Judge: Christian R. Gullon, Case: 21PSCV00014, Date: 2025-03-17 Tentative Ruling

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Case Number: 21PSCV00014    Hearing Date: March 17, 2025    Dept: O

Tentative Ruling

PLAINTIFFS’ NOTICE OF MOTION AND MOTION FOR APPROVAL OF PRIVATE ATTORNEYS GENERAL ACT (CAL. LABOR CODE § 2698, ET SEQ.) SETTLEMENT AGREEMENT AND AWARD OF PAGA COUNSEL FEES PAYMENT, PAGA COUNSEL LITIGATION EXPENSES PAYMENT,  GENERAL RELEASE FEE, AND ADMINISTRATION EXPENSES PAYMENT is GRANTED; a proposed order has been filed.

Background

This is a PAGA case.

On January 7, 2021, Plaintiff filed suit against Defendants for California Labor Code violations.

On February 24, 2021, Defendants filed their Answer.

On June 18, 2021, the court issued the following ruling: The Court orders the following cases, 21PSCV00014 and 21STCV08428 (Ana Nunez v. Cast Parts, Inc.), consolidated and assigned to Department J in Pomona Courthouse South for all purposes. The Court designates 21pscv00014 as the lead case. All future documents must be filed under 21pscv00014 (ALFREDO SALAZAR, INDIVIDUALLY, AND ON BEHALF OF OTHER AGGRIEVED EMPLOYEES PURSUANT TO THE CALIFORNIA PRIVATE ATTORNEYS GENERA vs CPP-CITY OF INDUSTRY CAST PARTS, INC. AN UNKNOWN BUSINESS ENTITY, et al.). Case numbers on all subsequent filings should be reflected under the lead case.[1]

On September 30, 2024, the parties filed a JOINT NOTICE OF SETTLEMENT.

On October 24, 2024, Plaintiff filed the instant motion.

Legal Standard

Labor Code section 2699, subdivision (l)(2) states:¿“The superior court shall review and approve any settlement of any civil action filed pursuant to this part. The proposed settlement shall be submitted to the agency at the same time that it is submitted to the court.” “A copy of the superior court’s judgment in any civil action filed pursuant to this part and any other order in that action that either provides for or denies an award of civil penalties under this code shall be submitted to the agency within 10 days after entry of the judgment or order.” (Lab. Code, §2699, subd. (l)(3).)

While PAGA requires court review and approval of settlements, it does not specify the standard or criteria for such review. (Moniz v. Adecco USA, Inc. (2021) 72 Cal.App.5th 56, 75 (Moniz).) Thus, courts have generally applied the same review standards used for class actions, which inquire “independently whether a PAGA settlement is fair and reasonable.” (Id., at p. 77.) To determine if a PAGA settlement is fair and reasonable, courts consider factors “including 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.) Lastly, courts will also consider if the settlement is “adequate in view of PAGA's purposes to remediate present labor law violations, deter future ones, and to maximize enforcement of state labor laws.” (Ibid.)

Discussion

Plaintiff moves for court approval of PAGA settlement pursuant to Labor Code section 2699, subdivision (l)(2).

Under the terms of the Settlement Agreement, Defendant will pay a Gross Settlement Amount of $865,000.007, which is inclusive of the following: (1) PAGA Counsel Fees Payment to be paid to Lawyers for Justice, PC and KJT Law Group, LLP ($302,750.00) and the amount of $16,028.62 for reimbursement of litigation costs and expenses; (2) General Release Fee to Plaintiffs ($7,500.00/plaintiff for their broader individual waiver and release of claims with a California Civil Code Section 1542 waiver), (3) Administration Expenses Payment of $10,000.00 to be paid to Phoenix Settlement Administrators, a necessary third-party for handling the settlement process., and (4) Net Settlement Amount of $521,221.38 to be paid to the California Labor and Workforce Development Agency (“LWDA”) and Aggrieved Employees--75% will be paid to the LWDA and 25% will be paid to the Aggrieved Employees.)

Here, the court finds that the civil penalties agreed upon are fair and reasonable.

As for the requested general release fee of $7,500.00 per Plaintiff, to Plaintiffs Alfredo Salazar and Ana Nunez (totaling, $15,000.00), a plaintiff may receive reasonable enhancement payments as a class representative. Courts must balance such an award between the interests of compensating the plaintiff for the expense or risk they incurred in bringing the suit while avoiding creating a perverse incentive for the plaintiff to accept suboptimal settlements in exchange for a higher enhancement payment. (See Munoz v. BCI Coca-Cola Bottling Co. of Los Angeles (2010) 186 Cal.App.4th 399, 412.) Courts routinely grant approval of class action settlement agreements containing service awards for the class representatives, which are "intended to compensate class representatives for work performed on behalf of the class to make up for financial or reputational risk undertaken in bringing the action, and to recognize their willingness to act as a private attorney general.” (Cellphone Fee Termination Cases (2010) 186 Cal.App.4th 1380, 1393-94.) In support of this request, Plaintiffs explain that they spent time reviewing discovery requests and providing information and documents in response thereto, including reviewing and providing information and documents to Defendant’s motion to compel arbitration. Thus, the court approves the requested general release fee.

As for attorney fees, pursuant to Labor Code section 2699, subdivision (g), an employee who prevails in a PAGA action is entitled to an award of attorney fees and costs. Though in some cases it may be appropriate to cross-check the percentage of recovery against Counsel’s lodestar, it is not required. (Consumer Privacy Cases (2009) 175 Cal.App.4th 545, 557.) Though the lodestar method provides for “better accountability,” a percentage method also has its advantages as it “establishes reasonable expectations on the part of plaintiffs' attorneys as to their expected recovery; and it encourages early settlement, which avoids protracted litigation.” (Lafitte v. Robert Half Internat. Inc. (2016) 1 Cal.5th 480, 490.) Here, the court elects to use a percentage method for its primary calculation of the fee award, which is a matter of discretion. (Id. at pp. 503-504.) And empirical studies show that fee awards in class actions average around one-third of the recovery. (Ibid, fn. 13.) Therefore, Plaintiff’s claimed fee of 35% is reasonable.

Overall, there are no defects or concerns with the motion.

Conclusion

Based on the foregoing, the motion is granted.