Joel Cummings vs Eureka Restaurant Group LLC

Case Number

18CV00849

Case Type

Hearing Date / Time

Fri, 05/10/2024 - 10:00

Nature of Proceedings

Motion: Approval

Tentative Ruling

For the reasons set forth herein and in accordance with this ruling, plaintiff’s motion for an order granting final approval of class action settlement is granted. The court has reviewed the proposed order and the proposed judgment and finds that they comply with this ruling.

Background:

The first amended complaint (FAC) filed by plaintiff Joel Cummings in this matter on March 22, 2018, on behalf of himself and others similarly situated, alleges six causes of action against defendant Eureka Restaurant Group LLC: (1) failure to provide meal periods; (2) failure to provide rest periods; (3) unfair competition; (4) failure to provide accurate wage statements; (5) failure to pay all wages owed upon termination; and (6) civil penalties under Labor Code section 2699 (the Private Attorneys General Act of 2004 or PAGA).

As alleged in the FAC, plaintiff worked at defendant’s Santa Barbara restaurant as a non-exempt employee from February 2016 to June 2017. During his employment with defendant, plaintiff and other similarly situated nonexempt employees worked between five and six hours each workday but were not provided with any meal or rest periods. Plaintiff did not consent to any meal period waiver. Defendant also failed to provide accurate wage statements and failed to pay all wages owed upon termination.

On May 8, 2018, defendant filed an answer to the FAC generally denying its allegations and asserting forty-three affirmative defenses.

On November 23, 2022, plaintiff filed a motion for preliminary approval of a proposed settlement and for preliminary certification of the proposed settlement class for settlement purposes. In the motion, plaintiff also sought leave to file a second amended complaint (SAC). On November 17, 2023, the motion was granted, and the final approval hearing was set for May 10, 2024.

Analysis:

“A settlement or compromise of an entire class action, or of a cause of action in a class action, or as to a party, requires the approval of the court after hearing.” (Cal. Rules of Court, rule 3.769(a).) “Any party to a settlement agreement may serve and file a written notice of motion for preliminary approval of the settlement. The settlement agreement and proposed notice to class members must be filed with the motion, and the proposed order must be lodged with the motion.” (Cal. Rules of Court, rule 3.769(c).)

As noted above, the court granted preliminary approval of the class action on November 17, 2023.

“Before final approval, the court must conduct an inquiry into the fairness of the proposed settlement.” (Cal. Rules of Court, rule 3.769(g).)

“At the final approval hearing, ‘the court must conduct an inquiry into the fairness of the proposed settlement.’ [Citation.]” (Luckey v. Superior Court (2014) 228 Cal.App.4th 81, 93.) “Because a court evaluating certification of a class action that settled prior to certification is considering certification only in the context of settlement, the court’s evaluation of the certification issues is somewhat different from its consideration of certification issues when the class action has not yet settled. In some ways, the court’s review of certification of a settlement-only class is lessened; as no trial is anticipated in a settlement-only class case, ‘the case management issues inherent in the ascertainable class determination need not be confronted.’ [Citation.]” (Id. at pp. 93-94.) “However, other certification issues, ‘those designed to protect absentees by blocking unwarranted or overbroad class definitions’ require heightened scrutiny in the settlement-only class context ‘for a court asked to certify a settlement class will lack the opportunity, present when a case is litigated, to adjust the class, informed by the proceedings as they unfold.’ [Citation.]” (Id. at p. 94.)

Plaintiff has presented evidence that, as defined, the there is a numerous, ascertainable class. Plaintiff has presented evidence that there is a well-defined community of interest. The class representative appears to have claims typical of the class and appears to be able to adequately represent the class.

“The burden is on the proponent of the settlement to show that it is fair and reasonable. However, ‘a presumption of fairness exists where: (1) the settlement is reached through arm’s-length bargaining; (2) investigation and discovery are sufficient to allow counsel and the court to act intelligently; (3) counsel is experienced in similar litigation; and (4) the percentage of objectors is small.’ [Citation.]” (Wershba v. Apple Computer, Inc. (2001) 91 Cal.App.4th 224, 245, disapproved on other grounds in Hernandez v. Restoration Hardware, Inc. (2018) 4 Cal.5th 260, 269, 274, fn. 4.)

Plaintiff presents evidence that the settlement occurred following reasonable investigation and discovery by experienced counsel through arm’s length bargaining. Plaintiff separately presents evidence that the terms of the settlement are reasonable given the risks of litigation and the potential or likely outcomes at trial. It appears to the court on the evidence now presented that the settlement is fair and reasonable.

On November 6, 2023, the parties to this matter filed a joint stipulation of class action and representative action for PAGA penalties (the joint stipulation). The joint stipulation provides for a settlement to a class of persons (the Class Members) who worked for defendant as a non-exempt employees in the State of California at any time between February 20, 2014 through August 11, 2017 or December 18, 2020 through August 31, 2023 (the Class Period). (Joint Stip., ¶¶ 18, 20, 56.) The joint stipulation also provides for a settlement to persons who worked for defendant in California in a nonexempt hourly-paid position (the PAGA Members) from January 11, 2017 through August 11, 2017 and December 18, 2020 through August 31, 2023 (the PAGA period). (Joint Stip., ¶¶ 36-39.)

