Judge: Armen Tamzarian, Case: 20STCV46020, Date: 2022-10-25 Tentative Ruling

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Case Number: 20STCV46020    Hearing Date: October 25, 2022    Dept: 52

12/2/2020: Plaintiff Virginio Calixto Camargo filed a complaint against defendants Unix Packaging, Inc. and Unix Packaging, LLC for:

(1) Failure to Pay Wages

(2) Failure to Pay Overtime Compensation

(3) Failure to Provide Meal and Rest Periods

(4) Failure to Provide Itemized Wage and Hour Statements

(5) Private Attorneys General Act

(6) Unfair Competition

           Plaintiff has worked as a packer for defendants since May 2016.  For eight months each year, he worked six days per week for 12 hours per day without getting adequate overtime pay.  Defendants improperly calculated overtime for employees by counting each pay period as beginning a new workweek instead of including all hours per true workweek.

Motion

Plaintiff moves for an order approving the proposed PAGA settlement.  The parties settled the PAGA penalties for a maximum of $95,000:

·       Up to 45% or $42,750 in attorney fees;

·       Up to $6,500 in plaintiff’s costs;

·       Up to $2,250 to the settlement administrator;

·       The remaining $42,500 goes to the PAGA fund, 75% ($32,635) to LWDA and 25% ($10,875) to the aggrieved employees.

Plaintiff estimates 145 aggrieved employees totaling 9,304 pay periods from September 27, 2019, to April 25, 2022.

The parties settled plaintiff’s individual claims in a separate agreement.

The settlement is fair.  The parties did extensive discovery.  They negotiated at arms’ length, including at mediation with Hon. Daniel Buckely (Ret.).  The amount is a reasonable compromise.  Defendant may have several defenses.  The records showed only 3.39% of meal periods were late.  The settlement is fair to the LWDA and employees.  The fees are reasonable.  The $6,500 in costs is plaintiff’s share of the mediator’s fees.

Opposition: None.

Discussion

The 145 aggrieved employees get an average of $75 each.  The settlement amounts to $1.17 per pay period.  It is small but not unusual in these cases.

Two parts of the settlement may be questionable: plaintiff’s individual claims and the attorney fees. 

Individual Claims

Plaintiff did not disclose how much he is getting from defendants in his separate, undisclosed settlement agreement.  One of the big problems with PAGA settlements is that the individual plaintiff can collude with defendants to get a lot of money for himself in exchange for selling out the other aggrieved employees’ PAGA penalties for cheap.  If he got, say, $500,000, that would suggest the agreement is not fair. 

Attorney Fees and Costs

 One could reasonably reject this agreement for overpaying plaintiff’s counsel.  The settlement apportions 45% or $42,750 for attorney fees.  Typical rates are 33 to 40%. 

Trial courts may use counsel’s lodestar to “cross-check” whether a percentage is reasonable.  “Courts using the percentage method have generally weighed the time counsel spent on the case as an important factor in choosing a reasonable percentage to apply.  [Citations.]  A lodestar cross-check is simply a quantitative method for bringing a measure of the time spent by counsel into the trial court’s reasonableness determination.”  (Laffitte v. Robert Half Internat. Inc. (2016) 1 Cal.5th 480, 505.) 

Plaintiff’s counsel did not provide any billing records or otherwise state how many hours he worked on the case.  The unusually high fees make sense given that this case was filed nearly two years ago.  At his claimed rate of $650, plaintiff would accrue $42,750 in fees after just 66 hours.  Despite the lack of billing records, the court considers 66 hours plausible and reasonable.

Spending $6,500 as plaintiff’s share of a single-day mediation sounds high but is plausible. 

The Proposed Order

Plaintiff filed a separate proposed order.  It has two minor potential problems:

(1) A potential loose end: the settlement is between plaintiff and defendant Unix Packaging, LLC, which states it was erroneously sued as Unix Packaging, Inc.  Defendants frequently do this, but there is no real authority for it.  Plaintiff never dismissed Unix Packaging, Inc.

(2) The proposed order does not explicitly state it incorporates the settlement agreement.  However, it does begin, “The representative PAGA Settlement… has been reviewed by the Court and are [sic] hereby approved.”  (¶ 1.)  It is clear enough that the court reviewed the settlement agreement attached as Exhibit 1 to Geshgian’s declaration.

Tentative Ruling:

Plaintiff Virginio Calixto Camargo’s Motion for Order Approving Private Attorneys General Act (PAGA) Settlement

Plaintiff Virginio Calixto Camargo moves for an order approving his proposed PAGA settlement agreement with defendant Unix Packaging, LLC, erroneously sued as Unix Packaging, Inc. 

Labor Code § 2699(l)(2) provides, “The superior court shall review and approve any settlement of any civil action filed pursuant to” the Private Attorneys General Act.  Courts review and approve PAGA settlements to “ensur[e] that any negotiated resolution is fair to those affected.”  (Williams v. Superior Court (2017) 3 Cal.5th 531, 549.) 

The proposed settlement is fair and reasonable.  Plaintiff’s counsel, Samvel Geshgian of the Law Offices of Ramin R. Younessi, has extensive experience in similar cases.  (Geshgian Decl., ¶¶ 1, 17.)  Before reaching this settlement, the parties conducted discovery including producing documents and deposing multiple witnesses.  (Id., ¶ 6-7.)  The parties reached the settlement after mediation with Hon. Daniel J. Buckley (Ret.).  (Id., ¶ 10.) 

The gross settlement amount of $95,000 is a reasonable compromise of the PAGA penalties alleged in the complaint.  Attorney fees of $49,250, or 45%, are reasonable and in line with similar settlements.  Finally, the agreement provides for timely funding and administration of the settlement.  (Geshgian Decl., Ex. 1, §§ 5, 7.)

Plaintiff’s motion for order approving PAGA settlement is granted.  The court will sign plaintiff’s proposed order.