Filed 8/17/20 Lavitt v. Goodwill Retail Industries CA2/7
   NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                         SECOND APPELLATE DISTRICT

                                      DIVISION SEVEN


 BRENT LAVITT et al.,                                             B278675

           Plaintiffs and Respondents,                            (Los Angeles County
                                                                  Super. Ct. No. BC537429)
           v.

 GOODWILL RETAIL INDUSTRIES
 et al.,

           Defendants and Respondents;

 JUAN ARIAS et al.,

           Interveners and Appellants.


      APPEAL from a judgment of the Superior Court of Los
Angeles County. Lisa Hart Cole, Judge. Affirmed.
      Matern Law Group, Matthew J. Matern, Joshua D. Boxer,
Roy K. Suh, Kiran Prasad, and Tagore O. Subramaniam for
Intervener and Appellant Juan Arias.
      David Yeremian & Associates and David Yeremian for
Intervener and Appellant Maria Rina Clemente.
      RGLAWYERS, Solomon E. Gresen; Benedon & Serlin,
Douglas G. Benedon, and Judith E. Posner for Plaintiffs and
Respondents.
      Ogletree, Deakins, Nash, Smoak & Stewart, Catherine L.
Hazany, and Lyne A. Richardson for Defendants and
Respondents.
                    _______________________

                       INTRODUCTION

      Interveners Juan Arias and Maria Rina Clemente appeal
from the judgment entered after the trial court approved a
settlement resolving five wage and hour class actions against
Goodwill Retail Services and Goodwill Industries of Southern
California (collectively, Goodwill). We affirm.

      FACTUAL AND PROCEDURAL BACKGROUND

     A.     Goodwill Employees File Wage and Hour Class
            Actions Against Their Employer
      In 2013 and 2014 employees of Goodwill filed five
subsequently related class actions alleging Goodwill committed
various wage and hour violations. Two of those lawsuits, Diaz v.
Goodwill Retail Services and Alvarado v. Goodwill Industries of
Southern California, were on behalf of current store managers
who alleged Goodwill had improperly classified them as exempt
employees. Two of the other lawsuits, Clemente v. Goodwill
Industries of Southern California and Arias v. Goodwill




                                2
Industries of Southern California, were on behalf of current and
former nonexempt employees.
      This action, the fifth, by Brent Lavitt on behalf of exempt
employees and Gamal Adams on behalf of nonexempt employees,
sought damages, penalties under the Private Attorneys General
Act (PAGA) (Lab. Code, § 2698 et seq.), and relief under the
unfair competition law (Bus. & Prof. Code, § 17200). This action
was the only one of the five lawsuits to assert claims on behalf of
both exempt and nonexempt employees, and it was the only one
asserting a claim for Goodwill’s alleged “‘failure to recalculate
overtime and double time after nondiscretionary bonus’”
payments.

      B.     The Court in the Alvarado Action Denies a
             Motion for Class Certification
       In August 2014 the plaintiffs in the Alvarado action moved
to certify the action as a class action and sought to be the class
representatives for several types of retail store managers whom
Goodwill had allegedly misclassified as exempt employees. The
court found that the proposed class included managers in various
types of business environments with different job functions, that
the plaintiffs failed to show the managers performed the same job
tasks, and that the defendants showed there were significant
differences in the positions, work environments, and tasks of the
proposed class members. The court in the Alvarado action denied
the motion for class certification, finding common questions of
law or fact did not predominate.




                                 3
      C.     The Parties in This Action Reach a Settlement
             and Move for Preliminary Approval
       In March 2015 Lavitt, Adams, and Goodwill jointly moved
for an order preliminarily approving a proposed settlement of the
class claims and conditionally certifying settlement classes.
Under the proposed settlement, Goodwill agreed to pay
$4,200,000 in cash and provide $300,000 in merchandise
vouchers to all 10,588 California Goodwill hourly employees
during the class period whom Goodwill had designated as
nonexempt from payment for overtime (the nonexempt class) and
to all 216 California employees whom Goodwill had designated as
exempt from payment for overtime (the exempt class). The
settlement consisted of $1,195,608 for nonexempt class members
and $286,566 for exempt class members for alleged missed meal
and rest breaks and associated unpaid or underpaid penalties;
$1,858,406 for nonexempt class members and $402,849 for
exempt class members for alleged underpayment of wages
relating to overtime or “off the clock” work and associated unpaid
or underpaid penalties; $6,507 for nonexempt class members for
alleged improper rounding time entries; $190,597 for 1,127
nonexempt class members “who were paid nondiscretionary
bonuses allegedly without recalculating overtime/double time”;
$127,407 for 858 nonexempt class members and 147 exempt class
members for an alleged specific sales bonus underpayment;
$162,060 for members of both classes (at $15 each) for alleged
nonpayment of job-related expenses; $294,003 in cash and $5,997
in merchandise vouchers for members of both classes for various
penalties allegedly owed for Labor Code violations; and $10,000
in PAGA penalties.




                                4
       Counsel for Lavitt and Adams submitted a declaration
explaining that settlement negotiations began in early 2014 when
counsel spoke about the possibility of mediation and Goodwill
indicated it was willing to resolve the unpaid and underpaid
bonus claims. The parties engaged in informal discovery, and
counsel for Lavitt and Adams received more than 2,500
documents, including Goodwill’s policies, training manuals,
internal memoranda, and retail store operational data, as well as
the plaintiffs’ personnel files, pay stubs, and other records.
Goodwill also produced spreadsheets of payroll registers that
contained approximately 350,000 line items with over 17 million
data points representing every wage payment to the nonexempt
class members between February 25, 2010 and January 2015 and
every wage payment to the exempt class members between
July 25, 2009 and January 2015. The data corresponded to the
individual components of each wage payment during the class
period, similar to information on pay stubs, and included
information about regular time, overtime, and bonus payments.
Counsel for Lavitt and Adams determined from this information
the size of the two putative classes, the average wage for each
class, the number of current and former employees, and the
number of full time equivalent positions during the class period
(2,242 for the nonexempt class, 83 for the exempt class). Counsel
for Lavitt and Adams also deposed two persons designated by
Goodwill as most qualified to testify about the payment of
overtime, the calculation and payment of bonuses, meal and rest
break policies, efforts to provide meal and rest breaks, and other
issues in the litigation. Counsel for Lavitt and Adams also
interviewed putative class members, reviewed declarations of




