Grey v. Pacific Coast Logistix, et al.

Plaintiff moves for an order: granting class certification for settlement purposes; preliminarily approve the Stipulated Settlement Agreement (the “Settlement”); appointing Adrian R. Bacon, Todd M. Friedman, Meghan E. George, and Matthew R. Snyder of the Law Offices of Todd M. Friedman, and Adib Assassi and Veronica Cruz of the Law Offices of Assassi & Cruz Law Firm, PC as Class Counsel; (4) appointing Plaintiff as the Class Representative; (5) approving the use of the proposed notice procedure and related forms; (6) directing that the Class Notice be mailed to the Class; (7) scheduling a hearing date for a final approval hearing; and (8) approving the PAGA settlement.

X. LEGAL STANDARDS FOR SETTLEMENT APPROVAL

C. Class Action

Generally, “questions whether a [class action] 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), disapproved of on other grounds by Hernandez v. Restoration Hardware, Inc. (2018) 4 Cal.5th 260.)

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, internal citations and quotations omitted.)

In general, the most important factor is the strength of the plaintiffs’ case on the merits, balanced against the amount offered in settlement. (See Kullar v. Foot Locker Retail, Inc. (2008) 168 Cal.App.4th 116, 130 (Kullar).) But the trial court is free to engage in a balancing and weighing of relevant factors, depending on the circumstances of each case. (Wershba, supra, 91 Cal.App.4th at p. 245.) The trial 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., citation and internal quotation marks omitted.)

The trial court also must independently confirm that “the consideration being received for the release of the class members’ claims is reasonable in light of the strengths and weaknesses of the claims and the risks of the particular litigation.” (Kullar, supra, 168 Cal.App.4th at p. 129.) Of course, before performing its analysis the trial court must be “provided with basic information about the nature and magnitude of the claims in question and the basis for concluding that the consideration being paid for the release of those claims represents a reasonable compromise.” (Id. at pp. 130, 133.)

B. PAGA

Labor Code section 2699, subdivision (l)(2) provides that “[t]he superior court shall review and approve any settlement of any civil action filed pursuant to” PAGA. 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.) Seventy-five percent of any penalties recovered under PAGA go to the Labor and Workforce Development Agency (LWDA), leaving the remaining twenty-five percent for the aggrieved employees. (Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348, 380, overruled on other grounds by Viking River Cruises, Inc. v. Moriana (2022) 596 U.S. 639, 2022 U.S. LEXIS 2940.)

Similar to its review of class action settlements, the Court must “determine independently whether a PAGA settlement is fair and reasonable,” to protect “the interests of the public and the LWDA in the enforcement of state labor laws.” (Moniz v. Adecco USA, Inc. (2021) 72 Cal.App.5th 56, 76–77.) It must make this assessment “in view of PAGA’s purposes to remediate present labor law violations, deter future ones, and to maximize enforcement of state labor laws.” (Id. at p. 77; see also Haralson v. U.S. Aviation Servs. Corp. (N.D. Cal. 2019) 383 F. Supp. 3d 959, 971 [“when a PAGA claim is settled, the relief provided for under the PAGA [should] be genuine and meaningful, consistent with the underlying purpose of the statute to benefit the public ....”], quoting LWDA guidance discussed in O’Connor v. Uber Technologies, Inc. (N.D. Cal. 2016) 201 F.Supp.3d 1110 (O’Connor).)

The settlement must be reasonable in light of the potential verdict value. (See O’Connor, supra, 201 F.Supp.3d at p. 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.)

XI. SETTLEMENT PROCESS

On November 8, 2023, Plaintiff filed the complaint in the instant action and sent a PAGA notice with the Labor and Workforce Development Agency (“LWDA”). On March 26, 2024, she filed the operative FAC. The parties agreed to an early private mediation with Christopher Barnes (“Barnes”), Esq. of Barnes Dispute Resolution.

Prior to mediation, Defendant provided information regarding wages paid, number of workweeks, and number of Class members, a sample of the Class members and Aggrieved Employees’ timekeeping and pay records, and miles driven.

