Pleading Wizard



DATE: DECEMBER 21, 2022 TIME: 1:30 P.M.

|LINE # |CASE # |CASE TITLE |RULING |

|LINE 1 |18CV328576 |Hightower v. Legends Hospitality, LLC |Matter will be called to hear from objectors, and |

| | | |then continued to 2/1/23 |

|LINE 2 |20CV367348 |Koshkalda v. Rebello's Towing Services, Inc., et al. |Motion for summary judgment/adjudication continued|

| | |(Class Action) |to 12/21/22 at 2:30pm; motion for class |

| | | |certification off calendar  |

|LINE 3 |18CV338800 |Chambers v. Crown Asset Management, LLC (Class Action)|Click on LINE 3 for Ruling |

|LINE 4 |20CV361771 |Geierman v. Grocery Delivery E-Services USA, Inc., et |Click on LINE 4 for Ruling |

| | |al. (Class Action) | |

|LINE 5 |21CV382350 |Cassidy v. Keyence Corporation of America (PAGA) |Click on LINE 5 for Ruling |

|LINE 6 |18CV338800 |Chambers v. Crown Asset Management, LLC (Class Action)|Click on LINE 3 for Ruling |

|LINE 7 |20CV367348 |Koshkalda v. Rebello's Towing Services, Inc., et al. |See LINE 2 |

| | |(Class Action) | |

SUPERIOR COURT OF CALIFORNIA

COUNTY OF SANTA CLARA

| |Case No. |

| | |

The Court will prepare the order.

SUPERIOR COURT OF CALIFORNIA

COUNTY OF SANTA CLARA

| |Case No. |

| | |

The Court will prepare the order.

SUPERIOR COURT OF CALIFORNIA

COUNTY OF SANTA CLARA

|PAMELA SHEREÉ CHAMBERS, individually and on behalf of all others similarly|Case No. 18CV338800 |

|situated, | |

| |TENTATIVE RULING RE: DISCOVERY MOTION; MOTION FOR CLASS |

|Plaintiff, |CERTIFICATION |

| | |

|vs. | |

| | |

|CROWN ASSET MANAGEMENT, LLC, a Georgia limited liability company; and DOES| |

|1 through 10, inclusive, | |

| | |

|Defendants. | |

The above-entitled action comes on for hearing before the Honorable Patricia M. Lucas on December 21, 2022, at 1:30 p.m. in Department 3. The court now issues its tentative ruling as follows:

I. INTRODUCTION

This is a putative consumer class action brought pursuant to the California Fair Debt Buying Practices Act, Civil Code sections 1788.50-1788.64 (“CFDBPA”). According to the Class Action Complaint for Statutory Damages (“Complaint”), filed on December 4, 2018, plaintiff Pamela Shereé Chambers (“Plaintiff”) seeks statutory damages against defendant Crown Asset Management, LLC (“Defendant”) arising from its routine practice of sending initial written communications in smaller than 12-point type. (Complaint, ¶ 1.) The Complaint sets forth a single cause of action under the CFDBPA.

Now before the court are two motions: (1) the motion by Defendant to compel Plaintiff to provide further responses to requests for admission, set one (“RFA”), Nos. 6 and 8, special interrogatories, set one (“SI”), Nos. 11-13, and requests for production of documents, set one (“RPD”), Nos. 11 and 17, and for an award of monetary sanctions; and (2) the motion by Plaintiff for class certification. Plaintiff opposes the discovery motion and requests an award of monetary sanctions. Defendant opposes the motion for class certification.

II. DISCOVERY MOTION

A. Legal Standard

If a party demanding a response to a request for admission deems an objection to a particular request is without merit or too general, that party may move for an order compelling a further response. (Code Civ. Proc., § 2033.290, subd. (a).) If a timely motion to compel a further response to a request for admission has been filed, the burden is on the responding party to justify any objections or failure to fully answer. (Fairmont Ins. Co. v. Superior Court (2000) 22 Cal.4th 245, 255 (Fairmont).)

If a party demanding a response to an interrogatory deems that an objection to an interrogatory is without merit or too general, that party may move for an order compelling a further response. (Code Civ. Proc., § 2030.300, subd. (a)(1)–(3).) If a timely motion to compel a further response to an interrogatory has been filed, the burden is on the responding party to justify any objection to the discovery request. (Fairmont, supra, 22 Cal.4th at p. 255; Coy v. Superior Court (Wolcher) (1962) 58 Cal.2d 210, 220-221.)

If a party demanding a response to a request for production of documents deems that an objection in the response is without merit or too general, that party may move for an order compelling a further response. (See Code Civ. Proc., § 2031.310, subd. (a).) On a motion to compel a further response to a request for production of documents, it is the moving party’s burden to demonstrate good cause for the discovery sought. (Kirkland v. Superior Court (2002) 95 Cal.App.4th 92, 98 (Kirkland).) Once good cause has been shown, the burden shifts to the responding party to justify any objections. (Ibid.)

B. The RFA, SI and RPD

Defendant argues that the court should compel Plaintiff to provide further responses to RFA Nos. 6 and 8, SI Nos. 11-13, and RPD Nos. 11 and 17 because Plaintiff’s objections lack merit and Plaintiff’s substantive responses are incomplete and evasive.

In opposition, Plaintiff advises that after the filing of this discovery motion, she served Defendant with further responses to the discovery requests at issue. Plaintiff provides a copy of the further responses with her opposition. (Declaration of Matthew C. Salmonsen in Opposition to Crown Asset Management, LLC’s Motion to Compel Further Discovery Responses, ¶ 3 & Exs. A-C.) Plaintiff contends that while her earlier responses to the discovery requests were code-compliant, her further responses render the motion moot.

In reply, Defendant states that it no longer seeks an order compelling further responses to RFA Nos. 6 and 8 and SI No. 12. However, Defendant argues that the motion is not moot as to the remaining discovery requests; Plaintiff’s further responses to those requests are deficient; and the court should therefore compel further responses to SI Nos. 11 and 13 and RPD Nos. 11 and 17.

It is undisputed that Plaintiff served further responses to the discovery requests after the filing of this motion. Parties sometimes cite Sinaiko Healthcare Consulting, Inc. v. Pacific Healthcare Consultants (2007) 148 Cal.App.4th 390 (Sinaiko), as Defendant did here, in support of the proposition that service of further responses after the filing of a motion to compel further responses does render the motion moot and the court has the discretion to rule on the motion or not. (Id. at pp. 405 & 409.) The Sinaiko court stated:

The trial court might compel responses without objection if it finds no legally valid responses have been provided to one or more interrogatories; it might deny the motion to compel responses as essentially unnecessary, in whole or in part, and just impose sanctions; it might treat the motion as one under section 2030.300 and either determine that further answers are required, or order the propounding party to “meet and confer” (§ 2030.300, subd. (b)) and file a separate statement (Cal. Rules of Court, rule 3.1020(a)(2), (c)); or it might take the motion off calendar, thereby requiring the propounding party to file a motion under section 2030.300.

