MotionMotionCal. Super. - 5th Dist.July 26, 2016© 0 0 d N o o u r B A O w N D R N O N N N N N D N N N M N N F P F FP F FR , FP , F P R , P R E c o ~ N O o o u l B A W w W O N F P O O V U 0 0 N O U U B A W w W N H o O o HAINES LAW GROUP, APC Paul K. Haines (SBN 248226) phaines@ haineslaw group.com letcher W. Schmidt (SBN 286462) fschmidt@ haineslawgroup.com Andrew J. Rowbotham (SBN 301367) arowbotham@ haineslawgroup.com 222 N. Sepulveda Blvd., Ste. 1550 El Segundo, California 90245 Tel: (424) 292-2350 Fax: (424) 292-2355 Attorneys for Plaintiff SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF FRESNO GILBERTO TRE) O, an individual, on behalf of himself and all others similarly situated, Plaintiff, VS. CEMEX, INC., a Louisiana Corporation; CEMEX CONSTRUCTION MATERIALS PACIFIC, LLC, aDelaware Limited Liability Company; and DOES 1 through 100, Defendants. CASE NO. 16CECG02398 [Assigned for all purposes to Hon. Alan Simpson, Dept. 503] PLAINTIFF’S NOTICE OF MOTION AND MOTION FOR SETTLEMENT APPROVAL OF CLAIMS BROUGHT UNDER THE PRIVATE ATTORNEYS GENERAL ACT AND REASONABLE ATTORNEYS’ FEES, COSTS, AND INCENTIVE PAYMENT Date: February 7, 2018 Time: 3:30 p.m. Dept.: 503 Complaint Filed: July 26, 2016 Trial Date: None Set PLAINTIFF'S NOTICE OF MOTION AND MOTION FOR PAGA SETTLEMENT APPROVAL © 0 0 d N o o u r B A O w N D R N O N N N N N D N N N M N N F P F FP F FR , FP , F P R , P R E c o ~ N O o o u l B A W w W O N F P O O V U 0 0 N O U U B A W w W N H o O o TO THE COURT, ALL PARTIES,AND THEIR ATTORNEYSOF RECORD: PLEASE TAKE NOTICE that on February 7, 2018 at 3:30 p.m., or as soon thereafter as the matter may be heard in Department 503 of the above-entitled Court located at 1130 O Street, Fresno, California 93721, Plaintiff Gilberto Trejo (“Plaintiff”), individually and on behalf of all similarly aggrieved employees, will and hereby does move this Court for entry of an Order as follows: 1. Granting approval, pursuant to California Labor Code § 2698 et seq., and specifically § 2699(1), of the proposed Settlement of claims brought pursuant to the Private Attorneys General Act of 2004 (Cal. Labor Code § 2698 et seq.) and set forth in the J oint Stipulation of Settlement and Release (“Settlement Agreement”), a true and correct copy of which is attached to the Declaration of Paul K. Haines filed concurrently herewith; 2. Appointing CPT Group, Inc. as the Settlement Administrator; 3. Approving the proposed Notice of Settlement as to form and content, and directing that it be distributed to the A ggrieved Employees pursuant to the terms of the Settlement A greement; 4. Directing the distribution of the M aximum Settlement A mount pursuant to the terms of the Settlement A greement; and 5. Approving an award of attorneys’ fees to Plaintiff’s counsel in the amount of $47,473.33, an award ofattorneys’ costs to Plaintiff’s counsel in the amount of $11,243.70, an award of $10,000.00 as Representative Plaintiff Incentive Payment to Plaintiff, and $6,500.00 in administration costs to CPT Group, Inc. I I I 1 PLAINTIFF'S NOTICE OF MOTION AND MOTION FOR PAGA SETTLEMENT APPROVAL = ~ Ww W o N N O 0 3 O N W n 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 This Motion is based on this Notice, the attached Memorandum ofPoints and Authorities, the declarations ofPaul K. Haines, Fletcher W. Schmidt, Andrew J. Rowbotham, Gilberto Trejo, Charles J. O'Reilly, and Julie Green, and all exhibits attached thereto, the [Proposed] Order, the Settlement Agreement, all other pleadings and papers on file in this action, and on any further oral or documentary evidence or argument presented at the time of hearing. Respectfully submitted, Dated: January 16,2018 HAINES LAW GROUP, APC of Paul K. Maines, Fsq. 2 PLAINTIFF’S NOTICE OF MOTION AND MOTION FOR PAGA SETTLEMENT APPROVAL © 0 0 d N o o u r B A O w N D R N O N N N N N D N N N M N N F P F FP F FR , FP , F P R , P R E c o ~ N O o o u l B A W w W O N F P O O V U 0 0 N O U U B A W w W N H o O o TABLE OF CONTENTS I. INTRODUCTION citessreeeresbesser bere nr ees 1 [1. SUMMARY OF THE LITIGATION Lootneens 3 A. Brief Factual and Procedural History...nese3 B. Informal Discovery and Mediation .......cccoeviieiiireees 4 ll. SUMMARY OF THE SETTLEMENT AND CLAIMS PROCESS ....ccovvviiiiiiiiicn 4 A. “Aggrieved Employees” Defined..........ccoviiiiiiiiiiiiiisss4 B. M ONEEANY TRIMStiieresrb ae sb besser enna nees 5 1. Attorneys’ Fees and COSLS .........ccouviiiiiiiiisiiiisins5 2. Settlement AAMINIStration COSES........ouvviiiiiiieieieeeeereens 5 3. Representative Plaintiff INCENtIVE AWAId ..........cccvveeieiecieccie cesseserences 6 4, Payment to thE LWDA .......cooooeeeiececeesseresteerer ener es 6 5. Payments to Aggrieved EMPIOYEES......ccuciviiiiiieiisssneer6 6. Funding of the SELIEMENT ........ccvoecieseer6 IV. LEGAL ARGUMENTcoisas1 A. Standards for Approval of aPAGA Settlement...7 B. This Court Should Approve the Settlement Because It Is a Fair, A dequate, and Reasonable Compromise of Disputed Claims .......ccoviiiiiiiiiiesissr,9 1. Factors in Evaluating a Representative PAGA Settlement. ..........cccocevvvvevcieinnnnn, 10 a. The Strength of Plaintiff’s Case ......ccccevviiiiiiiiiiiiiiiesierra11 b. Risk, Expense, Complexity, and Duration of Further Litigation..........c.ccoeevuennne, 12 c. Amount Offered in Settlement Given Realistic Value of Claims. .........ccoccceovrnnne. 13 d. Discovery Completed and the Status of Proceedings.......cccocvevivviiieciiiecievecie nen, 14 e. The Experience and Views of COUNSEL .....cviiiiiiiiiiiiiiiesecssess 14 i PLAINTIFF'S NOTICE OF MOTION AND MOTION FOR PAGA SETTLEMENT APPROVAL © 0 0 N N o o u r B A O w N D R N O N N N N N D N N N M N N F P F FP F FP , FP F F P FR , F P P c o ~ N o o u i A W w W N N F P O O V 0 0 N N o o u l B A W N O- -, o O o C. The Requested Awards of Attorneys’ Fees, Litigation Costs, and Settlement Administration Expenses Warrant This Court’s Approval as Fair, Adequate, and RETTY T={ R15 D. This Court Should Approve Plaintiff’s Requested Incentive Payment Because It Is Fair, Adequate, and Reasonable in View of Plaintiff’s Efforts and the Risks That He Assumed in This Litigation on Behalf of the Aggrieved Employees. ........cccevvvvvevviiiieininnnn, 18 V. CONCLUSIONc i19 PLAINTIFF'S NOTICE OF MOTION AND MOTION FOR PAGA SETTLEMENT APPROVAL © 0 0 d N o o u r B A O w N D R N O N N N N N D N N N M N N F P F FP F FR , FP , F P R , P R E c o ~ N O o o u l B A W w W O N F P O O V U 0 0 N O U U B A W w W N H o O o TABLE OF AUTHORITIES Federal Cases Air Line Stewards, etc., Local 550 v. American Airlines, Inc. (7th Cir. 1972) 455 F.2d 101.....11 Hanlon v. Chrysler Corp. (9th Cir. 1998) 150 F.3d 1011 .....ccooiiiiiiiicceccece reece, 10 Hesse v. Sprint Corp. (9th Cir., 2010) 598 F.3d 581 .....cccviiiiiiciiicececesees 9 In re Corrugated Container Antitrust Litigation (5th Cir. 1981) 643 F.2d 195........ccccovvviiiiinnn, 9 In re Pacific Enterprises Securities Litig. (9th Cir. 1995) 47 F.3d 373....c.ccoccvvviiiviinieiiinn, 15 In re Pacific Enterprises Securities Litigation (9th Cir. 1995) 47 F.3d 373 ....ccoevvvievvcinviene, 14 In re Syncor ERISA Litig. (9th Cir. 2008) 516 F.3d 1095 ......cccoveiiiiiiiiiceccece reece, 10 Linney v. Cellular Alaska Partnership (9th Cir. 1998) 151 F.3d 1234......ccccceiveviirciieirccieriennen, 14 Officers for Justice v. Civil Service Com. (9th Cir., 1982) 688 F.2d 615.........cccevveivevrcieiiinennn, 7 Van Vranken v. Atlantic Richfield Co. (N.D. Cal. 1995) 901 F. Supp. 2%.....c..cccovvvviiiirinnnnn, 18 Vizcaino v. Microsoft Corp. (9th Cir. 2002) 290 F.3d 1043......ccociiiiieicce creercere 15 Williams v. MGM -P athe Communications Co. (9th Cir. 1997) 129 F.3d 1026 .........c.cceverrnen. 