On August 27, 2024, the parties attended a full day mediation but they were unable to reach an agreement. They continued further settlement discussions with the assistance of Barnes over the following months. On November 12, 2024, the parties reached an agreement and began working on finalizing the terms of the Settlement, which was fully executed on July 29, 2025.

XII. SETTLEMENT PROVISIONS

The non-reversionary gross settlement amount is $350,000. Attorneys’ fees of up to one-third ($116,666.66), litigation costs of up to $20,000, and administration costs of up to $13,000. $10,000 will be allocated to PAGA penalties, 75% of which ($7,500) will be paid to the LWDA and the remaining 25% ($2,500) will be distributed to “Aggrieved Employees,” who are defined as “[a]ll Class Members employed during the PAGA Period [November 8, 2022 through November 12, 2024] and eligible to participate in a settlement of claims brought under the Private Attorneys General Act of 2004 in the Action.” Plaintiff will seek a Class representative award of $10,000.

The net settlement amount will be allocated to Class Members who are defined as “[a]ll individuals whose wages were reported on an IRS Form 1099, and who worked for Defendant Pacific Coast Logistix as drivers in California during the Class Period [November 8, 2019 through November 12, 2024].” Class Members will receive an average payment of $825.39. For tax purposes, 20% of each Class Member’s settlement payment will be allocated to wages and 80% will be allocated to interests and penalties. Defendant will pay the employer side payroll taxes separate and apart from the Settlement. Funds associated with checks uncashed after 180 days will be transmitted to Public Justice.

In exchange for settlement, Class Members who do not opt out and PAGA Members, who consistent with the statute will not be able to opt out of the PAGA portion of the settlement, will release:

[A]ll claims, demands, rights, liabilities, and/or causes of action asserted at any time in the Action based on the facts or laws alleged in the Complaint. Specifically, this includes any claims that during the Class Period and or PAGA Period, Defendant at any time that: 1) failed to pay wages, including minimum wages; 2) failed to pay overtime and/or double-time wages; 3) failed to provide timely, full, and uninterrupted rest breaks or a penalty payment in lieu thereof; 4) failed to provide timely, full, and uninterrupted meal periods or a penalty payment in lieu thereof; 5) failed to provide accurate itemized wage statements; 6) failed timely to pay wages or pay all wages due upon termination of employment; 7) failed to provide restitution for unpaid sums; 8) failed to maintain accurate records; 9) failed to reimburse business expense; 10) failed to properly classify employees; 11) violated the Unfair Competition Law, Bus. & Prof.

Code § 17200, et seg.; and 12) owed penalties pursuant to PAGA, Labor Code § 2698, et seq., including under Labor Code § 558 and § 226.8 predicated on any of the Labor Code sections identified in Plaintiff's PAGA Notice letter and attached complaint thereto.

The foregoing release is appropriately tailored to the allegations at issue. (See Amaro v. Anaheim Arena Management, LLC (2021) 69 Cal.App.5th 521, 537.)

XIII. FAIRNESS OF SETTLEMENT

Based on available data provided by Defendant, Class Counsel calculated Defendant’s maximum exposure as follows: $1,164,601.09 (mileage expenses); $1,425,000 (unpaid meal and rest break premiums); $158,333.33 (Section 226 damages); $432,000 (Section 203 damages); $3,000,000 (section 226.8 penalties); and $316,666.67 (PAGA penalties)—totaling $6,496,601.09.

Class Counsel then considered the risk related to the merits and class certification. Class Counsel also considered the fact that it was unlikely that Plaintiff and the Class would be able to successfully collect on a judgment in this matter if they were successful in litigating this case to judgment without putting Defendant out of business in the first place.

The gross settlement amount is approximately 5.4% of the maximum exposure, which is within the range of recoveries typically approved by California courts. (See Cavazos v. Salas Concrete, Inc. (E.D. Cal., Feb 18, 2022, No. 1:19-cv-00062-DAD-EPG) 2022 U.S.Dist. LEXIS 30201, at *41-42 [citing cases approving settlements in the range of 5 to 35 percent of the maximum potential exposure].)

