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Pearson v. P.F. Chang's China Bistro, Inc.

United States District Court, S.D. California

May 21, 2018

JOY PEARSON, individually and on behalf of all others similarly situated, Plaintiff,
P.F. CHANG'S CHINA BISTRO, INC., a Delaware corporation; and DOES 1 through 50, inclusive, Defendants.


          Hon. Janis L. Sammartino United States District Judge

         Presently before the Court is Plaintiffs Joy Pearson, (in Case No. 13-cv-2009), and Linda Andrade and Liliana Avila's, (in Case No. 12-cv-2724), Unopposed Motion for Order Granting Preliminary Approval of Class Action Settlement. (ECF No. 128.) The Court vacated the hearing and took the motion under submission without oral argument pursuant to Civil Local Rule 7.1(d)(1). (ECF No. 130.) Plaintiffs also filed supplemental briefing at the Court's request. (ECF No. 131.) Because the settlement is fundamentally fair, reasonable, and adequate, the Court GRANTS the Parties' Preliminary Settlement Motion.


         On November 7, 2012, Plaintiffs Linda Andrade, and Liliana Avila filed a class action suit alleging violations of California's Labor and Business and Profession Codes on behalf of all non-exempt employees of Defendant P.F. Chang's China Bistro, Inc. (“MTN, ” ECF No. 128-1, at 12.)[1] On July 23, 2013, Plaintiff Joy Pearson filed a class action suit in San Diego Superior Court, which Defendant removed to the Southern District of California. (Id. at 14.) Additionally, a third class action, Kidner et al. v. P.F. Chang's, No. RIC 1500355, was filed in state court, removed to the Central District of California, and subsequently remanded back to state court.[2] (Id. at 16.) Defendant operates several restaurants in California. (First Am. Compl. (“FAC”), ECF No. 20, ¶ 9.) The proposed class includes all non-exempt, hourly employees in Defendant's restaurants in California who worked at any time during the period July 22, 2009 through the date which this Court grants preliminary approval (“Settlement Class” “Class Members”). (MTN 11.)

         Plaintiffs, across all three actions, assert seven claims for relief under various provisions of California law:

1. Failure to Provide Legally Compliant Meal Periods
2. Failure to Pay Wages Due, Including Minimum Wages, Regular Time, Overtime, Double Time, and Other Types of Wages
3. Failure to Pay Split Shift Premiums
4. Failure to Pay Reporting Time Wages
5. Waiting Time Penalties
6. Unlawful Repayment of Wages
7. Cal. Bus. & Prof. Code § 17200, et seq.
8. Failure to Provide Accurate Wage Statements
9. Violation of the Private Attorney General Act

(See Id. at 10.) Plaintiffs generally allege that Defendant has failed to set various wage-related policies. For example, Plaintiffs allege that Defendant has no “split-shift interval policy, ” which harmed Plaintiffs because they were not compensated during occasions they worked split shifts. (Third Am. Compl. (“TAC”), ECF No. 70, ¶ 26.) Defendant did not provide Plaintiffs a duty free meal period or compensate one hour of pay to compensate for the loss of the meal period. (Id. ¶¶ 35-36.) Next, Defendant allegedly did not provide Plaintiffs a rest period at the legally mandated rate of ten minutes for every four hours of work. (Id. ¶¶ 47-49.) Plaintiffs also allege that Defendant did not timely pay employees upon their discharge from employment with Defendant, as required by California law. (Id. ¶¶ 61-65.) Finally, Defendant did not provide Plaintiffs accurate itemized wage statement. (Id. ¶¶ 71-72.)

         The Parties conducted voluminous discovery and motion practice, as well as arbitration, over the course of five years. (MTN 11.) They also engaged in two full-day mediations, once on August 18, 2016 and once on August 14, 2017. (Id. at 18.) The latter mediation was successful and resulted in a non-reversionary settlement of $6.5 million. (Id. at 19.)

         Plaintiffs present to the Court an unopposed Motion for an Order: (1) conditionally certifying the proposed Settlement Class, defined below; (2) preliminarily approving the proposed settlement of $2.9 million; (3) approving the proposed Notice and directing distribution of the Notice and related documents; (4) approving CPT Group, Inc. as Claims Administrator; (5) appointing Plaintiffs' counsel as class counsel; (6) appointing Plaintiffs as class representatives; and (7) setting a schedule for final approval.[3] (MTN 11-12.) Although Defendant does not oppose certification of a Settlement Class and the proposed Settlement, Defendant continues to deny all allegations of unlawful conduct alleged in the Complaint, and does not admit or concede that it has, in any manner, violated federal or California laws or committed any other unlawful action that would entitle Plaintiffs or any class to any recovery.


