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ALAN HARRIS, Bar No. 146079 Electronically Filed
1 DAVID GARRETT, Bar No. 160274
HARRIS & RUBLE 7/29/2020 5:36 PM
2 655 N. Central Avenue, 17th Floor Superior Court of California
Glendale, CA 91203 County of Stanislaus
3 Telephone: 323.962.3777 Clerk of the Court
Fax No.: 323.962.3004 By: Sonia Krohn, Deputy
4 harrisa@harrisanddruble.com
dgarrett@harrisandruble.com
5
David Harris (SBN 215224)
6 NORTH BAY LAW GROUP
116 E. Blithedale Ave., Ste. 2
7 Mill Valley, CA 94941
Telephone: (415) 388-8788
8 Facsimile: (415) 388-8770
dsh@northbaylawgroup.com
9
Attorneys for Plaintiffs
10
11 SUPERIOR COURT OF THE STATE OF CALIFORNIA
12 COUNTY OF STANISLAUS
13 JERAE PORRAS, MANDI SANCHEZ, JASON LE Case No.: CV-19-000937
SURE, KADIEDRA CRAWFORD, AND JANIE
14 SALGUERO AS AGGRIEVED EMPLOYEES ASSIGNED FOR ALL PURPOSES TO
PURSUANT TO THE PRIVATE ATTORNEYS HON. SONNY S. SANDHU,
15 GENERAL ACT (“PAGA”), DEPT. 24
16 Plaintiffs, PLAINTIFF LE SURE, CRAWFORD
AND SALGUERO’S OPPOSITION
17 v. TO MOTION TO VACATE THE
COURT’S ORDER APPROVING
18 CHIPOTLE SERVICES, LLC, a Colorado limited PAGA SETTLEMENT AND
liability company; JUDGMENT PURSUANT TO CCP
19 §663; MEMORANDUM OF POINTS
Defendant. AND AUTHORITIES
20
[Filed concurrently with Decl. of David
21 Garrett]
22 Date: August 12, 2020
Time: 8:30 a.m.
23 Judge: Sonny S. Sandhu
Dept.: 24
24 Stanislaus Superior Courthouse
800 11th Street
25 Modesto, CA 95354
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2 Table of Contents
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MEMORANDUM OF POINTS AND AUTHORITIES................................................................5
4
I. INTRODUCTION..............................................................................................................5
5 II. ARGUMENT .....................................................................................................................9
6 A. Legal Standard …………………………………………………………………..…..10
B. The Settlement was Reached After Meaningful Discovery…………………...…….11
7 C. The Settlement was Reached after Adversarial Negotiation.………………………..12
D. The Settlement was Fair and Reasonable…………………………………………....13
8 E. The Attorney’s Fees were Reasonable. …………………………….…………...…..14
9 III. CONCLUSION ................................................................................................................19
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TABLE OF AUTHORITIES
1
Page(s)
2
Cases
3
Atari, Inc. v. Sup. Ct.,
4 166 Cal.App.3d 867 (1985) ..................................................................................................................... 13
Beckstead v. Sup. Ct.,
5 21 Cal. App. 3d 780 (1971) ..................................................................................................................... 13
Blakemore v. Sup. Ct.,
6
129 Cal.App.4th 36.................................................................................................................................. 13
7 Carabini v. Sup. Ct.,
26 Cal. App. 4th 239 (1994) .................................................................................................................... 13
8 Cellphone Termination Fee Cases,
(2009) 180 Cal.App.4th 1110 .................................................................................................................. 11
9 Cook v. Superior Court of Los Angeles County,
50 Cal.Rptr. 81 (1966) ............................................................................................................................... 9
10
Gaines v. Fidelity National Title Ins. Co.,
11 62 Cal.4th 1081, 365 P.3d 904 (2016)................................................................................................. 9, 10
Hernandez v. Restoration Hardware, Inc.,
12 (2018) 4 Cal. 5th 260 ............................................................................................................................... 15
Hibernia etc. Society v. Churchill,
13 (1900) 128 Cal. 633 ................................................................................................................................. 12
14 Home Sav. & Loan Assn. v. Superior Court,
(1974) 42 Cal. App. 3d 1006 ................................................................................................................... 12
15 Hosp. Council of Northern California v. Sup. Ct.,
(1973) 30 Cal.App.3d 331 ................................................................................................................. 12, 13
16 Howard Gunty Profit Sharing Plan v. Sup. Ct.,
(2001) 88 Cal.App.4th 572 ...................................................................................................................... 10
17 Lee v. So. Cal. Univ. for Prof. Studies,
18 148 Cal.App.4th 782................................................................................................................................ 13
Luckey v. Superior Court,
19 (2014) 228 Cal. App. 4th 81 .................................................................................................................... 10
Mallick v. Superior Court,
20 (1979) 89 Cal.App.3d 434 ....................................................................................................................... 15
Mathews v. Savings Union B. & T. Co.,
21 (1919) 43 Cal.App. 45 ............................................................................................................................. 12
22 MKJA, Inc. v. 123 Fit Franchising, LLC,
119 Cal.Rptr.3d 634 (2011) ....................................................................................................................... 9
23 Noya v. A.W. Coulter Trucking,
(2006) 143 Cal.App.4th 838 .................................................................................................................... 15
24 Officers for Justice v. Civil Service Com.,
(9th Cir. 1982) 688 F.2d 615 ................................................................................................................... 11
25
People v. Superior Court (Good),
26 (1976) 17 Cal. 3d 732 .............................................................................................................................. 15
Prince v. CLS Transp., Inc.,
27 (2004) 118 Cal.App.4th 1320 .................................................................................................................. 13
Royal Indem. Co. v. United Enters., Inc.,
28 162 Cal. App. 4th 194 (2008) .................................................................................................................. 11
3
Sav-On Drug Stores, Inc. v. Superior Court,
1
(2004) 34 Cal. 4th 319 ............................................................................................................................. 14
2 Simpson Redwood Co. v. State of Cal.,
(1986) 196 Cal. App. 3d 1192 ........................................................................................................... 12, 13
3 Sky Sports, Inc. v. Sup. Ct.,
201 Cal.App.4th 1363 (2011) .................................................................................................................. 13
4 Stern v. Sup. Ct.,
105 Cal.App.4th 223 (2003) .................................................................................................................... 13
5
Villacres v. ABM Industries Inc.,
6 (2010) 189 Cal.App.4th 562 .................................................................................................................... 11
Wershba v. Apple Computer, Inc.,
7 (2001) 91 Cal.App.4th 224 ...................................................................................................................... 11
Ziani Homeowners Association v. Brookfield Ziani LLC,
8 (2015) 243 Cal.App.4th 274 .................................................................................................................... 17
9
Statutes
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California Code of Civil Procedure section 387(a) .................................................................................... 12
11 California Code of Civil Procedure § 663.................................................................................................... 7
12 Rules
13
California Rules of Court (“CRC”), Rule 3.1203 ........................................................................................ 4
14
Other Authorities
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4 Witkin, Cal. Procedure (5th ed. 2008) Pleading, § 224, 298................................................................... 15
16 Conte & Newberg, Newberg on Class Actions § 11.24 (4th ed. 2002)...................................................... 11
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MEMORANDUM OF POINTS AND AUTHORITIES
1
2 I. INTRODUCTION
3 The PAGA settlement has been appropriately approved and this Court should deny the Motion
4 filed by counsel for Jose Delgado (“Delgado”)—Jeff Hogue (“Hogue”) of the Hogue & Belong law firm.
5 Hogue & Belong has a history of being sanctioned, disqualified and filing meritless appeals in cases
6 similar to this one.1 Here, Delgado has already been denied the right to intervene, and its Writ of
7 Supersedeas (the “Writ”) was summarily rejected by the Court of Appeal. Undeterred, Hogue & Belong
8 has attempted to file not one, but two, frivolous motions, accompanied by over 1,000 pages of exhibits, in
9 order to cause unnecessary delay and to harass Plaintiffs and their counsel. As with its previous filings,
10 the moving papers are full of numerous misrepresentations of fact and misstatements of the law. For
11 example, on page 2, ¶6 of the Declaration of Devon K. Roepcke (“Roepcke Decl.”), Roepcke states that:
12 In August of 2019, Chipotle began organizing a mediation with mediator Jeff Krivis
for the Turley action.