15 State Cases Amalgamated Transit Union, Local 1756, AFL-CIO v. Superior Court (2009) 46 Cal. 4th 993.8 Arias v. Superior Court (2009) 46 Cal. 4th 969...eee9 Bell v. Farmers Ins. Exchange (2004) 115 Cal.App.4th 715...cece,18 Chavezv. Netflix, Inc. (2008) 162 Cal.APP.Ath 43 ......ccoooiciiec ee15 Clark v. American Residential Services LLC (2009) 175 Cal.App.4th 785 .......cccvvvviiiiinnnnn, 11 Dunk v. Ford Motor Co. (1996) 48 Cal.App.4th 1794 ........ceorice10 Kullar v. Foot Locker Retail, Inc. (2008) 168 Cal.App.4th 116.......ccccvvrvviiiriiiininnnns 10,11, 14 Malibu Outrigger Bd. of Governors v. Superior Court (1980) 103 Cal.App.3d 573................. 10 Mallick v. Superior Court (1979) 89 Cal.App.3d 434 .....cooviiiiiiiiiec 10 Maria P. v. Riles (1987) 43 Cal.30 128 .....ciiiiiiiiiiii iiss esses steerer estas setae esntae esses ennees 15 Nordstrom Comm'n Cases (2010) 186 Cal.App.4th 576......cccoviieiiiiiiiccc16 Reed v. United Teachers Los Angeles (2012) 208 Cal.App.4th322...10 Stambaugh v. Superior Court (1976) 62 Cal.ApP.3d 231 .covoviiiiiiicices9 Thurman v. Bayshore Transit M gmt., Inc. (2012) 203 Cal.App.4th 1112......cccoveivivcieicienn 13 PLAINTIFF'S NOTICE OF MOTION AND MOTION FOR PAGA SETTLEMENT APPROVAL © 0 0 d N o o u r B A O w N D R N O N N N N N D N N N M N N F P F FP F FR , FP , F P R , P R E c o ~ N O o o u l B A W w W O N F P O O V U 0 0 N O U U B A W w W N H o O o Wershba v. Apple Computer, Inc. (2001) 91 Cal.App.4th 224........c.coeieieiiiieceecece ces 11 Westside Community for Independent Living, Inc. v. Obledo (1983) 33 Cal.3d 348 ................. 15 Federal Statues and Rules FRCP RUE 23(8)ciessteerererste she sbeebs stash bes b bests steer bears be ens 9,10 State Statutes and Rules Code of Civil Procedure § 1021.5(2) ...cccvveiveiiiiieiii cies scree cesses sree sree ees sbeebs saers 15 Cal. RULE 3.769 s 8,9 Cal.CiVil Procure § 382...rer8 Cal. CVI COA E1542...6 LaDOr COUR220...3,12 ILTO Tl OXo To [SR TA1C=)EFT1 Labor COAE GE 226(8) .vviveeieiiciiiiiiectsseeesressressbbeebesseessb es shes bess be ss sb ae sb bear bes be ens 13 Labor Code 226(€)(2)(B) .ocvieiiiiiiisieteres sheesh ees sheer beers res 3 Labor CoA 8 2699(Q) .....eeiiiiiiiiiiicteerereere es bbeeesreb a s sb e sb eeessra sbeebs rans 13 Labor Code § 2699.3() (1) ..eevviieriiiieciesetree setess r es sheesh beers reser ees b beers r ares 3 Labor COA 2699(C) .oovuiiiiiiiiiiiececeeeebesser as sheesh bese s sees shee arbre be setae r es 1 Labor COA § 2699(€)(2) ..cvvvevviiiiiiirie cries stesteee sr ts ss re ssbb eebe ss aessb as shear seer ae sr ae sb beeen 12 Labor Code § 2699(0) ..cvviieieiiiieiiiie sess s este steers sree sree erasers sree sree eben er eee en eerie tenes 15 Labor CoA § 269(H )(i) vooveeviiiiii ieeecreerres sheesh bese aes sb ae sb bes be sera res 6 Labor COA E 2699(1)overeatres 7 Unpublished Cases Aguirrev. DSW, Inc., 2012 WL 11875296 at *3 (C.D. Cal. Nov. 29, 2012) ...cccviiiiiiiririirnrersrsrsrsrsesssssseseseseresenes 16 Boyd v. Bank ofAmerica Corp., 2014 WL 6473804 at *8 (C.D. Cal. Nov. 18, 2014) ...c.ccviiiiiiiiirireieiseisrsssrssssssssesesesennes 16 Cabrera v. Advantage Sale & Marketing, LLC, Case No. BC485259, 2013 WL 1182822 (Super. Ct. L.A. County, March 12, 2013) ............. 2 Casida v. Sears Holdings Corp., 2012 WL 253217 at *3 (E.D. Cal. Jan. 26, 2012)....cccccviiiiiiiiriiieresereserssssesssesssssesesssesenes 7 iv PLAINTIFF'S NOTICE OF MOTION AND MOTION FOR PAGA SETTLEMENT APPROVAL © 0 0 d N o o u r B A O w N D R N O N N N N N D N N N M N N F P F FP F FR , FP , F P R , P R E c o ~ N O o o u l B A W w W O N F P O O V U 0 0 N O U U B A W w W N H o O o Chavez v. Saticoy Lemon Ass'n, Case No. 56-2015-00468600-CU-OE-VTA (2015 WL 5561118) .....cccvvvvmrinnnrinininininn, 15 Chu v. Wells Fargo Investments, LLC, 2011 WL 672645 at *1 (N.D. Cal. Feb. 16, 2011) .ccooooeivereiieeceecisee sreesneer 16 Clavel v. Lupe’s Thousand Oaks Mexican Restaurant, Inc., Case No. 56-2015-00467353-CU-OE-VTA (2015 WL 1601221) ....cccovvvirrrnnrrininiiininn, 15 Fleming v. Covidien Inc., 2011 WL 7563047, at *4 (C.D. Cal. Aug. 12, 2011)coccisreesree sree 13 Franco v. Ruiz Food Prods., 2012 WL 5941801 at *14 (E.D. Cal. NOV. 27, 2012) c.ecveeeeeeee eee set16 Garcia v. Gordon Trucking, Inc., 2012 WL 5364575 at *7 (E.D. Cal. Oct. 31, 2012)coco16 InreTD Ameritrade Account Holder Litig., 2011 WL 4079226, *9 (N.D. Cal. Sept. 13, 2011) oovceieirciieiecreersree 7 Mendez v. Tween Brands, Inc., 2010 WL 2650571 at *4 (E.D. Cal. July 1, 2010) .ccvciueiiieciiecieieciesree8 Ochoa-Hernandez v. Cjaders Foods, Inc., 2010 WL 1340777 at *4 (N.D. Cal. Apr. 2, 2010) ..ocevevreriiieie erenceseserves sneer 8 Penaloza v. PPG Industries Inc., Case No. BC471369, 2013 WL 2917624 at *2 (Super. Ct. L.A. County, May 20, 2013) ....... 2 Thomas v. Aetna Health of Cal., Inc., 2011 WL 2173715 at *13 (E.D. Cal. June 2, 2011) ..cccciciiiieciiececeiercssreenens 7 V PLAINTIFF'S NOTICE OF MOTION AND MOTION FOR PAGA SETTLEMENT APPROVAL © 0 0 d N o o u r B A O w N D R N O N N N N N D N N N M N N F P F FP F FR , FP , F P R , P R E c o ~ N O o o u l B A W w W O N F P O O V U 0 0 N O U U B A W w W N H o O o MEMORANDUM OF POINTS AND AUTHORITIES l. INTRODUCTION Plaintiff Gilberto Trejo (“Plaintiff”), an “Aggrieved Employee” under the Private Attorneys General Act of 2004 (“PAGA”), respectfully moves this Court for an Order granting approval of the Joint Stipulation of Settlement and Release (the “Settlement Agreement” or “Settlement”) with Defendants Cemex Construction Materials Pacific, LLC and Cemex, Inc. (“Defendants”), which is attached as Exhibit A to the concurrently filed Declaration of Paul K. Haines. This proposed Settlement will dispose of Plaintiff’s representative PAGA claim filed on his behalfand on behalfof all “Aggrieved Employees” as defined by Labor Code section 2699(c). This PAGA action is predicated upon Defendants’ alleged failure to include the correct employer name and address on employee wage statements for those employees who were not registered to receive wages by direct deposit, in violation of Labor Code section 226(a). This PAGA action seeks civil penalties for these violations on behalf of the California Labor & Workforce Development Agency (“LWDA”) and all current and former employees of Defendants who elected to receive payment ofwages by “live” paycheck (i.e. a paper paycheck) during the period from June 22, 2015 through ten days following the date that the Court approves this Settlement (the “Settlement Class Period”) (Hereinafter these employees are referred to collectively as “Aggrieved Employees”). Notably, Defendants revised the wage statements that it issued to accompany live paychecks on M arch 15, 2017 to remove any argumentthat they failed to comply with Labor Code § 226(a), and there is no allegation that the Aggrieved Employees were underpaid any wages as a result of these violations. The relief provided for under the Settlement is solely for the payment of penalties under the PAGA. Defendants have identified 145 total Aggrieved Employees. In deciding whether to grant approval of the Settlement, the primary issue to be decided is whether the Settlementis fair, reasonable, and adequate. As set forth herein, the proposed Settlement embodies all of the features of a settlement that is fair, reasonable, and adequate, as it (1) is the product of arm’s-length negotiations, (2) was negotiated by attorneys experienced in 1 PLAINTIFF'S NOTICE OF MOTION AND MOTION FOR PAGA SETTLEMENT APPROVAL © 0 0 d N o o u r B A O w N D R N O N N N N N D N N N M N N F P F FP F FR , FP , F P R , P R E c o ~ N O o o u l B A W w W O N F P O O V U 0 0 N O U U B A W w W N H o O o wage-and-hour issues, (3) was negotiated subsequent to undertaking sufficient investigation to evaluate