Lingle v. Centimark Corp.

• Court: District Court, E.D. California
• Decided: November 15, 2024
• Docket: 2:22-cv-01471
• Status: Unknown

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 | Anthony Lingle, No. 2:22-cev-01471-KJM-JDP 12 Plaintiff, ORDER 13 v. 14 Centimark Corporation, et al., 1S Defendants. 16 17 Plaintiff Anthony Lingle has agreed with defendant Centimark Corporation, his former 18 | employer, to settle his own claims and the claims of a proposed class of similarly situated 19 | employees. He asks the court to approve the agreement on a preliminary basis and give notice to 20 | the proposed class. As explained in this order, although Lingle has demonstrated the proposed 21 | class will likely be certified, he has not demonstrated the court “will likely be able to approve” 22 | the settlement agreement itself as “fair, reasonable, and adequate,” as required by Federal Rule of 23 | Civil Procedure 23(e). For that reason, the court denies the motion in part without prejudice to 24 | renewal. 25 | I. BACKGROUND 26 The court described Lingle’s allegations in a previous order. See generally Order 27 | (Apr. 17, 2023), ECF No. 37. A brief summary suffices for purposes of his current motion. 28 | Lingle worked for Centimark as a roofer and laborer at remote job sites from 2019 to 2021. /d. at

1 1. According to his complaint, Centimark violated the California Labor Code and the state’s 2 Private Attorneys General Act (PAGA) by withholding wages from him and other employees, by 3 misreporting their wages on pay stubs and by depriving them of the full rest and meal breaks 4 required by law, among other similar claims. Id. at 1–2, 5, 6, 8, 9. He is pursuing his Labor Code 5 claims on behalf of a proposed class, while his PAGA claims are, by nature, representative. See 6 id. at 2. The court previously granted Centimark’s motion to dismiss some of Lingle’s claims, see 7 id.at 14–15, and the parties went to private mediation, see Stip. & Order, ECF No. 39. 8 The mediation was successful. It resulted in an agreement to settle Lingle’s claims on 9 behalf of the class. See Not. Settlement, ECF No. 40. He now asks the court to certify the 10 proposed class and to approve the settlement on a preliminary basis under Federal Rule of Civil 11 Procedure 23(e). See generally Mot. Prelim. Cert., ECF No. 43; Mem., ECF No. 43-1. 12 Centimark does not oppose the motion. 13 The settlement envisions payments to two groups of employees. First, a class certified 14 under Federal Rule of Civil Procedure Rule 23(b)(3) will include non-exempt Centimark 15 employees other than office and administrative staff who worked in California between July 2018 16 and November 2023. Mem. at 3; Settlement Agreement at 2, Mot. Prelim. Cert. Ex. A, ECF No. 17 43-2. These proposed class members can opt out of the class and, if so, would not be bound by 18 the settlement agreement. See Fed. R. Civ. P. 23(b)(3). Those who do not opt out will be bound 19 and they would release their claims. Mem. at 6; Settlement Agreement at 3–4. Second, the same 20 group of employees, but limited to those who worked from May 2023 to November 2023, will 21 receive settlement funds based on Lingle’s PAGA claims. Mem. at 3–4; Settlement Agreement at 22 7. This group will receive payment regardless of whether they opt out of the Rule 23 class. See 23 Sakkab v. Luxottica Retail N. Am., Inc., 803 F.3d 425, 436 & n.10 (9th Cir. 2015); Mem. at 6; 24 Settlement Agreement at 19–20. 25 Class members would be compensated from a $600,000 “Gross Settlement Amount,” but 26 only after several deductions for various costs and other payments. In the first instance, the 27 agreement allocates $140,000 to Lingle’s PAGA claims. Mem. at 4; Settlement Agreement at 25. 28 Of that $140,000, California law requires a payment of 75 percent ($105,000) to the California 1 Labor & Workforce and Development Agency (LWDA). See Cal. Lab. Code § 2699(i) (2023); 2 Mem. at 4; Settlement Agreement at 25.1 Next, Apex Class Action LLC, which will administer 3 the settlement agreement, will be compensated from the settlement fund for its administration 4 expenses. Mem. at 4; Settlement Agreement at 12–13. It has estimated these costs at $7,766.25, 5 but the settlement agreement allocates up to $15,000 for this purpose. See Apex Quotation, Mot. 6 Ex. D, ECF No. 43-2; Settlement Agreement at 21. Following these deductions, Lingle requests a 7 $10,000 award for his role as class representative, which would be in addition to his share of the 8 settlement fund, Mem. at 4; Settlement Agreement at 3, 26, and finally, Lingle’s attorneys request 9 $200,000 for their legal fees and $15,000 to cover their own litigation costs, see Mem. at 5; 10 Settlement agreement at 26. 