CASTELLANOS, ET AL. VS. BEAR TRACKS HOLDINGS, LLC

The list of factors is not exhaustive and should be tailored to each case. Id.

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 v. Apple Computer, Inc. (2001) 91 Cal. App. 4th 224, 225 (disapproved on other grounds by Hernandez v. Restoration Hardware (2018) 4 Cal. 5th 260).

Class Certification and Approval of Class Representative. A class action may be maintained “when the question is one of common or general interest, of many persons, or when the parties are numerous, and it is impracticable to bring them all before the court.” CCP § 382. “The ‘community of interest’ requirement embodies three factors: (1) predominant common 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.”

Gattuso v. Harte-Hanks Shoppers, Inc. (2007) 42 Cal. 4th 554, 575. Here, the settlement class is approximately 474 individuals employed by Bear Tracks Holdings, LLC in California and classified as non-exempt who worked for Bear Tracks Holdings, LLC during the Class Period, which is defined as January 10, 2021 until February 16, 2026, and who did not sign an arbitration clause. There appears to be a community of interest. There are common questions of law and fact because the proposed class members all worked for the same employer and were subject to the same employment practices and policies and same wage and hour laws.

The class members have a representative who appears to be similarly situated as an employee of Defendant during the Class Period. Counsel has provided evidence that Plaintiff’s claims are typical of the class. The Court certifies the class for the purpose of settlement and 4

confirms Genaro Castellanos and Alejandro Gandarilla Parra as the class representatives.

Approval of Class Counsel. Plaintiffs’ counsel has demonstrated their experience and familiarity with class action cases, including employment and wage-and-hour disputes. Plaintiffs’ counsel have provided evidence that they are well versed in class actions, particularly of this nature, and have the competence to be appointed as Class Counsel. The Court appoints Starpoint, LC and Southern California Attorneys, APC as class counsel for settlement purposes.

Approval of Settlement Administrator. A representative of proposed settlement administrator, ILYM Group, Inc., has provided evidence of the administrator’s qualifications which the Court finds sufficient.

Fairness of Settlement and Plan of Allocation. Preliminary approval of a class action settlement constitutes a conditional finding that the settlement appears to be in the range of acceptable settlements. The Court has broad discretion to determine whether the settlement is fair. Dunk v. Ford Motor Company, supra, 48 Cal. App. 4th at 1801. As noted above, factors relevant to the court’s determination include, but are not limited to, 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, and the experience and views of counsel.

Id. There is a presumption of fairness 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; and (3) counsel is experienced in similar litigation. Id. at 1802.

The settlement here was the result of arm’s-length negotiation through mediation with an experienced mediator following informal discovery. The declarations of counsel provide analysis of each claim that included the maximum overall exposure, discounts applied, and the realistic exposure. The proposed settlement is within the ballpark of the realistic exposure in this matter. Settling avoids the added costs of litigation to certify the class and to try the matter. It also avoids the possibility that putative class members will have no recovery at all. The Court finds the settlement to be fair, adequate, and reasonable.

Total Settlement Amount $573,000 Proposed Attorneys’ Fees (up to 1/3) -$191,000 Litigation Costs and Expenses (up to) -$25,000.00 Settlement Administration Costs (up to) -$21,000 Proposed Class Representative Enhancement (both Plaintiffs) -$20,000 PAGA Claim Settlement Allocation $100,000 Payment to LWDA (65%) (-$65,000) Payment to Class Members (35%) ($35,000) Settlement to be Disbursed to Class Members $251,000

Attorney Fees and Costs: Counsel seeks up to $191,000 in attorney fees and up to $25,000 in litigation costs. Counsel has provided evidence of their expertise in the area, the risk of taking the case given that no payment is provided until settlement, and efforts put forth to prosecute the case. The Court will not approve the amount of attorney fees until the final approval hearing. The Court cannot award attorney fees without reviewing information about counsel's hourly rate and the time spent on the case. This is the law even if the parties have agreed to the fees. Robbins v. Alibrandi 5

(2005) 127 Cal. App. 4th 438, 450-451. At the time of the final approval hearing, the Court will review the evidence provided by Class Counsel. In addition to the hourly rate and hours spent on the case, Class Counsel should provide admissible evidence supporting the hourly fee requested including, if applicable, whether Class Counsel charges fee-paying clients the same rates. The Court will likewise not approve final costs until the final hearing as that is when Class Counsel can provide evidence of the specific costs incurred as part of this litigation.