                                5
putative class members, and investigated Goodwill’s financial,
employment, and other publicly available information.
       The parties advised the court they participated in a
mediation with a retired judge in January 2015 and, after
Goodwill produced additional data, a second session of the
mediation. The parties explained, “At that time, upon a realistic
and good faith review of the voluminous documentary and other
evidence in this case, each side recognized the substantial risk of
an adverse result as to some of the claims, and based upon the
risk . . . agreed to settle all of the claims of the [e]xempt and
[n]onexempt [c]lasses in this action, and have reduced their
positions to writing” in the settlement agreement.
       Counsel for Lavitt and Adams described in his declaration
the method the parties used to value and resolve each category of
claims. For some categories Goodwill agreed to pay the full
amount of its potential exposure. For example, Goodwill agreed
to pay 100 percent of the “failure to recalculate bonus” claim.
Goodwill also agreed to pay each class member in both classes
$15 for allegedly unreimbursed job related expenses, which was
the average amount Lavitt and Adams estimated Goodwill owed.
And Goodwill agreed to pay the nonexempt class members $.01
per pay period for allegedly improper rounding, which was how
the plaintiffs valued the rounding claim.
       The parties resolved other categories of claims by
compromise, in light of the potential exposure and litigation
risks. For example, counsel for Lavitt and Adams calculated
Goodwill’s exposure for the meal and rest period claims by
assuming there was, on average, one missed or interrupted meal
or rest break per week for each full time equivalent position
(exempt and nonexempt) and multiplying that figure by the




                                 6
average hourly rate for the class. Counsel estimated the total
value of these claims was $5,607,511 for the nonexempt class and
$487,103 for the exempt class. Goodwill denied its employees
missed all or part of any of their meal or rest breaks. Goodwill
also contended that, because the evidence regarding this category
of claims was specific to each employee, individual issues
predominated, and the court in this action, as the court had in
the Alvarado action, would deny the plaintiff’s motion for
certification of this claim. In light of the risks the plaintiffs faced
in certifying the class and the uncertainties the litigation was
causing to Goodwill’s business plans, the parties agreed through
the mediation to allocate to these claims $1,195,608 for the
nonexempt class and $286,566 for the exempt class as part of the
settlement.
       Counsel for Lavitt and Adams calculated Goodwill’s
exposure for the claims for unpaid overtime and off-the-clock
work by assuming there was, on average, one unpaid hour of
overtime or off-the-clock work per week per full time equivalent
position (both exempt and nonexempt) and multiplying that
figure by the average hourly rate for the class, to arrive at a total
of $8,411,266 for the nonexempt class and $730,655 for the
exempt class. Goodwill denied its employees worked overtime or
off the clock. Goodwill also contended the court would deny class
certification of these claims because the evidence of overtime and
off-the-clock work was specific to each individual employee. The
parties, taking into account “the risks inherent in certification”
and the unsuccessful motion for class certification in Alvarado,
agreed in the mediation to allocate to these claims $1,858,406 for
the nonexempt class and $402,849 for the exempt class as part of
the settlement.




                                   7
      D.      Plaintiffs from the Other Class Actions Object to
              Preliminary Approval of the Settlement and Move To
              Intervene
       Arias, Clemente, and Gisela Diaz, plaintiffs in other class
actions against Goodwill, opposed preliminary approval of the
settlement and sought to intervene and conduct discovery. Arias,
joined by Clemente, argued that the settling parties failed to
conduct sufficient discovery, that counsel for Lavitt and Adams
did not appear to have compared the time records of the class
members with the payroll registers, and that the documents on
which counsel for Lavitt and Adams relied did not include the
necessary time records to perform such an analysis. Arias also
argued that it was unclear whether counsel for Lavitt and Adams
investigated whether Goodwill’s rounding policy deprived the
class members of overtime payments and that the settling parties
did not sufficiently explain the basis for the amounts Goodwill
would be paying under the settlement for nonpayment of job-
related expenses and potential penalties. Finally, Arias argued
that the settling parties provided “no verifiable data point(s) to
substantiate [the] claim” the nonexempt class members clocked
in and out for lunch and received a penalty payment for missed or
shortened lunch periods. Arias observed that his records
reflected he was not paid for missed, late, or short meal breaks,
which suggested the settling parties were making
misrepresentations to the court. Diaz also asserted there was a
conflict of interest between the exempt and nonexempt employee
classes.
       Counsel for Lavitt and Adams defended his investigation
and calculations and stated he compared the time card records of
the plaintiffs to the payroll registers and found no discrepancies.




                                8
Counsel for Lavitt and Adams provided the court with a meal
break waiver signed by Arias, which counsel suggested could
explain why Arias may not have been paid for missed meal
periods. Counsel also stated that, because only approximately 20
employees signed these waivers, Arias was not representative of
the 10,000-member class and his records did not show there was
anything wrong with the settlement. Counsel for Lavitt and
Adams also advised the court his analysis of Goodwill’s pay
records indicated Goodwill had paid meal penalties for 31,870
disparate pay periods during the class period, which resulted in
more than $750,000 in penalties.

       E.    The Trial Court Grants the Motions To Intervene
       At a May 27, 2015 hearing the trial court stated it intended
to allow the objecting parties to intervene “so that there is a clear
procedural basis for the parties to be filing, in essence, opposition
to the proposed settlement.” Because there were two classes and
two class representatives, the court emphasized it was important
the settlement process was “completely transparent” so that the
court, the attorneys, and the class representatives could fulfill
their fiduciary obligations to the classes. While the court did not
want “plaintiff versus plaintiff discovery in deposition practice,”
the court felt the parties needed “absolute transparency about
whatever evidence, materials, documents, whatever [Goodwill]
gave to the settling plaintiff[s], I think everybody should get to
see, because then if the other plaintiff attorneys ever should have
an argument that the settlement is not fair, for one reason or
another, you know, everybody has the same cards . . . . So my
tentative thinking is to allow intervention and order, essentially,
the settling party to share any and all evidence of documents or




                                  9
information that Goodwill provided to the . . . proposed settling
party in connection with the action to the settlement.” The court
also expressed concern about a possible conflict of interest
between the two classes and the use of merchandise vouchers as
part of the settlement. The court stated that Arias’s contention
the court and the parties needed the time records to evaluate the
settlement was “a fair point,” and the court asked counsel for
Lavitt and Adams how the objecting parties could “analyze the
sufficiency of a meal break settlement if they don’t have time
records.”
       The court explored with the parties the feasibility and cost
of Goodwill providing a representative sample of time record data
for the interveners to analyze. The court also suggested sending
the class members a Belaire-West1 notice to permit counsel to
contact additional class members about meal periods. Arias
advocated for both a document production and a Belaire-West
notice, and he offered to accept “a reasonable sample” of data for
the nonexempt class.
       The court ruled: “Let’s have the intervening plaintiffs and
allow everybody to intervene just for purposes of the motion for
preliminary and need of final approval. So let’s have the
plaintiffs get together and create and serve the simplest,
cheapest, most direct, efficient, etc., discovery plan that you can

1       Belaire-West Landscape, Inc. v. Superior Court (2007) 149
Cal.App.4th 554. “‘Belaire-West notice’ refers to an opt-out notice
sent to potential class members in representative actions. The
notice is designed to protect the privacy rights of third parties
and allow the recipient to object in writing to prevent his or her
information from being disclosed to the party seeking discovery.”
(Nunez v. Nevell Group, Inc. (2019) 35 Cal.App.5th 838, 844,
fn. 1.)