the relative strength and value of the PAGA claim, and (4) reflects a reasoned compromise based directly on the relative strength and value of the PAGA claim, as well as the risks, expense, complexity and likely duration of furtherlitigation. This proposed Settlement provides for D efendants to pay a M aximum Settlement A mount (“MSA”) of $142,420.00 on a non-reversionary basis. After deducting amounts for requested attorneys’ fees (one-third of the MSA, or $47,473.33), litigation costs ($11,243.70), Representative Plaintiff Incentive Payment ($10,000), and settlement administration expenses (up to $6,500.00 for CPT Group, Inc.), the Settlement provides for distribution of $67,202.97 to the Aggrieved Employees and the LWDA. Per the PAGA, this amount will be distributed 25% ($16,800.74) to the Aggrieved Employees, and 75% ($50,402.23) to the LWDA. See Cal. Lab. Code § 2699(i). Accordingly, each Aggrieved Employee is estimated to receive approximately $115.87, which represents a pro-rata share of the 25% of PAGA civil penalties recoverable by the A ggrieved Employees. The MSA of $142,420.00 represents an excellent recovery for the State of California (payable to the LWDA) and Aggrieved Employees. Further litigation may have resulted in a smaller recovery or even no recovery at all based on the defenses asserted by Defendants and given the significant litigation risks involved. Moreover, the MSA secured by Plaintiff is exponentially greater than other PAGA penalty awards approved as reasonable in California, which often range between $7,500.00 and $15,000.00 for PAGA claims impacting hundreds or thousands of individuals, resulting in much lower PAGA penalty payments on a per capita basis. See, e.g.,Penaloza v. PPG Industries Inc. Case No. BC471369, 2013 WL 2917624 at *2 (Super. Ct. L.A. County, May 20, 2013) (approving PAGA penalties of $5,000 to class of 667 members); Cabrera v. Advantage Sale & Marketing, LLC, Case No. BC485259, 2013 WL 1182822 (Super. Ct L.A. County, March 12, 2013) (approving PAGA penalties of $10,000 for class of approximately 3,000 members). The amounts requested for Plaintiff’s Counsel’s attorneys’ fees and costs, the Representative Plaintiff Incentive Payment, and claims administration costs are 2 PLAINTIFF'S NOTICE OF MOTION AND MOTION FOR PAGA SETTLEMENT APPROVAL © 0 0 d N o o u r B A O w N D R N O N N N N N D N N N M N N F P F FP F FR , FP , F P R , P R E c o ~ N O o o u l B A W w W O N F P O O V U 0 0 N O U U B A W w W N H o O o fair, adequate, and reasonable. In light of the foregoing, this Court should enter the [Proposed] Order Granting Approval of Settlement submitted concurrently herewith. I. SUMMARY OF THE LITIGATION A. Brief Factual and Procedural History Defendants operate a multinational building materials company headquartered in Mexico. Plaintiff was employed by Defendants as a non-exempt cement truck driver from approximately February 2015 until June 6, 2016. See Declaration of Gilberto Trejo (“Trejo Decl.”) at 9 2. Plaintiff's PAGA claims are based solely on the allegation that Defendants’ wage statements failed to display the name and address of the legal employer.! Declaration of Paul K. Haines (“Haines Decl.”), q 11. Employees who declined to enroll in direct deposit were issued two different forms of wage statements-an electronic wage statement that was accessible online, as well as a paper wage statement that was attached to the live check as part of a tri-fold, perforated envelope. Declaration of Charles J. O'Reilly (“O’Reilly Decl.”), 14. With respect to the paper wage statements only, Plaintiff alleges that the proper legal employer, Cemex Construction Materials Pacific, LLC, is not listed anywhere on the wage statements (the wage statements simply include a “Cemex” logo). Haines Decl., § 11. Furthermore, Plaintiff alleges that there is no employer address listed on the paper wage statements, because the employer address is listed only on the detachable portion of the tri-fold envelope that the wage statement arrives in, but is not listed on the wage statement itself, and is also a different address from the address listed on the electronic versions of the wage statements. /d. On June 22, 2016, Plaintiff sent a letter via certified mail to Defendants and the LWDA describing Defendants’ alleged violations of Labor Code § 226, as required by Labor Code § 2699.3(a)(1). Haines Decl., 112. Plaintiff filed his Complaint on July 26, 2016, after waiting the prescribed thirty-three day exhaustion period. Id. After meeting and conferring with Defendants ! Plaintiff's original Complaint also included the allegations that the abbreviations associated with certain itemized deductions on Defendants’ wage Statements violated Labor Code 226(e)(2)(B) because they failed to provide sufficient information to the enable the employee to determine the applicable deductions. See Haines Decl., 111. However,after Defendants informed Plaintiff that they intended to file a demurrer and/or a motion to strike, Plaintiff filed a First Amended Complaint removing these allegations after meeting and conferring with Defendants and concluding that they did not state a cause of action. Id. 3 PLAINTIFF'S NOTICE OF MOTION AND MOTION FOR PAGA SETTLEMENT APPROVAL © 0 0 d N o o u r B A O w N D R N O N N N N N D N N N M N N F P F FP F FR , FP , F P R , P R E c o ~ N O o o u l B A W w W O N F P O O V U 0 0 N O U U B A W w W N H o O o regarding a contemplated demurrer and/or motion to strike, Plaintiff filed a First Amended Complaint on October 25, 2016. Id. Defendants filed an Answer on December 29, 2016. Id. Thereafter, the parties agreed to attend mediation with Mark Rudy on July 19, 2017, which resulted in a resolution of this action. Id. B. Informal Discovery and M ediation In preparation for mediation, the parties engaged in an informal exchange of information and data. Haines Decl., § 13. Specifically, Defendants provided Plaintiff with the number of potentially A ggrieved Employees, the number of aggregate pay periods in which wage statements were issued to A ggrieved Employees during the relevant time period that contained the defects complained of, and the date on which Defendants revised the format of their paper wage statements. Id. Following extensive discussions about the factual and legal strengths and weaknesses of the claims and defenses, and following the submission of detailed mediation briefs, the parties attended a full day of mediation before Mark Rudy, a respected mediator with extensive experience handling California wage-and-hour class actions and representative PAGA actions. Haines Decl., 113. During mediation, the parties vigorously debated the likelihood of Plaintiff’s ability to proceed on a representative basis as to the wage statement claims, the legal bases for Plaintiff’s claims and Defendants’ defenses, and the parties’ data analyses and conclusions based on data provided by Defendants. Id. Ultimately, after a full day of negotiations, Mr. Rudy made a mediator’s proposal for a resolution that was accepted by both sides, and the parties executed a binding memorandum of understanding. Id. During the months that followed, the parties continued negotiating the finer terms of the proposed resolution and formalized their agreement and executed the Settlement A greement that is now before the Court for approval. Id. I. SUMMARY OF THE SETTLEMENT AND CLAIMS PROCESS A. “Aggrieved Employees” Defined The Aggrieved Employees are defined as “all current and former employees identified by CEMEX Construction M aterials Pacific, LLC, including Plaintiff Trejo, who elected to receive payment of wages by “live” paycheck (i.e., a paper paycheck) during the Settlement Class 