Motion for Final Approval of Class Action and PAGA Settlement
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(34) Tentative Ruling
Re: Ung v. Broder Bros. Co. Superior Court Case No. 23CECG01529
Hearing Date: May 7, 2026 (Dept. 403)
Motion: by Plaintiffs for Final Approval of Class Action and PAGA Settlement
Tentative Ruling:
To deny without prejudice.
Explanation:
Final Approval of Settlement
California Rules of Court, rule 3.769(g) states: “Before final approval, the court must conduct an inquiry into the fairness of the proposed settlement.” Subsection (h) states: “If the court approves the settlement agreement after the final approval hearing, the court must make and enter judgment. The judgment must include a provision for the retention of the court's jurisdiction over the parties to enforce the terms of the judgment. The court may not enter an order dismissing the action at the same time as, or after, entry of judgment.”
The court has vetted the fairness of the settlement through prior hearings, each with its own filings. The settlement here generally meets the standards for fairness, and the class has approved it, with no objections or disputes and only one opt-out. Only three of 186 notices were undeliverable. The court finds that the method of notice followed, which this court approved at the prior hearing, comports with due process and was reasonably calculated to reach the absent class members:
“Individual notice of class proceedings is not meant to guarantee that every member entitled to individual notice receives such notice,” but “it is the court's duty to ensure that the notice ordered is reasonably calculated to reach the absent class members.” [Citations.] After such appropriate notice is given, if the absent class members fail to opt out of the class action, such members will be bound by the court's actions, including settlement and judgment, even though those individuals never actually receive notice. Cooper, 467 U.S. at 874, 104 S.Ct. 2794; 7B Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 1789 (2d ed.1986).
(Reppert v. Marvin Lumber and Cedar Co., Inc. (1st Cir. 2004) 359 F.3d 53, 56-57 emphasis added.)
Calculation of Class Member Payments
The class period has been adjusted as a result of the settlement agreement’s escalator clause having been triggered after the workweeks for the original class from April 21, 2019 through July 24, 2024 exceeded 69.606 workweeks. The class period for final approval is April 21, 2019 through March 1, 2024 and the final PAGA period is April 21, 2022 through March 1, 2024. (Islas Suppl. Del., ¶ 11.) Based on the number of class members known to be participating, Lluvia Islas of Phoenix Class Action Administration Solutions calculates the net settlement fund to be $484,415.59 after deducting attorney fees and costs, the administration costs of $19,750, and the class representative awards totaling $20,000. (Islas Suppl. Decl., ¶ 7.) The highest estimated class payment is $1,854.88, the average payment is $356.45. (Id. at ¶ 8.)
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PAGA Settlement
Plaintiffs also seek approval of $40,000 to be paid to settle the PAGA claim, 75% of which will be paid to the LWDA pursuant to Labor Code section 2699, subdivision (i). The amount to be paid to settle the PAGA claim appears to be reasonable. The LWDA has been served with a copy of the settlement as well as preliminary approval motions, and it has not objected to the request to approve the settlement. However, there is no proof of service reflecting submission of the final approval motion to the LWDA.
Supplemental evidence is requested demonstrating the request for final approval of the PAGA settlement was submitted to the LWDA.
The settlement administrator has not provided information confirming the number of aggrieved employees entitled to penalties from the PAGA settlement is provided by the settlement administrator. Additional evidence is requested with respect to the number of aggrieved employees and estimated PAGA penalty payments.
Payment to Class Representatives
Plaintiffs also seek court approval of a $10,000 payment to the each of the two named class representatives, Pina Ung and Timothy Peraza. Plaintiffs state generally that they have taken risks by agreeing to participate as the named plaintiff in a class action against their employer. Pina Ung attests to spending in excess of 40 hours assisting with the prosecution of her case. (Ung Decl., ¶ 12.) Timothy Peraza provides details of the activities he has participated in during the litigation process.
Peraza Decl., ¶¶ 4-9.) Mr. Peraza attests to having difficulty finding employment for eight to nine months following the initiation of the lawsuit creating a financial hardship. (Peraza Decl., ¶ 11.) Plaintiffs claim they undertook financial risk that there would be no financial compensation and they may have had to pay defendants’ costs if the lawsuit was unsuccessful. (Ung Decl., ¶ 12; Peraza Decl., ¶ 3.)
