Case Name: ?? Ortiz, et al. v. Headstart Nursery, Inc.
Case No.: ?????? 2011-1-CV-211336
In this class action, plaintiffs Maria Ortiz, Rosalia Garcia Arriaga, and Mariana Rojas (collectively ?Plaintiffs?) sue defendant Headstart Nursery, Inc. (?Defendant?) for not providing full 30-minute meal breaks as required by law.? In the operative Second Amended Complaint (?SAC?), filed July 31, 2013, Plaintiffs allege that Defendant owns and operates a business that produces, grows, ships and sells vegetable transplants and ornamental plugs and liners,[1] and Plaintiffs and the class are non-exempt employees who were paid on an hourly, piece rate, or incentive plan basis.[2]? The SAC asserts four causes of action for: (1) unfair business practices, violation of Business & Professions Code section 17200; (2) violation of Labor Code section 200 et seq.; (3) violation of Labor Code sections 226.7 and 512, failure to provide required meal periods; and (4) violation of Labor Code section 226, failure to provide accurate statements.
Plaintiffs allege they were required to work through their meal periods and/or to take their lunch breaks late due to the necessity of completing their assigned tasks and the time spent to commute between their assigned work stations in the field and the designated lunch area.? Plaintiffs allege that Defendant has an explicit policy requiring employees, including named Plaintiffs and other class members to eat in a designated ?lunch area? on the business premises, which was at a great distance from where employees worked on the field.[3]? Plaintiffs and the class were also required ?to spend a material amount of time thoroughly cleaning themselves before they could safely consume a meal? and were not compensated for this time.[4]? Plaintiffs further allege that Defendant failed to provide them with proper field sanitation facilities as required by law.[5]
The SAC defines four classes:
- Class I (Meal Period Class): All California based non-exempt employees who were paid hourly based and/or piece rate based and/or incentive plan based who were or are employed by Defendant within the last four years who were subject to Defendant?s uniform meal period policy to work through their meal periods and/or to take their lunch breaks late, through necessity of completing their assigned tasks; to spend time to commute by walking/running between their assigned work stations in the field and a suitable lunch area and were not paid an hour of pay for meal period violations.
- Class II (Waiting Time Penalty Class): All California based employees employed by Defendant in California any time within the last four years who left employment with Defendant and did not receive all wages due as a result of Defendant?s failure to pay meal period violations on termination.
- Class III (Pay Stub Class ? Injunctive Relief): All California based employees employed by Defendant in California any time within the last four years who received a non-compliant pay stub that failed to comply with Labor Code section 226, i.e., failed to properly report the pay rate, failed to properly report total hours worked, and failed to provide an accurate explanation of the incentive plan formula and/or piece rate among other deficiencies.
- Class IV (Field Sanitation Class ? Injunctive Relief): All California based employees employed by Defendant in California any time within the last four years who were not provided with proper field sanitation facilities as required by California Code of Regulations Title 8, Section 3457, Health & Safety Code sections 113310-113360, and Labor Code section 6712.
On August 14, 2014, the Court granted in part Plaintiffs? motion for class certification.? Based on Plaintiffs? evidence of company policies related to hand washing, meal periods (including where meal periods could be taken), and Defendant?s horn practices at three locations (Gilroy, Desert Sea/Mecca and Castroville), the Court certified a Meal Period Class of all California based non-exempt employees of Defendant who worked at the Gilroy, Desert Sea/Mecca and Castroville locations from October 2008 through December 2012 and were subject to Defendant?s uniform meal period and hand washing policies and were not paid an hour of pay for meal period violations.? The Court held that under Plaintiffs? theory, if the class members were required to work until the 12:00 p.m. lunch horn, wash their hands before eating, walk to a designated lunch are in order to eat, wash again upon return, and be ready to work by the 12:30 p.m. horn, these workers would inevitably spend a portion of their 30-minute meal period conducting themselves in accordance with Defendant?s explicit policies regarding hand washing and meal breaks.? The Court also certified a Waiting Time Penalty Class of all California based employees employed by Defendant at the Gilroy, Desert Sea/Mecca and Castroville locations from October 2008 through December 2012 who left employment with Defendant and did not receive all wages due as a result of Defendant?s failure to pay meal period violations on termination.
The motion for class certification was denied without prejudice as to the inclusion of individuals employed at Defendant?s other facilities because the Court found that Plaintiffs had not adequately demonstrated how they could prove Defendant?s liability based on predominantly common facts and evidence for facilities where horns were not used.? The motion was also denied as to the Pay Stub Class on the grounds that Plaintiffs are not adequate class representatives since they are no longer employees of Defendant and therefore no longer stand to be harmed by Defendant?s pay stubs practices for purposes of entitling them to injunctive relief.
On November 19, 2015, the parties attended a full-day, third mediation session with mediatory Jeffrey Ross of Oakland. ?After a third day of mediation and extensive negotiations, the parties entered into an agreement resolving the Plaintiffs? claims.? On February 29, 2016, the Court granted preliminary approval of the settlement.? Plaintiffs now move for final approval of class action settlement.? Plaintiffs also move for attorney?s fees and costs and incentive awards.
