Court Opinion

ID: 2721511
Source: CourtListenerOpinion
Date Created: 2014-08-27 22:02:06.660881+00
Date Added: 2024-06-11T15:43:35.557555
License: Public Domain

Filed 4/24/12 Tormey v. The Vons Companies CA4/1
Received for posting 8/27/14
                      NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
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or ordered published for purposes of rule 8.1115.

                    COURT OF APPEAL, FOURTH APPELLATE DISTRICT

                                                  DIVISION ONE

                                           STATE OF CALIFORNIA

DONALD J. TORMEY,                                                   D057912

         Plaintiff and Respondent,

         v.                                                         (Super. Ct. No. 37-2007-00069418-
                                                                   CU-OE-CTL)
THE VONS COMPANIES, INC., et al.,

         Defendants and Respondents;

DENNIS HUGHES et al.,

        Objectors and Appellants.

         APPEAL from an order and judgment of the Superior Court of San Diego County,

Joan Lewis, Judge. Reversed and remanded with directions.

         Appellants Dennis Hughes and Robert C. Wieck (collectively objectors) appeal

from an order approving the settlement and judgment of dismissal of a class action

lawsuit filed by plaintiff and respondent Donald Tormey against defendants and
respondents the Vons Companies, Inc. (Vons) and Safeway, Inc. (Safeway). Objectors

challenge the trial court's final approval of the class settlement as premature and thus

reversible per se on due process grounds, or so prejudicial as to require reversal. They

further contend the order should be vacated as a result of class counsel's conflict of

interest, as well as the misleading and inadequate notice to the class. Finally, objectors

urge reversal is required because the court exceeded its authority in dismissing the action

with prejudice.

       We conclude the trial court in the first instance should pass on objectors'

arguments relating to the strength of the defense of federal preemption under section 301

of the Labor Management Relations Act (29 U.S.C. § 185(a) (hereafter section 301

preemption), which defendants applied in supplemental briefing to present for the first

time calculations significantly lessening the valuation of Tormey's case. We reject

objectors' arguments as to class counsel's conflict of interest, and their challenge to the

adequacy of notice to the class. Because we reverse and remand for further proceedings

on final approval of the class action settlement, we need not reach objectors' contentions

regarding dismissal of the action with prejudice other than to point out that class

settlement provisions of the California Rules of Court preclude dismissal of the action "at

the same time as or after entry of judgment." (See Cal. Rules of Court, rules 3.769(h),

3.770(a).)

                   FACTUAL AND PROCEDURAL BACKGROUND

       In June 2007, Tormey, a pharmacist, filed a class action complaint in the San

Diego Superior Court against his employer Vons and Vons's parent company, Safeway.

                                              2
Tormey alleged defendants failed to provide rest and meal periods to pharmacists who

were non-exempt employees, in violation of Labor Code sections 201, 204, 226.7 and

Industrial Welfare Commission (IWC) wage order No. 4-2001 (Cal. Code Regs., tit. 8, §

11040) and that the violations constituted unlawful activity prohibited by the Unfair

Competition Law (UCL; Bus. & Prof. Code, § 17200, et seq.). Among other relief, he

sought damages, injunctive and declaratory relief, and restitution. Defendants answered

the complaint in August 2007. Tormey commenced discovery about four months later,

serving sets of form and special interrogatories and a request for documents. Defendants

later took Tormey's deposition. Counsel for Tormey took no depositions.

       In February 2008, former Vons employee Kenneth Amodeo filed a putative class

action complaint in Los Angeles Superior Court (Amodeo v. Safeway, et al. (Super. Ct.

L.A. County, No. BC385354)) assertedly containing nearly identical causes of action on

behalf of licensed pharmacists employed or previously employed in California by

Safeway and Vons.

       In May 2008, Tormey and defendants participated in a 12-hour day of mediation

before retired Superior Court Judge William Pate. Thereafter, they reached a classwide

settlement of a proposed class of hourly-paid pharmacists or pharmacy managers who

worked for Vons or Safeway from June 29, 2003, to the date of the preliminary order

approving the settlement. In September 2008, they executed a stipulation of settlement

and release providing that defendants would jointly pay $760,000 into a fund from which

a $10,000 enhancement payment to Tormey and the costs of a claims administrator would

be deducted, and the claims administrator would calculate individual settlement amounts

                                            3
under a specified formula.1 The agreement allowed the defendants to retain unclaimed

settlement funds. Defendants agreed to separately pay class counsel $200,000 in attorney

fees and costs subject to court approval and payable only upon entry of an order

approving the settlement and a judgment of dismissal with prejudice, and the expiration

of time for any appeal from those orders.

       Tormey and defendants unsuccessfully moved for an order preliminarily

approving the settlement. The trial court denied the motion without prejudice, finding it

had insufficient evidence to determine whether the settlement was fair, adequate and

reasonable absent evidence concerning class size, the number of weeks and/or hours

subject to the action, and class counsel's time and effort expended before the settlement.

At the hearing on the matter, counsel for Kenneth Amodeo, Armond Marcarian, appeared

to seek consolidation of the Tormey and Amodeo cases. The court invited Marcarian to

file an appropriate motion.

       In December 2008, respondents renewed their joint motion to preliminarily

approve the settlement. They advised the court that the class consisted of approximately

1,729 individuals, the average member would receive $439.56 under the settlement, and

1     The agreement provides that the claims administrator, using information received
from defendants, would assign each class member a "settlement ratio:" a fractional
number composed of the class member's individual workweek as the numerator, and the
aggregate total of all class members' individual workweeks as the denominator. The
administrator would then calculate each individual settlement amount by multiplying that
member's settlement ratio with what the parties referred to as the "net settlement
number," that is, the amount remaining after the deductions for Tormey and the claims
administrator were made from the $760,000 fund.

                                             4
the aggregate number of weeks worked by the putative class was 186,424. According to

respondents, a class member who worked the maximum number of weeks during the

applicable class period would be entitled to $1,133.33. Respondents asked the court to

assess the settlement in light of the fact that defendants had obtained signed declarations

from approximately 556 individuals in the putative class, approximately one-third of the

class, that they claimed "completely dispose[d] of their individual claims" and also

weighed heavily against class certification. According to respondents, the declarations

showed class members knew they were entitled to rest breaks and meal periods under

defendants' policies; they took their rest breaks and meal periods in accordance with

those policies; and if any declarant failed to take a rest break or meal period, his or her

failure to do so was voluntary and based on personal individualized reasons.

