Tuumamao Esau Jr, II v. Tekberry, Inc.

Plaintiff now seeks an order: granting preliminary approval of class action settlement agreement; conditionally certifying the proposed class for settlement purposes; appointing Plaintiff as class representative; appointing Plaintiff as class representative; appointing Aegis Law Firm, PC as class counsel; appointing ILYM Group, Inc. as settlement administrator and

authorizing ILYM Group, Inc. to send notice of the settlement to class members; and scheduling a final approval hearing. XI. LEGAL STANDARD a. 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 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 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, supra, 91 Cal.App.4th at p. 245, citation omitted.) 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.) Like 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 considering 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, 2016 U.S. Dist. LEXIS 140759, at *20-24.) XII. DISCUSSION

a. Provisions of the Settlement Plaintiff moves for approval of a proposed settlement made on behalf of: [A]ll non-exempt employees employed by Defendant3 in California who were staffed at Bloom Energy Corporation at any time between May 6, 2018 through June 13, 2025 (“Class Period”). (Davies Decl., Ex. 1 [“Agreement”], ¶¶ 1.5, 1.16) The settlement also includes a subset PAGA class of aggrieved employees defined as “all non-exempt employees employed by Defendant in California who were staffed at Bloom Energy Corporation at any time between February 8, 2022 through June 13, 2025 (the “PAGA Period”).” (Id. at ¶¶ 1.4, 1.16.)

Defendant will pay a gross settlement amount of $145,000.00. This amount includes: (1) the individual class payments; (2) individual PAGA payments; (3) the LWDA PAGA payment; (4) class counsel fees payment of not more than one-third of the gross settlement amount ($48,333.33); (5) class counsel expenses payment of up to $25,000.00, (6) class representative service payment of $5,000.00; and (7) administrator expenses not to exceed $6,650.00. The individual class payment will be distributed to participating class members based on their pro rata share of the net settlement amount according to the number of workweeks worked during the class period.

The individual PAGA payments will be distributed to aggrieved employees on based on their pro rata share of 25% of the PAGA penalties according to the number of PAGA pay periods worked during the PAGA period. The total amount of the PAGA penalties is $4,000.00. In exchange for the settlement, the class members and their representatives agree to release Defendant and related entities and persons “all claims arising during the Class Period that were alleged, or could have been alleged based on the facts alleged in the Operative Complaint or otherwise ascertained in the course of the Action...” (Agreement, ¶ 5.2.)

Participating class members, except aggrieved employees, do not release other claims, “including claims for vested benefits, wrongful termination, violation of the Fair Employment and Housing Act, unemployment insurance, disability, social security, workers’ compensation, or claims based on facts occurring outside the Class Period.” (Ibid.) Aggrieved employees and

3 The Agreement defines Defendant as excluding “named-Defendant Bloom Energy Corporation”. (Agreement, ¶ 1.16.) All references to Defendant shall only mean Tekberry, Inc. unless otherwise stated.

their representatives are deemed to have released Defendant from “all claims for PAGA penalties alleged or could have been alleged based on the facts alleged in any of the pleadings that have been filed in the Lawsuit, in Plaintiff’s PAGA Notice Letter, or that were discovered in preparation for mediation and/or asserted at mediation, against Defendant Tekberry, Inc., which arose during the PAGA period.” (Id. at ¶ 5.3.) 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. Fairness of the Settlement Plaintiff contends the Settlement meets the standards for preliminary approval. The parties participated in one, full-day mediation session with Monique Ngo-Bonnici, Esq. (Davies Decl., ¶ 10.) While the parties did not reach settlement through mediation, the parties continued settlement discussions via adversarial, arm’s length negotiations. (Id. at ¶ 12.) Prior to reaching settlement, the parties engaged in formal discovery in Esau I and subsequently engaged in informal discovery as part of private mediation. (Id. at ¶¶ 7-8.)

Defendant produced documents and records, including Plaintiff’s personnel files, timekeeping records, and itemized wage statements. (Id. at ¶ 9.) Plaintiff’s counsel retained an expert to evaluate Defendant’s potential exposure based on time and payroll records before assessing the risks associated with each claim. (Id. at ¶ 19.) Plaintiff’s counsel estimated that Defendant’s maximum exposure for the following class claims: (1) $45,910.00 for failure to pay minimum wage and overtime; (2) $272,897.00 for failure to pay class members weekly; (3) $526,383.00 for failure to provide meal periods; (4) $666,901.00 for failure to provide rest breaks; (5) $1,189,382.00 for waiting time penalties; and (6) $162,300.00 for wage statement penalties. (Davies Decl., ¶¶ 24, 26, 28-29, 31.)

