Leopoldo Martinez-Bravo, individually, and on behalf of all others similarly situated v. Mike Kelley Construction, Inc., et al.

Following the exchange of extensive informal discovery, including a 20 percent sampling of time and payroll records and other pertinent information, on July 9, 2025, the parties attended mediation. (Davis Decl. in Support of Preliminary Approval, P.P. 20-23.) After a full day of mediation, the parties reached an agreement to resolve this consolidated matter, including the representative action and the PAGA action, for a gross settlement of $499,000.00. (Davis Decl. in Support of Preliminary Approval, P. 25.)

On October 28, 2025, after extensive discussions and revisions to the agreement, the parties executed a Joint Stipulation of Class Action and PAGA Settlement which contains all relevant terms of the proposed settlement. (Davis Decl. in Support of Preliminary Approval, P. 26 & Exh. 3.) On February 18, 2026, the Court granted preliminary approval of the settlement. Pursuant to that approval, Plaintiffs' counsel was ordered to correct the Notice of Proposed Class Action Settlement, Section 5, subdivisions (D) and (E), prior to sending it to Class Members. A review of the Notice reflects that the ordered corrections were made prior to sending them to Class Members. Plaintiffs now seek final approval of the Settlement. The motion is unopposed.

Analysis

"Before final approval, the Court must conduct an inquiry into the fairness of the proposed settlement." (Cal. Rules of Court, rule 3.769(g).) "At the final approval hearing, 'the Court must conduct an inquiry into the fairness of the proposed settlement.' [Citation.]" (Luckey v. Superior Court (2014) 228 Cal.App.4th 81, 93.)

"Because a Court evaluating certification of a class action that settled prior to certification is considering certification only in the context of settlement, 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. In some ways, the Court's review of certification of a settlement-only class is lessened; as no trial is anticipated in a settlement-only class case, 'the case management issues inherent in the ascertainable class determination need not be confronted.' [Citation.]" (Id. at pp. 93-94.)

"However, other certification issues, 'those designed to protect absentees by blocking unwarranted or overbroad class definitions' require heightened scrutiny in the settlement-only class context 'for a Court asked to certify a settlement class will lack the opportunity, present when a case is litigated, to adjust the class, informed by the proceedings as they unfold.' [Citation.]" (Id. at p. 94.)

"'The Court has a fiduciary responsibility as guardians of the rights of the absentee class members when deciding whether to approve a settlement agreement.'" (Kullar v. Foot Locker Retail, Inc. (2008) 168 Cal.App.4th 116, 129.) The Court has broad discretion to determine whether the settlement is fair. (Dunk v. Ford Motor Co.) (1996) 48 Cal.App.4th 1794, 1801.)

"The well-recognized factors that the trial Court should consider in evaluating the reasonableness of a class action settlement agreement include '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 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.' [Citations.] This list 'is not exhaustive and should be tailored to each case.' [Citation.]" (Kullar v. Foot Locker Retail, Inc., supra, 168 Cal.App.4th at p. 128.)

A PAGA action is a type of qui tam action, in which a private party is authorized to bring an action to recover a penalty on behalf of the government and receive part of the recovery as compensation. (Huff v. Securitas Sec. Servs. USA, Inc. (2018) 23 Cal.App.5th 745, 753.) In doing so, the employee acts as proxy for the state labor law enforcement agency; the proceeding is designed to protect the public, not to benefit private parties. (Amalgamated Transit Union, Local 1756, AFL-CIO v. Superior Court (2009) 46 Cal.4th 993, 1003.)

The dispute is between the employer and the state. (Kim v. Reins International California, Inc. (2020) 9 Cal.5th 73, 81.) The purpose of PAGA is not to recover damages, restitution, or redress the employees' injuries, but to recover civil penalties to remediate present violations and deter future ones. (Id. at p. 86.) While a PAGA case is representative in nature, it is not a class action and may be brought without the procedural requirements involved in class actions.

Prior to January 1, 2026, Labor Code section 2699, subdivision (i) mandated that PAGA civil penalties be allocated 75% to the California Labor and Workforce Development Agency ("LWDA"), for enforcement of labor laws and education of employers and employees about their rights and responsibilities under the code, and 25% to the aggrieved employees. Section 2699(l)(2) required that the superior Court review and approve any penalties sought as part of a proposed settlement agreement, pursuant to that part of the code. The code section, as was effective prior to January 1, 2026, is applicable to this action.