Respondents also modified their stipulation of settlement and release to provide for

mailing of the notice of the proposed settlement using mailing address information

provided by the defendants, and included procedures for returned notices due to incorrect

addresses.

       The trial court granted preliminary approval of the settlement. However, it

observed that each putative class member would be entitled to no more than $4 per week

in compensation for the missed rest and meal breaks, and expressed concern that the

amount did not meet a threshold showing that the settlement was adequate, fair, or

reasonable. It ordered the parties to provide argument on the issue at the time of the final

approval hearing, which it set for December 11, 2009.

                                              5
       In October 2009, Marcarian and the law firm of Harris & Kaufman filed a notice

of intent to object to final approval of the Tormey class settlement on behalf of 21

individuals, including objectors. They maintained the class notice did not permit an

informed decision by class members in that it lacked information from which each class

member could calculate his or her individual potential recovery, and thus violated

Fourteenth Amendment due process. Objectors also argued the notice included Labor

Code section 1194 overtime claims and causes of action that were not within the scope of

Tormey's operative complaint, and failed to mention the Amodeo action and the effect the

settlement would have on that action, which they claimed was more developed than the

Tormey action. They asserted the court had no data concerning the amount in

controversy and realistic range of outcomes of the litigation, and the settlement was not

fair, adequate or reasonable given evidence in their possession showing putative class

members were denied the opportunity to take uninterrupted, duty-free, meal and/or rest

breaks. Marcarian represented he had obtained evidence establishing commonality

required for class certification as well as demonstrating defendants' liability for meal- and

rest-break violations.

       The following month, respondents jointly applied ex parte to correct errors that

had caused "inaccuracies in the notice process," and sought to continue the hearing on

final settlement approval. Marcarian appeared telephonically for objectors. He protested

he had not received notice of the hearing, and argued respondents were improperly trying

to get a "second bite at the apple" to correct their class notice, causing confusion among

the putative class. The court permitted respondents to submit an amended notice as well

                                             6
as a revised schedule for the motion on final settlement approval. The final approval

hearing was eventually set for May 7, 2010.

      On January 15, 2010, respondents' claims administrator served an amended claim

and notice to 1,825 class members. Two months later, objectors (within a group of 26

individuals) renewed their objections to final approval of the Tormey class settlement. In

addition to repeating their previous objections, they challenged the adequacy and

comprehensibility of the amended notice, which advised class members who had already

submitted a claim that they need not take further action if they agreed with the number of

workweeks identified on the amended claim form. According to objectors, the amended

notice invited putative class members to overlook substantive changes, including the

deletion of a reference to Labor Code section 1194 overtime claims, and the addition of a

reference to the Amodeo action. They argued removal of the overtime claims did not

resolve problems of those putative class members who had sent in claims before the

amended claim forms were sent, thereby releasing overtime claims they might possess.

Objectors asserted the two different claim forms created a disparity in treatment among

the class, rendering the settlement unfair. Objectors presented 22 declarations from the

objectors as well as 14 pharmacist declarations provided by defendants in the Amodeo

action, 36 survey responses, and four deposition excerpts from class members assertedly

demonstrating the plaintiffs' case was strong on the merits; that the class members were

unable to take 30-minute duty-free meal and rest breaks due to various interruptions, and

some class members chose to have interrupted breaks to provide better customer service.

      On April 14, 2010, respondents filed a joint motion for final approval of the

                                              7
settlement. They asserted that discovery had revealed strong legal and factual defenses to

liability, including federal preemption under section 301 by virtue of the fact Vons's

pharmacists were members of the United Food and Commercial Workers' Union

(UFCW), whose terms and conditions of employment were governed by a collective

bargaining agreement with detailed provisions for one-hour lunch periods, 10- and 15-

minute rest periods, and in some cases, fully paid on-call meal periods. Respondents

stated Tormey had admitted he was subject to Vons policies and procedures requiring

employees to properly record all time worked and take required lunch hours and breaks.

They further stated defendants had obtained 554 sworn declarations from pharmacists

largely explaining that they took their meal periods and rest breaks as expected or

instructed, and had never been told to skip those breaks. Respondents pointed out they

had reached a compromise after a full day of mediation and had concluded the risks

warranted the settlement. They asserted only 33 of 1,825 class members had opted out

and only one objection had been filed: that of the 26 class members represented by the

Amodeo attorneys. In part, respondents argued the settlement was adequate because it

accounted for the legal weaknesses of the case and the strengths of the defenses.

       On April 30, 2010, defendants separately filed a response to objectors' papers,

including evidentiary objections to the declarations objectors had submitted. Defendants

argued objectors had not challenged the settlement on grounds it was a product of fraud

or collusion and they had not sufficiently rebutted the presumption of fairness arising

where the settlement is reached through arms-length bargaining, investigation and

discovery are sufficient to allow counsel and the court to act intelligently, counsel is

                                              8
experienced in similar litigation, and the percentage of objectors is small. They argued

the settlement value was generous given the state of the law, including federal authorities

decided after the settlement affirming that meal and rest break claims were not generally

subject to class treatment. Defendants reiterated that Tormey's claims were subject to a

total preemption defense because they "inherently require[d] interpretation of the

[collective bargaining agreement] . . . ." They asserted the class notice was full and

complete, and disputed the objectors' claims as to its insufficiency. Defendants argued

the settlement was reasonable given their strong legal and factual defenses and that

objectors' remedy was to opt out if they disputed the settlement amount's adequacy.

       On May 7, 2010, the trial court issued a tentative ruling denying final approval of

the settlement. Noting the law was unsettled and under review by the California Supreme

Court,2 the court asked the parties for evidence demonstrating the value of the case to

Tormey should the law support his claims, that is, the potential dollar amount of those

claims. It expressed concern about its ability to conclude sufficient discovery had been

conducted before the parties reached their settlement. Finally, the court observed that

while the notice contained a calculation, it did not appear to allow class members to

easily determine the value of the settlement to them.

2      In part, the court cited Cicairos v. Summit Logistics, Inc. (2005) 133 Cal. App. 4th
949 and Brinkley v. Public Storage, Inc. (2008) 167 Cal. App. 4th 1278, review granted
Jan. 14, 2009, S168806. Both cases involve issues now resolved by the California
Supreme Court in Brinker Restaurant Corp. v. Superior Court (Apr. 12, 2012, S166350)
___ Cal.4th ___. We express no opinion concerning Brinker's impact on the present case.
                                             9
       The parties argued the matter, with Marcarian and two additional attorneys

appearing telephonically for objectors. Tormey's attorneys, Michael Ian Rott and Eric

Overholt of Hiden, Rott & Oertle, LLP first addressed the trial court's concerns. They

argued the formula provided in the notice was sufficient to allow each class member to

calculate their dollar figure, and the law did not require them to include a dollar figure.

