james jh hawkins, aplc · james r. hawkins, esq. sbn 192925 [email protected] gregory e....

- 0 -

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR FINAL APPROVAL OF CLASS ACTION SETTLEMENT

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

James R. Hawkins, Esq. SBN 192925 [email protected] Gregory E. Mauro, Esq. SBN 222239 [email protected] JAMES JH HAWKINS, APLC 9880 Research Drive, Suite 200 Irvine, CA 92618 TEL: (949) 387-7200 FAX: (949) 387-6676 Attorneys for Plaintiff, MARIA SANCHEZ, on behalf of herself and all others similarly situated

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

WESTERN DIVISION

MARIA SANCHEZ, as an individual and on behalf of all others similarly situated, Plaintiffs, v. HVM/LQ MANAGEMENT, LLC., a Delaware Corporation, and DOES 1 through 50, inclusive, Defendants.

Case No. 8:11-cv-00123-JAK-PJW

The Honorable John A. Kronstadt

CLASS ACTION

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR FINAL APPROVAL OF CLASS ACTION SETTLEMENT Date: September 24, 2012 Time: 8:30 a.m. Courtroom: 750-7th Floor

Case 8:11-cv-00123-JAK-PJW Document 70-1 Filed 09/05/12 of 22 Page ID #:1293

i TABLE OF CONTENTS AND AUTHORITIES

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

TABLE OF CONTENTS Page

I. INTRODUCTION AND BACKGROUND . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

A. Procedural Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2

B. Discovery And Investigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3

C. Mediation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4

D. Proposed Settlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

E. Preliminary Approval Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6

F. Notice to the Class . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7

G. Class Participation in the Settlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7

II. ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8

A. Class Action Settlements are Subject to Court Review and

Approval Under the Federal Rule of Civil Procedure . . . . . . . . . . .. . . . . . . 8

B. FRCP, Rule 23 Pre-Requisites Have Been Satisfied . . . . . . . . . . . . . . . . . . .8

C. The Settlement Is Fair, Reasonable and Adequate . . . . . . . . . . . . . . . . . . . . 9

1. The Amount of the Settlement is a Fair Compromise of

Vigorously Contested, Factually Complex Claims, Subject to

Many Legal Uncertainties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

2. The Settlement Is the Result of Serious, Informed, Non-Collusive

Negotiations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13

3. The Extent of Discovery Completed and the Stage of the

Proceedings Support the Settlement . . . . . . . . . . . . . . . . . . . . . . . . . . .14

4. No Objections Have Been Made to the Settlement . . . . . . . . . . . . . . . . 15 III. THE SETTLEMENT ADMINISTRATOR'S REQUESTED

EXPENSES ARE REASONABLE AND APPROPRIATE . . . . . . . . . . . . . 16

VI. CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16


ii TABLE OF CONTENTS AND AUTHORITIES

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

TABLE OF AUTHORITIES Page

Boeing Co. v. Van Gemert (1980) 444 U.S. 472 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8 Boyd v. Bechtel Corp. (N.D. Cal. 1979) 485 F. Supp. 610 . . . . . . . . . . . . . . . . . . . . . . . . . . . .14, 15 Dunk v. Ford Motor Co. (1996) 48 Cal.App.4th 1794 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9, 10 Ellis v. Naval Air Rework Facility (N.D.Cal. 1980) 87 F.R.D. 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Fisher Bros. v. Cambridge-Lee Industries, Inc. (E.D. Pa. 1985) 630 F. Supp. 482 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Frank v. Eastman Kodak Co. (W.D.N.Y. 2005) 228 F.R.D. 174 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 In re Beef Industry Antitrust Litigation (5th Cir. 1979) 607 F.2d 167 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9 In re Michael Milken and Assoc. Sec. Litig. (S.D.N.Y. 1993) 150 F.R.D. 57 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Iowa Beef Processors, Inc. v. Meat Price Investigators Ass'n (1981) 452 U.S. 905 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9 Jamison v. Butcher & Sherrerd (E.D.Pa. 1975) 68 F.R.D. 479 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Officers for Justice v. Civil Serv. Comm'n (9th Cir. 1982) 688 F.2d 615 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9, 13 Rodriguez v. West Publishing Corp. (C.D. Ca. Sept. 10, 2007) 2007 U.S. Dist. LEXIS 74849 . . . . . . . . . . . . . 10 Staton v. Boeing (9th Cir. 2003) 327 F.3d 938 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8