4 PLAINTIFF'S NOTICE OF MOTION AND MOTION FOR PAGA SETTLEMENT APPROVAL © 0 0 d N o o u r B A O w N D R N O N N N N N D N N N M N N F P F FP F FR , FP , F P R , P R E c o ~ N O o o u l B A W w W O N F P O O V U 0 0 N O U U B A W w W N H o O o Period.” See Settlement Agreement at § 11.12 The Settlement Class Period is defined as J une 22, 2015 through the Effective Date, which is 10 days after the date that the Court approves this Settlement. /d., §§ 11.10 & 11.26. B. Monetary Terms This Settlement provides for Defendants to pay a M SA of $142,420.00. See Settlement Agreement at § IV.H.1. After deducting amounts for requested attorneys’ fees, litigation costs, Plaintiff’s incentive payment, and settlement administration costs, the Settlement provides for distribution of a PAGA Penalty Fund of $67,202.97, with $50,402.23 paid to the LWDA, representing 75% of the PAGA Penalty Fund, and $16,800.74, representing 25% of the PAGA Penalty Fund, paid to the Aggrieved Employees on an equal per-capita basis. See Settlement Agreement, § IV.H.1. Significantly, this settlement is non-reversionary, and does not require any A ggrieved Employees to submit claim forms to reap the financial benefits of the Settlement. ld. 1 Attorneys’ Fees and Costs Plaintiff’s Counsel is requesting $47,473.33 (one-third of the M SA)in attorneys’ fees, and $11,243.70 in actual litigation costs. Settlement, § IV.H.1.A-B; Haines Decl., 19 15-16. In the event the Court reduces the amount requested in Plaintiff’s Counsel Fees or Costs, only the amounts approved by the Court will be deducted from the MSA, and the PAGA penalty Fund will therefore increase proportionately. Haines Decl., 115. 2. SettlementAdministration Costs The parties have agreed to use CPT Group, Inc. (“CPT”) as the third-party settlement administrator. See Settlement Agreement, §§ 11.25, IV.l. CPT shall be responsible for mailing the Notice of Settlement Share and Release of Claims (“Notice of Settlement) and calculating and distributing the settlement checks, among other duties. The parties have designated $6,500 as administration costs, which will cover the costs incurred by CPT in connection with the settlement. Id., § 11.23. The settlement administration bid provided by CPT is attached to the 2 All citations to the Settlement A greement refer to the Settlement A greement attached as Exhibit A to the Declaration of Paul K. Haines filed concurrently herewith. 5 PLAINTIFF'S NOTICE OF MOTION AND MOTION FOR PAGA SETTLEMENT APPROVAL © 0 0 d N o o u r B A O w N D R N O N N N N N D N N N M N N F P F FP F FR , FP , F P R , P R E c o ~ N O o o u l B A W w W O N F P O O V U 0 0 N O U U B A W w W N H o O o Declaration of Julie Green as Exhibit B. 3. Representative Plaintiff Incentive Award Plaintiff requests a representative plaintiff incentive award of $10,000, in recognition of Plaintiff’s unique contributionsto the prosecution ofthis case, as well as his agreement to execute a general release of all claims against Defendants, including a waiver of Cal. Civil Code § 1542. See Settlement, §§ 11.22; Trejo Declaration, 19 3-4. 4. Payment to the LWDA Seventy-five percent of the PAGA Penalty Fund, i.e., $50,402.23, will be paid to the LWDA. See Settlement, § IV.H.1; Cal. Labor Code § 2699(H)(i) (“Except as provided in subdivision (j), civil penalties recovered by aggrieved employees shall be distributed as follows: 75 percent to the Labor and Workforce Development A gency for enforcement of labor laws and education of employers and employees abouttheir rights and responsibilities under this code, to be continuously appropriated to supplement and not supplant the funding to the agency for those purposes; and 25 percent to the aggrieved employees.”). 5. Payments to A ggrieved E mployees The estimated Distributable Amount to the Aggrieved Employees is $16,800.74, representing 25% of the PAGA Penalty Fund. The Distributable Amount will be divided amongst A ggrieved Employees on an equal per-capita basis. See Settlement, § IV.H.1. Payment to each A ggrieved Employee shall be reported on an IRS Form 1099. /d., § IV.H.2. 6. F unding of the Settlement Within 30 business days of the Settlement becoming effective, Defendants will tender to CPT the full MSA. Id., § IV.H.1. Within 30 calendar days of the settlement becoming effective, Defendants will provide CPT with a list containing the Aggrieved Employees’ names, last known mailing addresses, and last known telephone numbers. Id., § 111.D. Within 10 calendar days of the receipt of the MSA, CPT will distribute Settlement Payments to the Aggrieved Employees along with the Notice of Settlement via First-Class U.S. Mail. Id. Before mailing, CPT will perform a search of the National Change of Address registry and/or perform skip-traces to find the most current addresses for Aggrieved Employees. Id. If any Notices are returned with a forwarding address, CPT will re-mail the Notices to the A ggrieved Employees at the forwarding address. Id. 6 PLAINTIFF'S NOTICE OF MOTION AND MOTION FOR PAGA SETTLEMENT APPROVAL © 0 0 d N o o u r B A O w N D R N O N N N N N D N N N M N N F P F FP F FR , FP , F P R , P R E c o ~ N O o o u l B A W w W O N F P O O V U 0 0 N O U U B A W w W N H o O o Aggrieved Employees will not be required to submit claim forms to participate in this Settlement, and will automatically receive their shares under the terms of the Settlement. Aggrieved Employees will have 180 days within which to cash their checks. See Settlement, § [11.I. The amount of any Settlement checks that are not cashed by A ggrieved Employees within 180 days shall be tendered to the California Department of Industrial Relations in the name of the Aggrieved Employee. Id. IV. ARGUMENT A. Standards for Approval of a PAGA Settlement The settlement of a PA GA claim requires court approval pursuant to the operative PAGA statute, which states that the “court shall review and approve any penalties sought as part of a proposed settlement agreement pursuantto this part.” See Labor Code § 2699(1). As with any settlement, the Court must be mindful in conducting its inquiry that “[s]ettlementis a compromise, which balances the possible recovery against the risks inherent in litigating further.” See ln re TD Ameritrade Account Holder Litig., 2011 WL 4079226, *9 (N.D. Cal. Sept. 13, 2011). Indeed, “the very essence of a settlementis ... ‘a yielding of absolutes and an abandoning of highest hopes,”as “it is the very uncertainty of outcome in litigation and avoidance of wasteful and expensive litigation that induce consensual settlements.” See Officers for Justice v. Civil Service Com., 688 F.2d 615, 624-25 (9th Cir., 1982). As such, “the settlement or fairness hearing is not to be turned into a trial or rehearsal for trial on the merits” or “judged against a hypothetical or speculative measure of what might have been achieved by the negotiators.” Id. Although the operative PAGA statute does not set forth the criteria by which a PAGA settlement is to be judged, it is presumed that a reviewing court may utilize some of the factors for review of a class action settlement. However, “a PAGA claim asserted on a non-class representative basis. ..is not considered a class action but a law enforcement action, and therefore does not have to meet the requirements of [a class action].” See Casida v. Sears Holdings Corp., 2012 WL 253217 at*3 (E.D. Cal. an. 26, 2012); Thomas v. Aetna Health of Cal., Inc., 2011 WL 2173715 at *13 (E.D. Cal. June 2, 2011); Mendez v. Tween Brands, Inc., 2010 WL 2650571 at 7 PLAINTIFF'S NOTICE OF MOTION AND MOTION FOR PAGA SETTLEMENT APPROVAL © 0 0 d N o o u r B A O w N D R N O N N N N N D N N N M N N F P F FP F FR , FP , F P R , P R E c o ~ N O o o u l B