11 Following these deductions, the $255,000 remainder—plus any cost or fee awards the 12 court does not approve—will be distributed to the class members, both those in the Rule 23 class 13 and those entitled to a recovery under PAGA. See Mem. at 5–6; Settlement Agreement at 26. 14 Funds will be allocated to class members pro rata based on the number of weeks they worked 15 during the relevant time periods. See Mem. at 6–7; Settlement Agreement at 17–21, 24–25. 16 Individual class members will receive notice of their prospective awards and may object if they 17 believe the prospective award is based on an incorrect calculation of the number of weeks they 18 worked. See Settlement Agreement at 19. The settlement administrator will then mail checks to 19 class members. See Mem. at 6; Settlement Agreement at 24–25. If any checks go uncashed, the 20 uncollected money will be paid to the Salvation Army Sacramento Metro as a cy pres recipient. 21 Mem. at 6; Settlement Agreement at 28. 22 The settlement agreement also includes a draft notice that would be sent to members of 23 the proposed class. See Draft Notice, Settlement Agreement Ex. A, ECF No. 43-2. The notice 24 explains the terms of the settlement agreement in relatively straightforward language, including 25 what the lawsuit is about, who is in the proposed class, the amount of the settlement, what costs

1 Under a recent amendment, the share paid to the LWDA is 65 percent in actions filed on or after June 19, 2024. See 2024 Cal. Stat. Ch. 44, § 1 (A.B. 2288). This action was filed before that effective date. See generally Compl., ECF No. 1-1. 1 and fees will be deducted, how individual payments will be calculated, how to opt out or object 2 and who can answer questions about the agreement. See generally id. 3 The court heard arguments on Lingle’s unopposed motion for preliminary approval of the 4 proposed settlement on January 26, 2024. Justin Rodriguez appeared for Lingle and the proposed 5 class, and Paul Smith appeared for the defense. Mins., ECF No. 45. 6 II. DISCUSSION 7 The Federal Rules of Civil Procedure require the court’s approval of any settlement 8 agreement that would bind members of a class. See Fed. R. Civ. P. 23(e). Before approving a 9 proposal, the court must give notice to the people who would be members of the proposed class, 10 but only if the court first determines it “will likely be able to” both certify the class formally and 11 conclude that the terms of the settlement are “fair, reasonable, and adequate.” Fed. R. Civ. P. 12 23(e)(1)(B). The court takes these issues in turn. 13 A. Class Certification 14 Every proposed class must meet the four general prerequisites listed in Rule 23(a) and 15 must fit the description of one of the three types of classes identified in Rule 23(b). 16 Starting with the four general prerequisites, a class must first be “so numerous that joinder 17 of all members is impracticable.” Fed. Civ. P. 23(a)(1). Joinder is “impracticable” when it is 18 difficult or inconvenient. Smothers v. NorthStar Alarm Servs., LLC, No. 17-00548, 2019 WL 19 280294, at *4 (E.D. Cal. Jan. 22, 2019) (citing In re Itel Sec. Litig., 89 F.R.D. 104, 112 (N.D. Cal. 20 1981)). Although “no fixed number . . . satisfie[s] the numerosity requirement, as a general 21 matter, a class greater than forty often satisfies the requirement, while one less than twenty-one 22 does not.” Ries v. Ariz. Beverages USA LLC, 287 F.R.D. 523, 526 (N.D. Cal. 2012). Lingle 23 estimates the proposed class includes more than 200 employees, see Mem. at 13, so the court 24 finds the proposed class is likely to meet the first prerequisite. 25 Second, there must be “questions of law or fact common to the class.” Fed. R. Civ. P. 26 23(a)(2). This means the “claims must depend upon a common contention . . . capable of 27 classwide resolution—which means that determination of its truth or falsity will resolve an issue 28 that is central to the validity of each one of the claims in one stroke.” Wal-Mart Stores, Inc. v. 1 Dukes, 564 U.S. 338, 350 (2011). The court considers “the capacity of the classwide proceeding 2 to generate common answers” and whether “[d]issimilarities within the proposed class” will 3 “impede the generation of common answers.” Millan v. Cascade Water Servs., Inc., 310 F.R.D. 4 593, 604 (E.D. Cal. 2015) (quoting Wal-Mart Stores, Inc., 564 U.S. at 350) (other alterations 5 omitted). Lingle identifies several legal and factual issues in his request for preliminary 6 certification, all derived from Centimark’s “allegedly common policies and practices.” Mem. 7 at 14. He groups these issues in three categories: 8  He alleges Centimark paid employees extra if they completed work more 9 efficiently or traveled to the job site, but he alleges Centimark had a policy— 10 contrary to California law—to exclude these extra payments from its calculation of 11 employees’ overtime pay and compensation for meal breaks, rest breaks and sick 12 leave. Id.; see also Second Am. Compl. ¶¶ 18–19. 