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1 LAW OFFICES OF MORRIS NAZARIAN
Morris Nazarian (230275)
2 1875 Century Park East, Suite 1790
3 Los Angeles, California 90064
Tel: (310) 284-7333
4
ALTUS LAW FIRM
5 Andrew J. Jaramillo (198303) E-FILED
Sean T. Nguyen (206245) 4/13/2021 7:33 PM
6 Superior Court of California
Judy T. Sha (261432)
County of Fresno
7 5 Park Plaza, Suite 200
By: K. Daves, Deputy
Irvine, California 92614
8 andrew.jaramillo@altuslawfirm.com
Tel: (949) 346-3391
9
10 Attorneys for Plaintiff
JEFFREY MAXWELL
11
12 SUPERIOR COURT FOR THE STATE OF CALIFORNIA
13 COUNTY OF FRESNO
14
JEFFREY A. MAXWELL, on behalf of ) CASE NO.: 16CECG02457
15
himself and a class of others similarly situated, ) Assigned for all purposes to
)
16 ) Hon. D. Tyler Tharpe
Plaintiff, ) Department 501
17 )
vs. ) MEMORANDUM OF POINTS AND
18 ) AUTHORITIES IN SUPPORT OF
)
19 CRAWFORD & COMPANY, a Georgia ) PLAINTIFF’S MOTION FOR
Corporation; BROADSPIRE SERVICES ) PRELIMINARY APPROVAL OF CLASS
20 INC., a Delaware Corporation; BROADSPIRE ) AND PAGA ACTION SETTLEMENT
INSURANCE SERVICES, INC., a New York )
21 )
Corporation, and DOES 1 THROUGH 50, ) Hearing
22 INCLUSIVE, ) Date: May 5, 2021
) Time: 3:30 p.m.
23 Defendants. ) Location: Dept. 501
)
24 )
) Date Filed: August 1, 2016
) Trial Date: Not Set
25 )
26 )
)
27 )
28
MOTION FOR PRELIMINARY APPROVAL – POINTS & AUTHORITIES
1
TABLE OF CONTENTS
2
I. INTRODUCTION 1
3
4 II. DESCRIPTION OF THE SETTLEMENT 2
5 III. CASE BACKGROUND 4
6 IV. THE SETTLEMENT MEETS THE CRITERIA NECESSARY FOR THIS
7 COURT TO GRANT PRELIMINARY APPROVAL 6
8 A. The Court’s Role in Preliminary Approval of a Class Action Settlement 8
9 B. Factors to be Considered In Granting Preliminarily Approval 9
10 1. The Settlement is the Product of Serious, Informed and Arm’s-Length
11 Negotiations by Experienced Counsel 10
12 2. The Settlement Has No “Obvious Deficiencies” and Falls Well Within the
13 Range for Approval 13
14 3. The Settlement Does Not Grant Preferential Treatment to Plaintiff or
15 Segments of the Class 15
16 4. The Stage of the Proceedings are Sufficiently Advanced to Permit Preliminary
17 Approval of the Settlement 16
18 V. THE CLASS IS PROPERLY CERTIFIED FOR SETTLEMENT PURPOSES
19 ONLY 17
20 A. California Code of Civil Procedure § 382 18
21 B. The Proposed Class Is Ascertainable and Numerous 18
22 C. Common Issues of Law and Fact Predominate 19
23
D. The Claims of the Plaintiff Are Typical of the Class Claims 19
24
E. The Class Representation Fairly and Adequately Protected the Class 20
25
F. The Superiority Requirement Is Met 21
26
VI. THE PROPOSED METHOD OF CLASS NOTICE IS APPROPRIATE 21
27
VII. CONCLUSION 23
28
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1 TABLE OF AUTHORITIES
2 Cases
3 Boggs v. Divested Atomic Corp., 141 F.R.D. 58 (S.D. Ohio 1991) .............................................. 21
4 Bowles v. Superior Court, 44 Cal.2d 574 (1955).......................................................................... 18
5 Boyd v. Bechtel Corp., 485 F.Supp. 610 (N.D. Cal. 1979) ............................................................. 9
6 Brinker v. Superior Court, 53 Cal.4th 1004 (2012) ...................................................................... 14
7 Cellphone Termination Fee Cases, 180 Cal.App.4th 1110 (2009) ................................................ 7
8 Cho v. Seagate Tech. Holdings, Inc., 177 Cal.App.4th 734 (2009)................................................ 7
9 Dunk v. Ford Motor Co., 48 Cal.App.4th 1794 (1996) ........................................................ 7, 8, 11
10 Ferguson v. Randy's Trucking, Inc., 2016 U.S. Dist. LEXIS 32719 (E.D. Cal. 2016)................. 14
11 Frazier v. City of Richmond, 184 Cal.App.3d 1491 (1986) ............................................................ 7
12 Gautreaux v. Pierce, 690 F.2d 616 (7th Cir. 1982) ........................................................................ 7
13 Ghazaryan v. Diva Limousine, Ltd., 169 Cal.App.4th 1524 (2008) ............................................. 19
14 Glass v. UBS Fin. Servs., 2007 WL 221862, 2007 U.S. Dist. LEXIS 8476 (N.D.Cal. Jan. 27
15 2007) ............................................................................................................................. 15, 16, 17
16 Green v. Obledo, 29 Cal.3d 126 (1981) .......................................................................................... 7
17 Hanlon v. Chrysler Co., 150 F.3d 1011 (9th Cir. 1998) ......................................................... 14, 20
18 Holman v. Experian Info. Solutions, Inc., 2014 U.S. Dist. LEXIS 173698 (N.D. Cal.2014) ....... 16
19 In re Mego Financial Corp. Securities Litigation, 213 F.3d 454 (9th Cir. 2000) .................. 15, 17
20 In re Tableware Antitrust Litig., 484 F.Supp.2d 1078 (N.D. Cal. 2007) ........................................ 9
21 In re Wash. Public Power Supply System Sec. Litig., 720 F.Supp. 1379 (D. Ariz. 1989) ........ 9, 12
22 Kirkorian v. Borelli, 695 F.Supp. 446 (N.D. Cal. 1988) ................................................................ 9
23 Linder v. Thrifty Oil Co., 23 Cal.4th 429 (2003) .......................................................................... 19
24 Louie v. Kaiser Foundation Health Plan, Inc., 2008 WL 4473183 (S.D.Cal. Oct. 06, 2008) .... 16
25 Lyons v. Marrud, Inc., [1972-1973 Transfer Binder] Fed. Sec. L. Rep. (CCH) Paragraph 93,525
26 (S.D.N.Y. 1972) .......................................................................................................................... 9
27 Mathein v. Pier 1 Imps. (U.S.), Inc., 2018 U.S. Dist. LEXIS 71386 (E.D. Cal. 2018) ................ 16
28 Nat'l Rural Telecomms. Coop. v. DIRECTV, Inc., 221 F.R.D. 523, 528 (C.D. Cal. 2004) ............ 9
MOTION FOR PRELIMINARY APPROVAL – POINTS & AUTHORITIES
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1 Nordstrom Comm'n Cases, 186 Cal.App.4th 576, 581 (2010) ....................................................... 7
2 Officers for Justice v. Civil Serv. Comm'n, 688 F.2d 615 (9th Cir. 1982), cert. denied, 459 U.S.
3 1217 (1983) ............................................................................................................................. 7, 8