Enhancement Award: The settlement provides for an enhancement award of $10,000 to each of the named Plaintiffs as the Class Representatives. The Court will not approve the amount of the Plaintiff's enhancement award until the final approval hearing. With the final approval motion, a plaintiff should provide admissible evidence to support the request, e.g. the number of hours of service provided, the nature of the work performed, the risks faced in prosecuting this lawsuit, including any actual retaliation, and/or other evidence demonstrating the need for an incentive payment. See Clark v. American Residential Services, LLC (2009) 175 Cal. App. 4th 785, 804- 807.

Settlement Administration Costs: Settlement administration costs have been requested in an amount up to $21,000. Based on the size of the class and work required to administer this settlement, this amount appears to be higher than the Court typically approves for settlement administration. The estimate provided by ILYM Group, attached as Exhibit C to the Declaration of Lisa Mullins, provides that the estimate assumes 2,500 Class Members. Plaintiffs’ briefing estimates fewer than 500 Class Members. The Court will require further clarification of this discrepancy before preliminarily approving the settlement administration costs. Additionally, the Court will not approve costs until the Final Approval Hearing and expects the Settlement Administrator to provide detailed billing records to support any requested costs.

PAGA: Under the Private Attorney General Act, private parties can assert claims for penalties that otherwise can be recovered only by the Labor and Workforce Development Agency ("LWDA"). Labor Code 2699(a). See also Dunlap v. Superior Court (2006) 142 Cal. App. 4th 330, 336. An employee who, through the PAGA, asserts a claim for civil penalties on behalf of the LWDA is acting as an agent of the LWDA. This is evident from the requirement that before initiating a PAGA claim, an employee must provide notice to the LWDA per Labor Code 2699.3(a), and the requirement that that 65% of any recovered civil penalties must be distributed to the LWDA, Labor Code 2699(i).

In settling the LWDA's claims, Class Counsel are settling and releasing claims for penalties that belong to the People of the State of California acting through the LWDA. A settlement of LWDA claims should, therefore, provide a reasonable benefit to the state for the settlement of the released claims. The reasonable benefit may be based on the potential value of the recoverable civil penalties discounted by the risk and expense of litigation. In Nordstrom Com’ Cases (2010) 186 Cal. App. 4th 576, 589, the Court of Appeal held that the Court can approve a settlement even when no money is allocated to the PAGA claims.

The Declaration of Zachary Greenberg provides evidence that the LWDA was notified of the settlement prior to the motion being filed and how the PAGA portion of the settlement was determined. The Court notes that no objection was received from the LWDA. The Court finds that the $65,000 PAGA portion of the settlement is reasonable and confers a substantial benefit on both the State of California and aggrieved employees.

Notice and Notice Procedure. Plaintiff requests approval of the Class Notice attached as Exhibit 1 to Exhibit A to the Declaration of Zachary Greenberg. If a class notice is to be effective, 6

"members of the class must receive the best notice practicable under the circumstances, including individual notice to all members who can be identified through reasonable effort." Home Sav. & Loan Ass'n v. Sup. Ct. (1975) 42 Cal. App. 3d 1006, 1012, citing Fed. R. Civ. P. 23(b)(2). The standard in California is whether the notice "has a reasonable chance of reaching a substantial percentage of class members." Wershba v. Apple Computer (2001) 91 Cal. App. 4th 224, 251. The Court notes the following issues with the Class Notice that will need to be corrected prior to mailing: 1) Under sections 7 and 9, remove reference to accessing documents on the Court’s website.

Shasta County Superior Court currently does not provide this option. Individuals may access public documents in person at the Court at any time during normal business hours; 2) Item 3.2.C. at page 24 of the proposed Class Notice indicates costs of up to $21,000 for settlement administration. This figure must be revised as appropriate pending the outcome of today’s hearing. Following the changes noted above, the Class Notice is approved for mailing in the manner described in the Settlement Agreement.

If Plaintiff appears at the hearing with satisfactory clarification and/or revision of the estimated settlement administration costs, the Court is otherwise prepared to grant the motion and set a date for the Final Approval Hearing. If Plaintiff fails to do so, the Court will continue the hearing and permit the filing of a supplemental declaration that addresses this issue.

IN RE: FURTADO