Morales v. VPET USA, LLC, et al

Court’s answer. However, contrary to Plaintiff’s assertions, Defendant Court directly alleges Rule 10.500 in its answer (second and fourth affirmative defenses) and alleges its bases for contending that the records requested by Plaintiff are not “judicial Administrative records” subject to production (second affirmative defense). Therefore, Plaintiff’s argument on this point is without merit.

Finally, Plaintiff’s argument that the “affirmative defenses” are not sufficiently pleaded also appears without merit. In State Farm Mutual Automobile Insurance Co., the court explained the difference between denials and affirmative defenses: “Under Code of Civil Procedure section 431.30, subdivision (b)(2), the answer to a complaint must include ‘[a] statement of any new matter constituting a defense.’” (State Farm Mutual Automobile Insurance Co. v. Superior Court (1991) 228 Cal.App.3d 721, 725.) “The phrase ‘new matter’ refers to something relied on by a defendant which is not put in issue by the plaintiff.” (State Farm Mutual, supra, 228 Cal.App.3d at p. 725 [internal citation omitted].) “Thus, where matters are not responsive to essential allegations of the complaint, they must be raised in the answer as ‘new matter.’” (Ibid.)

Where, however, the answer sets forth facts showing some essential allegation of the complaint is not true, such facts are not ‘new matter,’ but only a traverse [(denial)].” (Ibid.)

Here, Defendant Court’s defenses allege “new matters” that are not found on the face of Plaintiff’s complaint. Plaintiff’s complaint alleges that Defendant Court is required to provide her with certain records. In its “affirmative defenses,” Defendant Court alleges reasons why Plaintiff is not entitled to the records she seeks or why it cannot comply. Defendant Court’s affirmative defenses allege the legal grounds and ultimate facts in support of its denial, which are not found on the fact of Plaintiff’s complaint and constitute “new matters.”

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35. Morales v. VPET USA, LLC, et al, Case No. CIVSB2108161 Plaintiff’s Motion for Preliminary Approval of Class Action Settlement 8/28/26, 9:00 a.m., Dept. S-17

Tentative Ruling The Court would GRANT as related to this settlement with Defendant Workforce Personnel.1 Preliminary Approval of Class Action Settlements in General

Settlement of a class action requires court approval. (Cal. Rules of Court, rule 3.769.) The moving party must demonstrate that “the settlement is fair, adequate and reasonable.” (Kullar v. Foot Locker Retail, Inc. (2008) 168 Cal.App.4th 116, 126; Reed v. United Teachers Los Angeles (2012) 208 Cal.App.4th 322, 337.) The court has “broad discretion in making this determination.” (In re Microsoft I-V Cases (2006) 135 Cal.App.4th 706, 723.) Relevant factors the court may consider include “the strength of the plaintiffs’ case, the risk, the 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.” (Dunk v.

Ford Motor Co. (1996) 48 Cal.App.4th 1794, 1801.) This list of factors “is not exhaustive and should be

1 The Settlement excludes VPET USA, LLC; Andrew Hernandez, Jr.; and Andrew Hernandez, Sr. (Settlement, ¶A17.)

tailored to each case.” (Ibid.) The court may “engage in balancing and weighing of factors depending on the circumstances of each case.” (Wershba v. Apple Computer, Inc. (2001) 91 Cal.App.4th 224, 245, overruled on other grounds in Hernandez v. Restoration Hardware (2018) 4 Cal.5th 260, 269.)

“Although the court gives regard to what is otherwise a private consensual agreement between the parties, the court must also evaluate the proposed settlement agreement with the purpose of protecting the rights of the absent class members who will be bound by the settlement.” (Wershba, supra, 91 Cal.App.4th at p.245 [quoting Dunk, supra, 48 Cal.App.4th at p. 1801].) “The court must therefore scrutinize 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. [quoting Officers for Justice v. Civil Service Com’n (9th Cir. 1982) 688 F.2d 615, 625].)

Nevertheless, the settlement is entitled to 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; (3) counsel is experienced in similar litigation; and 94) the percentage of objectors is small.” (Kullar, supra, 168 Cal.App.4th at p. 128, quoting Dunk, supra, 48 Cal.App.4th at p. 1802.)

Provisional Class Certification at Preliminary Approval

Although a lesser standard can be used to provisionally certify a settlement class, the court still needs to review and consider each element for certification. (Global Minerals & Metals Corp. v. Superior Court (2003) 113 Cal.App.4th 836, 859.) But, as settlement eliminates the need for trial, “the case management issues inherent in ascertainable class determination need not be confronted.” (Ibid.)

A class should be certified when “the question is one of a common or general interest, of many persons, or when parties are numerous and it is impracticable to bring them all before court.” (Code Civ. Proc., § 382.) There must be both an ascertainable class and a well-defined community of interest, which includes predominate questions of law or fact, class representatives with claims typical of the class, and class representatives who can adequately represent the class. (Linder v. Thrifty Oil Co. (2000) 23 Cal.4th 429, 435.)

Settlement Notice

“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. 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.” (Rules of Court, rule 3.769(f); Wershba v. Apple Computer, Inc., supra, 91 Cal.App.4th at p. 251.)

“The purpose of the class notice in the context of a settlement is to give class members sufficient information to decide whether they should accept the benefits offered, opt out and pursue their own remedies, or object to the settlement. As a general rule, class notice must strike a balance between thoroughness and the need to avoid unduly complicating the content of the notice and confusing class members. Here, again, the trial court has broad discretion. (Wershba, supra, 91 Cal.App.4th at p. 252.)