Rott and Overholt recounted the informal and formal discovery they and their firm had

conducted, which had allowed them to send out fliers to Vons pharmacists. Rott stated

they were "shocked by the lackluster response," which, coupled with the discovery they

had conducted and the 556 pharmacist declarations produced by defendants in mediation,

changed the "climate" of the case. Counsel for defendants addressed the absence of class

member depositions. He acknowledged plaintiffs usually took a representative sample of

depositions, but asserted defendants had obtained declarations from 99 percent of all of

the pharmacists they currently employed so as not to "cherry pick." He pointed out the

Vons pharmacists were subject to a collective bargaining agreement setting up a paid on-

duty meal period, countering the objectors' complaints that the declarants had not asserted

their meal periods were duty free. He pointed out the Safeway pharmacists stated in their

declarations that they did not work during their meal or rest periods. Tormey's counsel

described possible ranges of settlement outcomes given different factual scenarios of the

number of missed rest and meal breaks, reflecting ranges from over $57.2 million if

plaintiffs missed every single meal period, to $1.4 million if one half of the class missed

                                             10
one meal and rest period each month.3 Counsel for both Tormey and Vons stressed their

doubts as to whether plaintiffs could meet commonality requirements.

       Marcarian, for objectors, advised the court that he agreed the value of the case was

at least $60 million and maintained the $760,000 was a token settlement in view of the

extensive formal discovery he had conducted. He represented that "a lot" of pharmacists

informally stated they felt compelled to sign defendants' declarations or risk their

employment. He stated he and his colleagues had taken eight to ten depositions of

randomly chosen class members, deposed two upper managers, and conducted surveys in

which about 40 pharmacists reported they did not take duty-free breaks or a 10-minute

rest break. Marcarian complained the notice did not include any individual settlement

estimate and posited that respondents did not want class members to focus on the low

individual recovery amounts. He represented that his co-counsel was able to negotiate

much higher settlements for other retail pharmacists.

       Following arguments, the court took the matter under submission. However, it

allowed supplemental briefing to be filed by respondents no later than 30 days from the

hearing date, and by objectors no later than 15 days from the date of service of

3       Counsel for Tormey represented that they had arrived at an average wage of
$46.17, and stated if they took the total workweeks (229,129) and multiplied it by $50 per
day, the total figure for 100 percent missed meal breaks would be over $57,282,250. If
everyone in the class missed one meal and rest period per week, it would be "roughly"
$11 million. If one-half of the class missed only one week or one meal period per week,
the number would be approximately $5.7 million. If one-half of the class missed one
meal and one rest break per month, the figure would be over $1,432,056.25. He argued
the $766,000 guaranteed some money for the class in the face of substantial risk and costs
of litigation and large procedural hurdles of class certification.
                                             11
respondents' supplemental briefing. The court specified that the briefing was limited to

providing support for statements made at the hearing.

       Respondents filed their supplemental briefs on June 4, 2010. Tormey included a

breakdown of the potential recovery amounts based on a $46.17 average hourly wage

taken from the UFCW Local 135 contract from 2004 to 2007. Attorney Rott represented

in a supporting declaration that his law firm's connections with the UFCW allowed him

to conduct a substantial amount of informal discovery, including by obtaining from the

UFCW a copy of the collective bargaining agreement (the UFCW, Locals 135 "Retail

Food and Meat Agreement") covering Vons's pharmacists, and a store list for various

regions in the state of California. He stated that the collective bargaining agreement

provided the pharmacists with paid "on-call" meal and rest periods. Rott had met with

UFCW representatives and reportedly learned the Safeway pharmacists in San Francisco

were receiving their uninterrupted meal and rest periods. In October 2007, the UFCW

Local 136 distributed and posted a flyer in break rooms for Vons's pharmacists to contact

Rott's law firm if they had missed or had questions regarding meal and rest periods. Rott

stated Tormey served special interrogatories on January 11, 2008, and a request for

production of documents on January 22, 2008, receiving 1169 pages of documents in

March 2008 including an internal summary of policies and procedures and separate

pharmacy policies and procedures. Defendants took Tormey's deposition on May 8,

2008, and elicited his concession that he had the ability to take a break as well as his

reasons for deciding whether or not to take his break. According to Rott, Tormey's

deposition confirmed concerns that had arisen as a result of their interviews with other

                                             12
pharmacists: that every individual's experience was different, creating a " 'commonality

factor' flaw."

       In their supplemental brief, defendants argued the state of the law and range of

outcomes demonstrated the settlement amount was fair and reasonable; they repeated

there was a significant probability Tormey would not obtain class certification or recover

any amount given their policies, memos and postings providing meal and rest breaks, as

well as the binding union contract also providing for such breaks. They argued even if

some degree of liability existed and Tormey were able to obtain class certification, the

settlement amount was within the " 'realistic range of outcomes of the litigation' " taking

into account the above factors and the class members' sworn testimony. For the first

time, defendants presented a new damages calculation: they asserted that most potential

liability scenarios resulted in an monetary outcome lower than the settlement amount,

and that to reach a greater recovery, the court would have to make several assumptions:

that the class was certified; the union-represented class members bypassed exclusive

remedy provisions in their collective bargaining agreement in violation of federal law;

and class members would present testimony differing radically from their sworn

declarations. They illustrated their calculations in hypotheticals based on payroll and

time records.4

4      For example, defendants stated: "Defendants' time records demonstrate that a total
of 229,129 workweeks were worked (in whole or in part) by class members in the
relevant time period. Liberally assuming that each workweek consisted of a full five
days, there are potentially 1,145,645 workdays upon which a pharmacist could possibly
have missed a meal or rest period. Of these, 55 [percent] (representing the percentage of
                                             13
       On June 10, 2010, the court issued its final order approving settlement and entered

a judgment of dismissal with prejudice. It found the respondents' joint stipulation to be

fair, reasonable, adequate and in the class's best interests; found the amended notice and

amended claim in compliance with California Rules of Court, rule 3.769(f) and due

process; and approved a $5,000 enhancement payment to Tormey, class counsel fees of

$195,977.56, $4,022.44 in costs, and the payment of claims administrator expenses.