13
Roepcke Decl., ¶6. This statement is patently false. Roepcke and Hogue knew that the Turley mediation
14
was being scheduled as early as April, 2019, over five months earlier. On April 9, 2019, Jeff Hogue
15
wrote an email to then Counsel for Chipotle, SheppardMullin, copying Harris & Ruble, stating:
16
17 Rob and Richard, I understand that there is a mediation on calendar in the Turley
case which was recently certified against your client on the issue of illegal wage
18 statements. Unless we are invited, we would expect that you will not attempt to settle
out Barber's claims, use it as a negotiation point, and/or use it as an argument that
19 some or all of Barber's claims have been released. Thank you,
20 Jeffrey L. Hogue, Esq.
Hogue & Belong
21
See Exhibit 1 to Declaration of David Garrett (“Garrett Decl.”). Not only did counsel for Delgado know
22
about the mediation six months before it was to be held, they demanded to be invited. It is shocking
23
that Delgado’s counsel would attempt to misrepresent the foregoing fact to the Court, especially
24
considering that the above-referenced email was submitted to this Court as Exhibit 8 to the March 10,
25
2020, Declaration of Alan Harris (“Harris Decl.”). A true and correct copy of the Harris Decl. is attached
26
1
27 Hogue & Belong were once sanctioned for interfering in one of their own cases, having been found
to be inadequate counsel in a proposed class action, and disqualified, after filing a class action on top of
28 their own certified class action. See Walker v. Apple, Inc., 4 Cal. App. 5th 1098, 1115, (Ct. App. 2016).
5
1 to the Garrett Decl. as Exhibit 2. Perhaps even more significant is that Harris & Ruble has vigorously
2 prosecuted the cases against Chipotle, and achieved certification of a class, while Hogue & Roepcke have
3 yet to even file a motion for class certification, its case now being stayed, while compelled to arbitration.
4 These dates are important because counsel for Delgado states that they refused to go to the
5 mediation because they were unable to take a PMQ deposition.2 Roepcke Decl., ¶7. However, having
6 known about the proposed mediation as early as April, 2019, Hogue & Roepcke had six months before the
7 October 1, 2019, mediation to take one deposition, yet they did not do so. Roepcke Decl., ¶7.
8 Counsel for Delgado has spent many hours filing motions, an appeal and a Writ, all containing
9 thousands of pages of exhibits. Previously, however, they failed to diligently prosecute their own case,
10 failing to bother to attend the global mediation. Counsel for Delgado admits that they have not undertaken
11 any meaningful discovery in their own case in, including even taking one deposition, in the four years
12 since it was filed. Now, notwithstanding their lack of attention to their own case, Hogue and Roepcke are
13 attempting to overturn the hard-fought settlement in this case. In their apparent desperation to extract
14 attorney fees in this case, the Roepcke Declaration misrepresents other key facts to the Court, stating:
15 Chipotle never disclosed any information about the Porras, Le Sure, and Sanchez
actions to myself or other counsel for Barber and Delgado. . . Chipotle decided to
16 invite plaintiffs’ counsel for Porras, Sanchez, and Barber/Delgado to the mediation but
never disclosed any information about to the Porras and Sanchez actions to myself or
17 other counsel for Barber and Delgado.
18 Roepcke Decl., ¶6. The assertion that Chipotle “never disclosed any information” about the other cases is
19 completely false, as demonstrated by the emails attached as Exhibit 8 to the Harris Declaration (filed with
20 this Court on March 10, 2020) and also attached as Exhibit 3 to the present Garrett Declaration. Hogue
21 & Belong received an email regarding a change in location for the mediation along with contact
22 information for the attorneys representing all of the Plaintiffs (Porras, Sanchez & Le Sure) in this case.
23
24 2
“Barber and Delgado were willing to mediate their claims but conditioned participation in mediation
on Chipotle producing a PMQ for decision and providing sufficient time and pay records for the class so
25 that their attorneys and expert could properly value the claims. Chipotle refused to allow Barber and
Delgado to take a PMQ deposition prior to the mediation and did not provide time and wage records.”
26 Roepcke Decl., ¶7. Contradicting his own declaration, Roepcke emailed Chipotle’s counsel on September
23, 2019 stating that they “plan to attend the mediation and negotiate in good faith,” but insisted on
27 Chipotle making an “initial offer of $1 million.” Only after being told that no opening offer of $1 million
would be made did Delgado’s counsel state they would not attend and then raised supposed discovery
28 concerns. March 9, 2020, Declaration of Jeffrey Hogue, Ex. U.
6
1 Hogue and Roepcke were copied on the September 3, 2019, “Notice of Mediation” which contained the
2 names of all the attending counsel for all cases. It is absurd for Roepcke to claim that they were not given
3 “any information” about this action when they could have easily picked up the phone and called any of the
4 firms involved. Further, the case numbers for Porras, Sanchez and Le Sure are all searchable for free,
5 public viewing on the website of the Labor Workforce Development Agency (the “LWDA”). A true and
6 correct copy of the print out of the printout from the LWDA containing on the case numbers and
7 jurisdictions is attached hereto as Exhibit 4.
8 Defendant Chipotle Services, LLC (“Chipotle”) invited eight plaintiff firms3 involved in five
9 active statewide class and PAGA cases to the mediation with Jeff Krivis, informing all parties of the
10 intention to reach a global settlement.4 The only firms that refused to attend were counsel for Delgado.
11 David Garrett, counsel for Le Sure, Crawford and Salguero herein, reached out to Roepcke to help
12 facilitate Hogue and Roepcke’s attendance at the mediation in the summer of 2019. Garrett Decl., ¶2.
13 Throughout the weeks leading up to the mediation, Garrett texted and called Roepcke to encourage him to
14 attend. Garrett even offered to carpool with Roepcke since they both lived in the San Diego area. Id.
15 However, inexplicably, counsel for Delgado refused to make any effort at all to attend the mediation.
16 Hogue & Belong were informed that a global settlement would be sought at the mediation.
17 Afterward, as early as October 2, 2019, they were informed that a global settlement had been reached.
18 Previously, phone records have been supplied to the Court evidencing attempts by Harris & Ruble to reach
19 out to counsel for Delgado, but the efforts were rebuffed. The parties went above and beyond attempting
20 encourage Hogue & Roepcke’s attendance at mediation. Now, they seek to overturn an excellent $4.9
21 million settlement. Prompt payment to the State and aggrieved employees is important relief in the
22 current, Covid-induced economic crisis, a reality stressed in the Orders of the Judicial Council.
23 On March 10, 2020, six months after they refused to attend mediation and a few days before the
24 date for the initial approval hearing in this matter, Delgado filed an Ex Parte Motion to Intervene, not
25
3
26 Harris & Ruble; North Bay Law Group; Capstone Law, APC; Winston Law Group, P.C.; Ackermann
& Tilajef, P.C.; Barkodar Law Group, P.C.; Hogue & Belong and Roepcke.
27 4
Chipotle filed several emails between counsel for Chipotle and counsel for Delgado discussing the
intention to settle all of the cases on a global basis. March 10, 2020, Declaration of Stephen Hernandez,
28 Ex. 1-2.
7
1 bothering to engage in the meet and confer process, at all. Clearly the PI had been working on the filing
2 for weeks, submitting over 1,000 pages of exhibits, forcing counsel for plaintiffs herein to submit their
3 oppositions for the next morning. The Court denied the Motion as untimely and for lack of standing on
4 March 16, 2020.
5 Thereafter, for a period of three months, counsel for Delgado did nothing, despite the fact that this
6 Court issued tentative orders for additional briefing for the continued approval hearings in this case.
7 Then, just one business day prior to the final hearing on approval, on Friday, June 12, 2020, Hogue filed
8 a Writ of Supersedeas with nearly two thousand pages of exhibits. Counsel for Plaintiffs herein worked
9 throughout the weekend to file an opposition on Monday morning, June 15, 2020. The Court of Appeal
10 summarily denied the Writ of Supersedeas on June 15, 2020.
11 Counsel for Delgado completely misrepresent the record regarding discovery, stating that there
12 was no formal discovery or depositions that had “anything to do with this case.” Memo, p. 26:27. On
13 the contrary, three named Plaintiffs herein (Jason Le Sure, Kadiedra Crawford and Janie Salguero)
14 were subject to full-day depositions. Alan Harris, Counsel for Le Sure, discussed the depositions in his
15 January 20, 2020 Declaration (filed Feb. 26, 2020), stating that:
16 The full-day depositions of Plaintiffs Le Sure, Crawford and Salguero were taken in the
related case of Turley v. Chipotle, Case No. CGC-15-544936 (San Francisco Superior
17 Court). (The PAGA time periods in this case and Turley overlap, and the issues regarding
alleged payroll violations are substantially similar, with the approximately 45,000
18 Aggrieved Employees in this case also class members in the Turley case. Therefore, the
depositions, discovery and payroll records have been applicable to these settling cases and
19 useful in settlement discussions.)
