Case Name: ?? Manuel Mijangos v. Marquez Brothers International, Inc., et al.
Case No.: ?????? 2014-1-CV-26972
In this putative class action, plaintiff alleges that defendant Marquez Brothers International, Inc. required non-exempt employees to work substantial time without pay, including for activities related to donning and doffing required sanitary gear (?SG?), and failed to provide meal and rest breaks.? (First Amended Class Action Complaint for Violations of California Labor Code (?FAC?), ?? 1-2.)? Currently at issue is plaintiff?s unopposed motion for preliminary approval of a settlement.
- Factual and Procedural Background
Plaintiff Manuel Mijangos is a California resident who has been employed at one of Marquez?s food production facilities.? (FAC, ? 6.)? Pursuant to regulations and Marquez?s policies, plaintiff and other class members were required to wear SG to prevent cross-contamination of the food product manufactured by Marquez.? (Id. at ? 13.)? At the beginning of each workday, prior to the start of paid time, class members spent substantial time waiting to receive SG, donning the SG, waiting in line to wash their hands and sanitize their SG, walking to production lines, and performing other work activities.? (Id. at ? 14.)? At the end of the day, class members were required to doff and dispose of their SG without pay.? (Id. at ? 18.)? In addition, class members were not provided with all required ten-minute rest periods and second meal periods when they worked more than ten hours, and were not offered first meal periods during shifts of more than five hours.? (Id. at ?? 15-17.)
In the FAC, plaintiff asserts claims for (1) failure to pay minimum wages, (2) failure to compensate for all hours worked, (3) failure to pay overtime wages, (4) failure to provide legally compliant meal and rest periods, (5) unpaid wages and waiting time penalties, (6) failure to properly itemize pay stubs, (7) violation of California Business & Professions Code section 17200, et seq., and (9) enforcement of the Labor Code Private Attorneys General Act of 2004 (?PAGA?).[1]
The parties have now reached a settlement. ?Plaintiff moves for an order preliminarily approving the settlement, provisionally certifying the settlement class and appointing the class representative, designating class counsel and the settlement administrator, approving the form and method for providing notice to the class, and scheduling a final fairness hearing.
- ?The Proposed Settlement
- ?Legal Standard for Approving a Class Action Settlement
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, citing 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.)
- Settlement Process and Considerations
The parties engaged in significant discovery, including exchanging and responding to numerous interrogatories and over 100 requests for production of documents.? (Declaration of Robert W. Sink ISO Mot., ? 3.)? Marquez produced, and plaintiff?s counsel reviewed, over 14,000 pages of documents including time records, earning statements, company policies, and employee handbooks.? (Id. at ? 3.)? Both plaintiff and Marquez?s person most knowledgeable regarding recordkeeping, wage statements, meal and rest periods, overtime pay, and other subjects were deposed.? (Ibid.)
After a year and a half of discovery, the parties attended mediation before Michael Loeb at JAMS.? (Sink Decl., ? 4.)? The matter did not settle at mediation, but negotiations continued for several weeks with the mediator?s assistance.? (Ibid.)? Mr. Loeb evaluated the parties? positions, including on damages, and recommended the settlement amount as fair and reasonable.? (Ibid.)
Based on the discovery that was obtained, plaintiff?s counsel determined that plaintiff had a reasonable likelihood of success on his rest period claims, and estimated the class?s potential damages on these claims at $855,024.? (Sink Decl., ?? 5-6.)? Counsel determined that the likelihood of success on the other claims was significantly diminished, with Marquez presenting defenses that donning and doffing time was de minimus, meal periods were waived, and second meal periods were provided after 12 hours.? (Id. at ? 7.)? Plaintiff?s counsel also concluded that the claims for waiting time penalties and failure to itemize paystubs were unlikely to succeed.? (Ibid.)? Given these circumstances, counsel believes the $700,000 settlement is fair, reasonable, and adequate.? (Id. at ? 9.)