       About a week later, objectors filed a "notice of premature ruling," asserting the

court had issued its ruling before permitting them to file their supplemental briefing,

which had been due on June 19, 2010. On July 16, 2010, the court, having reviewed the

objectors' notice, issued an order vacating the judgment subject to its receipt of an

objection challenging its power to do so. The order provided that if no objection were

filed by August 6, 2010, the judgment would be vacated and objectors given until August

pharmacists who were subject to the [collective bargaining agreement]) should be
disregarded because of [section] 301 preemption, leaving 515,540 opportunities for a
missed meal or rest period that would fall within the jurisdiction of this Court.
Defendants have established (and Objectors have not disputed) that defendants
maintained policies providing meal and rest periods, and 99.5 [percent] of the
pharmacists interviewed testified under oath that they were never instructed by
defendants to skip any rest or meal period. . . . Applying the remaining .5 [percent] to
the 515,540 workdays noted above yields roughly 2,578 'opportunities' for a missed break
or meal period. Even if every pharmacist were able to prove at trial that he or she missed
every such meal period, the resultant liability at an average hourly rate of $49.52 would
be $127,662.56—a fraction of the amount being paid in settlement." The sole support for
these figures was an attorney's declaration attesting he had supervised attorneys who
interviewed and gathered declarations from nearly every current pharmacist employed by
defendants in California, and that of the pharmacists interviewed, approximately 55
percent worked for Vons. He also stated based on defendants' payroll records that the
average hourly rate of pay of the entire class during the relevant time period was $49.52.
                                             14
27, 2010, to respond to respondents' supplemental papers. The court clerk, however, did

not serve the order on the parties.

       Objectors filed a notice of appeal on August 10, 2010. It was not until October 5,

2010, that the court advised the parties of its July 16, 2010 order. The minute order from

that hearing states that the court read the order to counsel, the clerk faxed it to all counsel,

and "[a]fter reviewing the order, counsel will contact the court as to how they wish to

proceed."

                                        DISCUSSION

                  I. July 16, 2010 Order Purporting to Vacate Judgment

       Tormey argues this court may not consider matters occurring after the trial court

entered its June 10, 2010 judgment; that error cannot be predicated on any matter

occurring subsequent to that judgment. However, because the trial court in its July 16,

2010 order purported to vacate the judgment, raising questions as to this court's

jurisdiction to consider this appeal, we asked the parties for supplemental briefing on the

effect of the court clerk's failure to serve the July 16, 2010 order on the parties, and

whether or not that order in fact vacated the judgment of dismissal.

       We conclude the clerk's failure to mail serve the order on the parties in compliance

with Code of Civil Procedure section 1013, subdivision (a), and the resulting lack of

notice, rendered the order ineffective. (See Triumph Precision Products, Inc. v.

Insurance Co. of North America (1979) 91 Cal. App. 3d 362, 365 [section 1013,

subdivision (a) "is applicable to the mailing by a court clerk of notice announcing the

entry of an appealable judgment or order"]; Lee v. Placer Title Co. (1994) 28 Cal. App. 4th
15
503, 510 [because notice of the court's intent to file a dismissal "was not sent to the

'office address as last given by [litigant] on any document filed in the cause,' as required

by [Code of Civil Procedure] section 1013, subdivision (a), the notice was not effective"

and dismissal subsequently entered was void]; Valley Vista Land Co. v. Nipomo Water &

Sewer Co. (1967) 255 Cal. App. 2d 172, 174 [clerk's mailing of notice of entry of

judgment "must, in all respects, comply with the provisions of the Code of Civil

Procedure relating to service by mail"]; Dobrick v. Hathaway (1984) 160 Cal. App. 3d
913, 921 [service by mail must be made in strict compliance with the mandates of

sections 1013 and 1013a].)

       Thereafter, the filing of objectors' August 10, 2010 notice of appeal divested the

trial court of jurisdiction to act further on the matter, including to cure defects in the June

2010 judgment. (See Varian Medical Systems, Inc. v. Delfino (2005) 35 Cal. 4th 180, 197

[effect of appeal is to divest court of jurisdiction over subject matter of action; the court

has no power to vacate or modify the judgment or even to cure any purported defect in

the judgment or order appealed from]; Betz v. Pankow (1993) 16 Cal. App. 4th 931, 938-

940 [appeal precludes trial court from vacating the appealed judgment or order].) For

this reason, it is immaterial that the court purported to give objectors an opportunity to

advise the court how they wished to proceed concerning the prematurely entered

judgment. Because the court was without jurisdiction to give them any relief, objectors

were powerless to influence it to do anything affecting the judgment.

                                              16
    II. The Court's Premature Entry of the June 10, 2010 Order and Judgment is Not

                                      Reversible Per Se

       Objectors contend the trial court denied them their due process right to be heard

when it prematurely entered the order approving final settlement and judgment. They

maintain the error was reversible per se because the court refused to permit them to

present evidence and thus deprived them of a fair hearing.

       Whether a denial of fundamental due process has occurred depends on the

circumstances of the particular case. (See, e.g., Southern Cal. Underground Contractors,

Inc. v. City of San Diego (2003) 108 Cal. App. 4th 533, 543, citing Mathews v. Eldridge

(1976) 424 U.S. 319, 333.) In Southern Cal. Underground Contractors, this court

explained that due process " ' "is not a technical conception with a fixed content unrelated

to time, place and circumstance." [Citation.]' [Citation.] Rather, it ' "is flexible and calls

for such procedural protections as the particular situation demands." ' " (Southern Cal.

Underground Contractors, 108 Cal.App.4th at p. 543.) As we explain, we cannot say

under the present circumstances that such a fundamental due process violation occurred.

       It is true that as a general proposition, failing to accord a party litigant his or her

constitutional right to due process by denying that litigant a full and fair hearing is

reversible per se, so no prejudice need be demonstrated. (Kelly v. New West Federal

Savings (1996) 49 Cal. App. 4th 659, 677; Hoffman Street, LLC v. City of West Hollywood

(2009) 179 Cal. App. 4th 754, 773; In re Marriage of Carlsson (2008) 163 Cal. App. 4th
281, 292, 293.) Thus, "[d]enying a party the right to testify or to offer evidence is

reversible per se." (Kelly, at p. 677; Carlsson, at p. 291.)

                                               17
       This principle, however, is applicable where a "trial court erroneously denies all

evidence relating to a claim, or essential expert testimony without which a claim cannot

be proven . . . because it deprives the party offering the evidence of a fair hearing and of

the opportunity to show actual prejudice." (Gordon v. Nissan Motor Club One., Ltd.