13  He alleges Centimark had company-wide policies not to pay employees for their 14 time and required out-of-pocket expenses, such as for travel to job sites, work 15 during breaks, mandatory use of personal cell phones for work and breaks that 16 were shorter than required by law but reported as compliant. See Mem. at 14; 17 Second Am. Compl. ¶¶ 20–21. 18  Finally, some of his claims are derivative of the others. Mot. at 14. This group 19 includes his claims for civil penalties under state law about the required contents 20 of wage statements and about when wages must be paid. See id.; see also Order 21 (Apr. 17, 2023) at 6–9 (discussing these claims). 22 Whether Centimark followed the policies and practices above and whether those policies violated 23 state law are common questions, and they are likely to be what would drive this litigation forward 24 absent a settlement agreement. Lingle has shown the litigation is likely to turn on common issues 25 of law and fact. 26 Under the third prerequisite, “the claims or defenses of the representative parties” must be 27 “typical of the claims or defenses of the class.” Fed. R. Civ. P. 23(a)(3). “Measures of typicality 28 include ‘whether other members have the same or similar injury, whether the action is based on 1 conduct, which is not unique to the named plaintiffs, and whether other class members have been 2 injured by the same course of conduct.’” Torres v. Mercer Canyons Inc., 835 F.3d 1125, 1141 3 (9th Cir. 2016) (quoting Hanon v. Dataproducts Corp., 976 F.2d 497, 508 (9th Cir. 1992), 4 overruled in part on other grounds by Wal-Mart Stores, Inc., 564 U.S. 338). Lingle has satisfied 5 his obligation to show his claims are typical of the proposed class. The record supports his 6 argument that Centimark’s policies were the same or similar for all members of the proposed 7 class, and if proven, the harms to its employees were similar, if not identical, in that all proposed 8 class members allegedly lost wages or are entitled to damages or penalties based on the same 9 alleged meal and rest break violations, sick leave violations, uncompensated travel to job sites 10 and personal cell phone use requirement. See Rodriguez Decl. ¶ 9, ECF No. 43-4 (summarizing 11 claims and supporting evidence). 12 Finally, under the fourth general prerequisite, class representatives and their counsel must 13 “fairly and adequately protect the interests of the class.” Fed. R. Civ. P. 23(a)(4). In evaluating 14 this requirement, courts consider both whether (1) “the named plaintiffs and their counsel have 15 any conflicts of interest with other class members” and (2) “the named plaintiff and their counsel 16 [will] prosecute the action vigorously on behalf of the class.” Hanlon v. Chrysler Corp., 150 F.3d 17 1011, 1020 (9th Cir. 1998), overruled in part on other grounds by Wal-Mart Stores, Inc., 18 564 U.S. at 338). “Serious conflicts of interest can impair adequate representation by the named 19 plaintiffs, yet leave absent class members bound to the final judgment, thereby violating due 20 process.” In re Volkswagen “Clean Diesel” Mktg., Sales Practices, & Prod. Liab. Litig., 21 895 F.3d 597, 607 (9th Cir. 2018). Both Lingle and his attorneys have submitted declarations 22 describing the work they have done to move this case toward a final resolution. See Lingle Decl. 23 ¶¶ 3–11, ECF No. 43-3; Rodriguez Decl. ¶¶ 3–10, ECF No. 43-4. Lingle’s attorneys also have 24 described their extensive experience in class litigation of this type. See Rodriguez Decl. ¶¶ 14– 25 19. This evidence supports the conclusion Lingle and his attorneys are likely to be adequate 26 representatives. See, e.g., Smothers, 2019 WL 280294, at *6. 27 At least one aspect of the proposed settlement agreement, however, separates Lingle from 28 other members of the proposed class, which could suggest he is not an adequate representative. 