SUPERIOR COURT, STATE OF CALIFORNIA COUNTY …...SUPERIOR COURT, STATE OF CALIFORNIA COUNTY OF SANTA CLARA Department 3, Honorable Patricia Lucas Presiding Naomi Matautia, Courtroom

SUPERIOR COURT, STATE OF CALIFORNIA

COUNTY OF SANTA CLARA

Department 3, Honorable Patricia Lucas Presiding Naomi Matautia, Courtroom Clerk

191 North First Street, San Jose, CA 95113 Telephone: 408.882.2150

To contest the ruling, call (408) 808-6856 before 4:00 p.m.

Please state the case name, case number, the name of the attorney and contact number. It would also be helpful if you could identify the specific portion or portions of the tentative ruling that will be contested. Thank you.

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Pursuant to the Judicial Council’s Emergency Rule 3(a)(1) and (3), all law and motion hearings will be conducted telephonically through CourtCall until further notice. Please see the General Order re: COVID-19 Emergency Order Regarding Complex Civil Actions, and in particular sections 7 and 10, available at http://www.scscourt.org/general_info/news_media/newspdfs/GENERALORDER_RECOVID-19_EMERGENCY_ORDER_REGARDING_COMPLEXCIVILACTION.pdf. If a party gives notice that a tentative ruling will be contested, any party seeking to participate in the hearing should contact CourtCall.

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DATE: SEPTEMBER 9, 2020 TIME: 1:30 P.M.

LINE # CASE # CASE TITLE RULING LINE 1 17CV320770 Nichols v. Northrop Grumman

Systems Corp., et al. Click on LINE 1 for Ruling

LINE 2 18CV339693 Stewart v. Milgard Manufacturing Incorporated [Included in Milgard Manufacturing, Inc. Wage and Hour Cases, JCCP5056/Santa Clara]

Click on LINE 2 for Ruling

LINE 3 19CV348335 Pereltsvaig v. Cartus Corporation Click on LINE 3 for Ruling LINE 4 2014-1-CV-005487 Green v. Green RESET to 9/30/20 at 1:30pm LINE 5 LINE 6 LINE 7

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SUPERIOR COURT OF CALIFORNIA


ERIC S. NICHOLS, on behalf of himself, all others similarly situated, Plaintiff, vs. NORTHROP GRUMMAN SYSTEMS CORPORATION, a Delaware corporation; NORTHROP GRUMMAN CORPORATION, a Delaware corporation; and DOES 1 through 50, inclusive, Defendants.

Case No. 17CV320770 TENTATIVE RULING RE: DEMURRER; MOTION TO STRIKE

The above-entitled action comes on for hearing before the Honorable Patricia M. Lucas

on September 9, 2020 at 1:30 p.m. in Department 3. The court now issues its tentative ruling as

follows:

I. INTRODUCTION

According to the allegations of the Complaint filed on December 19, 2017, plaintiff Eric

S. Nichols (“Plaintiff”) was hired by defendants Northrop Grumman Systems Corporation and

Northrop Grumman Corporation (collectively, “Defendants”) in May 2010 as an hourly, non-

exempt employee. (Complaint, ¶ 10.) Plaintiff alleges that Defendants violated various wage

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and hour laws, including requiring Plaintiff and the putative class1 to go through security checks,

failing to provide meal periods, failing to reimburse for business expenses such as the purchase

of steel-toed boots, failing to pay overtime wages, and providing inaccurate wage statements.

(Complaint, ¶¶ 11-28.) The Complaint sets forth a single cause of action for civil penalties

pursuant to Labor Code section 2698, et seq. (The Private Attorneys General Act [“PAGA”]).

Now before the court is Defendants’ demurrer to and motion to strike the Complaint.

II. DEMURRER

A. Request for Judicial Notice

Defendants request judicial notice of Plaintiff’s October 10, 2017 PAGA Letter to the

California Labor and Workforce Development Agency (“LWDA”). The court can take judicial

notice of the records and files of a state administrative board. (Evid. Code, § 452, subd. (c); see

also Fowler v. Howell (1996) 42 Cal.App.4th 1746, 1750.) Accordingly, the request for judicial

notice is GRANTED.