(2009) 170 Cal. App. 4th 1103, 1114; see also Kelly v. New West Federal Savings, supra,

49 Cal.App.4th at pp. 667-668, 675, 677 [trial court's in limine ruling prevented plaintiffs

from pursuing the only factual theory of liability supported by the evidence]; Fewel v.

Fewel (1943) 23 Cal. 2d 431 [reversal required for trial court's refusal in a child custody

proceeding to consider any parties' affidavits or permit the plaintiff the right to produce

evidence and cross-examine adverse witnesses]; In re Waite's Guardianship (1939) 14
Cal. 2d 727 [reversal required where court refused to allow the alleged incompetent to

testify in a guardianship proceeding, where evidence showed she was of sound mind and

qualified to testify]; Hoffman Street, LLC v. City of West Hollywood, supra, 179
Cal. App. 4th 754, 773 [error was reversible per se when court entered judgment on

several counts in petition for writ of mandate without conducting hearing on the merits of

those counts and absent any dispositive motion as to them]; In re Marriage of Carlsson,

supra, 163 Cal. App. 4th 281 [trial court's arbitrary termination of presentation of evidence

during husband's case in chief and while expert witness was on the stand denied husband

his constitutional right to a fair hearing, and required reversal without an assessment of

actual prejudice]; Adoption of Baby Girl B. (1999) 74 Cal. App. 4th 43, 51-52 [reversal

required where prospective adoptive parent was denied an evidentiary hearing before

adoptive placement was terminated; such parent had both a constitutional right to notice

                                             18
and a full hearing and a statutory right to an evidentiary hearing]; Caldwell v. Caldwell

(1962) 204 Cal. App. 2d 819 [reversal required where court refused to hear wife's

testimony as to child's needs in a child support modification proceeding].)

       Here, objectors invoke these principles, arguing class members have a due process

interest in expressing their views to the court, and must be afforded an opportunity to

" 'make the [c]ourt aware of any undisclosed inadequacies.' " They correctly point out the

purpose of a settlement hearing is to insure the opportunity for all relevant facts and

objections to be placed before the trial court so it has sufficient facts to intelligently

evaluate the settlement proposal. But objectors did in fact appear by counsel, both at the

preliminary approval and final approval hearing, and they were given the opportunity to,

and did, present written arguments expressing their objections to the proposed settlement

terms. "The erroneous denial of some but not all evidence relating to a claim [citations]

differs . . . . In [that] situation, the appellant must show actual prejudice . . . ." (Gordon

v. Nissan Motor Club One., Ltd., supra, 170 Cal.App.4th at p. 1115.) The court's

approval of the settlement and entry of judgment before objectors' deadline to file

supplemental briefing did not deprive objectors from presenting all argument or evidence

in support of their positions, just evidence they believed rebutted or contradicted the

statements or assertions made by respondents at the final approval hearing.

       Objectors have not provided us with authority for the proposition that, in this

factual context, where they had notice of the arguments made by counsel prior to and

during a hearing in which they participated, their inability to provide additional briefing

invited on those points violated fundamental constitutional due process rights in such a

                                               19
way to render the trial court's premature entry of judgment reversible per se. None of the

authorities on which objectors rely present such factual circumstances.

III. Reversal is Nevertheless Required To Permit the Trial Court to Conduct an Informed

                 and Independent Assessment of the Settlement's Fairness

       However, we are persuaded by objectors' alternative contention that they were

prejudiced by the court's premature entry of the order and judgment. They point out

respondents' supplemental papers urged the court to disregard, or discount to zero, 55

percent of the value of Tormey's claims due to Vons's federal preemption defense, and

relied on federal district court authority (Brown v. Federal Express Corp., supra, 249
F.R.D. 580) to argue the remaining discounted value of the case was little if any.

Objectors argue they were unfairly denied the opportunity to respond with relevant

arguments and authorities that would significantly affect the court's valuation of the case.

       In support, objectors set forth the legal arguments they would have made to the

trial court. They argue defendants' assertion of a federal preemption defense is untenable;

that California statutory meal and rest break claims are based on fundamental state rights

that cannot be bargained away by a private collective bargaining agreement. According

to objectors, any purported waiver of duty-free breaks in the bargaining agreement

directly conflicts with California public policy (reflected in Labor Code sections 850

through 853, as well as California Code of Regulations, title 16, section 1714.1)

restricting the working hours of retail pharmacists, mandating days of rest, and ensuring

pharmacists' ability to have duty-free breaks and meal periods. Objectors contend the

court had an obligation to pass on whether a legitimate controversy existed on these legal

                                             20
points in its fairness evaluation, and without doing so it did not consider the strength and

considerable value of Tormey's class claims, requiring reversal as in Clark v. American

Residential Services LLC (2009) 175 Cal. App. 4th 785 (Clark).

       When a class action settlement has been reached, the trial court bears the

responsibility of ensuring that the recovery represents a reasonable compromise, and in

so doing, the court has a fiduciary responsibility as guardian of the rights of absent class

members. (Kullar v. Foot Locker Retail, Inc. (2008) 168 Cal. App. 4th 116, 129 (Kullar) ;

see 7-Eleven Owners for Fair Franchising v. Southland Corp. (2000) 85 Cal. App. 4th
1135, 1150 (7-Eleven).) "Although '[t]here is usually an initial presumption of fairness

when a proposed class settlement . . . was negotiated at arm's length by counsel for the

class, . . . it is clear that the court should not give rubber-stamp approval. . . . Rather, . . .

the court must independently and objectively analyze the evidence and circumstances

before it in order to determine whether the settlement is in the best interests of those

whose claims will be extinguished.' [Citation.] 'To make this determination, the factual

record before the . . . court must be sufficiently developed.' [Citation.] . . . 'The

proposed settlement cannot be judged without reference to the strength of plaintiffs'

claims. "The most important factor is the strength of the case for plaintiffs on the merits,

balanced against the amount offered in settlement." ' [Citation.] The court 'must stop

short of the detailed and thorough investigation that it would undertake if it were actually

trying the case,' but nonetheless it 'must eschew any rubber stamp approval in favor of an

independent evaluation.' " (Kullar, supra, 168 Cal.App.4th at p. 130, emphasis added.)

In this process, the parties must provide "a meaningful and substantiated explanation of

                                               21
the manner in which the factual and legal issues have been evaluated." (Id. at pp. 132-

133.) The court must have "basic information about the nature and magnitude of the

claims in question and the basis for concluding that the consideration being paid for the

release of those claims represents a reasonable compromise." (Id. at p. 133.)

