary
approval. The moving papers demonstrate the settlement was the product of arms-length bargaining
between the parties for approximately five years, and was reached after sufficient formal and informal
discovery, motion practice, class certification, and a full day of mediation, which allowed the parties, and,
therefore, this Court, to act intelligently with respect to the settlement. (Nordrehaug Decl. ¶¶ 10-16.) The
discovery included significant written discovery, reviewing several thousand pages of documents, along
with depositions of both class representatives and four corporate representatives. (Nordrehaug Decl. ¶
35.) In preparation for the mediation, Defendant provided Class Counsel with time data, payroll data,
and data concerning the composition of the Class. Plaintiff analyzed the data with the assistance of
damages expert, DM&A, James Toney, and Berger Consulting, and prepared and submitted a mediation
brief and damage valuation to the mediator. (Nordrehaug Decl. ¶ 5.) Based on Plaintiff's calculations, the
Gross Settlement Amount represents more than 33% of the value of the potential maximum damages at
issue, assuming the amounts could all be proven at trial. (Nordrehaug Decl. ¶ 6.) Class Counsel is also
experienced in this type of class action litigation, evaluated the strengths and weaknesses of the case,
and views the settlement as favorable to the class. (Nordrehaug ¶ 5, 18, 35; Setareh Decl. ¶¶ 3-5, 8-9.)
The settlement provides value to the Class Members as it provides them with monetary compensation in
a manner approximately commensurate with the potential value of their individual claims in light of the
risks of continued litigation. The Court is granting preliminary approval of the settlement.
Final Approval Hearing
The Court will again review and consider the terms of this settlement at the time of the final approval
hearing.
The final approval hearing will be scheduled for July 12, 2022, in Department 54 at 9:00 a.m., or such
later date as is necessary for the administrator and counsel. The moving, opposing, and reply papers
shall be filed and served in conformity with Code of Civil Procedure section 1005.
Finding no objection thereto, the Court will sign the formal order submitted with the moving papers.
This minute order is effective immediately. No formal order or other notice is required. (Code Civ. Proc.
§1019.5; CRC Rule 3.1312.)
COURT RULING
There being no request for oral argument, the Court affirmed the tentative ruling.
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CASE TITLE: Spears vs. Health Net of California Inc CASE NO: 34-2017-00210560-CU-OE-GDS
The Motion - Other - Civil Law and Motion Final Approval Hearing is scheduled for 07/12/2022 at 09:00
AM in Department 54.
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