B. Discussion

Defendants argue that Plaintiff has not exhausted his administrative remedies. Prior to

commencing a PAGA action, an “aggrieved employee or representative shall give written notice

by online filing with the Labor and Workforce Development Agency and by certified mail to the

employer of the specific provisions of this code alleged to have been violated, including the facts

and theories to support the alleged violation.” (Lab Code, § 2699.3, subd. (a)(1)(A).)

Defendants assert that Plaintiff did not meet the prerequisite for maintaining a PAGA action of

sending a detailed notice to the LWDA and the employer. Although Plaintiff did send a letter,

Defendants contend that the letter did not contain sufficient information for the LWDA to

determine whether to investigate and for Defendants (the employers) to determine what policies

or practices are being complained of so as to know how to respond or to correct the alleged

violations.

1 The Complaint refers to a “putative class” even though this case is only a PAGA action and there is no putative class.

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(1) Identity of Aggrieved Employees and Employer

Defendants first contend that Plaintiff’s notice letter identifies “aggrieved employees” too

broadly because it includes: (1) every non-exempt employee of Northrop Grumman Systems

Corporation working anywhere in California; (2) unknown employees of Northrop Grumman

Corporation, the parent, without any facts to establish that Plaintiff worked for that entity; (3) all

non-exempt employees of every unnamed third party in California; and (4) all non-exempt

employees of every unspecified staffing agency in California. Defendants also point out that

Plaintiff does not identify his own job title.

In the letter, Plaintiff states that he is providing notice for aggrieved employees defined

as follows:

[A]ll similarly situated current and former employees in California (“aggrieved employees”) of Northrop Grumman Systems Corporation, Delaware corporation; Northrop Grumman Corporation, a Delaware corporation; and Does 1 through 50, inclusive (collectively referred to as “Defendants”) who were employed by Defendants and/or any staffing agencies and/or any other third parties who worked in hourly or non-exempt positions….

(Defendants’ Request for Judicial Notice in Support of Demurrer to and Motion to Strike

Complaint, Ex. A (“PAGA Notice”).)

While the definition refers to staffing agencies and other third parties, in essence it

appears to be limited to employees who worked for Defendants (or Does). In other words, the

definition of aggrieved employees can be reasonably read to include only those employees of

staffing agencies or third parties who worked for Defendants. Further, although the reference to

unnamed staffing agencies may not suffice to enable Plaintiff to maintain an action against those

agencies, it is not disputed that Defendants, the only parties named in the lawsuit as defendants

and the only ones challenging the letter, are properly identified in the letter and received notice.

Defendants also argue that Plaintiff must differentiate between the separate defendants

named in the PAGA Notice. Defendants cite to Bush v. Vaco Technology Services, LLC (N.D.

Cal. 2018) 2018 WL 2047807, at *6 for the proposition that Plaintiff must identify his employer

and distinguish between the conduct of the employers identified in the PAGA Notice. However,

Bush, a non-binding federal case, concerned the allegations of a complaint, not the contents of a

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PAGA notice. (Ibid.) Another federal case relied on by Defendants also involved the allegations

of the complaint, specifically a class definition. (Parsittie v. Schneider Logistics, Inc. (C.D. Cal.

2020) 2020 WL 2120003, at *4-5.)

The PAGA Notice names the defendants who employed the aggrieved employees.

Defendants’ cited authorities do not establish that more specificity is required.

(2) Supporting Facts and Theories

Defendants argue that even if the PAGA Notice sufficiently identified the “employer”

and the “aggrieved employees,” it would still be deficient because it does not provide sufficient

information to apprise the LWDA and the “employer” of the facts and theories supporting the

claimed Labor Code violations.

A distinction has been recognized by the courts between “the alleged violation (i.e. ‘the

allegations an aggrieved employee is making’) and the facts and theories to support the alleged

violation (i.e. ‘any basis for those allegations’).” (Brown v. Ralphs Grocery Co. (2018) 28

Cal.App.5th 824, 836, citing Williams v. Superior Court (2017) 3 Cal.5th 531, 546.) “Nothing in

Labor Code section 2699.3, subdivision (a)(1)(A), indicates the ‘facts and theories’ provided in

support of ‘alleged’ violations must satisfy a particular threshold of weightiness, beyond the

requirements of nonfrivolousness generally applicable to any civil filing.” (Williams v. Superior

Court, supra, 3 Cal.5th at p. 545.) “PAGA’s standing provision similarly contains no evidence

of a legislative intent to impose a heightened preliminary proof requirement.” (Id. at p. 546.)