                                10
think they have that would let you get, if nothing else, the clock
in and clock out, or anything else you think is extremely critical
to your ability to analyze the fairness of the settlement.” The
court stated Goodwill could consult its information technology
department concerning the feasibility and cost and report back to
the court. The court also asked the parties to submit additional
briefs on the issue of a possible conflict of interest, requested
more information about the rounding practice, and reiterated
that the interveners were not permitted to conduct formal
discovery but were only allowed to formulate “a demand of what
you think you need to achieve transparency.” The court granted
the motion to intervene, and Goodwill and the settling plaintiffs
gave the interveners deposition transcripts and other documents
and information.

      F.     The Interveners Obtain Additional Information
      The parties prepared a joint statement describing the
interveners’ proposed discovery plan and appeared at a hearing
on July 17, 2015. While the parties had resolved a number of
issues, including the Belaire-West notice, they had not resolved
the issue of what time records Goodwill would produce. Goodwill
proposed that, because it would cost $24,000 to produce the
information the interveners sought, the court require Goodwill to
provide data for a sample of 100 or more class members selected
by the interveners.
      The court stated that $24,000 was “too much” and ruled
that a 100-employee sample was sufficient. The court stated: “It
seems to me that sampling with a hundred or more class
members randomly selected by the interven[e]rs gives you
enough data to see what’s happening and to assess whether




                                11
there’s an issue or not. And that seems to be something of an
expense level that Goodwill can live with.” The court also asked
Goodwill to demonstrate by expert declaration that a sample of
100 class members’ records was statistically significant and gave
the interveners permission to advise the court if their expert
believed such a sampling was not sufficient. The court also
approved the stipulated Belaire-West order for pre-certification
notice to the putative class members.
       Goodwill subsequently submitted a declaration from a
statistical expert opining that a sample of 100 employees was
sufficient to evaluate Goodwill’s time rounding procedures. On
September 11, 2015 the interveners gave Goodwill a randomly
selected sample of 100 employee identification numbers for the
purpose of obtaining the workhour and compensation records of a
sample of the nonexempt class.
       In advance of an October 2015 status conference, the
interveners asked the court not to set a briefing schedule for the
motion for preliminary approval of the proposed settlement
because they needed the putative class members’ contact
information and the sample of the records before they could
proceed. The settling plaintiffs argued the interveners had not
timely proceeded with the informal discovery the court had
ordered in July. They complained that the interveners had not
given the court’s signed order to the claims administrator to use
in sending the Belaire-West notices and that they had taken two
months to provide Goodwill with the list of employee
identification numbers for the sample. The settling parties
argued that the interveners were more interested in delaying and
obstructing the settlement than in determining whether the
settlement was fair and reasonable and that the court should set




                               12
the hearing on the motion for preliminary approval as soon as
possible. The trial court agreed the interveners were “moving at
a slow pace” and set the hearing on the motion for preliminary
approval for January 8, 2016. On October 22, 2015 Goodwill gave
the interveners the sampled time records for the 100 nonexempt
employees the interveners had selected.

     G.      The Trial Court Gives the Settlement Preliminary
             Approval
       Arias and Clemente opposed the motion for preliminary
approval,2 continuing to maintain the record did “not contain
sufficient information to allow the [c]ourt to determine whether
the proposed settlement is within the ‘ballpark of
reasonableness.’” They claimed that the investigation by Lavitt
and Adams was inadequate and that Lavitt and Adams had
obstructed the interveners’ efforts to obtain information. Arias
and Clemente also argued the representation of two classes by
the same counsel created a conflict of interest.
       Goodwill argued the settlement was a fair compromise that
would provide substantial benefit to the class members. Goodwill
observed that the interveners objected to the methodologies the
parties used to reach the settlement but did not submit an expert
declaration demonstrating any flaws in the settling parties’
valuation of the claims, analysis of the data, or calculation of
potential damages. Goodwill submitted the declaration of an
economic expert stating that Goodwill’s practice of time rounding
was “neutral with respect to time worked and [did] not
systematically deny employees pay.” Lavitt and Adams similarly
faulted the interveners for failing to submit evidence in support

2    Diaz withdrew her opposition in January 2016.




                               13
of their objections to the settlement. Lavitt and Adams described
their investigation in detail, justified the allocation of the
settlement proceeds between the classes, and explained the
methodology and bases for the calculations the interveners were
challenging.
       At the hearing on the motion for preliminary approval, the
court observed that the interveners, rather than demonstrating
the settlement was inadequate, simply criticized Lavitt, Adams,
and Goodwill. The court found that the parties reached the
settlement through arms-length negotiation and that the
investigation and discovery was sufficient for counsel to propose,
and the court to evaluate, the settlement. The court also found
that counsel for Lavitt and Adams was experienced in similar
litigation and that the settlement was entitled to a presumption
of fairness. The court preliminarily concluded the settlement was
fair, reasonable, and adequate, considering the strength of the
plaintiffs’ case; the risk, expense, complexity, and likely duration
of further litigation; the risk of maintaining class action status
through trial; the amount offered in settlement; the extent of
discovery completed; and the stage of the proceedings and the
experience and views of counsel. In response to the interveners’
objections and arguments, the court observed that the settling
parties had “persuasively argue[d] that the non-settling parties
have been less than diligent prosecuting their own cases and
have failed to submit analysis, evidence, or expert testimony
substantiating their complaints that the proposed settlement is
inadequate or unfair. The evidence submitted by the settling
parties attesting to their diligent investigation and active
negotiation of the settlement is likewise persuasive.” The court
granted the motion for preliminary approval of the settlement,




                                14
conditionally certified the classes, and appointed counsel for
Lavitt and Adams as class counsel.

       H.     The Trial Court Gives the Settlement Final Approval
       After the court preliminarily approved the settlement, class
counsel notified the class of the proposed settlement. Of the
11,531 potential class members, only 73 opted out, which yielded
a 99.4 percent participation rate. No members of the class other
than Arias and Clemente objected to the settlement.
       Lavitt and Adams filed a motion for final approval of the
settlement. As with the motion for final preliminary approval of
the settlement, class counsel submitted a declaration detailing
his efforts since 2014 to obtain discovery and resolve the case and
explaining how he valued the claims and why the parties were
settling those claims for the compromised amounts.
       In their opposition to the motion for final settlement
approval, Arias and Clemente, relying on an expert witness who
analyzed employee time records produced by Goodwill, argued
the settling parties had “grossly undervalued” the meal break
claims of the nonexempt class. They claimed that the
investigation by class counsel was inadequate, that the
settlement was based on inadequate investigation, that class
counsel misrepresented facts to the court, and that the court still
lacked sufficient information to intelligently review the proposed
settlement. Arias and Clemente also argued class counsel had a
conflict of interest because they represented both classes (exempt
and non-exempt employees). Arias and Clemente’s expert
witness analyzed the payroll records of 89 employees and
determined that, of the 19,539 workdays encompassed by the




