Judge: Bruce G. Iwasaki, Case: 21STCV40012, Date: 2025-01-13 Tentative Ruling

Case Number: 21STCV40012    Hearing Date: January 13, 2025    Dept: 58

Judge Bruce G. Iwasaki

Hearing Date:             January 13, 2025

Case Name:                Hill v. Fashion Nova, LLC

Case No.:                    21STCV40012

Motion:                       Motion to Approve PAGA Settlement

Moving Party:             Plaintiff Anderson Hill

Responding Party:      Unopposed

Background

            On October 29, 2021, Plaintiff Anderson Hill, individually and behalf of all aggrieved employees, filed a representative action complaint against Fashion Nova, LLC, Fashion Nova, Inc., Nova Fashion, Inc., and Fashion Nova Holdings, LLC. The Complaint alleges a violation of the California Labor Code Private Attorneys General Act (PAGA) based on allegations that the companies failed to maintain adequate temperatures in the workplace.

            On November 20, 2024, Plaintiff filed a motion to approve a settlement under PAGA. The Settlement Agreement defines “aggrieved employees” as “all current and former hourly, non-exempt employees who worked for Defendant from August 24, 2020 through earlier of the date this settlement is approved by the Court or November 18, 2024 (PAGA Period).” (Rhodes Decl., Ex. A [PAGA Settlement Agreement], ¶ 1.4.) The breakdown of the settlement is as follows:

Gross Settlement Amount:                                         $500,000.00 

Plaintiff’s Counsel’s Fees:                                          $175,000 (35%)

Plaintiff’s Counsel’s Litigation Costs:                       $10,788.30

Plaintiff’s Service Award:                                          $10,000.00 

Settlement Administration Costs:                               $32,550.00 

Net Settlement Amount (PAGA Penalties):               $271,661.70

Labor Workforce Development Agency (75%):             $203,746.27

Aggrieved Employees (25%):                                    $67,915.43

            Plaintiff seeks court approval of the PAGA settlement. 

Legal Standard

            The Private Attorneys General Act is “a procedural statute allowing an aggrieved employee to recover civil penalties—for Labor Code violations—that otherwise would be sought by state labor law enforcement agencies.”  (Amalgamated Transit Union, Local 1756, AFL-CIO v. Superior Court (2009) 46 Cal.4th 993, 1003.)  The statute provides a mechanism for private enforcement of Labor Code violations for the public benefit.  (See Arias v. Superior Court (2009) 46 Cal.4th 969, 986.) The statute incentivizes aggrieved employees by providing 25 percent of the recovered civil penalties, while the remaining 75 percent is distributed to the Labor and Workforce Development Agency (LWDA) “for enforcement of labor laws…and for education of employers and employees about their rights and responsibilities under [the Labor Code].”  (Lab. Code, § 2699, subd. (i).) 

            “The superior court shall review and approve any settlement of any civil action filed pursuant to this part [Labor Code Private Attorneys General Act of 2004].” (Lab. Code, § 2699, subd. (l)(2).)

            “[A] trial court should evaluate a PAGA settlement to determine whether it is fair, reasonable, and adequate in view of PAGA’s purposes to remediate present labor law violations, deter future ones, and to maximize enforcement of state labor laws.”  (Moniz v. Adecco USA, Inc. (2021) 72 Cal.App.5th 56, 77.) A court should consider factors used in evaluating class action settlements, such as the strength of the plaintiff’s case, the risk, the stage of the proceeding, the complexity and likely duration of further litigation, and the settlement amount. (Ibid.) Other factors that may be useful in determining fairness include whether (1) the settlement is the result of 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.  (Nordstrom Com. Cases (2010) 186 Cal.App.4th 576, 581; Wershba v. Apple Computer, Inc. (2001) 91 Cal.App.4th 224, 245.)  In considering the amount of settlement, the court is mindful that compromise is inherent and necessary in the settlement process.  (Wershba, supra, 91 Cal.App.4th at p. 250.)

Discussion

Service on the Labor and Workforce Development Agency

            Plaintiff asserts that the proposed settlement was electronically served on the Labor and Work Force Development Agency. (Rhodes Decl., ¶ 27, Ex. E.)

Fair, Reasonable & Adequate

            The Court finds the proposed settlement is fair, reasonable, and adequate to all concerned parties and is not the product of fraud, collusion, or overreaching.