iii TABLE OF CONTENTS AND AUTHORITIES

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

STATUTES AND REGULATIONS Page

California Business and Professions Code § 17200, et seq. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1, 6 California Labor Code §201-203 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 § 218.5, §218.5, §226, §226.7, §512, §558, §1194, §1194.2, . . . . . . . . . . . . . . . 6 §1197, §1198, §2699 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6 Federal Rules of Civil Procedure Rule 23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Rule 23 (e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Rule 23 (e)(1)(C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8


- 1 -


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

I. INTRODUCTION AND BACKGROUND

This motion is brought seeking final approval of a proposed non-

reversionary wage and hour class action settlement of $1,500,000 by Plaintiff

Maria Sanchez on behalf of the current and former persons employed in non-

exempt positions by Defendant LQ Management LLC, dba HVM/LQ

Management LLC, (“LQ” or “Defendant”) at any time during the Class

Period, October 22, 2006 through June 20, 2012. (Declaration of James

Hawkins (“Hawkins”) ¶¶ 17, 18.)

In this putative wage and hour class action, Named Plaintiff Maria

Sanchez ("Plaintiff') alleges, on behalf of herself and the Class Members,

that Defendant LQ violated California state wage and hour laws and

California Business and Professions Code Section 17200 et seq., by (1)

failing to accurately calculate and pay overtime wages, (2) failing to provide

rest periods and second meal periods or compensation in lieu thereof, (3)

failing to timely pay wages at termination, (4) knowing and intentional

failure to comply with itemized employee wage statement provisions, (5)

violation of unfair competition laws, and (6) Private Attorneys General Act

(the "Lawsuit") for the period between October 26, 2006 through preliminary

approval date. (Hawkins Decl. ¶ 2.)

LQ denies Named Plaintiff’s allegations, and has denied them

throughout this Litigation. LQ maintains that all Class Members were

provided second meal periods and rest periods as required by law, were

properly paid all overtime wages, were provided accurate itemized wage

statements, did not engage in unfair competition, and thus are not entitled to

any relief in this action. (Hawkins Decl.¶ 3.)

A. Procedural Background

Prior to filing this action, Plaintiff’s counsel interviewed


- 2 -


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Plaintiff, reviewed documents and conducted internet research as part of

their factual development and analysis into the claims and damages for the

putative class. On or about October 22, 2010, Plaintiff filed her complaint in

Orange County Superior Court alleging the following five (5) causes of

action: (1) failure to accurately calculate and pay overtime wages, (2) failure

to provide rest periods and second meal periods or compensation in lieu

thereof, (3) failure to timely pay wages at termination, (4) knowing and

intentional failure to comply with itemized employee wage statement

provisions, and (5) violation of unfair competition laws. (Hawkins Decl., ¶

4.)

On or about December 2, 2010, Plaintiff exhausted her administrative

remedy pursuant to Labor Code § 2699.3 and filed a first amended complaint

adding a sixth (6) cause of action under the Private Attorneys General Act.

On or about the same day, Defendant, through its counsel, contacted

Plaintiff’s counsel and agreed to accept service on behalf of Defendant.

Defendant was served on or about December 3, 2010. Thereafter, the parties

engaged in extensive discussions and meetings to discuss the claims and

Defendant’s defenses. Defendant has denied, and continues to vigorously

deny all of Plaintiff’s allegations, including allegations of miscalculated

overtime wages and meal and rest periods. (Hawkins Decl., ¶5.)

On or about January 21, 2011, Defendant filed its notice of removal to

this Court. On January 28, 2011, Defendant then moved to dismiss the action

based upon failure to state facts sufficient to state a claim. On or about

February 4, 2011, Plaintiff moved to remand the matter back to state court.

