Judge: Christopher K. Lui, Case: 21STCV35253, Date: 2025-05-08 Tentative Ruling
Case Number: 21STCV35253 Hearing Date: May 8, 2025 Dept: 76
This is a PAGA action seeking to recover civil penalties for wage and hour violations.
The parties have settled and Plaintiffs now move for approval of the PAGA settlement.
TENTATIVE RULING
Plaintiffs Marco Ojendiz and Elizabet Rios’s motion for approval of the PAGA settlement is GRANTED.
ANALYSIS
Motion To Approve PAGA Settlement
Discussion
The parties entered into a settlement agreement regarding the PAGA claim. Plaintiffs seek an order approving settlement of the representative PAGA claim.
The State is the real party in interest as to a PAGA claim. (Tanguilig v. Bloomingdale's, Inc. (2016) 5 Cal.App.5th 665, 680.)
Pursuant to Labor Code § 2699(l)(2) & (4), a copy of the settlement agreement, and notice of this motion, was provided to the Labor and Workforce Development Agency (“LWDA”). (See Declaration of Jonathan M. Genish, ¶ 20; Exh. 3.)
The LWDA was given an opportunity to object if it wished to do so. The Court has not received any objection from the LWDA. It does not appear that Plaintiffs received any objection from the LWDA. As such, the LWDA is deemed to have waived any such objection.
Labor Code, § 2699(l)(2) provides; “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 proposed settlement is attached to the Jones Declaration as Exhibit A.)
(i) Except
as provided in subdivision (j), civil penalties recovered by aggrieved
employees shall be distributed as follows: 75 percent to the Labor and
Workforce Development Agency for enforcement of labor laws, including the
administration of this part, and for education of employers and employees about
their rights and responsibilities under this code, to be continuously
appropriated to supplement and not supplant the funding to the agency for those
purposes; and 25 percent to the aggrieved employees.
(Labor
Code, § 2699(i).)
The parties engage in mediation which did not result in settlement, but the parties thereafter reached an agreement to resolve this action. (Genish Decl., ¶¶ 17, 18.) Prior to settling, Defendant responded to Plaintiff’s written discovery responses. (Id. at ¶¶ 9, 10.)
The terms of the settlement, attached as Exhibit 1 to the Declaration of James Clark, are as follows:
(a) Defendant
shall pay the maximum gross sum of Five Hundred Fifty
Thousand
Dollars and Zero Cents ($550,000.00) (the
“Gross Settlement Amount”) to resolve the Action and Released Claims (as
defined in Section 6(a) below), which will be paid as follows:
(1) Attorneys’ fees in the amount of thirty-three
point thirty-three percent (33.33%) of the Gross Settlement Amount, which
is One Hundred Eighty-Three Thousand Three Hundred Fifteen Dollars and Zero
Cents ($183,315.00), and reimbursement of litigation costs and expenses
in the amount of up to Thirty Thousand Dollars and Zero Cents ($30,000.00)
(collectively, “Attorneys’ Fees and Costs”) to Blackstone Law, APC and Lavi
& Ebrahimian, LLP (together, “PAGA Counsel”), which Defendant will not
contest. In the event that the Court reduces or does not approve the requested
Attorneys’ Fees and Costs, PAGA Counsel reserve their right to appeal such
order, however, Plaintiffs or PAGA Counsel will not request or demand an
increase to the Gross Settlement Amount on that basis. If the Court approves
the Attorneys’ Fees and Costs less than the amounts requested, the remainder
will revert to the Net Settlement Amount.
(2) General
release fees in the amount of up to Seven Thousand Five Hundred Dollars and
Zero Cents ($7,500.00) each (total, $15,000.00) (“General Release Fee(s)” or
“Enhancement Award(s)”) to Plaintiff Ojendiz and Plaintiff Rios, which
Defendant will not contest. If the Court approves General Release Fees less
than the amounts requested, the remainder will revert to the Net Settlement
Amount. Any Enhancement Award approved by the Court will result in the issuance
of a Form 1099 to Plaintiff Ojendiz and Plaintiff Rios, as appropriate.
(3) Costs
and expenses of administration of the Settlement up to the amount of Six
Thousand Dollars and Zero Cents ($6,000.00) (“Settlement Administration
Costs”) to ILYM Group, Inc. (“Settlement Administrator”). To the extent that
the Settlement
Administration
Costs are less or the Court approves an amount less than the requested amount,
the remainder will revert to the Net Settlement Amount. Defendant agrees not to
oppose a request by
Plaintiffs
for reimbursement for the Settlement Administrator’s costs, which will be paid
from the Gross Settlement Amount. The Parties agree that the Settlement
Administrator will administer the Settlement and will issue to Aggrieved
Employees a Form 1099 for all amounts paid as penalties. The Parties agree to
mutually select a Settlement Administrator to administer the settlement.