(Id. at p. 409.) However, Sinaiko involved a motion to compel initial responses to interrogatories as to which there is no meet-and-confer requirement, rather than a motion to compel further responses such as the motion at issue here. A motion to compel further responses to discovery requests requires a meet-and-confer regarding the responses which are the subject of the motion. (See Code Civ. Proc., §§ 2033.290, subd. (b), 2030.300, subd. (b), & 2031.310, subd. (b); see also Clement v. Alegre (2009) 177 Cal.App.4th 1277, 1293-1294.) As the parties have not yet engaged in sufficient meet-and-confer efforts regarding the further responses served after the filing of the motion, the court declines Defendant’s invitation to consider the sufficiency of those further responses at this time.

Accordingly, the discovery motion is deemed MOOT to the extent Defendant seeks an order compelling Plaintiff to provide further responses to RFA Nos. 6 and 8, SI Nos. 11-13, and RPD Nos. 11 and 17. The court will still address the issue of monetary sanctions below. (Cal Rules of Court, Rule 3.1348(a) [“The court may award sanctions under the Discovery Act in favor of a party who files a motion to compel discovery, even though no opposition to the motion was filed, or opposition to the motion was withdrawn, or the requested discovery was provided to the moving party after the motion was filed.”].

C. Requests for Monetary Sanctions

1. Defendant’s Request

Defendant seeks an award of monetary sanctions against Plaintiff in the amount of $8,003.50 pursuant to Code of Civil Procedure sections 2030.300, subdivision (d), 2033.290, subdivision (d), and 2031.310, subdivision (h).

Those statutes provide that the court shall impose a monetary sanction against any party, person, or attorney who unsuccessfully makes or opposes a motion to compel a further response to requests for admission, interrogatories, or requests for production of documents, unless it finds that the one subject to the sanction acted with substantial justification or that other circumstances make the imposition of the sanction unjust. (Code Civ. Proc., §§ 2030.300, subd. (d), 2033.290, subd. (d), & 2031.310, subd. (h).)

//

Here, the filing of this motion resulted in Plaintiff providing further responses to the discovery requests at issue. Furthermore, the court finds that Plaintiff did not act with substantial justification and there are no other circumstances that make the imposition of sanctions unjust. Consequently, Defendant is entitled to an award of monetary sanctions.

The declaration submitted by Defendant’s counsel states that three lawyers spent approximately 15.6 hours “working on issues relating to the informal resolution of this discovery dispute” at their respective hourly rates. (Declaration of Tomio B. Narita in Support of Motion to Compel Further Responses […], ¶ 9.) No information is provided as to who did what, but the major portion of the time was spent by the most senior lawyer, according to billing rate. Generally, higher billing rates are justified by greater efficiency and the principle that the work will be done by the competent person with the lowest billing rate. The declaration does not explain, and it is not apparent from the papers, why it was reasonably necessary and efficient to have this work done by three lawyers. For these reasons, the court discounts the 4.4 hours at $485, leaving 11.2 hours as a reasonable effort given the work product.

Accordingly, Defendant’s request for an award of monetary sanctions is GRANTED in the amount of $5,869.50 payable by Plaintiff to Defendant within ten days of this order.

2. Plaintiff’s Request

Plaintiff requests an award of monetary sanctions in the amount of $5,000 against Defendant in connection with her opposition.

Plaintiff did not prevail on the motion and her opposition to the motion was without substantial justification. Therefore, she is not entitled to an award of monetary sanctions.

Accordingly, Plaintiff’s request for an award of monetary sanctions is DENIED.

II. MOTION FOR CLASS CERTIFICATION

A. Legal Standard

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.

(Sav-On Drug Stores, Inc. v. Superior Court (2004) 34 Cal.4th 319, 326 (Sav-On), internal quotation marks, ellipses, and citations omitted.)

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, supra, 34 Cal.4th at p. 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, 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.)

B. Discussion

1. 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.) A class is ascertainable “when it is defined ‘in terms of objective characteristics and common transactional facts’ that make ‘the ultimate identification of class members possible when that identification becomes necessary.’” (Noel v. Thrifty Payless, Inc. (2019) 7 Cal.5th 955, 980 (Noel).)

Plaintiff seeks certification of the following class:

All persons with addresses in California to whom McCarthy, Burgess & Wolff, Inc. [(“MB&W”)], sent, or causes to be sent, an initial written communication in the form of Exhibit “1” on behalf of [Defendant] in an attempt to collect a charged-off consumer debt originally owed to Synchrony Bank, which was sold or resold to [Defendant] on or after January 1, 2014, which were not returned as undeliverable by the U.S. Post Office during the period December 4, 2017, through the date of class certification.

(Notice of Motion and Plaintiff’s Motion for Class Certification, pp. 1:26-2:5.) Plaintiff argues that the class is ascertainable because class members can be identified from Defendant’s records. Plaintiff states that Defendant provided a discovery response advising that the putative class is estimated to be 4,517 individuals based on Defendant’s review of records. (Evidence Offered in Support of Plaintiff’s Motion for Class Certification (“P’s Evid.”), Ex. B, p. 23; Declaration of Fred W. Schwinn in Support of Plaintiff’s Motion for Class Certification (“Schwinn Dec.”), ¶ 12.) Plaintiff concludes that the class is, therefore, ascertainable and numerous.

Defendant argues that Plaintiff has not established that the class is sufficiently numerous or ascertainable. Defendant states that its interrogatory response only identifies the number of individuals in California to whom MB&W sent, or caused to be sent, letters in the form of Exhibit 1 to the complaint during the proposed class period. Defendant asserts that this is not sufficient given the class definition. Defendant points out that to be a member of the class an individual must have incurred a “consumer credit transaction” as defined in the CFDBPA, i.e., an obligation acquired on credit and incurred primarily for personal, family, or household use. (See Civ. Code, §§ 1788.2, subds., (e) & (f), 1788.50, subd. (a)(2), 1788.50, subd. (c).) Defendant maintains that its discovery response does not establish that all of the letters were sent in an attempt to collect a charged-off consumer debt. Defendant maintains that the court, and the parties, cannot determine whether a debt was incurred primarily for personal, family, or household reasons without receiving evidence from each individual regarding the purpose for which they incurred the obligation. Defendant states that Plaintiff does not identify any common method by which the court can make this determination and Defendant does not have sufficient information in its business records to make this determination. Defendant contends that Plaintiff, therefore, has not carried her burden as to show the class is sufficiently numerous and ascertainable.

“[T]he need to determine the consumer nature of a debt does not automatically preclude class certification. Instead, courts should examine the general nature of the debts and the ease of separating consumer from business debts finding class certification appropriate in a variety of circumstances.” (Berrios v. Sprint Corp. (E.D.N.Y. Mar. 16, 1998, CV-97-0081 (CPS)) 1998 U.S.Dist.LEXIS 6579, at *29 [discussing motions for class certification for analogous Fair Debt Collection Practices Act (“FDCPA”) claims].)