20 Harris Decl., ¶7. The Plaintiffs were deposed regarding the matters at issue in this case: alleged wage
21 and hour violations while employed at Chipotle during the PAGA period. Chipotle also provided the
22 complete payroll files for Le Sure, Crawford and Salguero, comprised of hundreds of pages, which led to
23 the filing of their PAGA case. It appears that counsel for Delgado either failed to read all of the moving
24 papers or is deliberately attempting to mislead the Court regarding the record. In any event, the record as
25 it stands indicates an extraordinary volume of pre-mediation formal discovery and informal post-
26 mediation confirmatory discovery related to Aggrieved Employees herein. Other formal discovery
27 which allowed Plaintiffs’ counsel herein to be fully-informed in settling the case at mediation included:
28 In connection with the Settling Cases, Plaintiffs’ counsel reviewed thousands of pages of
8
payroll records provided by Chipotle in response to formal Requests for Production
1
(“RFP’s”). Both Plaintiffs and Defendants propounded multiple sets of Form
2 Interrogatories, RFP’s, and Special Interrogatories. Chipotle provided over 25,000 pages of
documents in response to Plaintiff’s RFP’s, including wage statements and punch data for
3 Aggrieved Employees.
4 Prior to class certification, Plaintiffs’ counsel interviewed over 50 class members, and
secured declarations and documents from approximately 35 class members. Chipotle
5 deposed five class members, reviewing each individual’s entire payroll and employment
file prior to the depositions. Plaintiff took the depositions of Chipotle PMK (Person Most
6 Qualified) as well a senior store manager. Plaintiff’s expert witness Stephen Moses was
deposed. Plaintiffs’ counsel reviewed thousands of pages from potentially-related cases.
7
8 Harris Decl., ¶7. Chipotle also provided over 350 declarations from employees, who worked in some
9 100 different stores statewide. The records were analyzed by experts Stephen Moses and Berger
10 Consulting Group, LLC (“BCG”), which analyzed timekeeping data for over 10,000 pay periods during
11 the relevant period. Id. Chipotle also supplied additional data prior during mediation. Here, formal
12 discovery was undertaken relating to the claims in the case, with confirmatory discovery analyzed by
13 separate and independent experts, providing the parties with ample data necessary to analyze the claims.
14 The Motion to Vacate should be denied. The parties provided the Court will an adequate record to
15 approve the $4.9 million settlement. There was voluminous data available for the mediation. The parties
16 that attended were well able to consider the evidence versus the risks and rewards of settlement. Counsel
17 for Delgado could have participated, but they chose not to attend. Instead, they have wasted valuable
18 judicial resources with their frivolous filings. The Court has the inherent power to issue sanctions for
19 frivolous motions, under Cal. Rules of Ct. 8.276(a). Such sanctions are appropriate here.5
20 II. ARGUMENT
21 A. Legal Standard
22 A motion to vacate judgment under section 663, subdivision (1) “is a remedy to be used when a
23 trial court draws incorrect conclusions of law or renders an erroneous judgment on the basis of
24 uncontroverted evidence.” A motion to vacate under section 663 may only be brought when the trial
25 judge draws an incorrect legal conclusion or renders an erroneous judgment upon the facts found by it to
26
5
27 California Rules of Court 2.30 states, in relevant part, that “the court may order a person, after
written notice and an opportunity to be heard, to pay reasonable monetary sanctions to the court or an
28 aggrieved person, or both, for failure without good cause to comply with the applicable rules. CRC
2.30(b)-(c).
9
1 exist.” Garibotti v. Hinkle, 243 Cal.App.4th 470, 477 (2015) (emphasis added). Moreover, “[i]n ruling on
2 a motion to vacate the judgment the court cannot in any way change any finding of fact.” Glen Hill Farm,
3 LLC v. California Horse Racing Bd., 189 Cal. App. 4th 1296, 1302 (2010). Here, where conclusions of
4 law are consistent with and supported by the findings of fact first filed, Delgado is not entitled to relief
5 under this section. See e.g. Waters v. Spratt, 166 Cal.App.2d 80, 85 (1958).
6 More importantly, the entire motion and appeal is moot because the judgment has already been
7 paid. Declaration of Madely Nava of ILYM Group, ¶3 (Exhibit 3). Hild v. Justice's Court, 11 Cal. App.
8 2d 235, 236 (1936)(when judgment paid, issue of setting aside becomes moot, and “it therefore becomes
9 idle and useless for the court to consume further time in considering the issues presented.”) “It is well
10 settled that an appellate court will decide only actual controversies. . . [A]n action that originally was
11 based on a justiciable controversy cannot be maintained on appeal if the questions raised therein have
12 become moot by subsequent acts of events.” Finnie v. Town of Tiburon, 199 Cal. App. 3d 1 (1988).
13 One who is “legally aggrieved” by a judgment may become a party of record and obtain a right of
14 appeal by moving to vacate the judgment. Bates v. John Deere Co., 148 Cal.App.3d 40 (App. 1 Dist.
15 1983). However, Delgado does not appear to be “legally aggrieved” according to California law.
16 Binding California Supreme Court and other authority provides that Delgado has neither a property
17 interest in this action, the right to notice, nor the right to be heard. See e.g. Williams v. Sup. Ct., 3 Cal.5th
18 531, 547, n.4 (2017)(“explaining that ‘PAGA actions and certified class actions have a host
19 of…procedural differences’ and that ‘absent employees do not own a personal claim for PAGA civil
20 penalties…and whatever personal claims the absent employees might have for relief are not at stake’”);
21 Medina v. Vander Poel, 523 B.R. 820, 827 (E.D. Cal. 2015) (finding that “the State is the owner of PAGA
22 claims and fine, and that it alone holds a property interest in them.”); Amalgamated Transit Union, Local
23 1756, AFL-CIO v. Sup. Ct., 46 Cal.4th 993, 1003 (2009); (holding that “[PAGA] does not create property
24 rights or any other substantive rights.”); Arias v. Sup. Ct., 46 Cal.4th 969, 986-987 (2009) (“nonparty
25 employees…[are] not…afforded an opportunity to be heard.”).
26 PAGA actions can never impair or impede an employee’s rights—rather because of the one-way
27 collateral estoppel applicable to PAGA actions recognized in Arias, it can only ever benefit aggrieved
28 employees. In Arias, the California Supreme Court found, that because nonparty aggrieved employees are
10
1 “not given notice of the action or afforded an opportunity to be heard, [they] would not be bound by the
2 judgment as to remedies other than civil penalties” assessed by the state and for which no private right of
3 action exists. Id. at 987. Therefore, Delgado is not “legally aggrieved” and cannot move to vacate.
4 B. The Settlement was Reached after Meaningful Discovery & Investigation
5 As indicated in the extensive record, the Settlement was reached after meaningful discovery and
6 investigation. Counsel for Plaintiffs Le Sure, Crawford and Salguero herein conducted extensive formal
7 discovery in the Turley case (which covered a substantial portion of the Aggrieved Employees and time
8 period herein) and received extensive informal discovery prior to, during and following mediation,
9 including but not limited to:
10 1. Full day depositions of Plaintiffs Le Sure, Crawford and Salguero regarding alleged wage
and hour violations during the PAGA period;
11 2. Review of the personnel files/punch records of Plaintiffs Le Sure, Crawford and Salguero;
3. Review of 25,000 pages of payroll/punch data in response to RFP’s;
12 4. Mutual exchange of Form Interrogatories, Special Interrogatories & RFP’s;
5. Personal interviews of 50+ employees and review of payroll records;
13 6. Review of 350 declarations from employees from over 100 California stores;
7. Video-taped depositions of five PAGA period employees by Chipotle;
14 8. Deposition of Chipotle’s PMQ as well as a senior manager in charge of several stores;
9. Deposition of Plaintiff’s expert, Stephen Moses;
15 10. Review of prior Chipotle settlements, including the settlement in Segovia v. Chipotle
Mexican Grill, Inc., Los Angeles County Superior Court Case No. BC489851
16 11. Review of dozens of declarations filed in Turner v. Chipotle Mexican Grill, Inc., Case No.