1 He asks the court to award him $10,000 as compensation for his efforts as class representative. 2 See Mem. at 4; see also Lingle Decl ¶ 11. The average class member, by contrast, would receive 3 less than $1,000 under the proposed settlement agreement. See Rodriguez Decl. ¶ 10. Plaintiffs 4 who stand to receive several thousand dollars extra may have an incentive to support settlement 5 agreements unfair to the absent class members. Large awards can for that reason “undermine the 6 adequacy of the class representatives.” Radcliffe v. Experian Info. Sols., Inc., 715 F.3d 1157, 7 1163 (9th Cir. 2013). The Ninth Circuit has “cautioned that awarding them should not become 8 routine practice.” Id. at 1164. “[I]f class representatives expect routinely to receive special 9 awards in addition to their share of the recovery, they may be tempted to accept suboptimal 10 settlements at the expense of the class members whose interests they are appointed to guard.” Id. 11 (alteration in original) (quoting Staton v. Boeing Co., 327 F.3d 938, 975 (9th Cir. 2003)). 12 Although the $10,000 award warrants closer scrutiny, the court cannot conclude Lingle and his 13 attorneys are unlikely to represent the class adequately just because they propose that award; 14 under the terms of the settlement agreement, if the court ultimately does not approve the $10,000 15 award, the money will return to the settlement fund and will be distributed to all members of the 16 proposed class. 17 For these reasons, the court finds the proposed class will likely satisfy the four general 18 prerequisites of Rule 23(a). The next question, as previewed above, is whether the proposed class 19 meets the definition of one of the three types of classes listed in Rule 23(b). Lingle relies on Rule 20 23(b)(3). A class can be certified under Rule 23(b)(3) if “the questions of law or fact common to 21 class members predominate over any questions affecting only individual members” and “a class 22 action is superior to other available methods for fairly and efficiently adjudicating the 23 controversy.” Fed. R. Civ. P. 23(b)(3). 24 The first part of this test—predominance—addresses “whether the common, aggregation- 25 enabling, issues in the case are more prevalent or important than the non-common, aggregation- 26 defeating, individual issues.” Tyson Foods, Inc. v. Bouaphakeo, 577 U.S. 442, 453 (2016) 27 (citation and internal quotation marks omitted). Claims like those in Lingle’s complaint often are 28 a good fit for class litigation because they focus on an employer’s company-wide policies and 1 how those policies affected many employees in the same or a similar situation. See, e.g., Miles v. 2 Kirkland’s Stores Inc., 89 F.4th 1217, 1222–24 (9th Cir. 2024); Vaquero v. Ashley Furniture 3 Indus., Inc., 824 F.3d 1150, 1153–55 (9th Cir. 2016); Abdullah v. U.S. Sec. Assocs., Inc., 4 731 F.3d 952, 964–66 (9th Cir. 2013). As this court has observed in previous cases, wage and 5 hour class actions are more likely to be certified under Rule 23(b)(3) when “the major questions 6 in the case arise from the defendants’ alleged failure to properly calculate wages and overtime, 7 account for meal periods and rest periods, and provide reimbursements.” Alcazar v. OEI 8 Holdings, LLC, No. 19-01209, 2023 WL 2876833, at *6 (E.D. Cal. Apr. 10, 2023) (alterations 9 omitted) (quoting Smothers, 2019 WL 280294, at *7). “That may be true even when some factual 10 questions call for individualized evidence.” Id. (citing Pena v. Taylor Farms Pac., 305 F.R.D. 11 197, 213–22 (E.D. Cal. 2015), aff’d, 690 F. App’x 526 (9th Cir. 2017) (unpublished)). An 12 employer’s uniform policies often predominate when they apply to the entire putative class and 13 when class members did or do the same or similar work. See, e.g., Abdullah, 731 F.3d at 964; 14 Smothers, 2019 WL 280294, at *7. 15 Lingle contends common questions of law and fact predominate in this case because all 16 class members were subject to the same policies. Mot. at 14. The court agrees based on its 17 preliminary review of the record. The disputes that would most likely take center stage in this 18 case concern Centimark’s policies and their effects on the workers it employed in the field, 19 including on their pay, their breaks, their uncompensated travel, their need to spend their own 20 money on phones and their paystubs. Because all proposed class members appear to have 21 performed similar work and were subject to the same alleged policies, these questions appear 22 likely to predominate under the terms of Rule 23(b)(3). This is not to say that no individual 23 issues are likely to crop up. Damages, for example, and the day-to-day practices of the individual 24 employees likely would vary. But the court finds it unlikely such person-by-person differences 25 would be so weighty that the broader common questions described above—such as Centimark’s 26 policies and practices and the requirements of state law—would not predominate. See, e.g., 27 Leyva v. Medline Indus. Inc., 716 F.3d 510, 513–14 (9th Cir. 2013). 