4 Rausch v. Hartford Fin. Servs. Grp., 2007 U.S. Dist. LEXIS 14740, 2007 WL 671334 (D. Or.
5 2007) ......................................................................................................................................... 16
6 Rose v. City of Hayward, 126 Cal.App.3d 926 (1981) ................................................................. 18
7 Santos v. TWC Admin. LLC, 2014 U.S. Dist. LEXIS 199358 (C.D. Cal. 2014) .......................... 14
8 Sav-On Drug Stores, Inc. v. Superior Court, 34 Cal. 4th 319, 326 (2004)....................... 18, 19, 21
9 Sayaman v. Baxter Healthcare Corp., 2010 U.S. Dist. LEXIS 151997 (C.D. Cal. 2010) ............. 7
10 Dunleavy v. Nadler (In re Mego Fin. Corp. Sec. Litig.), 213 F.3d 4549 (9th Cir. 2000) ............. 13
11 Kullar v. Foot Locker, 168 Cal. App. 4th 116, 133 (2008) .......................................................... 11
12 Stovall-Gusman v. W.W. Granger, Inc., 2015 U.S. Dist. LEXIS 78671 (N.D. Cal. 2015) .......... 13
13 Tate v. Weyerhaeuser Co., 723 F.2d 598 (8th Cir. 1983) ............................................................. 19
14 Ugas v. H&R Block Enterprises, LLC, 2012 U.S. Dist. LEXIS 156359 (C.D. Cal. 2012) .......... 14
15 Valentino v. Carter-Wallace, Inc., 97 F.3d 1227 (9th Cir. 1996) ................................................. 21
16 Vasquez v. Superior Court, 4 Cal.3d 800 (1971) ............................................................................ 7
17 Weinberger v. Kendrick, 698 F.2d 61, 73 (2d Cir. 1982), cert. denied 464 U.S. 818 (1983)......... 8
18 Wershba v. Apple Computer, Inc., 91 Cal.App.4th 2245 (2001) ................................................ 7, 8
19 Wren v. RGIS Inventory Specialists, 256 F.R.D. 180 (N.D. Cal. 2009) ....................................... 14
20 Statutes
21 California Business & Professions Code § 17200 et seq ................................................................ 4
22 California Code of Civil Procedure § 382 .................................................................................... 18
23 California Labor Code § 201 .......................................................................................................... 4
24 California Labor Code § 202 .......................................................................................................... 4
25 California Labor Code § 203 .......................................................................................................... 4
26 California Labor Code § 204 .......................................................................................................... 4
27 California Labor Code § 226 .......................................................................................................... 4
28 California Labor Code § 226.7 ....................................................................................................... 4
MOTION FOR PRELIMINARY APPROVAL – POINTS & AUTHORITIES
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1 California Labor Code § 512 .......................................................................................................... 4
2 California Labor Code § 1174 ........................................................................................................ 4
3 California Labor Code § 1174.5 ..................................................................................................... 4
4 California Labor Code § 1175 ........................................................................................................ 4
5 California Labor Code § 2698 et seq .............................................................................................. 4
6 California Labor Code § 2699 ........................................................................................................ 4
7 California Rules of Court
8 Rule of Court 3.766 ..................................................................................................................... 23
9 Rule of Court 3.769................................................................................................................... 7, 23
10
Treatises
11
Newberg & A. Conte, Newberg on Class Actions (3d ed. 1992) .......................................... 7, 8, 19
12
Moore's Federal Practice (2003)................................................................................................... 8
13
14 Other Authorities
15 California Manual for Complex Litigation, Second (1993)........................................................ 7, 9
16
17
18
19
20
21
22
23
24
25
26
27
28
MOTION FOR PRELIMINARY APPROVAL – POINTS & AUTHORITIES
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1 I. INTRODUCTION
2 Plaintiff Jeffrey Maxwell (“Plaintiff”) respectfully submits this memorandum in support
3 of his unopposed motion for preliminary approval of the proposed class and California Private
4 Attorneys General Act (“PAGA”) action settlement, and with Defendants Crawford & Company,
5 Broadspire Services, Inc, and Broadspire Insurance Services, Inc (collectively the "Defendants"),
6 seeks entry of an order: (1) conditionally certifying the settlement class and preliminarily
7 approving the proposed settlement of this class action with Defendants; (2) approving the form
8 and method for providing class-wide notice; (3) directing that notice of the proposed settlement
9 be given to the class; and, (4) scheduling a final approval hearing date to consider Plaintiff’s
10 motion for final approval of the proposed settlement and Plaintiff’s motion for attorneys’ fees
11 and expenses.
12 Plaintiff and Defendants (collectively the “Parties”) have reached a full and final
13 settlement of the above-captioned action, which is embodied in the Joint Stipulation of Class
14 Action Settlement Agreement and Release ("Agreement") filed concurrently with the Court. A
15 copy of the fully executed Agreement is attached as Exhibit 1 to the Declaration of Andrew J.
16 Jaramillo in Support of Motion for Preliminary Approval (“Jaramillo Decl.”), served and filed
17 herewith.
18 As consideration for this Settlement,1 the Maximum Settlement Amount is Three Million
19 Eight Hundred and Fifty Thousand Dollars and Zero Cents ($3,850,000.00) to be paid by
20 Defendants. This payment will settle all issues pending in the litigation between the Parties,
21 including all settlement payments to the Participating Class Members, Class Counsel Fees and
22 Costs Award, the Settlement Administration Costs, the payment to the California Labor
23 Workforce Development Agency (“LWDA”) of penalties pursuant to PAGA, and Plaintiff’s
24 Service Award. The Maximum Settlement Amount does not include the employer’s share of
25 payroll taxes which will be separately paid by Defendants. The Settlement is all-in with no
26 reversion to Defendants and no need to submit a claim form. Jaramillo Decl. at ¶3.
27
1
28 Unless otherwise indicated, all initial-capped words in this motion shall have the same meaning
as those words are defined in the Agreement.
MOTION FOR PRELIMINARY APPROVAL – POINTS & AUTHORITIES
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1 On February 5, 2020, the parties participated in a full day of mediation before Hon. Peter
2 D. Lichtman (Ret.), a well-known, respected and experienced wage and hour class action
3 mediator. Although the Parties were unable to agree to all material terms of the Settlement at the
4 mediation session, counsel for the Parties continued to negotiate following the mediation and
5 ultimately agreed to the material terms of this Settlement after conducting further litigation,
6 discovery and motion practice (e.g., Plaintiff’s Motion for Corrective Action). At all times, each
7 Party was represented by their respective counsel during the arms-length, good-faith
8 negotiations. Jaramillo Decl. at ¶5.
9 The Settlement is fair, reasonable and adequate, and should be preliminarily approved
10 because there is a substantial monetary payment, and because there are substantial litigation and
11 class-certification risks. Therefore, Plaintiff respectfully requests that this Court grant
12 preliminary approval of the Agreement and enter the proposed order submitted herewith.
13 II. DESCRIPTION OF THE SETTLEMENT
14 The Maximum Settlement Amount is Three Million Eight Hundred and Fifty Thousand
15 Dollars and Zero Cents ($3,850,000). Under the Settlement, the Maximum Settlement Amount
16 consists of the following elements: (1) Class Member Payments to Participating Class Members;
17 (2) the Class Counsel Fees and Costs Award; (3) the Settlement Administration Costs; (5) the
18 Service Award for Plaintiff; and (6) the PAGA Payment for civil penalties to the State of
19 California (LWDA). (Agreement at ¶¶ 3.5.1 - 3.5.5.) The Maximum Settlement Amount does not
20 include Defendants’ share of payroll taxes. (Agreement at ¶1.17.) The Maximum Settlement
21 Amount shall be all-in with no reversion to Defendants. Jaramillo Decl. at ¶17.
22 Within fifteen (15) days following the Effective Date, Defendant shall fund the
23 Settlement by providing the Maximum Settlement Amount to the Settlement Administrator.
24 (Agreement at ¶ 3.7.2.). Within thirty (30) calendar days following the Effective Date, the
25 Settlement Administrator shall distribute from the Settlement Fund Account the Class Member
26 Payments to Participating Class Members (Agreement at ¶3.7.7.) Jaramillo Decl. at ¶18.
27 The Net Settlement Amount shall equal the net amount available for distribution to
28 Participating Class Members after deducting the Court-approved amounts for the Service Award,
MOTION FOR PRELIMINARY APPROVAL – POINTS & AUTHORITIES
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1 the Class Counsel Fees and Costs Award, the Settlement Administration Costs, and the PAGA
2 LWDA Payment. (Agreement at ¶ 1.18.) The Net Settlement Amount will be distributed among
3 the Class Members who do not timely request exclusion (“Participating Class Members”).
4 (Agreement at ¶ 1.26). Each Class Member Payment shall be calculated by dividing a Class
5 Member’s individual workweeks worked as an hourly paid adjuster in California during the
6 Class Period according to Defendant’s business records by the total workweeks worked by all
7 Class Members as hourly paid adjusters in California during the Class Period according to
8 Defendant’s business records and multiplying this result by the Net Settlement Amount.
9 (Agreement at ¶ 3.5.1.5.) Jaramillo Decl. at ¶17.
10 Class Members may choose to opt-out of the Settlement by following the directions in the
11 Class Notice. (Agreement at ¶ 3.6.8.1.) All Class Members who do not "opt out" will be deemed
12 Participating Class Members who will be bound by the Settlement, including the release of Class
13 Claims, and will be entitled to receive a Class Member Payment. (Agreement at ¶3.6.8.1.)
14 Finally, the Notice will advise the Class Members of their right to object to the Settlement.
15 (Agreement at ¶3.6.8.1.) Jaramillo Decl. at ¶20.
16 A Participating Class Member must cash his or her Settlement Share check within 120
17 days after it is mailed. (Agreement at ¶ 3.7.8.) Any settlement checks not cashed on the 121st day
18 after mailing will be voided and the funds from such uncashed checks shall be transmitted by the
19 Settlement Administrator to the State of California Controller’s Office, Unclaimed Property
20 Fund, in accordance with California law regarding such escheatment, within twenty-one (21)
21 calendar days of the Void Date. (Agreement at ¶ 3.7.8.) Jaramillo Decl. at ¶21.
22 The parties have agreed to use Phoenix Class Administration Solutions as the Settlement
23 Administrator for the Settlement. Payment of Settlement Administration Costs from the
24 Maximum Settlement Amount shall be made for the expenses of effectuating and administering
25 the Settlement. (Agreement at ¶1.37.) The Settlement Administrator shall receive payment for
26 services in an amount not to exceed $9,000. (Agreement at ¶ 1.36.) Jaramillo Decl. at ¶22.