1:14-cv-02612-JLK-CBS (the “Turner Action”).
17
Harris Decl., ¶7. The records were analyzed by Plaintiff’s expert Stephen Moses and BCG, which
18
analyzed timekeeping data for over 10,000 pay periods during the relevant period. Garrett Decl., ¶7.
19
David Winston, Counsel for Sanchez, indicated in his declaration filed in support of approval that:
20 In advance of the Mediation, Plaintiffs and Defendant engaged in informal discovery that
allowed Plaintiff to assess the value of the alleged claims. This included information about
21 the number of aggrieved employees, the number of pay periods at issue during the PAGA
period, and the relevant policies in effect during the PAGA period. . . As part of the
22 informal and confirmatory discovery process, Defendant also produced time and pay
records for 10 of Defendant’s stores. The time keeping data contained employee
23 identification numbers, a record of when employees clocked in and clocked out, and
information about the number of hours worked. Defendant also provided Plaintiff and
24 PAGA Counsel with payroll data. The payroll data also identified employees by their
identification number, included the start and end dates of the pay periods, identified the
25 number of hours worked and the applicable hourly rate in effect for each hour worked, and
whether or not employees received additional compensation for the time allegedly
26 associated with meal periods during that pay period. I reviewed this data and my office also
retained Jarrett Gorlick of Berger Consulting Group to analyze the time and pay records
27 produced by Defendant. Mr. Gorlick’s analysis confirmed the reasonableness of the
Parties’ proposed settlement and actually suggests that the violation rates were lower than
28 contemplated at the Mediation.
11
1 Declaration of David Winston, ¶7. Further, counsel relied on the opinions of two experts and a neutral in
2 determining the reasonableness of the settlement. “In the context of class action settlements, ‘formal
3 discovery is not a necessary…where the parties have sufficient information to make an informed decision
4 about settlement.” In re Mego Financial Corp. Securities Litigation, 213 F.3d 454, 459 (9th Cir. 2000).
5 See also Zepeda v. PayPal, Inc., No. C 10-2500 SBA) 2017 U.S. Dist. LEXIS 43672, at *43 (N.D.Cal.
6 Mar. 24, 2017) (rejecting the objectors assertion that the lack of formal discovery weighs against
7 approving the settlement despite the fact that “no formal discovery has been conducted.”).
8 Here, a combination of formal discovery in the Turley case relating to the Aggrieved Employees
9 herein, combined with extensive informal discovery in relation to the mediation allowed the parties to
10 make informed decision while working with one of the most experienced wage and hour mediators in
11 California, Jeff Krivis. See Syed v. M-I LLC, No. 1:14-742 WBS BAM, 2016 U.S.Dist.LEXIS 9022, at
12 *21 (E.D.Cal.) (“The parties’ investigation of the claims through informal discovery and mediation, and
13 their consideration and acceptance of the views of a third-party mediator weigh in favor of settlement.”)
14 C. The Settlement was Reached after Adversarial and Arm’s Length Negotiations
15 As described in the approval papers and accompanying declarations:
16 The parties participated in a full-day mediation on October 1, 2020, with Jeff Krivis of First
Mediation, an experienced mediator of wage and hour class actions. Krivis has resolved
17 thousands of disputes including wage and hour and consumer class actions, entertainment,
mass tort, employment, business, complex insurance, product liability and wrongful death
18 matters. Krivis is considered a pioneer in the mediation field, named by The Los Angeles
Daily Journal legal newspaper as one of the “Top Neutrals in the State” every year. Co-
19 founder and Past President of the International Academy of Mediators, Past President
Southern California Mediation Association, Past Council Member of the American Bar
20 Association’s Section of Dispute Resolution.
21 Harris Decl., ¶8. Krivis is a top mediator. The mediation involved SIX plaintiff firms experienced in
22 complex wage and hour litigation (Harris & Ruble; North Bay Law Group; Capstone Law; Winston Law
23 Group; Ackermann & Tilajef; Barkodar Law Group). On the other side were highly-respected defense
24 firms DLAPiper and Messner Reeves, along with Chipotle’s in-house counsel. The Parties went into
25 mediation willing to explore the potential for a settlement, but each side was also prepared to litigate its
26 position through trial and appeal. The global mediation was the textbook example of “adversarial.” Here,
27 six highly-experienced law firms representing separate clients were pitted against two well-known defense
28 firms and Chipotle in-house counsel, under the guidance of an experienced neutral. See e.g. Regan
12
1 Roofing Co. v. Superior Court, 21 Cal. App. 4th 1685, 1709 (1994)(attendance at a mediation conference
2 provides evidence of “adversarial” negotiations).
3 In approving a settlement, the court should determine that settlement “was reached in an
4 atmosphere which was appropriately adversarial to give rise to the presumption that a reasonable valuation
5 was reached.” Id. “The judge should give considerable weight to the competence and integrity of the
6 attorneys and the role played by a neutral mediator, if any, in determining that a settlement agreement
7 represents an arm’s-length transaction entered without self-dealing or other potential misconduct.” Cal.
8 Judges Benchbook Civ. Proc. Before Trial §11.67.
9 The record indicates that the negotiations here were “arm’s length” as they involved experienced
10 counsel from several law firms and a third-party neutral. See e.g. Cho v. Seagate Tech. Holdings, Inc.,
11 177 Cal. App. 4th 734, 744–45 (2009) (determination that negotiation was “arm’s length” supported by
12 the parties’ characterization of the mediation, involvement of experienced counsel and vigorous litigation
13 over two years). The parties have indicated that the mediation was adversarial and counsel from every
14 firm was highly-experienced. For example, Alan Harris has over 45 years of class action experience.
15 Harris Decl., ¶2. Several other attorneys have over twenty years worth of experience. Id.
16 D. The Settlement was Fair and Reasonable
17 A presumption of fairness exists where: (1) the settlement is reached through arm’s length
18 bargaining; (2) investigation and discovery are sufficient to allow counsel and the court to act
19 intelligently; (3) counsel is experienced in similar litigation; and (4) the percentage of objectors is small.
20 In re Microsoft I-V Cases, 135 Cal. App. 4th 706, 723 (2006). As the proposed Settlement was reached
21 through arm’s-length negotiations, sufficient investigation and discovery allowed Counsel to act
22 intelligently, and Counsel is experienced in wage-and-hour cases, the proposed Settlement was entitled to
23 a presumption of fairness. “An agreement reached under these circumstances is presumably fair to all
24 concerned, even when some of the affected class members have expressed objections.” Cal. Judges
25 Benchbook Civ. Proc. Before Trial § 11.67.
26 The efforts by Delgado’s counsel are misplaced. Delgado’s counsel admits that it has not
27 undertaken any meaningful discovery in its own case and it failed to take even one PMQ deposition during
28 the four years since the case was filed. Delgado’s counsel refused to attend a global mediation in Los
13
1 Angeles, but then made overnight trips from San Diego to San Francisco and this Court to seek ex parte
2 relief for motions to intervene after-the-fact. Now, Delgado’s counsel wishes to substitute its opinion for
3 the court’s independent analysis. There is no basis for Delgado to do so. A judge has broad discretion to
4 determine whether a settlement is fair and reasonable. Carter v City of Los Angeles, 224 CA4th 808, 819
5 (2014); Cal. Judges Benchbook Civ. Proc. Before Trial § 11.67. When, as here, “plaintiff faced
6 considerable risk in proceeding to trial, and the [] recovery is significant in light of that risk. . . [t]he
7 court’s order to approve settlement is the product of a reasoned exercise of discretion. Cho, 177 Cal. App.
8 4th at 744–45.
9 In considering whether a settlement is reasonable, the trial court should consider relevant factors,
10 which may include the strength of plaintiff’s case, the risk, expense, complexity and likely duration of
11 further litigation, the risk of maintaining class action status through trial, the amount offered in settlement,
12 the extent of discovery completed and the stage of the proceedings, the experience and views of counsel,
13 the presence of a governmental participant, and the reaction of the class members to the proposed
14 settlement. Kullar v. Foot Locker Retail, Inc., 168 Cal. App. 4th 116, 128 (2008).