Here, the court finds that Plaintiff’s evidence is sufficient to satisfy her burden to establish numerosity and ascertainability for class certification purposes. Plaintiff has shown that there are approximately 4,517 individuals to whom MB&W sent, or caused to be sent, letters in the form of Exhibit 1 to the complaint during the proposed class period. (P’s Evid., Ex. B, p. 23; Schwinn Dec., ¶ 12.) The letters in the form of Exhibit 1 state:

“This communication is from a debt collector.”;

“This is an attempt to collect a debt.”;

“PLEASE SEE REVERSE FOR IMPORTANT CONSUMER RIGHTS INFORMATION.”;

“You may request records showing the following: (1) that Crown Asset Management, LLC has the right to seek collection of the debt; (2) the debt balance, including an explanation of any interest charges and additional fees; (3) the date of default or the date of the last payment; (4) the name of the charge-off creditor and the account number associated with the debt; (5) the name and last known address of the debtor as it appeared in the charge-off creditor’s or debt buyer’s records prior to the sale of the debt, as appropriate; and (6) the names of all persons or entities that have purchased the debt. You may also request from us a copy of the contract or other document evidencing your agreement to the debt. A request for these records may be addressed to: Crown Asset Management, LLC c/o McCarthy, Burgess & Wolff, Inc. 26000 Cannon Road, Cleveland, OH 44146.”;

“We are required to provide the following information under state law for the states indicated.”; and

“CALIFORNIA: The state Rosenthal Fair Debt Collection Practices Act and the federal Fair Debt Collection Practices Act require that, except under unusual circumstances, collectors may not contact you before Sam or after 9pm. They may not harass you by using threats of violence or arrest or by using obscene language. Collectors may not use false or misleading statements or call you at work if they know or have reason to know that you may not receive personal calls at work. For the most part, collectors may not tell another person, other than your attorney or spouse, about your debt. Collectors may contact another person to confirm your location or enforce a judgment. For more information about debt collection activities, you may contact the Federal Trade Commission at 1-877-FTC-HELP or. Cal. Civ. Code § 1812.700 [¶] Nonprofit credit counseling services may be available in the area. [¶] As required by law, you are hereby notified that a negative credit report reflecting on your credit record may be submitted to a credit reporting agency if you fail to fulfill the terms of your credit obligations.”

(Complaint, Ex. 1.) In sum, the letters state that MB&W is a debt collector, the letters are attempts to collect a debt, the letters provide consumer rights information, and MB&W is required under California law to provide the consumer rights information to the recipients of the letters.

Based on the statements in the letters, a reasonable inference can be made that MB&W made a determination that the debts were consumer in nature and it was, therefore, required to provide certain information to the debtors. (See Civ. Code, § 1788.52, subd. (d) [providing that under the CFDBPA, debt collectors are required to provide notice to debtors of certain information, all of which is contained in Exhibit 1 to the Complaint].) Defendant has not provided any information about the process MB&W used to identify debtors to whom it should send letters in the form of Exhibit 1 or any explanation for why MB&W would have sent letters to debtors in the form of Exhibit 1 if the underlying debts were not actually consumer in nature. Consequently, the letters themselves are evidence that the underlying obligations are consumer credit transactions as defined in the CFDBPA. (See Reese v. Ellis, Painter, Ratterree & Adams LLP (11th Cir. 2012) 678 F.3d 1211, 1217 [relying on statements in letters themselves to determine whether the defendant was a debt collector and the letters were attempts to collect a debt]; see also Wells v. McDonough (N.D.Ill. 1999) 188 F.R.D. 277, 278-279 [looking at the checks at issue and determining that the checks themselves constituted prima facie evidence of a consumer debt].) While the issuance of the letters in the form of Exhibit 1 does not indisputably prove the underlying obligations constitute consumer debts and there may be situations where an individual incurred credit card debt for other purposes, the letters nevertheless are at least prima facie evidence that the underlying debts were incurred for personal, family, or household purposes.

The cases cited by Defendant for the proposition that the statements in the letters themselves are insufficient to establish the nature of the underlying debts are distinguishable. Unlike the statements in Exhibit 1 to the Complaint, the statements at issue in Fonteno v. Wells Fargo Bank, N.A. (2014) 228 Cal.App.4th 1358, 1375-1377 were equivocal. Second, unlike the plaintiff in Slenk v. Transworld Sys. (9th Cir. 2001) 236 F.3d 1072, 1076, Plaintiff is not arguing that the statements in the letters somehow transformed the nature of the underlying debts; rather, Plaintiff simply asserts that the letters are prima facie evidence of the nature of the obligations.

Next, Defendant’s contention that it cannot determine the nature of the debts from its records is unsubstantiated. In support of its contention, Defendant cites to the Declaration of Jessica Kagansky in Support of Defendant’s Opposition for Class Certification. But no such declaration was filed with the court. Additionally, the proof of service filed with Defendant’s opposition papers does not reflect that such a declaration was served on Plaintiff.

Moreover, Plaintiff cites persuasive case law which provides that certification should not be denied due to a defendant’s own failure to keep adequate records regarding the nature of the debt. (See e.g., Tourgeman v. Collins Fin. Servs. (S.D.Cal. Apr. 17, 2012, No. 08cv1392-CAB(NLS)) 2012 U.S.Dist.LEXIS 54036, at *24 [“Nor is the Court persuaded by Defendants’ arguments that Plaintiff cannot demonstrate numerosity as to which of the class members purchased the computer for consumer as opposed to business purposes. The Court finds that Plaintiff’s evidence that the loan agreement is itself entitled a ‘consumer credit contract’ is sufficient evidence to satisfy his burden to establish numerosity for class certification purposes. … Indeed, the Court will not deny class certification because of defendants’ own failure to keep adequate records regarding the nature of the debt. See Macarz v. Transworld Systems, Inc., 193 F.R.D. 46, 57 (D. Conn. 2000) (certifying the class, finding the Congressional purpose behind the FDCPA statute would be thwarted if debt collectors were able to avoid class action liability due to their own inadequate record-keeping, and recognizing that any disputes regarding whether a particular class member’s debt is commercial or consumer can be remedied through the claims process.)”].)

Lastly, several cases provide that to the extent the determination of the nature of the debts requires individualized inquiry, the task would be manageable and could be resolved by asking class members the question of whether the individual’s debt was incurred primarily for personal, family, or household purposes. (See e.g., Butto v. Collecto Inc. (E.D.N.Y. 2013) 290 F.R.D. 372, 382-383 (Butto); Khoday v. Symantec Corp. (D.Minn. Mar. 31, 2014, No. 11-180 (JRT/TNL)) 2014 U.S.Dist.LEXIS 43315, at *94-95 (Khoday).)

For all of these reasons, Plaintiff has met her burden to show that the class is ascertainable and numerous.

2. Community of Interest

a. Predominant Questions of Law or Fact

Regarding the predominance of questions of law or fact:

The ultimate question in every case of this type 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 (2003) 29 Cal.4th 1096, 1104-1105, quoting Collins v. Rocha (1972) 7 Cal.3d 232, 238.) The answer hinges on “whether the theory of recovery advanced by the proponents of certification is, as an analytical matter, likely to prove amenable to class treatment.” (Sav-On, supra, 34 Cal.4th at p. 327.)

Plaintiff argues that common legal and factual issues predominate because the class members’ claim for violation of the CFDBPA arises from Defendant’s practice of sending initial communications to debtors in the form of Exhibit 1. Plaintiff states that Defendant sent nearly identical letters to every member of the proposed class. The letters allegedly violated the CFDBPA in the same way, i.e., by providing the required notice in smaller than 12-point type. Plaintiff concludes that the case, therefore, raises common issues of fact and law.