Nevertheless, a PAGA notice must have “more than bare allegations of a Labor Code

violation.” (Brown v. Ralphs Grocery Co., supra, 28 Cal.App.5th at p. 836.) A notice

containing “a string of legal conclusions with no factual allegations or theories of liability to

support them” is inadequate. (Ibid, quoting Alcantar v. Hobart Service (9th Cir. 2015) 800 F.3d

1047, 1057.)

While Plaintiff’s PAGA Notice includes long block quotes of Labor Code provisions, it is

not devoid of factual support. For example, in connection with a claim that Defendants failed to

provide meal periods, Plaintiff presents the fact that Defendants have a policy of requiring

aggrieved employees to remain on the premises during meal periods. (PAGA Notice, p. 3.) In

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connection with the failure to pay hourly and overtime wages claim, Plaintiff states that

Defendants failed to include non-discretionary bonuses and shift differential pay when

calculating regular rates of pay. (Id. at p. 7.) Plaintiff also asserts that Defendants failed to

maintain employee uniforms and did not pay employees for time spent maintaining their

uniforms. (Id. at p. 8.) With regard to off-the-clock work, Plaintiff states that employees were

subjected to random security checks lasting ten to fifteen minutes for which they were not paid.

(Ibid.) For the failure to reimburse for expenses claim, Plaintiff states aggrieved that employees

were required to purchase steel-toed boots to wear as part of their job duties and Defendants did

not reimburse employees for the purchases. (PAGA Notice, p. 9.)

Plaintiff is not required to meet a heightened specificity requirement in setting forth the

facts supporting his claims in the PAGA Notice. As discussed in one case:

A written notice “is sufficient,” [] if “it contains some basic facts about the violations, such as which provision was allegedly violated and who was allegedly harmed.” Green v. Bank of Am., N.A., 634 F. App’x 188, 190 (9th Cir. 2015). A Plaintiff need not put forth “every potential fact or every future theory.” Cardenas v. McLane FoodServs., Inc., 796 F.Supp.2d 1246, 1259-61 (C.D. Cal. 2011); see Green, 634 F. App’x at 191 (quoting Cardenas for this proposition); Jones v. AB Acquisition LLC, No. CV 14-8535 DSF (JEMx), 2016 WL 7638188, * 4 (C.D. Cal. Apr. 4, 2016) (“[I]f the claims are simple and are combined with factual allegations, the notice requirement is not difficult to satisfy.”)

(Mays v. Wal-Mart Stores, Inc. (C.D. Cal. 2019) 354 F.Supp.3d 1136, 1147.)

Based on this framework, it has been held that a PAGA letter that identifies at least some

facts and theories regarding the claims complies with the notice requirement of Labor Code

section 2699.3. (See Mays v. Wal-Mart Stores, Inc. (C.D. Cal. 2019) 354 F.Supp.3d at p. 1148;

see also Moua v. International Business Machines Corp. (N.D. Cal. 2012) 2012 WL 370570,

at *5.) Plaintiff has identified some facts to support the theories asserted in the PAGA Notice.

Accordingly, the court finds that Plaintiff has met the notice requirement of Labor Code section

2699.3. The demurrer is OVERRULED.

III. MOTION TO STRIKE

Defendants move to strike claims for which Plaintiff offers inadequate facts and theories

in the PAGA Notice. For the reasons discussed in connection with the demurrer, this basis for

the motion to strike is rejected.

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Defendants also move to strike Plaintiff’s prayer for statutory penalties, asserting that

such penalties are not available for a PAGA claim; only civil penalties are available. Defendants

state that Plaintiff has agreed to strike the statutory penalties. Plaintiff has not opposed the

motion to strike the statutory penalties.

Accordingly, the motion to strike is DENIED IN PART and GRANTED IN PART

WITHOUT LEAVE TO AMEND. The prayer for statutory penalties is struck from the

Complaint.

The court will prepare the final order if this tentative ruling is not contested.