                                15
sample, there were 1,955 “unique meal violations”3 and 1,911
workdays longer than six hours where a meal had been
automatically deducted, but that Goodwill had only paid 287
meal premiums for the employees included in the sample. In
response, counsel for Goodwill submitted a declaration stating
that the analysis by Arias and Clemente’s expert did not account
for instances where a missed meal period was not a violation but
the result of a shortened work day, voluntary early departure,
meal waiver, or similar reason.
       The trial court granted the motion for final settlement
approval. The court ruled that the settlement was presumptively
fair because the parties reached it through arms-length
negotiation in several mediation sessions with a retired judge,
that the parties conducted sufficient investigation and discovery
to allow counsel to evaluate the settlement and the court to
determine whether it was fair, that class counsel was experienced
in class action litigation, and that only two of the 11,531 class
members, far less than 10 percent of the class, objected to the
settlement.
       The court also found the settlement was fair, reasonable,
and adequate. In making this finding, the court balanced the
evidence of the strength of the plaintiffs’ case and the value of the
claims against the amount offered in settlement; the considerable
risk, likely expense, and probable lengthy duration of the trial, as

3      The expert found there was a meal break violation if the
first meal break was “after the 5th hour” of work, the putative
class member did not take a meal break but worked over 6 hours,
a meal break was “less than 30 minutes,” or the putative class
member did not take a second meal break after working over 10
hours. The expert defined a “unique meal violation” as a
violation “without overlapping multiple violations per day.”




                                 16
well as the likelihood that extended motion practice would
prolong the litigation; the risk of class decertification; the amount
of the settlement compared to the estimated value of the claims;
the extensive discovery by Lavitt and Adams; the views and
experience of counsel; and the reaction of the class members to
the proposed settlement.
       Responding to the arguments by Arias and Clemente that
the settlement was based on an inadequate investigation, the
court stated: “Based upon all the investigation undertaken by
Class Counsel, and given the extraordinary procedural history of
this action, in which Objectors were permitted to intervene for
the limited purpose of conducting discovery, the Court finds these
arguments lack merit and overrules them. Class Counsel has
presented sufficient evidence of the investigation conducted, and
the analysis of the damage claims based on such discovery. That
Objectors’ counsel may have conducted analysis that arrives at
different damage models is insufficient to undermine the
settlement; the result would be different if Objectors could
demonstrate that Class Counsel had conducted insufficient
investigation or analysis. Such is not the case. Moreover, a
settlement ‘need not obtain 100 percent of the damages sought in
order to be fair and reasonable.’”
       The court entered judgment on the settlement. Clemente
and Arias timely appealed.




                                 17
                          DISCUSSION

       A.    Applicable Law and Standard of Review
       When the parties settle a class action, the trial court must
approve the settlement after a hearing. (Cal. Rules of Court, rule
3.769(a).) At the final approval hearing, the “court must conduct
an inquiry into the fairness of the proposed settlement.” (Id.,
rule 3.769(g).) “‘The court must determine the settlement is fair,
adequate, and reasonable. [Citations.] The purpose of the
requirement is “the protection of those class members, including
the named plaintiffs, whose rights may not have been given due
regard by the negotiating parties.”’” (Luckey v. Superior Court
(2014) 228 Cal.App.4th 81, 93.)
       “‘“The trial court has broad discretion to determine whether
the settlement is fair. [Citation.] It should consider relevant
factors, such as the strength of plaintiffs’ case, the risk, expense,
complexity and likely duration of further litigation, the risk of
maintaining class action status through trial, the amount offered
in settlement, the extent of discovery completed and the stage of
the proceedings, the experience and views of counsel, the
presence of a governmental participant, and the reaction of the
class members to the proposed settlement. . . . Due regard should
be given to what is otherwise a private consensual agreement
between the parties. The inquiry ‘must be limited to the extent
necessary to reach a reasoned judgment that the agreement is
not the product of fraud or overreaching by, or collusion between,
the negotiating parties, and that the settlement, taken as a
whole, is fair, reasonable and adequate to all concerned.’”’”
(Nordstrom Com. Cases (2010) 186 Cal.App.4th 576, 581
(Nordstrom).) “‘Ultimately, the [trial] court’s determination is




                                 18
nothing more than an “amalgam of delicate balancing, gross
approximations and rough justice.”’” (Dunk v. Ford Motor Co.
(1996) 48 Cal.App.4th 1794, 1801.)
       “We review the trial court’s decision to approve a class
action settlement in order to determine whether the trial court
acted within its discretion. We do not reweigh the evidence or
substitute our notions of fairness for the trial court’s. [Citations.]
“To merit reversal, both an abuse of discretion by the trial court
must be ‘clear’ and the demonstration of it on appeal ‘strong.’”
[Citation.]’ [Citation.] ‘Our review of the trial court’s approval of
a class action settlement is limited in scope. We make no
independent determination whether the settlement terms are
“fair, adequate and reasonable,” but only determine whether the
trial court acted within its discretion.’” (Nordstrom, supra, 186
Cal.App.4th at p. 581.)

      B.     The Trial Court Did Not Abuse Its Discretion in
             Determining the Settlement Was Fair, Reasonable,
             and Adequate
       To evaluate the fairness of a class action settlement, the
trial court must have “a record which allows ‘an understanding of
the amount that is in controversy and the realistic range of
outcomes of the litigation.’” (Munoz v. BCI Coca-Cola Bottling
Co. of Los Angeles (2010) 186 Cal.App.4th 399, 409 (Munoz); see
Clark v. American Residential Services LLC (2009) 175
Cal.App.4th 785, 801; Kullar v. Foot Locker Retail, Inc. (2008)
168 Cal.App.4th 116, 120 (Kullar).) Arias and Clemente argue
the trial court abused its discretion because, as a result of the
parties’ misrepresentations, the trial court did not have sufficient
information about “the nature and magnitude of the claims in




                                 19
question” (Kullar, at p. 133) to determine whether the
consideration Goodwill paid for the class member’s release of the
claims was reasonable. We conclude that, while class counsel
made some troubling misrepresentations about the evidence in
support of his valuation of the claims resolved by the settlement,
the trial court still had sufficient information to evaluate the
fairness of the settlement.

            1.     Meal Breaks, Rest Breaks, and Off-the-clock
                   Time
       Arias and Clemente argue the settling parties falsely
asserted Goodwill had paid for 100 percent of the missed or
interrupted meal break violations, when Goodwill in fact paid
penalties for only a small fraction of those violations. Arias and
Clemente’s expert calculated that there were 1,955 “unique meal
violations” during the workdays of a sample of 89 putative class
members and that Goodwill paid only 287 meal premiums to
these putative class members. The settling parties, however, did
not tell the court Goodwill had fully compensated class members
for all meal break violations. Although they told the court
Goodwill’s regular practice was to compensate nonexempt
employees for meal breaks when there was a missed or
impermissibly short meal break, the settlement recognized that
both nonexempt and exempt employees had not been fully
compensated for meal and rest break violations by valuing the
meal and rest break claims, in addition to the $750,000 Goodwill
already paid as meal premiums, at more than $5.6 million for
nonexempt employees and $487,000 for exempt employees.
       Arias and Clemente also argue counsel for Lavitt and
Adams misrepresented his clients’ deposition testimony to