In opposition, Defendant raises the same arguments that it made in connection with the numerosity and ascertainability factors. Namely, Defendant maintains that the court, and the parties, cannot determine whether a debt was incurred primarily for personal, family, or household reasons without receiving evidence from each individual regarding the purpose for which they incurred the obligation. Defendant contends that there is no common method by which the court can make this determination as Defendant does not have sufficient information in its business records to make this determination.

For the reasons explained above, Defendant’s arguments lack merit. As Plaintiff persuasively argues, the claim will turn on common issues regarding the form letters sent to the class. The factual and legal issues raised by the claim are susceptible to class-wide proof. Furthermore, to the extent individualized issues exist regarding the nature of the debts, the issues are manageable and can be resolved by asking class members the question of whether the individual’s debt was incurred primarily for personal, family, or household purposes. (See e.g., Butto, supra, 290 F.R.D. at pp. 382-383; Khoday, supra, 2014 U.S.Dist.LEXIS 43315, at *94-95.) Thus, the court finds that common questions of law and fact predominate over individual issues.

b. Typicality

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.)

Defendant asserts that Plaintiff is not typical because she cannot prove that Defendant sought to collect a consumer credit transaction from her. Defendant states that Plaintiff testified at deposition that she could not remember what she used her account for.

Defendant’s assertion is not well taken. The deposition testimony cited by Defendant shows that Plaintiff could not recall the nature of some specific transactions reflected in her account. (Declaration of Tomio B. Narita in Support of Defendant’s Opposition to Plaintiff’s Motion for Class Certification (“Narita Dec.”), Ex. A, pp. 54-63.) However, Plaintiff submits a sworn declaration that she generally used the credit card to purchase personal items, including clothing, groceries, and gasoline. (Declaration of Pamela Sheree Chambers in Support of Plaintiff’s Motion for Class Certification (“Chambers Dec.”), ¶ 4.) This is sufficient, for class certification purposes, to demonstrate that Plaintiff’s claim is typical of the class.

Defendant also contends that Plaintiff is atypical because she is subject to a unique defense. Defendant states that after Plaintiff received the letter at issue, she met with her attorneys at the Consumer Law Center and gave them the letter (and this was her common practice when she received such letters). (Narita Dec., Ex. A, p. 88, Ex. B, pp. 152-155 & 160-163.) Plaintiff’s counsel then responded to and disputed the letters on Plaintiff’s behalf. (Ibid.) Defendant states that it will argue at trial that any collector’s communications with Plaintiff are automatically filtered through the Consumer Law Center and, therefore, are not actionable under Guerrero v. RJM Acquisitions LLC (9th Cir. 2007) 499 F.3d 926 (Guerrero).

However, Guerrero does not appear to be applicable here. The Guerrero court determined that the purposes of the FDCPA “are not served by applying its strictures to communications sent only to a debtor’s attorney.” (Guerrero, supra, 499 F.3d at p. 938.) The court held that “when the debt collector ceases contact with the debtor, and instead communicates exclusively with an attorney hired to represent the debtor in the matter, the Act’s strictures no longer apply to those communications.” (Id. at p. 939.) As Plaintiff persuasively argues, Guerrero is readily distinguishable from this case because the evidence shows that the communication at issue, i.e., the letter in the form of Exhibit 1, was sent directly to Plaintiff, not to her counsel. Counsel only received the letter after it was brought to them by Plaintiff. Thus, unlike in Guerrero, Plaintiff’s counsel did not serve as an intermediary between the debt collector and the consumer. For these reasons, it does not appear that the asserted defense will be a major focus of the litigation.

c. Adequacy of Representation

“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 fact that a class representative does not personally incur all of the damages suffered by each different class member does not necessarily preclude the representative from providing adequate representation to the class. (Wershba v. Apple Computer, Inc. (2001) 91 Cal. App. 4th 224, 238.)

Plaintiff generally shares the interests of the class and introduces evidence that class counsel is well qualified to conduct this litigation, which Defendant does not dispute. (Schwinn Dec., ¶¶ 3-11.) Thus, the court finds that Plaintiff has met the requirement concerning adequacy of representation.

Defendant argues that Plaintiff is not an adequate class representative because she has ceded all control of the case to her counsel. In addition to Plaintiff’s testimony regarding her general practice of providing collection letters to her counsel, Defendant points to deposition testimony from Plaintiff that she could not recall reading the complaint before it was mailed, it was her attorney’s idea to file the lawsuit, and she had no idea the type size in the letter was correct. Defendant also suggests that Plaintiff is an inadequate class representative due to memory problems, citing deposition testimony that she could not recall all of the medications she had taken; she was not aware whether the medications impacted her ability to testify; she has trouble remembering things sometimes; and she could not remembers details regarding other lawsuits in which she was a party.

The evidence cited by Defendant does not convince the court that Plaintiff is an inadequate class representative. Plaintiff has submitted a sworn declaration establishing that she understands the facts giving rise to her lawsuit and her responsibilities as a class representative. (Chambers Dec., ¶¶ 3-12.) In addition, Plaintiff’s deposition testimony demonstrates that she understands the nature of the lawsuit and her claims. (Narita Dec., Ex. A, pp. 14-16.) The fact that Plaintiff generally relies on her counsel to advise her as to legal issues and the best course of action to take with respect to her lawsuits, cannot recall specific details of other cases, has occasional issues recalling the names of particular medications she takes, and experiences typical lapses in memory (like forgetting an item that she wants from a store if she does not write it down) does not show that she is inadequate.

3. Substantial Benefits of Class Litigation

“[A] class action should not be certified unless substantial benefits accrue both to litigants and the courts ….” (Basurco v. 21st Century Insurance Co. (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.)

Defendant argues that there are no substantial benefits to proceeding as a class action because numerous individual issues would necessarily arise in resolving Plaintiff’s claims.

Despite Defendant’s assertion otherwise, there are several common factual and legal issues to be decided in connection class. It would be inefficient to hear and decide the same issues separately and repeatedly for each class member in this class. Consequently, the court finds that a class action would be superior in this case.

4. Conclusion

Accordingly, the motion for class certification is GRANTED.

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

NOTICE: Remote appearances are mandatory for complex civil matters in Department 3. (See Public Notice – June 10, 2022, Remote Appearance – Downtown and Historic Courthouses, available at .) Effective August 15, 2022, Department 3 will be using TEAMS for all remote hearings, unless otherwise ordered by the court. Instructions for appearing remotely and the necessary TEAMS link for Department 3 can be found at .

State and local rules prohibit recording of court proceedings without a court order. These rules apply while in court and also while participating in a telephonic hearing.

The court does not provide court reporters for proceedings in the complex civil litigation departments. Any party wishing to retain a court reporter to report a hearing may do so in compliance with this court’s October 13, 2020 Policy Regarding Privately Retained Court Reporters. The court reporter may participate remotely and need not be present in the courtroom.