27 Subject to Court approval, the Agreement provides for Class Counsel to collectively be
28 awarded a sum not to exceed $1,293,333, which is one-third of the Maximum Settlement Amount,
MOTION FOR PRELIMINARY APPROVAL – POINTS & AUTHORITIES
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1 as the Class Counsel Fees Payment. (Agreement at ¶ 3.5.1.2.) Class Counsel will also be allowed
2 to apply separately for an award of costs in an amount not to exceed $10,000. (Agreement at ¶1.5.)
3 Subject to Court approval, the Agreement provides payment of no more than $15,000 as the
4 Service Award to Plaintiff Jeffrey Maxwell or such lesser amount as may be approved by the
5 Court. (Agreement at ¶1.34.) Jaramillo Decl. at ¶23.
6 Subject to Court approval, Ten Thousand Dollars ($10,000) will be paid from the
7 Maximum Settlement Amount for PAGA penalties under Labor Code Section 2698 et seq.
8 Pursuant to the express requirements of Labor Code § 2699(i), this LWDA Payment shall be
9 allocated as follows: $7,500 to the LWDA as the LWDA's share of the settlement of civil
10 penalties paid under this Agreement pursuant to the PAGA, and $2,500 to the Net Settlement
11 Amount for distribution to the Participating Class Members. (Agreement at ¶¶1.23-1.24).)
12 Jaramillo Decl. at ¶24.
13 III. CASE BACKGROUND
14 On August 1, 2016, Plaintiff filed a class action complaint against Defendant in the
15 Superior Court of California for the County of Fresno alleging claims for: (a) failure to pay
16 wages in violation of California Labor Code sections 510 and 1194; (b) failure to timely provide
17 accurate, itemized wage statements in violation of California Labor Code section 226, 1174,
18 1174.5, and 1175; (c) failure to timely pay wages at termination in violation of California Labor
19 Code sections 201-204; (d) unfair competition in violation of California Business & Professions
20 Code section 17200 et seq.; and (e) civil penalties pursuant to the PAGA. Jaramillo Decl. at ¶8.
21 On May 9, 2017, Plaintiff filed a First Amended Complaint to add causes of action for (a)
22 failure to provide meal periods or compensation in lieu thereof in violation of California Labor
23 Code sections 226.7, 512, and the applicable IWC Wage Order, and (b) failure to provide rest
24 breaks or compensation in lieu thereof in violation of California Labor Code section 226.7, 512,
25 and the applicable IWC Wage Order. Jaramillo Decl. at ¶9.
26 Accordingly, for purposes of this Settlement, the “Class” is defined as “all individuals
27 employed by Defendant in the State of California as hourly paid adjusters (or persons in
28 substantially equivalent positions, however titled) during the Class Period. However, the Class
MOTION FOR PRELIMINARY APPROVAL – POINTS & AUTHORITIES
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1 shall not include: (a) individuals who were first hired by Defendant in or after January 2019 and
2 signed an arbitration agreement as part of the onboarding process, or (b) the workweeks that
3 were worked in and/or after January 2019 by Class Members who were rehired in and/or after
4 January 2019 and signed an arbitration agreement as part of the onboarding process.”
5 (Agreement at ¶1.3.) The Released Class Claims are based upon the allegations in the Actions.
6 (Agreement at ¶1.2.) Jaramillo Decl. ¶ 12.
7 The Parties have diligently engaged in both formal and informal discovery to investigate
8 the Class Claims. The Parties engaged in extensive written discovery and Defendant produced
9 over 1,000 pages of documents related to Plaintiff’ allegations. Further, for purposes of
10 mediation and settlement, Defendant informally produced additional information regarding the
11 number of current and former putative class members, average pay rate, and the number of
12 workweeks of employment for putative class members. Jaramillo Decl. at ¶110.
13 On February 5, 2020, the Parties attended a full day of mediation with Hon. Peter D.
14 Lichtman (Ret.), a well-known and experienced wage and hour class action mediator. Although
15 the Parties were unable to agree to all material terms of the Settlement at the mediation session,
16 counsel for the Parties ultimately agreed to the material terms of this Settlement after further
17 litigating this matter, conducting additional discovery and engaging in motion practice (e.g.
18 Plaintiff’s Motion for Corrective Action). At all times, each Party was represented by their
19 respective counsel during the arms-length, good-faith negotiations. Jaramillo Decl. at ¶11.
20 Although a settlement has been reached, Defendants deny any liability or wrongdoing of
21 any kind associated with the claims alleged in the Actions and further deny that, for any purpose
22 other than settlement, the Actions are appropriate for class treatment. Defendants contend,
23 among other things, that they have correctly compensated the Class Members and complied at all
24 times with the California Labor Code, applicable Wage Order, and all other laws and regulations.
25 Further, Defendants contend that class certification would be inappropriate for any reason other
26 than for settlement. Jaramillo Decl., ¶ 13.
27 Plaintiff contends that Defendants violated California wage and hour laws. Plaintiff
28 further contends that the Action is appropriate for class certification on the basis that the claims
MOTION FOR PRELIMINARY APPROVAL – POINTS & AUTHORITIES
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1 meet the requisites for class certification. Without admitting that class certification is proper,
2 Defendants have stipulated that the above Class may be certified for settlement purposes only.
3 (Agreement at ¶3.1.) The Parties agree that certification for settlement purposes is not an
4 admission that class certification would be proper if the class certification issue were litigated.
5 Further, the Agreement is not admissible in this or any other proceeding as evidence that the
6 Class could be certified absent a settlement. Solely for purposes of settling the Action, the Parties
7 stipulate and agree that the requisites for establishing class certification with respect to the Class,
8 as defined above, are satisfied. Jaramillo Decl. ¶ 13.
9 Class Counsel has conducted a thorough investigation into the facts of the class action.
10 Class counsel has diligently evaluated the Class Members’ claims against the Defendants. The
11 Parties have diligently engaged in both formal and informal discovery to investigate the Class
12 Claims. The Parties engaged in extensive written discovery and Plaintiff also engaged in motion
13 practice, including a Motion for Curative Action (i.e. invalidating class action waivers signed by
14 putative class members) that was granted by this Court. Further, for purposes of mediation and
15 settlement, Defendant informally produced additional information regarding the number of
16 current and former putative class members, average pay rate, and the number of workweeks of
17 employment for putative class members. Jaramillo Decl. ¶ 15.
18 In addition, Class Counsel previously negotiated settlements with other employers in
19 actions involving similar issues and analogous defenses. Based on the foregoing data and their
20 own independent investigation, evaluation and experience, Class Counsel believes that the
21 settlement with Defendants on the terms set forth in the Agreement is fair, reasonable, and
22 adequate and is in the best interest of the Class in light of all known facts and circumstances,
23 including the risk of significant delay, defenses asserted by Defendants, and potential appellate
24 issues. Jaramillo Decl. at ¶ 16.
25 IV. THE SETTLEMENT MEETS THE CRITERIA NECESSARY FOR
26 THIS COURT TO GRANT PRELIMINARY APPROVAL
27 When a proposed class-wide settlement is reached, the settlement must be submitted to
28 the court for approval. 2 H. Newberg & A. Conte, Newberg on Class Actions (3d ed. 1992) at
MOTION FOR PRELIMINARY APPROVAL – POINTS & AUTHORITIES
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1 §11.41, p.11-87. California “[p]ublic policy generally favors the compromise of complex class
2 action litigation.” Nordstrom Comm'n Cases, 186 Cal. App. 4th 576, 581 (2010) (quoting
3 Cellphone Termination Fee Cases, 180 Cal.App.4th 1110, 1117-18 (2009). Class action
4 settlements are approved where the proposed settlement is “fair, adequate and reasonable.”
5 Dunk v. Ford Motor Co., 48 Cal.App.4th 1794,1801 (1996) (citing Officers for Justice v. Civil
6 Serv. Comm'n, 688 F.2d 615, 625 (9th Cir. 1982), cert. denied, 459 U.S. 1217 (1983)).
7 Preliminary approval is the first of three steps that comprise the approval procedure for
8 settlements of class actions. The second step is the dissemination of notice of the settlement to all
9 Class Members. The third step is a final settlement approval hearing, at which evidence and
10 argument concerning the fairness, adequacy, and reasonableness of the settlement may be
11 presented and Class Members may be heard regarding the settlement. See Dunk v. Ford Motor
12 Co., 48 Cal.App.4th 1794, 1801 (1996); Manual for Complex Litigation, Second §30.44 (1993);
13 Cal. Rules of Court, rule 3.769.
14 The primary question presented on an application for preliminary approval of a proposed
15 class action settlement is whether the proposed settlement is “within the range of possible
16 approval.” Manual for Complex Litigation, Second §30.44 at 229; Gautreaux v. Pierce, 690 F.2d
17 616, 621 n.3 (7th Cir. 1982).2 Preliminary approval is merely the prerequisite to giving notice so
18 that “the proposed settlement... may be submitted to members of the prospective Class for their
19 acceptance or rejection.” Sayaman v. Baxter Healthcare Corp., 2010 U.S. Dist. LEXIS 151997,
20 *3 (C.D. Cal. 2010). There is “a presumption of fairness . . . where . . . [a] settlement is reached
21 through arms-length bargaining.” Wershba, 91 Cal. App. 4th at 245 (citation omitted); see also
22 Cho v. Seagate Tech. Holdings, Inc., 177 Cal. App. 4th 734, 742-45 (2009) (upholding trial
23 court's determination that settlement was “fair, reasonable and adequate" where the settlement
24 "provided valuable benefits to the class … that were 'particularly valuable in light of the risks
25
26 2
California courts look to federal authority on class actions. Vasquez v. Superior Court, 4 Cal.3d
27 800, 821 (1971). “It is well established that in the absence of relevant state precedents trial courts
are urged to follow the procedures prescribed in Rule 23 of the Federal Rules of Civil Procedure
28 for conducting class actions.” Frazier v. City of Richmond, 184 Cal. App.3d 1491, 1499 (1986),
citing Green v. Obledo, 29 Cal.3d 126, 145-146 (1981).
