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LINE 4 Hearing Start Time 9:00 AM
Ly v. Sage Intacct, Inc.
18CV334378 Hearing Type: Motion: Preliminary Approval
Date of Hearing: 08/07/2020 Comments:
Heard By: Walsh, Brian C Location: Department 1
Courtroom Reporter: - No Court Reporter Courtroom Clerk Ann Vizconde
Court interpreter:
Court Investigator:
Parties Present: Future Hearings:
Exhil
- Motion by Plaintiff Thompson Ly for Preliminary Approval of Class Action Settlement
No appearances.
The Court states he received the Supplemental Declaration submitted by Pintff which met the Court s
requirements.
The matter is unopposed.
THE COURT ADOPTS THE TENTATIVE RULING; see below:
This is a putative class action on behalf of employees of defendant Sage Intacct, Inc., alleging
misclassification of certain employees and resulting wage and hour violations. Before the Court is plaintiff
s motion for preliminary approval ofa settlement, which is unopposed.
|, Factual and Procedural Background
As alleged in the operative complaint, plaintiff worked for Sage as an Inbound Sales Development
Representative, also known as a Sales Development Representative, from October 2016 to May 2017.
(Complaint, 12-13.) His duties included calling on potential customers and qualifying marketing-
generated leads, discussing defendant s cloud accounting and ERP software with potential customers,
generating new business opportunities, and selling cloud accounting and ERP software to small to mid-size
businesses. (Ibid.) Plaintiff was paid a base salary, plus variable commissions. (Ibid.) However, he alleges
that he and other class members were regularly scheduled to work overtime without receiving straight
time or overtime compensation, because they are properly classified as nonexempt employees. (Id., 14.)
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As a result of defendant s failure to pay these wages, class members also did not receive all wages owed at
the time of separation and are entitled to waiting time penalties. (Id., 32.)
Based on these allegations, plaintiff brings putative class claims for (1) violation of Labor Code sections 510
and 1194, (2) restitution pursuant to Business & Professions Code section 17203, and (3) waiting time
penalties pursuant to Labor Code section 203.
The parties have now reached a settlement. Plaintiff moves for an order preliminarily approving the
settlement, provisionally certifying the settlement class, approving the form and method for providing
notice to the class, and scheduling a final fairness hearing.
ll. Legal Standards for Approving a Class Action Settlement
Generally, questions whether a settlement was fair and reasonable, whether notice to the class was
adequate, whether certification of the class was proper, and whether the attorney fee award was proper
are matters addressed to the trial court s broad discretion. (Wershba v. Apple Computer, Inc. (2001) 91
Cal.App.4th 224, 234-235, citing Dunk v. Ford Motor Co. (1996) 48 Cal.App.4th 1794, disapproved of on
other grounds by Hernandez v. Restoration Hardware, Inc. (2018) 4 Cal.5th 260.)
In determining whether a class settlement is fair, adequate and reasonable, the trial court should consider
relevant factors, such as the strength of plaintiffs case, the risk, expense, complexity and likely duration of
further litigation, the risk of maintaining class action status through trial, the amount offered in settlement,
the extent of discovery completed and the stage of the proceedings, the experience and views of counsel,
the presence of a governmental participant, and the reaction of the class members to the proposed
settlement.
(Wershba v. Apple Computer, Inc., supra, 91 Cal.App.4th at pp. 244-245, internal citations and quotations
omitted.)
In general, the most important factor is the strength of plaintiffs case on the merits, balanced against the
amount offered in settlement. (See Kullar v. Foot Locker Retail, Inc. (2008) 168 Cal.App.4th 116, 130.) Still,
the list of factors is not exclusive and the court is free to engage in a balancing and weighing of factors
depending on the circumstances of each case. (Wershba v. Apple Computer, Inc., supra, 91 Cal.App.4th at
p. 245.) The court must examine the proposed settlement agreement to the extent necessary to reach a
reasoned judgment that the agreement is not the product of fraud or overreaching by, or collusion
between, the negotiating parties, and that the settlement, taken as a whole, is fair, reasonable and
adequate to all concerned. (Ibid., quoting Dunk v. Ford Motor Co., supra, 48 Cal.App.4th at p. 1801,
internal quotation marks omitted.)
The burden is on the proponent of the settlement to show that it is fair and reasonable. However 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.
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(Wershba v. Apple Computer, Inc., supra, 91 Cal.App.4th at p. 245, citing Dunk v. Ford Motor Co., supra, 48
Cal.App.4th at p. 1802.) The presumption does not permit the Court te give rubber-stamp approval toa
settlement; in all cases, it must independently and objectively analyze the evidence and circumstances
before it in order to determine whether the settlement is in the best interests of those whose claims will be
extinguished, based on a sufficiently developed factual record. (Kullar
v. Foot Locker Retail, Inc., supra,
168 Cal.App.4th at p. 130.)
Ill. Settlement Process
Plaintiff served initial discovery requests in March 2019, and multiple discovery disputes developed. The
parties participated in an informal discovery conference (IDC ) with the Court on August 14, 2019, and
reached an agreement regarding some disputes, at which point defendant produced approximately 1,200
documents. More disputes arose, and a second IDC was held on November 4, 2019. Defendant produced
approximately 11,000 additional documents, and plaintiff agreed to delete confidential information he
retained after his termination and produce certain electronically stored information. During this period,
both plaintiff and defendant prepared and served numerous amended discovery responses. Defendant
deposed plaintiff on November 19, 2019, but did not complete the deposition.