SUPERIOR COURT OF CALIFORNIA

COUNTY OF SANTA CLARA

|JENNIFER GEIERMAN, on behalf of herself, and all others similarly |Case No. 20CV361771 |

|situated, | |

| |TENTATIVE RULING RE: MOTION FOR PRELIMINARY APPROVAL OF CLASS AND|

|Plaintiff, |REPRESENTATIVE ACTION SETTLEMENT |

| | |

|vs. | |

| | |

|GROCERY DELIVERY E-SERVICES USA, INC., an Delaware Corporation; INSPERITY | |

|BUSINESS SERVICES, L.P., a Texas Limited Partnership; and DOES 1 through | |

|50, inclusive, | |

| | |

|Defendants. | |

The above-entitled action comes on for hearing before the Honorable Patricia M. Lucas on December 21, 2022, at 1:30 p.m. in Department 3. The court now issues its tentative ruling as follows:

I. INTRODUCTION

This is a class and representative action arising out of alleged violations of the Fair Credit Reporting Act (“FCRA”) and the Labor Code. Plaintiff Jennifer Geierman (“Plaintiff”) filed the operative First Amended Complaint (“FAC”) against defendants Grocery Delivery E-Services USA, Inc. and Insperity Business Services, L.P. (collectively, “Defendants”) on March 18, 2020. The FAC sets forth the following causes of action: (1) Violation of 15 U.S.C. §§ 1681b(b)(2)(A) (FCRA); (2) Violation of 15 U.S.C. §§ 1681d(a)(1) and 1681g(c) (FCRA); (3) Failure to Provide Meal Periods (Lab. Code §§ 204, 223, 226.7, 512 and 1198); (4) Failure to Provide Rest Periods (Lab. Code §§ 204, 223, 226.7 and 1198); (5) Failure to Pay Hourly Wages (Lab. Code §§ 223, 510, 1194, 1194.2, 1197, 1997.1 and 1198); (6) Failure to Indemnify (Lab. Code § 2802); (7) Failure to Provide Accurate Written Wage Statements (Lab. Code § 226(a)); (8) Failure to Timely Pay All Final Wages (Lab. Code §§ 201, 202 and 203); (9) Unfair Competition (Bus. & Prof. Code §§ 17200 et seq.); and (10) Civil Penalties (Lab. Code §§ 2698 et seq.).

Plaintiff states that the parties have reached a settlement and she now moves for an order preliminarily approving the settlement. The motion is unopposed.

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 (Wershba), citing Dunk v. Ford Motor Co. (1996) 48 Cal.App.4th 1794 (Dunk).)

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, 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 (Officers).)

“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, 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, 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 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, supra, 91 Cal.App.4th at p. 245, citing Dunk, supra, 48 Cal.App.4th at p. 1802.)

III. DISCUSSION

The Joint Stipulation of Class Action Settlement and Release (“Settlement Agreement”) is entered into between Plaintiff, on behalf of herself and all others similarly situated, and “Defendants Grocery Delivery E-Services USA, Inc. and Insperity PEO Services, L.P.,” who are defined collectively as “Defendants” in the Settlement Agreement. (Declaration of Jose Maria D. Patino Jr. in Support of Plaintiff’s Motion for Preliminary Approval (“Patino Dec.”), ¶ 4 & Ex. 1 (“Settlement Agreement”), pp. 3:1-5 & 4:4-9, & ¶ VI.1.43.)

The Settlement Agreement provides that the case has been settled on behalf of the following class:

1) any individual who applied for employment with Defendant Grocery Delivery E-Service USA, Inc. and had a background check performed in connection with their employment during the FCRA Class Period (“FCRA Class”) or (2) any individual who worked for Defendant Grocery Delivery E-Service USA, Inc. in California as a Brand Ambassador during the Hourly Employee Class Period (“Brand Ambassador Class”) or (3) non-exempt hourly employees who worked [for] Defendant Grocery Delivery E-Service USA, Inc. in California and who signed arbitration agreements during the Hourly Employee Class Period (“Hourly Employee Class”).

(Settlement Agreement, ¶ VI.1.7.) The “FCRA Class Period” means January 13, 2015 through October 29, 2020. (Settlement Agreement, ¶ VI.1.11.) The “Hourly Employee Class Period” means January 13, 2016 through the date of preliminary approval. (Settlement Agreement, ¶ VI.1.12.)

The class also includes a subset of “Aggrieved Employees” who are defined as “any person who was employed by Defendant Grocery Delivery E-Service USA and [against] whom one or more of the alleged labor violations was committed from January 14, 2019 through the Release Date, and shall specifically include any aggrieved hourly-paid or non-exempt employees who worked for Defendant in California during this period.” (Settlement Agreement, ¶ VI.1.2.) The term “Release Date” is not defined in the Settlement Agreement. The “PAGA Period” is defined in the Settlement Agreement as January 13, 2019 through the date of preliminary approval. (Settlement Agreement, ¶ VI.1.35.)

According to the terms of Settlement Agreement, Grocery Delivery E-Services USA, Inc. and Insperity PEO Services, L.P will pay a non-revisionary gross settlement amount of $945,391.45. (Settlement Agreement, ¶¶ VI.1.19, VI.2.1.1.) The gross settlement amount includes attorney fees up to $315,130.48 (1/3 of the gross settlement amount), litigation costs of up to $22,000, settlement administration costs not to exceed $40,000, and a service award to Plaintiff of $7,500. (Settlement Agreement, ¶ VI.1.19.) The Settlement Agreement also states that the gross settlement amount includes “the California Labor Workforce and Development Agency PAGA Penalties in the sum of $10,000.” (Settlement Agreement, ¶ VI.1.19.) The Settlement Agreement elsewhere provides that “PAGA Penalties” shall be paid in the total amount of $10,000 and the LWDA shall only receive 75 percent of the PAGA Penalties. (Settlement Agreement, ¶¶ VI.1.9, VI.1.25, VI.1.34) Some provisions of the Settlement Agreement provide that the remaining 25 percent of the PAGA Penalties shall become part of the “Class Member Payout Fund” (i.e., the net settlement amount) that is to be paid to all participating class members. (Settlement Agreement, ¶¶ VI.1.9, VI.1.20, VI.2.1.4, VI.2.1.6.) Other provisions indicate that the remaining 25 percent of the PAGA Penalties are to be paid only to “Aggrieved Employees who have not previously released PAGA claims.” (Settlement Agreement, ¶¶ VI.1.34.)

The Settlement Agreement originally provided that checks remaining uncashed more than 180 days after mailing will be void and the funds from those checks will be sent to the Controller of the State of California to be held pursuant to the Unclaimed Property Law. (Settlement Agreement, ¶¶ VI.3.2.8.)

Plaintiff’s counsel declares that the parties subsequently agreed to modify the Settlement Agreement to designate a new cy pres recipient. (Patino Dec., ¶ 5.) The Amendment to Joint Stipulation of Class Action Settlement and Release (“Amendment”) is entered into between Plaintiff and “Defendants Grocery Delivery E-Services USA, Inc. and Insperity Business Services, L.P.” (Patino Dec., Ex. 2, p. 1:1-6.) The Amendment identifies the new cy pres as White Pony Express and represents that White Pony Express is a non-profit child advocacy program. (Id. at p. 1:14-23.) The Amendment is not signed by the parties, only by counsel for the parties. As is relevant here, the Amendment is signed by counsel for Insperity PEO Services, L.P., not by counsel for Insperity Business Services, L.P. (Id. at p. 2:15-16.)