Considering the portion of the case’s value attributable to uncertain penalties, claims that could be difficult to certify for class treatment, and the multiple, dependent contingencies that Plaintiff would have had to overcome to prevail on the claims, the settlement achieves a good result for the Class. For purposes of preliminary approval, the Court finds that the settlement is fair and reasonable to the Class, and the PAGA allocation is genuine, meaningful, and reasonable in light of the statute’s purposes.

XIV. PROPOSED SETTLEMENT CLASS

Plaintiff requests certification of the following class for settlement purposes:

All individuals whose wages were reported on an IRS Form 1099, and who worked for Defendant Pacific Coast Logistix as drivers in California during the Class Period.

I. Legal Standard for Certifying a Class for Settlement Purposes

Rule 3.769(d) of the California Rules of Court states that “[t]he court may make an order approving or denying certification of a provisional settlement class after [a] preliminary settlement hearing.” California Code of Civil Procedure Section 382 authorizes certification of a class “when the question is one of a common or general interest, of many persons, or when the parties are numerous, and it is impracticable to bring them all before the court ....”

Section 382 requires the plaintiff to demonstrate by a preponderance of the evidence: (1) an ascertainable class and (2) a well-defined community of interest among the class members. (Sav-On Drug Stores, Inc. v. Superior Court (2004) 34 Cal.4th 319, 326, 332 (Sav- On Drug Stores).) “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.)

In the settlement context, “the court’s evaluation of the certification issues is somewhat different from its consideration of certification issues when the class action has not yet settled.” (Luckey v. Superior Court (2014) 228 Cal.App.4th 81, 93.) As no trial is anticipated in the settlement-only context, the case management issues inherent in the ascertainable class determination need not be confronted, and the court’s review is more lenient in this respect. (Id. at pp. 93–94.) But considerations designed to protect absentees by blocking unwarranted or overbroad class definitions require heightened scrutiny in the settlement-only class context, since the court will lack the usual opportunity to adjust the class as proceedings unfold. (Id. at p. 94.)

J. Ascertainable Class

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).) A class definition satisfying these requirements

puts members of the class on notice that their rights may be adjudicated in the proceeding, so they must decide whether to intervene, opt out, or do nothing and live with the consequences. This kind of class definition also advances due process by supplying a concrete basis for determining who will and will not be bound by (or benefit from) any judgment.

(Noel, supra, 7 Cal.5th at p. 980, citation omitted.)

“As a rule, a representative plaintiff in a class action need not introduce evidence establishing how notice of the action will be communicated to individual class members in order to show an ascertainable class.” (Noel, supra, 7 Cal.5th at p. 984.) Still, it has long been held that “[c]lass members are ‘ascertainable’ where they may be readily identified ... by reference to official records.” (Rose v. City of Hayward (1981) 126 Cal. App. 3d 926, 932, disapproved of on another ground by Noel, supra, 7 Cal.5th 955; see also Cohen v. DIRECTV, Inc. (2009) 178 Cal.App.4th 966, 975-976 [“The defined class of all HD Package subscribers is precise, with objective characteristics and transactional parameters, and can be determined by DIRECTV’s own account records. No more is needed.”].)

Here, the estimated 210 Class members are readily identifiable based on Defendant’s records, and the settlement Class is appropriately defined based on objective characteristics. The Court finds that the settlement Class is numerous, ascertainable, and appropriately defined.

K. Community of Interest

The “community-of-interest” requirement encompasses three factors: (1) predominant questions of law or fact, (2) class representatives with claims or defenses typical of the class, and (3) class representatives who can adequately represent the class. (Sav-On Drug Stores, supra, 34 Cal.4th at pp. 326, 332.)

For the first community of interest factor, “[i]n order to determine whether common questions of fact predominate the trial court must examine the issues framed by the pleadings and the law applicable to the causes of action alleged.” (Hicks v. Kaufman & Broad Home Corp. (2001) 89 Cal.App.4th 908, 916 (Hicks).) The court must also examine evidence of any conflict of interest among the proposed class members. (See J.P. Morgan & Co., Inc. v. Superior Court (2003) 113 Cal.App.4th 195, 215.) The ultimate question is whether the issues which may be jointly tried, when compared with those requiring separate adjudication, are so numerous or substantial that the maintenance of a class action would be good for the judicial process and to the litigants. (Lockheed Martin Corp. v.