As noted above, on October 28, 2025, the parties executed a joint stipulation of class action and PAGA settlement that resulted in a settlement in principle of the class action and PAGA claims. Pursuant to the agreement, the parties set forth the following settlement terms:

The Class Period means the period from September 26, 2020, and ending on September 7, 2025. (Agreement, P. 7.) The PAGA Period means the period from April 24, 2023, and ending on September 7, 2025. (Id. at P. 23.) The settlement class members means all participating class members and the PAGA members. (Id. at P. 37.) The proposed class consists of an estimated 141 class members within the class period and approximately 97 PAGA members who were employed within the PAGA period. (Davis Decl., P. 30.)

The non-revisionary gross settlement amount is $499,000.00 and is inclusive of payments to the class, class counsels' fees, class counsels' costs, settlement administration costs, incentive payments to Plaintiffs, and payment of PAGA penalties to be paid to the LWDA. (Agreement, P. 15.) The gross settlement amount is exclusive of employer share of any applicable payroll taxes, and any such employer-side payroll taxes shall be paid by Defendants separately and in addition to the gross settlement amount. (Ibid.) 10 percent of each individual settlement payment will be allocated as wages; 45 percent shall be allocated as interest; and 45 percent shall be allocated as penalties. (Id. at P. 59, subd. (c).)

The gross settlement amount is based on Defendants' representation that the class members worked a total of 10,605 workweeks during the class period. Should the qualifying workweeks worked by the class members during the class period ultimately increase by more than 10 percent, Defendant shall increase the gross settlement amount on a pro-rata basis equal to the percentage increase in the number of workweeks worked by the class members above 10 percent. (Agreement, P. 52.)

Proposed Class Counsel, Protection Law Group LLP, King & Siegen LLP, and Law Office of Xavier Villegas APC, request attorneys' fees in an amount not to exceed thirty-five percent of the gross settlement amount, or $174,650.00, plus costs not to exceed $25,000.00. (Agreement, P. 54.) In the event the Court awards class counsel less than this requested amount, the difference shall become part of the net settlement amount and shall be distributed to participating class members as part of their individual settlement awards. (Ibid.) If the escalator clause of the settlement agreement is triggered, class counsel shall have the right to seek up to 35 percent of the escalated gross settlement amount. (Ibid.)

For settlement purposes only, the parties agree to the designation of Plaintiffs as the class representatives and request a class representative service award of $15,000.00 for Bravo and $10,000.00 for Estrada. (Agreement, P.P. 8, 55.) The parties agree that Apex Class Action ("Apex") shall be the settlement administrator and shall paid settlement administration costs, not to exceed $6,500.00, to be paid from the gross settlement amount. (Agreement, P.P. 35, 56.)

Apex shall: (1) establish and maintain a Qualified Settlement Fund, (2) calculate the individual settlement payment each participating class member is eligible to receive and the portion of the PAGA penalties each PAGA member shall receive, (3) translate the notice from English to Spanish, (4) print and mail the notice in English and Spanish, (5) conduct additional address searches for mailed notices that are returned as undeliverable, (6) process requests for exclusion and field inquiries from class members, (7) print and issue settlement payment checks, prepare IRS W-2 and 1099 Tax Forms and any other filings required by any governmental taxing authority, (8) provide declarations and other information to the Court as requested by the parties or the Court regarding settlement administration process, (9) provide weekly status reports to counsel for the parties, and (10) post a notice of final judgment online at Apex's website. (Agreement, P. 61.)

The parties agree that Defendants will pay a total of $25,000.00 to resolve the PAGA claims, with 75 percent, or $18,750.00, to be paid to the LWDA and the remaining 25 percent, or $6,250.00 to be distributed to the PAGA eligible employees based on their proportionate share of the compensable pay periods worked during the PAGA period. (Agreement, P. 57.)

Following the preliminary approval of the settlement: "On February 18, 2026, Counsel for Plaintiff[s] provided Apex with the Court-approved content for the Class Notice. Apex then generated a draft of the formatted Class Notice, which received approval from the Parties' Counsel prior to mailing." (Botero Decl., P. 4.)

"On March 4, 2026, Counsel for the Defendants provided Apex with the Class List, comprising the names, social security numbers, last known mailing addresses, and dates worked for Defendants during the Class Period and PAGA Period. Apex reviewed & cleansed the data for duplicates, discrepancies and any potential missing information. Apex identified one (1) Class Member with zero (0) workweeks and 36 Class Members with a greater number of PAGA pay periods than recorded workweeks. These discrepancies were submitted to Defendant for confirmation prior to finalizing the Class List. The Class List consisted of a total of 150 individuals." (Botero Decl., P. 5.)