15 In order to approve a settlement, the court must satisfy itself that the settlement is within the
16 “ballpark” of reasonableness. Id. at 133. “The most important factor is the strength of the case for
17 plaintiffs on the merits, balanced against the amount offered in settlement.” Kullar, 168 Cal. App. 4th at
18 130; Clark v. American Residential Servs. LLC, 175 Cal. App. 4th 785, 799 (2009). An informed
19
Preview
ALAN HARRIS, Bar No. 146079 Electronically Filed 1 DAVID GARRETT, Bar No. 160274 HARRIS & RUBLE 7/29/2020 5:36 PM 2 655 N. Central Avenue, 17th Floor Superior Court of California Glendale, CA 91203 County of Stanislaus 3 Telephone: 323.962.3777 Clerk of the Court Fax No.: 323.962.3004 By: Sonia Krohn, Deputy 4 harrisa@harrisanddruble.com dgarrett@harrisandruble.com 5 David Harris (SBN 215224) 6 NORTH BAY LAW GROUP 116 E. Blithedale Ave., Ste. 2 7 Mill Valley, CA 94941 Telephone: (415) 388-8788 8 Facsimile: (415) 388-8770 dsh@northbaylawgroup.com 9 Attorneys for Plaintiffs 10 11 SUPERIOR COURT OF THE STATE OF CALIFORNIA 12 COUNTY OF STANISLAUS 13 JERAE PORRAS, MANDI SANCHEZ, JASON LE Case No.: CV-19-000937 SURE, KADIEDRA CRAWFORD, AND JANIE 14 SALGUERO AS AGGRIEVED EMPLOYEES ASSIGNED FOR ALL PURPOSES TO PURSUANT TO THE PRIVATE ATTORNEYS HON. SONNY S. SANDHU, 15 GENERAL ACT (“PAGA”), DEPT. 24 16 Plaintiffs, PLAINTIFF LE SURE, CRAWFORD AND SALGUERO’S OPPOSITION 17 v. TO MOTION TO VACATE THE COURT’S ORDER APPROVING 18 CHIPOTLE SERVICES, LLC, a Colorado limited PAGA SETTLEMENT AND liability company; JUDGMENT PURSUANT TO CCP 19 §663; MEMORANDUM OF POINTS Defendant. AND AUTHORITIES 20 [Filed concurrently with Decl. of David 21 Garrett] 22 Date: August 12, 2020 Time: 8:30 a.m. 23 Judge: Sonny S. Sandhu Dept.: 24 24 Stanislaus Superior Courthouse 800 11th Street 25 Modesto, CA 95354 26 27 28 1 1 2 Table of Contents 3 MEMORANDUM OF POINTS AND AUTHORITIES................................................................5 4 I. INTRODUCTION..............................................................................................................5 5 II. ARGUMENT .....................................................................................................................9 6 A. Legal Standard …………………………………………………………………..…..10 B. The Settlement was Reached After Meaningful Discovery…………………...…….11 7 C. The Settlement was Reached after Adversarial Negotiation.………………………..12 D. The Settlement was Fair and Reasonable…………………………………………....13 8 E. The Attorney’s Fees were Reasonable. …………………………….…………...…..14 9 III. CONCLUSION ................................................................................................................19 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2 TABLE OF AUTHORITIES 1 Page(s) 2 Cases 3 Atari, Inc. v. Sup. Ct., 4 166 Cal.App.3d 867 (1985) ..................................................................................................................... 13 Beckstead v. Sup. Ct., 5 21 Cal. App. 3d 780 (1971) ..................................................................................................................... 13 Blakemore v. Sup. Ct., 6 129 Cal.App.4th 36.................................................................................................................................. 13 7 Carabini v. Sup. Ct., 26 Cal. App. 4th 239 (1994) .................................................................................................................... 13 8 Cellphone Termination Fee Cases, (2009) 180 Cal.App.4th 1110 .................................................................................................................. 11 9 Cook v. Superior Court of Los Angeles County, 50 Cal.Rptr. 81 (1966) ............................................................................................................................... 9 10 Gaines v. Fidelity National Title Ins. Co., 11 62 Cal.4th 1081, 365 P.3d 904 (2016)................................................................................................. 9, 10 Hernandez v. Restoration Hardware, Inc., 12 (2018) 4 Cal. 5th 260 ............................................................................................................................... 15 Hibernia etc. Society v. Churchill, 13 (1900) 128 Cal. 633 ................................................................................................................................. 12 14 Home Sav. & Loan Assn. v. Superior Court, (1974) 42 Cal. App. 3d 1006 ................................................................................................................... 12 15 Hosp. Council of Northern California v. Sup. Ct., (1973) 30 Cal.App.3d 331 ................................................................................................................. 12, 13 16 Howard Gunty Profit Sharing Plan v. Sup. Ct., (2001) 88 Cal.App.4th 572 ...................................................................................................................... 10 17 Lee v. So. Cal. Univ. for Prof. Studies, 18 148 Cal.App.4th 782................................................................................................................................ 13 Luckey v. Superior Court, 19 (2014) 228 Cal. App. 4th 81 .................................................................................................................... 10 Mallick v. Superior Court, 20 (1979) 89 Cal.App.3d 434 ....................................................................................................................... 15 Mathews v. Savings Union B. & T. Co., 21 (1919) 43 Cal.App. 45 ............................................................................................................................. 12 22 MKJA, Inc. v. 123 Fit Franchising, LLC, 119 Cal.Rptr.3d 634 (2011) ....................................................................................................................... 9 23 Noya v. A.W. Coulter Trucking, (2006) 143 Cal.App.4th 838 .................................................................................................................... 15 24 Officers for Justice v. Civil Service Com., (9th Cir. 1982) 688 F.2d 615 ................................................................................................................... 11 25 People v. Superior Court (Good), 26 (1976) 17 Cal. 3d 732 .............................................................................................................................. 15 Prince v. CLS Transp., Inc., 27 (2004) 118 Cal.App.4th 1320 .................................................................................................................. 13 Royal Indem. Co. v. United Enters., Inc., 28 162 Cal. App. 4th 194 (2008) .................................................................................................................. 11 3 Sav-On Drug Stores, Inc. v. Superior Court, 1 (2004) 34 Cal. 4th 319 ............................................................................................................................. 14 2 Simpson Redwood Co. v. State of Cal., (1986) 196 Cal. App. 3d 1192 ........................................................................................................... 12, 13 3 Sky Sports, Inc. v. Sup. Ct., 201 Cal.App.4th 1363 (2011) .................................................................................................................. 13 4 Stern v. Sup. Ct., 105 Cal.App.4th 223 (2003) .................................................................................................................... 13 5 Villacres v. ABM Industries Inc., 6 (2010) 189 Cal.App.4th 562 .................................................................................................................... 11 Wershba v. Apple Computer, Inc., 7 (2001) 91 Cal.App.4th 224 ...................................................................................................................... 11 Ziani Homeowners Association v. Brookfield Ziani LLC, 8 (2015) 243 Cal.App.4th 274 .................................................................................................................... 17 9 Statutes 10 California Code of Civil Procedure section 387(a) .................................................................................... 12 11 California Code of Civil Procedure § 663.................................................................................................... 7 12 Rules 13 California Rules of Court (“CRC”), Rule 3.1203 ........................................................................................ 4 14 Other Authorities 15 4 Witkin, Cal. Procedure (5th ed. 2008) Pleading, § 224, 298................................................................... 15 16 Conte & Newberg, Newberg on Class Actions § 11.24 (4th ed. 2002)...................................................... 