In exchange for the settlement, class members agree to release Grocery Delivery E-Services USA, Inc. and Insperity PEO Services, L.P, and related entities and persons, from:

claims that were or could have been brought in this Action relating to and/or arising out of the procurement of, use of, disclosure of intent to procure, or authorization to procure or use a consumer report, investigative consumer report, credit check, background check, criminal history report, reference check, or similar report for violations of the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. §§ 1681 et seq. that accrued during the FCRA Class Period; wage and hour claims that were brought in this Action, including but not limited to allegations that Defendants misclassified hourly non-exempt employees as exempt, failed to provide employees with lawful meal periods, failed to provide employees with lawful rest periods, failed to pay premium wages when non-exempt employees were not provided with lawful meal and/or rest periods, failed to pay minimum and/or overtime wages, failed to reimburse employees for all necessary business expenses in violation of the Labor Code, including but not limited to sections, 201, 202, 204, 223, 226.7, 510, 512, 1194, 1194.2, 1197, 1197.1, 1198, 2802 and Business and Professions Code section 17200 et seq.; for derivative claims for inaccurate wage statements and waiting time penalties under Labor Code sections 203 and 226, that accrued during the Hourly Employee Class Period, and civil penalties under the Labor Code Private attorneys General Act (Labor Code section §§2698 et seq.), that accrued during the applicable Period.

(Settlement Agreement, ¶¶ VI.1.5, VI.1.40.)

Upon review, the court concludes that the Settlement Agreement and Amendment suffer from several deficiencies.

As an initial matter, there are discrepancies regarding the identity of the Insperity entity that is settling this action. The Settlement Agreement states that it is entered into by Insperity PEO Services, L.P., which appears to be different from the Insperity entity that is named as a defendant in the FAC: Insperity Business Services, L.P. There is nothing in the moving papers or Settlement Agreement explaining this discrepancy. Next, the Amendment is entered into by Insperity Business Services, L.P., but then is signed by counsel for Insperity PEO Services, L.P. There is nothing in the moving papers or the Amendment explaining this discrepancy. The parties must amend their agreement to clarify the identity of the Insperity entity that is settling this action.

Next, given the definition of Aggrieved Employees in the Settlement Agreement, it is not clear to the court how the parties will identify employees that are Aggrieved Employees. Aggrieved Employees are defined as “any person who was employed by Defendant Grocery Delivery E-Service USA and [against] whom one or more of the alleged labor violations was committed from January 14, 2019 through the Release Date, and shall specifically include any aggrieved hourly-paid or non-exempt employees who worked for Defendant in California during this period.” (Settlement Agreement, ¶ VI.1.2, italics added.) Plaintiff does not explain how the parties will determine that one or more of the alleged labor violations were committed against certain employees such that they can determine the identities of the Aggrieved Employees. Moreover, as the term “Release Date” is not defined, the end date of the relevant time period is uncertain. Finally, the January 14, 2019 start date in the definition of Aggrieved Employees does not match the start date of the PAGA Period, which is January 13, 2019. (Settlement Agreement, ¶ VI.1.35.) The parties must amend their agreement to clarify the definition of Aggrieved Employees.

Also with respect to Aggrieved Employees, the Settlement Agreement provides that 25 percent of the PAGA Penalties are to be paid only to “Aggrieved Employees who have not previously released PAGA claims.” (Settlement Agreement, ¶¶ VI.1.34.) However, Plaintiff does not provide the court with any information about Aggrieved Employees who previously released PAGA claims. The court cannot determine the identity or number of those employees, whether the PAGA claims previously released by those employees encompassed the PAGA claim at issue in this action, or whether the employees received any compensation for releasing their claims. The parties must provide the court with sufficient information for the court to determine whether it is fair and reasonable for the settlement to exclude Aggrieved Employees who previously released PAGA claims.

Furthermore, some of the settlement terms are so unclear and contradictory that it is not possible to determine the correct net settlement amount and the amounts to be paid to class members and Aggrieved Employees. First, some provisions of the Settlement Agreement erroneously state that PAGA Penalties in the amount of $10,000 are to be paid to the LWDA and suggest that the gross settlement amount does not include PAGA Penalties to be paid to Aggrieved Employees. (Settlement Agreement, ¶ VI.1.19.) Second, as noted above, some provisions of the Settlement Agreement indicate that 25 percent of the PAGA Penalties are to be paid only to “Aggrieved Employees who have not previously released PAGA claims.” (Settlement Agreement, ¶¶ VI.1.34.) However, other provisions in the Settlement Agreement state that the portion of the PAGA Penalties intended for Aggrieved Employees will become part of the “Class Member Payout Fund” (i.e., the net settlement amount) that is distributed to all participating class members. (Settlement Agreement, ¶¶ VI.1.9, VI.1.19, VI.1.20, VI.2.1.4, VI.2.1.6.) Thus, each and every class member would receive a share of the PAGA allocation. This would be unfair as class members who are not also Aggrieved Employees are not entitled to any portion of the PAGA allocation. The parties must modify their agreement to clarify which categories of funds comprise the gross settlement amount and net settlement amount, and clearly provide for a separate PAGA payment to be made to Aggrieved Employees.

Moreover, the release of claims is overbroad. The release provides that class members will release “claims that were or could have been brought in this Action relating to and/or arising out of the procurement of, use of, disclosure of intent to procure, or authorization to procure or use a consumer report, investigative consumer report, credit check, background check, criminal history report, reference check, or similar report for violations of the Fair Credit Reporting Act (‘FCRA’), 15 U.S.C. §§ 1681 et seq. that accrued during the FCRA Class Period.” (Settlement Agreement, ¶¶ VI.1.5, VI.1.40.) This portion of the release is not adequately tethered to the factual allegations of the FAC and could potentially encompass claims that are only tangentially related to this action, such as defamation claims relating to information contained in a background check report. (See Amaro v. Anaheim Arena Management, LLC (2021) 69 Cal.App.5th 521, 528 [a release is overbroad if it extends to claims that may only be tangentially related to the allegations in the complaint].)

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Additionally, the motion does not provide any statement under oath that White Pony Express is a child advocacy program. Moreover, the link set forth in the Amendment suggests that White Pony Express is not primarily a child advocacy program but provides a food rescue and recovery program. While this is an admirable pursuit, it does not appear to comply with Code of Civil Procedure section 384 which mandates that unclaimed or abandoned class member funds be given to “nonprofit organizations or foundations to support projects that will benefit the class or similarly situated persons, or that promote the law consistent with the objectives and purposes of the underlying cause of action, to child advocacy programs, or to nonprofit organizations providing civil legal services to the indigent.” The parties must provide a declaration demonstrating that White Pony Services qualifies as a cy pres recipient under Code of Civil Procedure section 384 or designate a new cy pres recipient in compliance with the statute.

Because of the number and nature of the deficiencies described above, the motion for preliminary approval of the class and representative action settlement is DENIED without prejudice. When there is a new agreement correcting the noted deficiencies, another motion for preliminary approval can be made.

The Case Management Conference set for December 21, 2022 is continued to April 26, 2023.