In January 2020, the parties began to discuss mediation, and they stipulated to stay the case and vacate
case deadlines. On April 15, 2020, in light of the COVID-19 pandemic, they conducted a virtual mediation
with Francis Tripper Ortman Ill. Defendant provided substantial information about the claims alleged by
plaintiff, including payroll data, Salesforce data, and parking badge data. After mediating late into the
evening, the parties were able to reach the agreement before the Court.
IV. Provisions of the Settlement
The non-reversionary gross settlement amount is $ 1,100,000. Attorney fees of up to $ 366,666 (one-third
of the gross settlement), litigation costs not to exceed $15,000, and administration costs of $5,750 will be
paid from the gross settlement. The named plaintiff will also seek an enhancement award of $7,500.
The net settlement, approximately $705,084, will be distributed to individual class members pro rata
based on their weeks worked during the class period. Class members whose employment was terminated
during the class period will receive credit for an additional four workweeks. The average settlement
payment will be approximately $7,922.29 to each of the 89 class members, and class members will not be
required to submit a claim to receive their payments. Settlement awards will be allocated 1/3 to unpaid
wages and 2/3 to interest and penalties. Defendant will pay its share of payroll taxes in addition to the
gross settlement amount. Funds associated with checks uncashed after 180 days will be redistributed
among participating class members. Any redistribution checks that remain uncased after 90 days will be
deposited with the State of California unclaimed property fund in the name of the class member who
received the redistribution.
Class members who do not opt out of the settlement will release claims (1) that were pled in the
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complaint; (2) [t]hat could have been alleged by Plaintiff or any Settlement Class Member under the facts
pled in the Complaint including, but not limited to, any claims for penalties (statutory, civil or otherwise)
associated with the alleged failure to pay compensation for all hours worked (including minimum wages
and overtime wages), waiting time penalties, and violation(s) of Business and Professions Code section
17200 et seq. ; or (3) that first arose or existed during the class period with respect to a) Any claims for
failure to pay compensation for all hours worked (including minimum wages and overtime wages) in
accordance with the California Labor Code and/or applicable Wage Orders; b) Any claims for the failure to
pay waiting time penalties; c) Any claims for equitable relief, declaratory relief, liquidated damages,
restitution, or unfair business practices alleged or which could have been alleged in connection with the
alleged failure to pay for all wages owed (including minimum wages and overtime wages) and waiting time
penalties; and d) Any claims for attorneys fees, interest, or penalties in connection with the failure to
provide meal periods, failure to pay for all wages owed (including minimum wages and overtime wages)
and waiting time penalties.
The Court assumes that the reference to claims for failure to provide meal periods in the last subsection of
the release is in error. Plaintiff s counsel shall address this issue in a supplemental declaration to be filed
prior to the hearing on this matter if possible.
V. Fairness of the Settlement
Plaintiff believes he has a strong case at class certification and on the merits based on discovery regarding
the application of the administrative exemption in this case. However, defendant maintains that the class
members were properly classified, and some or all of them were not primarily engaged in sales but instead
advised management, negotiated or represented Sage, or conducted business research. It also asserts that
its incentive plan is a bona fide commission plan that would support its commissioned sales exemption
defense, at least as to some class members.
Plaintiff estimates that, after the deductions from the gross settlement described above, class members
will recover the value of approximately 2.1 hours of overtime per week. Based on his investigation, he
concluded that class members worked an average of 7.6 hours of overtime, and submits that the
settlement represents a fair and reasonable compromise of their claims. The Court is inclined to agree with
this assessment. Still, plaintiff s counsel must provide a supplemental declaration addressing the potential
value of the claims at issue, including the penalty claims, so that the Court may independently and
objectively analyze the settlement before it (Kullar v. Foot Locker Retail, Inc., supra, 168 Cal.App.4th at p.
130).
In addition, the Court retains an independent right and responsibility to review the requested attorney
fees and award only so much as it determines to be reasonable. (See Garabedian v. Los Angeles Cellular
Telephone Co. (2004) 118 Cal.App.4th 123, 127-128.) While 1/3 of the common fund for attorney fees is
generally considered reasonable, counsel shall submit lodestar information prior to the final approval
hearing in this matter so the Court can compare the lodestar information with the requested fees. (See
Laffitte v. Robert Half Intern. Inc. (2016) 1 Cal.5th 480, 504 [trial courts have discretion to double-check the
reasonableness of a percentage fee through a lodestar calculation].)
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VI. Proposed Settlement Class
Plaintiff requests that the following settlement class be provisionally certified:
all persons who are employed or have been employed as exempt by Sage Intacct, Inc. in the State of
California as a:
Sales Development Representative from September 12, 2014 through July 31, 2018; and/or
Corporate Account Manager from September 12, 2014 through July 15, 2020 or the date the Court grants
preliminary approval, whichever date is earlier.
A. Legal Standard for Certifying a Class for Settlement Purposes
Rule 3.769(d) of the California Rules of Court states that [t]he court may make an order approving or
denying certification of a provisional settlement class after [a] preliminary settlement hearing. California
Code of Civil Procedure Section 382 authorizes certification of a class when the question is one of a
common or general interest, of many persons, or when the parties are numerous, and it is impracticable to
bring them all before the court . As interpreted by the California Supreme Court, Section 382 requires the
plaintiff to demonstrate by a preponderance of the evidence (1) an ascertainable class and (2) a well-
defined community of interest among the class members. (Sav-On Drug Stores, Inc. v. Superior Court
(Rocher) (2004) 34 Cal.4th 319, 326, 332.)