NOTICE: Pursuant to the Judicial Council’s Emergency Rule 3(a)(1) and (3), all law and motion hearings will be conducted remotely until further notice. Please see the General Order re: COVID-19 Emergency Order Regarding Complex Civil Actions, and in particular sections 7 and 10. If a party gives notice that a tentative ruling will be contested, any party seeking to participate in the hearing should contact CourtCall.




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In re MILGARD WAGE AND HOUR CASES Coordination Proceeding Special Title (C.R.C. Rule 3.550) Included Actions: Sydney T. Stewart v. Milgard Manufacturing, Inc., et al. Santa Clara County Superior Court Case No. 18CV339693 Canez v. Milgard Manufacturing, Inc., et al. Riverside County Superior Court Case No. RIC1814387

Judicial Council Coordination Proceeding No. 5056 TENTATIVE RULING RE: MOTION FOR LEAVE TO INTERVENE; MOTION FOR APPROVAL OF PAGA SETTLEMENT



follows:

I. INTRODUCTION

This is a coordinated action which includes two cases: Canez v. Milgard Manufacturing,

Inc., et al., Riverside County Superior Court Case No. RIC1814387, filed on July 16, 2018, and

Sydney T. Stewart v. Milgard Manufacturing, Inc., et al., Santa Clara County Superior Court

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Case No. 18CV339693, filed on December 7, 2018. Both cases set forth a single cause of action

for civil penalties pursuant to the Private Attorneys General Act of 2004 (“PAGA”).

Plaintiff Sydney T. Stewart (“Stewart”) and defendant Milgard Manufacturing, Inc.

(“Milgard”) move for court approval of a settlement. Plaintiff Norma Canez (“Canez”) moves

for leave to intervene and opposes approval of the settlement.

II. MOTION FOR LEAVE TO INTERVENE

A. Request for Judicial Notice

In opposition to the motion for leave to intervene, Milgard requests judicial notice of an

order from the Superior Court of California, Contra Costa County, regarding a Special Set

Hearing On: Intervention by Tabitha Hart and Thomas Jarboe that was set for July 26, 2018, in

James Neil v. Hanlees Hilltop, Inc., Contra Costa County Case No. MSC17-01953.

An order from another superior court is neither binding nor citable and therefore has no

relevance here. (Mangini v. R. J. Reynolds Tobacco Co. (1994) 7 Cal.4th 1057, 1063 [Although

a court may judicially notice a variety of matters, only relevant material may be noticed.].)

Accordingly, the request for judicial notice is DENIED.

B. Discussion

There are two methods of intervention in a case: intervention by right and permissive

intervention. Code of Civil Procedure section 387 provides, in relevant part:

(d)(1) The court shall, upon timely application, permit a nonparty to intervene in the action or proceeding if either of the following conditions is satisfied: (A) A provision of law confers an unconditional right to intervene. (B) The person seeking intervention claims an interest relating to the property or transaction that is the subject of the action and that person is so situated that the disposition of the action may impair or impede that person's ability to protect that interest, unless that person’s interest is adequately represented by one or more of the existing parties. (2) The court may, upon timely application, permit a nonparty to intervene in the action or proceeding if the person has an interest in the matter in litigation, or in the success of either of the parties, or an interest against both.

(Code Civ. Proc., § 387, subd. (d).)

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Canez argues that she has a right to intervene under both mandatory intervention and

permissive intervention. She makes similar arguments in support of both.

Canez contends that she has a direct interest in the Stewart action. Both the Stewart and

the Canez actions are PAGA cases against Milgard Manufacturing, Inc. for alleged wage and

hour violations. The Canez action also includes Masco Corp., Milgard’s parent company until

February 2020, as a defendant. The release in the Stewart settlement, Canez contends,

improperly releases the claims in the action she filed and also releases claims against Masco,

which is not a defendant in Stewart. Canez argues further that the release in Stewart is too broad

because it includes a Civil Code section 1542 waiver for any PAGA claim and applies to all

aggrieved employees. Canez states that the action she filed includes additional claims regarding

the failure to provide a second meal period to employees who worked in excess of 10 hours a

day, the failure to maintain accurate and complete records, and an unlawful rounding system.