                                20
substantiate his valuation of the meal break, rest break, and off-
the-clock claims. To estimate the potential value of those claims,
class counsel assumed that on average there was one off-the-clock
hour of work per week and one missed or interrupted meal or rest
break per week for each full time equivalent position. Class
counsel defended this assumption by stating in his declaration
Lavitt and Adams testified in their depositions that managers
and other employees worked one or two off-the-clock hours per
week at certain Goodwill stores and that they generally had one
or two meal or rest breaks interrupted per week. Class counsel,
however, misrepresented Lavitt’s and Adams’s testimony. Lavitt
did not mention off-the-clock hours, meal breaks, or rest breaks
in his deposition testimony. Adams did not mention off-the-clock
hours either, but he did discuss meal and rest breaks. Class
counsel’s description of Adams’s testimony about those claims,
however, was far from accurate. While Adams testified he
generally did not miss meal breaks, he stated he normally took
only about four rest breaks per week (which meant he was
missing approximately six rest breaks per week).
       These misstatements, however, were not the only evidence
of the value of the meal break, rest break, and off-the-clock
claims. Class counsel’s valuation of these claims was also based
on his determination, from reviewing the payroll records, of the
average hourly wage of the putative class members and the
number of full time equivalent positions during the class period,
a determination Arias and Clemente do not argue was
inaccurate. Class counsel also stated in his declaration that he
interviewed several putative class members and that his
assumption class members generally missed or had interrupted
one or two meal or rest breaks and worked one or two off-the-




                               21
clock hours per week was consistent with information he
obtained from the class members.4 And even though Adams’s
testimony suggests he missed six rest breaks per week instead of
one or two, the trial court had discretion to find a settlement
based on the latter figure was fair and reasonable. Finally, class
counsel advised the court that the settlement value for these
claims was “arrived at by way of contentious arms-length
negotiations” with the mediator and that “the amount which was
agreed-upon by the parties takes into account the risks inherent
in [class] certification (particularly considering the fact that this
court has already denied an identical motion for certification in
the Alvarado case).” The court was within its discretion to credit
class counsel’s declaration on these points, even if his declaration
contained some inaccurate information on other points. (See
Ellis v. Toshiba America Information Systems, Inc. (2013) 218
Cal.App.4th 853, 884 [when reviewing attorney declarations, “a
credibility determination is uniquely the province of the trial
court”]; In re Marriage of Calcaterra & Badakhsh (2005) 132
Cal.App.4th 28, 36 [trial court sitting “as a trier of fact on a
motion . . . ‘may believe and accept as true only part of a witness’s
testimony and disregard the rest’”].)



4     Class counsel stated in his declaration that the information
he received from putative class members on the meal and rest
break and the off-the-clock claims was “in accord with” and
“supported by” the deposition testimony of Lavitt and Adams.
We interpret these statements to mean the information was
consistent with and supported counsel’s calculation that
employees had one missed or interrupted meal or rest break per
week and that they worked one or two off-the-clock hours per
week.




                                 22
       There was also evidence Lavitt and Adams could have
difficulty successfully certifying classes for the meal break and
rest break claims. (See Munoz, supra, 186 Cal.App.4th at p. 411
[class action settlement was fair considering “the trial court’s
observations . . . that the class ‘may not be certifiable,’ [and] that
‘it would be extremely difficult to try this case’”]; Noll v. eBay,
Inc. (N.D.Cal. 2015) 309 F.R.D. 593, 606 [class action settlement
was fair considering the defendant’s contention that “individual
issues in determining both liability and damages” would
predominate]; Bellinghausen v. Tractor Supply Co.
(N.D.Cal. 2015) 306 F.R.D. 245, 255-256 [wage and hour class
action settlement was fair in light of the “significant risk that
class action status might not be maintained” because of
“‘differences between the individual stores where different class
members worked and/or differences in circumstances
surrounding the end of each employee’s employment’”].) Indeed,
the court in the Alvarado action had already denied certification
of a class of exempt employees raising similar claims, ruling
individual issues predominated.
       Adams’s testimony also suggested that other nonexempt
employees missed fewer rest breaks than he did and that he
missed rest breaks for a different reason than other nonexempt
employees may have missed rest breaks (to the extent they did).
Adams, an assistant manager, testified he often missed rest
breaks because he could not leave the sales floor if he was the
manager on duty. On the other hand, one of the witnesses
Goodwill designated as a person most qualified testified Goodwill
trained all employees to take uninterrupted meal and rest breaks
and required managers to ensure employees took proper meal
and rest breaks. (See Nordstrom, supra, 186 Cal.App.4th at




                                 23
p. 587 [“trial court did not abuse its discretion in determining
that the class’s” claims were “not strong, and therefore deciding
the terms of the settlement were fair, adequate, and reasonable”];
Sutter Health Uninsured Pricing Cases (2009) 171 Cal.App.4th
495, 511 [purported intervenor’s “failure to acknowledge the
reality that the case might have been lost undermines his claim
that the settlement is unfair”]; see also Brinker Restaurant Corp.
v. Superior Court (2012) 53 Cal.4th 1004, 1051 [individual issues
predominated in off-the-clock claims where “neither
a common policy nor a common method of proof [was] apparent”
and the plaintiff did not present “substantial evidence of a
systematic company policy to pressure or require employees to
work off-the-clock”].)
       Finally, while Arias and Clemente objected to the fairness
of the proposed settlement, they did not provide the trial court
with a reasonable estimate of the value of the meal break, rest
break, or off-the-clock claims—despite successfully moving to
intervene and obtaining discovery. Class counsel’s assumption
that on average there was one meal or rest break violation per
week for each full time equivalent position corresponded to a
cumulative total of over 573,000 meal and rest break violations
during the class period. While Arias and Clemente rely heavily
on the declaration of their data analysis expert, their expert only
suggested Goodwill often failed to pay a meal premium when
there was a meal break violation. He did not analyze how
frequently there were meal or rest break violations, nor did he
suggest there was more than one violation per week for each full
time equivalent position per week, as class counsel assumed.
       To be sure, class counsel could have submitted better
evidence to support his valuation of the claims, such as




                                24
declarations from class members stating how frequently they
missed rest breaks or worked off the clock. But the trial court
does not need evidence of “the maximum amount the plaintiff
class could recover if it prevailed on all its claims.” (Munoz,
supra, 186 Cal.App.4th at p. 409; see Sutter Health Uninsured
Pricing Cases, supra, 171 Cal.App.4th at p. 511 [“A trial court
should not evaluate a proposed settlement ‘against a hypothetical
or speculative measure of what might have been achieved had
plaintiffs prevailed at trial.’”]; Wershba v. Apple Computer, Inc.
(2001) 91 Cal.App.4th 224, 250 [“the test is not the maximum
amount plaintiffs might have obtained at trial on the complaint,
but rather whether the settlement is reasonable under all of the
circumstances”], disapproved on another ground in Hernandez v.
Restoration Hardware, Inc. (2018) 4 Cal.5th 260, 269.) Nor does
the law require the court to justify individually the amount the
settling parties have allocated to each claim in a class action
settlement. (See Dunk v. Ford Motor Co., supra, 48 Cal.App.4th
at p. 1801 [trial court must “‘reach a reasoned judgment . . . that
the settlement, taken as a whole, is fair, reasonable and adequate
to all concerned’”].) Here, the trial court had and considered
“enough information about the nature and magnitude of the
claims the parties were settling, as well as the impediments to
recovery, to make an independent assessment of the
reasonableness of the terms, and to “satisfy itself that the class
settlement [was] within the ‘ballpark’ of reasonableness.”
(Kullar, supra, 168 Cal.App.4th at p. 133.)