The community-of-interest requirement encompasses three factors: (1) predominant questions of law or
fact, (2) class representatives with claims or defenses typical of the class, and (3) class representatives who
can adequately represent the class. (Ibid.) Other relevant considerations include the probability that each
class member will come forward ultimately to prove his or her separate claim to a portion of the total
recovery and whether the class approach would actually serve to deter and redress alleged wrongdoing.
(Linder v. Thrifty Oil Co. (2000) 23 Cal.4th 429, 435.) The plaintiff has the burden of establishing that class
treatment will yield substantial benefits to both the litigants and to the court. (Blue Chip Stamps v.
Superior Court (Botney) (1976) 18 Cal.3d 381, 385.)
In the settlement context, the court s evaluation of the certification issues is somewhat different from its
consideration of certification issues when the class action has not yet settled. (Luckey v. Superior Court
(Cotton On USA, Inc.) (2014) 228 Cal.App.4th 81, 93.) As no trial is anticipated in the settlement-only
context, the case management issues inherent in the ascertainable class determination need not be
confronted, and the court s review is more lenient in this respect. (Id. at pp. 93-94.) However,
considerations designed to protect absentees by blocking unwarranted or overbroad class definitions
require heightened scrutiny in the settlement-only class context, since the court will lack the usual
opportunity to adjust the class as proceedings unfold. (Id. at p. 94.)
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B. Ascertainable Class
The trial court must determine whether the class is ascertainable by examining (1) the class definition, (2)
the size of the class and (3) the means of identifying class members. (Miller v. Woods (1983) 148
Cal.App.3d 862, 873.) Class members are ascertainable where they may be readily identified without
unreasonable expense or time by reference to official records. (Rose v. City of Hayward (1981) 126
Cal.App.3d 926, 932.)
Here, the estimated 89 class members have already been identified based on defendant s records, and the
settlement class is clearly defined. The Court finds that the settlement class is numerous and
ascertainable. The class also appears to be appropriately defined, assuming that defendant no longer
employed Sales Development Representatives after July 31, 2018. Counsel shall address this issue in the
supplemental declaration to be filed with the Court.
C. Community of Interest
With respect to the first community of interest factor, [i]n order to determine whether common questions
of fact predominate the trial court must examine the issues framed by the pleadings and the law applicable
to the causes of action alleged. (Hicks v. Kaufman & Broad Home Corp. (2001) 89 Cal.App.4th 908, 916.)
The court must also give due weight to any evidence of a conflict of interest among the proposed class
members. (See J.P. Morgan & Co., Inc. v. Superior Court (Heliotrope General, Inc.) (2003) 113 Cal.App.4th
195, 215.) The ultimate question is whether the issues which may be jointly tried, when compared with
those requiring separate adjudication, are so numerous or substantial that the maintenance of a class
action would be advantageous to the judicial process and to the litigants. (Lockheed Martin Corp. v.
Superior Court, supra, 29 Cal.4th at pp. 1104-1105.) As a general rule if the defendant s liability can be
determined by facts common to all members of the class, a class will be certified even if the members must
individually prove their damages. (Hicks v. Kaufman & Broad Home Corp., supra, 89 Cal.App.4th at p. 916.)
Here, common legal and factual issues predominate. Plaintiff s claims all arise from defendants wage and
hour practices applied to the similarly-situated class members.
As to the second factor,
The typicality requirement is meant to ensure that the class representative is able to adequately represent
the class and focus on commen issues. It is only when a defense unique to the class representative will be a
major focus of the litigation, or when the class representative s interests are antagonistic to or in conflict
with the objectives of those she purports to represent that denial of class certification is appropriate. But
even then, the court should determine if it would be feasible to divide the class into subclasses to eliminate
the conflict and allow the class action to be maintained.
(Medrazo v. Honda of North Hollywood (2008) 166 Cal. App. 4th 89, 99, internal citations, brackets, and
quotation marks omitted.)
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Like other members of the class, plaintiff was employed by defendant in one of the positions at issue and
alleges he experienced the violations alleged. The anticipated defenses are not unique to plaintiff, and
there is no indication that his interests are otherwise in conflict with those of the class.
Finally, adequacy of representation depends on whether the plaintiff s attorney is qualified to conduct the
proposed litigation and the plaintiff s interests are not antagonistic to the interests of the class. (McGhee
v. Bank of America (1976) 60 Cal.App.3d 442, 450.) The class representative does not necessarily have to
incur all of the damages suffered by each different class member in order to provide adequate
representation to the class. (Wershba v. Apple Computer, Inc. (2001) 91 Cal.App.4th 224, 238.) Differences
in individual class members proof of damages [are] not fatal to class certification. Only a conflict that goes
to the very subject matter of the litigation will defeat a party s claim of representative status. (Ibid.,
internal citations and quotation marks omitted.)
Plaintiff has the same interest in maintaining this action as any class member would have. Further, he
has hired experienced counsel. Plaintiff has sufficiently demonstrated adequacy of representation.
D. Substantial Benefits of Class Certification
[A] class action should not be certified unless substantial benefits accrue both to litigants and the courts. .
.. (Basurco v. 21st Century Ins. (2003) 108 Cal.App.4th 110, 120, internal quotation marks omitted.) The
question is whether a class action would be superior to individual lawsuits. (Ibid.) Thus, even if questions
of law or fact predominate, the lack of superiority provides an alternative ground to deny class
certification. (Ibid.) Generally, a class action is proper where it provides small claimants with a method of
obtaining redress and when numerous parties suffer injury of insufficient size to warrant individual action.