A W w W O N F P O O V U 0 0 N O U U B A W w W N H o O o *4 (E.D. Cal. July 1, 2010). Based thereon, a court’s review of a PAGA settlement necessarily implicates the following unique features that render the approval process distinct from approval of a class action settlement under C.C.P. § 382 and Rule 3.769, Cal. Rules of Court. First, in evaluating the adequacy of the settlement amount, the Court’s focus is not concerned with the amount(s) that “aggrieved employees” are to receive, but rather, must focus on the total settlement amount in achieving PAGA’s objective. Indeed, “[t]he remedy sought in a PA GA suit consists of civil penalties, not individual or class damages.” Mendez, supra, 2010 WL 2650571 at *4. “Unlike class actions, these civil penalties are not meant to compensate unnamed employees because the action is fundamentally a law enforcement action.” O choa- Hernandez v. Cjaders Foods, Inc., 2010 WL 1340777 at*4 (N.D. Cal. Apr. 2,2010). Moreover, while “‘[a PAGA] action is ... designed to protect the public and penalize the employer for past illegal conduct” (Mendez, supra, 2010 WL 2650571 at *4), a reviewing Court must take into account the fact that settlement of aPA GA claim - like any settlement - involves a “compromise” that stops short of rendering findings of liability and damages. M oreover, the Court must not lose sight of the fact that “[u]nlike a class action seeking damages or injunctive relief for injured employees, the purpose of PAGA is to incentivize private parties to recover civil penalties for the government that otherwise may not have been assessed and collected by overburdened state enforcement agencies.” See Ochoa-Hernandez, supra, 2010 WL 1340777 at *4. Second, consistent with the fact that unnamed employees have no property interestin a PAGA claim, “[ulnnamed employees need not be given notice of the PAGA claim, nor do they have the ability to opt-out of the representative PAGA claim.” Ochoa-H ernandez at *5. This renders the approval process of a PAGA settlement distinct from a class action settlement, as there is no need for the Court to employ the “two-step approval process” required under FRCP 3 Asheld by the California Supreme Court, “[t]he Labor Code Private Attorneys General A ct of 2004 does not create property rights or any other substantive rights” as “[i]t is simply a procedural statute allowing an aggrieved employee to recovercivil penalties-for Labor Code violations- that otherwise would be sought by state labor law enforcement agencies.” See Amalgamated Transit Union, Local 1756, AFL-CIO v. Superior Court, 46 Cal. 4th 993, 1003 (2009). 8 PLAINTIFF'S NOTICE OF MOTION AND MOTION FOR PAGA SETTLEMENT APPROVAL © 0 0 d N o o u r B A O w N D R N O N N N N N D N N N M N N F P F FP F FR , FP , F P R , P R E c o ~ N O o o u l B A W w W O N F P O O V U 0 0 N O U U B A W w W N H o O o Rule 23(e) and Rule 3.769. Finally, unlike a class action settlement under Rule 23(e) and Rule 3.769, the scope of release permitted in a PAGA settlement is limited. While “judgment in [a PAGA] action is binding not only on the named employee plaintiff but also on government agencies and any aggrieved employee not a party to the proceeding...the nonparty employees, because they were not given notice of the action or afforded any opportunity to be heard, would not be bound by the judgmentas to remedies other than civil penalties.” See Arias v. Superior Court, 46 Cal. 4th 969, 986-87 (2009). Thus, with the exception of the named Plaintiff, the scope of areleasein a PAGA settlement is necessarily strictly confined to the PAGA penalties alleged in the complaint, and claims that were or could have been alleged pursuant to PAGA based on the factual allegations in the Complaint.> In the case at hand, as the only claims at issue are PAGA claims, those will be the only claims extinguished as a result of this Settlement, with the exception of Plaintiff’s much broader, general personal release against Defendants. B. T his Court Should Approve the Settlement Because It Is a Fair, Adequate, and R easonable C ompromise of Disputed Claims California courts have a strong policy in favor of settlement. See, e.g., Stambaugh v. Superior Court 62 Cal.App.3d 231, 236 (1976). Unlike individual settlements, class action * Significantly, the “two-step” approval process of Rule 23(e)is required to facilitate “notice” to absent class members, as Rule 23(e) expressly requires notice and an opportunity for absent class members to exclude themselves or object. See Fed. Rule of Civil Procedure 23(e) (“The following procedures apply to a proposed settlement ... (1) The court must direct notice in a reasonable mannerto all class members who would be bound by the proposal.... (4) ... the court may refuse to approve a settlement unless it affords a new opportunity to request exclusion to individual class members .... (5) Any class member may object to the proposal if it requires court approval underthis subdivision”). Cal. Rule of Court 3.769 contains similar rules for State court class actions. > This is contrasted with the much broader release permitted in a class action context, which may be based on “any matter or fact” alleged in the complaint. See In re Corrugated Container Antitrust Litigation, 643 F.2d 195, 221(5th Cir. 1981) (“The weight of authority establishes that ... a court may release not only those claims alleged in the complaint and before the court, but also claims which ‘could have been alleged by reason of or in connection with any matter or fact set forth or referred to in” the complaint.”); Hesse v. Sprint Corp., 598 F.3d 581, 590 (9th Cir, 2010) (“we have held that federal district courts properly released claims not alleged in the underlying complaint where those claims depended on the same set of facts as the claims that gave rise to the settlement.”). 9 PLAINTIFF'S NOTICE OF MOTION AND MOTION FOR PAGA SETTLEMENT APPROVAL © 0 0 d N o o u r B A O w N D R N O N N N N N D N N N M N N F P F FP F FR , FP , F P R , P R E c o ~ N O o o u l B A W w W O N F P O O V U 0 0 N O U U B A W w W N H o O o settlements (and representative PA GA settlements) involve a court approval process that exists to prevent fraud, collusion, and unfairness to absent individuals. See Malibu Outrigger Bd. of Governors v. Superior Court, 103 Cal.App.3d 573, 578-79 (1980). California law generally follows the same standards applicable under Rule 23 of the Federal Rules of Civil Procedure. See Hanlon v. Chrysler Corp., 150 F.3d 1011, 1026 (9th Cir. 1998) (stating that Rule 23(e) requires the trial court to determine “whether a proposed settlement is fundamentally fair, adequate, and reasonable”). To be approved, a settlement must be “fair, reasonable and adequate to all concerned.” Reed v. United Teachers Los Angeles, 208 Cal.A pp.4th 322, 337 (2012). Settlement is the preferred means of dispute resolution, particularly in complex representative litigation. See In re Syncor ERISA Litig., 516 F.3d 1095, 1101 (9th Cir. 2008). The Court’s role in evaluating a proposed settlementis limited to ensuring that the agreementtaken as a whole is fair, and is not the product of fraud or collusion between the negotiating parties. See, e.g., Hanlon, supra, 150 F.3d at 1027. There is an initial presumption of fairness when the settlement agreement was negotiated at arm’s length by experienced counsel. See, e.g., Kullar v. Foot Locker Retail, Inc., 168 Cal.App.4th 116, 130 (2008). Because this Settlementis fair, adequate, and reasonable, Plaintiff respectfully requests that the Court approve the Settlement. 