                                25
              2.   Rounding Policy
       Arias and Clemente argue class counsel lacked the
necessary records to evaluate whether Goodwill’s rounding policy,
rather than being neutral, unfairly favored the employer.
Goodwill’s expert witness, however, compared actual time punch
records and rounded time entries for 204,329 shifts involving
3,319 employees over 15 pay periods. She found that 51 percent
of the shifts had rounded time totals that corresponded exactly
with their actual time, 29 percent of shifts had rounded time
totals greater than the actual time worked, and 20 percent of the
shifts had rounded time totals less than the actual time worked.
She concluded Goodwill’s rounding practice was neutral with
respect to time worked and did not systematically deny
employees’ wages for time they had worked. Although the court
was not required to evaluate the rounding claims individually,
the court had sufficient information to conclude the $3,507 the
parties allocated to resolve the rounding claims was sufficient.
(See Kullar, supra, 168 Cal.App.4th at p. 133; see, e.g., Lopez v.
Aerotek, Inc. (C.D.Cal. Aug. 3, 2017, No. SACV14-00803-CJC
(JCGx) [2017 WL 10434395, p. 5] [class action settlement
approved where the settling defendant had argued that the
plaintiffs’ “rounding claims fail because ‘[the defendant’s]
rounding policies are both facially neutral and even-handed in
practice, and that, over time, they do not deprive employees of
compensation for time worked’”]; McClean v. Health Systems, Inc.
(W.D.Mo. June 1, 2015, No. 6:11-CV-03037-DGK) [2015 WL
12426091, p. 4] [settlement providing the plaintiffs with “30% of
the net time rounded away” was “quite reasonable,” considering
“the numerous impediments to recovery and the very real




                               26
possibility that these individuals will not recover anything absent
a settlement”].)

             3.    Release of Other Claims
       Finally, Arias and Clemente contend that the settlement
summarily released various claims without analyzing the value
of those claims5 and that the trial court did not know the number
of former employees in the class,6 the value of their claims, or the
amount of vacation time Goodwill may have owed them. The
notice of the proposed class action settlement and final approval
hearing disclosed the release of the claims. Arias and Clemente,
who had already intervened in the action when the notice was
sent, objected to the settlement on many grounds, but they did
not object to the scope of the release of claims in their opposition


5     The addendum to the settlement agreement provided: “The
Class Released Claims include all such claims arising under the
California Labor Code (including, but not limited to,
sections . . . 200, 201, 202, 203, 204, 210, 218.5, 218.6, 223, 225.5,
226, 226.3, 226.6, 226.7, 227.3, 510, 512, 515, 558, 1174, 1174.2,
1182.12, 1194, 1194.2, 1197, 1197.1, 1197.2, 1198, 2802, 2698 and
2699, among other provisions of law); the wage orders of the
California Industrial Welfare Commission; California Business
and Professions Code section 17200 et seq.; and the California
common law of contract.”

6     The assertion the court did not know the number of class
members is not supported by the record, which demonstrates that
the court was fully advised of the number of class members and
the changes in class size over the course of the settlement
approval period. In its final approval of the settlement, the court
stated it had requested and received detailed information about
the growth of the class.




                                 27
to final approval of the settlement. Arias and Clemente forfeited
these issues by failing to raise them in the trial court. (See
Chavez v. Netflix, Inc. (2008) 162 Cal.App.4th 43, 59 [objector
forfeited challenge to notice procedures by failing to raise the
issue in the trial court]; see also Hanna v. Mercedes-Benz USA,
LLC (2019) 36 Cal.App.5th 493, 513 [“‘“As a general rule, theories
not raised in the trial court cannot be asserted for the first time
on appeal”’”].)

             4.     PAGA Penalties
       Arias and Clemente argue the trial court abused its
discretion under Kullar, supra, 168 Cal.App.4th 116 in approving
the settlement without analyzing the total potential PAGA
penalties and providing a “cogent explanation” of why it approved
the amount of the settlement allocated to PAGA penalties.
Again, however, Arias and Clemente did not make this argument
in their objections to the final approval of class settlement, thus
forfeiting the argument.
       Moreover, even if Arias and Clemente had preserved the
argument, they have not shown the trial court abused its
discretion in approving the settlement. “PAGA settlements are
subject to trial court review and approval, ensuring that any
negotiated resolution is fair to those affected.” (Williams v.
Superior Court (2017) 3 Cal.5th 531, 549; see Lab. Code, § 2699,
subd. (l).)7 But “neither the California legislature, nor the


7     At the time Lavitt and Adams filed this action, former
Labor Code section 2699, subdivision (l), provided that “[t]he
superior court shall review and approve any penalties sought as
part of a proposed settlement agreement pursuant to [PAGA].”




                                28
California Supreme Court, nor the California Courts of Appeal,
nor the [Labor and Workforce Development Agency] has provided
any definitive answer” to the “vexing question” of what the
appropriate standard is for approving the settlement of PAGA
claims, whether they are brought as a class or a representative
action. (Flores v. Starwood Hotels & Resorts Worldwide
(C.D.Cal. 2017) 253 F.Supp.3d 1074, 1075; accord, Haralson v.
U.S. Aviation Servs. Corp. (N.D.Cal. 2019) 383 F.Supp.3d 959,
971.) Rather than argue an articulable standard, Arias and
Clemente simply argue the trial court did not undertake an
analysis of the total potential PAGA penalties. That is not
sufficient to show the court abused its discretion in approving the
$10,000 allocation for PAGA penalties. (See O’Connor v. Uber
Technologies, Inc. (N.D.Cal. 2016) 201 F.Supp.3d 1110, 1134 [“the
purposes of PAGA may be concurrently fulfilled” by a settlement
providing substantial monetary relief for the class because “a
settlement not only vindicates the rights of the class members as
employees, but may have a deterrent effect upon the defendant
employer and other employers”]; see also Shahbazian v. Fast
Auto Loans, Inc. (C.D.Cal. June 20, 2019) No. 2:18-cv-03076-
ODW [2019 WL 8955420, p. 8] [“‘where a settlement for
a . . . class is robust, the statutory purposes of PAGA may be



On June 27, 2016–while the motion for final approval of the
settlement was pending—the Legislature amended Labor Code
section 2699 to provide, in relevant part, “the superior court shall
review and approve any settlement of any civil action
filed pursuant to this part.” (Lab. Code, § 2699, subd. (l)(2).) The
parties do not address the effect of this amendment, if any, on the
settlement.