(Id. at pp. 120-121, internal quotation marks omitted.)
Here, there are an estimated 89 members of the proposed class. It would be inefficient for the Court to
hear and decide the same issues separately and repeatedly for each class member. Further, it would be
cost prohibitive for each class member te file suit individually, as each member would have the potential
for little to no monetary recovery. It is clear that a class action provides substantial benefits to both the
litigants and the Court in this case.
VIL. Notice
The content of a class notice is subject to court approval. (Cal. Rules of Court, rule 3.769(f).) The notice
must contain an explanation of the proposed settlement and procedures for class members to follow in
filing written objections to it and in arranging to appear at the settlement hearing and state any objections
to the proposed settlement. (Ibid.) In determining the manner of the notice, the court must consider: (1)
The interests of the class; (2) The type of relief requested; (3) The stake of the individual class members; (4)
The cost of notifying class members; (5) The resources of the parties; (6) The possible prejudice to class
members who do not receive notice; and (7) The res judicata effect on class members. (Cal. Rules of Court,
rule 3.766(e).)
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Here, the notice describes the lawsuit, explains the settlement, and instructs class members that they may
opt out of the settlement or object. The gross settlement amount and estimated deductions are provided,
along with the estimated payment to each class member. Class members are given 45 days to request
exclusion from the class, submit a written objection, or dispute their work week information. Class
members are instructed that they may appear at the final approval hearing to make an oral objection even
if they do not submit a written objection. The form of notice is generally adequate and is approved, with
the modification that class members estimated payments and work week information shall be displayed in
bold within a box set off from the rest of the text on the first page of the notice.
With regard to appearances at the final fairness hearing, the notice shall be further modified to instruct
class members as follows:
Due to the COVID-19 pandemic, hearings before the judge overseeing this case are currently being
conducted remotely with the assistance of a third-party service provider, CourtCall. If that remains the
case at the time of the final fairness hearing, class members who wish to appear at the final fairness
hearing should contact class counsel to arrange a telephonic appearance through CourtCall, at least three
days before the hearing if possible. Any CourtCall fees for an appearance by an objecting class member
shall be paid by class counsel.
Turning to the notice procedure, the parties have selected Phoenix Settlement Admi istrators as the
settlement administrator. The administrator will mail the notice packet within 15 days of preliminary
approval, after updating class members addresses using the National Change of Address Database. Any
notice packets returned as undeliverable will be re-mailed to any forwarding address provided or more
recent address located through a skip trace or by calling the class member s mobile telephone. Class
members who receive a re-mailed notice will have an additional 20 days to respond. These notice
procedures are appropriate are approved.
VII. Conclusion and Order
Prior to the hearing on this matter if possible, plaintiff s counsel shall file a supplemental declaration
addressing the maximum value of the claims in this action, including the penalty claims. The supplemental
declaration shall also address the reference in the last subsection of the release to meal period claims, as
well as the termination of the class period as to Sales Development Representatives on July 31, 2018.
If preliminary approval is granted, the final approval hearing shall take place on December 4, 2020 at 9:00
a.m. in Dept. 1. The following class will be preliminarily certified for settlement purposes:
all persons who are employed or have been employed as exempt by Sage Intacct, Inc. in the State of
California as a:
Sales Development Representative from September 12, 2014 through July 31, 2018; and/or
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Corporate Account Manager from September 12, 2014 through July 15, 2020 or the date the Court grants
preliminary approval, whichever date is earlier.
Prior to final approval, plaintiff shall lodge for the Court s review any individual settlement agreement he
may have executed in connection with his employment with defendant.
The Court will prepare the order.
COVID-19 LAW AND MOTION HEARING PROCEDURES
Pursuant to the Judicial Council s Emergency Rule 3(a)(1) and (3), all law and motion hearings will be
conducted telephonically through CourtCall until further notice. Please see the General Order re: COVID-19
Emergency Order Regarding Complex Civil Actions, and in particular sections 7 and 10, available at
http://www.scscourt.org/
general_info/news_media/newspdfs/GENERALORDER_RECOVID-19_
EMERGENCY_ORDER_REGARDING_COMPLEXCIVILACTION.pdf. If a party gives notice that a tentative ruling
will be contested, any party seeking to participate in the hearing should contact CourtCall.
Public access to telephonic hearings is available on a listen-only line by calling 888-808-6929 (access code
2752612).
State and local rules prohibit recording of court proceedings without a court order. These rules apply while
in court and also while participating in a telephonic hearing or listening in on a public access line. No court
order has been issued which would allow recording of any portion of this motion calendar.
The court does not provide court reporters for proceedings in the complex civil litigation departments. Any
party wishing to retain a court reporter to report a hearing may do so in compliance with this Court s July
24, 2017 Policy Regarding Privately Retained Court Reporters. The court reporter will participate remotely
and will not be present in the courtroom.