MOTION FOR PRELIMINARY APPROVAL – POINTS & AUTHORITIES
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1 plaintiff would have faced if she proceeded to litigate her case.'"); Newberg, 3d Ed., §11.41,
2 p.11-88. However, the ultimate question of whether the proposed settlement is fair, reasonable
3 and adequate is made after notice of the settlement is given to the Class Members and a final
4 settlement hearing is held by the Court.
5 A. THE COURT’S ROLE IN PRELIMINARY APPROVAL OF A CLASS ACTION SETTLEMENT
6 The approval of a proposed settlement of a class action suit is a matter within the broad
7 discretion of the trial court. Wershba v. Apple Computer, Inc., 91 Cal.App.4th 224, 234-235
8 (2001); Dunk, 48 Cal.App.4th 1794. Preliminary approval does not require the trial court to
9 answer the ultimate question of whether a proposed settlement is fair, reasonable and adequate.
10 That final determination is made only after notice of the settlement has been given to the class
11 members and after they have been given an opportunity to voice their views of the settlement or
12 to be excluded from the settlement. 3B J. Moore, Moore's Federal Practice §§23.80 - 23.85
13 (2003).
14 In considering a potential settlement for preliminary approval purposes, the trial court
15 does not have to reach any ultimate conclusions on the issues of fact and law which underlie the
16 merits of the dispute, and need not engage in a trial on the merits. Wershba, supra, 91
17 Cal.App.4th at 239-40; Dunk, supra, 48 Cal.App. 4th at 1807. The Ninth Circuit explains, “the
18 very essence of a settlement is compromise, ‘a yielding of absolutes and an abandoning of
19 highest hopes.’” Officers for Justice, 688 F.2d at 624. The question whether a proposed
20 settlement is fair, reasonable and adequate necessarily requires a judgment and evaluation by the
21 attorneys for the parties based upon comparison of “‘the terms of the compromise with the likely
22 rewards of litigation.’” Weinberger v. Kendrick, 698 F.2d 61, 73 (2d Cir. 1982), cert. denied 464
23 U.S. 818 (1983) (quoting Protective Comm. for Indep. Stockholders of TMT Trailer Ferry, Inc. v.
24 Anderson, 390 U.S. 414, 424-25 (1968)). Thus, when analyzing the settlement, the amount is
25 “not to be judged against a hypothetical or speculative measure of what might have been
26 achieved by the negotiators.” Officers for Justice, 688 F.2d at 625, 628.
27 With regard to class action settlements, the opinions of counsel should be given
28 considerable weight both because of counsel’s familiarity with this litigation and previous
MOTION FOR PRELIMINARY APPROVAL – POINTS & AUTHORITIES
-8-
1 experience with cases such as these. Officers for Justice, 688 F.2d at 625; In re Wash. Public
2 Power Supply System Sec. Litig., 720 23F. Supp. 1379, 1392 (D. Ariz. 1989); Kirkorian v.
3 Borelli, 695 F. Supp. 446, 451 (N.D. Cal. 1988); Weinberger, 698 F.2d at 74. For example, in
4 Lyons v. Marrud, Inc., [1972-1973 Transfer Binder] Fed. Sec. L. Rep. (CCH) Paragraph 93,525
5 (S.D.N.Y. 1972), the court noted that “[e]xperienced and competent counsel have assessed these
6 problems and the probability of success on the merits….The parties’ decision regarding the
7 respective merits of their position has an important bearing.” Id. at ¶ 95,520. “The
8 recommendations of plaintiffs’ counsel should be given a presumption of reasonableness.” Boyd
9 v. Bechtel Corp., 485 F.Supp. 610, 622 (N.D. Cal. 1979). As a result, courts hold that the
10 recommendation of counsel is entitled to significant weight. Nat'l Rural Telecomms. Coop. v.
11 DIRECTV, Inc., 221 F.R.D. 523, 528 (C.D. Cal. 2004).
12 B. FACTORS TO BE CONSIDERED IN GRANTING PRELIMINARILY APPROVAL
13 A number of factors are to be considered in evaluating a settlement for purposes of
14 preliminary approval. In determining whether to grant preliminary approval, the court considers
15 whether the "(1) the proposed settlement appears to be the product of serious, informed, non-
16 collusive negotiations, (2) has no obvious deficiencies, (3) does not improperly grant preferential
17 treatment to class representatives or segments of the class, and (4) falls within the range of
18 possible approval." In re Tableware Antitrust Litig., 484 F.Supp. 2d 1078, 1079 (N.D. Cal.
19 2007). No one factor should be determinative, but rather all factors should be considered. The
20 analysis has been summarized as follows:
21 If the proposed settlement appears to be the product of serious, informed,
22 noncollusive negotiations, has no obvious deficiencies, does not improperly grant
23 preferential treatment to class representatives or segments of the class, and falls
24 within the range of possible approval, then the court should direct that notice be
25 given to the class members of a formal fairness hearing, at which evidence may be
26 presented in support of and in opposition to the settlement.
27 Manual of Complex Litigation, Second § 30.44, at 229. Here, the Settlement meets all of these
28 criteria for preliminary approval.
MOTION FOR PRELIMINARY APPROVAL – POINTS & AUTHORITIES
-9-
1 1. The Settlement is the Product of Serious, Informed and Arm’s-Length
2 Negotiations by Experienced Counsel
3 This settlement is the result of extensive and hard-fought litigation as well as negotiations
4 before an experienced and well-respected mediator. Defendants have expressly denied and
5 continue to deny any wrongdoing or legal liability arising out of the conduct alleged in the
6 Actions. Plaintiff and Class Counsel have determined that it is desirable and beneficial to the
7 Class to resolve the Released Class Claims of the Class in accordance with this Settlement.3
8 Class Counsel are experienced and qualified to evaluate the class claims, the viability of
9
10
11
3
Released Class Claims are defined as: “any and all claims, rights, demands, liabilities and
causes of action of every nature and description, whether known or unknown, for wages,
12 benefits, and related penalties actually asserted or that could have been asserted in the Action by
the Plaintiff on behalf of himself, the Class Members, the State of California, and/or PAGA
13
Affected Employees, based on the facts alleged in the Action, the operative First Amended
14 Complaint in the Action, and/or Plaintiff’s notice letter to the LWDA, including but not limited
to claims for: (a) failure to pay wages in violation of California Labor Code sections 510 and
15 1194; (b) failure to provide meal periods or compensation in lieu thereof in violation of
California Labor Code sections 226.7, 512, and the applicable IWC Wage Order; (c) failure to
16 provide rest breaks or compensation in lieu thereof in violation of California Labor Code section
17 226.7, 512, and the applicable IWC Wage Order; (d) failure to provide accurate, itemized wage
statements in violation of California Labor Code section 226, 1174, 1174.5, and 1175; (e) failure
18 to timely pay wages at termination in violation of California Labor Code sections 201-204; (f)
unfair competition in violation of California Business & Professions Code section 17200 et seq.;
19 (g) civil penalties pursuant to the PAGA for the California Labor Code violations that were or
that could have been alleged in the Action based on the facts stated in the original or First
20
Amended Complaint; (h) liquidated damages pursuant to California Labor Code section 1194.2;
21 (i) injunctive relief to halt any unlawful practices alleged in the Action to be unlawful; (j)
restitution and an order requiring Defendant to restore and disgorge funds to each Class Member
22 acquired by means of any act or practice alleged in the Action to be unlawful; (k) attorneys’ fees
and costs incurred to prosecute the Action on behalf of Class Members, the State of California
23
and PAGA Affected Employees, including but not limited to fees incurred for the services of
24 Class Counsel or any other counsel; and (l) any other derivative remedies, penalties, and interest
available under the law based on the facts alleged in the Action,, including but not limited to
25 California Labor Code sections 203, 226, 226.7, 512, 1194, and 1194.2 and the applicable IWC
Wage Order. “Claims” also includes all claims that Plaintiff, Class Members, the State of
26 California and/or PAGA Affected Employees may have against the Released Parties relating to
27 (a) the payment, taxation, and allocation of attorneys’ fees and
Preview