1 After predominance, Rule 23(b)(3) requires the court to ensure class litigation is the 2 “superior” method of resolving the case. This “necessarily involves a comparative evaluation of 3 alternative mechanisms of dispute resolution.” Hanlon, 150 F.3d at 1023 (citation omitted). Rule 4 23 lists “non-exclusive factors” to consider: 5 (A) the class members’ interests in individually controlling the 6 prosecution or defense of separate actions; 7 (B) the extent and nature of any litigation concerning the controversy 8 already begun by or against class members; 9 (C) the desirability or undesirability of concentrating the litigation of 10 the claims in the particular forum; and 11 (D) the likely difficulties in managing a class action. 12 Fed. R. Civ. P. 23(b)(3); Hanlon, 150 F.3d at 1023. 13 In this case, none of these factors suggests another type of litigation, another action or 14 another venue would be superior to a class settlement in this case. No individual employee is 15 likely to have a compelling reason to litigate individually, as all will be entitled to roughly the 16 same award, and these awards are so small that individual litigation would probably not be 17 possible. See Amchem Prod., Inc. v. Windsor, 521 U.S. 591, 620 (1997). Neither the parties nor 18 the court are aware of any other similar cases in any other forum. And because the parties 19 propose to settle this action rather than to litigate it through trial, any difficulties that might arise 20 during a trial are irrelevant. See id. (“Confronted with a request for settlement-only class 21 certification, a district court need not inquire whether the case, if tried, would present intractable 22 management problems, for the proposal is that there be no trial.” (citation omitted)). 23 In sum, the court finds the proposed class could likely be certified for purposes of 24 settlement under Rule 23(b)(3). 25 B. Fair, Adequate and Reasonable Settlement 26 In addition to showing a proposed class is likely to be certified, its proponents must show 27 the agreement is likely to meet the requirements of Rule 23(e)(2). Under that part of Rule 23, the 28 court may approve a class that binds absent class members: 1 only after a hearing and only on finding that it is fair, reasonable, and 2 adequate after considering whether: 3 (A) the class representatives and class counsel have adequately 4 represented the class; 5 (B) the proposal was negotiated at arm’s length; 6 (C) the relief provided for the class is adequate, taking into account: 7 (i) the costs, risks, and delay of trial and appeal; 8 (ii) the effectiveness of any proposed method of distributing 9 relief to the class, including the method of processing class- 10 member claims; 11 (iii) the terms of any proposed award of attorney’s fees, 12 including timing of payment; and 13 (iv) any agreement required to be identified under Rule 14 23(e)(3); and 15 (D) the proposal treats class members equitably relative to each 16 other. 17 Fed. R. Civ. P. 23(e)(2). The Advisory Committee added these specific provisions to Rule 23 in 18 2018 in an effort “to focus the court and the lawyers on the core concerns of procedure and 19 substance that should guide the decision whether to approve the proposal.” Fed. R. Civ. P. 20 23(e)(2) Advisory Committee Notes to 2018 Amendments. The Committee did not intend to 21 “displace” any of the factors courts had used previously to decide whether proposed settlement 22 agreements were fair, reasonable and adequate. Id. Accordingly, this court has kept those factors 23 in mind as well. See, e.g., Volkswagen, 895 F.3d at 610–11 & nn.18–19 (listing factors). 