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ie SUPERIOR COURT OF CALIFORNIA RCTS COUNTY OF SANTA CLARA Se MINUTE ORDER LINE 4 Hearing Start Time 9:00 AM Ly v. Sage Intacct, Inc. 18CV334378 Hearing Type: Motion: Preliminary Approval Date of Hearing: 08/07/2020 Comments: Heard By: Walsh, Brian C Location: Department 1 Courtroom Reporter: - No Court Reporter Courtroom Clerk Ann Vizconde Court interpreter: Court Investigator: Parties Present: Future Hearings: Exhil - Motion by Plaintiff Thompson Ly for Preliminary Approval of Class Action Settlement No appearances. The Court states he received the Supplemental Declaration submitted by Pintff which met the Court s requirements. The matter is unopposed. THE COURT ADOPTS THE TENTATIVE RULING; see below: This is a putative class action on behalf of employees of defendant Sage Intacct, Inc., alleging misclassification of certain employees and resulting wage and hour violations. Before the Court is plaintiff s motion for preliminary approval ofa settlement, which is unopposed. |, Factual and Procedural Background As alleged in the operative complaint, plaintiff worked for Sage as an Inbound Sales Development Representative, also known as a Sales Development Representative, from October 2016 to May 2017. (Complaint, 12-13.) His duties included calling on potential customers and qualifying marketing- generated leads, discussing defendant s cloud accounting and ERP software with potential customers, generating new business opportunities, and selling cloud accounting and ERP software to small to mid-size businesses. (Ibid.) Plaintiff was paid a base salary, plus variable commissions. (Ibid.) However, he alleges that he and other class members were regularly scheduled to work overtime without receiving straight time or overtime compensation, because they are properly classified as nonexempt employees. (Id., 14.) Printed: 8/7/2020 08/07/2020 Motion: Preliminary Agproval - 18CV334378 Page 1 of 9 ie SUPERIOR COURT OF CALIFORNIA RCTS COUNTY OF SANTA CLARA Se MINUTE ORDER As a result of defendant s failure to pay these wages, class members also did not receive all wages owed at the time of separation and are entitled to waiting time penalties. (Id., 32.) Based on these allegations, plaintiff brings putative class claims for (1) violation of Labor Code sections 510 and 1194, (2) restitution pursuant to Business & Professions Code section 17203, and (3) waiting time penalties pursuant to Labor Code section 203. The parties have now reached a settlement. Plaintiff moves for an order preliminarily approving the settlement, provisionally certifying the settlement class, approving the form and method for providing notice to the class, and scheduling a final fairness hearing. ll. Legal Standards for Approving a Class Action Settlement Generally, questions whether a settlement was fair and reasonable, whether notice to the class was adequate, whether certification of the class was proper, and whether the attorney fee award was proper are matters addressed to the trial court s broad discretion. (Wershba v. Apple Computer, Inc. (2001) 91 Cal.App.4th 224, 234-235, citing Dunk v. Ford Motor Co. (1996) 48 Cal.App.4th 1794, disapproved of on other grounds by Hernandez v. Restoration Hardware, Inc. (2018) 4 Cal.5th 260.) In determining whether a class settlement is fair, adequate and reasonable, the trial court should consider relevant factors, such as the strength of plaintiffs case, the risk, expense, complexity and likely duration of further litigation, the risk of maintaining class action status through trial, the amount offered in settlement, the extent of discovery completed and the stage of the proceedings, the experience and views of counsel, the presence of a governmental participant, and the reaction of the class members to the proposed settlement. (Wershba v. Apple Computer, Inc., supra, 91 Cal.App.4th at pp. 244-245, internal citations and quotations omitted.) In general, the most important factor is the strength of plaintiffs case on the merits, balanced against the amount offered in settlement. (See Kullar v. Foot Locker Retail, Inc. (2008) 168 Cal.App.4th 116, 130.) Still, the list of factors is not exclusive and the court is free to engage in a balancing and weighing of factors depending on the circumstances of each case. (Wershba v. Apple Computer, Inc., supra, 91 Cal.App.4th at p. 245.) The court must examine the proposed settlement agreement to the extent necessary to reach a reasoned judgment that the agreement is not the product of fraud or overreaching by, or collusion between, the negotiating parties, and that the settlement, taken as a whole, is fair, reasonable and adequate to all concerned. (Ibid., quoting Dunk v. Ford Motor Co., supra, 48 Cal.App.4th at p. 1801, internal quotation marks omitted.) The burden is on the proponent of the settlement to show that it is fair and reasonable. However 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. Printed: 8/7/2020 08/07/2020 Motion: Preliminary Agproval - 18CV334378 Page 2 of 9 ie SUPERIOR COURT OF CALIFORNIA RCTS COUNTY OF SANTA CLARA Se MINUTE ORDER (Wershba v. Apple Computer, Inc., supra, 91 Cal.App.4th at p. 245, citing Dunk v. Ford Motor Co., supra, 48 Cal.App.4th at p. 1802.) The presumption does not permit the Court te give rubber-stamp approval toa settlement; in all cases, it must independently and objectively analyze the evidence and circumstances before it in order to determine whether the settlement is in the best interests of those whose claims will be extinguished, based on a sufficiently developed factual record. (Kullar v. Foot Locker Retail, Inc., supra, 168 Cal.App.4th at p. 130.) Ill. Settlement Process Plaintiff served initial discovery requests in March 2019, and multiple discovery disputes developed. The parties participated in an informal discovery conference (IDC ) with the Court on August 14, 2019, and reached an agreement regarding some disputes, at which point defendant produced approximately 1,200 documents. More disputes arose, and a second IDC was held on November 4, 2019. Defendant produced approximately 11,000 additional documents, and plaintiff agreed to delete confidential information he retained after his termination and produce certain electronically stored information. During this period, both plaintiff and defendant prepared and served numerous amended discovery responses. Defendant deposed plaintiff on November 19, 2019, but did not complete the deposition. In January 2020, the parties began to discuss mediation, and they stipulated to stay the case and vacate case deadlines. On April 15, 2020, in light of the COVID-19 pandemic, they conducted a virtual mediation with Francis