The remand motion was denied on March 8, 2011. The parties subsequently

agreed to the filing of a second amended complaint. Thereafter, the parties

met and conferred further regarding Defendant’s perceived deficiencies


- 3 -


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

regarding the SAC and agreed to file a third amended complaint which took

place on or about April 27, 2011. Defendant subsequently filed its motion to

dismiss and/or strike Plaintiff’s third amended complaint. The hearing was

held before this Court on or about June 13, 2011. The Court granted

Defendant’s motion to dismiss with leave to amend. On June 29, 2011,

Plaintiff filed her fourth amended complaint and Defendant answered on July

11, 2011. (Hawkins Decl., ¶ 6.)

After serving written discovery, LQ sought to exchange information

and data subject to a protective order to allow Plaintiff to prepare for

meaningful settlement discussions before a neutral mediator. (Hawkins Decl.

¶8.)

Although LQ continues to contest any liability on the claims asserted in

the complaint and continues to believe that class certification is inappropriate,

it nevertheless agreed to attempt resolution of the case to avoid the expense,

distraction and uncertainty of protracted litigation and trial. (Hawkins Decl.,

¶ 7.)

B. Discovery And Investigation

As a part of the investigation and exchange of information, Plaintiff

demanded the relevant documents to investigate liability, merits, class wide

certification, and to prepare a damage analysis on behalf of the class.

Defendant produced voluminous documents, including time records, payroll

records, personnel file, defendant’s relevant policies and procedures, average

number of workweeks, hours worked, number of shifts worked per week,

total shifts worked for the period from 2006 through 2011, average hourly

rates, information pertaining to bonuses, and the like. Plaintiff’s counsel

reviewed thousands of lines of data and hundreds of documents in

preparation for mediation. Plaintiff’s counsel reviewed the data to assess and


- 4 -


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

calculate class-wide damages. In preparation for the anticipated mediation,

Plaintiff prepared an exposure analysis for use at the mediation. (Hawkins

Decl., ¶ 9.)

C. Mediation

On October 21, 2011, the Parties entered into settlement

negotiations in a lengthy full day mediation session before the well-respected

mediator Mark Rudy. Following the mediation, the parties continued to

negotiate with the assistance of the mediator and on October 26, 2011 a

Memorandum of Understanding setting forth the principal terms of their

resolved this matter after a mediation settlement was executed. (Hawkins

Decl., ¶15.)

D. Proposed Settlement

LQ has agreed to pay each member of the Class who has not requested

exclusion, automatically, without a claim form, his/her proportionate share of

the settlement proceeds. The proposed Settlement is described in the

Stipulation for Class Action Settlement attached to the Declaration of James

Hawkins as Exhibit “1” (“Settlement Agreement”.) (Hawkins Decl., ¶20.)

Pursuant to the Settlement Agreement, the Parties have agreed, subject

to and contingent upon final approval of this Court, that the case be settled

and compromised for the non-reversionary sum of $1,500,000. The proposed

Class Settlement Amount includes, subject to Court approval (a) attorneys’

fees of $500,000 (33.3% of the common fund), (b) reasonable litigation costs

which are $9,469.77, (c) Class Representative enhancement payment to

Named Plaintiff of $5,000 (d) claims administration expenses of $24,000, and

(e) Labor Workforce and Development Agency, civil penalties in the sum of

$18,750. The sum remaining, an estimated $952,250.00 (“Net Settlement

Consideration” or “NSC”) will be paid out entirely on a proportionate basis


- 5 -


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

based upon the number of workweeks worked, automatically and without a

claim form, to all members of the Class who do not request exclusion.

(Hawkins Decl. ¶ 20.)

Specifically, Each Participating Claimant shall receive an Individual

Class Member Payment, less legally required withholdings, which is a share

of the Net Settlement Consideration based on the number of Compensable

Workweeks worked by the Participating Claimant during the Class Period,

less statutorily required tax withholdings. The “Compensable Workweeks” of

a Settlement Class member shall be the actual number of complete

workweeks that he or she was employed by La Quinta as a nonexempt

employee at a California hotel between October 22, 2006 and the Date of

Preliminary Approval. The number of Compensable Workweeks of each

Settlement Class member shall be determined from the employment records

maintained by La Quinta in the regular course of business. For the purpose

of calculating applicable taxes, the Parties agree that ten percent (10%) of

each Individual Class Member Payment constitutes wages, and that ninety

percent (90%) constitutes penalties. The Parties estimate the Settlement will

result in an average Compensable Workweek payment of approximately

$7.16.1 (Hawkins Decl., ¶ 20.)