Where the incentive payment is greatly disproportionate to the average payment for a class member, the court is generally hesitant to approve the payment without evidence of expense or risks incurred, beyond speculation, to demonstrate the enhancement was necessary to induce the plaintiff to participate in the lawsuit. (Clark v. American Residential Services, LLC (2009) 175 Cal.App.4th 785, 807.) Here, such 4
evidence is provided in the declaration of Timothy Peraza but is absent from the declaration of Pina Ung. Additional evidence beyond speculative risk as to employability or other evidence supporting the enhancement as necessary to induce plaintiff to participate in the action is requested in a subsequent submission.
Attorneys’ Fees
The settlement provided that the parties agreed (i.e., defendant agreed not to oppose) to fees calculated at thirty-five percent of the gross settlement amount or $315,000. Counsel has provided evidence of the time expended by the various attorneys representing plaintiffs and the class throughout this action to support the lodestar amount, as a cross-check of the percentage-based fees requested.
In the present case, attorneys Douglas Han of the Justice Law Corporation and Douglas Perlman of the Rastegar Law Group, APC, provide declarations reflecting their respective law firms’ hours spent litigating the case and the attorney billing rates. The Justice Law Corporation has spent approximately 299.4 hours of attorney time and its attorney rates range from $500 per hour to $900 per hour to support a lodestar of $230,550. (Han Decl., ¶¶ 10-11, Ex. 1.) Rastegar Law Group spent 134.61 hours litigating this case and its billing rates range from $900 per hour to $1,100 per hour, for a total lodestar of $129,694.00. (Perlman Decl., ¶ 21.) Time records are provided by the Justice Law Corporation but not for Rastegar Law Group, APC.
The court is unable to adequately assess the fee request in the absence of time records for the Rastegar Law Group APC. Additionally the rates charged by counsel greatly exceed those of the local community. Where a party is seeking out-of-town rates, he or she is required to make a “sufficient showing...that hiring local counsel was impractical.” (Nichols v. City of Taft (2007) 155 Cal.App.4th 1233, 1244.) Plaintiffs have made no showing that hiring local counsel was impractical. As such, in conducting its lodestar analysis of the fees the court will assess the reasonableness based on local billing rates.
Although the combined lodestars for the Justice Law Corporation and Rastegar Law Group, APC exceed the percentage based $315,000 fee sought in this case, the hourly rates are high for the Fresno area. Reducing the attorney rates to better reflect those of the local community results in a lodestar of approximately $200,000. As a result, a multiplier is required to increase the fees to the percentage-based fee requested to be approved. The moving papers provide some discussion of the factors the court will look to in determining whether a multiplier is warranted.
On the motion for final approval of the settlement, the request for attorney fees must also set forth in full any fee-sharing agreement between plaintiffs’ attorneys. Failure to disclose a fee-sharing arrangement is in violation of the California Rules of Court, Rule 3.769(b), and renders the agreement unenforceable. (Mark v. Spencer (2008) 166 Cal.App.4th 219, 227; Lofton v. Wells Fargo Home Mortgage (2018) 27 Cal.App.5th 1001, 1018 [“concealed” attorney fee payment of $5 million was properly disallowed and awarded to the class instead].)
Additional evidence to allow the court to assess the reasonableness of the fees requested is required before the award can be approved.
Costs
The Settlement Agreement provides that plaintiffs’ counsel would be reimbursed costs up to $30,000.00. In their motion for final approval of the settlement, counsel request actual costs totaling $20,834.41. The request for actual costs of $9,490.15 to Justice Law Corporation and $11,344.26 to Rastegar Law Group, APC is supported with evidence and can be approved. The remaining $9,165.59 of the $30,000 reserved for costs can be returned to the common fund for the benefit of the class members and was taken into consideration in the settlement administrator’s calculation of the net settlement fund.
Administrator’s Costs
The court intends to find the amount of $19,750 as requested to be reasonable, and approve the administrator’s costs as requested.
Pursuant to California Rules of Court, rule 3.1312(a), and Code of Civil Procedure section 1019.5, subdivision (a), no further written order is necessary. The minute order adopting this tentative ruling will serve as the order of the court and service by the clerk will constitute notice of the order.
Tentative Ruling
Issued By: lmg on 5-5-26. (Judge’s initials) (Date)
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