Judge: Christopher K. Lui, Case: 23STCV28435, Date: 2025-05-27 Tentative Ruling

Case Number: 23STCV28435    Hearing Date: May 27, 2025    Dept: 76

            This is a PAGA action seeking to recover civil penalties for wage and hour violations.

            The parties have settled and Plaintiff now move for approval of the PAGA settlement.

TENTATIVE RULING

            Plaintiffs Steve Paura’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.  Plaintiff seeks 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 Chad Saunders, ¶ 26.) 

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 Plaintiff 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 Saunders 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 resulted in settlement. (Saunders Decl., ¶ 7.) Prior to settling, Defendant responded to Plaintiff’s written discovery responses, including producing a sampling of documents pertinent to about 20% of Aggrieved Employees. (Id. at ¶ 6.)

The terms of the settlement, attached as Exhibit 1 to the Declaration of Chad Saunders, are as follows: The Gross Settlement Amount is $250,000 (Settlement Agreement, ¶ 3.1), from which the following payments will be made: (1) Attorney Fees in the amount of not more than 1/3 of the Gross Settlement Amount, estimated to be $83,325.00; (Settlement Agreement, ¶ 3.2.1); (3) Attorney Litigation Expenses of not more than $20,000.00 (Settlement Agreement, ¶ 3.2.1); (4) Administrator Expenses of $3,000 (Settlement Agreement, ¶ 3.2.2); (5) Individual PAGA Payment to Plaintiff of $10,000 (Settlement Agreement, ¶ 3.2.4.1); (6) PAGA Payment of 75% to the LWDA and 25% to Aggrieved Employees (Settlement Agreement, ¶ 3.2.4.2.)

            Plaintiffs’ counsel represents the following:

For mediation, Defendant indicated that during the PAGA Period, it employed about 421 non-exempt employees in California, including 190 former employees, who worked an aggregate 7,622 PAGA pay periods during that time. Based on the data and information provided by Defendant, Plaintiff estimated Defendant’s maximum PAGA exposure at approximately $3,448,900 assuming a 100% violation rate on all claims. This estimate includes approximately $762,200 in civil penalties for the unpaid wage claims, $381,100 for the meal period claims based on a 50% violation rate, about $762,200 in civil penalties on the rest break claims, around approximately $762,200 in civil penalties on the inaccurate wage statement claim, $762,200 in civil penalties for the unreimbursed business expenses claim, and approximately $19,000 in civil penalties for failing to timely pay wages on separation of employment. 

     (Saunders Decl., ¶ 16.)

            Plaintiff’s counsel explains the above calculations in detail at ¶ 17 of the Saunders Declaration.

            Plaintiffs’ counsel sets forth the factors going into the evaluation of the value of the claims and risks of recovering less at ¶¶ 18 – 25 the of the Saunders Declaration.  

            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 1/3 attorney’s fees recovery ($83,325.00), especially in light of counsel’s estimated lodestar amount of $121,375. (Saunders Decl., ¶¶ 30 – 45.) The Court approves costs in the amount of $8,912.75 (Saunders Decl., ¶ 48.) The remainder of the maximum estimated costs of $20,000 ($11,087.25) will be added to the Net Settlement Fund amount.

            The Court approves the named Plaintiff incentive award of $10,000. The named Plaintiff Steve Paura submitted a declaration substantiating the amount of this award.

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. (Settlement, ¶ 5.2.) Further, Plaintiff released his individual claims, thus additionally justifying the Incentive Award. (Settlement, ¶ 5.1.)

The Settlement Adinistrator will administer the settlement in accordance with ¶ 7 of the Settlement Agreement. The Court approves the Settlement Administrator Expenses in the amount of $3,000. (Declaration of Eric Springer, ¶ 9.)

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.