Canez argues that she has a direct interest in the Stewart action because the proposed

settlement expressly names the action she filed and purports to release all claims included

therein. Canez contends that the Stewart settlement will impair or impede her ability to protect

her interest and will deprive aggrieved employees of additional penalties sought in the action she

filed. The broad release and a lack of a showing that the claims were fully investigated

demonstrates, Canez claims, that aggrieved employees are not adequately represented in the

Stewart action.

Milgard argues in opposition that Canez does not have the requisite interest to intervene

because a PAGA action is a law enforcement action designed to protect the public and not to

benefit private parties and therefore the State of California is the only real party in interest.

Milgard is correct. As recently explained by the California Supreme Court:

A PAGA claim is legally and conceptually different from an employee’s own suit for damages and statutory penalties. An employee suing under PAGA does so as the proxy or agent of the state’s labor law enforcement agencies. Every PAGA claim is a dispute between an employer and the state. Moreover, the civil penalties a PAGA plaintiff may recover on the state’s behalf are distinct from the statutory damages or penalties that may be available to employees suing for individual violations. Relief under PAGA is designed primarily to benefit the general public, not the party bringing the action. A PAGA representative action is therefore a type of qui tam action, conforming to all traditional criteria, except that a portion of the penalty goes not only to the citizen bringing the suit but to all

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employees affected by the Labor Code violation. The government entity on whose behalf the plaintiff files suit is always the real party in interest.

(Kim v. Reins International California, Inc. (2020) 9 Cal.5th 73, 81, emphasis in original,

quotation marks and citations omitted.)

Moreover, “[t]here is no individual component to a PAGA action because every PAGA

action is a representative action on behalf of the state. Plaintiffs may bring a PAGA claim only

as the state’s designated proxy, suing on behalf of all affected employees.” (Kim v. Reins

International California, Inc. (2020) 9 Cal.5th at p. 87, emphasis in original, quotation marks,

ellipses, and citations omitted.)

Therefore, although Canez and the other aggrieved employees are “affected” by the

settlement in Stewart, they have no protectable individual interest in the case. Both Canez and

the representative plaintiff in Stewart stand in the shoes of the State of California as

representative plaintiffs. California is the real plaintiff in both Stewart and Canez and has the

ability to intervene in either or both cases through the Labor and Workforce Development

Agency (“LWDA”).

Without any true interest in the Stewart case, Canez cannot meet the requirements for

intervention. Accordingly, the motion for leave to intervene is DENIED.

III. MOTION FOR APPROVAL OF PAGA SETTLEMENT

A. Legal Standard

A superior court must review and approve any PAGA settlement. (Lab. Code, § 2699,

subd. (l)(2).) The proposed settlement must be submitted to the LWDA at the same time it is

submitted to the court. (Ibid.)

As discussed by one court:

PAGA does not establish a clear standard for evaluating PAGA settlements. … Accordingly, certain courts have been willing to approve PAGA settlements only if (1) the statutory requirements set forth by PAGA have been satisfied, and (2) the settlement agreement is fair, reasonable, and adequate in view of PAGA’s public policy goals.

(Patel v. Nike Retail Services, Inc. (N.D. Cal. 2019) 2019 WL 2029061 at *2.)

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As part of this analysis, these courts have evaluated proposed PAGA settlements under

the relevant factors from Hanlon v. Chrysler Corp. (9th Cir. 1998) 150 F.3d 1011, 1026. (Patel

v. Nike Retail Services, Inc., supra, 2019 WL 2029061 at *2.) “Of the Hanlon factors, the

following are relevant to evaluating [a] PAGA settlement: (1) the strength of the plaintiff’s case;

(2) the risk, expense, complexity, and likely duration of further litigation; (3) the amount offered

in settlement; (4) the extent of discovery completed and the stage of the proceedings; (5) the

presence of government participation; and (6) the expertise and views of counsel.” (Ibid.)

B. Discussion

Stewart and Milgard have reached a settlement that provides for a non-reversionary fund

of $1,563,660. (Declaration of Shaun Setareh in Support of Motion for Approval of PAGA

Settlement (“Setareh Decl.”), ¶ 15(b).) This includes attorney fees of $521,220 and costs of

$10,923.27 to Stewart’s counsel only, a $10,000 incentive award to Stewart only, and settlement

administration costs of $20,000. (Id. at ¶ 15(d)-(g).) Of the estimated remaining amount of

$1,001,516.73, 75% ($751,137.54) will be allocated to the LWDA and 25% ($250,379.19) will

go to the aggrieved employees. (Id. at ¶ 15(c).)