Defendant’s estimated total maximum exposure for the class claims is therefore $2,863,773.00. Defendant’s estimated total maximum exposure for the PAGA claims is $280,000.00. (Id. at ¶ 32.) Plaintiff’s counsel valued each claim by multiplying the maximum exposure for each claim by the likelihood of class certification and the merits at trial. The chances of class certification and prevailing on the merits of the claims were estimated to be 20%, 30%, or 50%. (Id. at ¶¶ 25, 27-28, 30-31.) The proposed settlement represents approximate 4.6 percent

of the maximum potential value of Plaintiff’s claims ($145,000.00/$3,143,773.00). The proposed settlement amount falls outside the general range of percentage recoveries that California courts have found to be reasonable. (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].) Plaintiff, however, explains that the value of the claims have been discounted due to Defendant’s disclosure of its financial condition under the mediation privilege. (Davies Decl., ¶ 33.)

The Court has reviewed Plaintiff’s written submissions and is satisfied that the settlement is fair and may be approved. c. Service Award, Fees, and Costs Plaintiff seeks a $5,000.00 service award. 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.)

Incentive awards are particularly appropriate where a plaintiff undertakes a significant reputational risk in bringing an action against an employer. (Covillo v. Specialty’s Café (N.D. Cal. 2014) 2014 U.S.Dist.LEXIS 29837, at *29.)

Plaintiff provided a declaration describing his participation in this action in general terms. The declaration does not provide sufficient facts supporting his request. The Court will issue its determination of the approved service award amount at the final approval hearing. 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.)

Plaintiff’s counsel will seek attorney fees of up to one-third of the gross settlement amount ($48,333.33) and reimbursement of litigation costs up to $25,000.00. The anticipated settlement administration costs are $6,650.00. (Declaration of Lisa Mullins, ¶10.) Prior to the final approval hearing, Plaintiff’s counsel shall submit lodestar information (including hourly rate and hours worked) as well as evidence of actual litigation costs incurred and settlement administration costs. d. Conditional Certification of Class Plaintiffs request that the class be conditionally certified for purposes of the settlement.

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 . . ..” As interpreted by the California Supreme Court, section 382 requires: (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 (Sav-On).) 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, supra, 34 Cal.4th at p. 326.) “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.) As explained by the California Supreme Court, The certification question is essentially a procedural one that does not ask whether an action is legally or factually meritorious. A trial court ruling on a certification motion determines 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 advantageous to the judicial process and to the litigants. (Sav-On, supra, 34 Cal.4th at p. 326, internal punctuation and citations omitted.)

Plaintiff states there are approximately 400 class members that can be identified from a review of Defendant’s records. There are common questions regarding whether class members were subjected to uniform employment policies or practices that violated wage and hour laws. No issue has been raised regarding the typicality or adequacy of Plaintiffs as class representatives. Therefore, the court finds that the proposed class should be conditionally certified for settlement purposes. e. Class Notice The content of a class notice is subject to court approval. “If the court has certified the action as a class action, notice of the final approval hearing must be given to the class members in the manner specified by the court.” (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 form of the notice is generally adequate. It describes the lawsuit, explains the settlement, and states the settlement amounts, including attorney fees and payment to the

named plaintiff. The notice informs class members that they may appear at the final approval hearing to make an oral objection without filing a written objection. However, the second and third pages of the notice are deficient in suggesting that recipients have only two “basic options” under the settlement: do nothing or opt-out. This portion of the notice must be modified to clarify that recipients have two more “basic options”: to object or challenge the number of workweeks and/or pay periods.

Finally, the following language regarding the final approval hearing shall be added to the notice: Class members who wish to appear remotely are encouraged to contact class counsel at least three days before the hearing, if possible, so that potential technology or audibility issues can be avoided or minimized. Turning to the notice procedure, the parties have selected ILYM Group, Inc. (“ILYM”) as the settlement administrator. Defendant will deliver the class data (i.e., class list and related qualifying workweeks and contact information) to ILYM within thirty (30) days after preliminary approval.

ILYM shall notify class counsel that the class data has been received and state the number of class members, aggrieved employees, workweeks, and pay periods in the class data. ILYM shall update class members’ addresses using the National Change of Address Database and mail the notice packet within fourteen (14) days after receiving the class data. The notice shall be mailed to all identified class members via first-class United States Postal Service mail. Any returned notices will be re-mailed within three (3) business days to any forwarding address provided or a better address located via skip trace or other search.

Class members who receive a re-mailed notice will have an additional fourteen (14) days to respond. ILYM shall inform class members receiving a re-mailed notice of the extended deadline. These notice procedures are appropriate and approved. On the condition that the parties make the above changes to the notice prior to its mailing, the notice is approved. XIII.

Conclusion

The motion for preliminary approval of the settlement is GRANTED.

The final approval hearing shall take place on March 3, 2027 at 2:30 p.m. in Department 5. Case Management Conference at 2:31 p.m. is VACATED. Further Case Management Conference is set on September 3, 2026 at 2:30 p.m. in Department 22. The following class shall be preliminarily certified for settlement purposes: All non-exempt employees employed by Tekberry, Inc. in California who were staffed at Bloom Energy Corporation at any time between May 6, 2018 through June 13, 2025. Plaintiff shall prepare the order in accordance with California Rules of Court, rule 3.1312. - oo0oo -

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