1 LAW OFFICES OF MORRIS NAZARIAN Morris Nazarian (230275) 2 1875 Century Park East, Suite 1790 3 Los Angeles, California 90064 Tel: (310) 284-7333 4 ALTUS LAW FIRM 5 Andrew J. Jaramillo (198303) E-FILED Sean T. Nguyen (206245) 4/13/2021 7:33 PM 6 Superior Court of California Judy T. Sha (261432) County of Fresno 7 5 Park Plaza, Suite 200 By: K. Daves, Deputy Irvine, California 92614 8 andrew.jaramillo@altuslawfirm.com Tel: (949) 346-3391 9 10 Attorneys for Plaintiff JEFFREY MAXWELL 11 12 SUPERIOR COURT FOR THE STATE OF CALIFORNIA 13 COUNTY OF FRESNO 14 JEFFREY A. MAXWELL, on behalf of ) CASE NO.: 16CECG02457 15 himself and a class of others similarly situated, ) Assigned for all purposes to ) 16 ) Hon. D. Tyler Tharpe Plaintiff, ) Department 501 17 ) vs. ) MEMORANDUM OF POINTS AND 18 ) AUTHORITIES IN SUPPORT OF ) 19 CRAWFORD & COMPANY, a Georgia ) PLAINTIFF’S MOTION FOR Corporation; BROADSPIRE SERVICES ) PRELIMINARY APPROVAL OF CLASS 20 INC., a Delaware Corporation; BROADSPIRE ) AND PAGA ACTION SETTLEMENT INSURANCE SERVICES, INC., a New York ) 21 ) Corporation, and DOES 1 THROUGH 50, ) Hearing 22 INCLUSIVE, ) Date: May 5, 2021 ) Time: 3:30 p.m. 23 Defendants. ) Location: Dept. 501 ) 24 ) ) Date Filed: August 1, 2016 ) Trial Date: Not Set 25 ) 26 ) ) 27 ) 28 MOTION FOR PRELIMINARY APPROVAL – POINTS & AUTHORITIES 1 TABLE OF CONTENTS 2 I. INTRODUCTION 1 3 4 II. DESCRIPTION OF THE SETTLEMENT 2 5 III. CASE BACKGROUND 4 6 IV. THE SETTLEMENT MEETS THE CRITERIA NECESSARY FOR THIS 7 COURT TO GRANT PRELIMINARY APPROVAL 6 8 A. The Court’s Role in Preliminary Approval of a Class Action Settlement 8 9 B. Factors to be Considered In Granting Preliminarily Approval 9 10 1. The Settlement is the Product of Serious, Informed and Arm’s-Length 11 Negotiations by Experienced Counsel 10 12 2. The Settlement Has No “Obvious Deficiencies” and Falls Well Within the 13 Range for Approval 13 14 3. The Settlement Does Not Grant Preferential Treatment to Plaintiff or 15 Segments of the Class 15 16 4. The Stage of the Proceedings are Sufficiently Advanced to Permit Preliminary 17 Approval of the Settlement 16 18 V. THE CLASS IS PROPERLY CERTIFIED FOR SETTLEMENT PURPOSES 19 ONLY 17 20 A. California Code of Civil Procedure § 382 18 21 B. The Proposed Class Is Ascertainable and Numerous 18 22 C. Common Issues of Law and Fact Predominate 19 23 D. The Claims of the Plaintiff Are Typical of the Class Claims 19 24 E. The Class Representation Fairly and Adequately Protected the Class 20 25 F. The Superiority Requirement Is Met 21 26 VI. THE PROPOSED METHOD OF CLASS NOTICE IS APPROPRIATE 21 27 VII. CONCLUSION 23 28 MOTION FOR PRELIMINARY APPROVAL – POINTS & AUTHORITIES -i- 1 TABLE OF AUTHORITIES 2 Cases 3 Boggs v. Divested Atomic Corp., 141 F.R.D. 58 (S.D. Ohio 1991) .............................................. 21 4 Bowles v. Superior Court, 44 Cal.2d 574 (1955).......................................................................... 18 5 Boyd v. Bechtel Corp., 485 F.Supp. 610 (N.D. Cal. 1979) ............................................................. 9 6 Brinker v. Superior Court, 53 Cal.4th 1004 (2012) ...................................................................... 14 7 Cellphone Termination Fee Cases, 180 Cal.App.4th 1110 (2009) ................................................ 7 8 Cho v. Seagate Tech. Holdings, Inc., 177 Cal.App.4th 734 (2009)................................................ 7 9 Dunk v. Ford Motor Co., 48 Cal.App.4th 1794 (1996) ........................................................ 7, 8, 11 10 Ferguson v. Randy's Trucking, Inc., 2016 U.S. Dist. LEXIS 32719 (E.D. Cal. 2016)................. 14 11 Frazier v. City of Richmond, 184 Cal.App.3d 1491 (1986) ............................................................ 7 12 Gautreaux v. Pierce, 690 F.2d 616 (7th Cir. 1982) ........................................................................ 7 13 Ghazaryan v. Diva Limousine, Ltd., 169 Cal.App.4th 1524 (2008) ............................................. 19 14 Glass v. UBS Fin. Servs., 2007 WL 221862, 2007 U.S. Dist. LEXIS 8476 (N.D.Cal. Jan. 27 15 2007) ............................................................................................................................. 15, 16, 17 16 Green v. Obledo, 29 Cal.3d 126 (1981) .......................................................................................... 7 17 Hanlon v. Chrysler Co., 150 F.3d 1011 (9th Cir. 1998) ......................................................... 14, 20 18 Holman v. Experian Info. Solutions, Inc., 2014 U.S. Dist. LEXIS 173698 (N.D. Cal.2014) ....... 16 19 In re Mego Financial Corp. Securities Litigation, 213 F.3d 454 (9th Cir. 2000) .................. 15, 17 20 In re Tableware Antitrust Litig., 484 F.Supp.2d 1078 (N.D. Cal. 2007) ........................................ 9 21 In re Wash. Public Power Supply System Sec. Litig., 720 F.Supp. 1379 (D. Ariz. 1989) ........ 9, 12 22 Kirkorian v. Borelli, 695 F.Supp. 446 (N.D. Cal. 1988) ................................................................ 9 23 Linder v. Thrifty Oil Co., 23 Cal.4th 429 (2003) .......................................................................... 19 24 Louie v. Kaiser Foundation Health Plan, Inc., 2008 WL 4473183 (S.D.Cal. Oct. 06, 2008) .... 16 25 Lyons v. Marrud, Inc., [1972-1973 Transfer Binder] Fed. Sec. L. Rep. (CCH) Paragraph 93,525 26 (S.D.N.Y. 1972) .......................................................................................................................... 9 27 Mathein v. Pier 1 Imps. (U.S.), Inc., 2018 U.S. Dist. LEXIS 71386 (E.D. Cal. 2018) ................ 16 28 Nat'l Rural Telecomms. Coop. v. DIRECTV, Inc., 221 F.R.D. 523, 528 (C.D. Cal. 2004) ............ 9 MOTION FOR PRELIMINARY APPROVAL – POINTS & AUTHORITIES -ii- 1 Nordstrom Comm'n Cases, 186 Cal.App.4th 576, 581 (2010) ....................................................... 7 2 Officers for Justice v. Civil Serv. Comm'n, 688 F.2d 615 (9th Cir. 1982), cert. denied, 459 U.S. 3 1217 (1983) ............................................................................................................................. 7, 8 4 Rausch v. Hartford Fin. Servs. Grp., 2007 U.S. Dist. LEXIS 14740, 2007 WL 671334 (D. Or. 5 2007) ......................................................................................................................................... 16 6 Rose v. City of Hayward, 126 Cal.App.3d 926 (1981) ................................................................. 18 7 Santos v. TWC Admin. LLC, 2014 U.S. Dist. LEXIS 199358 (C.D. Cal. 2014) .......................... 14 8 Sav-On Drug Stores, Inc. v. Superior Court, 34 Cal. 4th 319, 326 (2004)....................... 18, 19, 21 9 Sayaman v. Baxter Healthcare Corp., 2010 U.S. Dist. LEXIS 151997 (C.D. Cal. 2010) ............. 7 10 Dunleavy v. Nadler (In re Mego Fin. Corp. Sec. Litig.), 213 F.3d 4549 (9th Cir. 2000) ............. 13 11 Kullar v. Foot Locker, 168 Cal. App. 4th 116, 133 (2008) .......................................................... 11 12 Stovall-Gusman v. W.W. Granger, Inc., 2015 U.S. Dist. LEXIS 78671 (N.D. Cal. 2015) .......... 13 13 Tate v. Weyerhaeuser Co., 723 F.2d 598 (8th Cir. 1983) ............................................................. 19 14 Ugas v. H&R Block Enterprises, LLC, 2012 U.S. Dist. LEXIS 156359 (C.D. Cal. 2012) .......... 14 15 Valentino v. Carter-Wallace, Inc., 97 F.3d 1227 (9th Cir. 1996) ................................................. 21 16 Vasquez v. Superior Court, 4 Cal.3d 800 (1971) ............................................................................ 7 17 Weinberger v. Kendrick, 698 F.2d 61, 73 (2d Cir. 1982), cert. denied 464 U.S. 818 (1983)......... 8 18 Wershba v. Apple Computer, Inc., 91 Cal.App.4th 2245 (2001) ................................................ 7, 8 19 Wren v. RGIS Inventory Specialists, 256 F.R.D. 180 (N.D. Cal. 2009) ....................................... 14 20 Statutes 21 California Business & Professions Code § 17200 et seq ................................................................ 4 22 California Code of Civil Procedure § 382 .................................................................................... 18 23 California Labor Code § 201 .......................................................................................................... 4 24 California Labor Code § 202 .......................................................................................................... 4 25 California Labor Code § 203 .......................................................................................................... 4 26 California Labor Code § 204 .......................................................................................................... 4 27 California Labor Code § 226 .......................................................................................................... 4 28 California Labor Code § 226.7 ....................................................................................................... 4 MOTION FOR PRELIMINARY APPROVAL – POINTS & AUTHORITIES -iii- 1 California Labor Code § 512 .......................................................................................................... 4 2 California Labor Code § 1174 ........................................................................................................ 4 3 California Labor Code § 1174.5 ..................................................................................................... 4 4 California Labor Code § 1175 ........................................................................................................ 