11 17 18 19 20 21 22 23 24 25 26 27 28 4 MEMORANDUM OF POINTS AND AUTHORITIES 1 2 I. INTRODUCTION 3 The PAGA settlement has been appropriately approved and this Court should deny the Motion 4 filed by counsel for Jose Delgado (“Delgado”)—Jeff Hogue (“Hogue”) of the Hogue & Belong law firm. 5 Hogue & Belong has a history of being sanctioned, disqualified and filing meritless appeals in cases 6 similar to this one.1 Here, Delgado has already been denied the right to intervene, and its Writ of 7 Supersedeas (the “Writ”) was summarily rejected by the Court of Appeal. Undeterred, Hogue & Belong 8 has attempted to file not one, but two, frivolous motions, accompanied by over 1,000 pages of exhibits, in 9 order to cause unnecessary delay and to harass Plaintiffs and their counsel. As with its previous filings, 10 the moving papers are full of numerous misrepresentations of fact and misstatements of the law. For 11 example, on page 2, ¶6 of the Declaration of Devon K. Roepcke (“Roepcke Decl.”), Roepcke states that: 12 In August of 2019, Chipotle began organizing a mediation with mediator Jeff Krivis for the Turley action. 13 Roepcke Decl., ¶6. This statement is patently false. Roepcke and Hogue knew that the Turley mediation 14 was being scheduled as early as April, 2019, over five months earlier. On April 9, 2019, Jeff Hogue 15 wrote an email to then Counsel for Chipotle, SheppardMullin, copying Harris & Ruble, stating: 16 17 Rob and Richard, I understand that there is a mediation on calendar in the Turley case which was recently certified against your client on the issue of illegal wage 18 statements. Unless we are invited, we would expect that you will not attempt to settle out Barber's claims, use it as a negotiation point, and/or use it as an argument that 19 some or all of Barber's claims have been released. Thank you, 20 Jeffrey L. Hogue, Esq. Hogue & Belong 21 See Exhibit 1 to Declaration of David Garrett (“Garrett Decl.”). Not only did counsel for Delgado know 22 about the mediation six months before it was to be held, they demanded to be invited. It is shocking 23 that Delgado’s counsel would attempt to misrepresent the foregoing fact to the Court, especially 24 considering that the above-referenced email was submitted to this Court as Exhibit 8 to the March 10, 25 2020, Declaration of Alan Harris (“Harris Decl.”). A true and correct copy of the Harris Decl. is attached 26 1 27 Hogue & Belong were once sanctioned for interfering in one of their own cases, having been found to be inadequate counsel in a proposed class action, and disqualified, after filing a class action on top of 28 their own certified class action. See Walker v. Apple, Inc., 4 Cal. App. 5th 1098, 1115, (Ct. App. 2016). 5 1 to the Garrett Decl. as Exhibit 2. Perhaps even more significant is that Harris & Ruble has vigorously 2 prosecuted the cases against Chipotle, and achieved certification of a class, while Hogue & Roepcke have 3 yet to even file a motion for class certification, its case now being stayed, while compelled to arbitration. 4 These dates are important because counsel for Delgado states that they refused to go to the 5 mediation because they were unable to take a PMQ deposition.2 Roepcke Decl., ¶7. However, having 6 known about the proposed mediation as early as April, 2019, Hogue & Roepcke had six months before the 7 October 1, 2019, mediation to take one deposition, yet they did not do so. Roepcke Decl., ¶7. 8 Counsel for Delgado has spent many hours filing motions, an appeal and a Writ, all containing 9 thousands of pages of exhibits. Previously, however, they failed to diligently prosecute their own case, 10 failing to bother to attend the global mediation. Counsel for Delgado admits that they have not undertaken 11 any meaningful discovery in their own case in, including even taking one deposition, in the four years 12 since it was filed. Now, notwithstanding their lack of attention to their own case, Hogue and Roepcke are 13 attempting to overturn the hard-fought settlement in this case. In their apparent desperation to extract 14 attorney fees in this case, the Roepcke Declaration misrepresents other key facts to the Court, stating: 15 Chipotle never disclosed any information about the Porras, Le Sure, and Sanchez actions to myself or other counsel for Barber and Delgado. . . Chipotle decided to 16 invite plaintiffs’ counsel for Porras, Sanchez, and Barber/Delgado to the mediation but never disclosed any information about to the Porras and Sanchez actions to myself or 17 other counsel for Barber and Delgado. 18 Roepcke Decl., ¶6. The assertion that Chipotle “never disclosed any information” about the other cases is 19 completely false, as demonstrated by the emails attached as Exhibit 8 to the Harris Declaration (filed with 20 this Court on March 10, 2020) and also attached as Exhibit 3 to the present Garrett Declaration. Hogue 21 & Belong received an email regarding a change in location for the mediation along with contact 22 information for the attorneys representing all of the Plaintiffs (Porras, Sanchez & Le Sure) in this case. 23 24 2 “Barber and Delgado were willing to mediate their claims but conditioned participation in mediation on Chipotle producing a PMQ for decision and providing sufficient time and pay records for the class so 25 that their attorneys and expert could properly value the claims. Chipotle refused to allow Barber and Delgado to take a PMQ deposition prior to the mediation and did not provide time and wage records.” 26 Roepcke Decl., ¶7. Contradicting his own declaration, Roepcke emailed Chipotle’s counsel on September 23, 2019 stating that they “plan to attend the mediation and negotiate in good faith,” but insisted on 27 Chipotle making an “initial offer of $1 million.” Only after being told that no opening offer of $1 million would be made did Delgado’s counsel state they would not attend and then raised supposed discovery 28 concerns. March 9, 2020, Declaration of Jeffrey Hogue, Ex. U. 6 1 Hogue and Roepcke were copied on the September 3, 2019, “Notice of Mediation” which contained the 2 names of all the attending counsel for all cases. It is absurd for Roepcke to claim that they were not given 3 “any information” about this action when they could have easily picked up the phone and called any of the 4 firms involved. Further, the case numbers for Porras, Sanchez and Le Sure are all searchable for free, 5 public viewing on the website of the Labor Workforce Development Agency (the “LWDA”). A true and 6 correct copy of the print out of the printout from the LWDA containing on the case numbers and 7 jurisdictions is attached hereto as Exhibit 4. 8 Defendant Chipotle Services, LLC (“Chipotle”) invited eight plaintiff firms3 involved in five 9 active statewide class and PAGA cases to the mediation with Jeff Krivis, informing all parties of the 10 intention to reach a global settlement.4 The only firms that refused to attend were counsel for Delgado. 11 David Garrett, counsel for Le Sure, Crawford and Salguero herein, reached out to Roepcke to help 12 facilitate Hogue and Roepcke’s attendance at the mediation in the summer of 2019. Garrett Decl., ¶2. 13 Throughout the weeks leading up to the mediation, Garrett texted and called Roepcke to encourage him to 14 attend. Garrett even offered to carpool with Roepcke since they both lived in the San Diego area. Id. 15 However, inexplicably, counsel for Delgado refused to make any effort at all to attend the mediation. 16 Hogue & Belong were informed that a global settlement would be sought at the mediation. 17 Afterward, as early as October 2, 2019, they were informed that a global settlement had been reached. 18 Previously, phone records have been supplied to the Court evidencing attempts by Harris & Ruble to reach 19 out to counsel for Delgado, but the efforts were rebuffed. The parties went above and beyond attempting 20 encourage Hogue & Roepcke’s attendance at mediation. Now, they seek to overturn an excellent $4.9 21 million settlement. Prompt payment to the State and aggrieved employees is important relief in the 22 current, Covid-induced economic crisis, a reality stressed in the Orders of the Judicial Council. 23 On March 10, 2020, six months after they refused to attend mediation and a few days before the 24 date for the initial approval hearing in this matter, Delgado filed an Ex Parte Motion to Intervene, not 25 3 26 Harris & Ruble; North Bay Law Group; Capstone Law, APC; Winston Law Group, P.C.; Ackermann & Tilajef, P.C.; Barkodar Law Group, P.C.; Hogue & Belong and Roepcke. 27 4 Chipotle filed several emails between counsel for Chipotle and counsel for Delgado discussing the intention to settle all of the cases on a global basis. March 10, 2020, Declaration of Stephen Hernandez, 28 Ex. 1-2. 7 1 bothering to engage in the meet and confer process, at all. Clearly the PI had been working on the filing 2 for weeks, submitting over 1,000 pages of exhibits, forcing counsel for plaintiffs herein to submit their 3 oppositions for the next morning. The Court denied the Motion as untimely and for lack of standing on 4 March 16, 2020. 5 Thereafter, for a period of three months, counsel for Delgado did nothing, despite the fact that this 6 Court issued tentative orders for additional briefing for the continued approval hearings in this case. 7 Then, just one business day prior to the final hearing on approval, on Friday, June 12, 2020, Hogue filed 8 a Writ of Supersedeas with nearly two thousand pages of exhibits. Counsel for Plaintiffs herein worked 9 throughout the weekend to file an opposition on Monday morning, June 15, 2020. The Court of Appeal 10 summarily denied the Writ of Supersedeas on June 15, 2020. 