Pacheco v. Culturalink, LLC

Background

Cibelli Pacheco, Hanna Ishchenko, and Alexander Pogorelov, the named plaintiffs, brought a proposed wage-and-hour class and representative action against Culturalink, LLC. They moved for preliminary approval of a proposed class settlement under Federal Rule of Civil Procedure 23. The action also includes claims under the Fair Labor Standards Act (FLSA) and a representative claim under California’s Private Attorneys General Act (PAGA).

The court stated that its Civil Standing Order requires motions seeking preliminary or final approval of class settlements to address the Northern District of California’s Procedural Guidance for Class Action Settlements. The court found that the named plaintiffs failed to address the Guidance and identified several deficiencies. The court stated that the list was not exhaustive.

Reasons for Denial

The motion did not state the estimated recovery for class members, the potential recovery if the proposed class had fully prevailed on each claim, or the estimated discount applied to the claims. The court held that these omissions prevented it from meaningfully assessing whether the proposed settlement was fair.

The motion also failed to clarify whether other related cases existed, what claims would be released in those cases, the class definitions and procedural status of those cases, whether their counsel participated in settlement negotiations, or how those matters affected settlement approval. It provided no comparable settlements or litigation outcomes for comparison.

The proposed notice created uncertainty about FLSA participation. It described a 60-day period to opt in and a 45-day period to object or opt out, but did not explain the difference between opting in and opting out or why the deadlines differed. The notice also said that class members who did nothing would receive a payment and release wage-and-hour claims, while failing to explain opting in. The court required a renewed motion to resolve this inconsistency.

The proposed notice also inconsistently identified the courthouse where class members could access case materials, stated that the final approval hearing would occur in Oakland rather than San Francisco, and omitted a reminder to check the settlement website or the court’s public-access case system to confirm that the hearing date had not changed. The court directed that these issues be corrected.

The parties’ proposed settlement included dismissal of the PAGA claim, but the named plaintiffs did not discuss that dismissal in their brief. Because a PAGA plaintiff acts as a representative of California labor-law enforcement agencies, including the Labor Workforce Development Agency, the court required any renewed motion to address whether dismissing the PAGA claim without that agency’s approval would be proper at that stage.

Disposition

The court denied the named plaintiffs’ motion for preliminary approval of the class settlement. It vacated the June 5, 2025 hearing because the motion could be decided without oral argument and terminated as moot the named plaintiffs’ motion to appear remotely at that hearing.

The court allowed the named plaintiffs to file a renewed motion within 30 days if they could correct the identified deficiencies. The renewed motion must address the District’s settlement guidance, provide a fuller discussion of warning signs relevant to whether the settlement was non-collusive under Ninth Circuit precedent, and include signed versions of the named plaintiffs’ declarations and other supporting materials. If the named plaintiffs do not file a renewed motion within 30 days, the parties must file a joint status report within 45 days proposing how the litigation should proceed.