Tripper Ortman Ill. Defendant provided substantial information about the claims alleged by plaintiff, including payroll data, Salesforce data, and parking badge data. After mediating late into the evening, the parties were able to reach the agreement before the Court. IV. Provisions of the Settlement The non-reversionary gross settlement amount is $ 1,100,000. Attorney fees of up to $ 366,666 (one-third of the gross settlement), litigation costs not to exceed $15,000, and administration costs of $5,750 will be paid from the gross settlement. The named plaintiff will also seek an enhancement award of $7,500. The net settlement, approximately $705,084, will be distributed to individual class members pro rata based on their weeks worked during the class period. Class members whose employment was terminated during the class period will receive credit for an additional four workweeks. The average settlement payment will be approximately $7,922.29 to each of the 89 class members, and class members will not be required to submit a claim to receive their payments. Settlement awards will be allocated 1/3 to unpaid wages and 2/3 to interest and penalties. Defendant will pay its share of payroll taxes in addition to the gross settlement amount. Funds associated with checks uncashed after 180 days will be redistributed among participating class members. Any redistribution checks that remain uncased after 90 days will be deposited with the State of California unclaimed property fund in the name of the class member who received the redistribution. Class members who do not opt out of the settlement will release claims (1) that were pled in the Printed: 8/7/2020 08/07/2020 Motion: Preliminary Agproval - 18CV334378 Page 3 of 9 ie SUPERIOR COURT OF CALIFORNIA RCTS COUNTY OF SANTA CLARA Se MINUTE ORDER complaint; (2) [t]hat could have been alleged by Plaintiff or any Settlement Class Member under the facts pled in the Complaint including, but not limited to, any claims for penalties (statutory, civil or otherwise) associated with the alleged failure to pay compensation for all hours worked (including minimum wages and overtime wages), waiting time penalties, and violation(s) of Business and Professions Code section 17200 et seq. ; or (3) that first arose or existed during the class period with respect to a) Any claims for failure to pay compensation for all hours worked (including minimum wages and overtime wages) in accordance with the California Labor Code and/or applicable Wage Orders; b) Any claims for the failure to pay waiting time penalties; c) Any claims for equitable relief, declaratory relief, liquidated damages, restitution, or unfair business practices alleged or which could have been alleged in connection with the alleged failure to pay for all wages owed (including minimum wages and overtime wages) and waiting time penalties; and d) Any claims for attorneys fees, interest, or penalties in connection with the failure to provide meal periods, failure to pay for all wages owed (including minimum wages and overtime wages) and waiting time penalties. The Court assumes that the reference to claims for failure to provide meal periods in the last subsection of the release is in error. Plaintiff s counsel shall address this issue in a supplemental declaration to be filed prior to the hearing on this matter if possible. V. Fairness of the Settlement Plaintiff believes he has a strong case at class certification and on the merits based on discovery regarding the application of the administrative exemption in this case. However, defendant maintains that the class members were properly classified, and some or all of them were not primarily engaged in sales but instead advised management, negotiated or represented Sage, or conducted business research. It also asserts that its incentive plan is a bona fide commission plan that would support its commissioned sales exemption defense, at least as to some class members. Plaintiff estimates that, after the deductions from the gross settlement described above, class members will recover the value of approximately 2.1 hours of overtime per week. Based on his investigation, he concluded that class members worked an average of 7.6 hours of overtime, and submits that the settlement represents a fair and reasonable compromise of their claims. The Court is inclined to agree with this assessment. Still, plaintiff s counsel must provide a supplemental declaration addressing the potential value of the claims at issue, including the penalty claims, so that the Court may independently and objectively analyze the settlement before it (Kullar v. Foot Locker Retail, Inc., supra, 168 Cal.App.4th at p. 130). In addition, the Court retains an independent right and responsibility to review the requested attorney fees and award only so much as it determines to be reasonable. (See Garabedian v. Los Angeles Cellular Telephone Co. (2004) 118 Cal.App.4th 123, 127-128.) While 1/3 of the common fund for attorney fees is generally considered reasonable, counsel shall submit lodestar information prior to the final approval hearing in this matter so the Court can compare the lodestar information with the requested fees. (See Laffitte v. Robert Half Intern. Inc. (2016) 1 Cal.5th 480, 504 [trial courts have discretion to double-check the reasonableness of a percentage fee through a lodestar calculation].) Printed: 8/7/2020 08/07/2020 Motion: Preliminary Agproval - 18CV334378 Page 4 of 9 ie SUPERIOR COURT OF CALIFORNIA RCTS COUNTY OF SANTA CLARA Se MINUTE ORDER VI. Proposed Settlement Class Plaintiff requests that the following settlement class be provisionally certified: all persons who are employed or have been employed as exempt by Sage Intacct, Inc. in the State of California as a: Sales Development Representative from September 12, 2014 through July 31, 2018; and/or Corporate Account Manager from September 12, 2014 through July 15, 2020 or the date the Court grants preliminary approval, whichever date is earlier. A. Legal Standard for Certifying a Class for Settlement Purposes Rule 3.769(d) of the California Rules of Court states that [t]he court may make an order approving or denying certification of a provisional settlement class after [a] preliminary settlement hearing. California Code of Civil Procedure Section 382 authorizes certification of a class when the question is one of a common or general interest, of many persons, or when the parties are numerous, and it is impracticable to bring them all before the court . As interpreted by the California Supreme Court, Section 382 requires the plaintiff to demonstrate by a preponderance of the evidence (1) an ascertainable class and (2) a well- defined community