All Class Members will enjoy benefits and none are singled out for

special treatment. While individual monetary recoveries will vary, that

difference will be dictated only by the number of workweeks each class

1 The actual payment and amount of the Net Settlement Consideration will

depend upon exclusions, final calculation of Compensable Workweeks,

amount of Attorneys’ Fees Award, Enhancement Award, etc., approved by

the Court.


- 6 -


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

member worked for Defendant during the class period. The proposed payout

structure will provide reasonable settlement amounts to putative class

members. (Hawkins Decl., ¶ 21.)

In return for the payments made to the Class Members, each Class

Member who does not timely opt out will grant LQ only a release of the

Released Claims as set forth in ¶10.1 of the Settlement. The “Released

Claims” include, to the extent permitted by law: (a) any claims and causes of

action, whether known or unknown, that were or could have been alleged or

asserted based on the facts and allegations alleged in the Lawsuit; (b) any

claims that were or could have been brought under California Labor Code

Sections 203, 218.5, 226, 226.7, 512, 558, 1194, 1194.2, 1197, 1198, 2699 et

seq. (“PAGA”), or 2802, the applicable Industrial Welfare Commission

Wage Orders, the Fair Labor Standards Act, and all related or corresponding

federal laws, and all implementing regulations and interpreting guidance

arising from the facts alleged in the Lawsuit, or arising out of or related to the

same nucleus of operative facts as are alleged in the Lawsuit; (c) any claims

that were or could have been brought under California Business and

Professions Code Section 17200 et seq. as unlawful, and as set forth more

fully in Section 10.2 of the Settlement. (Hawkins Decl., ¶ 22.)

E. Preliminary Approval Granted

On June 20, 2012, this Court granted Preliminary Approval of the

proposed Settlement. Based on the motion and supplemental papers

submitted, the Court found that (1) the proposed Settlement, negotiated at

arms‟ length, was preliminarily determined to be fair, reasonable and

adequate and in the best interest of the Settlement Class as defined in the

Order and in the Settlement Agreement, (2) that for purposes of approving

this settlement only and for no other purpose, the proposed Class met each


- 7 -


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

of the requirements of certification under FRCP 23, (3) appointed Class

Counsel to represent Plaintiff and the conditionally certified Class, (4)

appointed Simpluris, Inc., (“Simpluris”) to administrator the settlement, and

(5) directed that all Class Members be given notice of the proposed

Settlement, among other things. (Hawkins Decl., ¶ 23, Ex. 2.)

F. Notice to the Class

Pursuant to the Court’s Order Granting Preliminary Approval, on July

18, 2012, Simpluris mailed to the 2,300 member class at their last known

address by first class mail, a Notice describing the pertinent terms of the

settlement and estimated share of the NSC. (Declaration of Eric Springer on

behalf of Simpluris (“Springer Decl.,”), ¶ 9, Ex. A (Notice). The Notice also

informed the Class of their rights (1) to request exclusion from the settlement,

(2) to dispute the information upon which their proportionate shares of the

settlement would be based, (3) to object to the settlement or to any of its

terms, and (4) the timing and manner to do each of the preceding acts. (Id.)

The Notice also informed the class of the date of the Final Fairness hearing

and their right to appear at the hearing and provided the toll-free number for

the claims administrator and for Class Counsel in the event they had any

questions. (Hawkins, Decl., ¶ 24; Springer Decl., ¶ 5, Ex. A.)

G. Class Participation in the Settlement

As a result of the successful notice process described above and as set

forth in the Springer Declaration, the Class has been given an opportunity to

exclude themselves from the Settlement. The Class has overwhelmingly

accepted the Settlement. As of September 4, 2012, only eight (8) requests for

exclusions had been received which represents 0.34% of the Settlement Class

and not one objection to the settlement was asserted and/or filed.