- Provisions of the Settlement
The non-reversionary settlement will be distributed to the class pro rata based on each class member?s weeks worked, without the need for class members to submit a claim.? (Joint Stipulation of Class Action Settlement and Release, ? 37.)? In exchange, class members who do not opt out of the settlement will release ?all claims against Defendant as alleged in the [FAC], or could have been alleged, (sic.) based upon the same factual predicate as the claims raised in the [FAC], including but not limited to, claims for unpaid wages, overtime pay, minimum wage, regular wages, noncompliant and/or missed meal period pay, noncompliant and/or missed rest period pay, claims for interest, attorneys? fees, costs, penalties, waiting time penalties, wage statement penalties, premium pay, Business & Professions Code Section 17200 et seq., and penalties under PAGA.?? (Id. at ? 45.)? The named plaintiff will also provide a general release pursuant to Civil Code section 1542.? (Id. at ? 46.)
Class counsel will petition the Court for fees not to exceed one-third of the gross settlement, plus costs not to exceed $50,000.? (FAC, ? 32.)? The settlement administrator, Simpluris, has agreed to cap its fees at $8,099.? (Id. at ? 18.)? Class counsel may apply for an incentive award on behalf of the named plaintiff not to exceed $5,000.? (Id. at ? 33.)? Finally, a $7,500 payment will be made to the California Labor & Workforce Development Agency in connection with the PAGA claim.? (Id. at ? 35.)
- Analysis
In light of the above, it appears that the settlement amount is fair and will be fairly apportioned among class members based on their weeks worked. ?The settlement was reached through arm?s-length bargaining following sufficient investigation and discovery, and both plaintiff?s counsel and the mediator are experienced in employment litigation.? The mediator recommended the settlement amount as fair.? Accounting for the deductions described above, the net settlement of $396,067.67 will result in an average recovery of $1,158.09 to each of the 342 class members.
Prior to final approval of the settlement, plaintiff must submit a declaration specifically detailing his participation in the case supporting any requested incentive payments. ?The Court also has an independent right and responsibility to review the requested attorney fees and award only so much as it determines to be reasonable. ?(See Garabedian v. Los Angeles Cellular Telephone Co. (2004) 118 Cal.App.4th 123, 127-128.) ?While one-third of the common fund for attorney fees is generally considered reasonable, counsel should submit billing records and lodestar information prior to the final approval hearing in this matter so the Court can compare the lodestar information with the requested fees. ?The settlement administrator should also submit a declaration detailing its actual expenses associated with the settlement.
III. ?Proposed Settlement Class
Plaintiff requests that the following settlement class be provisionally certified: ?All direct-hire workers who are currently employed, or formerly have been employed, as non-exempt hourly production department employees at Defendant?s facilities in California, at any time from August 20, 2010 through June 24, 2016.? ?(Stipulation, ? 10.)
- ?Legal Standard
Rule 3.769(d) of the California Rules of Court states that ?[t]he court may make an order approving or denying certification of a provisional settlement class after [a] preliminary settlement hearing.? ?California Code of Civil Procedure Section 382 authorizes certification of a class ?when the question is one of a common or general interest, of many persons, or when the parties are numerous, and it is impracticable to bring them all before the court ?.? ?As interpreted by the California Supreme Court, Section 382 requires the plaintiff to demonstrate by a preponderance of the evidence (1) an ascertainable class and (2) a well-defined community of interest among the class members. ?(Sav-On Drug Stores, Inc. v. Superior Court (Rocher) (2004) 34 Cal.4th 319, 326, 332.)
The ?community-of-interest? requirement encompasses three factors: (1) predominant questions of law or fact, (2) class representatives with claims or defenses typical of the class, and (3) class representatives who can adequately represent the class. ?(Ibid.) ??Other relevant considerations include the probability that each class member will come forward ultimately to prove his or her separate claim to a portion of the total recovery and whether the class approach would actually serve to deter and redress alleged wrongdoing.? ?(Linder v. Thrifty Oil Co. (2000) 23 Cal.4th 429, 435.) ?The plaintiff has the burden of establishing that class treatment will yield ?substantial benefits? to both ?the litigants and to the court.? ?(Blue Chip Stamps v. Superior Court (Botney) (1976) 18 Cal.3d 381, 385.)
