Judge Alison Mackenzie, Case Number: 23STCV14982, Date: 2025-01-16 Tentative Ruling

Judge: Alison Mackenzie, Case: 23STCV14982, Date: 2025-01-16 Tentative Ruling

Case Number: 23STCV14982 Hearing Date: January 16, 2025 Dept: 55

NATURE OF PROCEEDINGS: Motion for Order Approval of Settlement Pursuant to Private Attorneys General Act

The Motion for Order Approval of Settlement Pursuant to Private Attorneys General Act (“PAGA”) filed by Plaintiff Johnny Perez on 10/21/24 and 11/15/24 is granted.

Background

Johnny Perez, individually and on behalf of all other aggrieved employees (“Plaintiff”) filed this PAGA case against Additive Circuits Technologies LLC (“ACT”), Data Technology Printed Circuits LLC, and Winonics LLC d/b/a Bench 2 Bench Technologies alleging that he and similarly situated employees suffered various labor law violations by their joint employers. The Complaint alleges the sole cause of action for Violation of PAGA.

Plaintiff filed a Motion re: Approval of Settlement Pursuant to PAGA. It is unopposed.

Legal Standard

Under PAGA, an aggrieved employee may bring a civil action personally and on behalf of other current or former employees to recover civil penalties for Labor Code violations.¿ (Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348, 380.)¿ Under PAGA, 75 percent of any penalties recovered go to the Labor and Workforce Development Agency (“LWDA”), leaving the remaining 25 percent for the employees.¿ (Ibid.)¿ PAGA is intended “to augment the limited enforcement capability of [LWDA] by empowering employees to enforce the Labor Code as representatives of the Agency.”¿ (Id. at p. 383.)¿ A judgment in a PAGA action binds all those, including nonparty aggrieved employees, who would be bound by a judgment in an action brought by the government.¿ (Id. at p. 381.)¿A superior court must “review and approve any settlement of any civil action filed pursuant to this part.” (Lab. Code, § 2699, subd. (l)(2).)¿¿

Though there is no statutory or common law standard for approval of a PAGA settlement, the standard used for approval of class action settlements is instructive.

“[A]¿presumption¿of¿fairness¿exists where: (1) the settlement is reached through arm's-length bargaining; (2) investigation and discovery are sufficient to allow counsel and the court to act intelligently; (3) counsel is experienced in similar litigation; and (4) the percentage of objectors is small.” (Dunk v. Ford Motor Co. (1996) 48 Cal.App.4th 1794, 1802.) The last factor, small percentage of objectors, is inapplicable to PAGA claims. (See Arias v. Superior Court (2009) 46 Cal.4th 969, 984-985 [rejecting the argument that representative actions under PAGA violate the due process rights of “nonparty aggrieved employees who are not given notice of, and an opportunity to be heard”].) Additional factors that are useful to consider include the strength of a plaintiff’s case, the risk, expense, complexity and likely duration of further litigation, the amount offered in settlement, the extent of discovery completed, and the experience and views of counsel. (See Kullar v. Foot Locker Retail, Inc. (2008) 168 Cal.App.4th 116, 128.)¿

Analysis

A. The Settlement Amount and Distributions are Reasonable

The proposed $100,000.00 settlement breaks down to a net settlement of $42,590.03 following the deduction of $33,000.00 in attorney’s fees, $11,919.97.00 in costs, a $8,000.00 incentive award, and $4,490.00 in settlement administration costs. (Motion at pp. 1-2; Scott Wheeler Decl. ¶¶ 3, 14, Exh. A at ¶ 31-33.)

The parties propose the standard¿distribution of 75% to the State ($31,882.50) and 25% to the aggrieved employees ($10,627.50). (Ibid.) The parties have not provided an estimated average payment to each employee, but the settlement provides that each employee shall be paid on a pro rata basis. (Id., at ¶ 33(c).) The parties gave the LWDA notice of the settlement. (Scott Wheeler Decl. ¶ 6, Exh. 3.)¿

The requested attorney’s fees are acceptable under the common fund doctrine and are substantially less than the pre-multiplier lodestar amount of $62,252.50 that Plaintiff’s counsels would otherwise receive for their work. (Consumer Privacy Cases (2009) 175 Cal. App. 4th 545, 557; Scott Wheeler Decl. ¶¶ 39-49.) Given the work completed by Plaintiff’s counsels on this case (e.g., legal research, discovery, damages analysis, mediation, etc.), the fee award is reasonable.¿¿

B. The Settlement is Non-Reversionary

The settlement is non-reversionary. Mailed checks will remain valid for 180 days, after which the value of any uncashed checks will be distributed to the California Controller’s Unclaimed Property Fund in the name of the aggrieved employee. (Scott Wheeler Decl., Exh. A at ¶¶ 42.)

C. The Aggrieved Employee’s Releases are Narrow and Plaintiff’s Release is Broad

In exchange for the settlement amount of money, Plaintiff will provide Defendant with a general release of all PAGA, underlying, and other claims, including a waiver of Civil Code section 1542, but aggrieved employees will only be releasing their PAGA penalty claims.¿¿(Scott Wheeler Decl., Exh. A at ¶¶ 34-35.)

D. The Settlement is Presumptively Fair

The parties reached the proposed settlement through arms-length mediation following a review of ACT’s records and in spite ACT’s denial of liability. The parties reached this settlement after extensive mediation efforts with an experienced mediator. (Motion at pg. 9; Scott Wheeler Decl. ¶ 3.) Accordingly, the settlement is entitled to a presumption of fairness.¿¿ (Clark v. American Residential Services LLC (2009) 175 Cal.App.4th 785, 800 [(“The court undoubtedly should give considerable weight to the competency and integrity of counsel and the involvement of a neutral mediator in assuring itself that a settlement agreement represents an arm’s-length transaction entered without self-dealing or other potential misconduct.”].)

The terms of the settlement are fair, reasonable, and adequate in light of the gamut of Plaintiff’s claims, ACT’s potential defenses, possible reductions in any eventual PAGA award, and the posture of this case. (Motion at pp. 2-7, Scott Wheeler Decl. ¶¶ 9-26; See Kullar v. Foot Locker Retail, Inc. (2008)168 Cal. App. 4th 116, 130 [“The most important factor is the strength of the case for plaintiffs on the merits, balanced against the amount offered in settlement.”].) The proposed fee, cost, and incentive awards appear to be reasonable as well. Ultimately, there appears to be no other reason countenancing denial of the motion.

Conclusion

Based on the foregoing, Plaintiff’s motion for approval of PAGA settlement is granted. The Court will sign the proposed judgment submitted by Plaintiff.