24 Turning back to the proposed agreement in this case, Lingle has not shown it is likely 25 “fair, reasonable and adequate” on these terms. His motion falls short in at least four respects. A 26 renewed motion for preliminary approval addressing these shortcomings could likely be granted, 27 least in part, but the court cannot reach that conclusion with certainty before reviewing such a 28 renewed motion: 29 1. Arm’s Length Negotiations. Lingle has not explained what evidence will demonstrate 30 the parties negotiated at arm’s length. He and his counsel state simply, in conclusory fashion, 1 they did not collude with the defense and reached an agreement after private mediation that was 2 “adversarial and contentious, although still professional in nature.” See Mem. at 9; Rodriguez 3 Decl. ¶ 8. “[T]he mere presence of a neutral mediator . . . is not on its own dispositive of whether 4 the end product is a fair, adequate, and reasonable settlement agreement.” In re Bluetooth, 5 654 F.3d 935, 948 (9th Cir. 2011). In the language of Rule 23(e), the court cannot say it will 6 “likely be able to” find “the proposal was negotiated at arm’s length.” Fed. R. Civ. P. 7 23(e)(2)(B). 8 2. Proposed Fee Award. Lingle’s counsel does not explain why a $200,000 fee award is 9 fair and reasonable in these circumstances. They state only that their actual fees to date are 10 $239,597.50 and offer to provide “additional information to enable a lodestar cross check.” 11 Rodriguez Decl. ¶ 21. As the docket of this action shows, relatively little has happened since this 12 action was removed from state court: Lingle amended his complaint, ECF No. 16; Centimark 13 moved to dismiss, ECF No. 17; the court resolved that motion largely in Lingle’s favor, ECF No. 14 35; and the parties went to mediation, ECF No. 39. The court did not issue a Rule 16 scheduling 15 order. The parties did not engage in formal discovery and litigated no discovery disputes. They 16 filed no other pretrial motions. They did not prepare for a final pretrial conference or trial. None 17 of this is to say it is clear from the record that Lingle’s counsel has inflated its bills or spent too 18 much time on this matter. On the current record, the court finds it is unlikely to approve the 19 proposed fee award under Rule 23(3)(2)(C)(iii), quoted above. At the same time, however, the 20 court cannot exclude the possibility that counsel could justify the proposed award at least in part 21 in a renewed motion, and the court could grant preliminary approval with the understanding that 22 any fees not awarded would revert to the class. 23 3. Comparison of Fees and Costs with Payments to Class Members. Relatedly, when 24 the various proposed fees, costs and awards are added together, they yield a sum of $240,000. 25 See id. ¶ 10. Members of the proposed class, by contrast, would receive about $255,000 26 altogether. This court hesitates to find the proposed agreement is fair and adequate when it 27 allocates nearly as much to the attorneys, administrators and named plaintiff as it does to all of 28 the other members of the proposed class. Again, as above, the total compensation and fees could 1 be reasonable, but counsel has not demonstrated as much. It is also possible the settlement 2 agreement could be approved based on the understanding that fees and costs would revert to the 3 class if not approved. But the ratio of $240,000 to $255,000 raises the possibility of a collusive 4 agreement. This court “must be particularly vigilant not only for explicit collusion, but also for 5 more subtle signs that class counsel have allowed pursuit of their own self-interests and that of 6 certain class members to infect the negotiations.” Bluetooth, 654 F.3d at 947. 7 4. Adequate Compensation to Class Members. Finally, Lingle has not demonstrated 8 class members will receive adequate compensation given the harms they allegedly suffered. 9 As explained above, the proposed agreement starts with a gross settlement fund of 10 $600,000, and after deductions for fees, costs and payments to the state regulator, $255,000 will 11 remain for distribution to the individual Centimark employees. That sum is far lower than the 12 values both Centimark and Lingle’s counsel have placed on his claims at different times in this 13 case. 14 When Centimark removed the case to this court, it estimated it was then facing an 15 exposure of more than $8 million, or about $7 million if it excluded a potential award of 16 attorneys’ fees. See Not. Removal ¶¶ 24–66. For just those claims related to rest breaks, 17 Centimark estimated more than $1.8 million was in dispute based on its own records and an 18 economist’s analysis. See id. ¶¶ 32, 45–49. If Lingle had thought his potential recovery was 19 actually much lower or that Centimark’s assumptions were faulty, he could have moved to 20 remand the case to state court, where he chose to file it originally. See generally, e.g., Harris v. 21 KM Indus., Inc., 980 F.3d 694 (9th Cir. 2020) (affirming remand amount in controversy below 22 $5 million). But he did not contest Centimark’s estimates or move to remand. 