Cramer v. MGE Underground, Inc.

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.) 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, supra, 91 Cal.App.4th at p. 245.)

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” the Private Attorneys General Act (“PAGA”). The trial 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.) A PAGA settlement may be substantially discounted, and courts often exercise their

discretion to award PAGA penalties below the statutory maximum. (Carrington v. Starbucks Corp. (2018) 30 Cal.App.5th 504, 529; Amaral v. Cintas Corp. No. 2 (2008) 163 Cal.App.4th 1157, 1213.)

II. Terms and Administration of Settlement

A. Settlement Terms This case has been settled on behalf of the following class: [A]ll current and former non–exempt, hourly individuals that worked for Defendant MGE Underground in the State of California during the Class Period [April 4, 2018 through January 22, 2025]. (Declaration of John G. Yslas in Support of Motion for Preliminary Approval, Ex. 1 (“Agreement”), ¶¶ 1.5, 1.13.) The settlement includes a subset PAGA class of Aggrieved Employees, defined as: “all current and former non–exempt, hourly individuals that worked for Defendant MGE Underground, Inc. in the State of California during the PAGA Period [May 9, 2022 through January 22, 2025].” (Id. at ¶¶ 1.4, 1.34.)

Defendant will pay a gross settlement amount of $2,000,000, and this amount includes: attorney fees of up to 35 percent of the gross settlement amount (i.e., $700,000); litigation costs not to exceed $40,000; a PAGA allocation of $100,000 (75 percent of which will be paid to the LWDA and 25 percent of which will be paid to Aggrieved Employees as individual PAGA payments); a service payment of up to $10,000 to each Plaintiff; and settlement administration costs up to $14,790. (Agreement, ¶¶ 3.1–3.2.)

The net settlement amount will be distributed to participating class members on a pro-rata basis according to the number of workweeks they were employed by Defendant, and individual PAGA payments will be distributed according to the number of pay periods worked. (Id. at ¶ 3.2.) At preliminary approval the Court approved and appointed Apex Class Action Administration (“Apex”) as settlement administrator and approved the designation of Legal Aid at Work as the cy pres recipient of funds from uncashed settlement checks. (Id. at ¶¶ 1.2, 4.4.3.)

In exchange for the settlement, the class members agree to release Defendant and related entities and persons from “all claims that were asserted in the Actions, or that arise from

or could have been asserted based on any of the facts, circumstances, transactions, events, occurrences, acts, disclosures, statements, omissions or failures to act alleged in Plaintiffs’ Complaints, regardless of whether such claims arise under federal, state and/or local law, statute, ordinance, regulation, common law, or other source of law.” (Agreement, ¶ 5.2.) Aggrieved Employees will be deemed to release Defendant and related entities and persons “from all claims for PAGA civil penalties that are alleged or reasonably could have been alleged based on the facts alleged against Defendant in the operative Complaint in the Actions and Plaintiffs’ PAGA Letters....” (Id. at ¶ 5.3.)

As the Court found at preliminary approval, the release provisions are appropriately tailored to the factual allegations of the operative pleading. (See Amaro v. Anaheim Arena Management, LLC (2021) 69 Cal.App.5th 521, 538.)

B. Administration of Settlement In its order granting preliminary approval, the Court approved Apex as settlement administrator. On March 11 and March 17, 2026, Defendant provided Apex with the class data and supplemental PAGA data. Apex identified 80 individuals whose PAGA pay period counts exceeded their class workweeks; Defendant’s counsel confirmed the workweek counts could be rounded up to match, and the finalized Class List consisted of 1,689 individuals. (Declaration of Elizabeth Botero Bravo (“Bravo Decl.”), ¶¶ 5–6.)

After running the addresses against the National Change of Address database, Apex mailed the Class Notice to all 1,689 individuals on April 8, 2026. (Id. at ¶¶ 7–8 and Ex. A.) Of the 111 notices returned as undeliverable, skip tracing produced 98 updated addresses to which the notice was re-mailed; 13 notices remain undeliverable. (Id. at ¶¶ 9–10.) As of the date of Ms. Bravo’s declaration, Apex had received zero requests for exclusion, zero objections, and zero workweek disputes. (Id. at ¶¶ 11–14.)

Three individuals who were inadvertently omitted from the class data contacted Apex and were confirmed by Defendant’s counsel to be class members, bringing the total to 1,692 participating class members, which is 100 percent of the settlement class. (Id. at ¶¶ 15–16.) Based on 84,136 class workweeks, Apex estimates the average individual class payment will be approximately $676.48. (Id. at ¶¶ 17–18.) Based on 41,804 pay periods worked by 1,012 Aggrieved

Employees, Apex estimates the average individual PAGA payment will be approximately $24.70. (Id. at ¶¶ 19–20.) The notice process has now been completed. At preliminary approval, the Court found the settlement to be fair and reasonable. Given that there are no objections, the Court finds no reason to deviate from its earlier finding. Accordingly, the Court finds that the settlement is fair and reasonable for purposes of final approval.

III. Service Awards, Attorney Fees and Costs Plaintiffs Jarrett Chow and Daniel Enriquez Ulloa each seek a service award of $10,000. At preliminary approval, the Court directed each Plaintiff to submit a supplemental declaration providing an estimate of the hours he had spent on this action and a description of that work. Both have done so. Having reviewed he Court finds that service awards are justified and that the amounts requested are reasonable. The service awards are approved in the amounts requested.

Plaintiffs’ attorneys seek an attorney fee award of $700,000, which is 35 percent of the gross settlement amount and the maximum permitted by the Agreement. (Memorandum, pp. 6– 12; Declaration of John G. Yslas in Support of Motion for Final Approval (“Yslas Decl.”), ¶¶ 16–22.) Counsel report a combined lodestar of $464,767 for approximately 468.35 hours billed across four firms: Wilshire Law Firm, PLC (310.3 hours, $344,910); D.Law, Inc. (129.25 hours, $94,362); United Employees Law Group, P.C. (21.7 hours, $15,732.50); and David Yeremian & Associates, Inc. (7.1 hours, $9,762.50). (Yslas Decl., ¶¶ 21–22; Declaration of Enoch J.

Kim, ¶ 26; Declaration of Walter L. Haines, ¶¶ 9–10; Declaration of David Yeremian, ¶ 8.) The hours reported are reasonable for a four-year class and representative action that proceeded through informal discovery, mediation, and two rounds of approval briefing.The benefits achieved by the settlement justify an award of attorney fees to class counsel. The Court approves an attorney fee award in the requested amount of $700,000. Plaintiffs’ counsel request reimbursement of litigation costs in the amount of $20,612.56, comprising $11,164.76 incurred by Wilshire Law Firm and $9,447.80 incurred by

D.Law, and they provide itemized records in support. (Memorandum, p. 12; Yslas Decl., ¶ 23 and Ex. 2; Kim Decl., ¶ 26.) The request is well below the $40,000 cap in the Agreement. The Court approves reimbursement of litigation costs in the requested amount. Settlement administration costs are likewise approved in the requested amount of $14,790. (Bravo Decl., ¶ 21.)

IV.

Conclusion

The Court GRANTS the motion for final approval of the settlement and sets a compliance hearing for March 24, 2027, at 2:30 p.m. in Department 5. Plaintiffs shall prepare the order in accordance with California Rules of Court, rule 3.1312.

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