                                29
fulfilled even with a relatively small award on the PAGA claim
itself””].)8

      C.   The Trial Court Did Not Abuse Its Discretion in
           Finding the Settlement Was Not the Product of a
           Conflict of Interest, Collusion, or Inadequate
           Representation
     Arias and Clemente argue the trial court should not have
approved the settlement and certified the classes because there
was substantial evidence of a conflict of interest, collusion, and
inadequate representation. These arguments lack merit.




8      Arias and Clemente also refer in their opening brief to the
provisions of the settlement agreement that required class
members to opt out of the class by returning notarized forms by
registered or certified mail and that gave class members coupons
for Goodwill merchandise. The few and scattered references to
these issues, however, are descriptions in the brief’s statement of
facts section of the parties’ positions in the trial court and of the
court’s rulings; Arias and Clemente do not argue they are reasons
the trial court erred in approving the settlement. (See St. Myers
v. Dignity Health (2019) 44 Cal.App.5th 301, 313 [appellant
forfeits assertions made “without pertinent argument or an
attempt to apply the law to the circumstances of [the] case”];
Dinslage v. City and County of San Francisco (2016)
5 Cal.App.5th 368, 377, fn. 3 [court may decline to consider
arguments “not set out under distinct headings” because,
“‘[a]lthough we address the issues raised in the headings, we do
not consider all of the loose and disparate arguments that are not
clearly set out in a heading and supported by reasoned legal
argument’”].)




                                 30
             1.     Collusion
       Arias and Clemente argue their exclusion from the
settlement negotiations and discovery, as well as the settling
parties’ reliance on a mediation privilege, suggests the settlement
was collusive. The negotiation of settlements, however, is
typically not transparent, and “[t]his lack of transparency is
reflected in the limited ability of objectors to obtain discovery
regarding settlement negotiations. ‘“It is well
established . . . that objectors are not entitled to discovery
concerning settlement negotiations between the parties without
evidence indicating that there was collusion between plaintiffs
and defendants in the negotiating process.” [Citations.]’
[Citation.] Ultimately, the key consideration for the trial court is
the substantive fairness of the settlement terms, as well as the
reasonableness of the fee award and any evidence of collusion,
rather than the transparency of the process by which the terms of
the settlement were accomplished.” (Cellphone Termination Fee
Cases (2009) 180 Cal.App.4th 1110, 1122-1123.)
       Arias and Clemente argue the trial court “abdicated its
affirmative obligation to police the settlement for evidence of
collusion.” It is true the trial court “must be vigilant against
fraud and collusion. The court is, in short, acting in a fiduciary
capacity as guardian of the rights of absentee class members.”
(Luckey v. Superior Court, supra, 228 Cal.App.4th at p. 103.)
Contrary to Arias and Clemente’s argument, however, the record
demonstrates the trial court evaluated the settlement for possible
collusion; the court did not find any. At the preliminary approval
stage, the trial court considered the claims by Arias and
Clemente of collusion and unfairness. The court stated it was not
persuaded the “failure to invite counsel in all pending cases to




                                31
participate in mediation or discovery is evidence of any
unfairness. In the absence of a court order to the contrary, the
Code of Civil Procedure does not require such invitations.
Moreover, . . . the [interveners] have had opportunities to conduct
discovery in their own cases. The various plaintiff[s’] attorneys
were also free to (and have had plenty of time to) reach an
agreement to cooperate with one another rather than compete
with one another.” The court stated that, because the various
plaintiffs’ attorneys were not cooperating, it was logical for
Goodwill to negotiate a settlement with one set of attorneys, and
it was “particularly reasonable for Goodwill to negotiate with
counsel in this case because this is the only case asserting claims
on behalf of both exempt and non-exempt employees. The failure
to include all attorneys from all cases in the mediation is not
evidence of improper collusion.” Consistent with this analysis, at
the hearing on the final approval of the proposed settlement, the
trial court found there was “no evidence of fraud or collusion.”
(See Nordstrom, supra, 186 Cal.App.4th at p. 581 [trial court’s
inquiry “‘“‘must be limited to the extent necessary to reach a
reasoned judgment that the agreement is not the product of fraud
or overreaching by, or collusion between, the negotiating
parties’”’”].)

             2.   Conflict of Interest
       Arias and Clemente argue that, without independent
representation, Adams could not adequately represent the class
of nonexempt employees. Arias and Clemente argue the trial
court abused its discretion in certifying the classes and approving
the settlement because there was a conflict of interest, although
it is unclear whether they are asserting there was a conflict




                                32
between Lavitt and Adams, a conflict between Adams and the
nonexempt class members on whose behalf he asserted claims, or
both.
       To the extent that Arias and Clemente are arguing there
was a conflict of interest between Lavitt and Adams, they rely on
cases concluding supervisors were not adequate representatives
for the classes that included employees they supervised. (See,
e.g., Lampe v. Queen of the Valley Medical Center (2018)
19 Cal.App.5th 832, 850 [putative class representative who was
responsible for scheduling meal breaks for other employees was
not an adequate meal-break-claim class representative where her
interests were “‘antagonistic to the remainder of the class’”];
Hughes v. WinCo Foods (C.D.Cal. Jan. 4, 2012) No. ED CV11-
00644 JAK (OPx) [2012 WL 34483, p. 7] [denying certification of
a class of supervisory and nonsupervisory employees where the
“[p]laintiffs assign partial responsibility for labor law violations
to their supervisors, and simultaneously seek to represent said
supervisors”]; Hadjavi v. CVS Pharmacy, Inc. (C.D.Cal. July 25,
2011) No. CV 10-04886 SJO (RCx) [2011 WL 3240763, p. 6]
[supervisory pharmacist who may have been partially responsible
for the inability of other pharmacists to take meal breaks was not
an appropriate representative for a class of all pharmacists,
supervisory and nonsupervisory]; see also Wagner v. Taylor
(D.C. Cir. 1987) 836 F.2d 578, 595 [in a race discrimination class
action, a supervisor was not an appropriate representative for a
class that included nonsupervisory personnel because,
“[a]lthough each group shares the interest in freedom from
discrimination, potential conflicts may and do arise within a class
including both”].) Here, however, one class representative is not
attempting to represent class members with whom he has a




                                33
potential or actual conflict of interest. Lavitt represents the
exempt employees, and Adams represents the nonexempt
employees. Courts routinely approve the division of a class into
subclasses or, as here, separate classes, to resolve potential
conflicts between groups of class members. (See Capitol People
First v. State Dept. of Developmental Services (2007) 155
Cal.App.4th 676, 697 [“where factual circumstances differ, or
class members disagree as to the proper theory of liability, the
trial judge, through resort to subclasses, intervention, and the
like, may incorporate class differences into the litigation process
and afford all members their due in deciding the proper
outcome”]; Aguiar v. Cintas Corp. No. 2 (2006) 144 Cal.App.4th
121, 134, 137 [potential divergence of interest between two
groups of employees arising out of a difference in the amount of
time worked on a matter did not mean the class representatives
could not represent the class because the creation of subclasses
would allow the class representatives to represent both groups],
disapproved on another ground in Noel v. Thrifty Payless,
Inc. (2019) 7 Cal.5th 955, 986, fn. 15; see also Martinez v. Joe’s
Crab Shack Holdings (2014) 231 Cal.App.4th 362, 376 [in an
employment class action, the court could resolve an apparent
conflict between general managers and assistant managers by,
among other things, creating a subclass for general managers].)
       To the extent Arias and Clemente are arguing there was a
conflict of interest between Adams and the members of the
nonexempt class he represents, Arias and Clemente have not
demonstrated there was such a conflict. They include in their
opening brief a heading stating Adams “Could not Adequately
Represent Interests of the Subordinate Nonexempt Employees
Whose Rights He Violated,” but they do not provide any citation