Superior Court (2003) 29 Cal.4th 1096, 1104–1105 (Lockheed Martin).) “As a general rule if the defendant’s liability can be determined by facts common to all members of the class, a class will be certified even if the members must individually prove their damages.” (Hicks, supra, 89 Cal.App.4th at p. 916.)

Here, common legal and factual issues predominate. Plaintiff’s claims all arise from Defendant’s purported misclassification of Class Members and its’ wage and hour practices.

As for the second factor,

The typicality requirement is meant to ensure that the class representative is able to adequately represent the class and focus on common issues. It is only when a defense unique to the class representative will be a major focus of the litigation, or when the class representative’s interests are antagonistic to or in conflict with the objectives of those she purports to represent that denial of class certification is appropriate. But even then, the court should determine if it would be feasible to divide the class into subclasses to eliminate the conflict and allow the class action to be maintained.

(Medrazo v. Honda of North Hollywood (2008) 166 Cal. App. 4th 89, 99, internal citations, brackets, and quotation marks omitted.)

Like the other members of the proposed Class, Plaintiff was employed by Defendant and alleges that she experienced the conduct at issue. The anticipated defenses are not unique to Plaintiff, and there is no indication that Plaintiff’s interests are otherwise in conflict with those of the proposed Class.

Finally, adequacy of representation “depends on whether the plaintiff’s attorney is qualified to conduct the proposed litigation and the plaintiff’s interests are not antagonistic to the interests of the class.” (McGhee v. Bank of America (1976) 60 Cal.App.3d 442, 450.) The class representative does not necessarily have to incur all of the damages suffered by each different class member in order to provide adequate representation to the class. (Wershba, supra, 91 Cal.App.4th at p. 238.) “Differences in individual class members’ proof of damages [are] not fatal to class certification. Only a conflict that goes to the very subject matter of the litigation will defeat a party’s claim of representative status.” (Ibid., internal citations and quotation marks omitted.)

Plaintiff has the same interest in maintaining this action as any Class Member would have. Further, she has hired experienced counsel. Plaintiff has sufficiently demonstrated adequacy of representation.

L. Substantial Benefits of Class Certification

“[A] class action should not be certified unless substantial benefits accrue both to litigants and the courts. . . .” (Basurco v. 21st Century Ins. (2003) 108 Cal.App.4th 110, 120, internal quotation marks omitted.) The question is whether a class action would be superior to individual lawsuits. (Ibid.) “Thus, even if questions of law or fact predominate, the lack of superiority provides an alternative ground to deny class certification.” (Ibid.) Generally, “a class action is proper where it provides small claimants with a method of obtaining redress and when numerous parties suffer injury of insufficient size to warrant individual action.” (Id. at pp. 120–121, internal quotation marks omitted.)

Here, there are an estimated 210 Class Members. It would be inefficient for the Court to hear and decide the same issues separately and repeatedly for each class member. Further, it would be cost prohibitive for each Class member to file suit individually, as each member would have the potential for little to no monetary recovery. It is clear that a class action provides substantial benefits to both the litigants and the Court in this case.

XV. NOTICE

The content of a class notice is subject to court approval. (Cal. Rules of Court, rule 3.769(f).) “The notice must contain an explanation of the proposed settlement and procedures for class members to follow in filing written objections to it and in arranging to appear at the settlement hearing and state any objections to the proposed settlement.” (Ibid.) In determining the manner of the notice, the court must consider: “(1) The interests of the class; (2) The type of relief requested; (3) The stake of the individual class members; (4) The cost of notifying class members; (5) The resources of the parties; (6) The possible prejudice to class members

who do not receive notice; and (7) The res judicata effect on class members.” (Cal. Rules of Court, rule 3.766(e).)

Here, the notice, which will be provided in English, informs the Class Members of the nature of the lawsuit and their rights under the terms of the Settlement and applicable law. It includes: a detailed explanation of the case, including the basic contentions or denials of the Parties and the basic terms of the Settlement; a statement that the court will exclude the member from the Class if they request so by a specified date; a procedure for the member to follow in requesting exclusions from the Class; an explanation that members of the Class can participate in the Settlement by doing nothing; a statement that the judgment, whether favorable or not, will bind all members who do not request exclusion; and a statement that any member who does not request exclusion may, if the member so desires, enter an appearance through counsel.