of interest among the class members. (Sav-On Drug Stores, Inc. v. Superior Court (Rocher) (2004) 34 Cal.4th 319, 326, 332.) The community-of-interest requirement encompasses three factors: (1) predominant questions of law or fact, (2) class representatives with claims or defenses typical of the class, and (3) class representatives who can adequately represent the class. (Ibid.) Other relevant considerations include the probability that each class member will come forward ultimately to prove his or her separate claim to a portion of the total recovery and whether the class approach would actually serve to deter and redress alleged wrongdoing. (Linder v. Thrifty Oil Co. (2000) 23 Cal.4th 429, 435.) The plaintiff has the burden of establishing that class treatment will yield substantial benefits to both the litigants and to the court. (Blue Chip Stamps v. Superior Court (Botney) (1976) 18 Cal.3d 381, 385.) In the settlement context, the court s evaluation of the certification issues is somewhat different from its consideration of certification issues when the class action has not yet settled. (Luckey v. Superior Court (Cotton On USA, Inc.) (2014) 228 Cal.App.4th 81, 93.) As no trial is anticipated in the settlement-only context, the case management issues inherent in the ascertainable class determination need not be confronted, and the court s review is more lenient in this respect. (Id. at pp. 93-94.) However, considerations designed to protect absentees by blocking unwarranted or overbroad class definitions require heightened scrutiny in the settlement-only class context, since the court will lack the usual opportunity to adjust the class as proceedings unfold. (Id. at p. 94.) Printed: 8/7/2020 08/07/2020 Motion: Preliminary Agproval - 18CV334378 Page 5 of 9 ie SUPERIOR COURT OF CALIFORNIA RCTS COUNTY OF SANTA CLARA Se MINUTE ORDER B. Ascertainable Class The trial court must determine whether the class is ascertainable by examining (1) the class definition, (2) the size of the class and (3) the means of identifying class members. (Miller v. Woods (1983) 148 Cal.App.3d 862, 873.) Class members are ascertainable where they may be readily identified without unreasonable expense or time by reference to official records. (Rose v. City of Hayward (1981) 126 Cal.App.3d 926, 932.) Here, the estimated 89 class members have already been identified based on defendant s records, and the settlement class is clearly defined. The Court finds that the settlement class is numerous and ascertainable. The class also appears to be appropriately defined, assuming that defendant no longer employed Sales Development Representatives after July 31, 2018. Counsel shall address this issue in the supplemental declaration to be filed with the Court. C. Community of Interest With respect to the first community of interest factor, [i]n order to determine whether common questions of fact predominate the trial court must examine the issues framed by the pleadings and the law applicable to the causes of action alleged. (Hicks v. Kaufman & Broad Home Corp. (2001) 89 Cal.App.4th 908, 916.) The court must also give due weight to any evidence of a conflict of interest among the proposed class members. (See J.P. Morgan & Co., Inc. v. Superior Court (Heliotrope General, Inc.) (2003) 113 Cal.App.4th 195, 215.) The ultimate question is whether the issues which may be jointly tried, when compared with those requiring separate adjudication, are so numerous or substantial that the maintenance of a class action would be advantageous to the judicial process and to the litigants. (Lockheed Martin Corp. v. Superior Court, supra, 29 Cal.4th at pp. 1104-1105.) As a general rule if the defendant s liability can be determined by facts common to all members of the class, a class will be certified even if the members must individually prove their damages. (Hicks v. Kaufman & Broad Home Corp., supra, 89 Cal.App.4th at p. 916.) Here, common legal and factual issues predominate. Plaintiff s claims all arise from defendants wage and hour practices applied to the similarly-situated class members. As to the second factor, The typicality requirement is meant to ensure that the class representative is able to adequately represent the class and focus on commen issues. It is only when a defense unique to the class representative will be a major focus of the litigation, or when the class representative s interests are antagonistic to or in conflict with the objectives of those she purports to represent that denial of class certification is appropriate. But even then, the court should determine if it would be feasible to divide the class into subclasses to eliminate the conflict and allow the class action to be maintained. (Medrazo v. Honda of North Hollywood (2008) 166 Cal. App. 4th 89, 99, internal citations, brackets, and quotation marks omitted.) Printed: 8/7/2020 08/07/2020 Motion: Preliminary Agproval - 18CV334378 Page 6 of 9 ie SUPERIOR COURT OF CALIFORNIA RCTS COUNTY OF SANTA CLARA Se MINUTE ORDER Like other members of the class, plaintiff was employed by defendant in one of the positions at issue and alleges he experienced the violations alleged. The anticipated defenses are not unique to plaintiff, and there is no indication that his interests are otherwise in conflict with those of the class. Finally, adequacy of representation depends on whether the plaintiff s attorney is qualified to conduct the proposed litigation and the plaintiff s interests are not antagonistic to the interests of the class. (McGhee v. Bank of America (1976) 60 Cal.App.3d 442, 450.) The class representative does not necessarily have to incur all of the damages suffered by each different class member in order to provide adequate representation to the class. (Wershba v. Apple Computer, Inc. (2001) 91 Cal.App.4th 224, 238.) Differences in individual class members proof of damages [are] not fatal to class certification. Only a conflict that goes to the very subject matter of the litigation will defeat a party s claim of representative status. (Ibid., internal citations and quotation marks omitted.) Plaintiff has the same interest in maintaining this action as any class member would have. Further, he has hired experienced counsel. Plaintiff has sufficiently demonstrated adequacy of representation. D. Substantial Benefits of Class Certification [A] class action should not be certified unless substantial benefits accrue both to litigants and the courts. . .. (Basurco v. 21st Century Ins. (2003) 108 Cal.App.4th 110, 120, internal quotation marks omitted.) The question is whether a class action would be superior to individual lawsuits. (Ibid.) Thus, even if questions of law or fact predominate, the lack