Erguera v. CMG CIT Acquisition, LLC

ORDER GRANTING PLAINTIFF'S MOTION FOR FINAL APPROVAL OF THE CLASS SETTLEMENT (DOC. 44) ORDER GRANTING PLAINTIFF'S MOTION FOR ATTORNEYS' FEES, LITIGATION COSTS, ADMINISTRATION EXPENSES, AND SERVICE PAYMENT (DOC. 43)

Margarita Erguera asserts CMG CIT Acquisition, LLC and Circharo Acquisition LLC violated California wage and hour laws by (1) failing to include all remuneration in the regular rate of pay when calculating overtime wages, and (2) failing to timely pay all wages owing at termination of employment. (See generally Doc. 1.) Plaintiff seeks final approval of a class settlement reached in this action. (Doc. 44.) In addition, Plaintiff seeks attorneys' fees and costs from the settlement fund, expenses for settlement administration, and a service payment for the class representative. (Doc. 43.) Defendants do not oppose these requests, and no class member submitted objections to the settlement terms. The Court found the matters suitable for decision without oral argument pursuant to Local Rule 230(g), and the hearing for final approval was vacated. (Doc. 46.)

Because Plaintiff meets the burden to demonstrate certification of the Settlement Class is appropriate under Rule 23 of the Federal Rules of Civil Procedure-and the terms of the settlement are

fair, reasonable, and adequate-the request for final approval of the Settlement is GRANTED. The request for attorneys' fees is granted in the amount of $225,000.00; costs are awarded in the amount of $9,305.85; Settlement Administration costs are granted in the amount of $10,000.00; and Plaintiff's service payment as the Class Representative is granted in the amount of $5,000.00.

BACKGROUND

Defendants “operate a healthcare staffing company that employs hourly health care professionals for short-term travel assignments at health care providers throughout California and elsewhere.” (Doc. 1 at 3-4, ¶ 11.) For each work assignment, Defendants execute an assignment contract specifying the employee's compensation and expected work hours. (Id. at 4, ¶ 12.) Employees receive both an hourly wage and a weekly per diem allowance, the latter of which varies depending upon the extent to which the employee satisfies her contracted hours for that week. (Id., ¶¶ 13-14.) An employees' weekly per diem allowance is prorated on a sliding scale to the extent the employee fails to satisfy her weekly contracted hours. (Id., ¶ 16.)

Plaintiff asserts that as employees of Defendants, she and others performed assignments for more than eight hours per week. (Doc. 1 at 4, ¶¶ 20, 23.) When this would occur, Plaintiff alleges that Defendants “did not include the value of the weekly per diem allowance in [their] regular rate of pay for purposes of calculating [their] overtime and double time wages.” (Id. at 5, ¶ 21.)

On December 8, 2020, Plaintiff filed the instant class complaint. (Doc. 1.) She identifies the following causes of action: (1) failure to pay overtime wages pursuant to Cal. Labor Code §§ 510, 1194; (2) unlawful and unfair conduct in violation of Cal. Bus. & Prof. Code § 17200, et seq.; (3) waiting time penalties pursuant to Cal. Labor Code §§ 201, 203; and (4) violation of the Fair Labor Standards Act, 29 U.S.C. § 201, et seq. (Id. at 7-10, ¶¶ 32-52.) Plaintiff asserts the claims are brought on behalf of herself and the California class composed of “[a]ll non-exempt hourly health care professionals employed by DEFENDANTS in California who, at any time since four years before the filing of this action, worked overtime and received a per diem allowance.” (Id. at 5, ¶ 23.) Defendants filed their answer on February 8, 2021. (Doc. 8.)

Plaintiff filed an unopposed motion for preliminary approval of the settlement, which was granted on November 8, 2022. (Docs. 34, 37.) The Court appointed Plaintiff as the Class

Representative and authorized her request for an incentive payment up to $5,000 “subject to a petition and review.” (Doc. 37 at 23-24.) In addition, the Court appointed the firm of Hayes Pawlenko LLP as Class Counsel. (Id. at 23.) The Court preliminarily granted “Class Counsel's request for fees not to exceed 25% of the gross settlement amount and costs up to $10,000.00,” noting the requests were also subject to review at the final approval stage. (Id. at 24.) Finally, the Court appointed Phoenix Class Action Administration Solutions as the Settlement Administrator, and authorized costs up to $15,000.00 for the administration. (Id. at 23-24.)

The Court approved the Class Notice that conveyed this information for Class Members on November 18, 2022. (Doc. 40 at 1.) The Class Notice informed Class Members of the class approved by the Court, claims and issues to be resolved, representation by counsel, how to be excluded from the class, deadlines for any requests for exclusion and objections, and the binding effect of a class judgment. (See Doc. 39-1.)