4 5 California Labor Code § 2698 et seq .............................................................................................. 4 6 California Labor Code § 2699 ........................................................................................................ 4 7 California Rules of Court 8 Rule of Court 3.766 ..................................................................................................................... 23 9 Rule of Court 3.769................................................................................................................... 7, 23 10 Treatises 11 Newberg & A. Conte, Newberg on Class Actions (3d ed. 1992) .......................................... 7, 8, 19 12 Moore's Federal Practice (2003)................................................................................................... 8 13 14 Other Authorities 15 California Manual for Complex Litigation, Second (1993)........................................................ 7, 9 16 17 18 19 20 21 22 23 24 25 26 27 28 MOTION FOR PRELIMINARY APPROVAL – POINTS & AUTHORITIES -iv- 1 I. INTRODUCTION 2 Plaintiff Jeffrey Maxwell (“Plaintiff”) respectfully submits this memorandum in support 3 of his unopposed motion for preliminary approval of the proposed class and California Private 4 Attorneys General Act (“PAGA”) action settlement, and with Defendants Crawford & Company, 5 Broadspire Services, Inc, and Broadspire Insurance Services, Inc (collectively the "Defendants"), 6 seeks entry of an order: (1) conditionally certifying the settlement class and preliminarily 7 approving the proposed settlement of this class action with Defendants; (2) approving the form 8 and method for providing class-wide notice; (3) directing that notice of the proposed settlement 9 be given to the class; and, (4) scheduling a final approval hearing date to consider Plaintiff’s 10 motion for final approval of the proposed settlement and Plaintiff’s motion for attorneys’ fees 11 and expenses. 12 Plaintiff and Defendants (collectively the “Parties”) have reached a full and final 13 settlement of the above-captioned action, which is embodied in the Joint Stipulation of Class 14 Action Settlement Agreement and Release ("Agreement") filed concurrently with the Court. A 15 copy of the fully executed Agreement is attached as Exhibit 1 to the Declaration of Andrew J. 16 Jaramillo in Support of Motion for Preliminary Approval (“Jaramillo Decl.”), served and filed 17 herewith. 18 As consideration for this Settlement,1 the Maximum Settlement Amount is Three Million 19 Eight Hundred and Fifty Thousand Dollars and Zero Cents ($3,850,000.00) to be paid by 20 Defendants. This payment will settle all issues pending in the litigation between the Parties, 21 including all settlement payments to the Participating Class Members, Class Counsel Fees and 22 Costs Award, the Settlement Administration Costs, the payment to the California Labor 23 Workforce Development Agency (“LWDA”) of penalties pursuant to PAGA, and Plaintiff’s 24 Service Award. The Maximum Settlement Amount does not include the employer’s share of 25 payroll taxes which will be separately paid by Defendants. The Settlement is all-in with no 26 reversion to Defendants and no need to submit a claim form. Jaramillo Decl. at ¶3. 27 1 28 Unless otherwise indicated, all initial-capped words in this motion shall have the same meaning as those words are defined in the Agreement. MOTION FOR PRELIMINARY APPROVAL – POINTS & AUTHORITIES -1- 1 On February 5, 2020, the parties participated in a full day of mediation before Hon. Peter 2 D. Lichtman (Ret.), a well-known, respected and experienced wage and hour class action 3 mediator. Although the Parties were unable to agree to all material terms of the Settlement at the 4 mediation session, counsel for the Parties continued to negotiate following the mediation and 5 ultimately agreed to the material terms of this Settlement after conducting further litigation, 6 discovery and motion practice (e.g., Plaintiff’s Motion for Corrective Action). At all times, each 7 Party was represented by their respective counsel during the arms-length, good-faith 8 negotiations. Jaramillo Decl. at ¶5. 9 The Settlement is fair, reasonable and adequate, and should be preliminarily approved 10 because there is a substantial monetary payment, and because there are substantial litigation and 11 class-certification risks. Therefore, Plaintiff respectfully requests that this Court grant 12 preliminary approval of the Agreement and enter the proposed order submitted herewith. 13 II. DESCRIPTION OF THE SETTLEMENT 14 The Maximum Settlement Amount is Three Million Eight Hundred and Fifty Thousand 15 Dollars and Zero Cents ($3,850,000). Under the Settlement, the Maximum Settlement Amount 16 consists of the following elements: (1) Class Member Payments to Participating Class Members; 17 (2) the Class Counsel Fees and Costs Award; (3) the Settlement Administration Costs; (5) the 18 Service Award for Plaintiff; and (6) the PAGA Payment for civil penalties to the State of 19 California (LWDA). (Agreement at ¶¶ 3.5.1 - 3.5.5.) The Maximum Settlement Amount does not 20 include Defendants’ share of payroll taxes. (Agreement at ¶1.17.) The Maximum Settlement 21 Amount shall be all-in with no reversion to Defendants. Jaramillo Decl. at ¶17. 22 Within fifteen (15) days following the Effective Date, Defendant shall fund the 23 Settlement by providing the Maximum Settlement Amount to the Settlement Administrator. 24 (Agreement at ¶ 3.7.2.). Within thirty (30) calendar days following the Effective Date, the 25 Settlement Administrator shall distribute from the Settlement Fund Account the Class Member 26 Payments to Participating Class Members (Agreement at ¶3.7.7.) Jaramillo Decl. at ¶18. 27 The Net Settlement Amount shall equal the net amount available for distribution to 28 Participating Class Members after deducting the Court-approved amounts for the Service Award, MOTION FOR PRELIMINARY APPROVAL – POINTS & AUTHORITIES -2- 1 the Class Counsel Fees and Costs Award, the Settlement Administration Costs, and the PAGA 2 LWDA Payment. (Agreement at ¶ 1.18.) The Net Settlement Amount will be distributed among 3 the Class Members who do not timely request exclusion (“Participating Class Members”). 4 (Agreement at ¶ 1.26). Each Class Member Payment shall be calculated by dividing a Class 5 Member’s individual workweeks worked as an hourly paid adjuster in California during the 6 Class Period according to Defendant’s business records by the total workweeks worked by all 7 Class Members as hourly paid adjusters in California during the Class Period according to 8 Defendant’s business records and multiplying this result by the Net Settlement Amount. 9 (Agreement at ¶ 3.5.1.5.) Jaramillo Decl. at ¶17. 10 Class Members may choose to opt-out of the Settlement by following the directions in the 11 Class Notice. (Agreement at ¶ 3.6.8.1.) All Class Members who do not "opt out" will be deemed 12 Participating Class Members who will be bound by the Settlement, including the release of Class 13 Claims, and will be entitled to receive a Class Member Payment. (Agreement at ¶3.6.8.1.) 14 Finally, the Notice will advise the Class Members of their right to object to the Settlement. 15 (Agreement at ¶3.6.8.1.) Jaramillo Decl. at ¶20. 16 A Participating Class Member must cash his or her Settlement Share check within 120 17 days after it is mailed. (Agreement at ¶ 3.7.8.) Any settlement checks not cashed on the 121st day 18 after mailing will be voided and the funds from such uncashed checks shall be transmitted by the 19 Settlement Administrator to the State of California Controller’s Office, Unclaimed Property 20 Fund, in accordance with California law regarding such escheatment, within twenty-one (21) 21 calendar days of the Void Date. (Agreement at ¶ 3.7.8.) Jaramillo Decl. at ¶21. 22 The parties have agreed to use Phoenix Class Administration Solutions as the Settlement 23 Administrator for the Settlement. Payment of Settlement Administration Costs from the 24 Maximum Settlement Amount shall be made for the expenses of effectuating and administering 25 the Settlement. (Agreement at ¶1.37.) The Settlement Administrator shall receive payment for 26 services in an amount not to exceed $9,000. (Agreement at ¶ 1.36.) Jaramillo Decl. at ¶22. 27 Subject to Court approval, the Agreement provides for Class Counsel to collectively be 28 awarded a sum not to exceed $1,293,333, which is one-third of the Maximum Settlement Amount, MOTION FOR PRELIMINARY APPROVAL – POINTS & AUTHORITIES -3- 1 as the Class Counsel Fees Payment. (Agreement at ¶ 3.5.1.2.) Class Counsel will also be allowed 2 to apply separately for an award of costs in an amount not to exceed $10,000. (Agreement at ¶1.5.) 3 Subject to Court approval, the Agreement provides payment of no more than $15,000 as the 4 Service Award to Plaintiff Jeffrey Maxwell or such lesser amount as may be approved by the 5 Court. (Agreement at ¶1.34.) Jaramillo Decl. at ¶23. 