(Springer Decl., ¶¶ 11, 12.)


- 8 -


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Accordingly, nearly 100% of the Class will receive their proportionate

share of the NSC estimated at $952,250. The highest Individual Class

Member Payment to be paid is approximately $1,818.00 and the average

Individual Class Member Payment to be paid is approximately $415.00.

(Hawkins Decl., ¶ 25; Springer Decl., ¶ 14.)

Thus, the NSC will be paid out entirely to the members of the Class

and will be exhausted without reversion to LQ. (Hawkins Decl., ¶ 20.)

By resolving this matter now and granting final approval, these class

members will receive a guaranteed recovery without risk of nonpayment,

delay, or an adverse judgment at trial. The Settlement should receive final

approval because it provides substantial monetary benefits to Class Members

and is the product of diligent efforts and extensive arms‟ length negotiations

by Class Counsel to obtain the best possible result for Class. Class Counsel

has achieved an excellent result in this litigation.

II. ARGUMENT

A. Class Action Settlements are Subject to Court Review and

Approval Under the Federal Rule of Civil Procedure

Rule 23(e) of the Federal Rule of Civil Procedure provides that "[a]

class action shall not be dismissed, settled, or compromised without the

approval of the Court, and notice of the proposed dismissal, settlement or

compromise shall be given as the Court directs. “The Ninth Circuit has

stated that in order to approve a final settlement in a class action, the district

court must find that the proposed settlement is fundamentally fair, adequate,

and reasonable. Id. at Rule 23(e) (1) (C); Staton v. Boeing Co., 327 F. 938,

952 (9th Cir. 2003).

B. Fed.R.Civ.P 23 Pre-Requisites Have Been Satisfied

Plaintiff’s Motion for Preliminary Approval filed February 29, 2012 at


- 9 -


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

pgs. 20-24 provides the evidence and information that satisfies the

pre-requisites for numerosity/ascertainability, predominance of common

issues of law and fact, typicality and adequacy of representation. Based on

such information, the Court conditionally certified the Class and included the

definition in the Order Granting Preliminary Approval filed June 20, 2012 at

paragraphs 3 and 6. (Hawkins Decl. ¶¶ 26-33, Ex. 2.)

C. The Settlement Is Fair, Reasonable and Adequate

Courts act within their discretion in approving settlements which are

fair, not collusive, and take into account "all the normal perils of litigation as

well as the additional uncertainties inherent in complex class actions." In re

Beef Industry Antitrust Litigation, 607 F. 2d 167, 179 (5th Cir. 1979) cert.

denied; Iowa Beef Processors, Inc. v. Meat Price Investigators Ass'n, 452

U.S. 905 (1981). In deciding whether to approve a proposed class action

settlement, the Court must find that a proposed settlement is "fair, adequate

and reasonable." Dunk v. Ford Motor Co., 48 Cal.App.4th 1794, 1801 (1996)

(quoting Officers for Justice v. Civil Serv. Comm., 688 F.2d 615, 625 (9th

Cir. 1982), cert. denied 459 U.S. 1217 (1983).) The trial court considers all

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." (Id.) Where a settlement is

reached on terms agreeable to all parties, a court should disapprove of the

settlement "only with considerable circumspection." Jamison v. Butcher &

Sherrerd, 68 F.R.D. 479, 481 (E. D. Pa. 1975).

In the Ninth Circuit, a court affords a presumption of fairness to


- 10 -


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

a settlement, if: (1) the negotiations occurred at arm's length; (2) there

was sufficient discovery to allow counsel to act and the Court to review their

actions in an informed manner; (3) the proponents of the settlement are

experienced in similar litigation; and (4) only a small fraction of the class

objected. Rodriguez v. West Publishing Corp., No. CV-05-3222 R (MCx)

2007 U.S. Dist. LEXIS 74849 at 33 (C.D. Ca. Sept. 10, 2007), Dunk v. Ford

Motor Co., 48 Cal. App.4th, 1794, 1801-1802 (1996).