11 Counsel for Delgado completely misrepresent the record regarding discovery, stating that there 12 was no formal discovery or depositions that had “anything to do with this case.” Memo, p. 26:27. On 13 the contrary, three named Plaintiffs herein (Jason Le Sure, Kadiedra Crawford and Janie Salguero) 14 were subject to full-day depositions. Alan Harris, Counsel for Le Sure, discussed the depositions in his 15 January 20, 2020 Declaration (filed Feb. 26, 2020), stating that: 16 The full-day depositions of Plaintiffs Le Sure, Crawford and Salguero were taken in the related case of Turley v. Chipotle, Case No. CGC-15-544936 (San Francisco Superior 17 Court). (The PAGA time periods in this case and Turley overlap, and the issues regarding alleged payroll violations are substantially similar, with the approximately 45,000 18 Aggrieved Employees in this case also class members in the Turley case. Therefore, the depositions, discovery and payroll records have been applicable to these settling cases and 19 useful in settlement discussions.) 20 Harris Decl., ¶7. The Plaintiffs were deposed regarding the matters at issue in this case: alleged wage 21 and hour violations while employed at Chipotle during the PAGA period. Chipotle also provided the 22 complete payroll files for Le Sure, Crawford and Salguero, comprised of hundreds of pages, which led to 23 the filing of their PAGA case. It appears that counsel for Delgado either failed to read all of the moving 24 papers or is deliberately attempting to mislead the Court regarding the record. In any event, the record as 25 it stands indicates an extraordinary volume of pre-mediation formal discovery and informal post- 26 mediation confirmatory discovery related to Aggrieved Employees herein. Other formal discovery 27 which allowed Plaintiffs’ counsel herein to be fully-informed in settling the case at mediation included: 28 In connection with the Settling Cases, Plaintiffs’ counsel reviewed thousands of pages of 8 payroll records provided by Chipotle in response to formal Requests for Production 1 (“RFP’s”). Both Plaintiffs and Defendants propounded multiple sets of Form 2 Interrogatories, RFP’s, and Special Interrogatories. Chipotle provided over 25,000 pages of documents in response to Plaintiff’s RFP’s, including wage statements and punch data for 3 Aggrieved Employees. 4 Prior to class certification, Plaintiffs’ counsel interviewed over 50 class members, and secured declarations and documents from approximately 35 class members. Chipotle 5 deposed five class members, reviewing each individual’s entire payroll and employment file prior to the depositions. Plaintiff took the depositions of Chipotle PMK (Person Most 6 Qualified) as well a senior store manager. Plaintiff’s expert witness Stephen Moses was deposed. Plaintiffs’ counsel reviewed thousands of pages from potentially-related cases. 7 8 Harris Decl., ¶7. Chipotle also provided over 350 declarations from employees, who worked in some 9 100 different stores statewide. The records were analyzed by experts Stephen Moses and Berger 10 Consulting Group, LLC (“BCG”), which analyzed timekeeping data for over 10,000 pay periods during 11 the relevant period. Id. Chipotle also supplied additional data prior during mediation. Here, formal 12 discovery was undertaken relating to the claims in the case, with confirmatory discovery analyzed by 13 separate and independent experts, providing the parties with ample data necessary to analyze the claims. 14 The Motion to Vacate should be denied. The parties provided the Court will an adequate record to 15 approve the $4.9 million settlement. There was voluminous data available for the mediation. The parties 16 that attended were well able to consider the evidence versus the risks and rewards of settlement. Counsel 17 for Delgado could have participated, but they chose not to attend. Instead, they have wasted valuable 18 judicial resources with their frivolous filings. The Court has the inherent power to issue sanctions for 19 frivolous motions, under Cal. Rules of Ct. 8.276(a). Such sanctions are appropriate here.5 20 II. ARGUMENT 21 A. Legal Standard 22 A motion to vacate judgment under section 663, subdivision (1) “is a remedy to be used when a 23 trial court draws incorrect conclusions of law or renders an erroneous judgment on the basis of 24 uncontroverted evidence.” A motion to vacate under section 663 may only be brought when the trial 25 judge draws an incorrect legal conclusion or renders an erroneous judgment upon the facts found by it to 26 5 27 California Rules of Court 2.30 states, in relevant part, that “the court may order a person, after written notice and an opportunity to be heard, to pay reasonable monetary sanctions to the court or an 28 aggrieved person, or both, for failure without good cause to comply with the applicable rules. CRC 2.30(b)-(c). 9 1 exist.” Garibotti v. Hinkle, 243 Cal.App.4th 470, 477 (2015) (emphasis added). Moreover, “[i]n ruling on 2 a motion to vacate the judgment the court cannot in any way change any finding of fact.” Glen Hill Farm, 3 LLC v. California Horse Racing Bd., 189 Cal. App. 4th 1296, 1302 (2010). Here, where conclusions of 4 law are consistent with and supported by the findings of fact first filed, Delgado is not entitled to relief 5 under this section. See e.g. Waters v. Spratt, 166 Cal.App.2d 80, 85 (1958). 6 More importantly, the entire motion and appeal is moot because the judgment has already been 7 paid. Declaration of Madely Nava of ILYM Group, ¶3 (Exhibit 3). Hild v. Justice's Court, 11 Cal. App. 8 2d 235, 236 (1936)(when judgment paid, issue of setting aside becomes moot, and “it therefore becomes 9 idle and useless for the court to consume further time in considering the issues presented.”) “It is well 10 settled that an appellate court will decide only actual controversies. . . [A]n action that originally was 11 based on a justiciable controversy cannot be maintained on appeal if the questions raised therein have 12 become moot by subsequent acts of events.” Finnie v. Town of Tiburon, 199 Cal. App. 3d 1 (1988). 13 One who is “legally aggrieved” by a judgment may become a party of record and obtain a right of 14 appeal by moving to vacate the judgment. Bates v. John Deere Co., 148 Cal.App.3d 40 (App. 1 Dist. 15 1983). However, Delgado does not appear to be “legally aggrieved” according to California law. 16 Binding California Supreme Court and other authority provides that Delgado has neither a property 17 interest in this action, the right to notice, nor the right to be heard. See e.g. Williams v. Sup. Ct., 3 Cal.5th 18 531, 547, n.4 (2017)(“explaining that ‘PAGA actions and certified class actions have a host 19 of…procedural differences’ and that ‘absent employees do not own a personal claim for PAGA civil 20 penalties…and whatever personal claims the absent employees might have for relief are not at stake’”); 21 Medina v. Vander Poel, 523 B.R. 820, 827 (E.D. Cal. 2015) (finding that “the State is the owner of PAGA 22 claims and fine, and that it alone holds a property interest in them.”); Amalgamated Transit Union, Local 23 1756, AFL-CIO v. Sup. Ct., 46 Cal.4th 993, 1003 (2009); (holding that “[PAGA] does not create property 24 rights or any other substantive rights.”); Arias v. Sup. Ct., 46 Cal.4th 969, 986-987 (2009) (“nonparty 25 employees…[are] not…afforded an opportunity to be heard.”). 26 PAGA actions can never impair or impede an employee’s rights—rather because of the one-way 27 collateral estoppel applicable to PAGA actions recognized in Arias, it can only ever benefit aggrieved 28 employees. In Arias, the California Supreme Court found, that because nonparty aggrieved employees are 10 1 “not given notice of the action or afforded an opportunity to be heard, [they] would not be bound by the 2 judgment as to remedies other than civil penalties” assessed by the state and for which no private right of 3 action exists. Id. at 987. Therefore, Delgado is not “legally aggrieved” and cannot move to vacate. 4 B. The Settlement was Reached after Meaningful Discovery & Investigation 5 As indicated in the extensive record, the Settlement was reached after meaningful discovery and 6 investigation. Counsel for Plaintiffs Le Sure, Crawford and Salguero herein conducted extensive formal 7 discovery in the Turley case (which covered a substantial portion of the Aggrieved Employees and time 8 period herein) and received extensive informal discovery prior to, during and following mediation, 9 including but not limited to: 10 1. Full day depositions of Plaintiffs Le Sure, Crawford and Salguero regarding alleged wage and hour violations during the PAGA period; 11 2. Review of the personnel files/punch records of Plaintiffs Le Sure, Crawford and Salguero; 3. Review of 25,000 pages of payroll/punch data in response to RFP’s; 12 4. Mutual exchange of Form Interrogatories, Special Interrogatories & RFP’s; 5. Personal interviews of 50+ employees and review of payroll records; 13 6. Review of 350 declarations from employees from over 100 California stores; 7. Video-taped depositions of five PAGA period employees by Chipotle; 14 8. Deposition of Chipotle’s PMQ as well as a senior manager in charge of several stores; 9. Deposition of Plaintiff’s expert, Stephen Moses; 15 10. Review of prior Chipotle settlements, including the settlement in Segovia v. Chipotle Mexican Grill, Inc., Los Angeles County Superior Court Case No. BC489851 16 11. Review of dozens of declarations filed in Turner v. Chipotle Mexican Grill, Inc., Case No. 1:14-cv-02612-JLK-CBS (the “Turner Action”). 