Miguel-Sanchez v. Mesa Packing, LLC

Background

William Miguel-Sanchez, Luis Antonio Meza-Estrada, and Sergio Jimenez-Cruz filed this action for themselves and on behalf of a proposed class against Mesa Packing, LLC. The complaint asserted claims under the Migrant and Seasonal Agricultural Workers Protection Act, California wage-and-hour laws, California’s Unfair Competition Law, and California’s Private Attorneys General Act.

The plaintiffs alleged that Mesa did not pay workers for pre-shift exercises, distributing work items and tools, and other work before scheduled shifts; did not accurately record field arrival times or piece-rate work; and did not provide accurate wage statements. They also alleged that workers had to purchase, maintain, charge, and replace headlamps and batteries without reimbursement; worked during automatically deducted meal periods; lacked required meal periods or rest breaks without receiving required compensation; and were sometimes sent home after reporting to work without receiving reporting-time wages.

After initial discovery, the parties participated in a full-day mediation and continued settlement negotiations. Mesa did not oppose the motion for preliminary approval.

Proposed Class and Settlement

For settlement purposes, the plaintiffs proposed a class of 701 people who worked for Mesa as non-exempt piece-rate workers from February 4, 2016, through October 23, 2020. The court provisionally certified that class under Rule 23 of the Federal Rules of Civil Procedure, which governs class actions.

The settlement required Mesa to pay a gross amount of $1,850,000. The agreement allowed for up to $400,000 in attorneys’ fees, $7,500 in costs, and $7,500 incentive payments for each named plaintiff. The estimated net settlement amount, after those fees, costs, and incentive payments, was $1,427,500. Mesa would separately pay payroll taxes on settlement benefits and estimated settlement-administration costs of $9,982. Unclaimed funds would be divided equally between the Food Bank for Monterey County, California, and Salud Para La Gente.

The agreement also required Mesa to maintain specified employment practices. These included providing full 30-minute duty-free meal periods, providing required rest periods, separately tracking and paying for nonproductive work such as pre-shift work and moving between harvesting locations, paying rest and recovery wages as required by California Labor Code section 226.2, and providing necessary tools and equipment, including headlamps and batteries, without charge.

Class members who did not timely opt out would receive a pro rata share of the net settlement based on their pay periods worked during the class period and would release claims based on the allegations in the complaint. The court accepted the proposed release after the parties represented that third-party releases would be limited to Earthbound Farm, LLC, Growers Express, LLC, The Nunes Company, Inc., and Ocean Mist Foods, LLC, and that the released claims would be limited to the class period and circumstances in which Mesa was responsible for paying the workers.

Court’s Analysis

Before approving a class-action settlement, the court must determine whether a class exists and whether the proposed settlement is fundamentally fair, adequate, and reasonable. Because the settlement occurred before formal class certification, the court applied a higher level of scrutiny.

The court found that the proposed class met Rule 23’s requirements. The class was sufficiently numerous, the claims involved common questions about Mesa’s wage-and-hour practices, the named plaintiffs’ claims were typical of the class’s claims, and the plaintiffs and their lawyers could adequately represent the class. The court also found that common issues predominated over individual issues and that a class action was superior to separate lawsuits, noting that the main individualized issue appeared to be the amount of damages for each worker.

The court considered the risks of continued litigation, including Mesa’s opposition to class certification and its defense that many workers had signed arbitration agreements. The court found that the settlement’s monetary recovery, estimated average net payment of $2,025.68 per class member, and nonmonetary employment-practice changes supported preliminary approval. Although no settlement funds were specifically allocated to the Private Attorneys General Act claim, the court concluded that the monetary and nonmonetary benefits served that law’s purpose of enforcing California’s Labor Code.

The court also found that the parties had engaged in sufficient investigation and negotiations, that the proposed notice met Rule 23’s requirements, and that the proposed distribution method was straightforward. The court approved mailed notice supplemented by WhatsApp messages, provided that the settlement-website address was included in the mailed notice and WhatsApp messages. Class members would have 45 days after the initial mailing to request exclusion or object to the settlement.

The proposed attorneys’ fees were up to $400,000, or 21.6% of the gross settlement amount. The court found that the request did not raise concern at the preliminary-approval stage. It noted, however, that the requested $7,500 incentive payment for each named plaintiff was higher than the estimated average class-member recovery and expected a fuller explanation from each plaintiff at the final-approval stage.

Disposition

Judge Virginia K. Demarchi granted the plaintiffs’ motion for preliminary approval. The court conditionally certified the settlement class, approved the proposed class representatives, class counsel, claims administrator, and modified class notice, and set a final approval hearing for September 14, 2021. The court required the parties to file revised materials by May 10, 2021, and stated that motions for final approval, incentive awards, and class counsel’s fees and costs were due no later than the date the administrator mailed the class materials. The order granted preliminary approval only; it did not grant final approval of the settlement.