                                 34
to the record, factual analysis, or legal explanation for this
claimed conflict of interest. Therefore, they have forfeited the
argument. (See Citizens for Positive Growth & Preservation v.
City of Sacramento (2019) 43 Cal.App.5th 609, 634 [arguments
not “supported with reasoned analysis or citations to evidence in
the record” are forfeited]; Taniguchi v. Restoration Homes LLC
(2019) 43 Cal.App.5th 478, 486, fn. 6 [arguments . . . not
supported by meaningful analysis or citation to authority” are
forfeited].)9

            3.     Adequacy of Class Counsel’s Representation
      Arias and Clemente contend class counsel’s representation
was inadequate because counsel could not simultaneously
represent the interests of the two classes. They argue class
counsel should have been disqualified because counsel’s loyalties
were divided between clients and classes. While a conflict of
interest may arise when an attorney’s duty on behalf of one client
obligates the attorney to take action prejudicial to the interests of
another client (Havasu Lakeshore Investments, LLC v. Fleming
(2013) 217 Cal.App.4th 770, 778), Arias and Clemente have not
established class counsel’s representation of both exempt and
nonexempt employees divided counsel’s loyalties or forced counsel
to take any actions that benefitted one group of employees at the
expense of the other. There is no categorical prohibition on class

9      Arias and Clemente also assert the court should have
ordered the settling parties to give notice to the class that Lavitt
and Adams had a conflict of interest and that they signed a
conflicts waiver allowing class counsel to represent both of them.
Arias and Clemente, however, forfeited this assertion by not
objecting to the settlement on this ground. In any event, as
discussed, there was no conflict of interest.




                                 35
counsel representing multiple classes or subclasses in which
members receive different allocations of settlement funds. (See
Moore v. PetSmart, Inc. (9th Cir. 2018) 728 Fed.Appx. 671, 673-
674 [rejecting the contention that the same class counsel could
not adequately represent two classes of employees in a wage and
hour case and stating that, “[a]lthough the claims of one class
purportedly are more valuable than the claims of another class, a
difference in value of claims does not necessarily mean that there
is a structural, or fundamental, conflict of interest requiring
separate counsel”]; see also Dunleavy v. Nadler (In re Mego
Fin. Corp. Sec. Litig.) (9th Cir. 2000) 213 F.3d 454, 462-463
[approving a settlement where class counsel represented two
groups of class members and each group received different
percentages of the settlement and where all class members were
damaged by the same underlying conduct].)
       Arias and Clemente also assert “the record shows that the
divided loyalties impacted the fairness of the agreement,”
arguing that members of the exempt class received a payment
approximately 10 times greater than members of the nonexempt
class and that “the court did not require proponents to explain”
the differences in recovery. But, as discussed, the settling parties
did explain the differences in allocations of the settlement
between the classes. As class counsel explained, the allocations
in the settlement to the meal break, rest break, and off-the-clock
claims for both the exempt class and nonexempt class were based
on the number of full time equivalent positions in each class and
the average hourly wage of the members of each class. Moreover,
where, as here, “class members essentially seek the same thing
from the defendant and differ only with respect to the amount or
value of their claims, absent vast differences or some other




                                36
evidence of unfairness, there is no fundamental conflict sufficient
to defeat adequacy.” (Moore v. PetSmart, Inc., supra, 728
Fed.Appx. at p. 674.)
       Citing Walker v. Apple, Inc. (2016) 4 Cal.App.5th 1098,
Arias and Clemente argue class counsel could not represent both
exempt and nonexempt employees. Walker, however, is
distinguishable. In that case, which did not involve approval of a
class action settlement, a law firm represented classes in two
separate class actions against the same employer. In the first
action, the employees contended that the employer’s meal and
rest break policies were inconsistent with California law and that
the employer systematically failed to timely pay employees upon
termination of their employment. (Id. at p. 1102.) In the second
action, the employees alleged that the employer violated
California law by failing to furnish final wage statements upon
termination of their employment. (Id. at p. 1103.) The law firm
was disqualified in the second action because the employer’s
expected litigation strategy in that action was to show that any
failure to provide wage statements was an error by a store
manager—and that manager was a member of the certified class
in the first action. (Id. at pp. 1105, 1111.) Because it was highly
likely the employer would call the manager to testify concerning
wage statements in the second action, the law firm would be
placed in the position of having to cross-examine its client in the
first action to advance its litigation strategy in the second action.
(Id. at p. 1105.) Therefore, the conflict between the class member
in the first action and the interests of the class members of the
second action was “practical and fundamental,” not merely
speculative or hypothetical. (Id. at pp. 1111-1112.) In contrast,
Arias and Clemente did not demonstrate any actual conflict of




                                 37
interest between the classes that would prevent concurrent
representation. Instead, they asserted without explanation that,
because Lavitt supervised Adams, representation by the same
counsel “raised the specter” of class counsel having to choose
between cross-examining Lavitt or Adams to establish the other’s
claims.

     D.      The Trial Court Did Not Place the Burden on the
             Interveners To Prove the Settlement Was Not Fair,
             Reasonable, and Adequate
       Finally, Arias and Clemente argue the trial court erred by
placing the burden on them to show the proposed settlement was
not fair, reasonable, and adequate, rather than fulfilling its
obligation to scrutinize the proposed settlement. The trial court
did no such thing. The court stated and understood the
proponents of the settlement had that burden, and the court
independently and objectively analyzed the evidence and
circumstances surrounding the settlement. While Arias and
Clemente assert the court improperly shifted the burden to them
when the court observed they were criticizing class counsel but
failed to present evidence the settlement was inadequate, these
comments reflected the court’s conclusion that Arias and
Clemente failed to rebut the settling parties’ showing that the
settlement was fair, reasonable, and adequate. (See 7-Eleven
Owners for Fair Franchising v. Southland Corp. (2000) 85
Cal.App.4th 1135, 1166 [rejecting the contention the court placed
the burden on the parties opposing the settlement where the
record demonstrated the trial court “understood the settlement
proponents had the burden of proof” and the class representatives




                               38
“‘made a sufficient showing which [objectors] failed to adequately
rebut’”].)

                           DISPOSITION

       The judgment is affirmed. Lavitt and Adams are to recover
their costs on appeal.




             SEGAL, Acting P. J.



We concur:




             FEUER, J.




             DILLON, J.*




*     Judge of the Los Angeles Superior Court, assigned by the
Chief Justice pursuant to article VI, section 6 of the California
Constitution.




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