Plaintiffs Jose Quiroz, Rolando Landeros, Abel Guaderrame-Arrellano, Rogelio Gonzalez, Jose Manuel Villalon-Carbajal, Denise Haslett and Defendant SWH MIMI?s Caf?, LLC?s Joint Motion for Preliminary Approval of Class Action Settlement
The Court has received and reviewed the supplemental papers filed 04/19/16 and thanks counsel and the parties for the revisions.? As presented, however, the motion for preliminary approval is DENIED without prejudice for the following reasons.
Item 2 identified in the court?s 04/08/16 minute order concerns Quintilone & Associates seeking 7.5% of the requested attorneys? fees (Settlement p. 10:25-26). It appears that Quintilone is seeking fees for a related, but not consolidated action, Haslett v. SWH Mimi?s Caf?, LLC, 2015-00789205. Plaintiff Haslett and her counsel cannot simply join in the settlement in the Quiroz lawsuit without some further action. Haslett is not a named party in this action and Quintilone is not counsel of record. Further, it is not clear that the claims in the two lawsuits are identical.
It also appears that Quintilone is not seeking 7.5% in attorney fees for his firm alone. That percentage is being split with the Carter Law Firm and Phelps Law Group. (Quintilone Decl. ? 12.) ?Any agreement, express or implied, that has been entered into with respect to the payment of attorney?s fees or the submission of an application for the approval of attorney?s fees must be set forth in full in any application for approval of the dismissal or settlement of an action that has been certified as a class action.? (CRC 3.769(b).) Any firm?Quintilone, Carter, or Phelps?seeking attorney fees in this action must seek to be appointed as class counsel and this fact must also be disclosed in the Notice. (See Notice p. 2:19; Settlement p. 3:13-14.)
With respect to item 3 in the 04/08/16 minute order, defense counsel declares that any cash payments that would have been paid to a Class Member but for that Class Member opting out of the Settlement will be returned to the Cash Fund. (Supp. Stearns Decl. ? 5.) This part has been corrected in the Notice. However, it appears as though it still must be fixed in the Settlement, which provides: ?Any portion of the Net Cash Fund that is not distributed to Participating Class Members for any reason, including any returned or undeliverable settlement checks, will be donated to the State Bar of California pursuant to California Code of Civil Procedure ? 384.? (Settlement p. 20:3-5.)
Also, any undeliverable vouchers ?will be donated to charity.? (Supp. Stearns Decl. ? 5.) But no charity is identified to enable the court to determine whether it is a qualified cy pres recipient under CCP ? 384(b). In addition, the following term in the Settlement must be changed: ?Any portion of the Voucher Fund that is not distributed to Participating Class Members for any reason, including any returned or undeliverable Individual Vouchers, will be returned to Defendant.? (Settlement p. 20:16-18.) It is not enough that defense counsel sets forth the changes in a declaration?the Settlement provides that it ?may be amended or modified only by a written instrument signed by all Parties or their successors in interest.? (Settlement p. 24:12-13.)
With respect to item 6, defense counsel declares that ?any amounts left in the Cash Fund (either due to opt-outs or undeliverable checks) will be sent to the California Department of Industrial Relations? Unclaimed Wages in the name of the Class Members. The parties ask the Court to address this issue in the Preliminary Approval Order.? (Supp. Stearns Decl. ??6.) Defense counsel?s representation that those amounts that would have gone to Class Members who opt-out will be sent to the DIR Unclaimed Wages fund is contrary to her representation in the preceding paragraph that the money ?will be returned to the Cash Fund? and, based on the Notice, will be reallocated to the participating Class Members. (Supp. Stearns Decl. ? 5, Ex. 1 – ? 10.) The court believes that the latter representation is the appropriate way to proceed. Further, the court declines to ?address this issue in the Preliminary Approval Order.? An amendment to the Settlement is required. (Settlement p. 24:12-13.)
As to item 7, Plaintiffs? counsel responds that they have lost contact with Plaintiff Villalon-Carbajal. (Supp. Perlman Decl. ? 3.) That Villalon-Carbajal cannot be located to agree to the Settlement weighs against his ability to adequately represent the Class. As a result, the court is not inclined to grant the request that Villalon-Carbajal be appointed a class representative (Settlement p. 3:27) or to award him an enhancement (Settlement p. 9:21). Accordingly, the Settlement and the Notice will need to be changed.
As to item 16, an opt-out form should be included.