The Hawkins Declaration demonstrates in the case at hand, (1) the

proposed settlement was the product of serious, informed, and non-collusive

negotiations, overseen by a neutral experienced wage and hour mediator, (2)

that the Class is represented by a very experienced law firm which does

similar work, and (3) that sufficient pre-litigation investigation and formal

and informal discovery was conducted such that Plaintiff and her counsel

were able to make an informed recommendation about the proposed

Settlement, and (4) not one objection was asserted and/or filed with the Court

or served on Simpluris or the Parties. Class Counsel submits that based on

the foregoing, the proposed Settlement is entitled to a presumption that it is

fair, reasonable and adequate and in all other respects proper, and one which

should be finally approved. (Hawkins Decl., ¶¶ 9- 16, Springer Decl., ¶¶11,

12.)

1. The Amount of the Settlement is a Fair Compromise of

Vigorously Contested, Factually Complex Claims, Subject to

Many Legal Uncertainties

Defendants have denied and continue to deny each of the claims and

contentions alleged by Named Plaintiff in this lawsuit. Defendants have

repeatedly asserted and continue to assert defenses thereto, and have

expressly denied and continue to deny any wrongdoing or legal


- 11 -


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

liability arising out of any of the facts or conduct alleged in the lawsuit.

Defendants also have denied and continue to deny, inter alia, the

allegations in the Fourth Amended Complaint. Defendants have concluded

that any further defense of this litigation would be protracted and expensive

for all Parties. Substantial amounts of time, energy, and resources of

Defendant have been and, unless this Settlement is made, will continue to be

devoted to the defense of the claims asserted by Named Plaintiff. Defendants

have, therefore, agreed to settle in the manner and upon the terms set forth in

this Agreement to put to rest the Claims as set forth in the Stipulation for

Class Action Settlement. (Hawkins Decl. 10.)

Further, Defendant asserted a number of serious and potentially

dispositive defenses in this case. Among other things, Defendant contends

that members of the Class were provided second meal periods, or waived

them during the tenth and twelfth hour, provided rest breaks as required by

California law, were properly compensated for all overtime hours worked,

were provided accurate itemized wages statements, and thus are not entitled

to collect any unpaid wages or related penalties arising from Named

Plaintiff’s claims. Further, Plaintiff’s overtime claim for failure to

incorporate bonuses into the regular rate of pay for overtime calculation

purposes was also contested by Defendant as having only a small

unappreciable effect on the regular rate of pay. (Hawkins Decl., ¶ 11.)

Nonetheless, Plaintiff believed the claim was certifiable. With respect

to Plaintiff’s waiting-time penalty claims, those claims, if successful could

yield 30 days wages for the Class Members. Yet, Defendant strongly

contested liability for all claims from which waiting-time penalties could

stem and further argue that even if such claims are successful, no finding of

"willfulness" is warranted given the unresolved state of the law on


- 12 -


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

meal periods and rest breaks. Further, the Defendant argued the alleged

penalties were not reasonably related to the alleged claims and

are to be strictly construed, thus not entitling Plaintiff to penalties, or at most

only moderate penalties. See; Hale v. Morgan (1972) 22 Cal.3d 388. In

contrast, Plaintiff positioned the penalties could be applied in their entirety if

the underlying claims were adjudicated in her favor. See; Smith v. Superior

Court (2006) 39 Cal.4th 77.) Although Plaintiff disagrees with Defendant,

these defenses were considered when resolving this action. (Hawkins Decl. ¶

12.)

In light of the above and the nature of the litigation process in general,

Named Plaintiff recognizes that the issues of liability and class certification

present significant uncertainty and risk. If Named Plaintiff was unable to

prevail on these claims, a judgment would be entered for LQ, and members

of the Settlement Class would receive nothing. The proposed Settlement, in

contrast, offers a guaranteed, significant value to the Settlement Class that

fairly and reasonably accounts for the very real risks of continued litigation.