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

NOTICE: Remote appearances are mandatory for complex civil matters in Department 3. (See Public Notice – June 10, 2022, Remote Appearance – Downtown and Historic Courthouses, available at .) Effective August 15, 2022, Department 3 will be using TEAMS for all remote hearings, unless otherwise ordered by the court. Instructions for appearing remotely and the necessary TEAMS link for Department 3 can be found at .

State and local rules prohibit recording of court proceedings without a court order. These rules apply while in court and also while participating in a telephonic hearing.

The court does not provide court reporters for proceedings in the complex civil litigation departments. Any party wishing to retain a court reporter to report a hearing may do so in compliance with this court’s October 13, 2020 Policy Regarding Privately Retained Court Reporters. The court reporter may participate remotely and need not be present in the courtroom.

SUPERIOR COURT OF CALIFORNIA

COUNTY OF SANTA CLARA

|KYLE CASSIDY, individually and on behalf of all others similarly situated,|Case No. 21CV382350 |

| | |

|Plaintiff, |TENTATIVE RULING RE: MOTION FOR APPROVAL OF PAGA SETTLEMENT |

| | |

|vs. | |

| | |

|KEYENCE CORPORATION OF AMERICA, a California Corporation, | |

| | |

|Defendant. | |

The above-entitled action comes on for hearing before the Honorable Patricia M. Lucas on December 21, 2022, at 1:30 p.m. in Department 3. The court now issues its tentative ruling as follows:

I. INTRODUCTION

This representative action brought pursuant to the Private Attorneys General Act of 2004 (“PAGA”) arises out of alleged wage and hour violations. The operative Second Amended Representative Action Complaint (“SAC”), filed on September 22, 2022, sets forth a single cause of action for PAGA Civil Penalties [Cal. Lab. Code §2698 et seq.] based on alleged misclassification by defendant Keyence Corporation of America (“Defendant”) of aggrieved employees as outside sales employees, failure to issue accurate itemized wage statements to aggrieved employees, failure to pay overtime wages, failure to pay all compensation owed upon discharge, and failure to reimburse necessary business expenses. (SAC, ¶¶ 13-34.)

The parties have now reached a settlement. Plaintiff Kyle Cassidy (“Plaintiff”) moves for approval of the settlement. The motion is unopposed.

II. LEGAL STANDARD

Under PAGA, an aggrieved employee may bring a civil action personally and on behalf of other current or former employees to recover civil penalties for Labor Code violations. (Iskanian v. CLS Transp. Los Angeles, LLC (2014) 59 Cal.4th 348, 380.) 75 percent of any penalties recovered go to the Labor and Workforce Development Agency (“LWDA”), leaving the remaining 25 percent for the employees. (Ibid.) PAGA is intended “to augment the limited enforcement capability of [LWDA] by empowering employees to enforce the Labor Code as representatives of the Agency.” (Id. at p. 383.) A judgment in a PAGA action binds all those, including nonparty aggrieved employees, who would be bound by a judgment in an action brought by the government. (Id. at p. 381.)

A superior court must review and approve any PAGA settlement. (Lab. Code, § 2699, subd. (l)(2).) The court’s review “ensur[es] that any negotiated resolution is fair to those affected.” (Williams v. Superior Court (2017) 3 Cal.5th 531, 549.) 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.)

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.)

“[W]hen a PAGA claim is settled, the relief provided … [should] be genuine and meaningful, consistent with the underlying purpose of the statute to benefit the public ….” (Villalobos v. Calandri Sonrise Farm LP (C.D. Cal., July 22, 2015, No. CV122615PSGJEMX) 2015 WL 12732709, at *13.) The settlement must be reasonable in light of the potential verdict value. (See O’Connor v. Uber Technologies, Inc. (N.D. Cal. 2016) 201 F.Supp.3d 1110, 1135 [rejecting settlement of less than one percent of the potential verdict].) But a permissible settlement may be substantially discounted, given that courts often exercise their discretion to award PAGA penalties below the statutory maximum even where a claim succeeds at trial. (See Viceral v. Mistras Group, Inc. (N.D. Cal., Oct. 11, 2016, No. 15-CV-02198-EMC) 2016 WL 5907869, at *8–9.)

III. DISCUSSION

The proposed settlement has been made with regard to PAGA Members, who are defined as: “(1) ‘Aggrieved Employees’ [(‘AEs’)]: all persons who were/are employed by Defendant in California as sales representatives or in a similar capacity at any time during the PAGA Period; and (2) ‘Expense Reimbursement Aggrieved Employees’ [(‘RAEs’)]: all persons who were/are employed by Defendant in California at any time during the PAGA Period, excluding Aggrieved Employees.” (Supplemental Declaration of Polina Brandler in Support of Plaintiff’s Unopposed Motion for Approval of PAGA Settlement Pursuant to Labor Code § 2699(l) (“Brandler Dec.”), Ex. 1 (“Settlement Agreement”), ¶ I.4.) The PAGA Period is defined as the time period commencing on May 25, 2020 and ending on September 4, 2022. (Settlement Agreement, ¶ I.12.)

Pursuant to the terms of the settlement, Defendant will pay a non-reversionary gross settlement amount of $300,000. (Settlement Agreement, ¶¶ I.9 & III.2.) This amount includes attorney fees up to $100,000 (1/3 of the gross settlement amount), litigation expenses up to $20,000, a service award of $7,500 for Plaintiff, and settlement administration costs up to $5,500. (Settlement Agreement, ¶¶ I.9, I.10, & III.3.) Of the remaining settlement amount, 75 percent will be paid to the LWDA and 25 percent be distributed to PAGA Members. (Settlement Agreement, ¶¶ I.9, I.10, III.3, & III.4.) The 25 percent portion to be paid to PAGA Members will be allocated as follows: 57 percent to AEs (the “Sales PAGA Fund”), and 43 percent to AEs and RAEs (the “Expense PAGA Fund”). (Settlement Agreement, ¶ III.4.) The amount that each AE will be eligible to receive from the Sales PAGA Fund will be calculated on a pro rata basis based on the number of pay periods worked by each AE during the PAGA Period. (Settlement Agreement, ¶ III.5.) The amount that each AE and RAE will be eligible to receive from the Expense PAGA Fund will be calculated on a pro rata basis based on the number of pay periods worked by each AE during the PAGA Period. (Settlement Agreement, ¶ III.5.) The settlement states that checks that are not cashed within 120 days from the date of their mailing will be transferred to the California State Controller’s Unclaimed Property Fund. (Settlement Agreement, ¶ IV.3.)

In exchange for the settlement, PAGA Members will release Defendant, and related entities and individuals, from “claims for penalties and attorneys’ fees and costs recoverable under PAGA which Plaintiff, PAGA Members, and/or the LWDA had, or may claim to have, against Released Parties, arising out of the violations alleged or that could have been alleged based on the facts alleged in the Action or the PAGA Notices by Plaintiff ….” (Settlement Agreement, ¶¶ I.13, I.14, & III.6.)