In the settlement context, ?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.?? (Luckey v. Superior Court (Cotton On USA, Inc.) (2014) 228 Cal.App.4th 81, 93.) ?As no trial is anticipated in the settlement-only context, the case management issues inherent in the ascertainable class determination need not be confronted, and the court?s review is more lenient in this respect. ?(Id., pp. 93-94.) ?However, considerations designed to protect absentees by blocking unwarranted or overbroad class definitions require heightened scrutiny in the settlement-only class context, since the court will lack the usual opportunity to adjust the class as proceedings unfold. ?(Id., p. 94.)
- ?Ascertainable Class
?The trial court must determine whether the class is ascertainable by examining (1) the class definition, (2) the size of the class and (3) the means of identifying class members.?? (Miller v. Woods (1983) 148 Cal.App.3d 862, 873.) ??Class members are ?ascertainable? where they may be readily identified without unreasonable expense or time by reference to official records.? ?(Rose v. City of Hayward (1981) 126 Cal.App.3d 926, 932.)
Here, there are an estimated 342 members of the clearly-defined proposed class. ?Class members are easily identifiable from defendant?s payroll records. ?The Court consequently finds that the class is numerous and ascertainable.
- ?Community of Interest
With respect to the first community of interest factor, ?[i]n order to determine whether common questions of fact predominate the trial court must examine the issues framed by the pleadings and the law applicable to the causes of action alleged.? ?(Hicks v. Kaufman & Broad Home Corp. (2001) 89 Cal.App.4th 908, 916.) ?The court must also give due weight to any evidence of a conflict of interest among the proposed class members. ?(See J.P. Morgan & Co., Inc. v. Superior Court (Heliotrope General, Inc.) (2003) 113 Cal.App.4th 195, 215.) ?The ultimate question is whether the issues which may be jointly tried, when compared with those requiring separate adjudication, are so numerous or substantial that the maintenance of a class action would be advantageous to the judicial process and to the litigants. ?(Lockheed Martin Corp. v. Superior Court, supra, 29 Cal.4th at pp. 1104-1105.) ??As a general rule if the defendant?s liability can be determined by facts common to all members of the class, a class will be certified even if the members must individually prove their damages.? ?(Hicks v. Kaufman & Broad Home Corp., supra, 89 Cal.App.4th at p. 916.)
Here, common legal and factual issues predominate. ?These issues include whether defendant?s donning and doffing policy was lawful and whether legally compliant meal and rest periods were provided to class members.
As to the second factor,
The typicality requirement is meant to ensure that the class representative is able to adequately represent the class and focus on common issues. It is only when a defense unique to the class representative will be a major focus of the litigation, or when the class representative?s interests are antagonistic to or in conflict with the objectives of those she purports to represent that denial of class certification is appropriate. But even then, the court should determine if it would be feasible to divide the class into subclasses to eliminate the conflict and allow the class action to be maintained.
(Medrazo v. Honda of North Hollywood (2008) 166 Cal. App. 4th 89, 99, internal citations, brackets, and quotation marks omitted.) ?Here, like other members of the class, plaintiff was employed as a nonexempt employee and suffered alleged violations due to defendant?s donning and doffing policy and failure to provide meal and rest periods. ?The anticipated defenses are not unique to plaintiff, and there is no indication that plaintiff?s interests are otherwise in conflict with those of the class.
Finally, adequacy of representation ?depends on whether the plaintiff?s attorney is qualified to conduct the proposed litigation and the plaintiff?s interests are not antagonistic to the interests of the class.? ?(McGhee v. Bank of America (1976) 60 Cal.App.3d 442, 450.) ?The class representative does not necessarily have to incur all of the damages suffered by each different class member in order to provide adequate representation to the class. ?(Wershba v. Apple Computer, Inc. (2001) 91 Cal.App.4th 224, 238.) ?Differences in individual class members? proof of damages [are] not fatal to class certification. ?Only a conflict that goes to the very subject matter of the litigation will defeat a party?s claim of representative status.? ?(Ibid., internal citations and quotation marks omitted.)