1 F actors in Evaluating a Representative PAGA Settlement. A settlement is presumptively fair where it is reached through arm’s-length bargaining, based on sufficient discovery and investigation to allow counsel and the court to act intelligently, and counsel is experienced in similar litigation. Dunk v. Ford Motor Co., 48 Cal.A pp.4th 1794, 1802 (1996). In deciding whether to approve a proposed settlement, a trial court has broad powers to determine if the proposed settlement is fair under the circumstances of the case. Mallick v. Superior Court, 89 Cal.App.3d 434, 438 (1979). In exercising these powers, the overriding concern is to ensure that a proposed settlement is “fair, adequate, and reasonable.” Dunk, supra, 48 Cal.A pp.4th at 1801 (internal quotations omitted). Relevant factors for the Court to consider include, but are not limited to: [T]he strength ofplaintiffs’ case, the risk, expense, complexity and likely duration of further litigation, the risk of maintaining class action status through trial, the amount offered in settlement, the extent of discovery completed and the stage of the proceedings, the experience and views of counsel, the 10 PLAINTIFF'S NOTICE OF MOTION AND MOTION FOR PAGA SETTLEMENT APPROVAL © 0 0 d N o o u r B A O w N D R N O N N N N N D N N N M N N F P F FP F FR , FP , F P R , P R E c o ~ N O o o u l B A W w W O N F P O O V U 0 0 N O U U B A W w W N H o O o presence of a governmental participant, and the reaction of the class members to the proposed settlement. Id. These factors require balancing, are non-exhaustive and, as such, trial courts should tailor the factors to each case and give due regard to “what is otherwise a private consensual agreement between the parties.” Id. As explained above, in the context of a representative PAGA settlement, the third and eighth factors (risk of maintaining class action status and reaction of class members to settlement) are inapplicable. “In the context of a settlement agreement, the test is not the maximum amount plaintiffs might have obtained at trial on the complaint, but rather whether the settlement is reasonable under all of the circumstances.” Wershba v. Apple Computer, Inc., 91 Cal.A pp.4th 224, 250 (2001). Because settlements inherently involve compromise, even settlements providing for substantially narrower relief than likely would be obtained if the suit were successfully litigated can be reasonable because “the public interest may indeed be served by a voluntary settlement in which each side gives ground in the interest of avoiding litigation.” [d. (quoting Air Line Stewards, etc., Local 550 v. American Airlines, Inc., 455 F.2d 101, 109 (7th Cir. 1972). In addition, courts review the discovery process and information received through it to aid them in assessing whether the parties sufficiently developed the claims and their supporting factual bases before reaching settlement. See Kullar v. Foot Locker Retail Inc., 168 Cal.A pp.4th 116, 129-31 (2008). Information is sufficient where it allows the parties and the court to form “an understanding of the amount that is in controversy and the realistic range of outcomes of the litigation.” See Clark v. American Residential Services LLC, 175 Cal.A pp.4th 785, 801 (2009). This requirement exists so that the parties can provide the court with “a meaningful and substantiated explanation of the manner in which the factual and legal issues have been evaluated.” Kullar, supra, 168 Cal.A pp.4th at 132. a. The Strength of Plaintiff’s Case Although he steadfastly maintains that his PAGA claims are meritorious, Plaintiff acknowledges that his position includes real risks and uncertainty. Haines Decl., § 17. Plaintiff’s sole claim was that Defendants’ wage statements failed to list the correct name and address of the employer on the wage statementitself. 1d. Specifically, the wage statements 11 PLAINTIFF'S NOTICE OF MOTION AND MOTION FOR PAGA SETTLEMENT APPROVAL © 0 0 d N o o u r B A O w N D R N O N N N N N D N N N M N N F P F FP F FR , FP , F P R , P R E c o ~ N O o o u l B A W w W O N F P O O V U 0 0 N O U U B A W w W N H o O o that accompanied live checks included only a “Cemex” logo with no entity name or address on the face of the wage statement, and included the employer address only on the outside of the tri-fold, perforated envelope (and although it was a correct employer address, it was different from the address listed on the electronic wage statements). Id. Furthermore, the evidence showed that all employees, including those who were not enrolled in direct deposit, had access to facially compliant electronic wage statements for all pay periods, that did contain the correct name and address of the employer on the face of the electronic wage statements. Id. Additionally, Defendants revised their live check wage statements to correct these potential violations before the parties attended mediation. Id. Plaintiff therefore faced the argument that Defendants had not violated Labor Code § 226 because: (a) the employees were issued facially- compliant electronic wage statements that satisfied Defendants’ obligations under Labor Code § 226; and (b) even if the electronic wage statements were set aside, the Cemex logo and address on the outside of the tri-fold envelope satisfied Defendants obligations under Labor Code § 226. Additionally, Plaintiff faced a significant risk that even if the Court did award PAGA penalties, the Court could drastically reduce the penalties awarded based on the discretionary factors contained in Cal. Lab. Code § 2699(e)(2) (“In action by an aggrieved employee..., a court may award a lesser amount than the maximum civil penalty amount specified by this part if, based on the facts and circumstances of the particular case, to do otherwise would result in an award that is unjust, arbitrary and oppressive, or confiscatory.”) Plaintiff believed there was an acute risk of the Court significantly reducing penalties given the highly technical nature of the alleged violations, along with the fact that the alleged violations were promptly corrected after Defendants received notice of Plaintiff’s allegations. Haines Decl., §17. b. Risk, E xpense, Complexity, and Duration of Further Litigation. This factor also weighs in favor of settlement approval. Although the parties had engaged in substantial informal discovery, the parties had not yet begun formal written and deposition discovery. See Haines Decl., 118. Preparation for trial remained for the parties as well as the 12 PLAINTIFF'S NOTICE OF MOTION AND MOTION FOR PAGA SETTLEMENT APPROVAL © 0 0 d N o o u r B A O w N D R N O N N N N N D N N N M N N F P F FP F FR , FP , F P R , P R E c o ~ N O o o u l B A W w W O N F P O O V U 0 0 N O U U B A W w W N H o O o prospect of appeals in the wake of a summary judgment ruling for either party. As a result, the parties would incur considerably more attorneys’ fees and costs through trial. This settlement avoids those risks and the accompanying expense. Thus, this factor favors settlement approval. C. Amount Offered in Settlement Given Realistic Value of Claims. This proposed Settlement provides a fair and reasonable monetary recovery for the Aggrieved Employees and the LWDA in the face of hotly disputed claims. Plaintiff estimated Defendants’ realistic exposure for the PAGA penalties as follows: PA GA Penalties for Alleged W age Statement Violations: $149,540 There were a total of approximately 7,128 total live checks issued within the statutory liability period (one year preceding Plaintiff sending notice to the LWDA) prior to Defendants correcting the alleged violations. Haines Decl., 119; O'Reilly Decl., 15. Because Labor Code § 226(e) specifies what penalties are recoverable for violations of § 226(a), (a $50 penalty per initial violation and a $100 penalty per subsequent violation, up