The aggrieved employees are defined in the settlement agreement as: “Plaintiff [Stewart]

and all persons who are employed or have been employed by MILGARD MANUFACTURING,

INC., in the State of California who worked one or more pay periods between October 5, 2017

and September 4, 2019.” (Setareh Decl., ¶ 15(a).)

Stewart and Milgard contend that the settlement is fair. They state that there are

approximately 2,619 aggrieved employees and, based on data provided during mediation,

Stewart contended at that time that the total penalties are $10,873,100. Milgard disputes that

amount, and contends that the total penalties come out to $5,567,500. Stewart and Milgard then

state that the gross settlement amount of $1,563,660 is 28% of the potential maximum penalties,

apparently now agreeing that Milgard’s number is correct. If Stewart’s original number is used,

the settlement is 14% of the maximum penalties.

There are a number of problems with the proposed settlement. The settlement agreement

includes a very broad release. “Covered Claims” as defined in the settlement agreement include

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claims against Masco, which is a defendant in the Canez action but not in Stewart. (Setareh

Decl., Ex. 1 (“Settlement Agreement”), p. 1.) Stewart was not deputized by the LWDA

concerning claims against Masco. Further, “[l]awsuit” is defined to include the entire

coordinated action: i.e., both Stewart and the Canez case. (Id. at p. 3.) It is not apparent how the

parties in Stewart can release claims in a different lawsuit, especially without the participation of

the representative plaintiff in that lawsuit. Nevertheless, Stewart and Milgard argue that this

settlement should resolve all of the claims set forth in the Canez action and, at the same time,

argue that Canez has no right to intervene in the Stewart case with regard to the settlement.

Stewart and Milgard argue that the two cases have “virtually identical” claims and the

same parties. They contend therefore that claim preclusion will apply and that the resolution of

Stewart will bind aggrieved employees in Canez. This may or may not be so, but it is not an

issue to be resolved in connection with settlement approval; it is an issue more appropriately

raised by a substantive motion should the defendants in Canez believe that case can no longer be

maintained following a settlement in Stewart. Importantly, Stewart and Milgard present no

authority that such possible claim preclusion gives them the ability to settle a separate case.

The settlement also purports to release a very wide range of claims. Stewart and Milgard

insist that the release for aggrieved employees is limited to PAGA, but the language of the

release itself conflicts with that assertion. The release states that it applies to Covered Claims

and also to the following:

[A]ny and all claims, causes of action, damages, wages, benefits, expenses, penalties, interest, debts, liabilities, demands, obligations, attorneys’ fees, costs, and any other form of relief of remedy in law, equity, or whatever kind or nature that were asserted or which could have been asserted based on or related to the facts alleged in the Lawsuit including claims for penalties and damages under Labor Code § 2699[, et seq.].

(Settlement Agreement, p. 10.)

The language in the release would conceivably include not only PAGA claims, but also

any possible individual wage and hour claims of the aggrieved employees. This is far too broad

a release and it renders the settlement unreasonable and unfair because the amount of the

settlement does not take into account all of the aggrieved employees’ potential individual claims.

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For this reason, the court does not undertake to analyze the reasonableness of the

remaining terms such as attorney fees and Stewart’s bonus payment, which in any event are not

supported by record evidence.

Accordingly, the motion for approval of PAGA settlement is DENIED.

On August 21, 2020, Stewart filed a Motion for Award of Attorneys’ Fees, Enhancement

Award, and Reimbursement of Litigation Costs, with the hearing set for September 9, 2020. The

filing was only 12 court days before the hearing and therefore fails to comply with Code of Civil

Procedure section 1005, subd. (b). Since the relief sought on that motion is part of the proposed

settlement, that motion is also DENIED.

The court sets a Case Management Conference for November 25, 2020, at 2:30 p.m.






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ASYA PERELTSVAIG, individually and on behalf of all others similarly situated, Plaintiff, vs. CARTUS CORPORATION, a Delaware Corporation, Defendant.