On January 18, 2023, the Settlement Administrator mailed the Class Notice to all 784 Class Members. (Doc. 44-4 at 3, Salinas Decl. ¶ 2.) Jarrod Salinas, a case manager for the Settlement Administrator, reports that “[f]or the forty-one (41) Notices returned from the Post Office without a forwarding address, Phoenix attempted to locate a current mailing address using TransUnion TLOxp, one of the most comprehensive address databases available for skip tracing.” (Id., ¶ 3.) Mr. Salinas reports that “[o]f the forty-one (41) Notices that were skip traced, thirty-nine (39) updated addresses were obtained and the Notice was promptly re-mailed to those Class Members via first class mail.” (Id.)

Mr. Salinas reports only two Notice Packets were undeliverable. (Doc. 44-4 at 3, ¶ 4.) No Class Member disputed the number of overtime hours identified in their Notice Packets for purposes of calculating each settlement share. (Id., ¶ 7.) Further, no requests for exclusion or objections to the agreement terms were received by either the Settlement Administrator or the Court. (See id., ¶¶ 5-6.)

On February 9, 2023, Plaintiff filed a motion for attorneys' fees and costs, a service award for Plaintiff as the Class Representative, and settlement administration expenses. (Doc. 43.) On March 2, 2023, Plaintiff filed a motion for final approval of the settlement. (Doc. 44.) Defendants did not oppose either of the pending motions.

SETTLEMENT TERMS

Pursuant to the proposed “Joint Stipulation and Settlement Agreement (“Settlement” or “Settlement Agreement”), the parties agree to a gross settlement amount (“Gross Settlement Fund”) of $900,000.00 for a class including:

All non-exempt hourly healthcare professionals employed by Defendant in California who, at any time from December 8 2016 through September 30, 2022, worked overtime and received a per diem allowance.

(Doc. 34-4 at 4, Settlement ¶ 2; id. at 6, ¶ 6, (“Settlement Class”).) In the event the number of class members exceeds 800, the Gross Settlement Fund “shall be increased pro-rata for each additional class member.” (Id. at 6, Settlement ¶ 6.) The settlement funds are non-reversionary and Defendants shall also pay “[e]mployer-side payroll taxes” separately from the Gross Settlement Fund. (Id.)

I. Payment Terms

The parties agree the Gross Settlement Fund shall cover payments to class members, including (1) a service award to Plaintiff as the Class Representative, not to exceed $5,000; (2) payment to Class Counsel for attorneys' fees and costs, not to exceed $10,000.00; and (3) administration fees to the Settlement Administrator, not to exceed $15,000.00. (Doc. 34-4 at 6-7, Settlement ¶ 7; id. at 19; see also Doc. 34-1 at 11-12.) After these payments, the remaining balance of the Gross Settlement Fund (“Net Settlement Fund”) would be distributed to class members who did not opt-out. (Id.)

Settlement shares will be calculated on a pro rata basis to class members “based on the number of overtime hours [Defendants'] pay records credit each member with having worked during the class period (hereafter ‘Qualifying Overtime Hours').” (Doc. 34-4 at 7, Settlement ¶ 8.) The Settlement provides:

The Net Settlement Fund shall first be divided by the total number of Qualifying Overtime Hours worked by the entire California Rule 23 Class to determine the monetary value of each Qualifying Overtime Hour. Each individual payment to a member of the class will then be calculated by multiplying that individual's number of Qualifying Overtime Hours by the monetary value of each Qualifying Overtime Hour. Mathematically, an individual's settlement payment will be calculated as follows: (Net Settlement Fund + Qualifying Overtime Hours of entire class) x (Qualifying Overtime Hours worked by the individual) = individual settlement payment.

(Id.)

The appointed Settlement Administrator will distribute payment by mailing checks to all class

members. (Doc. 34-4 at 11-12, Settlement ¶ 12.) Checks must be cashed within 180 days of the mailing. (Id.) If any check remains uncashed after the 180-day period, the money does not revert to Defendants. Rather, “the amount shall be deposited with the State of California Controller's Office of Unclaimed Funds in the name of the individual to whom the settlement check had been addressed.” (Id.)

II. Releases

The Settlement provides that Plaintiff and class members, other than those who elect not to participate in the Settlement, shall release Defendants from claims. (Doc. 34-4 at 5-6, Settlement ¶ 5.) Specifically, the release for all class members provides:

a. Class Release: As of the Effective Date, all members of the California Rule 23 Class who do not timely request exclusion from the Settlement, shall release CMG CIT Acquisition, LLC, its predecessor