Based on the parties' own independent investigations and evaluation, the

settlement for the consideration and on the terms set forth in the Stipulation is

fair, reasonable, and adequate and is in the best interests of the Class in light

of all known facts and circumstances and the expenses and risks inherent in

litigation and certification. This delay and the risks inherent in continued

litigation led Plaintiff to conclude that fighting the lawsuit to the bitter end

was not the prudent course. (Hawkins Decl. ¶ 14.) ["Compromise is inherent

and necessary in the settlement process...even if the relief afforded by the

proposed settlement is substantially narrower than it would be if the suits

were to be successfully litigated, this is no bar to a class settlement because

the public interest may indeed be served by a voluntary settlement in which


- 13 -


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

each side gives ground in the interest of avoiding litigation"]; Officers for

Justice v. Civil Serv. Comm'n (9th Cir. 1982) 688 F.2d 615, 628. Indeed,

“[t]he determination whether a settlement is reasonable does not involve the

use of a “mathematical equation yielding a particularized sum.‟” Frank v.

Eastman Kodak Co., (W.D.N.Y. 2005) 228 F.R.D. 174, 186, quoting In re

Michael Milken and Assoc. Sec. Litig. (S.D.N.Y. 1993) 150 F.R.D. 57, 66.

In light of the uncertainties of protracted litigation, the non-

reversionary nature of the Settlement with automatic payment to all class

members who did not request exclusion, this Settlement reflects an excellent

result for the Class. (Hawkins Decl., ¶¶7, 14.)

Indeed, the policy under California law in favor of settlement

in class actions and other complex cases applies with particular force in this

case. Certainty of recovery is enhanced by an equitable and timely

consummated settlement such as that under consideration in this case.

Tensions created in the employment relationship in the litigation process are

alleviated by such settlements as opposed to a trial of the matter, and all

Parties are in a better position to move forward with their roles in the

economy. The expense of protracted litigation in these cases is formidable

and the downside of loss to one side or the other is very great.

2. The Settlement Is the Result of Serious, Informed, Non-Collusive

Negotiations

The Settlement was reached as a result of arm’s-length negotiations

facilitated by an experienced and renowned wage and hour mediator.

Following agreement on the principle terms of the settlement,

arms-length negotiations continued through the date the Settlement

Agreement was signed. Although cordial and professional, the settlement

negotiations have been, at all times, adversarial and non-collusive in nature.


- 14 -


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Indeed, continued good faith but occasionally contentious negotiations were

required to ultimately reach agreement. While Plaintiff believes

in the merits of her case, she also recognizes the inherent risks of litigation

and understands the benefit of the class receiving significant settlement funds

immediately as opposed to risking an unfavorable decision on class

certification, the merits of the case after trial, the damages awarded, and/or on

an appeal that can take several more years to litigate. (Hawkins Decl., ¶ 15.)

3. The Extent of Discovery Completed and the Stage of the

Proceedings Support the Settlement

The proposed Settlement, subject to the Court’s approval, is the

product of substantial effort by the Parties and their counsel. Class counsel

conducted the investigation and discovery set forth above. The proposed

Settlement was reached following probative factual evaluation of LQ’s

relevant policies and procedures, job descriptions, and workweek data for the

putative class, as well as Plaintiff’s damage analysis and research. (Hawkins

Decl., ¶ 9.)

The Parties thoroughly investigated and evaluated the factual strengths

and weaknesses of the case before reaching the proposed Settlement, and

engaged in sufficient investigation and discovery to support the Settlement.

(Hawkins Decl., ¶¶ 9-13.)

The settlement before the Court came only after the case was fully

investigated by counsel, as set forth above. This litigation, therefore, has

reached the stage where “the Parties certainly have a clear view of the

strengths and weaknesses of their cases” sufficient to support the Settlement.

(Boyd v. Bechtel Corp. (N.D. Cal. 1979) 485 F.Supp. 610, 617.)

Plaintiff’s counsel have had significant and extensive experience in

litigating overtime, and failed rest/meal period cases. (Hawkins Decl. ¶ 31.)


- 15 -


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Experienced counsel, operating at arm’s-length, have weighed the strengths

of the case and examined all of the issues and risks of litigation and endorse

the proposed settlement. The view of the attorneys actively conducting the

litigation “is entitled to significant weight” in deciding whether to approve

the settlement. (Fisher Bros. v. Cambridge Lee Industries, Inc. (E.D. Pa.