The manner of notice shall be by means reasonably calculated to apprise the class members of the settlement. (Rules of Court, rule 3.766(f).) The standard is “whether the notice has ‘a reasonable chance of reaching a substantial percentage of the class members.’” (Wershba, supra, 91 Cal.App.4th at p. 251.) The court must consider the interest of the class, type of relief obtained, the state of the individual class members, the costs of notifying the class members, the resources of the parties, the possible prejudice to the class members who do not receive notice, and the res judicata effect on the class members. (Rules of Court, rule 3.766(e).)

The Proposed Settlement

Here, Plaintiff filed her complaint against Defendants VPET USA and Workforce Personnel on March 10, 2021. The complaint alleges violations relating to (1) minimum wages; (2) overtime wages; (3) meal periods; (4) rest breaks; (5) final pay; (6) accurate wage statements; as well as (7) violation of the unfair competition law; and (8) civil penalties pursuant to the Private Attorneys General Act (PAGA). The matter was settled as to Defendant VPET in April of 2022, leaving only Defendant Workforce active in the litigation.

Certainly, during the course of this lengthy litigation, Plaintiffs sought and received extensive discovery. (Lauby Decl., ¶16 [discovery after initial 2022 mediation]; Settlement, ¶A47.) They also received substantial payroll and time records, as well as handbook and policy documents. (Ibid.) While attempts to find a settlement offramp continued for several years, eventually the parties held a formal mediation on March 19, 2026, with Hon. Jonathan Cannon, an experienced neutral. (Lauby Decl., ¶16; Settlement, ¶B48.) The parties reached a settlement in the abstract. The long form settlement agreement was executed in August of 2026. (Lauby Supp. Decl., Exh. A [Signed Settlement].) Notice of the settlement was given to the LWDA currently with the initial filing of this motion. (Lauby Decl., ¶41 & Exh. D.)

The are an estimated 2452 class members and 1,438 PAGA aggrieved employees. (Settlement, ¶¶A5 & A24.) For purposes of settlement, the class period will reach from March 10, 2020, through March 19, 2026. The PAGA period is from March 10, 2020, through May 19, 2026.

The settlement is proposed on the following terms: Defendants will pay a gross, non-reversionary settlement amount of $330,000.00,3 from which will be deducted (1) up to $110,000.00 for Class Counsel’s attorneys’ fees (1/3rd of gross); (2) costs not to exceed $30,000.00;4 (3) Plaintiff’s enhancement fees of no more than $7,500.00 total; (4) claims administration fees not to exceed

2 The lower number of class members is explained by reference to a percentage of employees covered by arbitration agreements that impacted their participation in the class claims. (See, e.g., Settlement, ¶¶A5 & A24.)

3 The Court is aware that there is an escalator provision that may increase the amounts at the time of final approval.

4 Prior to any final approval, Counsel will provide a break-down of costs at the motion for final approval. Notably, any attorney bills submitted in the guise of services of an expert will require explanation and clarification as to why such bills are not properly considered attorneys’ fees. Expert fees will identify the expert utilized. Further, this cap for costs appears much higher than usual. Counsel will be sure to provide a complete breakdown of costs with its motion for final approval.

$18,550.00; and (5) PAGA penalties of $101,649.00 (of which $76,237, or 75%, will go to the LWDA and $25,412, or 25%, will go to the aggrieved employees).

The parties estimate this will leave a wage-and-hour only net settlement amount of a non-reversionary $62,301.00. This amount would be split by the class of approximately 245 current and former employees in proportionate shares determined by number of workweeks within the Settlement Class Period. The average per class member would be $254.29. Two-thirds of paid funds will be representative of penalties and interest, and the remaining one-third (1/3rd) are representative of wages. (Settlement, ¶C50(d).)

Presuming 1,438 PAGA aggrieved employees, the average PAGA payout would be $17.67.

The amount of the settlement is appropriate given the strength of the case, especially in light of Counsel’s estimated potential liability exposure. (Lauby Decl., ¶¶30-33.) However, the lower actual settlement appears fair and reasonable in light of certification issues and when calculated to include analysis of various potential defenses as well as the potential appeal of any judgment should Plaintiffs be successful in this venue.

Given the presumption of fairness, the Court would find the figure sufficient to satisfy the Kullar requirement. Further, adequate discovery and investigation has occurred. There is no evidence of fraud or collusion. Class Counsel are well qualified to represent the class. The settlement was reached through an arms-length negotiation with the assistance of an experienced and well-respected mediator. The deductions from the gross settlement fund (attorneys’ fees,5 costs,6 administration fee, incentive award, PAGA penalties, and taxes) appear to be reasonable and appropriate and are, therefore, preliminarily approved in the “not to exceed” amounts in the motion. The proposed notice is, also, adequate.

Counsel and the representative are appointed conditionally to represent the class. The motion is granted. The court will schedule a hearing to consider final approval at the closest available date to the date recommended by counsel.

The Court preliminarily approves the settlement and (1) Lauby, Mankin & Lauby, LLP, as Settlement Class Counsel; (2) appoints Karina Morales as Class Representative; (3) approves ILYM Group as Settlement Administrator; (4) preliminarily finds the settlement fair, reasonable, and adequate; and (5) approves the form and content of the proposed Class Notice and directs the mailing of the same.

At final approval, counsel must advise the court of any pending cases that will be affected by approval of the settlement. Again, prior to final approval, Counsel must provide the exact number of class members and workweeks for the class settlement and the exact number of PAGA aggrieved employees and pay periods for the PAGA settlement.

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5 Counsel must provide a full lodestar analysis in the motion for final approval.

6 Costs must be documented. The court does not award costs for LEXIS or Westlaw usage (which are considered items of overhead), faxes (also overhead), or photocopying in excess of $0.06 per page.

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