       Our inquiry on appeal, of course, is not whether the Tormey class settlement terms

are "fair, adequate and reasonable . . . ." (Kullar, supra, 168 Cal.App.4th at pp. 127-128;

Munoz v. BCI Coca-Cola Bottling Co. of Los Angeles (2010) 186 Cal. App. 4th 399, 407-

408; Dunk v. Ford Motor Club One. (1996) 48 Cal. App. 4th 1794, 1801.) That is a

question for the trial court in the first instance. (Nordstrom Com'n Cases (2010) 186
Cal. App. 4th 576, 581 [appellate court's task is not to make an independent determination

whether the terms of the settlement are fair, adequate and reasonable, but to determine

only whether the trial court acted within its discretion]; Kullar, at pp. 127-128 [same];

Munoz, at p. 407 [same]; Dunk, at p. 1802 ["We will not 'substitute our notions of

fairness for those of the [trial court] and the parties to the agreement' "].) Nor are we

required to pass on the merits of defendants' preemption defense. (7-Eleven, supra, 85

Cal.App.4th at p. 1146 [appellate court does not have " 'the right or the duty to reach any

ultimate conclusions on the issues of fact and law which underlie the merits of the

dispute,' " and " ' "need not reach any dispositive conclusions on the admittedly unsettled

legal issue" ' "]; see also Clark, supra, 175 Cal.App.4th at p. 803.) We decide only

whether objectors have demonstrated prejudice resulting from their inability to submit

briefing in response to respondents' supplemental showing; whether, absent the

information objectors say they would have provided, the court was without sufficient

                                             22
information to conduct an independent and objective analysis of the circumstances so as

to satisfy itself that the settlement was fair, adequate and reasonable to the class.

       Here, the trial court was poised to deny final approval, apparently unconvinced by

respondents' papers seeking final approval and feeling it lacked sufficient information to

decide the $760,000 settlement was fair and reasonable. Its invitation for additional

briefing sought a response from objectors as to counsel's calculations assuming the merit

of the class claims. As Tormey acknowledges, the additional information was intended

to "memorialize the potential [settlement] ranges and the strengths and weaknesses in

writing . . . ." Yet, objectors were precluded from presenting argument on the preemption

defense in response to defendants' new assertion in their supplemental papers that the

defense rendered the majority of class members' claims worthless, and that all reasonable

settlement ranges would come in lower than the proposed $760,000. Objectors are

entitled to " ' "meaningful participation" ' " in the settlement proceedings, and " ' "leave to

be heard . . . ." ' " (Hemphill v. San Diego Association of Realtors (S.D.Cal. 2004) 225
F.R.D. 616, 619.) In this respect, the fundamental question again is whether the judge

overseeing settlement approval "has sufficient facts before him [or her] to intelligently

approve or disapprove the settlement." (Hemphill, at pp. 619-620.)

       In Clark, the appellate court explained that "the trial court [considering the

fairness of a class settlement] is obliged, at a minimum, to determine whether a legitimate

controversy exists on a legal point, if that legal point significantly affects the valuation of

the case for settlement purposes." (Clark, supra, 175 Cal.App.4th at p. 803.) There, the

trial court did not set forth a " 'substantiated explanation' " of the manner in which it

                                              23
evaluated a core legal issue (the method of calculating overtime), but rather "simply

accepted class counsel's conclusion the overtime claim had 'absolutely no' value . . . ."

(Ibid.) The Clark court held the trial court thus "lacked a sufficient basis to 'satisfy itself

that the class settlement is within the "ballpark" of reasonableness' [citation], and

therefore abused its discretion in approving the settlement." (Ibid.)

       We conclude the trial court could not make the required independent and objective

evaluation without considering the additional points raised by objectors in passing on the

settlement so as to reach an informed, just and reasoned decision. This result is

compelled not only by the trial court's fiduciary obligation to the class, but also by the

fact that objectors were not given an opportunity to challenge defendants' supplemental

valuation calculations based on the preemption defense, which discounted over half of

the Tormey class claims and thus had a substantial effect on the potential total recovery.

As in Clark, the trial court's order granting final approval did not contain an analysis of

the legal and factual issues presented concerning the merits or value of the class claims.

(Clark, supra, 175 Cal.App.4th at p. 801 [court's order granting final approval, "while

finding the settlement was 'the product of serious, informed, non-collusive negotiations'

and was 'fair, reasonable and adequate,' gives no hint as to the court's 'independent

assessment of the adequacy of the settlement terms' "].) It is unknown whether the court

was ultimately persuaded by defendants' assertion that a reasonable valuation calculation,

in view of the preempted claims, was well below the $760,000 settlement amount.

Absent consideration of objectors' position on the merits of the preemption defense

underlying defendants' newly presented settlement calculations, we are not convinced the

                                              24
trial court had before it all information that would be helpful to assist it in determining

the strength of the class claims on the merits, a critical consideration in assessing whether

the settlement terms are fair, reasonable and adequate to the class. Accordingly, we

vacate the judgment and remand with directions that the court reconsider the fairness and

adequacy of the settlement after considering objectors' responsive federal preemption

arguments.

                    IV. Class Counsel's Purported Conflict of Interest

       Objectors further contend they were unable to present argument to the trial court

that class counsel, Rott and his law firm Hiden, Rott & Oertle, LLP, operated under a

"per se" disqualifying conflict of interest due to their simultaneous representation of the

UFCW and the settlement class. They maintain that as a result of his conflicting

representation, Rott violated his duty of loyalty by "blindly" discounting potential class

claims as a result of the collective bargaining agreement, and also misrepresented state

and federal law in a manner adverse to his clients' interest, demonstrating inadequacy and

incompetence as class counsel. Objectors ask us to vacate the judgment with directions

that the trial court deny final approval of the class with prejudice, on grounds Rott and his

firm are inadequate representatives and per se disqualified from representing the class.

       We need not decide whether simultaneous or dual representation of the UFCW

and its members is a disqualifying conflict of interest. As Tormey points out, objectors'

conflict claims are based on an erroneous factual premise. Rott did not state in his

supplemental declaration that he represented the UFCW, only that he represented UFCW

members in San Diego and Imperial Counties. Because objectors' conflict claims are

                                              25
based on the factual premise that Hiden, Rott & Oertle, LLP presently represent the

UFCW or did so while also representing UFCW members during these proceedings, we

reject them on the basis that the claims are not supported by the record.