(4) The
amounts stated in Sections 3(a)(1) – 3(a)(3) above, once
approved by
the Court, shall be paid from the Gross Settlement Amount. The balance remaining after these deductions
is referred to as the “Net Settlement Amount.”
(5)
Seventy-five percent (75%) ($236,763.75) of the Net Settlement Amount ($315,686)
will be distributed to the LWDA (“LWDA Payment”); and the remaining twenty-five
percent (25%) ($78,921.50) will be distributed to all non-exempt employees who
worked for Defendant in the State of California at any time during the PAGA
Period (“Aggrieved Employees”). The
period September 15, 2021 through June 22, 2024 is the “PAGA Period.” The twenty-five percent (25%) portion of the
Net Settlement Amount payable to the Aggrieved Employees is referred to as the
“Employees’ Portion.”
(6) There
are 625 Aggrieved Employees who worked 50,000
Workweeks
during the PAGA Period.
(PAGA Settlement Agreement, ¶¶ (a)(1) – (6)[bold emphasis added].)
Plaintiffs’ counsel represents the following:
Based on the informal discovery produced by Defendant, during the PAGA Period, Defendant employed approximately 625 aggrieved employees over the course of approximately 50,000 pay periods. Based on the data, Defendant’s fully-stacked, maximum possible PAGA exposure for this claim amounted to approximately $47,343,750.00, which assumes that a violation for each claim could be proven during each pay period and application of subsequent violation penalties. As discussed below, this degree of exposure is unlikely to be proven, and even if proved, significantly more than is likely to be awarded or recovered.
(Clark Decl., ¶ 30.)
Plaintiffs’ counsel sets forth the factors going into the evaluation of the value of the claims and risks of recovering less at the Clark Declaration, ¶¶ 30 – 47.
Taking into account the factors Plaintiffs’ counsel has considered, the Court finds that, the settlement amount is fair and reasonable, given the risks and expenses of further litigation. The Court approves the PAGA Penalty payments to the LWDA and individual Aggrieved Employees.
The Court approves the 33.33% attorney’s fees recovery ($183,315.00), especially in light of counsel’s estimated lodestar amount of $220,283.00. (Clark Decl., ¶¶ 48 - 67.) The Court approves costs in the amount of $8,117.04 (Clark Decl., ¶ 68.) The remainder of the maximum estimated costs of $30,000 ($21,882.96) will be added to the Net Settlement Fund amount.
The Court approves the named Plaintiff service award of $7,500 each ($15,000 total). The named Plaintiffs Marcos Ojendiz and Elizabeth Rios have submitted declarations substantiating the amount of these awards.
Nevertheless, named plaintiffs, as opposed to designated
class members who are not named plaintiffs, are eligible for reasonable
incentive payments. The district court must evaluate their awards individually,
using "relevant factors includ[ing] the actions the plaintiff has taken to
protect the interests of the class, the degree to which the class has
benefitted from those actions, . . . the amount of time and effort the
plaintiff expended in pursuing the litigation . . . and reasonabl[e] fear[s of]
workplace retaliation." Cook, 142 F.3d at
1016.
(Staton v. Boeing Co. (9th Cir. 2003) 327 F.3d 938, 977.)
The scope of the release is appropriately limited to those claims which all Aggrieved Employees have based on the facts asserted in the Operative Complaint and/or PAGA Notices, arising during the PAGA Period, including, but not limited to, claims involving any alleged violation of California Labor Code sections 201, 202, 203, 204, 226(a), 226.2, 226.7, 510, 512(a), 1174(d), 1194, 1197, 1197.1, 1198, and 2698 et seq., and the applicable Industrial Welfare Commission Wage Orders (collectively, the “Released Claims”). (Settlement Agreement, ¶ 6(a).) The named Plaintiffs also release their individual claims, thus additionally justifying their Service Awards. (Settlement Agreement, ¶ 6(b).)
The Settlement Administrator will administer the settlement in accordance with ¶ 5 of the Settlement Agreement.
The PAGA statute has no notice requirements for unnamed aggrieved employees, and there is no right for them to opt out. (Turrieta v. Lyft, Inc. (2021) 69 Cal.App.5th 955, 974.)
The motion for approval of the PAGA settlement is GRANTED.