Plaintiff contends that the PAGA settlement is fair, reasonable, and adequate. Plaintiff advises that the settlement resolves PAGA claims on behalf of 163 aggrieved employees: 145 AEs, who are sales representatives employed by Defendant during the PAGA Period with claims for failure to pay overtime, issue accurate itemized wage statements, pay all wages due upon discharge, and reimburse business expenses; and 18 RAEs, who are other employees employed by Defendant during the PAGA Period with claims for failure to reimburse business expenses. (Declaration of Julian Hammond in Support of Plaintiff’s Unopposed Motion for Approval of PAGA Settlement Pursuant to Labor Code § 2699(l) (“Hammond Dec.”), ¶¶ 3, 37, & 43.) Plaintiff then states that “[i]ndividuals who entered into general releases will not participate in this Settlement.” (Memorandum of Points and Authorities in Support of Plaintiff’s Unopposed Motion for Approval of PAGA Settlement Pursuant to Labor Code § 2699(l), p. 1:7-9, fn. 1; Hammond Dec., ¶ 3, fn. 2.) Plaintiff advises that the settlement was reached after informal discovery, mediation with mediator Mark Rudy, and arms-length negotiations. (Hammond Dec., ¶¶ 10, & 17-23.) Plaintiff calculates Defendant’s maximum potential exposure for the PAGA claim to be approximately $1,797,200. (Id. at ¶ 44.) Plaintiff further states that the expected risk-adjusted ranges from $503,250 to $1,178,970. (Id. at ¶ 42.) Plaintiff also provides a breakdown of these amounts based on the underlying Labor Code violations. (Id. at ¶¶ 28-39.) Plaintiff states that there was a risk of no recovery given employees’ mandatory arbitration agreements and the impact of Viking River Cruises, Inc. v. Moriana (2022) ___U.S.___ [142 S.Ct. 1906], and serious concerns that the court might substantially reduce the amount of PAGA penalties sought. (Id. at ¶¶ 21-26 & 40-41.) Plaintiff contends that the settlement amount is reasonable in light of Defendant’s defenses and the risks of continued litigation. (Id. at ¶¶ 21-27, 30, 33, 36, 39, & 48-50.) Plaintiff estimates that the average net payment to an AE is $274.26 and the average net payment to an RAE is $110.14. (Id. at ¶ 46.)

Prior to the hearing on this motion, the court requested additional information regarding the individuals who purportedly entered into general releases. In response to the court’s request, Plaintiff submitted a supplemental declaration from counsel. Plaintiff’s counsel declares that the referenced individuals who entered into general releases with Defendant agreed, as part of the general releases, to waive their right to any form of recovery or compensation from any action arising from or related to their employment with Defendant. (Brandler Dec., ¶ 6.) Plaintiff’s counsel states that as a result, those individuals “are excluded from the proposed settlement.” (Ibid.) Plaintiff counsel advises that the individuals entered into the general releases after and separately from the proposed PAGA settlement. (Id. at ¶ 7.) Plaintiff’s counsel declares that the parties are aware of the number and identities of the subject individuals, but will not provide more detailed information due to the confidential nature of the general releases. (Id. at ¶¶ 7-8.) Plaintiff’s counsel states that the parties are willing to provide a more detailed declaration for in camera review. (Id. at ¶ 9.)

//

In general, the court finds the settlement to be fair as it provides for some recovery for each aggrieved employee and eliminates the risk and expense of further litigation.

However, after reviewing the supplemental declaration from Plaintiff’s counsel, the court continues to have concerns regarding Plaintiff’s assertion that individuals who entered into general releases are excluded from this settlement. Notably, by its terms, the settlement does not exclude individuals who would otherwise fall within the definition of PAGA Members, but who have entered into general releases with Defendant. (Settlement Agreement, ¶ I.4.) Thus, it appears that Plaintiff contends such individuals should be excluded from the settlement based solely on the terms of the general releases. However, Plaintiff has not provided the general releases to the court for review. Additionally, Plaintiff has not explained what, if any, compensation those individuals received for releasing their claims, which apparently included the PAGA claim at issue here. Furthermore, Plaintiff does not identify how many of the 163 PAGA Members purportedly entered into general releases or explain how their exclusion from the settlement will impact the recovery received by PAGA Members.

Prior to the continued hearing on this motion, Plaintiff shall submit a more detailed declaration to the court for in camera review in order to provide further explanation regarding this issue.

Plaintiff also seeks a service award of $7,500. Although service awards are common in class actions, there is less authority regarding the propriety of service awards in PAGA cases. Nevertheless, a PAGA case is a representative action like a class action and it has been recognized that an individual’s willingness to act as a private attorney general may merit a service award. (See Rodriguez v. West Publishing Corp. (9th Cir. 2009) 563 F.3d 948, 959.)

Plaintiff submitted a declaration describing his participation in the action. Plaintiff estimates that he spent between 23 and 25 hours in connection with this lawsuit, including discussing the case with his counsel, reviewing the pleadings, searching for and providing documents to his counsel, responded to questions from his counsel, reviewing the mediation brief, attending meditation, and reviewing the settlement agreement. (Declaration of Kyle Cassidy in Support of Plaintiff’s Unopposed Motion for Approval of PAGA Settlement Pursuant to Labor Code § 2699(l), ¶¶ 2-16.) Based on the foregoing, the court finds that the service award is merited and it is approved.

Plaintiff’s counsel seeks attorney fees of $100,000 (1/3 of the gross settlement amount). Plaintiff’s counsel provide a lodestar of $139,366. (Hammond Dec., ¶¶ 56-62.) This results in a negative multiplier. The fees are reasonable and are approved.

Plaintiff’s counsel also requests litigation costs in the amount of $20,000. (Hammond Dec., ¶ 64.) Plaintiff’s counsel provides evidence of incurred costs in the amount of $20,697.19. (Ibid.) Accordingly, the costs are approved in the amount of $20,000.

Lastly, Plaintiff requests up to $5,500 for the settlement administration fee for Simpluris, Inc. to administer the settlement. However, no evidence is submitted from the settlement administrator supporting the requested fee. Prior to the continued hearing on this motion, Plaintiff shall submit a declaration from the settlement administrator justifying its fee.

Accordingly, the motion for approval of PAGA settlement is CONTINUED to February 8, 2023, at 1:30 p.m. in Department 3. Plaintiff shall file further declarations no later than 5:00 p.m. on January 18, 2022, addressing the general releases and settlement administration fee. No additional filings are permitted.

The Case Management Conference set for December 21, 2022 is continued to February 8, 2023.

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

NOTICE: Remote appearances are mandatory for complex civil matters in Department 3. (See Public Notice – June 10, 2022, Remote Appearance – Downtown and Historic Courthouses, available at .) Effective August 15, 2022, Department 3 will be using TEAMS for all remote hearings, unless otherwise ordered by the court. Instructions for appearing remotely and the necessary TEAMS link for Department 3 can be found at .

State and local rules prohibit recording of court proceedings without a court order. These rules apply while in court and also while participating in a telephonic hearing.

The court does not provide court reporters for proceedings in the complex civil litigation departments. Any party wishing to retain a court reporter to report a hearing may do so in compliance with this court’s October 13, 2020 Policy Regarding Privately Retained Court Reporters. The court reporter may participate remotely and need not be present in the courtroom.

SUPERIOR COURT OF CALIFORNIA

COUNTY OF SANTA CLARA

| |Case No. |

| | |

The Court will prepare the order.

SUPERIOR COURT OF CALIFORNIA

COUNTY OF SANTA CLARA

| |Case No. |

| | |

The Court will prepare the order.

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