                                      V. Class Notice

       Though we remand for a further hearing on the class settlement's final approval,

we nevertheless address objectors' contention that inadequacies and omissions in the

January 2010 amended notice of the class settlement render the notice insufficient to

permit an adequate basis for informed decision-making and violate class members' due

process rights. Specifically, objectors argue the amended notice inaccurately describes

the differences between it and the original class settlement notice by stating the "primary

differences" are merely the new hearing date and the number of workweeks, thus lulling

class members into believing they merely needed to verify their workweeks and failing to

draw attention to the original deficiencies (the deletion of overtime claims and addition of

a reference to the Amodeo action). They argue the amended notice does not permit any

class member to make an informed decision because the notice does not include

that individual member's settlement amount, but only a "confusing and ambiguous

formula . . . ." Finally, pointing out settlement class members were not required by the

amended notice to sign and return an amended claim form, objectors assert the use of

different claims caused some members who used the original claim form to release

overtime claims, and created an intra-class disparity " 'not rationally based on legitimate

considerations' " that is a prima facie indication of unfairness.

                                              26
       1. Review Standard

       The parties dispute the applicable standard of review. Objectors argue this court

independently reviews the content of the notice for its adequacy and clarity. Defendants

argue the trial court has "virtually unfettered discretion" regarding the notice's contents,

suggesting we apply the deferential abuse of discretion standard.

       We conclude de novo review applies to the question of whether the content of the

class settlement notice is legally sufficient and satisfies due process; whether the notice

" ' "fairly apprise[s] the class members of the terms of the proposed compromise and of

the options open to dissenting class members." ' " (Cho v. Seagate Technology Holdings,

Inc. (2009) 177 Cal. App. 4th 734, 746, citing Wershba v. Apple Computer, Inc. (2001) 91
Cal. App. 4th 224, 251; see also in re Cellphone Fee Termination Cases (2010) 186
Cal. App. 4th 1380, 1390.) The authority relied upon by defendants, Martorana v. Marlin

& Saltzman (2009) 175 Cal. App. 4th 685, presented a challenge to the settlement notice

procedure, and the Martorana court cites 7-Eleven, supra, 85 Cal.App.4th at page 1164,

which refers to the trial court's "virtually complete discretion" as to the manner of notice.

(Martorana, 175 Cal.App.4th at p. 694.) Martorana's unsupported dicta is not a

definitive statement of the standard of review for due process challenges or challenges to

the adequacy of a class action notice's contents.

       2. The Notice Satisfies Due Process

       Having reviewed the content of the original and amended notices, we perceive no

due process violations. The amended notice begins with the following capitalized

statement: "Attention: Former and current hourly paid pharmacists or pharmacy

                                             27
managers of the Vons Companies, Inc. or Safeway Inc. employed between June 29, 2003

and June 12, 2009; this is an amended notice. Please read it carefully even if you have

already read and/or responded to a prior notice regarding this action." (Capitalization

omitted.) The notice identifies the claims, sets forth the date of the final settlement

approval hearing, and sets forth the class members' options in either submitting a claim,

excluding themselves from the settlement, or objecting to the settlement. It summarizes

the effect of the settlement and specifies the "released rights and claims," specifying that

upon final approval, each class member would waive his or her right to participate in the

Amodeo action.

       The amended notice has none of the procedural deficiencies presented in Mullane

v. Central Hanover Bank & Trust Club One. (1950) 339 U.S. 306 or Pillsbury v. South

Coast Regional Com. (1977) 71 Cal. App. 3d 740, relied upon by objectors. Mullane held

court-ordered publication for four successive weeks constitutionally defective as to

known persons whose whereabouts were also known; the notice was not "reasonably

calculated, under all the circumstances, to apprise interested parties of the pendency of

the action and afford them an opportunity to present their objections." (339 U.S. at pp.

314; see also id. at p. 315 ["The means [of notice] employed must be such as one desirous

of actually informing the absentee might reasonably adopt to accomplish it"].) The

appellate court in Pillsbury held an administrative regulation for "written public notice"

to persons affected by a coastal development was not satisfied by one posting on a fence

obscured by a large bush and trash container on the site of the proposed development, and

neither that notice nor postings on nearby public buildings would satisfy due process

                                             28
under Mullane's principles because neither was reasonably likely to reach the nearby

residents, who were the most affected. (Pillsbury v. South Coast Regional Com., at

pp. 750, 753.) Objectors cite no authority for the proposition that a class settlement

notice otherwise containing the information required by the California Rules of Court5

violates such due process principles for failing to identify the differences between it and

any prior settlement notice.

       Nor can we conclude the notice fails to provide an adequate basis for an informed

decision by the class members. A class action settlement notice should present

information neutrally, simply, and understandably. (7-Eleven, supra, 85 Cal.App.4th at

p. 1164 [notice must express no opinion on the merits of the settlement]; Rodriquez v.

West Publishing Corp. (9th Cir. 2009) 563 F.3d 948, 962.) It should describe the

aggregate amount of the settlement fund and a formula or plan for computing recoveries.

(See In re Cellphone Fee Termination Cases, supra, 186 Cal.App.4th at p. 1393 [" 'The

5       California Rules of Court specify the contents of class notice that gives members
the right to request exclusion from the class, as does the notice at issue. The notice must
contain (1) a brief explanation of the case, including the basic contentions or denials of
the parties; (2) a statement the court will exclude the member from the class if the
member so requests by a specified date; (3) a procedure for the member to follow in
requesting exclusion from the class; (4) a statement that the judgment, whether favorable
or not, will bind all members who do not request exclusion; and (5) a statement that any
member who does not request exclusion may, if the member so desires, enter an
appearance through an attorney. (Cal. Rules of Court, rule 3.766(d).) In determining the
manner of giving notice to the class, the court must consider the interests of the class; the
type of relief requested; the stake of the individual class members; the cost of notifying
class members; the resources of the parties; the possible prejudice to class members who
do not receive notice; and the res judicata effect on class members. (Cal. Rules of Court,
rule 3.766(e).) Objectors do not challenge the manner or procedure for mailing of the
amended notice to the class members.