to an aggregate penalty of $4,000 per employee), the PAGA penalties recoverable through this section mirror the penalties available through § 226(e). See Labor Code § 2699(a). Defendants’ records showed that 77 of the potentially aggrieved employees received 41 or more offending wage statements, meaning that they would be subject to the $4,000 cap on penalties, for a combined amount of $308,000 in penalties. Haines Decl., 9 19. The other 67 potentially aggrieved employees would trigger an additional $65,850 in penalties (67 “initial” violations at $50 per violation, and 625 total “subsequent” violations at $100 per violation). /d. Therefore, Plaintiff calculated Defendants’ maximum exposure at $373,850. /d. However, based on Defendants” arguments in defense, and because the Court maintains discretion to reduce these penalties, Plaintiff discounted that figure by 20% for a risk of not prevailing on the merits, and an additional 50% to accountfor the Court’s discretion to reduce the penalties, given the highly technical nature of the alleged violations and Defendants’ prompt action to correct any confusion. /d.; see also, Fleming v. Covidien Inc., 2011 WL 7563047, at *4 (C.D. Cal. Aug. 12, 2011) (reducing PAGA penalties from $2.8 million to $500,000); Thurman v. Bayshore Transit Mgmt., Inc., 203 Cal.App.4th 1112, 1136 (2012) 13 PLAINTIFF'S NOTICE OF MOTION AND MOTION FOR PAGA SETTLEMENT APPROVAL © 0 0 d N o o u r B A O w N D R N O N N N N N D N N N M N N F P F FP F FR , FP , F P R , P R E c o ~ N O o o u l B A W w W O N F P O O V U 0 0 N O U U B A W w W N H o O o (affirming trial court’s finding that awarding maximum PA GA penalties would be unjust). Using these estimated figures, Plaintiff predicted that the realistic total potential recovery for the Aggrieved Employees and the LWDA would be approximately $149,540. Haines Decl., 919. The proposed GSA of $142,420 therefore represents over 95% of Plaintiff’s reasonably forecasted total recovery. “The fact that a proposed settlement may only amountto a fraction of the potential recovery does not, in and of itself, mean that the proposed settlement is grossly inadequate and should be disapproved.” Linney v. Cellular Alaska Partnership, 151 F.3d 1234, 1242 (9th Cir. 1998) (internal quotations omitted). As explained above, Plaintiff acknowledges that there was substantial uncertainty and risk as to his claims. Thus, approval is appropriate since this settlement will provide tangible, monetary relief to the Aggrieved Employees. d. Discovery C ompleted and the Status of Proceedings As discussed above, the parties engaged in substantial informal discovery sufficient to evaluate the potential value of the PAGA claims. Defendants provided Plaintiff with exemplars of the live check and electronic wage statements issued, as well as the numberof live check wage statements issued that included the alleged defects identified by Plaintiff. Haines Decl., 118. It was only after the exchange of this information, and significant discussions about the likelihood of prevailing on the merits of Plaintiff’s claims that the parties reached the proposed settlement. Thus, this factor supports settlement approval. e The E xperience and Views of C ounsel “Parties represented by competent counsel are better positioned than courts to produce a settlement that fairly reflects each party’s expected outcome in litigation.” In re Pacific Enterprises Securities Litigation, 47 F.3d 373, 378 (9th Cir. 1995). Here, Plaintiff is represented by competent and experienced counsel who possess extensive experience litigating wage and hour class actions from both the plaintiff and defense side and have been appointed as class counsel in numerous cases alleging similar claims. See Haines Decl., 92-9; Declaration of Fletcher W. Schmidt (“Schmidt Decl.”), 9 2-6; Declaration of Andrew J. Rowbotham (“Rowbotham Decl.”), 49 2-5. This factor strongly supports settlement approval. See, Kullar, supra, 168 Cal.A pp.4th at 130 (“The court undoubtedly should give considerable weight to the 14 PLAINTIFF'S NOTICE OF MOTION AND MOTION FOR PAGA SETTLEMENT APPROVAL © 0 0 d N o o u r B A O w N D R N O N N N N N D N N N M N N F P F FP F FR , FP , F P R , P R E c o ~ N O o o u l B A W w W O N F P O O V U 0 0 N O U U B A W w W N H o O o competency and integrity of counsel and the involvement of a neutral mediator in assuring itself that a settlement agreement represents an arm’s length transaction entered without self-dealing or other potential misconduct.”). C. The Requested Awards of Attorneys’ Fees, Litigation C osts, and Settlement Administration E xpenses Warrant This Court’s Approval as Fair, Adequate, and Reasonable Plaintiff, as the prevailing party in settlement,is entitled to recoverhis attorneys’ fees and costs for his claims. See Cal. Labor Code § 2699(g) (“Any employee who prevails in any action shall be entitled to an award of reasonable attorney’s fees and costs.”); Code of Civil Procedure § 1021.5(a). A feeaward is justified where the legal action has produced its benefits by way of a voluntary settlement. See, e.g., Maria P. v. Riles, 43 Cal.3d 1281, 1290-91 (1987); Westside Community for Independent Living, Inc. v. Obledo, 33 Cal.3d 348, 352-53 (1983). Fee awards of roughly one-third of the settlement fund are routinely awarded in California state and federal courts in class and representative PAGA actions. “[F]ee awards in class actions average around one-third of the recovery.” Chavez v. Netflix, Inc., 162 Cal.A pp.4th 43, 66, fn. 11 (2008); see also, In re Pacific Enterprises Securities Litig., 47 F.3d 373, 379 (9th Cir. 1995) (affirming 33% fee award); Williams v. MGM -P athe Communications Co., 129 F.3d 1026, 1027 (9th Cir. 1997) (holding that class counsel’s fee award should have been calculated as one-third of the gross settlement fund); Chavez v. Saticoy Lemon Ass'n, Case No. 56-2015-00468600-CU - OE-VTA (2015 WL 5561118) (Ventura Cty. Super. Ct.,, Aug. 29, 2015) (approving attorneys’ fees of one-third of settlement fund in representative PAGA settlement); Clavel v. Lupe’s Thousand Oaks Mexican Restaurant, Inc., Case No. 56-2015-00467353-CU-OE-VTA (2015WL 1601221) (Ventura Cty. Super. Ct., Mar. 25, 2016) (same). This is also consistent with Plaintiff’s counsel’s experience in similar wage-and-hour class and PAGA matters. Haines Decl., § 15. The fee award requested here is justified because Plaintiffs counsel achieved a significant monetary recovery for the Aggrieved Employees and the LWDA in an uncertain and risky case while bearing the substantial burdens of representation on a contingency basis, and the fees requested are in line with the marketrate. Vizcaino v. Microsoft Corp., 290 F.3d 1043, 1048- 51 (9th Cir. 2002) (finding that exceptional results in a contingency case, significant risk and the 15 PLAINTIFF'S NOTICE OF MOTION AND MOTION FOR PAGA SETTLEMENT APPROVAL © 0 0 d N o o u r B A O w N D R N O N N N N N D N N N M N N F P F FP F FR , FP , F P R , P R E c o ~ N O o o u l B A W w W O N F P O O V U 0 0 N O U U B A W w W N H o O o absence of supporting precedents, are proper considerations in awarding attorneys’ fees). Plaintiff's counsel negotiated a substantial recovery in the face of significant defense challenges and despite the fact that there were no actual underlying unpaid wages alleged. Plaintiff’s counsel expended significant time and resources in litigating this case, which resulted in a favorable result for Plaintiff, the Aggrieved Employees and the LWDA. Plaintiff’s counsel elected to bear the contingency risk of this litigation for the benefit of the A ggrieved Employees, as well as for the State of California (who elected not to take the case after receiving the