Pursuant to the joint stipulation, defendant will make a one-time payment in  the amount of $450,000 (the Maximum Settlement Amount) to Atticus Administration, LLC (the Settlement Administrator) within 30 calendar days of the effective date of the joint stipulation. (Joint Stip., ¶¶ 25, 54.) The Maximum Settlement Amount was agreed to by plaintiff and defendant based on the aggregation of the agreed-upon settlement value of individual claims, does not include defendant’s share of payroll taxes on individual settlement payments (which will be paid separately), and is non-reversionary. (Joint Stip., ¶ 31.)

The Maximum Settlement Amount includes individual payments to each participating Class Member, a service award to plaintiff not to exceed $4,500 as approved by the court (the Service Award), claims administration costs to be paid to the Settlement Administrator and not to exceed $36,000 (the Administration Costs) as approved by the court, a payment in the amount of $20,000 which will be allocated to the resolution of Class Member claims that arise under PAGA (the PAGA payment) as further discussed below, attorneys’ fees not to exceed one-third of the Maximum Settlement Amount or up to $150,000 payable to the Karasik Law Firm and D.Law, Inc. (collectively, Class Counsel) as approved by the court, and costs payable to Class Counsel and not to exceed $13,500 as approved by the court. (Joint Stip., ¶¶ 13, 14, 15, 16, 30, 49, 56-58, 60.)

The entirety of the Maximum Settlement Amount that remains after deducting the Service Award, the Administration Costs, the PAGA payment, and attorney’s fees and costs as approved by the court (the Net Settlement Amount) will be allocated to paying each individual participating Class Member’s share of the Net Settlement Amount (the Individual Settlement Allocation), less withholding taxes and other applicable payroll deductions required by law. (Joint Stip., ¶ 29, 32, 62.)

Each individual payment of a participating Class Member’s share of the Net Settlement Amount (the Individual Settlement Payment) will be calculated and apportioned based on the number of weeks each Class Member worked for defendant during the Class Period (the workweek). The Settlement Administrator will calculate the total number of workweeks worked by each Class Member and the total number of workweeks worked by all Class Members during the Class Period. Each Individual Settlement Payment will be determined based on the following formula: the number of workweeks that the Class Member was a member of the class during the Class Period divided by the total number of workweeks that every Class Member was a member of the class during the Class Period, then multiplied by the Individual Settlement Allocation. The Individual Settlement Payment will be reduced by any required deductions for each participating Class Member including all applicable tax withholdings or deductions. Any applicable tax withholdings or other required deductions will be paid from the Net Settlement Amount. (Joint Stip., ¶ 63.)

Each Individual Settlement Payment will be allocated as follows: 20 percent as unpaid wages, and 80 percent as civil penalties and interest. (Joint Stip., ¶ 81.) The Settlement Administrator is responsible for issuing necessary tax forms and forwarding all payroll taxes and penalties to appropriate government authorities. (Joint Stip., ¶ 83.)

Seventy-five percent or $15,000 of the PAGA payment will be paid to the  California Labor & Workforce Development Agency (the LWDA), and the remaining twenty-five percent or $5,000 will be paid to the PAGA Members (the PAGA Settlement Allocation). (Joint Stip., ¶¶ 30, 37-38.) PAGA Members will receive payment from the PAGA Settlement Allocation based on their equitable share which will be calculated as follows: the number of workweeks that employee was a member of the PAGA Claim Period divided by the total number of workweeks that every PAGA Member was a member of the PAGA Claim Period, multiplied by the PAGA Settlement Allocation. (Joint Stip., ¶ 63.)

Pursuant to the ruling granting preliminary approval, Atticus Administration received a data file from defense counsel that contained the name, address, email address, telephone numbers, social security number, and applicable start and end dates for 8,103 individuals who at any time during the class period and PAGA claims period worked for defendant in California as non-exempt employees. (Bridley Dec., ¶ 4.) On January 29, 2024, class notice was sent to 8,078 class members for whom address information was available. The class notice complied with the ruling granting preliminary approval and all applicable statutes. (Bridley Dec., ¶ 6 & Exh. A.) Of those notices, 1,423 were returned as undeliverable. (Bridley Dec., ¶ 7.) Of those, 44 included forwarding address information and the notices were promptly remailed to the addresses provided. (Ibid.) Of the remaining undeliverable notices, a professional address tracing was performed which resulted in obtaining 1,018 addresses, and notices were promptly remailed to those individuals. (Ibid.) In total, 94.11 percent of class members successfully received notice. (Bridley Dec., ¶ 8.) Atticus received three timely requests for exclusion from settlement with two of them being deemed valid. (Bridley Dec., ¶ 10.) No workweek disputes or objections to the settlement were received. (Ibid.)

Plaintiff has provided the court with a proposed order and proposed judgment. The order and judgment allocates the following distributions from the gross settlement of $450,000.00: (1) $35,000.00 to Atticus Administration; (2) $15,000.00 to the LWDA for PAGA penalties; (3) $150,000.00 to class counsel as attorney fees; (4) $13,145.33.00 to class counsel as litigation costs; (5) $4,500.00 to plaintiff as an enhancement award; and (6) the remaining amount to be distributed for the benefit of the settlement class as set forth in the settlement agreement.

The court determines that the settlement is entitled to final approval, and plaintiff’s motion will be granted.