NORDSTROM COMMISSION CASES.





























Filed 6/10/10;
pub. order 7/7/10
(see end of opn.)



















IN THE COURT OF
APPEAL OF THE STATE OF CALIFORNIA



FOURTH APPELLATE
DISTRICT



DIVISION THREE




>

NORDSTROM COMMISSION CASES.

G042772 (Super. Ct. No. JCCP4419) O P I N I O N

Appeal from a judgment
of the Superior Court
of Orange
County, Thierry Patrick Colaw, Judge. Affirmed.

Thierman Law Firm and
Mark R. Thierman for Objector and Appellant.

Deason & Archbold,
Matthew F. Archbold; Barnhill & Vaynerov, Maxim Vaynerov; Willis &
DePasquale and James M. Hansen for Plaintiffs and Respondents.

Littler Mendelson, Julie
A. Dunne and Matthew S. Dente for Defendant and Respondent.



*
* *

Introduction

Ernest
Young and Nicole Savala filed separate class action lawsuits against Nordstrom,
Inc., alleging Nordstrom's policy of paying net sales commissions to its
commissioned sales employees violated sections 221 and 203 of the Labor
Code. (All further statutory references
are to the Labor Code, unless otherwise noted.)
In 2009, the parties reached a settlement. One member of the class, Kellie Taylor,
objected to the settlement. The trial
court overruled Taylor's objection,
and approved the settlement. Taylor
appealed, and we affirm.

The
trial court considered all relevant factors in determining the settlement was
fair, adequate, and reasonable. On
appeal, Taylor argues that the court failed to fully consider the strength of
the class's case, and that the settlement undervalues the waiting period
penalties to which the class is allegedly entitled, pursuant to section
203. For all the reasons detailed >post, we conclude the trial court's
analysis of the settlement's terms correctly considered the merits of the
class's claims, and Nordstrom's defenses.
We therefore hold the trial court did not abuse its discretion in
overruling Taylor's objection and
approving the settlement.

Taylor
also argues that the settlement is not fair, adequate, and reasonable because
it allocates no portion of the damages to the class's claims under the Labor
Code Private Attorneys General Act of 2004 (PAGA). (§ 2699.) We conclude the trial court did not abuse its
discretion in approving a settlement which does not allocate any damages to the
PAGA claims.

Taylor
also argues the portion of the settlement providing for in‑store
merchandise vouchers is contrary to California
law. We disagree. Merchandise vouchers are permissible to fund
a portion of the settlement.

Finally,
we reject Taylor's request that we
opine on the applicability of the settlement of the present case to another
class action lawsuit against Nordstrom.

Statement of Facts and Procedural History

In
1996, Sandy Rios filed a class action lawsuit against Nordstrom, in which she
alleged Nordstrom violated sections 221, 400 to 410, and 203 by calculating
employee commissions based on net sales.
(Rios v. Nordstrom, Inc.
(C.D.Cal., Mar. 24, 1997,
No. CV 96‑4927 JSL) (Rios).) The parties reached a settlement in which
Nordstrom would calculate commissions based on net sales on a pay period basis
(subtracting the value of total pay period returns from the value of total pay
period sales), and agreed to enter written commission agreements with its sales
associates explaining how their commissions would be calculated. The Rios
court certified a settlement class in December 1996. In March 1997, the United
States District Court for the Central District of California approved the
settlement, finding it fair, adequate and reasonable, and entered judgment.

In
2004, Ernest Young and Nicole Savala filed separate class action lawsuits
alleging the net sales commission plan approved in the Rios settlement violated sections 221 and 203. Plaintiffs alleged the sales associates'
commissions became earned wages at the moment the merchandise was sold, and
Nordstrom's policy of deducting commissions for returned merchandise was a
taking back of wages. Young and Savala's
complaints were coordinated before the Orange County Superior Court and renamed
the Nordstrom Commission Cases.

In
2009, the parties reached a settlement of the Nordstrom Commission Cases. By the terms of the settlement, Nordstrom
agreed to pay up to $6.405 million in cash and $2.5 million in Nordstrom
merchandise vouchers and to make prospective changes to its calculation,
payment, and reporting of commissions.
The trial court entered an order preliminarily approving the
settlement. Notice of the settlement was
sent to the class.

Kellie
Taylor filed an objection to the Nordstrom Commission Cases settlement. Her objection was the only one filed. (Cynthia Alvarez had also filed an objection,
despite having filed a separate class action lawsuit against Nordstrom, as
described post. Alvarez opted out of the Nordstrom Commission
Cases settlement in order to pursue her separate lawsuit, mooting her
objection.) The trial court concluded Taylor's
objection lacked merit. The court then
found the settlement of the Nordstrom Commission Cases was fair, adequate, and
reasonable. The court entered an order
granting final approval to the settlement and entered final judgment in October
2009. Taylor
timely appealed.

During
the pendency of the Nordstrom Commission Cases, on June 13, 2008, Cynthia Alvarez filed a class
action lawsuit against Nordstrom in Los Angeles Superior Court, which was later
removed to the United
States District Court for the Central District of California. (Alvarez
v. Nordstrom, Inc. (C.D.Cal., Dec. 1,
2009, No. CV 08‑5856‑AHM) 2009 U.S.Dist. Lexis
119169 (Alvarez).) On July
10, 2009, the United States District Court denied Alvarez's motion
for class certification, concluding her claims were already pending before the
Orange County Superior Court. After
judgment was entered in the Nordstrom Commission Cases, Nordstrom moved to
remand the Alvarez case back to state
court. The unopposed motion was
granted. (Alvarez, supra, 2009
U.S.Dist. Lexis 119169.)

Discussion

I. >Standard of Review

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