17 Harris Decl., ¶7. The records were analyzed by Plaintiff’s expert Stephen Moses and BCG, which 18 analyzed timekeeping data for over 10,000 pay periods during the relevant period. Garrett Decl., ¶7. 19 David Winston, Counsel for Sanchez, indicated in his declaration filed in support of approval that: 20 In advance of the Mediation, Plaintiffs and Defendant engaged in informal discovery that allowed Plaintiff to assess the value of the alleged claims. This included information about 21 the number of aggrieved employees, the number of pay periods at issue during the PAGA period, and the relevant policies in effect during the PAGA period. . . As part of the 22 informal and confirmatory discovery process, Defendant also produced time and pay records for 10 of Defendant’s stores. The time keeping data contained employee 23 identification numbers, a record of when employees clocked in and clocked out, and information about the number of hours worked. Defendant also provided Plaintiff and 24 PAGA Counsel with payroll data. The payroll data also identified employees by their identification number, included the start and end dates of the pay periods, identified the 25 number of hours worked and the applicable hourly rate in effect for each hour worked, and whether or not employees received additional compensation for the time allegedly 26 associated with meal periods during that pay period. I reviewed this data and my office also retained Jarrett Gorlick of Berger Consulting Group to analyze the time and pay records 27 produced by Defendant. Mr. Gorlick’s analysis confirmed the reasonableness of the Parties’ proposed settlement and actually suggests that the violation rates were lower than 28 contemplated at the Mediation. 11 1 Declaration of David Winston, ¶7. Further, counsel relied on the opinions of two experts and a neutral in 2 determining the reasonableness of the settlement. “In the context of class action settlements, ‘formal 3 discovery is not a necessary…where the parties have sufficient information to make an informed decision 4 about settlement.” In re Mego Financial Corp. Securities Litigation, 213 F.3d 454, 459 (9th Cir. 2000). 5 See also Zepeda v. PayPal, Inc., No. C 10-2500 SBA) 2017 U.S. Dist. LEXIS 43672, at *43 (N.D.Cal. 6 Mar. 24, 2017) (rejecting the objectors assertion that the lack of formal discovery weighs against 7 approving the settlement despite the fact that “no formal discovery has been conducted.”). 8 Here, a combination of formal discovery in the Turley case relating to the Aggrieved Employees 9 herein, combined with extensive informal discovery in relation to the mediation allowed the parties to 10 make informed decision while working with one of the most experienced wage and hour mediators in 11 California, Jeff Krivis. See Syed v. M-I LLC, No. 1:14-742 WBS BAM, 2016 U.S.Dist.LEXIS 9022, at 12 *21 (E.D.Cal.) (“The parties’ investigation of the claims through informal discovery and mediation, and 13 their consideration and acceptance of the views of a third-party mediator weigh in favor of settlement.”) 14 C. The Settlement was Reached after Adversarial and Arm’s Length Negotiations 15 As described in the approval papers and accompanying declarations: 16 The parties participated in a full-day mediation on October 1, 2020, with Jeff Krivis of First Mediation, an experienced mediator of wage and hour class actions. Krivis has resolved 17 thousands of disputes including wage and hour and consumer class actions, entertainment, mass tort, employment, business, complex insurance, product liability and wrongful death 18 matters. Krivis is considered a pioneer in the mediation field, named by The Los Angeles Daily Journal legal newspaper as one of the “Top Neutrals in the State” every year. Co- 19 founder and Past President of the International Academy of Mediators, Past President Southern California Mediation Association, Past Council Member of the American Bar 20 Association’s Section of Dispute Resolution. 21 Harris Decl., ¶8. Krivis is a top mediator. The mediation involved SIX plaintiff firms experienced in 22 complex wage and hour litigation (Harris & Ruble; North Bay Law Group; Capstone Law; Winston Law 23 Group; Ackermann & Tilajef; Barkodar Law Group). On the other side were highly-respected defense 24 firms DLAPiper and Messner Reeves, along with Chipotle’s in-house counsel. The Parties went into 25 mediation willing to explore the potential for a settlement, but each side was also prepared to litigate its 26 position through trial and appeal. The global mediation was the textbook example of “adversarial.” Here, 27 six highly-experienced law firms representing separate clients were pitted against two well-known defense 28 firms and Chipotle in-house counsel, under the guidance of an experienced neutral. See e.g. Regan 12 1 Roofing Co. v. Superior Court, 21 Cal. App. 4th 1685, 1709 (1994)(attendance at a mediation conference 2 provides evidence of “adversarial” negotiations). 3 In approving a settlement, the court should determine that settlement “was reached in an 4 atmosphere which was appropriately adversarial to give rise to the presumption that a reasonable valuation 5 was reached.” Id. “The judge should give considerable weight to the competence and integrity of the 6 attorneys and the role played by a neutral mediator, if any, in determining that a settlement agreement 7 represents an arm’s-length transaction entered without self-dealing or other potential misconduct.” Cal. 8 Judges Benchbook Civ. Proc. Before Trial §11.67. 9 The record indicates that the negotiations here were “arm’s length” as they involved experienced 10 counsel from several law firms and a third-party neutral. See e.g. Cho v. Seagate Tech. Holdings, Inc., 11 177 Cal. App. 4th 734, 744–45 (2009) (determination that negotiation was “arm’s length” supported by 12 the parties’ characterization of the mediation, involvement of experienced counsel and vigorous litigation 13 over two years). The parties have indicated that the mediation was adversarial and counsel from every 14 firm was highly-experienced. For example, Alan Harris has over 45 years of class action experience. 15 Harris Decl., ¶2. Several other attorneys have over twenty years worth of experience. Id. 16 D. The Settlement was Fair and Reasonable 17 A presumption of fairness exists where: (1) the settlement is reached through arm’s length 18 bargaining; (2) investigation and discovery are sufficient to allow counsel and the court to act 19 intelligently; (3) counsel is experienced in similar litigation; and (4) the percentage of objectors is small. 20 In re Microsoft I-V Cases, 135 Cal. App. 4th 706, 723 (2006). As the proposed Settlement was reached 21 through arm’s-length negotiations, sufficient investigation and discovery allowed Counsel to act 22 intelligently, and Counsel is experienced in wage-and-hour cases, the proposed Settlement was entitled to 23 a presumption of fairness. “An agreement reached under these circumstances is presumably fair to all 24 concerned, even when some of the affected class members have expressed objections.” Cal. Judges 25 Benchbook Civ. Proc. Before Trial § 11.67. 26 The efforts by Delgado’s counsel are misplaced. Delgado’s counsel admits that it has not 27 undertaken any meaningful discovery in its own case and it failed to take even one PMQ deposition during 28 the four years since the case was filed. Delgado’s counsel refused to attend a global mediation in Los 13 1 Angeles, but then made overnight trips from San Diego to San Francisco and this Court to seek ex parte 2 relief for motions to intervene after-the-fact. Now, Delgado’s counsel wishes to substitute its opinion for 3 the court’s independent analysis. There is no basis for Delgado to do so. A judge has broad discretion to 4 determine whether a settlement is fair and reasonable. Carter v City of Los Angeles, 224 CA4th 808, 819 5 (2014); Cal. Judges Benchbook Civ. Proc. Before Trial § 11.67. When, as here, “plaintiff faced 6 considerable risk in proceeding to trial, and the [] recovery is significant in light of that risk. . . [t]he 7 court’s order to approve settlement is the product of a reasoned exercise of discretion. Cho, 177 Cal. App. 8 4th at 744–45. 9 In considering whether a settlement is reasonable, the trial court should consider relevant factors, 10 which may include the strength of plaintiff’s case, the risk, expense, complexity and likely duration of 11 further litigation, the risk of maintaining class action status through trial, the amount offered in settlement, 12 the extent of discovery completed and the stage of the proceedings, the experience and views of counsel, 13 the presence of a governmental participant, and the reaction of the class members to the proposed 14 settlement. Kullar v. Foot Locker Retail, Inc., 168 Cal. App. 4th 116, 128 (2008). 15 In order to approve a settlement, the court must satisfy itself that the settlement is within the 16 “ballpark” of reasonableness. Id. at 133. “The most important factor is the strength of the case for 17 plaintiffs on the merits, balanced against the amount offered in settlement.” Kullar, 168 Cal. App. 4th at 18 130; Clark v. American Residential Servs. LLC, 175 Cal. App. 4th 785, 799 (2009). An informed 19