Case No. 19CV348335 TENTATIVE RULING RE: MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT



follows:

I. INTRODUCTION

This is a putative class action and representative action arising out of various alleged

wage and hour violations. The Second Amended Class and Representative Action Complaint,

filed on July 30, 2020, sets forth the following causes of action: (1) Failure to Pay Minimum

Wage; (2) Failure to Authorize and Permit Paid Rest Breaks and Pay Premium Pay; (3) Failure to

Provide Off-Duty Meal Breaks and Pay Premium Pay; (4) Failure to Issue Itemized Wage

Statements; (5) Failure to Pay All Wages Timely During Employment and Due at Termination;

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(6) Failure to Reimburse Business-Related Expenses; (7) Unfair, Unlawful, or Fraudulent

Business Practices; and (8) Civil Penalties Pursuant to the Private Attorneys General Act

(“PAGA”).

The parties have reached a settlement. Plaintiff Asya Pereltsvaig (“Plaintiff”) moves for

preliminary approval of the settlement.

II. 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, citing Dunk, supra, 48

Cal.App.4th at p. 1801 and Officers for Justice v. Civil Service Com’n, etc. (9th Cir. 1982) 688

F.2d 615, 624.)

“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, supra, 48 Cal.App.4th at p. 1801 and Officers for Justice v. Civil Service Com’n,

etc., supra, 688 F.2d at p. 625, 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

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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, supra, 48

Cal.App.4th at p. 1802.)

III. DISCUSSION

A. Provisions of the Settlement

The case has been settled on behalf of the following class:

[A]ll individuals who entered into a Language Trainer Agreement with Cartus to provide services to customers in California during the Relevant Period and trained at least one session in California from May 31, 2015 through the Preliminary Approval Date.

([Proposed] Order Granting Preliminary Approval of Class Action Settlement, Ex. A

(“Settlement Agreement”), ¶ 2.28.)

The “Settlement Class Period” is May 31, 2015 through the preliminary approval date.

(Settlement Agreement, ¶ 2.38.) The PAGA portion of the settlement will only be distributed to

class members who provided services from April 25, 2018 to the date of preliminary approval.

(Id. at ¶ 2.19.)

According to the terms of settlement, defendant Cartus Corporation (“Defendant”) will

pay a total non-reversionary settlement amount of $300,000. (Settlement Agreement, ¶¶ 2.40,

4.1.) This amount will be increased if the actual number of class members exceeds the expected

number of 133 by more than 10%. (Id at ¶ 4.2.) The total settlement payment includes attorney

fees of $100,000, costs up to $10,000, a service award of $5,000, settlement administration costs

up to $10,000, and an allocation of $25,000 to the PAGA claim (of which 75% will be paid to

the LWDA). (Id. at ¶¶ 2.19, 2.33, 2.39, 4.5.) Funds from checks not cashed for 90 days from the

date of mailing will be distributed to cy pres beneficiary Workers’ Rights Clinic of Legal Aid at

Work. (Id. at ¶¶ 2.42, 5.5.)

B. Fairness of the Settlement

Plaintiff contends that the settlement is fair and was reached through arm’s-length

settlement negotiations. Plaintiff estimates that the maximum potential recovery is $1,141,318,

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but that Defendant’s realistic exposure is $522,314. (Declaration of Julian Hammond in Support

of Plaintiff[’s] Motion for Order Granting Preliminary Approval of Class Action Settlement,

¶ 75.) The settlement therefore represents a range of 26% to 57% of the potential recovery.

Plaintiff asserts that there are risks regarding Defendant’s arbitration agreements with

40% of the class, the difficulty of obtaining class certification, and the uncertainty of litigation

during the ongoing nationwide shutdown due to Covid.

Overall, the court finds that the settlement is fair. It provides for some recovery for each

class member and eliminates the risk and expense of further litigation.

C. Incentive Award, Fees, and Costs

Plaintiff requests an incentive award of $5,000.

The rationale for making enhancement or incentive awards to named plaintiffs is that they should be compensated for the expense or risk they have incurred in conferring a benefit on other members of the class. An incentive award is appropriate if it is necessary to induce an individual to participate in the suit. Criteria courts may consider in determining whether to make an incentive award include: 1) the risk to the class representative in commencing suit, both financial and otherwise; 2) the notoriety and personal difficulties encountered by the class representative; 3) the amount of time and effort spent by the class representative; 4) the duration of the litigation and; 5) the personal benefit (or lack thereof) enjoyed by the class representative as a result of the litigation. These “incentive awards” to class representatives must not be disproportionate to the amount of time and energy expended in pursuit of the lawsuit.