                                             29
aggregate amount available to all claimants was specified and the formula for

determining one's recovery was given. Nothing more specific is needed' "]; Rodriquez, at

p. 962; Torrisi v. Tucson Elec. Power Club One. (9th Cir. 1993) 8 F.3d 1370, 1373-

1374.) In Torrisi, the Ninth Circuit rejected a similar argument by objectors to a class

settlement that a notice was insufficient because it "did not specify their potential

recovery," where the notice clearly stated the aggregate settlement and the formula for

computing awards. (8 F.3d at p. 1374.)6 Similarly, the First District, Division Five

Court of Appeal recently upheld the adequacy of a class settlement notice where the mail

and long form notices identified the "total amount of the common fund recovery, the

nature of the costs and fees to be deducted from the common fund, and the fact that the

balance of the fund would be allocated among qualified class claims." (In re Cellphone

Fee Termination Cases, at p. 1393; see also id. at p. 1392 [citing federal unpublished

authorities rejecting objections to settlement notices on grounds they did not provide

details about " 'actual individual settlement values' " or " 'the actual value of the

settlement as to each class member' "].)

       The amended notice in this case states that the defendants would jointly pay "a

maximum total payment of . . . $760,000" that would be the "total gross amount to be

paid by Defendants for all claims of Class Members alleged in the Action" including the

6       " ' "California courts may look to federal authority for guidance on matters
involving class action procedures." [Citations.]' [Citation.] '[W]hen there is no relevant
California precedent on point [regarding attorney fees in class actions] federal precedent
should be consulted.' " (In re Cellphone Fee Termination Cases, supra, 186 Cal.App.4th
at p. 1392, fn. 18.)
                                              30
enhancement payment, costs of the claims administrator, interest, and penalties. The

notice explains that that number, minus the enhancement payment to the class

representative and claims administrator costs, would be the "net settlement number" and

that individual settlement amounts would be calculated by multiplying the net settlement

number with a ratio based on the member's individual workweek, divided by the total

aggregate workweeks. This sort of formula is all the specificity that due process requires.

(In re Cellphone Fee Termination Cases, at p. 1393; Torrisi v. Tucson Elec. Power Club

One, supra, 8 F.3d at p. 1374.)

       Finally, we are not persuaded by objectors' contention that the different release

forms contained in the original and amended notices result in an intraclass disparity by

which some class members have released unpleaded claims for overtime under Labor

Code section 1194. Objectors provided no indication of whether any class members

returned an original claim form or, if so, how many. Nor did they provide evidence any

class members were in fact misled by the contents of the amended notice or the

discrepancies in the original and amended notice. Objectors only state it is "quite likely"

that the majority of class members opted to rest on their original claim form pursuant to

the instruction of the amended notice. It is "significant[]" that objectors did not present

evidence that any class members were actually deceived or misled by the notice, or that

anyone actually submitted the original claim containing a release of unpleaded overtime

claims. (Accord, In re Cellphone Fee Termination Cases, supra, 186 Cal.App.4th at p.

1391.) Such speculation is not enough for us to conclude the existence or use of two

                                             31
claim forms renders the amended class settlement notice impermissibly defective, or the

settlement terms unfair.

       Our conclusion does not change by objectors' reliance on Trotsky v. Los Angeles

Fed. Sav. & Loan Assn. (1975) 48 Cal. App. 3d 134. Trotsky involved a proposed

settlement including claims that were not included in the complaint but were the subject

of a separate pending class action lawsuit. The Court of Appeal reversed a judgment

finding the class settlement and class notice to be fair and reasonable, explaining that the

related action should have been disclosed to the settling class so that the class could

decide which plaintiff could better represent their interests, and also to the court which

could have consolidated the two actions and resolved them together. (Id. at pp. 151-152.)

Unlike Trotsky, there has been no showing of the existence of a pending action involving

overtime claims (including within the Amodeo action), or any showing at all, for that

matter, that defendants were violating overtime laws in connection with the class.

       Objectors cite other authorities addressing contentions of inequity in class

settlements stemming from "intraclass disparities." (See 7-Eleven, supra, 85 Cal. App. 4th
1135; National Super Spuds, Inc. v. New York Mercantile Exchange (2nd Cir. 1981) 660
F.2d 9.) But they are inapposite and do not compel a finding of unfairness in this case.

These cases involved concrete examples of settlements that distributed settlement

amounts differently for class members who were differently situated. (See, e.g.,

7-Eleven, at pp. 1162-1163 [court upheld payment of $25 million in future benefits to

current franchisees and $7 million in cash to former operators held justified because

former franchisees could only be compensated by money, and current franchisees, who

                                             32
had been with the defendant longer and had an ongoing business relationship, could be

compensated by other means over time and through contractual changes]; New York

Mercantile, 660 F.2d at pp. 14, 18-19 [settlement approval reversed because it harmed a

definable minority that held "unliquidated" claims based on positions in potato futures

contracts that were different from the "liquidated" claims the class shared and notice did

not address the unliquidated contract claims, eliminating class members' opportunity to

opt out]; In re Vitamin Cases (2003) 107 Cal. App. 4th 820, 824-825, 829-830 [cash

payment to "commercial class" and charitable distribution to "consumer class" upheld

where distinction was based on the legitimate consideration of potential exorbitant

distribution cost of cash payment to consumer class].)

       In short, we have no basis to conclude any prejudice resulted to the class or

whether true "intraclass disparity" or disparate treatment otherwise occurred by the

inclusion of a release of overtime claims in the original notice. Those claims are now

omitted from the amended notice and claim form, and the amended notice and claim was

served on all class members. We cannot say on this record class members lacked notice

of the differences between the two claims.

                            V. Entry of Judgment of Dismissal

       Because we reverse the judgment and remand for further proceedings, we do not

reach objectors' contention pertaining to the trial court's entry of judgment of dismissal.

We leave it to the trial court on remand to interpret and apply the class settlement

provisions of the California Rules of Court, which now provide: "If the court approves

the settlement agreement after the final approval hearing, the court must make and enter

                                             33
judgment. The judgment must include a provision for the retention of the court's

jurisdiction over the parties to enforce the terms of the judgment. The court may not

enter an order dismissing the action at the same time as or after entry of judgment. (Cal.

Rules of Court, rule 3.769(h).) Further, California Rules of Court, rule 3.770 provides:

"The court may not grant a request to dismiss a class action if the court has entered

judgment following final approval of a settlement. . . . " (Cal. Rules of Court, rule

3.770(a).)

                                      DISPOSITION

       The order finally approving the class action settlement agreement and judgment

dismissing the case with prejudice are reversed and the matter is remanded for further

proceedings consistent with this opinion. The parties shall bear their own costs on

appeal.

                                                                            O'ROURKE, J.

WE CONCUR:

          McDONALD, Acting P. J.

                         IRION, J.

                                            34