1985) 630 F.Supp. 482, 488; Ellis v. Naval Air Rework Facility (N.D. Cal.

1980) 87 F.R.D. 15, 18, affd. 661 F.2d 939 (9th Cir. 1981); Boyd v. Bechtel

Corp., supra, 485 F.Supp. at pp.616-617.)

Plaintiff’s Counsel as well as Defendant’s counsel, are particularly

experienced in wage and hour employment law and class actions. ( Hawkins

Decl., ¶ 31.)

4. No Objections Have Been Made to the Settlement

The class Notice clearly explained the process and deadline for

objecting to the Settlement and for filing a Notice of Intention to Appear at

the Final Approval Hearing if a class member were inclined to object to any

term of the Settlement. (Springer Decl., Ex. A.) Not one objection was

asserted, received by the Claims Administrator or filed with the Court as of

the date these papers were filed with the Court. (Springer Decl.,¶ 13;

Hawkins Decl., ¶ 24.)

Class Counsel is convinced that this settlement is in the best interest of

the class based on the negotiations and a detailed knowledge of the issues

present in this action. The length and risks of trial and other normal perils of

litigation that may have impacted the value of the claims were all weighed in

reaching the proposed settlement. In addition, the affirmative defenses

asserted by Defendant, the prospect of a potential adverse summary judgment

ruling, class certification issues, as well as the uncertainty of class

certification, the difficulties of complex litigation, the lengthy process of


- 16 -


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

establishing specific damages and various possible delays and appeals, were

also carefully considered by Class Counsel in agreeing to the proposed

settlement. (Hawkins Decl., ¶ 16.)

Given the risks inherent in litigation and the defenses asserted, this

settlement is fair, adequate, and reasonable and in the best interests of the

class, and should be finally approved. (Hawkins Decl., ¶ 14.)

III. THE SETTLEMENT ADMINISTRATOR'S REQUESTED EXPENSES ARE REASONABLE AND APPROPRIATE

Plaintiffs retained a neutral third party administrator, Simpluris, Inc., to

administer the notice process. Simpluris’ duties include, among other things:

(a) printing and mailing in English and Spanish the Notice of Class

Action Settlement, the Settlement Allocation Form and Exclusion Form

(collectively, the “Notice Packet”); (b) receiving undeliverable Notice

Packets; (c) receiving and validating disputes to employment information and

Exclusion Forms; (d) calculating individual settlement payments, distributing

funds, and tax-reporting following final approval; (e) mailing settlement

checks; (f) answering questions from Class Members; (g) and for such other

tasks as the Parties mutually agree or the Court orders Simpluris to perform.

(Springer Decl. ¶ 3.)

Simpluris’ total expenses for present and future work are estimated to

be $24,000 and are not to exceed that amount. Plaintiff submits that those

expenses are reasonable and appropriate in light of the size of the settlement,

and well within the range for similarly sized settlement classes. As such,

Class Counsels request that the Court find Simpluris’ administration

expenses of $24,000 to be appropriate and award them.

VI. CONCLUSION

The parties respectfully submit that the settlement is fair, adequate,


- 17 -


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

and reasonable, and in the best interests of Plaintiff and the members of the

Settlement Class. The Settlement was embraced by everyone as evidenced

by the lack of objections and nominal exclusions. Under the applicable class

action criteria and guidelines, Plaintiff respectfully submits that the

Settlement deserves final approval, and asks the Court to grant final approval.

Respectfully submitted, Dated: September 5, 2012 JAMES HAWKINS, APLC /s/ Gregory E. Mauro_

James R. Hawkins, Esq. Gregory E. Mauro, Esq.

Attorneys for Plaintiff, MARIA SANCHEZ, on behalf of herself and all others similarly situated


- 18 -


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

CERTIFICATE OF ELECTRONIC SERVICE

I certify that all counsel of record who are registered with the Court’s

ECF system are being served on September 5, 2012, with a copy of this

document via the Court’s CM/ECF system. /s/ Gregory E. Mauro

Gregory E. Mauro


james jh hawkins, aplc · james r. hawkins, esq. sbn 192925 [email protected] gregory e....

Documents