1)Plaintiff Maria Barajas and Defendant Orangewood, LLC?s Joint Motion for Preliminary Approval of Class Action Settlement
2)Status Conference
The hearing is CONTINUED to August 12, 2016 at 9:00 a.m., to permit the parties to respond to the following items of concern.? Any supplemental briefing shall be filed on or before July 29, 2016. If a revised Settlement Agreement is submitted, a redline version showing all changes, deletions, and additions shall be submitted as well.
As to the settlement:
- Based on the evidence before the court, there is insufficient information to conclude that the amount to be paid to the class is fair and reasonable when balanced against the probable outcome of the future litigation. There does not appear to be any estimate from Class Counsel regarding Defendant?s total potential liability. There also is not a more exact calculation of the settlement if employer side-taxes are taken out of the settlement fund. Finally, in making a determination on the issue of fair and reasonable, the Court does not believe that it is appropriate to take into account the individual settlement agreements between defendant and potential class members who will not be sharing in this court-approved settlement.
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- At final approval Plaintiff is to provide a declaration addressing with specificity all the factors set forth in Golba v. Dick?s Sporting Goods, Inc. (2015) 238 Cal.App.4th 1251, 1252 and Clark v. Am. Residential Servs. LLC (2009) 175 Cal.App.4th 785, 804, including the amount of time spent on the litigation. In addition, Plaintiff should provide a high and low for individual settlement payments, along with Plaintiff?s individual payout.
- The release language and ? 1542 waiver provisions are too vague, ambiguous and broad.
First, the definition of ?Claims? includes those ?claims, liabilities, rights, . . . which . . . relate in any way to the allegations in any of the complaints filed by Plaintiff. . .? (Addendum ? 2.3; see also ? 15.2(h) [re: ?any of the complaints?].) The phrases ?relate in any way to? and ?any of the complaints? are vague, ambiguous, and overbroad.
Second, the ?Settlement Class Release? provision, setting forth the ? 1542 waiver, includes ?other claims . . . relating to the Claims defined in Section 2.3? and provides that ?[a]s to the Released Claims, Settlement Class Members expressly waive any right . . . that is related to the Claims defined in Section 2.3.? (Addendum ? 14.2.) The provision is vague, ambiguous, and overbroad as it attempts to include undefined ?other claims? related to the defined term ?Claims??whatever that means?and any ?Released Claims??which is not defined?into the Release.
Third, ? 14.3 of the Original Settlement is impermissibly overboard insofar as it seeks to have Class Members release ?Claims described in Section 2.3, whether known or unknown, suspected or unsuspected, which?.?.?. hereinafter may exist.? Class Members may not be forced to release any future claims not yet in existence.
Fourth, ? 15.2 of the Addendum states that Class Members shall release ?any Claims . . . and the Judgment will be a full and final release applying to all unknown and unsuspected claims . . . related to the Claims.? The use of ?relating to? is also found in ? 15.2, subds. (d), (h), and (i).
The waiver/release language should be revised in the Notice as well.
- The court will not approve a ?Settlement Class Release? that includes injunctive relief: ?Settlement Class Members . . . forever be enjoined from prosecuting, any Claims as defined in Section 2.3 against any of the Released Persons.? (Addendum ? 14.2 at p. 11:26 and 12:3; see also Original Settlement ? 18.1(d).) It is sufficient that Defendant can assert the affirmative defense of settlement and res judicata against any future lawsuits by Class Members.
- The parties are asking the court to permit Plaintiff to file a proposed Third Amended Complaint, which includes additional statutory violations and a PAGA claim. (Original Settlement ? 12.1.)
It appears that Plaintiff sent written notice to the LWDA in January 2014. Over 2 ? years later, Plaintiff still has not amended her complaint. Given the amount of the proposed PAGA settlement ($500) and the foregoing timing, it appears that the Defendant is ?throwing in? a nominal amount in an effort to foreclose other PAGA claims over some period of time. The parties are to provide a supplemental briefing with legal authority that (1) supports Plaintiff?s ability to include a PAGA claim after such a long and unexplained period of delay, (2) supports the conclusion that the claim is not time-barred, and (3) provides an adequate evidentiary basis for the Court to approve the settlement of penalties pursuant to Labor Code 2699(l).
- The Settlement provides for only 30 days to object or opt out. This is too short of a timeframe in the event that Notices are remailed pursuant to ? 6.4 of the original Settlement. An extension of time to respond should be provided.
- Objections should not be filed with the court. (Original Settlement ? 7.3.) They should only be served on counsel, who then can file the objections with the final approval motion. The Notice should be revised as well.
- The Settlement provides that Class Counsel will submit a proposed final order and judgment ?[d]ismissing this Action on the merits with prejudice and permanently barring and enjoining all members.? (Original Settlement ? 18.1(d).) This is improper. A class action settlement cannot result in a dismissal, only a judgment.? (CRC 3.769(h).)
- It appears that employer-side taxes are to be paid out of the Maximum Settlement Amount (MSA) and that Class Members are required to indemnify and hold harmless Defendant and Released Parties in the event of inadequate payment of taxes. (Addendum ??11.5; Original Settlement ? 19.11.) Why must employer-side taxes be paid out of the MSA? More importantly, the court will not approve a settlement that requires Class Members to indemnify Defendant for failure to pay employer-side taxes.
- The Settlement provides that ?Plaintiff, Settlement Class Members and Settlement Class Counsel agree that they will not execute or seek to enforce any Judgment entered into in this Action until 12 months after entry of the Final Approval Order.? (Original Settlement ??19.12.) Issuance of checks to Class Members, however, is contemplated to be 30 days after the ?Final Effective Date?, which can be as early as ?63 days after Settlement Class Counsel serves a file-stamped copy of the Final Approval Order on Defendant and on any Settlement Class member(s) who objected to the settlement.? (Original Settlement ? 2.10, 11.2.)? Why must Class Members wait at least 12 months after the Final Approval Order to enforce Defendant?s payment obligations if payment could be due as early as 2 months after final approval?
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As to the Class Notice:
- The following sentence at p. 1 should be deleted: ?Whether you agree or disagree with the merits of this lawsuit, defendant strongly encourages you to remain in the Settlement Class and receive your share of the settlement.?
- The Settlement contains a public comment provision that bars Settlement Class Members from discussing the Settlement. (Original Settlement ? 19.15.) Class Members should be notified of this if they are to be bound by it.
- An Opt-Out Form should be provided, as the Settlement requires the Class Member to provide specific information to opt out.? Also, because a Claim Form is provided, it should be just as easy to opt-out as to submit a claim.
- Defense counsel states that Defendant?s handbook, containing meal and rest break policies, was maintained in English and Spanish. (Binder Decl. ? 4.) Shouldn?t the Notice be sent in Spanish as well?
- The font size in the actual Class Notice should not be smaller than the font size in the sample Class Notice in support of this preliminary approval motion.
Status Conference is continued to 08/12/2016 at 9:00 a.m.