Plaintiff has the same interest in maintaining this action as any class member would have. ?Further, he has hired experienced counsel. ?Plaintiff has sufficiently demonstrated adequacy of representation.
- ?Substantial Benefits of Class Certification
?[A] class action should not be certified unless substantial benefits accrue both to litigants and the courts. . . .? ?(Basurco v. 21st Century Ins. (2003) 108 Cal.App.4th 110, 120, internal quotation marks omitted.) ?The question is whether a class action would be superior to individual lawsuits. ?(Ibid.) ??Thus, even if questions of law or fact predominate, the lack of superiority provides an alternative ground to deny class certification.? ?(Ibid.) ?Generally, ?a class action is proper where it provides small claimants with a method of obtaining redress and when numerous parties suffer injury of insufficient size to warrant individual action.? ?(Id. at pp.?120-121, internal quotation marks omitted.)
Here, there are hundreds of members of the proposed class. ?It would be inefficient for the Court to hear and decide the same issues separately and repeatedly for each class member.? Further, it would be cost prohibitive for each class member to file suit individually, as each member would have the potential for little to no monetary recovery. ?It is clear that a class action provides substantial benefits both to the litigants and the Court in this case.
In sum, plaintiff has demonstrated that this action is appropriate for class treatment, and that he and his counsel will adequately represent the class.
- ?Notice
The content of a class notice is subject to court approval. ?(Cal. Rules of Court, rule 3.769(f).) ??The notice must contain an explanation of the proposed settlement and procedures for class members to follow in filing written objections to it and in arranging to appear at the settlement hearing and state any objections to the proposed settlement.? (Ibid.) ?In determining the manner of the notice, the court must consider: ?(1) The interests of the class; (2) The type of relief requested; (3) The stake of the individual class members; (4) The cost of notifying class members; (5) The resources of the parties; (6) The possible prejudice to class members who do not receive notice; and (7) The res judicata effect on class members.? ?(Cal. Rules of Court, rule 3.766(e).)
Here, the notice will be provided in both English and Spanish.? It describes the lawsuit, explains the settlement, and instructs class members that they may opt out of the settlement or object. ?The release language is provided.? The gross settlement amount is set forth along with itemized estimated deductions.? However, class members are not notified of their own expected recoveries, or even of the average expected recovery, following these deductions.? Furthermore, although recoveries are based on weeks worked, class members are not informed of their weeks worked as reflected in defendant?s records or given an opportunity to contest that figure.? The notice must be modified to reflect class members? hours worked, permit class members to challenge any errors, and provide an individualized or average recovery amount.? The notice must also be modified to state that class members may appear and object at the final fairness hearing without submitting any written objection.
To administer notice to the class, Marquez will provide the settlement administrator with a spreadsheet containing the name, last known mailing address, phone number, social security number, dates of employment, and weeks worked for each class member.? (Stipulation, ? 19.)? The settlement administrator will mail the class notice and exclusion form to class members within 20 calendar days of entry of the order of preliminary approval.? (Id. at ? 21.)? Class members must mail any request for exclusion within 30 calendar days of this mailing date.? (Id. at ? 22.)? For all notice materials that are returned, the administrator shall take additional reasonable steps to locate current addresses and will resend the notice materials to any current addresses obtained.? (Ibid.)
Given that the class period extends back to 2010, contact information for class members may be outdated.? Consequently, the settlement administrator shall update the addresses provided by Marquez using the National Change of Address Database or similar database before mailing notice to the class.? In addition, class members shall have 60 days to exclude themselves from the class to allow for re-mailing.? For notices that are returned, the reasonable measures to be taken by the administrator to obtain a current address will include attempts to contact class members at the phone number provided by Marquez.
Subject to these changes, the notice and notice procedures are adequate.
- ?Conclusion and Order
Plaintiff?s motion for preliminary approval is GRANTED subject to the above modifications.? The final approval hearing shall take place on January 13, 2017 at 9:00 a.m. in Dept. 1. ?Plaintiffs shall submit the amended notice for the Court?s review by September 23, 2016.
[1] The FAC does not include an eighth cause of action.