6 Subject to Court approval, Ten Thousand Dollars ($10,000) will be paid from the 7 Maximum Settlement Amount for PAGA penalties under Labor Code Section 2698 et seq. 8 Pursuant to the express requirements of Labor Code § 2699(i), this LWDA Payment shall be 9 allocated as follows: $7,500 to the LWDA as the LWDA's share of the settlement of civil 10 penalties paid under this Agreement pursuant to the PAGA, and $2,500 to the Net Settlement 11 Amount for distribution to the Participating Class Members. (Agreement at ¶¶1.23-1.24).) 12 Jaramillo Decl. at ¶24. 13 III. CASE BACKGROUND 14 On August 1, 2016, Plaintiff filed a class action complaint against Defendant in the 15 Superior Court of California for the County of Fresno alleging claims for: (a) failure to pay 16 wages in violation of California Labor Code sections 510 and 1194; (b) failure to timely provide 17 accurate, itemized wage statements in violation of California Labor Code section 226, 1174, 18 1174.5, and 1175; (c) failure to timely pay wages at termination in violation of California Labor 19 Code sections 201-204; (d) unfair competition in violation of California Business & Professions 20 Code section 17200 et seq.; and (e) civil penalties pursuant to the PAGA. Jaramillo Decl. at ¶8. 21 On May 9, 2017, Plaintiff filed a First Amended Complaint to add causes of action for (a) 22 failure to provide meal periods or compensation in lieu thereof in violation of California Labor 23 Code sections 226.7, 512, and the applicable IWC Wage Order, and (b) failure to provide rest 24 breaks or compensation in lieu thereof in violation of California Labor Code section 226.7, 512, 25 and the applicable IWC Wage Order. Jaramillo Decl. at ¶9. 26 Accordingly, for purposes of this Settlement, the “Class” is defined as “all individuals 27 employed by Defendant in the State of California as hourly paid adjusters (or persons in 28 substantially equivalent positions, however titled) during the Class Period. However, the Class MOTION FOR PRELIMINARY APPROVAL – POINTS & AUTHORITIES -4- 1 shall not include: (a) individuals who were first hired by Defendant in or after January 2019 and 2 signed an arbitration agreement as part of the onboarding process, or (b) the workweeks that 3 were worked in and/or after January 2019 by Class Members who were rehired in and/or after 4 January 2019 and signed an arbitration agreement as part of the onboarding process.” 5 (Agreement at ¶1.3.) The Released Class Claims are based upon the allegations in the Actions. 6 (Agreement at ¶1.2.) Jaramillo Decl. ¶ 12. 7 The Parties have diligently engaged in both formal and informal discovery to investigate 8 the Class Claims. The Parties engaged in extensive written discovery and Defendant produced 9 over 1,000 pages of documents related to Plaintiff’ allegations. Further, for purposes of 10 mediation and settlement, Defendant informally produced additional information regarding the 11 number of current and former putative class members, average pay rate, and the number of 12 workweeks of employment for putative class members. Jaramillo Decl. at ¶110. 13 On February 5, 2020, the Parties attended a full day of mediation with Hon. Peter D. 14 Lichtman (Ret.), a well-known and experienced wage and hour class action mediator. Although 15 the Parties were unable to agree to all material terms of the Settlement at the mediation session, 16 counsel for the Parties ultimately agreed to the material terms of this Settlement after further 17 litigating this matter, conducting additional discovery and engaging in motion practice (e.g. 18 Plaintiff’s Motion for Corrective Action). At all times, each Party was represented by their 19 respective counsel during the arms-length, good-faith negotiations. Jaramillo Decl. at ¶11. 20 Although a settlement has been reached, Defendants deny any liability or wrongdoing of 21 any kind associated with the claims alleged in the Actions and further deny that, for any purpose 22 other than settlement, the Actions are appropriate for class treatment. Defendants contend, 23 among other things, that they have correctly compensated the Class Members and complied at all 24 times with the California Labor Code, applicable Wage Order, and all other laws and regulations. 25 Further, Defendants contend that class certification would be inappropriate for any reason other 26 than for settlement. Jaramillo Decl., ¶ 13. 27 Plaintiff contends that Defendants violated California wage and hour laws. Plaintiff 28 further contends that the Action is appropriate for class certification on the basis that the claims MOTION FOR PRELIMINARY APPROVAL – POINTS & AUTHORITIES -5- 1 meet the requisites for class certification. Without admitting that class certification is proper, 2 Defendants have stipulated that the above Class may be certified for settlement purposes only. 3 (Agreement at ¶3.1.) The Parties agree that certification for settlement purposes is not an 4 admission that class certification would be proper if the class certification issue were litigated. 5 Further, the Agreement is not admissible in this or any other proceeding as evidence that the 6 Class could be certified absent a settlement. Solely for purposes of settling the Action, the Parties 7 stipulate and agree that the requisites for establishing class certification with respect to the Class, 8 as defined above, are satisfied. Jaramillo Decl. ¶ 13. 9 Class Counsel has conducted a thorough investigation into the facts of the class action. 10 Class counsel has diligently evaluated the Class Members’ claims against the Defendants. The 11 Parties have diligently engaged in both formal and informal discovery to investigate the Class 12 Claims. The Parties engaged in extensive written discovery and Plaintiff also engaged in motion 13 practice, including a Motion for Curative Action (i.e. invalidating class action waivers signed by 14 putative class members) that was granted by this Court. Further, for purposes of mediation and 15 settlement, Defendant informally produced additional information regarding the number of 16 current and former putative class members, average pay rate, and the number of workweeks of 17 employment for putative class members. Jaramillo Decl. ¶ 15. 18 In addition, Class Counsel previously negotiated settlements with other employers in 19 actions involving similar issues and analogous defenses. Based on the foregoing data and their 20 own independent investigation, evaluation and experience, Class Counsel believes that the 21 settlement with Defendants on the terms set forth in the Agreement is fair, reasonable, and 22 adequate and is in the best interest of the Class in light of all known facts and circumstances, 23 including the risk of significant delay, defenses asserted by Defendants, and potential appellate 24 issues. Jaramillo Decl. at ¶ 16. 25 IV. THE SETTLEMENT MEETS THE CRITERIA NECESSARY FOR 26 THIS COURT TO GRANT PRELIMINARY APPROVAL 27 When a proposed class-wide settlement is reached, the settlement must be submitted to 28 the court for approval. 2 H. Newberg & A. Conte, Newberg on Class Actions (3d ed. 1992) at MOTION FOR PRELIMINARY APPROVAL – POINTS & AUTHORITIES -6- 1 §11.41, p.11-87. California “[p]ublic policy generally favors the compromise of complex class 2 action litigation.” Nordstrom Comm'n Cases, 186 Cal. App. 4th 576, 581 (2010) (quoting 3 Cellphone Termination Fee Cases, 180 Cal.App.4th 1110, 1117-18 (2009). Class action 4 settlements are approved where the proposed settlement is “fair, adequate and reasonable.” 5 Dunk v. Ford Motor Co., 48 Cal.App.4th 1794,1801 (1996) (citing Officers for Justice v. Civil 6 Serv. Comm'n, 688 F.2d 615, 625 (9th Cir. 1982), cert. denied, 459 U.S. 1217 (1983)). 7 Preliminary approval is the first of three steps that comprise the approval procedure for 8 settlements of class actions. The second step is the dissemination of notice of the settlement to all 9 Class Members. The third step is a final settlement approval hearing, at which evidence and 10 argument concerning the fairness, adequacy, and reasonableness of the settlement may be 11 presented and Class Members may be heard regarding the settlement. See Dunk v. Ford Motor 12 Co., 48 Cal.App.4th 1794, 1801 (1996); Manual for Complex Litigation, Second §30.44 (1993); 13 Cal. Rules of Court, rule 3.769. 