of superiority provides an alternative ground to deny class certification. (Ibid.) Generally, a class action is proper where it provides small claimants with a method of obtaining redress and when numerous parties suffer injury of insufficient size to warrant individual action. (Id. at pp. 120-121, internal quotation marks omitted.) Here, there are an estimated 89 members of the proposed class. It would be inefficient for the Court to hear and decide the same issues separately and repeatedly for each class member. Further, it would be cost prohibitive for each class member te file suit individually, as each member would have the potential for little to no monetary recovery. It is clear that a class action provides substantial benefits to both the litigants and the Court in this case. VIL. Notice The content of a class notice is subject to court approval. (Cal. Rules of Court, rule 3.769(f).) The notice must contain an explanation of the proposed settlement and procedures for class members to follow in filing written objections to it and in arranging to appear at the settlement hearing and state any objections to the proposed settlement. (Ibid.) In determining the manner of the notice, the court must consider: (1) The interests of the class; (2) The type of relief requested; (3) The stake of the individual class members; (4) The cost of notifying class members; (5) The resources of the parties; (6) The possible prejudice to class members who do not receive notice; and (7) The res judicata effect on class members. (Cal. Rules of Court, rule 3.766(e).) Printed: 8/7/2020 08/07/2020 Motion: Preliminary Agproval - 18CV334378 Page 7 of 9 ie SUPERIOR COURT OF CALIFORNIA RCTS COUNTY OF SANTA CLARA Se MINUTE ORDER Here, the notice describes the lawsuit, explains the settlement, and instructs class members that they may opt out of the settlement or object. The gross settlement amount and estimated deductions are provided, along with the estimated payment to each class member. Class members are given 45 days to request exclusion from the class, submit a written objection, or dispute their work week information. Class members are instructed that they may appear at the final approval hearing to make an oral objection even if they do not submit a written objection. The form of notice is generally adequate and is approved, with the modification that class members estimated payments and work week information shall be displayed in bold within a box set off from the rest of the text on the first page of the notice. With regard to appearances at the final fairness hearing, the notice shall be further modified to instruct class members as follows: Due to the COVID-19 pandemic, hearings before the judge overseeing this case are currently being conducted remotely with the assistance of a third-party service provider, CourtCall. If that remains the case at the time of the final fairness hearing, class members who wish to appear at the final fairness hearing should contact class counsel to arrange a telephonic appearance through CourtCall, at least three days before the hearing if possible. Any CourtCall fees for an appearance by an objecting class member shall be paid by class counsel. Turning to the notice procedure, the parties have selected Phoenix Settlement Admi istrators as the settlement administrator. The administrator will mail the notice packet within 15 days of preliminary approval, after updating class members addresses using the National Change of Address Database. Any notice packets returned as undeliverable will be re-mailed to any forwarding address provided or more recent address located through a skip trace or by calling the class member s mobile telephone. Class members who receive a re-mailed notice will have an additional 20 days to respond. These notice procedures are appropriate are approved. VII. Conclusion and Order Prior to the hearing on this matter if possible, plaintiff s counsel shall file a supplemental declaration addressing the maximum value of the claims in this action, including the penalty claims. The supplemental declaration shall also address the reference in the last subsection of the release to meal period claims, as well as the termination of the class period as to Sales Development Representatives on July 31, 2018. If preliminary approval is granted, the final approval hearing shall take place on December 4, 2020 at 9:00 a.m. in Dept. 1. The following class will be preliminarily certified for settlement purposes: all persons who are employed or have been employed as exempt by Sage Intacct, Inc. in the State of California as a: Sales Development Representative from September 12, 2014 through July 31, 2018; and/or Printed: 8/7/2020 08/07/2020 Motion: Preliminary Agproval - 18CV334378 Page B of 9 &s SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA % MINUTE ORDER Corporate Account Manager from September 12, 2014 through July 15, 2020 or the date the Court grants preliminary approval, whichever date is earlier. Prior to final approval, plaintiff shall lodge for the Court s review any individual settlement agreement he may have executed in connection with his employment with defendant. The Court will prepare the order. COVID-19 LAW AND MOTION HEARING PROCEDURES Pursuant to the Judicial Council s Emergency Rule 3(a)(1) and (3), all law and motion hearings will be conducted telephonically through CourtCall until further notice. Please see the General Order re: COVID-19 Emergency Order Regarding Complex Civil Actions, and in particular sections 7 and 10, available at http://www.scscourt.org/ general_info/news_media/newspdfs/GENERALORDER_RECOVID-19_ EMERGENCY_ORDER_REGARDING_COMPLEXCIVILACTION.pdf. If a party gives notice that a tentative ruling will be contested, any party seeking to participate in the hearing should contact CourtCall. Public access to telephonic hearings is available on a listen-only line by calling 888-808-6929 (access code 2752612). State and local rules prohibit recording of court proceedings without a court order. These rules apply while in court and also while participating in a telephonic hearing or listening in on a public access line. No court order has been issued which would allow recording of any portion of this motion calendar. The court does not provide court reporters for proceedings in the complex civil litigation departments. Any party wishing to retain a court reporter to report a hearing may do so in compliance with this Court s July 24, 2017 Policy Regarding Privately Retained Court Reporters. The court reporter will participate remotely and will not be present in the courtroom. Printed: 8/7/2020 08/07/2020 Motion: Preliminary Agproval - 18CV334378 Page 9 of 9