            Here, the parties attended a full-day, private mediation, with Monique Ngo-Bonnici, an experienced mediator with wage-and-hour class and representative actions. (Rhodes Decl., ¶ 21.)  Prior to the mediation, the parties exchanged informal discovery. (Rhodes Decl., ¶ 21.) This included information on temperature tracking data, employee handbooks and policy manuals, and employee counts and pay period data. (Rhodes Decl., ¶ 21.) Although the matter did not settle at mediation, the parties continued to work towards a reasonable resolution and were able to reach an arms-length settlement following extensive negotiations, by and through the mediator. (Rhodes Decl., ¶ 21.) This satisfies the requirement that the settlement was a result of arms-length bargaining.

            Plaintiff’s counsel also avers that he thoroughly investigated the facts and risks associated with the case. He concedes the risks with the case. (Rhodes Decl., ¶ 21.) Specifically, Defendant, at all times, denied the claims. (Rhodes Decl., ¶ 21.) Further, the law is unsettled as to Plaintiff’s temperature claims. (Rhodes Decl., ¶ 21.)

            Plaintiff also provides a detailed breakdown of the potential exposure. Defendant estimated there were 12,000 employees affected during the PAGA period. (Rhodes Decl., ¶ 10.) Based on the risks of establishing the case on the merits, the amount offered in settlement is reasonable

The Court finds that Plaintiff’s counsel has conducted adequate investigation and use of discovery.

Payment Procedures

            Within 30 days of the effective date, Defendants shall pay the $500,000 with the Settlement Administrator. (Rhodes Decl., Ex. A, ¶ 4.3.) Within 14 days of receiving the gross amount, the Settlement Administrator will distribute the 25% of the PAGA fund to aggrieved employees. (Rhodes Decl., Ex. A, ¶ 4.4.) Checks will be valid for 180 days and any uncashed amount will be sent to the Unclaimed Property division of the California State Controller’s office in the name of the aggrieved employee. (Rhodes Decl., Ex. A, ¶¶ 4.4.1, 4.4.4)

            The Settlement Administrator will issue IRS Form 1099s for each settlement payment.  (Rhodes Decl., Ex. A, ¶ 3.2.4.1.)

Experience of Counsel

            Rhodes attests to his firm’s extensive experience in class actions and labor and employment cases.  (Rhodes Decl., ¶¶ 7, 18.)

Attorney’s Fees and Litigation Costs

            Plaintiff requests $175,000 in attorney’s fees and $10,788.30 in costs.

            Labor Code section 2699, subdivision (g)(1) provides “[a]ny employee who prevails in any action shall be entitled to an award of reasonable attorney’s fees and costs . . . .” (Lab. Code, § 2699(g)(1).)

            The Court finds that Plaintiff is represented by experienced counsel and that the requested attorney fee award is fair, adequate, and reasonable. The fee requested, $175,000, represents 35% of the gross settlement, an amount routinely awarded in California courts in class and PAGA actions. (Chavez v. Netflix, Inc. (2008) 162 Cal.App.4th 43, 66, fn. 11.) None of the parties have objected to this amount. The Court finds that $175,000 in attorney’s fees is appropriate.

            As to costs, Plaintiff provides an itemized statement. (Rhodes Decl., Ex. C.) The total incurred was $10,788.30, of which the bulk was the mediation fee ($8,995). These costs are approved.

Plaintiff’s Service Award

            Plaintiff also requests $10,000 as a service award for her time and effort exerted on behalf of the aggrieved employees. (Hill Decl., ¶ 8.) He asserts that he has been actively involved in the case by engaging in regular communication with the attorneys by discussing litigation strategy, witnesses, and updates. (Hill Decl., ¶¶ 4-6.) The Court finds that this amount is reasonable in exchange for a general release of claims and for a release pursuant to Civil Code section 1542.

Settlement Administration Costs

            The parties have agreed to engage ILYM Group, Inc. (ILYM) as the third-party settlement administrator and requests court approval of $32,550.00 for administration costs.  (Rhodes Decl., ¶ 26.) Plaintiff submits ILYM’ bid for settlement administration, which contains an itemized statement of the various tasks that ILYM will undertake; ILYM will conduct data analysis, perform skip-tracing as necessary, calculate and disburse payments, provide tax reporting, re-issue checks, and perform other administrative tasks. (Rhodes Decl., ¶ 26, Ex. D.)

            The Court approves the requested $32,550 in settlement administration costs.

Release

            The Court finds the release under the Settlement Agreement is fair and reasonable.  (Rhodes Decl., Ex. A, ¶ 5.) 

Conclusion

            The motion to approve settlement of claims brought under the Private Attorneys General Act is granted.