14 The primary question presented on an application for preliminary approval of a proposed 15 class action settlement is whether the proposed settlement is “within the range of possible 16 approval.” Manual for Complex Litigation, Second §30.44 at 229; Gautreaux v. Pierce, 690 F.2d 17 616, 621 n.3 (7th Cir. 1982).2 Preliminary approval is merely the prerequisite to giving notice so 18 that “the proposed settlement... may be submitted to members of the prospective Class for their 19 acceptance or rejection.” Sayaman v. Baxter Healthcare Corp., 2010 U.S. Dist. LEXIS 151997, 20 *3 (C.D. Cal. 2010). There is “a presumption of fairness . . . where . . . [a] settlement is reached 21 through arms-length bargaining.” Wershba, 91 Cal. App. 4th at 245 (citation omitted); see also 22 Cho v. Seagate Tech. Holdings, Inc., 177 Cal. App. 4th 734, 742-45 (2009) (upholding trial 23 court's determination that settlement was “fair, reasonable and adequate" where the settlement 24 "provided valuable benefits to the class … that were 'particularly valuable in light of the risks 25 26 2 California courts look to federal authority on class actions. Vasquez v. Superior Court, 4 Cal.3d 27 800, 821 (1971). “It is well established that in the absence of relevant state precedents trial courts are urged to follow the procedures prescribed in Rule 23 of the Federal Rules of Civil Procedure 28 for conducting class actions.” Frazier v. City of Richmond, 184 Cal. App.3d 1491, 1499 (1986), citing Green v. Obledo, 29 Cal.3d 126, 145-146 (1981). MOTION FOR PRELIMINARY APPROVAL – POINTS & AUTHORITIES -7- 1 plaintiff would have faced if she proceeded to litigate her case.'"); Newberg, 3d Ed., §11.41, 2 p.11-88. However, the ultimate question of whether the proposed settlement is fair, reasonable 3 and adequate is made after notice of the settlement is given to the Class Members and a final 4 settlement hearing is held by the Court. 5 A. THE COURT’S ROLE IN PRELIMINARY APPROVAL OF A CLASS ACTION SETTLEMENT 6 The approval of a proposed settlement of a class action suit is a matter within the broad 7 discretion of the trial court. Wershba v. Apple Computer, Inc., 91 Cal.App.4th 224, 234-235 8 (2001); Dunk, 48 Cal.App.4th 1794. Preliminary approval does not require the trial court to 9 answer the ultimate question of whether a proposed settlement is fair, reasonable and adequate. 10 That final determination is made only after notice of the settlement has been given to the class 11 members and after they have been given an opportunity to voice their views of the settlement or 12 to be excluded from the settlement. 3B J. Moore, Moore's Federal Practice §§23.80 - 23.85 13 (2003). 14 In considering a potential settlement for preliminary approval purposes, the trial court 15 does not have to reach any ultimate conclusions on the issues of fact and law which underlie the 16 merits of the dispute, and need not engage in a trial on the merits. Wershba, supra, 91 17 Cal.App.4th at 239-40; Dunk, supra, 48 Cal.App. 4th at 1807. The Ninth Circuit explains, “the 18 very essence of a settlement is compromise, ‘a yielding of absolutes and an abandoning of 19 highest hopes.’” Officers for Justice, 688 F.2d at 624. The question whether a proposed 20 settlement is fair, reasonable and adequate necessarily requires a judgment and evaluation by the 21 attorneys for the parties based upon comparison of “‘the terms of the compromise with the likely 22 rewards of litigation.’” Weinberger v. Kendrick, 698 F.2d 61, 73 (2d Cir. 1982), cert. denied 464 23 U.S. 818 (1983) (quoting Protective Comm. for Indep. Stockholders of TMT Trailer Ferry, Inc. v. 24 Anderson, 390 U.S. 414, 424-25 (1968)). Thus, when analyzing the settlement, the amount is 25 “not to be judged against a hypothetical or speculative measure of what might have been 26 achieved by the negotiators.” Officers for Justice, 688 F.2d at 625, 628. 27 With regard to class action settlements, the opinions of counsel should be given 28 considerable weight both because of counsel’s familiarity with this litigation and previous MOTION FOR PRELIMINARY APPROVAL – POINTS & AUTHORITIES -8- 1 experience with cases such as these. Officers for Justice, 688 F.2d at 625; In re Wash. Public 2 Power Supply System Sec. Litig., 720 23F. Supp. 1379, 1392 (D. Ariz. 1989); Kirkorian v. 3 Borelli, 695 F. Supp. 446, 451 (N.D. Cal. 1988); Weinberger, 698 F.2d at 74. For example, in 4 Lyons v. Marrud, Inc., [1972-1973 Transfer Binder] Fed. Sec. L. Rep. (CCH) Paragraph 93,525 5 (S.D.N.Y. 1972), the court noted that “[e]xperienced and competent counsel have assessed these 6 problems and the probability of success on the merits….The parties’ decision regarding the 7 respective merits of their position has an important bearing.” Id. at ¶ 95,520. “The 8 recommendations of plaintiffs’ counsel should be given a presumption of reasonableness.” Boyd 9 v. Bechtel Corp., 485 F.Supp. 610, 622 (N.D. Cal. 1979). As a result, courts hold that the 10 recommendation of counsel is entitled to significant weight. Nat'l Rural Telecomms. Coop. v. 11 DIRECTV, Inc., 221 F.R.D. 523, 528 (C.D. Cal. 2004). 12 B. FACTORS TO BE CONSIDERED IN GRANTING PRELIMINARILY APPROVAL 13 A number of factors are to be considered in evaluating a settlement for purposes of 14 preliminary approval. In determining whether to grant preliminary approval, the court considers 15 whether the "(1) the proposed settlement appears to be the product of serious, informed, non- 16 collusive negotiations, (2) has no obvious deficiencies, (3) does not improperly grant preferential 17 treatment to class representatives or segments of the class, and (4) falls within the range of 18 possible approval." In re Tableware Antitrust Litig., 484 F.Supp. 2d 1078, 1079 (N.D. Cal. 19 2007). No one factor should be determinative, but rather all factors should be considered. The 20 analysis has been summarized as follows: 21 If the proposed settlement appears to be the product of serious, informed, 22 noncollusive negotiations, has no obvious deficiencies, does not improperly grant 23 preferential treatment to class representatives or segments of the class, and falls 24 within the range of possible approval, then the court should direct that notice be 25 given to the class members of a formal fairness hearing, at which evidence may be 26 presented in support of and in opposition to the settlement. 27 Manual of Complex Litigation, Second § 30.44, at 229. Here, the Settlement meets all of these 28 criteria for preliminary approval. MOTION FOR PRELIMINARY APPROVAL – POINTS & AUTHORITIES -9- 1 1. The Settlement is the Product of Serious, Informed and Arm’s-Length 2 Negotiations by Experienced Counsel 3 This settlement is the result of extensive and hard-fought litigation as well as negotiations 4 before an experienced and well-respected mediator. Defendants have expressly denied and 5 continue to deny any wrongdoing or legal liability arising out of the conduct alleged in the 6 Actions. Plaintiff and Class Counsel have determined that it is desirable and beneficial to the 7 Class to resolve the Released Class Claims of the Class in accordance with this Settlement.3 8 Class Counsel are experienced and qualified to evaluate the class claims, the viability of 9 10 11 3 Released Class Claims are defined as: “any and all claims, rights, demands, liabilities and causes of action of every nature and description, whether known or unknown, for wages, 12 benefits, and related penalties actually asserted or that could have been asserted in the Action by the Plaintiff on behalf of himself, the Class Members, the State of California, and/or PAGA 13 Affected Employees, based on the facts alleged in the Action, the operative First Amended 14 Complaint in the Action, and/or Plaintiff’s notice letter to the LWDA, including but not limited to claims for: (a) failure to pay wages in violation of California Labor Code sections 510 and 15 1194; (b) failure to provide meal periods or compensation in lieu thereof in violation of California Labor Code sections 226.7, 512, and the applicable IWC Wage Order; (c) failure to 16 provide rest breaks or compensation in lieu thereof in violation of California Labor Code section 17 226.7, 512, and the applicable IWC Wage Order; (d) failure to provide accurate, itemized wage statements in violation of California Labor Code section 226, 1174, 1174.5, and 1175; (e) failure 18 to timely pay wages at termination in violation of California Labor Code sections 201-204; (f) unfair competition in violation of California Business & Professions Code section 17200 et seq.; 19 (g) civil penalties pursuant to the PAGA for the California Labor Code violations that were or that could have been alleged in the Action based on the facts stated in the original or First 20 Amended Complaint; (h) liquidated damages pursuant to California Labor Code section 1194.2; 21 (i) injunctive relief to halt any unlawful practices alleged in the Action to be unlawful; (j) restitution and an order requiring Defendant to restore and disgorge funds to each Class Member 22 acquired by means of any act or practice alleged in the Action to be unlawful; (k) attorneys’ fees and costs incurred to prosecute the Action on behalf of Class Members, the State of California 23 and PAGA Affected Employees, including but not limited to fees incurred for the services of 24 Class Counsel or any other counsel; and (l) any other derivative remedies, penalties, and interest available under the law based on the facts alleged in the Action,, including but not limited to 25 California Labor Code sections 203, 226, 226.7, 512, 1194, and 1194.2 and the applicable IWC Wage Order. “Claims” also includes all claims that Plaintiff, Class Members, the State of 26 California and/or PAGA Affected Employees may have against the Released Parties relating to 27 (a) the payment, taxation, and allocation of attorneys’ fees and