"In preparation for the mailing process, all 150 names and addresses listed in the Class List underwent verification and updating against the National Change of Address (NCOA) database maintained by the United States Postal Service (USPS). The purpose of this step was to ensure the accuracy and validity of the Settlement Class Members' mailing addresses before sending out the Class Notice. The NCOA database contains records of requested address changes submitted to the USPS. If an updated address was found in the NCOA database, it was utilized for the mailing of the Class Notice. However, in cases where no updated address was found in the NCOA database, the original address provided by Counsel for Defendants was used for the mailing of the Class Notice." (Botero Decl., P. 6.)

"On March 13, 2026, the Class Notice was sent to all 150 individuals listed in the Class List via U.S First Class Mail." (Botero Decl., P. 7 & Exh. A.)

Apex received 23 returned Class Notices as undeliverable, so they conducted a skip trace in an attempt to acquire updated addresses for the purpose of remailing. This resulted in obtaining six updated addresses to which Apex promptly re-mailed the Class Notices. (Botero Decl., P. 8.) Seventeen Class Notices have been considered undeliverable as no updated address was found by way of the skip tracing. (Botero Decl., P. 9.) Apex did not receive any requests for exclusion or objections to the settlement. (Botero Decl., P.P. 11, 12.)

"The total number of workweeks worked by Participating Class Members during the Class Period is 11,288.99. The Net Settlement Amount available to Participating Class Members is estimated to be ($242,850.00) and was calculated by subtracting the requested Class Counsel's Fees ($174,650.00), the amount requested for litigation costs ($25,000.00) [Note: the amount in costs is less], the requested Class Representative Enhancement Award totaling $25,000.00 ($15,000.00 for Plaintiff Leopoldo Martinez- Bravo and $10,000.00 for Roberto Ramon Joya Estrada aka Roberto R. Flores Cruz), the requested Settlement Administration Costs ($6,500.00), and the PAGA Penalties ($25,000.00) from the Gross Settlement Amount ($499,000.00)." (Botero Decl., P. 15.)

"The highest Individual Class Payment to a Participating Class Member is currently estimated to be approximately $5,614.66, the average Individual Class Payment is currently estimated to be approximately $1,619.00, and the lowest Individual Class Payment is currently estimated to be approximately $6.24. These amounts are subject to employee-side tax and withholdings." (Botero Decl., P. 16.)

"Pursuant to the Agreement, 25% of the PAGA Payment ($6,250.00) will be allocated to Aggrieved Employees regardless of whether they opt out of the Class settlement. Aggrieved Employees cannot opt out of the PAGA settlement. There are Aggrieved Employees who worked a total of 6,086.00 Pay Periods during the PAGA Period." (Botero Decl., P. 17.)

"The highest Individual PAGA Payment to an Aggrieved Employee is approximately $127.34, the average Individual PAGA Payment is approximately $63.78, and the lowest Individual PAGA Payment is approximately $2.05." (Botero Decl., P. 18.)

"Apex's comprehensive fees and costs for administering this Settlement, covering both incurred and anticipated expenses, amount to $6,500.00." (Botero Decl., P. 20.)

Based on the declaration of Botero, as well as the Class Notice, the Court finds that Apex completed the distribution of the Class Notice in a manner that comports with California Rules of Court, rule 3.766, and that the Class Notice contained all relevant information regarding the settlement terms and Class Members' rights with respect to the proposed settlement.

By way of this motion for final approval, Plaintiffs request the following be approved: Defendants shall pay a total gross settlement amount of $499,000.00 to resolve the action; Individual Settlement Payments are to be paid to the Settlement Class Members as provided for in the settlement agreement and the Botero declaration; Payments of PAGA Civil Penalties in the amount of $25,000.00, with 75 percent to be paid to the LWDA and 25 percent to be distributed to the PAGA Members; Class representative enhancement payments of $15,000.00 to Plaintiff Leopoldo Martinez-Bravo and $10,000.00 to Plaintiff Roberto Ramon Joya Estrada; Administration fees and expenses of $6,500.00 to be paid to Apex; Attorney fees of 35 percent of the gross settlement amount ($174,650.00); and Litigation costs of $17,856.14.

The Court finds: (1) the notice procedure afforded adequate protections to Class Members; (2) the members of the Class are ascertainable and so numerous that joinder of all members is impracticable; (3) there are questions of law and fact common to the Class, as well as a well-defined community of interest among members of the Class with respect to the subject matter of this action; (4) the claims of the class representatives are typical of the claims of the other Class Members; (5) the class representatives have fairly and adequately protected the interests of the Class; and (6) counsel of record for the class representatives are qualified to serve as class counsel.

The Court finds that the terms of the settlement are fair, reasonable, and adequate, and will approve final settlement upon the agreed upon terms. However: The proposed order has a typographical error at paragraph 14 b that must be corrected. It should read "$17,856.14," but reads "$17,856314." Plaintiffs will be ordered to correct the order and resubmit it to the Court for signature.

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