23 Even now, after further investigation and negotiations with Centimark, Lingle estimates 24 damages are almost $6 million. Rodriguez Decl. ¶ 10. His attorneys also offer a “more realistic 25 range of potential damages” that accounts for the uncertainties of litigation, such as successful 26 defense arguments about Centimark’s intent to follow the law and a jury’s potential skepticism of 27 competing evidence. See id. ¶¶ 9–10. But even that estimate is more than twice as large as the 28 $600,000 gross settlement fund, and it is more than six times larger than the net fund that would 1 be available to Centimark’s employees after reductions for fees, costs and other amounts. See id. 2 ¶ 10. 3 The explanations Lingle’s counsel offers for these reductions leave much to be desired. 4 An example suffices for purposes of this order. Several of Lingle’s claims rest on his allegation 5 that Centimark did not pay employees for the many hours they were often required to spend 6 traveling between job sites. See, e.g., Second Am. Compl. ¶ 17. Based on interviews with 7 Centimark employees, Lingle’s memories of his own work, Centimark’s payroll data and other 8 similar evidence, Lingle’s counsel estimated on average that employees devoted more than three 9 hours every week—off-the-clock uncompensated hours—to mandatory travel between job sites. 10 See Rodriguez Decl. at 6. This means that by Lingle’s counsel’s estimate, employees were 11 entitled to more than $400,000 in unpaid minimum wages, more than $1.2 million in unpaid 12 overtime wages and hundreds of thousands of dollars in additional penalties based on his 13 derivative claims about inaccurate paystubs and delayed payments. See id. at 7–8, 11–12. 14 Lingle’s counsel argues a much smaller award was more likely for four basic reasons: 15  During the summer, employees did not travel between job sites as often as they did 16 in other seasons, so three hours might overstate the actual weekly travel time for 17 the whole year. Id. at 7. 18  Despite the evidence about what employees actually did in practice, Centimark 19 had a written policy to pay employees for their travel time. Id. at 6–7. 20  Centimark would likely argue employees spent more time traveling than was truly 21 necessary. See id. at 6. 22  Centimark would likely argue it did not intend to break the law or to underpay its 23 employees, possibly citing splits of authority within the California appellate 24 courts. See, e.g., id. at 11–12. 25 But counsel does not explain how they connected these risks to their estimates of the claims’ 26 more “realistic” value, nor whether similar defenses have proven successful in other similar cases. 27 They have extensive experience in this type of litigation, as is clear from the declaration they 28 submitted. See id. ¶¶ 14–19. But they have not connected that experience to this case and this 1 | proposed agreement. On this record, their proposed reductions could very well be mere back-of- 2 | the-envelope guesswork, even if informed guesswork. 3 The court understands that evidentiary and legal challenges like those above could make a 4 | full recovery uncertain or even unlikely. It is simply unclear on this record that $255,000 would 5 | adequately compensate employees for the wrongdoing that Lingle alleges in his complaint. 6 | Ill. CONCLUSION 7 Given the uncertainties above, the court declines to consider now whether the agreement 8 | to settle Lingle’s PAGA claims meets the applicable requirements of state law, which resemble 9 | those in Rule 23(e). See, e.g., Moniz v. Adecco USA, Inc., 72 Cal. App. 5th 56, 77 (2021) □□□□□ 10 | trial court should evaluate a PAGA settlement to determine whether it is fair, reasonable, and 11 | adequate in view of PAGA’s purposes to remediate present labor law violations, deter future 12 | ones, and to maximize enforcement of state labor laws.”). 13 The court denies the motion for preliminary certification without prejudice to renewal. 14 | Any renewed motion must be filed within thirty days. Alternatively, the parties may file a 15 | further joint status report by the same deadline proposing a schedule for further negotiations, 16 | mediation or litigation. 17 This order resolves ECF No. 43. 18 IT IS SO ORDERED. 19 | DATED: November 14, 2024. □□□ 20 = A... — STATES DISTRICT JUDGE