(Cellphone Termination Fee Cases (2010) 186 Cal. App. 4th 1380, 1394-1395, quotation marks,

brackets, ellipses, and citations omitted.)

Prior to the final approval hearing, the class representative shall file a declaration

detailing her participation including the amount of time spent on the case. The court will make a

determination regarding the incentive award at that time.

The court also has an independent right and responsibility to review the requested

attorney fees and only award so much as it determines reasonable. (See Garabedian v. Los

Angeles Cellular Telephone Co. (2004) 118 Cal.App.4th 123, 127-128.) Plaintiff’s counsel will

seek attorney fees of $100,000 (1/3 of the total settlement fund). Plaintiff’s counsel shall submit

lodestar information (including hourly rates and hours worked) prior to the final approval

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hearing in this matter so the court can compare the lodestar information with the requested fees.

Plaintiff’s counsel shall also submit evidence of actual, incurred costs.

D. Conditional Certification of Class

Plaintiff requests that the putative class be conditionally certified for purposes of the

settlement. 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: (1) an ascertainable class; and

(2) a well-defined community of interest among the class members. (Sav-On Drug Stores, Inc. v.

Superior Court (2004) 34 Cal.4th 319, 326.)

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. (Sav-On Drug Stores, Inc. v.

Superior Court, supra, 34 Cal.4th at p. 326.) “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 (1976) 18 Cal.3d

381, 385.)

As explained by the California Supreme Court,

The certification question is essentially a procedural one that does not ask whether an action is legally or factually meritorious. A trial court ruling on a certification motion determines 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.

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(Sav-On Drug Stores, Inc. v. Superior Court, supra, 34 Cal.4th at p. 326, internal quotation

marks, ellipses, and citations omitted.)

Plaintiff asserts that there are 133 putative class members. Class members can be

ascertained from Defendant’s records. Some common issues in this case include whether class

members were misclassified as independent contractors, whether class members were paid for all

hours worked, whether Defendant failed to provide accurate itemized wage statements, and

whether Defendant provided meal and rest breaks. No issue has been raised regarding the

typicality or adequacy of Plaintiff as class representative. In sum, the court finds that the

proposed class should be conditionally certified.

E. Class Notice

The content of a class notice is subject to court approval. “If the court has certified the

action as a class action, notice of the final approval hearing must be given to the class members

in the manner specified by the court.” (Cal. Rules of Court, rule 3.769(f).)

The notice generally complies with the requirements for class notice. (See Settlement

Agreement, Ex. 1.) It provides basic information about the settlement, including the settlement

terms, and procedures to object or request exclusion.

However, the notice states any class member who wishes to object to the settlement must

mail a letter to the settlement administrator. (Settlement Agreement, Ex. 1, p. 7.) The notice

must be changed to eliminate the requirement for written objections. While written objections

may be left in the notice as an option, the notice should also make clear that any class member,

individually or through an attorney, may appear at the final approval hearing to make an oral

objection.

Additionally, the following language shall be added to the notice:

Due to the COVID-19 pandemic, hearings are currently being conducted remotely with the assistance of a third-party service provider, CourtCall. Class members who wish to appear at the final fairness hearing should contact class counsel to arrange a telephonic appearance through CourtCall, at least three days before the hearing if possible. Any CourtCall fees for an appearance by an objecting class member will be paid by class counsel.

The amended notice shall be provided to the court for approval prior to mailing.

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IV. CONCLUSION

The motion for preliminary approval of the class action settlement is GRANTED, subject

to the modification to the class notice. The final approval hearing is set for January 13, 2021, at

1:30 p.m. The hearing will be conducted remotely as described in the notice below.






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Case No.

The Court will prepare the order.

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Documents

SUPERIOR COURT, STATE OF CALIFORNIA COUNTY …...SUPERIOR COURT, STATE OF CALIFORNIA COUNTY OF SANTA CLARA Department 3, Honorable Patricia Lucas Presiding Naomi Matautia, Courtroom