Kastler v. Oh My Green, Inc.

Background

Anne Kastler filed a putative wage-and-hour class action against Oh My Green, Inc., now known as Garten, Inc. The case was removed from state court to federal court. Kastler alleged violations of California law involving unpaid overtime; unpaid meal-period and rest-period premiums; unpaid minimum wages; late final wages; inaccurate wage statements; unreimbursed business expenses; and unfair competition. The amended complaint later added Saul Andrade and Anthonicia Stallings as named plaintiffs and added a claim under California’s Private Attorneys General Act, or PAGA.

The parties reached a settlement after discovery and mediation. The proposed settlement class consists of all current and former non-exempt hourly employees who worked for the defendant in California between February 28, 2015, and the date of preliminary approval.

Settlement Terms

The defendant will pay $500,000 into a non-reversionary gross settlement fund. The fund covers payments to class members, settlement administration, PAGA penalties, possible incentive awards, attorney’s fees, and litigation costs. The defendant will also pay its share of employer payroll taxes on the portion allocated to wages.

Class members’ payments will generally be based on their proportional share of the total workweeks worked during the class period. The settlement allocates $50,000 to PAGA penalties: $37,500 to the California Labor and Workforce Development Agency and $12,500 to eligible class members who worked during the PAGA period. The agreement provides that eligible class members receive their PAGA payment even if they exclude themselves from the class settlement, but those who opt out are bound by the release only as to PAGA claims.

The settlement administrator, Simpluris Inc., will mail notice in English and Spanish. Class members generally have 45 days after the initial mailing to dispute their workweek calculations, object, or request exclusion. The agreement also provides different deadlines for people who receive re-mailed notice or who submit disputes. Uncashed checks will be sent to the California State Controller’s Office, Unclaimed Property Division, in the class member’s name.

Kastler may seek an incentive award of up to $7,500, while Andrade and Stallings may each seek up to $5,000. Class counsel may seek up to $175,000 in attorney’s fees and up to $40,000 in costs. The court did not finally award these amounts; it stated that it would evaluate the requests at the final approval stage.

Provisional Class Certification

For settlement purposes, the court found that the requirements of Federal Rule of Civil Procedure 23 were met. The court found that the estimated 684 class members made joining everyone in separate litigation impracticable. It also found common questions concerning alleged uniform policies, including whether the defendant failed to pay for all hours worked and missed breaks, provide accurate wage statements, and reimburse necessary business expenses.

The court found the named plaintiffs’ claims sufficiently similar to those of the class and found no conflicts of interest between the representatives, counsel, and other class members. It also concluded that common issues predominated and that a class action was the most efficient method for resolving the dispute. The court appointed Kastler, Andrade, and Stallings as class representatives and appointed LippSmith LLP and Lawyers for Justice, PC as class counsel.

Preliminary Settlement Approval

The court applied the heightened review required for a settlement reached before class certification. It considered whether the settlement appeared to result from serious and informed negotiations, whether it improperly favored the representatives, whether it fell within the range of possible approval, and whether it had obvious defects.

The court noted that the agreement included a “clear sailing” provision under which the defendant would not oppose the requested attorney’s fees and costs. The court treated that provision as a warning sign requiring close review, but concluded that it did not prevent preliminary approval because the settlement was non-reversionary and the requested fees would not create a disproportionate allocation compared with the class’s recovery. The court reserved judgment on the appropriate final fee and incentive-award amounts.

The court also considered the strength and risks of the claims. Plaintiffs’ estimates of potential damages were higher than the $500,000 settlement, but the court noted the risks of continued litigation, including potential difficulties obtaining class certification and the defendant’s stated financial problems. The court found the proposed settlement fair, reasonable, and adequate on a preliminary basis.

Ruling and Next Steps

Judge Haywood S. Gilliam, Jr. granted the plaintiffs’ motion for preliminary approval of the class action settlement. The court approved the proposed notice process, directed the parties to implement it, and ordered them to meet and confer about deadlines for notice, fee and incentive-payment motions, objections and exclusion requests, the final approval motion, and the final fairness hearing. The order was preliminary; it did not constitute final approval of the settlement, attorney’s fees, costs, or incentive awards.