         The Parties have submitted a comprehensive settlement document with approximately forty pages of substantive terms, (Stipulation of Settlement and Release (“Settlement Agreement”), Ex. A, ECF No. 128-2, at 24-64), and a nine-page proposed class notice, (Notice of Class Action Settlement, Ex. B., ECF No. 128-2, at 74-83). The settlement provides monetary relief but no programmatic relief.

         Defendant proposes to pay a Maximum Settlement Fund of $6, 500, 000.00. (MTN 19.) From this amount will be deducted: (a) all Settlement payments to Class Members eligible for Settlement payments; (b) the Class Representative incentive payment approved by the Court; (c) Class Counsel's attorneys' fees and expenses approved by the Court; (d) administration fees and expenses; and (e) payment made to the State of California Labor Workforce and Development Agency (“LWDA”). (See Settlement Agreement ¶¶ III.L.2- 6.) Defendant will automatically make Settlement payments to Class Members (unless they choose to opt out) based on the following formula:

Using the Class Data, the Settlement Administrator will calculate the total Compensable Workweeks for all Settlement Class Members. The respective Compensable Workweeks for each Settlement Class Member will be divided by the total Compensable Workweeks for all Settlement Class Members, resulting in the Payment Ratio for each Settlement Class Member. Each Settlement Class Member's Payment Ratio will then be multiplied by the Net Settlement Amount to calculate each Settlement Class Member's estimated Individual Settlement Payment.
(1) Settlement Class Members are not eligible to receive any compensation other than Individual Settlement Payments from this Settlement, and they will receive Individual Settlement Payments if they do not submit timely and valid requests for exclusion.
(2) If any Class Members submit requests for exclusion, each Settlement Class Member will have his or her Individual Settlement Payment increased pro-rata based on Compensable Workweeks such that the aggregate of all Individual Settlement Payments paid to Settlement Class Members is equal to the Net Settlement Amount.

(Id. ¶ III.L.2.a.) The check will escheat to the State of California Department of Industrial Relations Unpaid Wages Fund if the Class Member fails to cash his or her check within 180 days after it is mailed. (Id. ¶ III.L.2.e.)


         Before granting preliminary approval of a class action settlement agreement, the Court must first determine whether the proposed class can be certified. Amchem Prods. v. Windsor, 521 U.S. 591, 620 (1997) (indicating that a district court must apply “undiluted, even heightened, attention [to class certification] in the settlement context” in order to protect absentees).

         Class actions are governed by Federal Rule of Civil Procedure 23. To certify a class, each of the four requirements of Rule 23(a) must first be met. Zinser v. Accufix Research Inst., Inc., 253 F.3d 1180, 1186 (9th Cir. 2001). Rule 23(a) allows a class to be certified only if:

(1) the class is so numerous that joinder of all members is impracticable;
(2) there are questions of law or fact common to the class;
(3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and
(4) the representative parties will fairly and adequately protect the interests of the class.

Fed. R. Civ. P. 23(a). Next, in addition to Rule 23(a)'s requirements, the proposed class must satisfy the requirements of one of the subdivisions of Rule 23(b). Zinser, 253 F.3d at 1186. Here, Plaintiffs seeks to certify the Settlement Class under subdivision Rule 23(b)(3), which permits certification if “questions of law or fact common to class members predominate over any questions affecting only individual class members, ” and “a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.” The Court addresses each of these requirements in turn.

         I. Rule 23(a)(1): Numerosity

         Federal Rule of Civil Procedure 23(a)(1) requires that a class must be “so numerous that joinder of all members is impracticable.” “[C]ourts generally find that the numerosity factor is satisfied if the class comprises 40 or more members and will find that it has not been satisfied when the class comprises 21 or fewer.” Celano v. Marriott Int'l, Inc., 242 F.R.D. 544, 549 (N.D. Cal. 2007).

         Here, the proposed Settlement Class consists of approximately 17, 000 individuals, all of whom were (or are currently) employed by Defendant. (MTN 24.) Accordingly, joinder of all members would be impracticable for purposes of Rule 23(a)(1), and the numerosity requirement is satisfied.

         II. Rule 23(a)(2): Commonality

         Federal Rule of Civil Procedure 23(a)(2) requires that there be “questions of law or fact common to the class.” Commonality requires that “the class members ‘have suffered the same injury.'” Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 349-50 (2011) (quoting Gen. Tel. Co. of Sw. v. Falcon, 457 U.S. 147, 157 (1982)). “The existence of shared legal issues with divergent factual predicates is sufficient, as is a common core of salient ...

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