PA GA notice). Critically, Plaintiff's recovery for the Aggrieved Employees significantly exceeds other PAGA awards approved by courts in this district and others. See, e.g., Aguirre v. DSW, Inc., 2012 WL 11875296 at *3 (C.D. Cal. Nov. 29, 2012) (approving $10,000 PAGA payment); Garcia v. Gordon Trucking, Inc., 2012 WL 5364575 at*7 (E.D. Cal. Oct. 31,2012) (“GTI agrees to allocate $10,000 to Plaintiffs' PAGA claims, and will pay $7,500 to the LWDA, and $2,500 to participating Class Members on a pro-rata basis. This comports with settlement approval of PAGA awards in other cases. [Citations.] Therefore, the Court will approve the allocation of the Settlement to Plaintiffs” PAGA claim.”); Boyd v. Bank of America Corp., 2014 WL 6473804 at *8 (C.D. Cal. Nov. 18, 2014) (approving $18,750 PAGA payment); Franco v. Ruiz F ood Prods., 2012 WL 5941801 at *14 (E.D. Cal. Nov. 27, 2012) (approving $10,000 PAGA payment); Chu v. Wells Fargo Investments, LLC, 2011 WL 672645 at *1 (N.D. Cal. Feb. 16, 2011) (approving $10,000 PAGA payment); cf. Nordstrom Comm'n Cases, 186 Cal.App.4th 576, 589 (2010) (holding that trial court did abuse its discretion in approving wage and hour class action settlement that involved PAGA claims even though no settlement money was allocated to the PAGA claims and paid to the LWDA). That Plaintiff’s counsel achieved these results without engaging in a protracted legal battle, in the face of serious defense challenges and an uncertain legal landscape, confirms the strength of the results achieved. As discussed above, this case carried substantial risk as to the merits as well as the potential of the Court drastically reducing penalties in the context of a contested trial or summary judgment proceeding. Accordingly, it is fair and reasonable to account for these risks in compensating Plaintiff’s counsel. Since undertaking representation of Plaintiff, Plaintiff’s 16 PLAINTIFF'S NOTICE OF MOTION AND MOTION FOR PAGA SETTLEMENT APPROVAL © 0 0 d N o o u r B A O w N D R N O N N N N N D N N N M N N F P F FP F FR , FP , F P R , P R E c o ~ N O o o u l B A W w W O N F P O O V U 0 0 N O U U B A W w W N H o O o counsel has dedicated substantial resources to this litigation, including expending over $11,243.70 in costs, without receiving any compensation to date. Haines Decl., §16. Plaintiffs counsel conducted extensive legal research regarding the merits of Plaintiff’s claims, his ability to recover penalties under the PAGA, and Defendants’ potential defenses. Id. at 115. Plaintiff’s counsel also conducted significant research and analysis of data and information produced by Defendants prior to mediation, and used this data and analysis to draft a comprehensive mediation brief, with exposure analyses for the PAGA penalties. Id. Plaintiff's counsel traveled to San Francisco to attended a full-day mediation, and expended significant additional effort in preparing formal settlement documents, and this M otion for settlement approval. Id. Given the considerable potential for adverse outcomes in this case, including, but not limited to Defendants defeating Plaintiff’s claims on the merits, and/or facing a drastic reduction to potential PAGA penalties, the contingent risk borne by Plaintiff’s counsel was great. The quality of Plaintiff’s counsel’s work, and the efficiency and dedication with which it was performed, should be compensated. Plaintiff’s Counsel’s previous experience in litigating Similar class and representative actions also supports the reasonableness of the fee request. Plaintiff’s counsel bring extensive plaintiff and defense-side wage-and-hour class, collective and representative action experience. See Haines Decl., 19 2-9; Schmidt Decl., 99 2-6; Rowbotham Decl., 19 2-5. They have been found to be adequate counsel in numerous cases alleging wage and hour claims, including other PAGA-only settlements. Haines Decl., 99 6-8; Schmidt Decl., 91 4-6; Rowbotham Decl., § 4. Practice in the narrow field of wage-and-hour litigation requires skill and knowledge concerning the rapidly evolving substantive state and federal law, as well as the procedural law of class and representative action litigation. Because it is reasonable to compensate Plaintiff’s counsel commensurate with their skill, reputation, and experience, a fee award of one-third of the MSA is reasonable. Plaintiff’s request for reimbursement of actual litigation costs of $11,243.70 is also fair and reasonable. As the evidence submitted herewith shows, all of Plaintiff’s litigation costs are documented and reasonably incurred. See Haines Decl., 116 & Exh. C. Finally, the request for 17 PLAINTIFF'S NOTICE OF MOTION AND MOTION FOR PAGA SETTLEMENT APPROVAL © 0 0 d N o o u r B A O w N D R N O N N N N N D N N N M N N F P F FP F FR , FP , F P R , P R E c o ~ N O o o u l B A W w W O N F P O O V U 0 0 N O U U B A W w W N H o O o administration costs of $6,500 is also fair and reasonable. CPT Group, Inc. was selected because it is an experienced, well-respected settlement administrator, and because it returned a low and discounted bid in the amount of $6,500. See Declaration of Julie Green, 114-7 & Exhs. A-B. D. This Court Should Approve Plaintiff’s Requested Incentive Payment Because It Is Fair, Adequate, and Reasonable in View of Plaintiff’s Efforts and the Risks That He Assumed in This Litigation on Behalf of the Aqgrieved E mployees. Courts routinely approve incentive awards to compensate named plaintiffs for the services they provide and the risks they incur during class and representative litigation. Seg, e.g., Bell v. Farmers Ins. Exchange, 115 Cal.A pp.4th 715, 726 (2004) (upholding “service payments” to named plaintiffs for their efforts in bringing the case); see also Van Vranken v. Atlantic Richfield Co., 901 F. Supp. 294 (N.D. Cal. 1995) (approving $50,000 incentive payment). Here, pursuant to the Settlement, Plaintiff seeks an incentive award of $10,000. This request is reasonable given the much broader release that Plaintiff is agreeing to, as well as Plaintiff’s efforts in this case and the risks he undertook on behalf of the A ggrieved Employees. W hile all of the other Aggrieved Employees will be releasing only PAGA claims for deficient wage statements, Plaintiff is agreeing to a general release of all claims, known or unknown, that he may have against Defendants. See Settlement, § VI.B. Additionally, by contacting and retaining counsel to pursue these claims, Plaintiff made this settlement possible for the other A ggrieved Employees and the LWDA, while shouldering the risk of being liable for Defendants’ litigation costs if he were unsuccessful. Plaintiff also exposed himself to unwanted notoriety related to filing a public lawsuit (discoverable even through a simple google search) for the benefit of other employees, placing Plaintiff at risk of discrimination by future prospective employers. Plaintiff provided substantial factual information to Plaintiff’s counsel, and attended numerous in-person and telephonic meetings with Plaintiffs counsel to discuss the case. See Declaration of Gilberto Trejo, 914. Accordingly, the incentive payment to Plaintiff is appropriate and justified as part of the Settlement. 18 PLAINTIFF'S NOTICE OF MOTION AND MOTION FOR PAGA SETTLEMENT APPROVAL O O 0 N N R k W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 V. CONCLUSION. For the reasons stated herein, this Court should grant Plaintiff’s motion in its entirety and adopt the [Proposed] Order Granting Settlement Approval submitted concurrently herewith. Respectfully submitted, Dated: January 16, 2018 HAINES LAW GROUP, APC Pil K. Haines, Esq. Attorneys for Plaintiff 19 PLAINTIFF'S NOTICE OF MOTION AND MOTION FOR PAGA SETTLEMENT APPROVAL