- Legal Standard
Generally, ?questions whether a settlement was fair and reasonable, whether notice to the class was adequate, whether certification of the class was proper, and whether the attorney fee award was proper are matters addressed to the trial court?s broad discretion.?? (Wershba v. Apple Computer, Inc. (2001) 91 Cal.App.4th 224, 234-235, citing Dunk v. Ford Motor Co. (1996) 48 Cal.App.4th 1794.)
In determining whether a class settlement is fair, adequate and reasonable, the trial court should consider relevant factors, such as the strength of plaintiffs? 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 presence of a governmental participant, and the reaction of the class members to the proposed settlement.
(Wershba v. Apple Computer, Inc., supra, 91 Cal.App.4th at pp.?244-245, internal citations and quotations omitted.)
The list of factors is not exclusive and the court is free to engage in a balancing and weighing of factors depending on the circumstances of each case.? (Wershba v. Apple Computer, Inc., supra, 91 Cal.App.4th at p. 245.)? The court must examine the ?proposed settlement agreement to the extent necessary to reach a reasoned judgment that the agreement is not the product of fraud or overreaching by, or collusion between, the negotiating parties, and that the settlement, taken as a whole, is fair, reasonable and adequate to all concerned.?? (Ibid., quoting Dunk v. Ford Motor Co., supra, 48 Cal.App.4th at p. 1801, internal quotation marks omitted.)
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.?
(Wershba v. Apple Computer, Inc., supra, 91 Cal.App.4th at p. 245, quoting Dunk v. Ford Motor Co., supra, 48 Cal.App.4th at p. 1802.)? The presumption does not permit the Court to ?give rubber-stamp approval? to a settlement; in all cases, it must ?independently and objectively analyze the evidence and circumstances before it in order to determine whether the settlement is in the best interests of those whose claims will be extinguished,? based on a sufficiently developed factual record.? (Kullar v. Foot Locker Retail, Inc. (2008) 168 Cal.App.4th 116, 130.)
- Analysis
As discussed in connection with the motion for preliminary approval, the parties have agreed to settle this action for a gross settlement amount of $1,300,000.? From this amount, a net settlement fund has been calculated by subtracting the following: (1) $22,818.20 for settlement administrator costs; (2) $60,000 for incentive payments ($20,000 to each representative plaintiff); (3) $390,000 for attorney?s fees; and (4) $47,782.56 for litigation costs.? This results in approximately $779,000 for the net settlement fund.
On April 8, 2016, class notices were mailed to 348 potential class members.? (Declaration of Amy Tadewald on Behalf of Rust Consulting, Inc., the Appointed Claims Administrator (?Tadewald Decl.?), ??10.)? As of July 11, 2016, 49 class notices have been returned as undeliverable.? (Supplemental of Amy Tadewald on Behalf of Rust Consulting, Inc., the Appointed Claims Administrator (?Supp. Tadewald Decl.?), ??5.)? Of those notices, Rust Consulting performed 28 address traces and found three updated addresses to which notices were re-mailed.? (Ibid.)? Rust Consulting also obtained more current addresses for 18 class members via class counsel.? (Ibid.)? As of July 11, 28 class notices remain undeliverable.? (Ibid.)
As of July 11, 259 claim forms have been received, of which one is untimely.? (Supp. Tadewald Decl., ??6.)? The class member who submitted an untimely claim form was contacted for an explanation but no explanation has been provided.? (Ibid.)? Three class members have requested exclusion, but one later clarified that he or she intends to participate in the settlement.? (Id. at ??7.)? Rust Consulting estimates that the average settlement payment is approximately $2,985.06, with the highest payment approximately $6,155.82 and the lowest payment approximately $19.54.? (Id. at ??11.)
The Court previously found that the proposed settlement is fair, reasonable, and in the best interests of the putative class and the Court continues to make that finding for purposes of final approval.
Plaintiffs? counsel requests attorney?s fees in the amount of $390,000.? This represents 30% of the gross settlement amount, which is not an uncommon contingency fee allocation.? The amount requested is lower than Plaintiff?s counsel?s lodestar figure of $508,333.50.? Accordingly, the Court finds that the requested fees are fair and should be approved.
Plaintiffs? counsel requests reimbursement for $47,782.56 in costs incurred.? This amount is approved.
Plaintiffs request $60,000 for incentive awards ($20,000 for each representative plaintiff).? At the time of preliminary approval, the Court indicated that it views the reasonable range for incentive awards to be in the $10,000-$15,000 range.? After reviewing the declarations of the class representatives, however, which detail the work they performed on this case and state they each spent between 180 and 250 hours on the case, the Court finds that the requested incentive awards are justified in this instance.? (See Declaration of Maria Ortiz in Support of Plaintiffs? Motion for Final Approval of Class Settlement, ??14; see also Declaration of Rosalia Garcia Arriaga in Support of Plaintiffs? Motion for Final Approval of Class Settlement, ??14; see also Declaration of Mariana Rojas in Support of Plaintiffs? Motion for Final Approval of Class Settlement, ??14.)? Further, there have been no objections to these amounts from class members.? Accordingly, the incentive awards are approved.
In sum, Plaintiffs? motions are GRANTED.
[1] Second Amended Compl. (?SAC?) ? 6.
[2] SAC ? 12.
[3] SAC ? 17.b.
[4] SAC ? 17.c.
[5] SAC ?12.D.