Class Members are given 45 days to exclude themselves or object.

The form of notice is generally adequate but must be modified to instruct Class Members that they may opt out of or object to the settlement simply by providing their name, without needing to provide personal information.

Regarding appearances at the final fairness hearing, the notice shall be modified to instruct class members as follows:

Although class members may appear in person, the judge overseeing this case encourages remote appearances. Class members who wish to appear remotely should contact class counsel at least three days before the hearing if possible. Remote appearances must be made through UDC, unless otherwise arranged with the Court. Please go to https://santaclara.courts.ca.gov/online-services/remote- hearings to find the appropriate link. Also, please note that that you must register in advance to appear remotely..

Turning to the notice procedure, as articulated above, the parties have selected Rust Consulting, Inc. (“Rust”) as the Settlement Administrator. No later than 20 days after preliminary approval is entered, Defendant will deliver the Class List to Rust. Rust, in turn, will mail the notice within 10 days of receiving the Class List. Any returned notices will be promptly re-mailed to any forwarding address provided. If no forwarding address is found, Rust shall conduct an investigation for one and if one is found, Rust shall re-mail the notice. These notice procedures are appropriate and are approved.

XVI. SERVICE AWARD, FEES, AND COSTS

Plaintiff requests a service award of $10,000. The rationale for making enhancement or incentive awards to named plaintiffs is that they should be compensated for the expense or risk they have incurred in conferring a benefit on other members of the class. An incentive award is appropriate if it is necessary to induce an individual to participate in the suit. Criteria courts may consider in determining whether to make an incentive award include: 1) the risk to the class representative in commencing suit, both financial and otherwise; 2) the notoriety and personal difficulties encountered by the class representative; 3) the amount of time and effort spent by the class representative; 4) the duration of the litigation and; 5) the personal benefit (or

lack thereof) enjoyed by the class representative as a result of the litigation. These “incentive awards” to class representatives must not be disproportionate to the amount of time and energy expended in pursuit of the lawsuit. (Cellphone Termination Fee Cases (2010) 186 Cal.App.4th 1380, 1394-1395, internal punctuation and citations omitted; see also Covillo v. Specialty’s Café (N.D. Cal. 2014) 2014 U.S.Dist.LEXIS 29837, at *29 [incentive awards are particularly appropriate where a plaintiff undertakes a significant “reputational risk” in bringing an action against an employer].)

Plaintiff submitted a declaration in support of her request. She states she spent approximately 20-25 hours on this action, which includes: communicating with Class Counsel; providing facts and documents; participating in settlement discussions; participating in mediation; creating logs and notes from her time working for Defendant; and reviewing documents. (Plaintiff’s Declaration (“Decl.”), ¶¶ 3.-4) She further states she considered the personal and financial risk of participating in this action. (Plaintiff’s Decl., ¶ 5.) The Court finds Plaintiff is entitled to a service award and the amount requested is reasonable. Thus, Plaintiff’s request is preliminarily approved.

The administrative costs in the amount of $12,86 is supported by the declaration of Andrew Meyer, the Director of Business Development for Rust. Thus, it is approved.

The court also has an independent right and responsibility to review the requested attorney fees and only award so much as it determines reasonable. (See Garabedian v. Los Angeles Cellular Telephone Co. (2004) 118 Cal.App.4th 123, 127-128.) Class Counsel will seek attorneys’ fees of up to one-third of the gross settlement amount (currently estimated to be $116,666.66), and litigation costs for up to $20,000. Prior to any final approval hearing, Class Counsel shall submit lodestar information (including hourly rate and hours worked) as well as evidence of actual litigation costs incurred.

XVII. CONCLUSION

Plaintiff’s motion for preliminary approval is GRANTED.

The final approval hearing shall take place on December 17, 2026 at 1:30 in Department 22. The following Class is preliminarily certified for settlement purposes:

All individuals whose wages were reported on an IRS Form 1099, and who worked for Defendant Pacific Coast Logistix as drivers in California during the Class Period.

The Court will prepare the order.

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